Economic Disaster Looms

[The_Professor]

But it is real hard to cut a benefit that you recieve.
But, the MATURE thing is to consider others. Sometimes, as corny as it sounds, you must do what is best for the country and not for you.

[BT]

So you wouldn't classify Lanya's dismissal of social spending cuts as the MATURE thing to do?

[domer]

Without getting into remedies, I'll simply note that if this report had been made by so authoritative a figure in the old Soviet Union about that defunct country's prospects, President Reagan would have included it among the prime exhibits supporting his confrontational stance toward the old nemesis. In other words, folks, this is serious.

[Plane]

Plane---
Sounds to me like tax cuts got us in this position.  If you cut income and keep on spending, you get in trouble. We're in trouble.  We have to raise taxes, and cut spending.   

Well you are half right.
Cutting spending would definately help , and I would agree with the professor that cutting should be across the board and spare no one , every exception will harm some one more than another and so each exception will be unfair .

The simplest means of spending cut is a freeze , instead of a new budget , we should have no more spending than last years , and spread it the same way, if this could be done for several years it would have the effect of a gradually increaseing cut.

Don't worry about my pay , if I can't get a cost of liveing raise , I can still get a promotion or another job.

Raiseing taxes , on corporations , on the rich or poor , on the middle class or the upper crust, all has the effect of reduceing the productivity of the economy.

If taxes are raised enough to make 20% of our economy ,government, this is like a company makeing 20% of its payroll management.

Imagine the disaster resulting from a tax rate of 100%?
Can you see that that would be a mistake?

Now you can see that a tax rate of 99% might also be a mistake ?

Keep going in that direction , what amount of our productive economy should be diverted from production for taxes for the optimum amount of government and the optimum amount of real economy?

[Lanya]

Plane,

I read an article about the tax rate that was put into effect by FDR.
This isn't it but it gives the tax rate I was looking for. 
http://www.tompaine.com/articles/shared_sacrifice_shared_glory.php

[Plane]

Plane,

I read an article about the tax rate that was put into effect by FDR.
This isn't it but it gives the tax rate I was looking for. 
http://www.tompaine.com/articles/shared_sacrifice_shared_glory.php

And that top rate stood till the late fiftys .


In the face of impending subjugation the people gave up a lot , even though we were paying more taxes than ever , we also bought more bonds and lent the government more money than ever also.

But do we really need to quintiple our military spending right now? That was certainly needed then but I don't see the need being the same now.

Recent evidence demonstrates that a drop in tax rates causes an increase in tax recipt.

Compare this to a store , does a store make more money automaticly whenever they raise prices?
Of course not , if you raise prices enough you get fewer buyers.

Since the present Democratic proposals are weighted to take the money mostly from employers , the most immediate effect will be a reduction in hireing, fewer taxpayers in other words .

I see no evidence at all that an increase in taxes right now is required .

[The_Professor]

Since the present Democratic proposals are weighted to take the money mostly from employers , the most immediate effect will be a reduction in hireing, fewer taxpayers in other words .
Well, some of them will jsut move offshore. I think the operative question is how much of an increase will it require to create this event?

[_JS]

Imagine the disaster resulting from a tax rate of 100%?
Can you see that that would be a mistake?

Now you can see that a tax rate of 99% might also be a mistake ?

An extreme example. Imagine a tax rate of 0% with no government resources to pay for a military, an FBI, disability coverage, medicaid, medicare, social security, interstate maintenance, all the way down to local greenways and erosion prevention programs.

The economics of taxation is not nearly as simplistic as you've made it. Public investment is not as destructive a force as you've made it sound either.

[The_Professor]

Regardless, the issue will continue to loom LARGE, e.g. enormous government deficits. The longer we wait to address this, the worse the ultimate effect.solution will be.

A large part of the reason is that the typcial politician isn't interested in really solving the problem, due to the potential fallout.

[Plane]

Since the present Democratic proposals are weighted to take the money mostly from employers , the most immediate effect will be a reduction in hireing, fewer taxpayers in other words .
Well, some of them will jsut move offshore. I think the operative question is how much of an increase will it require to create this event?

Each .01% tasken from employers as taxes should be considered .01% less availible for hireing.

Unless we are going to reinstitute the draft , then the employment of Soldiers can b e the main business of the nation as it was during WWII.

If we could maintain that strain we could take over the world entirely and crush any kind of resistance.


As it is we devote a larger purportion of our budget to defense than the tipical European country and less than the tipical tyrany , much less than N. Korea.


But we being the largest economy and all, this spending winds up being only a little less than equal to all the rest of the worlds spending on defense.


If we went onto a War footing as we did during WWII  and raised our defense spending by a factor of five or more,we could arm more Americans as soldiers than all the rest of the world put together could , by a factor of three at least.


I don't see this as necessacery, but if we elect a very agressive Democrat like FDR I will go along with it.

[Plane]

Imagine the disaster resulting from a tax rate of 100%?
Can you see that that would be a mistake?

Now you can see that a tax rate of 99% might also be a mistake ?

An extreme example. Imagine a tax rate of 0% with no government resources to pay for a military, an FBI, disability coverage, medicaid, medicare, social security, interstate maintenance, all the way down to local greenways and erosion prevention programs.

The economics of taxation is not nearly as simplistic as you've made it. Public investment is not as destructive a force as you've made it sound either.

A confiscatory tax was the foundation of our Nation , we didn't stand for it from King George , but what rate of taxation did the Stamp Tax amount to ?


A tax rate of 0 is quite obviously a mistake , but a tax rate of 100% is an equally ridiculous mistake. You can't get beef next year from the heard you have totally slaughtered this year.

There must indeed be an ideal rate for maximizing the Government intake , and the subject shouldn't be much more complex than determining the maximum ,sustainable, beef production from a heard of a certain size.

But why do you accuse me of making it seem too simple ?
Too many seem to think that a rise in taxes is going to produce a raise in government tax receipts as certainly as 2+2=4 but the relationship is very non lienear.


http://en.wikipedia.org/wiki/Laffer_curve




http://www.investopedia.com/terms/l/laffercurve.asp

http://www.heritage.org/Research/Taxes/bg1765.cfm

[kimba1]

the problem is this country overall do not think in terms that see`s this ever as a problem
I brought this up earlier.
20 years ago if a person said he`s broke ,people will back away.
to day if you say your broke,people will not accept that and say charge it.
this thinking is entrenched in our government and it`ll be very hard to convinced those folks to reacted to anything economic as a serious problem.
in fact bankruptcy is thought of as a goodthing by many folks as a form of bailout of your problems.

[_JS]

Actually, no one knows what the middle of the Laffer Curve looks like. The supposition you have there is that it is a parabolic equation. The reality is that we know two endpoints (the two extremes) and nothing else about the middle of the "curve" or whatever it is.

The capital gains graph assumes that there are only two variables involved. In other words, you are providing what you hope is causation, but in reality it is not. It might be correlation, but one would have to do statistical analysis to see if that is the case.

And remember what you are essentially saying when you cut capital gains lower than income tax brackets. You are basically saying that income realized on real estate (and other ventures) is worth more than income realized through a hard day of work. You are saying that a dollar of a real estate executive or a stock speculator is worth more than a dollar someone earns being a nurse, a garbageman, an engineer, or a policeman.

Economics is no science and beware anyone who tells you otherwise. It is an amalgamation of mathematics, art, psychology, politics, and philosophy all rolled into one bizarre attempt to project reality onto the future.

Too many seem to think that a rise in taxes is going to produce a raise in government tax receipts as certainly as 2+2=4 but the relationship is very non lienear.

You'll have to show me where I've indicated that because I certainly do not recall doing so.

A confiscatory tax was the foundation of our Nation , we didn't stand for it from King George , but what rate of taxation did the Stamp Tax amount to ?

The stamp tax was in fact rather mild. It was the management of paying the damn thing on every piece of paper one used that bothered Americans. In fact, most of the Crown's taxes on Americans were rather mild. It was irony that Hamilton and Washington turned around and did the same thing to Americans in having to raise taxes to pay for a war (which is exactly what the British were doing).

[Xavier_Onassis]

Social Security should at the minimum be barred from contributing to the general fund and iou's should not be considered legal tender. I would prefer that the program be privatized. or more likely modeled after the thrift savings program. All those under 40 would be enrolled in the new program, all those over 40 would remain in the old program. I have no problem eliminating the ceiling on income eligible for SS taxes.


=======================================================
O How utterly clever!

Tell me, when all the people over 40 are retired, and no longer paying in, where will the government find money to pay for their benefits, since the people who are working have all their money going to their benefits?

I suppose that if they stop paying the geezers, some of them will starve and die. But many will vote before they croak.
And they will not vote in favor of the klutzes who passed your clever plan.

The guys who passed this plan will be quite lucky if the geezers do not parade about, with the heads of the originators of your plan stuck atop tall sticks.

[The_Professor]

What is YOUR solution to the problem, XO?