Six Economic Myths Ruining our Presidential Election

Discussion in 'Politics, Religion, Social Issues' started by vrDrew, May 8, 2016.

  1. vrDrew macrumors 65816

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    #1
    A good, and timely, article in today's New York Times on the slew of complete myths regarding our present day economy. Courtesy of well-known (in economics circles) Harvard professor Gregory Mankiw:

    The article itself is well worth reading completely, but to summarize here are the myths:

    1) American Manufacturing has disappeared. Not so: US manufacturers produce 47% more today than they did twenty years ago.

    2) Bad Trade Deals are whats hurting the Economy. Again, just not so. They present challenges to displaced workers, but overall the economy as a whole gains from them.

    3) The Economy is Rigged. Nope. Wealthy people try to protect their interests. Sometimes they succeed, sometimes they fail.

    4) The Rich don't Pay much in Taxes Nope. The wealthiest 1% pays about 33% in Federal income taxes. The middle-class pays roughly 13%.

    5) Tax Cuts will cause stupendous growth. No. They might create some growth - but not nearly enough to offset the loss of revenue.

    6) The next President can fix everything. Not a chance. At best, the policies and actions of the President might slowly improve things for some people. At worst (as in sparking a trade war or financial panic) they could make things very bad very quickly.
     
  2. Herdfan macrumors 6502

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    #2
     
  3. aaronvan Suspended

    aaronvan

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    #3
    Only an ivory tower-dwelling Harvard economist could say with a straight face that U.S. manufacturing is better than it was 20 years ago. I'd like to take this pencil-neck to a bar in SE Michigan, he can tell my cousins that they've never had it so good, that NAFTA is a great thing.
     
  4. samiwas macrumors 65816

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    #4
    You don't think things have been shifted quite a bit in favor of the rich in the past few decades? Tax policy, regulations, etc?

    How does this compare to their share of the income. You can't say "The 1% pay 33% of the taxes!!!" as a good thing if that same 1% take home 50% of the income, while the people paying 13% of the taxes take home only 10% of the income.

    Well, we know this is blatantly false. Just as much as "a minimum wage increase will cause mass job loss".
     
  5. mrkramer macrumors 603

    mrkramer

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    Well if they make 50% of the income then they would be paying 33% of that in taxes, and the people who take home 10% of the income would be paying 13% of that 10% as taxes assuming your numbers are right.
     
  6. Praxis91 macrumors regular

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    #6
    If we're all supposed to be equal under the law, then we should all pay the same rate. I vote for 0%.
     
  7. Eraserhead macrumors G4

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    #7
    How does that let you fund public goods?
     
  8. hulugu macrumors 68000

    hulugu

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    Fine. You get none of the services. Get off my roads and bridges. Don't use my schools or electrical grid. No health care services. And, no military protection. Also, no traded goods.

    Otherwise. Pay up bub.
     
  9. Meister Suspended

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    #9
    They pulled a similar train on germans in regards to the EU.

    They keep telling them that the euro is somehow good for the economy but at the same time people are getting poorer by the day, income inequality is higher than ever and the Euro is worth as much as monopoly money.

    I vividly remember the day they switched from the Deutsche Mark to the Euro on 1/1/2002.

    Everything went downhill from that moment on.

    And the state controlled, force financed media indoctrinated the sheeple that they are only imagining that the Euro is ****.

    Don't let this happen to the US!!!!
    Prevent the globalists from taking over!!
     
  10. hulugu macrumors 68000

    hulugu

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    #10
    Mankiw addresses this:

    And, this has been happening since 1978 when according to BLS, around 19.4 million people worked in manufacturing declining to around 12.3 million in 2016.

    BTW, from 2010 to 2016 manufacturing gained an average of 146,000 jobs per year, totaling around 878,000 jobs.

    The last time the manufacturing sector gained jobs was in 1989 when manufacturers hired around 267,000 people compared to the year before.

    Shorter version: while productivity went up, jobs were lost throughout the Reagan, Bush (I and II) and Clinton administrations, but during the Obama administration, manufacturing jobs increased.
     
  11. vrDrew, May 9, 2016
    Last edited: May 9, 2016

    vrDrew thread starter macrumors 65816

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    #11
    You don't think that might be taking a rather narrow view of the US economy?

    But since we're talking about the US automobile industry; I think we ought to get a few things straight.

    Like the fact that President Obama (who you apparently see as worse than Satan himself) took the considerable political risk at the outset of his Presidency to engineer the bailout of GM and Chrysler that allowed those companies, as well as the vast network of suppliers, vendors, and dealers that go with them - to survive.

    I can well imagine the idiotic racist filth you'd likely hear spoken about President Obama in those same Michigan bars. A bitter irony that is not lost on me. And something I'll not soon forget or forgive.

    But they are about to double down on their losing bet with Donald Trump. It would be funny, if it weren't so sad.
     
  12. VulchR macrumors 68020

    VulchR

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    #12
    The do not pay in taxes anything like the proportion of wealth they own in the US. Looking at how much they pay in comparison to the total taxes collected is misleading*, and wealth should be taxed, not income.


    *Suppose the wealthiest person in the country, 'Bob', is so wealthy that he has all of the income. He'd pay 100% of the country's taxes if he paid 1%, 10%, or 100% of his taxable income.
     
  13. aaronvan Suspended

    aaronvan

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    #13
    Taking umbrage at imaginary conversations occurring only in your head is peculiar at best.
     
  14. VulchR macrumors 68020

    VulchR

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    #14
    I hope that you own a horse or a mule for when all the roads become impassable, as well as a private army, police force, fire department, etc..
     
  15. aaronvan Suspended

    aaronvan

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    #15
    I believe the 1% should pay 1% in taxes and the 99% should pay 99%.
     
  16. VulchR macrumors 68020

    VulchR

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    Written like somebody in the top 1%. In theory your plan would work ... if you wanted a class war that would benefit nobody.
     
  17. vrDrew thread starter macrumors 65816

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    #17
    But you don't deny President Obama's role in the bailout of the US automobile companies? A bailout that probably saved the best part of half a million jobs.
     
  18. aaronvan Suspended

    aaronvan

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    #18
    That's me all right. I start every day with 20 laps in my swimming pool full of money, just like Uncle Scrooge.
     
  19. jkcerda macrumors 6502

    jkcerda

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    #19
    how many jobs will be gone thanks to TPP? article is a joke.
    no kidding, whisky tango foxtrot does the economy gain from bad trade deals?
     
  20. bent christian, May 9, 2016
    Last edited: May 9, 2016

    bent christian Suspended

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    #20
    Distortion and myth. This is a bullet point designed for people who don't think critically very often. When you look at the aggregate, numbers can be misleading. What we want to look at is the effective tax rate individuals pay. The fact is, tax codes increasingly favor higher income earners. We know this. Those with enough resources to to invest, strategically "donate" to "charity" and otherwise shelter themselves from tax liability are able to bring about a very low effective tax rate. This is not really something that is in dispute for those who understand the game.
     
  21. NT1440 macrumors G4

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    #21
    Says the guy that made the West Point thread....

    As for this thread, some very misleading summations that don't put much in context. Figures can lie and liars can figure.
     
  22. vrDrew, May 9, 2016
    Last edited: May 9, 2016

    vrDrew thread starter macrumors 65816

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    #22
    This may be hard to understand, but the reality is that NAFTA probably saved the US automobile industry.

    Do you remember what the US auto industry was like in the 1980s and 1990s? It was a disaster. Terrible quality. Dreadful productivity. (I remember stories about workers sleeping and having sex in cars as they moved down the production line.) GM spent billions buying EDS, a company in an industry it didn't understand. It spent billions more on Saturn, a car nobody liked and nobody wanted.

    I'm not going to say the loss of jobs in the US auto industry hasn't been very tough. It has been. But those jobs were going one way or another. They'd have been lost to imports. They'd have been lost to robots.

    NAFTA allowed the entire US auto industry - not just GM and Ford, but also Honda and BMW and Mercedes - to take advantage of the maquiladora suppliers of top-quality parts and sub-assemblies- that allowed them to, in turn, compete in a global auto market.

     
  23. samiwas macrumors 65816

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    #23
    Uh, no. It wasn't their tax rate, it was a percentage of the total amount of taxes paid.

    Quick example.
    You have ten people.
    One guy makes $500,000, and pays $40,000 in taxes. Six of them make $15,000 each and pay $2,500 in taxes each. The remaining three make $110,000 each and pay $20,000 in taxes each. Total income made was $920,000, while total taxes paid were $115,000.
    The guy who made $500,000 paid nearly 35% of the total taxes, while he took home 54% of the total income. The six people making $15,000 altogether paid only 13% of the total taxes, but they made less than 10% of the total income. The remaining three people paid a whopping 52% of the taxes, while taking home only 36% of the income.

    Obviously made up numbers, but shows that the guy who made the largest share of the money by far did not pay the largest share of taxes. That's why I asked the question. If the people who paid 33% of the total taxes paid made 50% of the income, while the people people who made only 10% of the income paid 13% of the taxes, there's something wrong with that.
    --- Post Merged, May 9, 2016 ---
    Yeah! That makes total sense!!! Yeah!!!!
     
  24. Desertrat macrumors newbie

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    #24
    The dollar volume may be up, but where it once came from millions of blue-collar jobs, nowadays it's fewer people doing that work. Plus, it's more in the way of such things as plastics rather than industrial equipment.

    Trade deals? NAFTA has been blamed by many for lost jobs, here in the US. Regardless, it has bankrupted many Mexican farmers, leading to more northbound illegals. TTP doesn't include China, which is stupid. Only China's trade partners? It might benefit US corporations, but it will prove detrimental to SE Asia. TTIP is a giant shuck on the Eurozone, regardless of what it does for the big US corporations.

    Historically, when tax rates are lowered, income to the federal government rises. True for JFK, Reagan and Bush II. And spare me any red herring about deficits--or surpluses. Those are a function of the House Appropriations Committee, aka the "Rubber Stamp Brigade". :)
     
  25. Eraserhead macrumors G4

    Eraserhead

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    #25
    Source that lower taxes increase government revenue.

    Edit it seems not: http://www.slate.com/articles/busin...x_cuts_ever_increase_government_revenues.html
    http://taxfoundation.org/blog/income-tax-cuts-increase-growth-reduce-revenue
     

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