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Old Nov 10, 2012, 12:58 PM   #76
zioxide
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Dems or Republicans... it is all the same s***. We have been voluntarily exporting American jobs to China and India name your low wage country of the decades... since the 1980s. It started with unskilled labor and now it's the hardware and software engineers and anyone else whose job can be exported are not exempt. Figure out how to stop and reverse that and I'd vote for you to be President. My guess is that the plan is to lower wages in the US until they = wages in the developing world. Then the exporting of jobs will stop.
Lowering wages won't work. Our minimum wage is already near poverty level. How could you ever possibly lower it? It has lagged behind inflation for way too long and should be at least double what it is now.

You need to create a climate where it's cheaper for companies to do business and create goods here. Increase import taxes and eliminate the loopholes that allow you to take tax deductions for business operations overseas and you'd go a long way towards doing this.

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The class envy and total lack of understanding of how the economy actually works by the people on this forum would be funny if it were not also the same misunderstanding that the rest of America seems to have.
Pot, meet kettle.

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Th Federal government CANNOT stimulate the economy by spending tax dollars on infrastructure projects.
FDR disagrees. The majority of our infrastructure is on the brink of collapse. It needs to be replaced and upgraded or we will never be able to compete in the 21st century with countries like China and Japan. No company is going to want to invest in starting a business in a country where the infrastructure is falling apart or falling behind other countries.

On top of that, starting a bunch of projects to fix our infrastructure would put tens of thousands of construction workers back to work. These workers will be off unemployment and making money again which they will be able to reinvest in the economy. It will put companies to work providing the concrete, steel, and other goods we need to fix the infrastructure, which means these companies will have to hire more workers and they will also be making more profit.

Clearly, these kind of things will help the economy. It's obvious to anyone who has taken ECON 101.

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I cannot believe you still think you can tax your way to prosperity.
Nobody believes that raising taxes is the only answer. But sometimes, it has to be done. You can't just expect to continue making cuts for decades and expect to still be able to pay for everything. It's simple math.
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Old Nov 10, 2012, 01:00 PM   #77
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Originally Posted by Dmunjal View Post
You

Then how did Ford, Jobs, etc create new products (and millions of jobs) that were never in demand in the first place? There was zero demand for cars and iPhones until an entrepreneur came along and invested in it and took the risk to create something new.

We're arguing chicken and egg.
They were still hiring based on (projected) demand. My arguement was this, that just because a company has more money doesn't mean they hire more employees if there is no need to.

For example, consider my local restaurant. If taxes are cut so they have an extra $100,000 in profit next year that doesn't translate to them hiring more employees unless there is need for them to, which they would only need to if there is an increase in demand.

The idea that if employers had more money due to lower taxes that they would hire more employees is not true unless there is a need for more employees.
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Old Nov 10, 2012, 01:08 PM   #78
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The idea that if employers had more money due to lower taxes that they would hire more employees is not true unless there is a need for more employees.
Exactly. The majority of the time it just means more profit, more yachts for the CEOs, etc. That's why the Republicans continue to fight for it so much. They just want more money.
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Old Nov 10, 2012, 01:11 PM   #79
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The late 1800s was marked by the industrial revolution (bringing millions out of poverty) not just an agrarian economy.
Could you please define this statement of yours more clearly?

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Originally Posted by Dmunjal View Post
This country progressed for over a hundred years with federal spending a fraction (of GDP) of what it is today.
When did this period begin and when did it end?
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Old Nov 10, 2012, 01:18 PM   #80
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This may be a useful link: http://www.u-s-history.com/pages/h980.html

~1920 appears to be the year the US switched from being a mostly rural/agrarian country to a mostly urban one.

Today (in 2000) our rural/urban mix is exactly opposite what it was in 1860 (20/80 vs 80/20). In the last 150 years, things have changed quite dramatically.

EDIT: The 2010 census appears to still support the 20/80 split. http://www.census.gov/geo/www/ua/201...uralclass.html

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Old Nov 10, 2012, 01:20 PM   #81
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Could you please define this statement of yours more clearly?
http://en.wikipedia.org/wiki/Industrial_Revolution

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When did this period begin and when did it end?
"The Industrial Revolution was a period from 1750 to 1850 where changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times."

This was all done in a time where federal government expenditures were less than 5% of GDP compared to 25% today and there were no income taxes.
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Old Nov 10, 2012, 01:25 PM   #82
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Its an imperfect system to be sure and there is a fine line between too little cooperation and too much. Beyond the question of corruption, which pretty much anyone says they are against, you have the questions of efficiency. Many people argue that the public sector is highly inefficient when compared with the private which like all these arguments has its truths and non-truths.

This is why the checks and balances in democracy are so important. One group checks the power of the other group.
The primary difference is that the private sector is mostly concerned with profits not the overall health of society.
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Old Nov 10, 2012, 01:33 PM   #83
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I'm seeing some room for compromise here. I'm certainly not a Republican who wants to lower taxes on the rich or a Democrat who wants to raise them. My argument is the the Federal Government is lousy at using this tax revenue efficiently. And they certainly don't need to micro manage a $15T economy.

I see the need for taxes for infrastructure and defense at the federal level but most other activities can be better handled at the state and local level where there is better accountability and less corruption and bureaucracy.
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Old Nov 10, 2012, 01:34 PM   #84
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Originally Posted by Dmunjal View Post
"The Industrial Revolution was a period from ...
That's not the period I asked you to define.

I asked you to define more accurately the period you described earlier ...

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This country progressed for over a hundred years with federal spending a fraction (of GDP) of what it is today.
When did that period being?

When did that period end?
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Old Nov 10, 2012, 02:01 PM   #85
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Originally Posted by citizenzen View Post
That's not the period I asked you to define.

I asked you to define more accurately the period you described earlier ...



When did that period being?

When did that period end?
From 1776 to 1913, the federal government had very little revenue and very little spending. Something less than 5% of GDP and the country did very well economically. We went from 13 colonies to one of the world's most powerful economies measured by GDP.

Since then, federal government spending has ballooned to 25% of GDP and 100% debt to GDP. And our economy is in the toilet.

You can't make the argument that we need more taxes to fix this problem when I've shown you a sustained period of growth and job development with 0% taxes.

The problem with the tax system is that it is used for social policy (I'm actually a social liberal) and invites lobbyists to corrupt the system.

Let's see how lobbyists muck up the upcoming debate on tax reform. I'd love to see removal of EVERY tax loophole but it's not going to happen.

At least zero taxes would put every one on a level playing field.
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Old Nov 10, 2012, 02:04 PM   #86
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Originally Posted by Dmunjal View Post
From 1776 to 1913.
Now we're getting somewhere.

What was the percentage of federal spending to GDP in 1776*?

Just to establish a starting point.

Edit: Please provide a source for that figure.





*BTW, the U.S. Government was formed in 1789

Last edited by citizenzen; Nov 10, 2012 at 02:17 PM.
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Old Nov 10, 2012, 02:11 PM   #87
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Quote:
Originally Posted by Dmunjal View Post
From 1776 to 1913, the federal government had very little revenue and very little spending. Something less than 5% of GDP and the country did very well economically. We went from 13 colonies to one of the world's most powerful economies measured by GDP.

Since then, federal government spending has ballooned to 25% of GDP and 100% debt to GDP. And our economy is in the toilet.

You can't make the argument that we need more taxes to fix this problem when I've shown you a sustained period of growth and job development with 0% taxes.
the problem though is that compared to the 1780-1900 timeframe, there are no more regions in north america, nor african colonies or the vast woods of sibiria to grab from their native populations

the growth of the 19th century was paid for by others ... don't forget that
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Old Nov 10, 2012, 02:26 PM   #88
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I see the need for taxes for infrastructure and defense at the federal level but most other activities can be better handled at the state and local level
Let's be forthright here. Besides eventually paying for the Iraq and Afghanistan, which the U.S. borrowed money to pay for, the main problem the Federal Budget has is healthcare. Since healthcare is a labor-intensive service, it does make sense to try to pay for it as close to the consumer as possible.

The problem that I see is that the U.S. population is much too mobile today to provision healthcare for the elderly poor using the old "county hospital" system. I don't see a great solution-- but let's be clear that the financial and social problem is healthcare, not some idealized battle between the forces of "socialism" and "free-market capitalism". The social problem of our era in the U.S. is how to provision healthcare. The problem is that, unlike normal consumer goods, the people who need healthcare the most are usually the people least able to pay for it-- the elderly, the unemployed, the bankrupt, the poor. That creates a problem quite unlike that of smartphones. Capitalism has done a wonderful job with smartphones; it is just not obvious how to apply Apple's iPhone product development process to medical care services.

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where there is better accountability and less corruption and bureaucracy.
Do you have a source for this statement? My own personal/anecdotal experience is just the opposite, but, that isn't a statistically valid sample. Are there studies supporting your assertion?
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Old Nov 10, 2012, 02:35 PM   #89
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Why does the self-proclaimed "Party of Personal Responsibility" always try to blame others for its failings?
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Old Nov 10, 2012, 02:36 PM   #90
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Originally Posted by citizenzen View Post
Now we're getting somewhere.

What was the percentage of federal spending to GDP in 1776*?

Just to establish a starting point.

Edit: Please provide a source for that figure.





*BTW, the U.S. Government was formed in 1789
Except for the Civil War, WW1 and WW2 peaks, federal government spending was less than 5% of GDP before WW2, over 10% since, and over 20% in the last 10 years. And we borrowed and printed most of that to get to $16T in debt. Has the economy benefited much from all this spending?

To show that this is not a tax problem, here's a additional chart of government revenue since 1792. We are taxing more than ever.

The problems we are experiencing are very recent in nature. To say that the US didn't prosper before the income tax in 1913 is to ignore history. We have prospered since than but I would offer that wasn't because of tax and spending but because of major innovations created jointly by the public and private sector. However, the spending that the federal government spends on that is a very small part of the overall budget. We could do a lot more spending on innovation if we were able to cut some of the spending that doesn't benefit the nation as a whole.
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Old Nov 10, 2012, 02:41 PM   #91
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the problem though is that compared to the 1780-1900 timeframe, there are no more regions in north america, nor african colonies or the vast woods of sibiria to grab from their native populations

the growth of the 19th century was paid for by others ... don't forget that
We still exploit the world today. We exploit and abuse the natural resources of the Middle East, we use cheap labor in Asia and locally through illegal immigrants. It's not slavery but pretty darn close.
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Old Nov 10, 2012, 02:41 PM   #92
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Originally Posted by Dmunjal View Post
You

Then how did Ford, Jobs, etc create new products (and millions of jobs) that were never in demand in the first place? There was zero demand for cars and iPhones until an entrepreneur came along and invested in it and took the risk to create something new.

We're arguing chicken and egg.[COLOR="#808080"]
It's not chicken and egg. If no one is buying a company's products/services the company will fold. If consumer demand is being met by a staff of 5 employees the company will not hire on 20 new employees just for the hell of it. Why pay 25 people to do the work of 5? If the staff of 5 cannon meet consumer demand then new employees will be hired, but only the bare minium required to meet demand. If you were going to open a surf shop would you target a location like Los Angeles where are there is a big surfing population or would you target a location like rural kentucky where there is a small, if any, surfing population?

This is basically the reason for the dot com bubble bursting. People overpaid for companies that superficially looked great but in reality they didn't have the ability to sufficiently monetize their products/services (i.e. not enough paying customers).
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Old Nov 10, 2012, 02:48 PM   #93
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We could do a lot more spending on innovation if we were able to cut some of the spending that doesn't benefit the nation as a whole.
Please identify this spending.
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Old Nov 10, 2012, 02:53 PM   #94
Dmunjal
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It's not chicken and egg. If no one is buying a company's products/services the company will fold. If consumer demand is being met by a staff of 5 employees the company will not hire on 20 new employees just for the hell of it. Why pay 25 people to do the work of 5? If the staff of 5 cannon meet consumer demand then new employees will be hired, but only the bare minium required to meet demand. If you were going to open a surf shop would you target a location like Los Angeles where are there is a big surfing population or would you target a location like rural kentucky where there is a small, if any, surfing population?

This is basically the reason for the dot com bubble bursting. People overpaid for companies that superficially looked great but in reality they didn't have the ability to sufficiently monetize their products/services (i.e. not enough paying customers).
Demand is insatiable. Just ask any 3 year old. Everyone wants everything at all times. Even the poor, even those not in the US. The problem is that you need money to get what you demand. Where does one get that money? You have to work for it. Unless you're starting a company or opening a business (supply!), you're probably going to have to get a job. Who hires you? Some business owner will give you a job because they have taken the chance to open a business or invent something new. Where does the business man get the money to create that business? He borrows it. From whom? The banks who get money from savers.

Where in this process does the government stimulate demand? Where does it get the money to stimulate demand? From the private sector. Or they have to borrow it or print it.

The only reason the Keynesian system has worked to create demand is because the US has the reserve currency and can print it at will. But it cannot be sustained forever. Our debt bubble will pop before that.

If government spending created demand and wealth, Zimbabwe would be the richest country in the world.

http://blog.heritage.org/2011/09/20/...create-demand/
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Old Nov 10, 2012, 03:00 PM   #95
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Please identify this spending.
Here's the current budget spending by category. The innovation portion of it probably lives in the other category. We can cut quite a bit of the rest which is primarily warfare and welfare spending. Cut the military budget in half, get out of policing the world, and let states deal with the entitlements.
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Old Nov 10, 2012, 03:07 PM   #96
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The only reason the Keynesian system has worked to create demand is because the US has the reserve currency and can print it at will. But it cannot be sustained forever. Our debt bubble will pop before that.
The Heritage Foundation and von Mises Institute stuff isn't moving us forward. Let's talk about how we got out of a high-debt situation once before. At the end of WWII, debt was very high. How did the U.S. do it from 1946-1980?



What, for example, were the top marginal income tax rates and capital gains rates when the debt to gdp ratio was dropping so fast, and, the economy was growing at the same time? What was the real rate of return on bank deposits, bonds, and stocks and other investments? I'm asking because we have actual history to draw upon here.
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Old Nov 10, 2012, 03:31 PM   #97
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Originally Posted by Dmunjal View Post
http://en.wikipedia.org/wiki/Industrial_Revolution



"The Industrial Revolution was a period from 1750 to 1850 where changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times."

This was all done in a time where federal government expenditures were less than 5% of GDP compared to 25% today and there were no income taxes.
What was the lifespan back then?

People mostly raised most of their own food.

Land was free or at least very cheap.

Education generally was a matter of just a coup,e of years.

Transportation was mostly via water, mostly free of course the railroads were massively subsidized by the US govt.

The reasons are endless. Attempting to distill the issue into one of taxes does you a great disservice.
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Old Nov 10, 2012, 03:34 PM   #98
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Hmmm... Nice comments at the bottom of that piece by a poster called Ranny Lane.
Interesting site the OP linked to. Apparently Freedom Works is closely connected to serial polluting and privately owned Koch Industries' David Koch.

http://en.wikipedia.org/wiki/FreedomWorks
This quote from the POTUS was lifted from the FreedomWorks site;

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"I don't think this is a secret. Dick Armey and FreedomWorks, which was one of the first organizational mechanisms to bring Tea Party folks together..."

—Barack Obama, October 15, 2010 issue of Rolling Stone Magazine.
The even go on to brag about spreading divisiveness and hatred;

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Liberal journalist Jane Mayer on Koch Industries wrote in her 2010 article;

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The Republican campaign consultant said of the family’s political activities, “To call them under the radar is an understatement. They are underground!” Another former Koch adviser said, “They’re smart. This right-wing, redneck stuff works for them. They see this as a way to get things done without getting dirty themselves.” Rob Stein, a Democratic political strategist who has studied the conservative movement’s finances, said that the Kochs are “at the epicenter of the anti-Obama movement. But it’s not just about Obama. They would have done the same to Hillary Clinton. They did the same with Bill Clinton. They are out to destroy progressivism.”
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Old Nov 10, 2012, 03:37 PM   #99
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The Heritage Foundation and von Mises Institute stuff isn't moving us forward. Let's talk about how we got out of a high-debt situation once before. At the end of WWII, debt was very high. How did the U.S. do it from 1946-1980?

Image

What, for example, were the top marginal income tax rates and capital gains rates when the debt to gdp ratio was dropping so fast, and, the economy was growing at the same time? What was the real rate of return on bank deposits, bonds, and stocks and other investments? I'm asking because we have actual history to draw upon here.
Yes, you are correct. We did raise taxes to pay for the debt. But we also cut spending dramatically immediately after the war. Since we really don't have a peacetime dividend this time, are you open to cutting spending to get us to 20% of GDP from 25%? I think the overall average has been 18% and as I showed, less than 5% before 1913.
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Old Nov 10, 2012, 03:40 PM   #100
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What was the lifespan back then?

People mostly raised most of their own food.

Land was free or at least very cheap.

Education generally was a matter of just a coup,e of years.

Transportation was mostly via water, mostly free of course the railroads were massively subsidized by the US govt.

The reasons are endless. Attempting to distill the issue into one of taxes does you a great disservice.
I'm not the one pointing to taxes as the sole reason for prosperity in the 1800s. Of course we live in a different time. My point is that raising will NOT necassarily fix the problem.
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