Republican proposes Balanced Budget Amendment

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Where did I get this silly idea from? My parents who have always been small business owners. It's kinda hard to follow good business opportunities when you have less money for investments after the operating costs. If you have less money then more of what you have has to go towards operating costs and therefore less money for investments. You couldn't figure that out?

And what is "Sitting on money" supposed to mean? Since when was money supposed to be like hot potato? You can't always predict when business will be slow or fast, so it's common sense to save some money for the slow times. And I'd like to see what knowledge you have about business, cuz I think you don't know jack s**t about business since these are basic business concepts. No one sits around and does nothing with their business, they always have to be one step ahead of their competitors. Cash flow isn't a given, so they must always adapt to the situation and do as much as they can to attract customers.

I think you got inflation and deflation mixed up. If you need less money to buy something, that means your money is worth more. If you need more money to buy something, that means your money is worth less. Saying that higher taxes will give an incentive for business owners to follow good business opportunities is like saying a bottleneck will lower traffic.

I hated to use the authoritative argument but the economist Michael Hudson, who has predicted all the recent events, he says he accepts the State Theory of Money.

Anyway, I've had enough of this "to get the rich to work harder pay them more, to get the poor to work harder pay them less" mentality. If rich people pay more taxes then they won't say "I guess I won't work as much because they'll take more in taxes. I'd rather have less". So much right wing economic dogma is based on this absurd idea that they would choose less, whilst they advocate cutting the wages of the lower classes in a bid to "make them work harder".

And likewise I've had enough of people talking about progressive taxing and minimum wages like they help the poor without even backing it up with facts. The ultimate irony of it is that those policies hurt small businesses more than big businesses and make it harder for the poor to get hired. Do you have anything to rebut my arguments on left wing policies hurting small businesses more so than big businesses or are you still gonna go on with this ranting about the right wing?



How's inflation supposed to help the poor? How does it help the poor to have a higher entry point to hiring? Not only are there less job positions available from high minimum wages, but there's also less numbers of jobs available which means there are higher standards for hiring. Therefore it's harder for the unskilled and inexperienced to get hired. Besides there's something called raises, so it's much better to work from the bottom-up than to not be given a chance at all.

This has nothing to do with making the poor work harder. No one even mentioned welfare, so that wasn't even my point. It has to do with the fact that high minimum wages are detrimental to businesses, customers, AND those looking for work.

I didn't say business owners will try less hard and make less investments when they could make more. I said it leaves em with less money, which means more of the money they have goes towards operating costs which leaves em with less money for investments. I said higher taxes are a disincentive because if you're forcing business owners to survive by using a bigger portion of their money to pay for operating costs rather than expand by making more investments or hiring more people, then that's gonna discourage people from even becoming business owners. Why do you think there's a trend of doctors moving from Canada to the states?

Increasing taxes does not cause inflation, it's in fact a dampening measure - it achieves the opposite. It also increases demand for currency and is a much less damaging way of doing this than causing unemployment through interest rate hikes, particularly if the taxes are structured so that those who can afford to pay them do pay. Better to use the money for the common good rather than to gamble on derivatives and create destructive bubbles.

Well, this is embarrassing. No one involved in this conversation really seems to have a solid grasp of economics. Just for fun, I'll respond to a couple of Ace's points.

Progressive taxation does help the poor, at least in comparison to a flat tax or a regressive tax that gets the same revenue. This is a fairly obvious consequence of the fact that with a progressive tax, you can cut taxes for the lower classes by shifting some of the burden to the wealthy. It especially helps the poor when you consider that most advocates of a progressive tax are also in favor of using tax revenue to fund social programs, which predominantly benefit the poor.


That is largely because of a few weird situations in our tax code that enable mega-corporations to avoid paying high taxes. You will find few leftists in favor of preserving those loopholes.


Inflation benefits debtors at the expense of creditors, and obviously the poor are more likely to be in debt.

There was a huge national controversy in the late 19th and early 20th century with farmers, populists, and other groups pushing for inflationary policies that would benefit the poor, while big bankers opposed such policies. Remember William Jennings Bryan?


This actually is not a foregone conclusion. It appears you are the one making assertions without backing them up with facts. At least one study has found, counter-intuitively enough, a positive correlation between mininum wage and employment of low-wage workers (in states which mandate a minimum wage higher than the federal minimum wage). The general consensus of the published literature is that higher minimum wage has only a moderate impact on employment- a 10% increase in minimum wage is normally expected to result in only a 1% increase in unemployment.

sarcasm: Yeah like you're the all knowing pervayer of wisdom...



It could be argued that the progressive tax system and welfare makes the poor dependent on the Government and also ensures that they can't work their way out of poverty.



Seriously, a large corporation can simply move if you push them too far and quite frankly you say you're a centrist, in a pig's eye!

Tax and spend, tax and spend is that all you liberals can come up with. You have the gall to lecture AceOfSpades and myself on economics when it is clear you don't know the first thing about economics. AceOfSpades is from a family of small business owners, he knows a hell of a lot more than you do when it comes to what affects small business.



Yeah let's have massive lines for soup because no-one can buy food cause the economy collapsed.



I don't know who Mr. Bryan is and I'm not sure I would care. You remember the Great Depression, it took a World War to get us out of that.


As to the rest of your post, I couldn't care less what some left wing academic writes about how an economy should work. We have a far-left academic in the White House, and he turned the economic downturn into a recession, arguably a New Depression. If you want to blame Republicans for Democrats stonewalling on trying to fix the issue with Fannae and Freddie that's your problem.

I would argue that Government Programs put in place by left wing progressives caused this mess. If you want to look at when spending went crazy under Bush, it was when Pelosi and Reid took over congress. Obama and the Dems have made those few years look like we were dealing with someone that horded money and didn't spend on basic necessities to live.

Depends on what social programs you're talking about. I'm not too fond of the ones that make people dependent, but I am fond of the type that are built on the principle of "Give a man a fish, and he'll eat for a day. Teach a man to fish and he'll eat for a lifetime". Those are the ones that instill autonomy. But still, I'm not quite sure on whether these can be handled with charity or tax money. f**k welfare's policy of "The more children you have, the more money we'll send you". People should be rewarded for being productive, not reproductive.

I haven't heard of that, but I was saying it hurts small businesses more based on the fact that a lot of convenience stores (excluding chain stores) are run by a husband and a wife because the progressive taxes and high minimum wages means they don't have enough money to hire people.

Well I don't like the idea of people getting into debts. That's what caused the housing bubble and I'm repulsed by the culture of entitlement appealing to people biting off more than they can chew.

How much would the min wage be in the states you're talking about? All I know is the federal is $5.15. In Ontario the minimum wage is $10.25. 10% isn't really much of an increase anyways, that's $1.25 more than the minimum wage in Ontario so I wouldn't call it deal breaker. Most of the working poor who are working full time usually get paid more than the minimum wage, and most minimum wage workers are teenagers, part time workers, workers in the process of training, etc.

@ Inuyasha: Uggghh Pelosi... nuff said LOL. Bush does fall under neocon though, and they are known to more in favour of a bigger welfare state.

Last edited by AceOfSpades on 23 Jan 2011, 12:29 am, edited 2 times in total.

That could be argued in regards to welfare, and I'm not interested in debating welfare right now. Strictly in regards to progressive taxation, though, you are most certainly wrong.


Quote where I have claimed to be a centrist. Or are you spreading yet another random lie about me?

And large corporations still do business in other countries that make them pay taxes.


Random polemical rant with no relation to the issues being discussed.


Um... mild inflation does not lead to economic collapse. Massive hyper-inflation can, but no one is advocating that as a policy, so this is (at best) a miserable straw man.


You seriously don't know who Bryan was?

Damn. I knew you sucked at history, but I didn't realize your ignorance of American political history was that severe. I mean, that's just pathetic.

And how does the Great Depression relate here? Are you going to argue that it resulted from inflationary policies, or is it just a completely random comment? Ironically enough, your claim that WWII was what ended the Great Depression is actually an Keynesian viewpoint. Are you a commie leftist now?


So you are rejecting empirical facts? This isn't about someone saying how they think the economy "should" work. It is just measuring and reporting empirical data.


Calling Obama far-left is a joke. And Bush left us with much more than an "economic downturn." The entire financial system was on the brink of collapse.


The numbers disagree with you. The Republicans and Bush were happy to run up huge deficits when they had complete control of the federal government. Bigger deficits occurred in 2008 because of the bail-outs.

GE, Wal-Mart, and a lot of other big-name companies don't pay any US taxes. Several of them actually pay negative taxes, AKA corporate welfare. So yes, our current tax structure hurts small businesses mroe than it hurts big businesses. I think we can all agree that that should change.


OK. Nevertheless, you asked how inflation benefits the poor. Inflation makes the effective value of a debt go down, and the poor are more likely to be in debt, so inflation helps the poor.

Actually he is. He was just voted the all-knowing purveyor of wisdom last week.


Well.... no, not really. A progressive tax system just means that the poor pay less of their income than the rich. It wouldn't prevent them from working their way out of poverty, all else equal. Even further, the mere existence of such a tax system does not mean that there is welfare, and the existence of welfare would make any tax system less relevant in some ways.


Well, for the most part, they won't move too much, unless somebody *really* disrupts their behavior. I mean, any economic activity can cease if you go too far with it.


Funny thing is that last I heard Orwell was going for an economics degree.


That only happens under hyper-inflation, and nobody sensible is going to talk about hyper-inflation due to a regulatory or fiscal policy. Hyper-inflation basically requires a massive increase in the money-supply. There is nothing you can do to velocity that will cause the dollar to be worth less than the paper it is printed on.


Ok, that's just sad. William Jennings Bryan is a major American historical figure. He ran for President a few times. He continually pushed for a bimetal standard in our coinage. He was a member of the populist movement. He also was a lawyer in the Scopes Monkey Trial.

That being said.... um.... I don't know what exactly you are trying to argue about with the "Great Depression".


Well, right, the reason why you couldn't care less about what some left-wing academic writes about how an economy should work is because you can't read. You probably don't really care about what some right-wing academic writes about how an economy should work either for matter.

That being said, given that you capitalize "New Depression", if you are implying a Great Depression situation, then that's just nuts. Just look at unemployment data during the Great Depression, and you have to recognize that it was terrible during that time period, much much much worse than anything has even come close to.

federal min wage is 7.25 not 5. whatever you said.

Definitely. Tax cuts for the rich and corporate subsidies are BS, as well as welfare being eligible to those unwilling to work and progressive taxing. The minimum wage in Ontario is $10.25, and according to wiki the highest state minimum wage is $8.67 in Washington and the new federal minimum wage is $7.25, so it's bound to affect small businesses more in Ontario. I've done a quick google search and according to what I'm quickly read, this has to do with a "real-estate investment trust" which means it pays rent to itself.

Check this out http://www.walmart.com/ip/3184188
What the f**k? Talk about ratting yourself out.

It doesn't help the poor in the same sense that welfare doesn't help the poor. Also, investments become more expensive during inflation so it depends on how much debt you're in, how many things you buy, and what type of things you buy.

The right wing anti-inflation recipe is bad for balanced budgets because it includes a reserve army of labour (the unemployed percentage under the NAIRU) who do not pay income taxes. A humane society would pay them benefits though especially mean Social Darwinists would probably argue against it though killing your reserve army of labour with starvation will require the engineering of more unemployment to deal with the labour shortage which we are told is horribly inflationary which is why this reserve army of labour is required in the first place under Milton Friedman's immortal NAIRU dogma that has guided western government policy since 1980 or so.

That is incorrect. Debtors benefit from inflationary policy; this is exceedingly basic economics. Poor people are much more likely than rich people to be debtors, so they benefit from (mild) inflation. Poor people are generally not investors, so that is an irrelevant point.

And yes, the progressive tax most certainly does benefit the poor. It shifts the tax burden away from them and onto the rich. Now, if you buy into the theories of crank supply-side economists, you might argue that this somehow ultimately hurts the poor, but quite frankly you would just be wrong. Essentially all mainstream economics, and all available empirical data, and basic common sense, say that a progressive tax benefits the poor in comparison to a flat or regressive tax.

Haiti doesn't have welfare and it's not a good place in which to be poor. In fact, the lack of welfare and the deliberate policies to shut down alternative opportunities (the destruction of the Haitian peasantry by deliberate policies since 1980 or so) is part of the strategy to create a captive and desperate work force willing to work for anything - it's a so-called development strategy that uses poverty as its engine. Poverty is good as far as the people who benefit from this strategy is concerned and that's the same mindset for those who want to abolish welfare and other social programmes.

Well, right, the big issue is that given the ability of financial institutions to adjust to inflation due to inflation measurements, this impact of inflation is dampened significantly. Actually, one could compose a counter-argument based upon cognitive biases we have due to focusing on the dollar amount. People often think that a 3% wage cut is worse than having a constant wage with 3% inflation, and this likely impacts wage adjustment.


From what I understand, the real argument for a flat or regressive tax isn't "helping the poor" so much as an aim at efficiency in some form or fashion, which would only be indirect.