Trickle Down Economics is Misunderstood and Straw-Manned

[SigmatheZeta]

Billionaires do not really benefit from the most disadvantages Americans continuously failing to fully get their shit together. It is not a win/lose scenario to fight back against inequality. If a large percent of people are living on meager wages, it is probable that they are not really making the most efficient use of either their time or their energy or their talents. Even the wealthiest Americans do not gain by such waste. The question is only a matter of what investments could most efficiently stimulate growth among those that remain economically disadvantaged.

Imagine you're a one-percenter, already consuming about as much as you can. What's the marginal utility of additional swimming pools vs a set of policies and institutions which preserve your status? You gain nothing from a more productive economy, but stand to lose advantage and power from a more equal distribution.

Unfortunately, social status is zero-sum and that's what those at the top tend to value. So it's unsurprising if they continue to buy failed policies which work for them.

I simply do not adhere to that belief. If I were wasting my time at minimum wage jobs, rather than using my ability to make a stronger contribution to industry, then even the wealthiest Americans ought to be concerned about that.

There is evidence, at this point, that excessive intragenerational inequality really damages overall economic growth.

This paper develops a model of intergenerational mobility and intragenerational
inequality that allows us to explore the relationship between economic growth
and social mobility. The model is used to analyse the neo-liberal theory of stratifi-
cation and to assess the consequences of some of the criticisms that have been
made of it. In particular, the intergenerational transmission of wealth and privi-
lege, and the existence of ethnic, gender and other forms of ascriptive disadvan-
tage, reduce economic efficiency, although they do not always diminish the extent
of social mobility. Furthermore, excessive intragenerational inequality may
inhibit, rather than encourage, economic growth. We show that there is no neces-
sary link between rates of social mobility and levels of economic growth. This, we
suggest, provides an explanation of why rates of social mobility show very little
cross-national variation and display no very evident trend over time towards
greater societal openness.

The British Journal of Sociology, Vol. 48, No. 3 (Sep., 1997), pp. 429-449

https://tyap.net/mediaf/breen_1997_429.pdf

That is ultimately costly to everybody. Jeff Bezos actually should be concerned if the poorest Americans are just not keeping up. He actually should be concerned about that untapped potential. It is not zero sum.

 

[Swammerdami]

This thread leads to many important but difficult questions. For examples:

(1) How hard would it be to institute a "fair" nation-wide real estate tax? This would be a clean way for the government to raise revenue and set priorities but the details would be fraught with peril. If the thread turns to this question I may have nothing to contribute; my response would be "Wise in principle perhaps, but implementation would be too chaotic to contemplate."

(2) How about a wealth tax imposed on the super-rich? Wise in principle perhaps, but as the super-rich themselves point out, they'll convert their wealth into untaxed real estate, paintings, private businesses. Again I have no simple answer.

(3) Corporate taxes should be increased. The recent international agreement on corporate income taxes was a good step in the right direction. (Are small businesses exempt from those mandatory taxes?)

But it's hard to discuss nuanced questions when the thread is filled with nonsense. Partly because I'm by nature a nitpicker, and partly because I don't have good answers for the real questions with their difficult nuances, I will just try to clear up some of the worst confusions.

Nobody would invent anything if there was no profit motive.

Profit motives are Good. But absolute generalizations which are FALSE are annoying.
Tim Berners-Lee invented the "World Wide Web" and deliberately forwent any patent rights. Jonas Salk did the same thing with his vaccine for polio. How many examples do I need?

"Some inventors would not invent if there were no profit motive." Sure; I'll vote for that. "Nobody would invent"? This sort of over-generalization is an obstacle to intelligent debate.

Mr. Generation overlooked that there are taxes other than personal income taxes, but funinspace dealt with that. Another error by Mr. Generation is more interesting, where he asserts something about Musk's $250,000,000,000.00 wealth not being "real." I'd like to ask him — just for starters so we can get a good handle on his confusion — whether Musk's wealth would be "real" if it were all in the form of $100 banknotes or gold bullion. Just as shares of TESLA do not equal a super-yacht — you'd first call up broker and say "Sell" — so the banknotes or gold wouldn't provide a super-yacht directly either: The banknotes would got soggy, and a boat built from gold would sink. In what sense is one form of wealth "real" and another form not?

It's possible Mr. Generation referred to the fact that suddenly liquidating a large portion of TESLA stock would cause that bubble to burst. Sure. And for that reason Mr. Musk may only be able to afford a dozen new palaces or super-yachts per month. Poor Elon?

Whenever the "jobs! jobs! jobs!" babble is spewed out, by Blues or Reds, it's wrong -- whether it's from the "trickle-down" dogmatists, or from the Bernie Sanders and Donald Trump China-bashers.

The taxes have to be increased in order to reduce the federal deficits, which are too high. If we must do the spending, then the taxes have to be increased in order to pay for it. Regardless whether it means fewer jobs. There is no reason to "create jobs" artificially by reducing the tax revenue needed to pay for the budget.

The only legitimate reason to reduce taxes is that we don't need so much revenue to pay for the programs.

You've made this argument before, but repetition doesn't make an incorrect opinion correct. Bump one of the older threads if you need help understanding the fallacies.

[off-topic]

I just read that Elon Musk is worth 250 Big Ones. That's a Quarter-Trillion Dollars. With a T. Wasn't it just 2 or 3 years ago that the first individual joined the $100+ Billion club?

But only on the short scale. He is not worth anything close to a real quarter-trillion dollars (that would be a 250,000 of the short trillions).

... But by the way, does anybody still use "long" billions and trillions? (Merriam-Webster shows the long billion as "British"; Cambridge dictionary shows it as "UK Old-fashioned." But Larousse.fr shows ONLY the long billion!)

 

[Canard DuJour]

Billionaires do not really benefit from the most disadvantages Americans continuously failing to fully get their shit together. It is not a win/lose scenario to fight back against inequality. If a large percent of people are living on meager wages, it is probable that they are not really making the most efficient use of either their time or their energy or their talents. Even the wealthiest Americans do not gain by such waste. The question is only a matter of what investments could most efficiently stimulate growth among those that remain economically disadvantaged.

Imagine you're a one-percenter, already consuming about as much as you can. What's the marginal utility of additional swimming pools vs a set of policies and institutions which preserve your status? You gain nothing from a more productive economy, but stand to lose advantage and power from a more equal distribution.

Unfortunately, social status is zero-sum and that's what those at the top tend to value. So it's unsurprising if they continue to buy failed policies which work for them.

I simply do not adhere to that belief. If I were wasting my time at minimum wage jobs, rather than using my ability to make a stronger contribution to industry, then even the wealthiest Americans ought to be concerned about that.

There is evidence, at this point, that excessive intragenerational inequality really damages overall economic growth.

Certainly - as I've already said.

This paper develops a model of intergenerational mobility and intragenerational
inequality that allows us to explore the relationship between economic growth
and social mobility. The model is used to analyse the neo-liberal theory of stratifi-
cation and to assess the consequences of some of the criticisms that have been
made of it. In particular, the intergenerational transmission of wealth and privi-
lege, and the existence of ethnic, gender and other forms of ascriptive disadvan-
tage, reduce economic efficiency, although they do not always diminish the extent
of social mobility. Furthermore, excessive intragenerational inequality may
inhibit, rather than encourage, economic growth. We show that there is no neces-
sary link between rates of social mobility and levels of economic growth. This, we
suggest, provides an explanation of why rates of social mobility show very little
cross-national variation and display no very evident trend over time towards
greater societal openness.

The British Journal of Sociology, Vol. 48, No. 3 (Sep., 1997), pp. 429-449

https://tyap.net/mediaf/breen_1997_429.pdf

That is ultimately costly to everybody.

Not to people who're already consuming about as much as they can.

Jeff Bezos actually should be concerned if the poorest Americans are just not keeping up. He actually should be concerned about that untapped potential. It is not zero sum.

I didn't say economic growth is zero-sum; I said social status. We can all be better off but we can't all be better off than each other.

 

[SigmatheZeta]

I also believe that attacking inequality ought to be regionally targeted. First, you need to be introduced to my unusual way of thinking: instead of imagining that people living in economically desolate parts of the United States as part of your own country, imagine instead that they are like a foreign country.

Low and middle income countries really benefit the most from redistribution of income because, for the most part, their economies suffer due to low access to education and barriers to advancement, which makes those economies less efficient.

Evidence from a current panel of harmonized worldwide data highlights a robust
negative effect of income inequality on economic growth that we trace back to its
transmission channels. Less equal societies tend to have less educated populations
and higher fertility rates, but not necessarily lower investment shares. The first two
effects are harmful for growth and reinforced by limited credit availability. Higher
public spending on education attenuates the negative effects of inequality. In addi-
tion to the inequality-growth relationship, we examine the direct influence of effective
redistribution. When net inequality is held constant, public redistribution negatively
affects economic growth. Redistribution hampers investment and raises fertility rates.
Combining the negative direct growth effect and the indirect positive effect operat-
ing through lower net inequality, the overall impact of redistribution is insignificant.
Whereas this result stems mainly from advanced economies, redistribution is beneficial
for growth in low and middle-income countries.

Klaus; Scheuermeyer, Philipp (2015) : Income inequality,
economic growth, and the effect of redistribution, W.E.P. - Würzburg Economic Papers, No. 95,
University of Würzburg, Department of Economics, Würzburg

^https://www.econstor.eu/bitstream/10419/114736/1/833477102.pdf

This is a very good article, and everybody should read it. Unlike most people that trade rhetoric on debate forums, I am actually going to prove my views with strong, reasonably within-my-lifetime research because FYIAD. I suggest actually reading these things I post here because my opinions are really very heavily researched, and I have very good reasons for how I think.

*snaps her tail aggressively* Therefore, if someone does not give me the impression that they have at least read and understood the abstract that I posted there, then do not be surprised if I give them the cold shoulder. I consider myself to be profoundly justified in treating somebody in the same way that I would treat any other mentally handicapped troll if they respond without even reading the abstracts of these research papers that I am posting. Whether others believe it or not, there is a rime and a reason to why I am posting these, and it behooves someone that is serious about becoming better informed to actually understand this information.

Let's rip out the entrails of the idea of national borders. They do not exist anymore because Sigma waved her wing and made it so. They are a political fiction that ultimately is not as meaningful as we pretend it is. Borders are really porous, and bilingualism frequently occurs near them. It is simply a fallacy to assume that humans obediently stay within the boxes we attempt to stuff them into. While strong border control policies can theoretically quell movement across borders, there is an upper bound of economic efficiency in doing so.

As a consequence, it is also reasonable, to a certain extent, to treat impoverished regions of the United States in the same way that we would treat a foreign country.

Now, if you have read the abstract, you would notice that redistribution of wealth is not really helpful in countries that have advanced, educated economies. Therefore, let's take New York City: New York City has tremendous wealth inequality, but they are also an economic power house. The reason why is that the inequality in New York City is due to there being greater opportunity there, and when you see opportunity, then I suggest strongly that you be there the "firstest with the mostest." If you are slow to capitalize on existing opportunities, then sucks for you. Get faster. Develop greater agility. I am sorry, but when you see opportunity, then you should move fast to seize it, and do not waste time.

Therefore, New York City follows the trend that we see in advanced economies. Trying to focus on the redistribution of wealth is really not the best route for making New York City grow. They have a mixture of growth and inequality precisely because there really was genuinely a great big pie, there, and some people got there faster than others. As Sun Tzu said, "On contentious ground, I would hurry up my rear."

However, the entire nation is not one big New York City.

As a matter of fact, there are actually less developed regions, in the United States, that have seen relatively poor progress for centuries, and the inequality in those regions of the United States can be largely attributed to a lack of adequate opportunities and insurmountable social and political barriers to advancement.

According to that paper of which you should at least read the abstract, please, it actually might be valuable to address inequality directly in parts of the country that have similar attributes to "low and middle-income countries."

Regionally targeted redistribution policy, especially a policy that is focused on education, is, in my highly informed and eloquently expressed opinion, most likely the right answer to overcoming the problems that tend to be associated with income inequality. I earnestly suspect that it would ultimately benefit the entire nation to help those regions to become engines of productivity.

Whether or not it helps economic growth to focus on redistribution is highly variable according to circumstances, but it is also highly evident that there actually are situations where that inequality is based on entrenched economic inefficiency that ought to be remedied.

 

[TV and credit cards]

I find interesting the comments that assume we are all motivated by money. That Elon Musk would not do what he does for a fraction of what he earns. That nonagenarian Warren Buffett would not do what he does and is still motivated by money. That we would what? All commit ourselves to sloth without financial incentive because that is our natural inclination? I think not. I think this is a false assumption some use to press their argument.
Similarly, I think the assumption the wealthy are all evil moneygrubbers who want to use less advantaged people to their own ends is also a false assumption. While I believe this may be true of some, I believe most do so out of a sense of commitment to their current employees and investors to look at their return on investment. And for this reason, Amazon is not going to concern themselves with the untapped potential of the poor but the untapped labor they need to continue their business. This is why Amazon has Camperforce.

 

[SigmatheZeta]

Furthermore, it is a good personal policy to NOT try to make it in a jungle like New York City unless you already have extensive resources and agility. Without existing power, you are more likely to be somebody's sucker than get ahead. Move to small but fast growing cities that have figured out the meritoriousness of tackling economic inequality under their particular conditions. They will grow extremely fast for a while, and if you move fast, you might actually be able to rise to the top before it becomes more of an urban jungle.

Always be prepared to move fast.

 

[Jimmy Higgins]

Billionaires do not really benefit from the most disadvantages Americans continuously failing to fully get their shit together. It is not a win/lose scenario to fight back against inequality. If a large percent of people are living on meager wages, it is probable that they are not really making the most efficient use of either their time or their energy or their talents. Even the wealthiest Americans do not gain by such waste. The question is only a matter of what investments could most efficiently stimulate growth among those that remain economically disadvantaged.

Imagine you're a one-percenter, already consuming about as much as you can. What's the marginal utility of additional swimming pools vs a set of policies and institutions which preserve your status? You gain nothing from a more productive economy, but stand to lose advantage and power from a more equal distribution.

Unfortunately, social status is zero-sum and that's what those at the top tend to value. So it's unsurprising if they continue to buy failed policies which work for them.

As a reminder, a 1%'er makes on average, $1.6 million. The poor among 1% earners is $545,000 a year.

 

[TomC]

The taxes have to be increased in order to reduce the federal deficits, which are too high. If we must do the spending, then the taxes have to be increased in order to pay for it. Regardless whether it means fewer jobs. There is no reason to "create jobs" artificially by reducing the tax revenue needed to pay for the budget.

This is one of the big reasons I stopped supporting the Republican Party. They became the Party of fiscal insanity.

The Democrats are still largely about "Tax and Spend". But the Republicans have become about "Borrow and Spend". The only time the Republicans care about deficits is when the government is doing stuff for the American people as a whole. When they're supporting corporate welfare or buying votes they're happy to let the grandkids pay it off.
Tom

 

[laughing dog]

Whenever the "jobs! jobs! jobs!" babble is spewed out, by Blues or Reds, it's wrong -- whether it's from the "trickle-down" dogmatists, or from the Bernie Sanders and Donald Trump China-bashers.

The taxes have to be increased in order to reduce the federal deficits, which are too high. If we must do the spending, then the taxes have to be increased in order to pay for it. Regardless whether it means fewer jobs. There is no reason to "create jobs" artificially by reducing the tax revenue needed to pay for the budget.

The only legitimate reason to reduce taxes is that we don't need so much revenue to pay for the programs.

Federal deficits can be reduced by making sure that the rate of increase in spending is slower than the rate of growth in tax revenue. That does not require an increase in tax rates.

 

[bilby]

Whenever the "jobs! jobs! jobs!" babble is spewed out, by Blues or Reds, it's wrong -- whether it's from the "trickle-down" dogmatists, or from the Bernie Sanders and Donald Trump China-bashers.

The taxes have to be increased in order to reduce the federal deficits, which are too high. If we must do the spending, then the taxes have to be increased in order to pay for it. Regardless whether it means fewer jobs. There is no reason to "create jobs" artificially by reducing the tax revenue needed to pay for the budget.

The only legitimate reason to reduce taxes is that we don't need so much revenue to pay for the programs.

Federal deficits can be reduced by making sure that the rate of increase in spending is slower than the rate of growth in tax revenue. That does not require an increase in tax rates.

But first someone would need to establish that reducing federal deficits is a worthwhile thing to want to do.

What, exactly, is the reason why these deficits need to be reduced? What is the benefit of doing so? What harm is the deficit doing to anyone?

None of the things that make a personal or household debt undesirable applies to the federal deficit. It's essentially just an accountancy term of art to describe it as a debt at all - it meets their definition of a debt, but for those of us who don't fetishise double-entry bookkeeping, it's really not similar to the other debts with which we may be familiar in any important way.

 

[Jarhyn]

Whenever the "jobs! jobs! jobs!" babble is spewed out, by Blues or Reds, it's wrong -- whether it's from the "trickle-down" dogmatists, or from the Bernie Sanders and Donald Trump China-bashers.

The taxes have to be increased in order to reduce the federal deficits, which are too high. If we must do the spending, then the taxes have to be increased in order to pay for it. Regardless whether it means fewer jobs. There is no reason to "create jobs" artificially by reducing the tax revenue needed to pay for the budget.

The only legitimate reason to reduce taxes is that we don't need so much revenue to pay for the programs.

Federal deficits can be reduced by making sure that the rate of increase in spending is slower than the rate of growth in tax revenue. That does not require an increase in tax rates.

But first someone would need to establish that reducing federal deficits is a worthwhile thing to want to do.

What, exactly, is the reason why these deficits need to be reduced? What is the benefit of doing so? What harm is the deficit doing to anyone?

None of the things that make a personal or household debt undesirable applies to the federal deficit. It's essentially just an accountancy term of art to describe it as a debt at all - it meets their definition of a debt, but for those of us who don't fetishise double-entry bookkeeping, it's really not similar to the other debts with which we may be familiar in any important way.

As said before and said again, it is a debt to the void which money itself came from. We owe it back no more than we owe the big bang our entropy back. That's just silly. It will get paid when we stop needing to play with our Monopoly money to figure out merit.

 

[Generation55]

This thread leads to many important but difficult questions. For examples:

(1) How hard would it be to institute a "fair" nation-wide real estate tax? This would be a clean way for the government to raise revenue and set priorities but the details would be fraught with peril. If the thread turns to this question I may have nothing to contribute; my response would be "Wise in principle perhaps, but implementation would be too chaotic to contemplate."

(2) How about a wealth tax imposed on the super-rich? Wise in principle perhaps, but as the super-rich themselves point out, they'll convert their wealth into untaxed real estate, paintings, private businesses. Again I have no simple answer.

Why do Democrats always seem to want to constantly tax the the people into oblivion? This isn't good. Do you realize taxes on estates are paid multiple times throughout a person's life? If a person has a house and has been taxed on it all their life and wants to give it to their kids, why should the government tax it again? This is way too authoritarian.

I feel like both parties are bad, but I feel like the Republicans at least care about the average worker and the middle class. The Democrats keep taxing, which makes the middle class and poor suffer. Look at how the Democrats policies led to inflation and the average middle class family is spending $175 more a month compared to when trump was in office. Gas has also risen over $1 a gallon since Trump. Do the rich care about gas price increases? No, but the middle class and poor people care about it, and that's who it affects the most. Do Democrats care? Not much. Jen Psaki was laughing at a reporter who asked her what the administration plans to do about inflation crushing the middle class and poor. Who gets hurt the most when prices go up by a few dollars? Not the rich, that's for sure.

Republicans want to tax less so people keep more of their money. Do you realize we have spent 22 trillion dollars (almost the price of our national debt) just to combat poverty since the 1960's? It's not working. People are still stealing from stores all over, despite the fact that we have one of the most generous welfare systems in the world. There's people who have $2,000 balance on their food stamp cards and people are still saying that we can't feed the poor? Ridiculous. If we brought any poor person here from another third world country, they would be in shock and awe and say that the poor live like kings in this country. We need to get everyone back to reality. Taxing the people and putting the incompetent government in charge of the money has done absolutely nothing to help the poor and middle class. The only time they get relief is when a Republican is in office. Why do you think so many Biden voters disapprove of him now and he's at an all-time low? Republicans warned of massive inflation if Biden got in office. Democrats laughed. Now, here we are. Do you think this inflatiion would've happened under Trump? All those ships stuck in ports, he wol've been on TV every day screaming at them to unload and lighting a fire under them to mvoe quickly. What does Biden do? Nothing. Tells us to, "wait it out." Say what you want about Trump, but he held people accountable. If you weren't doing your job, he fired you. That's it. Done.

I need to be convinced that the very authoritarian government rule via crushing taxation does anything to help the people. If you look up corporate donations, Democrats take more dark money than Republicans do by a long shot. Democrats are the party of big government and they also have corporate America in their pockets. Corporate America hates Republicans.

 

[SigmatheZeta]

Billionaires do not really benefit from the most disadvantages Americans continuously failing to fully get their shit together. It is not a win/lose scenario to fight back against inequality. If a large percent of people are living on meager wages, it is probable that they are not really making the most efficient use of either their time or their energy or their talents. Even the wealthiest Americans do not gain by such waste. The question is only a matter of what investments could most efficiently stimulate growth among those that remain economically disadvantaged.

Imagine you're a one-percenter, already consuming about as much as you can. What's the marginal utility of additional swimming pools vs a set of policies and institutions which preserve your status? You gain nothing from a more productive economy, but stand to lose advantage and power from a more equal distribution.

Unfortunately, social status is zero-sum and that's what those at the top tend to value. So it's unsurprising if they continue to buy failed policies which work for them.

I simply do not adhere to that belief. If I were wasting my time at minimum wage jobs, rather than using my ability to make a stronger contribution to industry, then even the wealthiest Americans ought to be concerned about that.

There is evidence, at this point, that excessive intragenerational inequality really damages overall economic growth.

Certainly - as I've already said.

This paper develops a model of intergenerational mobility and intragenerational
inequality that allows us to explore the relationship between economic growth
and social mobility. The model is used to analyse the neo-liberal theory of stratifi-
cation and to assess the consequences of some of the criticisms that have been
made of it. In particular, the intergenerational transmission of wealth and privi-
lege, and the existence of ethnic, gender and other forms of ascriptive disadvan-
tage, reduce economic efficiency, although they do not always diminish the extent
of social mobility. Furthermore, excessive intragenerational inequality may
inhibit, rather than encourage, economic growth. We show that there is no neces-
sary link between rates of social mobility and levels of economic growth. This, we
suggest, provides an explanation of why rates of social mobility show very little
cross-national variation and display no very evident trend over time towards
greater societal openness.

The British Journal of Sociology, Vol. 48, No. 3 (Sep., 1997), pp. 429-449

https://tyap.net/mediaf/breen_1997_429.pdf

That is ultimately costly to everybody.

Not to people who're already consuming about as much as they can.

Jeff Bezos actually should be concerned if the poorest Americans are just not keeping up. He actually should be concerned about that untapped potential. It is not zero sum.

I didn't say economic growth is zero-sum; I said social status. We can all be better off but we can't all be better off than each other.

I only really see that attitude among members of the lower middle class that think they are 1% because they have some retirement savings. I think that emotional dependence upon schadenfreude is less of a problem among the seriously wealthy. I will not deny that it does not occur, but I doubt that it's a primary governing motive.

 

[Metaphor]

it's really not similar to the other debts with which we may be familiar in any important way.

So, if a government defaulted on its debt, it would have no consequences to that government or that country?

 

[SigmatheZeta]

This thread leads to many important but difficult questions. For examples:

(1) How hard would it be to institute a "fair" nation-wide real estate tax? This would be a clean way for the government to raise revenue and set priorities but the details would be fraught with peril. If the thread turns to this question I may have nothing to contribute; my response would be "Wise in principle perhaps, but implementation would be too chaotic to contemplate."

(2) How about a wealth tax imposed on the super-rich? Wise in principle perhaps, but as the super-rich themselves point out, they'll convert their wealth into untaxed real estate, paintings, private businesses. Again I have no simple answer.

Why do Democrats always seem to want to constantly tax the the people into oblivion?

If the government is spending money, then I certainly hope that they are raising taxes in order to pay for it.

 

[SigmatheZeta]

The taxes have to be increased in order to reduce the federal deficits, which are too high. If we must do the spending, then the taxes have to be increased in order to pay for it. Regardless whether it means fewer jobs. There is no reason to "create jobs" artificially by reducing the tax revenue needed to pay for the budget.

This is one of the big reasons I stopped supporting the Republican Party. They became the Party of fiscal insanity.

The Democrats are still largely about "Tax and Spend". But the Republicans have become about "Borrow and Spend". The only time the Republicans care about deficits is when the government is doing stuff for the American people as a whole. When they're supporting corporate welfare or buying votes they're happy to let the grandkids pay it off.
Tom

That is the tragedy of our current system, unfortunately. Whether or not you agree with big spending is a different story.

There are certain programs that I really do want the government to spend money on. I love scientific research. That is my pet thing. I care about that substantially more than I care about the welfare state. Nevertheless, I know that other people also have their pet things, and we have to share space with each other in the budget.

However, whether you agree or disagree with certain spending is a legitimate topic. It is something tangible that we can talk about.

When politicos promise tax cuts, I ask them, "How do you intend to pay for it?" When a politician does not want to tell you the price of something, then you should be wary of their motives. When a politician promises a tax-cut but does not talk about what is being cut from the budget in order to pay for that tax-cut, then I bristle.

A politician might as well go up behind a podium and say, "a chicken in every pot, a car in every garage." That was what Herbert Hoover said in 1928, the year before the economy tanked. Those infamous words of Herbert Hoover ought to come to mind whenever you hear politicians promising tax-cuts without discussing how they really intend to pay for those tax-cuts.

 

[bilby]

This thread leads to many important but difficult questions. For examples:

(1) How hard would it be to institute a "fair" nation-wide real estate tax? This would be a clean way for the government to raise revenue and set priorities but the details would be fraught with peril. If the thread turns to this question I may have nothing to contribute; my response would be "Wise in principle perhaps, but implementation would be too chaotic to contemplate."

(2) How about a wealth tax imposed on the super-rich? Wise in principle perhaps, but as the super-rich themselves point out, they'll convert their wealth into untaxed real estate, paintings, private businesses. Again I have no simple answer.

Why do Democrats always seem to want to constantly tax the the people into oblivion? This isn't good. Do you realize taxes on estates are paid multiple times throughout a person's life? If a person has a house and has been taxed on it all their life and wants to give it to their kids, why should the government tax it again? This is way too authoritarian.

I feel like both parties are bad, but I feel like the Republicans at least care about the average worker and the middle class. The Democrats keep taxing, which makes the middle class and poor suffer. Look at how the Democrats policies led to inflation and the average middle class family is spending $175 more a month compared to when trump was in office. Gas has also risen over $1 a gallon since Trump. Do the rich care about gas price increases? No, but the middle class and poor people care about it, and that's who it affects the most. Do Democrats care? Not much. Jen Psaki was laughing at a reporter who asked her what the administration plans to do about inflation crushing the middle class and poor. Who gets hurt the most when prices go up by a few dollars? Not the rich, that's for sure.

Republicans want to tax less so people keep more of their money. Do you realize we have spent 22 trillion dollars (almost the price of our national debt) just to combat poverty since the 1960's? It's not working. People are still stealing from stores all over, despite the fact that we have one of the most generous welfare systems in the world. There's people who have $2,000 balance on their food stamp cards and people are still saying that we can't feed the poor? Ridiculous. If we brought any poor person here from another third world country, they would be in shock and awe and say that the poor live like kings in this country. We need to get everyone back to reality. Taxing the people and putting the incompetent government in charge of the money has done absolutely nothing to help the poor and middle class. The only time they get relief is when a Republican is in office. Why do you think so many Biden voters disapprove of him now and he's at an all-time low? Republicans warned of massive inflation if Biden got in office. Democrats laughed. Now, here we are. Do you think this inflatiion would've happened under Trump? All those ships stuck in ports, he wol've been on TV every day screaming at them to unload and lighting a fire under them to mvoe quickly. What does Biden do? Nothing. Tells us to, "wait it out." Say what you want about Trump, but he held people accountable. If you weren't doing your job, he fired you. That's it. Done.

I need to be convinced that the very authoritarian government rule via crushing taxation does anything to help the people. If you look up corporate donations, Democrats take more dark money than Republicans do by a long shot. Democrats are the party of big government and they also have corporate America in their pockets. Corporate America hates Republicans.

Taxes are a mechanism to prevent spending from causing high inflation.

To argue simultaneously for lower taxes and lower inflation, without a mechanism to avoid the inflation inherent in lower taxes, is to demonstrate conclusively that you are incompetent to have an opinion on the matter.

Taxes are a response to spending. They destroy some of the money created by spending, and thereby prevent an oversupply of money, which would be inflationary.

Spending doesn't require taxation, but ceteris paribus, spending without taxation leads to higher prices.

Well targeted spending can cause an economic stimulus that reduces the need for taxation by soaking up the excess money in productive effort, so it's not necessary to tax as much as was spent. That's the reason for the existence of the deficit in the first place.

 

[Generation55]

The taxes have to be increased in order to reduce the federal deficits, which are too high. If we must do the spending, then the taxes have to be increased in order to pay for it. Regardless whether it means fewer jobs. There is no reason to "create jobs" artificially by reducing the tax revenue needed to pay for the budget.

This is one of the big reasons I stopped supporting the Republican Party. They became the Party of fiscal insanity.

The Democrats are still largely about "Tax and Spend". But the Republicans have become about "Borrow and Spend". The only time the Republicans care about deficits is when the government is doing stuff for the American people as a whole. When they're supporting corporate welfare or buying votes they're happy to let the grandkids pay it off.
Tom

That is the tragedy of our current system, unfortunately. Whether or not you agree with big spending is a different story.

There are certain programs that I really do want the government to spend money on. I love scientific research. That is my pet thing. I care about that substantially more than I care about the welfare state. Nevertheless, I know that other people also have their pet things, and we have to share space with each other in the budget.

However, whether you agree or disagree with certain spending is a legitimate topic. It is something tangible that we can talk about.

When politicos promise tax cuts, I ask them, "How do you intend to pay for it?" When a politician does not want to tell you the price of something, then you should be wary of their motives. When a politician promises a tax-cut but does not talk about what is being cut from the budget in order to pay for that tax-cut, then I bristle.

A politician might as well go up behind a podium and say, "a chicken in every pot, a car in every garage." That was what Herbert Hoover said in 1928, the year before the economy tanked. Those infamous words of Herbert Hoover ought to come to mind whenever you hear politicians promising tax-cuts without discussing how they really intend to pay for those tax-cuts.

usually conservatives say they will cut welfare. Trump cut food stamps and this resulted in the lowest unemployment rate for black people in history. Why? Turns out paying people to stay home and not work leads to fewer people going out and looking for jobs. Take away some benefits and it lights a fire under them to get out there and work for their fellow man, just like everyone else in the world. Seems like common sense.

You cut a majority of welfare (not saying all of it) and the economy will boom like never before.

 

[SigmatheZeta]

This thread leads to many important but difficult questions. For examples:

(1) How hard would it be to institute a "fair" nation-wide real estate tax? This would be a clean way for the government to raise revenue and set priorities but the details would be fraught with peril. If the thread turns to this question I may have nothing to contribute; my response would be "Wise in principle perhaps, but implementation would be too chaotic to contemplate."

(2) How about a wealth tax imposed on the super-rich? Wise in principle perhaps, but as the super-rich themselves point out, they'll convert their wealth into untaxed real estate, paintings, private businesses. Again I have no simple answer.

Why do Democrats always seem to want to constantly tax the the people into oblivion? This isn't good. Do you realize taxes on estates are paid multiple times throughout a person's life? If a person has a house and has been taxed on it all their life and wants to give it to their kids, why should the government tax it again? This is way too authoritarian.

I feel like both parties are bad, but I feel like the Republicans at least care about the average worker and the middle class. The Democrats keep taxing, which makes the middle class and poor suffer. Look at how the Democrats policies led to inflation and the average middle class family is spending $175 more a month compared to when trump was in office. Gas has also risen over $1 a gallon since Trump. Do the rich care about gas price increases? No, but the middle class and poor people care about it, and that's who it affects the most. Do Democrats care? Not much. Jen Psaki was laughing at a reporter who asked her what the administration plans to do about inflation crushing the middle class and poor. Who gets hurt the most when prices go up by a few dollars? Not the rich, that's for sure.

Republicans want to tax less so people keep more of their money. Do you realize we have spent 22 trillion dollars (almost the price of our national debt) just to combat poverty since the 1960's? It's not working. People are still stealing from stores all over, despite the fact that we have one of the most generous welfare systems in the world. There's people who have $2,000 balance on their food stamp cards and people are still saying that we can't feed the poor? Ridiculous. If we brought any poor person here from another third world country, they would be in shock and awe and say that the poor live like kings in this country. We need to get everyone back to reality. Taxing the people and putting the incompetent government in charge of the money has done absolutely nothing to help the poor and middle class. The only time they get relief is when a Republican is in office. Why do you think so many Biden voters disapprove of him now and he's at an all-time low? Republicans warned of massive inflation if Biden got in office. Democrats laughed. Now, here we are. Do you think this inflatiion would've happened under Trump? All those ships stuck in ports, he wol've been on TV every day screaming at them to unload and lighting a fire under them to mvoe quickly. What does Biden do? Nothing. Tells us to, "wait it out." Say what you want about Trump, but he held people accountable. If you weren't doing your job, he fired you. That's it. Done.

I need to be convinced that the very authoritarian government rule via crushing taxation does anything to help the people. If you look up corporate donations, Democrats take more dark money than Republicans do by a long shot. Democrats are the party of big government and they also have corporate America in their pockets. Corporate America hates Republicans.

Taxes are a mechanism to prevent spending from causing high inflation.

To argue simultaneously for lower taxes and lower inflation, without a mechanism to avoid the inflation inherent in lower taxes, is to demonstrate conclusively that you are incompetent to have an opinion on the matter.

Taxes are a response to spending. They destroy some of the money created by spending, and thereby prevent an oversupply of money, which would be inflationary.

Spending doesn't require taxation, but ceteris paribus, spending without taxation leads to higher prices.

Well targeted spending can cause an economic stimulus that reduces the need for taxation by soaking up the excess money in productive effort, so it's not necessary to tax as much as was spent. That's the reason for the existence of the deficit in the first place.

Would you care to provide a source for the relationship you say there is between inflation and taxation? I would like to read more about this.

 

[Canard DuJour]

Billionaires do not really benefit from the most disadvantages Americans continuously failing to fully get their shit together. It is not a win/lose scenario to fight back against inequality. If a large percent of people are living on meager wages, it is probable that they are not really making the most efficient use of either their time or their energy or their talents. Even the wealthiest Americans do not gain by such waste. The question is only a matter of what investments could most efficiently stimulate growth among those that remain economically disadvantaged.

Imagine you're a one-percenter, already consuming about as much as you can. What's the marginal utility of additional swimming pools vs a set of policies and institutions which preserve your status? You gain nothing from a more productive economy, but stand to lose advantage and power from a more equal distribution.

Unfortunately, social status is zero-sum and that's what those at the top tend to value. So it's unsurprising if they continue to buy failed policies which work for them.

I simply do not adhere to that belief. If I were wasting my time at minimum wage jobs, rather than using my ability to make a stronger contribution to industry, then even the wealthiest Americans ought to be concerned about that.

There is evidence, at this point, that excessive intragenerational inequality really damages overall economic growth.

Certainly - as I've already said.

This paper develops a model of intergenerational mobility and intragenerational
inequality that allows us to explore the relationship between economic growth
and social mobility. The model is used to analyse the neo-liberal theory of stratifi-
cation and to assess the consequences of some of the criticisms that have been
made of it. In particular, the intergenerational transmission of wealth and privi-
lege, and the existence of ethnic, gender and other forms of ascriptive disadvan-
tage, reduce economic efficiency, although they do not always diminish the extent
of social mobility. Furthermore, excessive intragenerational inequality may
inhibit, rather than encourage, economic growth. We show that there is no neces-
sary link between rates of social mobility and levels of economic growth. This, we
suggest, provides an explanation of why rates of social mobility show very little
cross-national variation and display no very evident trend over time towards
greater societal openness.

The British Journal of Sociology, Vol. 48, No. 3 (Sep., 1997), pp. 429-449

https://tyap.net/mediaf/breen_1997_429.pdf

That is ultimately costly to everybody.

Not to people who're already consuming about as much as they can.

Jeff Bezos actually should be concerned if the poorest Americans are just not keeping up. He actually should be concerned about that untapped potential. It is not zero sum.

I didn't say economic growth is zero-sum; I said social status. We can all be better off but we can't all be better off than each other.

I only really see that attitude among members of the lower middle class that think they are 1% because they have some retirement savings. I think that emotional dependence upon schadenfreude is less of a problem among the seriously wealthy. I will not deny that it does not occur, but I doubt that it's a primary governing motive.

I doubt it too. "Emotional dependence upon schadenfreude" is a different motive from preserving one's advantage and power.

I also doubt that you observe the policy-buying class first hand, unless you're in it.