Does trickle down economics/austrian economics/conservatives

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Deinonychus
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04 May 2012, 11:38 am

ArrantPariah wrote:
Cutting taxes for the rich even further will only enlarge the budget deficit again.


That's certainly arguable. The real question, however, is by how much? Would the difference be markedly sizable? I'm not arguing from the standpoint of whether the rich should "pay their fair share" or not. My point of contention is that soaking the rich is not as meaningful a solution to our budget problems as it is all too frequently touted to be.



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04 May 2012, 11:44 am

Jacoby wrote:
AstroGeek wrote:
Jacoby wrote:
cut regulation

Deregulation of the banks is a big part of what caused the recession in the first place. As for environmental regulation, that's there for a reason. To be honest, there isn't anything like enough of it. It continues to fail to make our society sustainable.

I don't know if trickle down economics work or not, but I do know that I find them morally wrong. The rich should have to pay more taxes than the poor, not less.


Artificially low interest rates set by the Federal Reserve created the housing bubble which caused the recession. The free market when left alone will regulate itself.

also, the rich do pay more in taxes


Uttter and complete nonsense.

Canada had comparable interest rates to the United States, but we didn't experience bank collapses. Germany had comparable interest rates to the United States--but they didn't experience bank collapses.

The simple fact of the matter is that US and British banking and securities regulation were so woeful that lenders could write mortgages for anyone; could write mortgages beyond the value of the security interest; and could slice-and-dice the mortgages into derivative securities that they could sell on to others, so that the the loan issuer was no longer the entity that carried the risk.

The housing bubble was created by easy credit--not low interest. The financial crisis was triggered when the security interest in those easy credit loans disappeared and banks could no longer obtain cash on the liquidity market--because no one knew what was on anyone's balance sheet anymore.

And that's all down to regulation (or, more importantly, the lack of it).


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04 May 2012, 12:01 pm

If the rich contribute 45% of tax revenue where does the other 55% come from? those with less I imagine.


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04 May 2012, 12:07 pm

Sweetleaf wrote:
If the rich contribute 45% of tax revenue where does the other 55% come from? those with less I imagine.


I'm on your side here, but that's a flawed argument. There are more poor/middle class people than there are rich people, so you're saying the relatively few rich contribute nearly half of all taxes... :lol:


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04 May 2012, 12:10 pm

abacacus wrote:
Sweetleaf wrote:
If the rich contribute 45% of tax revenue where does the other 55% come from? those with less I imagine.


I'm on your side here, but that's a flawed argument. There are more poor/middle class people than there are rich people, so you're saying the relatively few rich contribute nearly half of all taxes... :lol:


Yeah I know I realised that after I posted it :lol: ...but yeah I didn't check the source of that statistic anyways, just saw it mentioned. But yeah I will have to do better because that was kind of a flawed argument.


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04 May 2012, 12:13 pm

Sweetleaf wrote:
abacacus wrote:
Sweetleaf wrote:
If the rich contribute 45% of tax revenue where does the other 55% come from? those with less I imagine.


I'm on your side here, but that's a flawed argument. There are more poor/middle class people than there are rich people, so you're saying the relatively few rich contribute nearly half of all taxes... :lol:


Yeah I know I realised that after I posted it :lol: ...but yeah I didn't check the source of that statistic anyways, just saw it mentioned. But yeah I will have to do better because that was kind of a flawed argument.


'sall good, s**t happens.


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04 May 2012, 12:14 pm

abacacus wrote:
Sweetleaf wrote:
If the rich contribute 45% of tax revenue where does the other 55% come from? those with less I imagine.


I'm on your side here, but that's a flawed argument. There are more poor/middle class people than there are rich people, so you're saying the relatively few rich contribute nearly half of all taxes... :lol:


The way i see it, the people with 90% of the money pay 45% of the tax revenue, and the people with 10% of the money pay the other 55%.



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04 May 2012, 12:20 pm

blauSamstag wrote:
abacacus wrote:
Sweetleaf wrote:
If the rich contribute 45% of tax revenue where does the other 55% come from? those with less I imagine.


I'm on your side here, but that's a flawed argument. There are more poor/middle class people than there are rich people, so you're saying the relatively few rich contribute nearly half of all taxes... :lol:


The way i see it, the people with 90% of the money pay 45% of the tax revenue, and the people with 10% of the money pay the other 55%.


And see just when I was thinking my argument was complete rubbish...but yeah that is one way to see it as well I guess that might be what I was trying to get at.


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abacacus
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04 May 2012, 12:32 pm

blauSamstag wrote:
abacacus wrote:
Sweetleaf wrote:
If the rich contribute 45% of tax revenue where does the other 55% come from? those with less I imagine.


I'm on your side here, but that's a flawed argument. There are more poor/middle class people than there are rich people, so you're saying the relatively few rich contribute nearly half of all taxes... :lol:


The way i see it, the people with 90% of the money pay 45% of the tax revenue, and the people with 10% of the money pay the other 55%.


That is one way to look at it, yes. However, despite my want of higher taxes for the rich, there must be some limits. And the few paying 90% of all taxes? That'd give the rich pretty damn steep tax rates and uphill battles to make money, it would make them MUCH more apt to dodge the system.


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16 May 2012, 8:03 pm

Jacoby wrote:
AstroGeek wrote:
Jacoby wrote:
cut regulation

Deregulation of the banks is a big part of what caused the recession in the first place. As for environmental regulation, that's there for a reason. To be honest, there isn't anything like enough of it. It continues to fail to make our society sustainable.

I don't know if trickle down economics work or not, but I do know that I find them morally wrong. The rich should have to pay more taxes than the poor, not less.


Artificially low interest rates set by the Federal Reserve created the housing bubble which caused the recession. The free market when left alone will regulate itself.

also, the rich do pay more in taxes


What are artificially-low interest rates? How does one know what they are? What makes you think that Knut Wicksell's magic formula wasn't used? By the way, say they chose not to use Wicksell's formula and had they done so, they would have caused 8% unemployment with the two year welfare limit. Isn't that a bit unfair.



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16 May 2012, 9:40 pm

open immigration, cut regulation, end government involvement in the financial sector (fannie mae, freddie mac, import-export bank, granted monopoly of the federal reserve), allowing free banking, end subsidies, and quit bailing out companies. (among other things)



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17 May 2012, 5:14 am

visagrunt wrote:
Jacoby wrote:
AstroGeek wrote:
Jacoby wrote:
cut regulation

Deregulation of the banks is a big part of what caused the recession in the first place. As for environmental regulation, that's there for a reason. To be honest, there isn't anything like enough of it. It continues to fail to make our society sustainable.

I don't know if trickle down economics work or not, but I do know that I find them morally wrong. The rich should have to pay more taxes than the poor, not less.


Artificially low interest rates set by the Federal Reserve created the housing bubble which caused the recession. The free market when left alone will regulate itself.

also, the rich do pay more in taxes


Uttter and complete nonsense.

Canada had comparable interest rates to the United States, but we didn't experience bank collapses. Germany had comparable interest rates to the United States--but they didn't experience bank collapses.

The simple fact of the matter is that US and British banking and securities regulation were so woeful that lenders could write mortgages for anyone; could write mortgages beyond the value of the security interest; and could slice-and-dice the mortgages into derivative securities that they could sell on to others, so that the the loan issuer was no longer the entity that carried the risk.

The housing bubble was created by easy credit--not low interest. The financial crisis was triggered when the security interest in those easy credit loans disappeared and banks could no longer obtain cash on the liquidity market--because no one knew what was on anyone's balance sheet anymore.

And that's all down to regulation (or, more importantly, the lack of it).


Wouldn't low interest rates mean that credit is cheap? Especially since it is the artificial increase in the supply of loanable funds that lowered the interest rates in the first place?

I haven't really looked into whether or not there was a housing bubble outside of the United States.

I will say that I think that monetary/credit expansion is a bad idea in general. In a stable economy, savings=investment.



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19 May 2012, 12:47 pm

Why so much cheap credit. It's very simple, really. Bosses don't like paying their employees well because that's bad for profit. That's why they push the Export is Virtue, Import is Vice line, because the more is exported, the less they can pay their own workers and the more they can get away with undermining the local market. It's a way to have it both ways; have the demand to sell their product without helping contribute to that market by paying their employees sufficiently. Aside from exports, the other option was cheap credit and keeping the domestic market from shrinking too much by replacing wage money increasingly with cheap debt. They wanted to pay people less, they encouraged the replacement of that money with debt to be able to keep up the sales. Really, what happened was that demand was being sapped by anti-worker policies and to prevent a recession Central Banks lowered interest rates to compensate for that.

What's the answer? Pay people better.



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19 May 2012, 3:43 pm

blauSamstag wrote:
abacacus wrote:
Sweetleaf wrote:
If the rich contribute 45% of tax revenue where does the other 55% come from? those with less I imagine.


I'm on your side here, but that's a flawed argument. There are more poor/middle class people than there are rich people, so you're saying the relatively few rich contribute nearly half of all taxes... :lol:


The way i see it, the people with 90% of the money pay 45% of the tax revenue, and the people with 10% of the money pay the other 55%.


Money is the wrong term, the correct term is wealth. However, not all wealth is liquid, in fact many of said "rich" people are "rich" in terms of property, stock, options and such, which means that if taxes went beyond a certain point, they would start having to sell assets to free up capital, in order to pay taxes. In that case, taxes are in fact a tax on working capital, which is a huge problem in the long term.



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19 May 2012, 7:56 pm

What's wrong with these people being forced to sell things when that happens all the time. Corporate raiders seize companies and empty the pension plans and strip mine the companies, the state are forced to privatise natural monopolies and increase the cost of doing business. These are practices that have picked up during the neoliberal age of coddling the very wealthy in the name of making sure they don't have to sell some of their precious assets.