A Hedge Fund Republic?

[mookiemookie]

Originally Posted by tater

Pretty stupid op-ed.



The unemployed will spend it at walmart—your fave place. I guess that stimulates China to buy more T-bills, so maybe he's right.

The rich, he says, will "save" the money, not "spend" it. How, pray tell, will the rich save the money? Stuff it into fine linen mattresses? Cause that's what they'd have to do for it not to be spent. That MUST be what he means. If they invest the money it is spent by the companies to grow their business (you know, hire people, buy raw materials, etc). Maybe they WILL waste it by putting it someplace safe—like T-bills or munis. What else might they spend their disposable money on (it is THEIR money, after all we are talking about, just money not confiscated by the feds)? Another house? Who remodels the house? Who builds the furniture? Do they buy stuff to furnish from China at walmart? Do they buy chinese melamine cabinets at lowes? No, they hire a cabinet maker. They buy higher end stuff—the stuff expensive enough that Americans can make money doing the work—craftspeople.

That article is rubbish.

The idea that trickle down economics works is rubbish.

[tater]

Originally Posted by mookiemookie

The idea that trickle down economics works is rubbish.

It works just fine. That's how all economies would be naturally. Any other system is only possible at gunpoint. Black markets are "natural" economies. What do they look like?

My definition of "works" of course is likely different. I have no particular social goal in mind at all other than people get to keep what they earn.

[Ducimus]

I have to admit, i don't see how trickle down works. Not when your 401K match is stopped. You recieve no more raises, no more bonuses, no more nothing. Meanwhile, the big exec types are rolling in clover. Explain that trickle down to me again? Oh right.. i should be grateful im employed at all. I could be in a cardboard box.

[tater]

Originally Posted by Ducimus

I have to admit, i don't see how trickle down works. Not when your 401K match is stopped. You recieve no more raises, no more bonuses, no more nothing. Meanwhile, the big exec types are rolling in clover. Explain that trickle down to me again? Oh right.. i should be grateful im employed at all. I could be in a cardboard box.

Every penny earned by anyone is spent unless it is literally shoved in a hole in the ground or in a mattress.

That exec ends up employing many people outside his actual business employees, just via this spending. He has employees that mow their own lawns... he has 3 lawns, and pays people to mow all of them. The employee hires 0 people, he hires 3! His trophy wife spends a gajillion bucks redecorating the perfectly fine (super nice!) house they just bought in Aspen... the remodellers in Aspen get work redoing a house that doesn't even need to be redone. He has multiple cars. Many made in the US (even if they are a Benz, etc). He buys artisanal cheese, and overpriced organic food, grown locally. The list goes on.

The employee buys stuff fresh off the cargo container at walmart. Go china!

[Ducimus]

Tater,
You do realize that illegal immigration shoots that last paragraph to hell?

[tater]

Originally Posted by Ducimus

Tater,
You do realize that illegal immigration shoots that last paragraph to hell?

I'm for locking up people that hire illegals, and shoot to kill on the border, I'm for fixing that FIRST.

Mookie, "accepted economic theory" pretty much means left-leaning guys in academia.

The real question is if the money is put more effectively into the economy by being spent, or by going through the filter of the government. The government borrows so much, that the overhead just associated with interest on their spending instantly makes it inefficient. Better to not confiscate the moeny, than spend it at XX% on the dollar (even less give all the gov payroll that comes out between collection and expense).

The top 1% makes it sound like you are discussing Oprah and Bill Gates. You're in fact talking about hundreds of thousands of families where wages absolutely = hours worked. Professionals, for example. Every penny they don't pay in taxes will be invested or otherwise spent. They don't have jets, they only sometimes even have a 2d house (in fancy places like Pecos, lol—unlike back east, if someone here has a "cabin"... it's a CABIN). If they lives in CA or NY, they'd be hard-pressed to not spend every penny just to live. Housing is insane in NYC or CA, as ducimus can tell you. It's a million bucks to get a tiny place. 250k in major metro areas is hardly "rich."

[mookiemookie]

Originally Posted by tater

I'm for locking up people that hire illegals, and shoot to kill on the border, I'm for fixing that FIRST.

Mookie, "accepted economic theory" pretty much means left-leaning guys in academia.

The real question is if the money is put more effectively into the economy by being spent, or by going through the filter of the government. The government borrows so much, that the overhead just associated with interest on their spending instantly makes it inefficient. Better to not confiscate the moeny, than spend it at XX% on the dollar (even less give all the gov payroll that comes out between collection and expense).

The top 1% makes it sound like you are discussing Oprah and Bill Gates. You're in fact talking about hundreds of thousands of families where wages absolutely = hours worked. Professionals, for example. Every penny they don't pay in taxes will be invested or otherwise spent. They don't have jets, they only sometimes even have a 2d house (in fancy places like Pecos, lol—unlike back east, if someone here has a "cabin"... it's a CABIN). If they lives in CA or NY, they'd be hard-pressed to not spend every penny just to live. Housing is insane in NYC or CA, as ducimus can tell you. It's a million bucks to get a tiny place. 250k in major metro areas is hardly "rich."

I work in the financial business. We deal with factual and data driven analysis, not theory. If someone is going to propose theory, it needs to be backed up by empirical data. I have never seen one piece of data driven analysis for trickle down economics. All that is ever offered in its defense is idealistic thinking and anecdotal evidence. That doesn't hold water. Therefore, it doesn't work.

[mookiemookie]

Originally Posted by Ducimus

I have to admit, i don't see how trickle down works. Not when your 401K match is stopped. You recieve no more raises, no more bonuses, no more nothing. Meanwhile, the big exec types are rolling in clover. Explain that trickle down to me again? Oh right.. i should be grateful im employed at all. I could be in a cardboard box.

That's the whole point. Proponents say that giving financial incentives to the highest earners are supposed to somehow help out everyone.

If you take money away from someone (i.e. higher taxes) they work harder to replace it. Trickle down economics also relies on the idea that wages have a direct correlation to hours worked - which is not true. Wages are inelastic to hours worked. The majority of people work salaried jobs where their hours are set. A change in wages are not going to equate into a change in hours worked.

Trickle down proponents also say that inequality is supposed to motivate lower earners to work harder to bridge the gap - that doesn't happen. Studies have shown that higher rates of income inequality lead to lower growth rates. Indeed, it's been found that higher equality leads to higher growth rates: http://www.dallasfed.org/research/ec...08/el0801.html

Not to metion that any metric of tax rates, both top marginal and effective (lord knows tater and I have gone round and round about that) do not have any measurable or meaningful correlation to any generally accepted metric of economic prosperity (GDP, wage growth or employment). If you want to weasel around that and use your own strange metric where tax rates do show a correlation, know that it doesn't hold water according to meaningful economic theory.

Trickle down theory fails in terms of both empirical and historical evidence, along with generally accepted economic theory.

Bottom line is if you don't know how many states are in the union you are more than queer. It is much worse than coining refudiate.

[Takeda Shingen]

Originally Posted by The Third Man

Bottom line is if you don't know how many states are in the union you are more than queer. It is much worse than coining refudiate.

Hey, you're the one whining about big words. Refudiate that.

Well counting states and ridicule over words are different. You ridiculed word by Palins, but disregarded states by Obama. Is that not leftist?

I love your man on man love...but marraige is not a right.

[Takeda Shingen]

Originally Posted by The Third Man

Well counting states and ridicule over words are different. You ridiculed word by Palins, but disregarded states by Obama. Is that not leftist?

You're the leftist. Die, pinko-commie.

Originally Posted by Takeda Shingen

You're the leftist. Die, pinko-commie.

Neo-con. Your boogie man. lol.

[Sailor Steve]

The problem I have with the whole thing is people discussing who should be taxed at all. The sole purpose of taxation is that government has no means of producing revenues besides taking it from the citizens. This is a necessary evil, no more and no less. The people who want to make the rich pay "their fair share" are misusing the concept of taxation, period. They tend to hate the businessmen and entrepreneurs for what they have, yet won't hear anything bad said about the congressmen who waste money which isn't even their own. If it was possible for the government to survive with no income tax at all they would still insist we needed them just to keep the rich from "getting away with it".

Originally Posted by Takeda Shingen

Refudiate that.

I think you misconscrewed the whole point.

[Torvald Von Mansee]