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On February 08 2015 04:18 GreenHorizons wrote:
Anyone know how to get wealth without income?
Wealth isn't taxed to pay for social security, nor does social security transfer the ownership of wealth. Social security is retirement income that is largely spent. I sure hope you aren't arguing that we spend wealth to boost consumption. But I really don't know what you are arguing. No one has argued to cut down the bottom 80's wealth. Social security is not counted as wealth. Maybe you think it should be? I really don't know, as your post was nonsense.
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On February 08 2015 04:32 JonnyBNoHo wrote:
I sure hope you aren't arguing that we spend wealth to boost consumption.
A wealth tax to distribute wealth to the lower classes where it will be turned into consumption or in other words economic growth sounds like a pretty reasonable idea. Wealth disparity has by several sources been identified as a mechanism that hampers economic growth in the developed world.
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I'd be highly surprised if there isn't a very large correlation between wealth and income.
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On February 08 2015 04:50 Nyxisto wrote:Show nested quote +On February 08 2015 04:32 JonnyBNoHo wrote:
I sure hope you aren't arguing that we spend wealth to boost consumption. A wealth tax to distribute wealth to the lower classes where it will be turned into consumption or in other words economic growth sounds like a pretty reasonable idea. Wealth disparity has by several sources been identified as a mechanism that hampers economic growth in the developed world.
In the long or medium run turning wealth into consumption results in negative growth. It's only beneficial if in the short run you have a lack of demand leading to idle capacity. E.g. this is a short-run stimulus.
I don't think we're talking about a short-run tax policy and I don't think the US economy is in need of a stimulus right now either.
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Why would turning wealth into consumption result in less growth in the future? Especially because the wealthiest families/companies whatever have hoarded so much wealth that it's literally doing nothing besides sitting around?
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On February 08 2015 05:05 Nyxisto wrote:
Why would turning wealth into consumption result in less growth in the future? Especially because the wealthiest families/companies whatever have hoarded so much wealth that it's literally doing nothing besides sitting around?
Because that money isn't doing nothing. Its not like Warren Buffet has stacks of dollar bills just sitting in a vault in his house somewhere. It's invested. Some of it is in bank accounts, which banks then use to give loans. The rest of it is in the stock exchange. Practically none of his money is "doing nothing". Increased consumption means less investment in stocks and less money in bank accounts, which means less money to loan to entrepreneurs.
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more consumptions = more revenue for firms = more capital for them to use.
But yes, the Banks would lose out and we can't have that... It would probably also lower the BIP... The dumbest number ever invented.
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Also a lot of money that has been moved offshore is doing nothing for the respective economies it has been moved out of. US entrepreneurs do not profit from the two trillion dollars of wealth that have been moved out of the country.
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On February 08 2015 05:16 Velr wrote:
more consumptions = more revenue for firms = more capital for them to use.
But yes, the Banks would lose out and we can't have that... It would probably also lower the BIP... The dumbest number ever invented.
Bear with me, it's been a long time since econ 101.
Simple economy:
GDP = (C)onsumption + (I)nvestment
Increaseing C decreases I. In the short-run increasing C can increase GDP without causing I to decrease, but only if you have idle capacity. When we talk about the long-run GDP is around potential, so there isn't spare capacity laying around.
Without spare capacity you have a budgetary constraint. More money spent on C means less spent on something else, which in this case is I.
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On February 08 2015 05:27 Nyxisto wrote:
Also a lot of money that has been moved offshore is doing nothing for the respective economies it has been moved out of. US entrepreneurs do not profit from the two trillion dollars of wealth that have been moved out of the country.
Two trillion dollars of wealth wasn't moved out of the country. That figure is corporate overseas profits - so money made by GM, Apple or whoever's subsidiaries in the EU, China, etc. That money isn't completely locked out of the US either. The subsidiary can park the money in a foreign bank, which can then lend to the US.
Changing US tax law to bring that money home would mean a marginal increase in the preference for US investment, and maybe some extra tax revenue, but it wouldn't be $2T in new cash flooding in.
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On February 08 2015 04:18 GreenHorizons wrote:
Anyone know how to get wealth without income?
Be offered more for something you already own and already have paid taxes on. Even if you dont take the offer.
For example the market might offer 10% more for Berkshire Hathaway but only took home a salary of 100k. Do you ask him to pay 2 billion in taxes because his wealth increased 6bn even though he only has 100k in the bank?
How about the kid that inherited a copy of action comics 1 At a million dollars? If another copy goes for auction next year for 2 million does the tax man force him to sell his house to pay the 3-400k he owes in taxes because his wealth has increased by a million.
Wealth =/= income.
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Those are percentage shifts. Increasing spending on entitlements is not the same as cutting spending on other things. This is usually the kind of stuff you correct other people on jonny.
The biggest shift seems to be in defense spending. Are you arguing for more defense spending in place of entitlements?
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Cayman Islands24199 Posts
disability insurance is, the more i look at it, a mess. don't think there will be drastic ss reform outside of some chained inflation/slight raise in retirement age.
wealth generating passive income for the super wealthy is not good for any economy. especially when that wealth isn't in the real economy but playing poker on the financial markets.
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Again, money in the stock market isn't just doing nothing. Companies sell stock to raise money for things. It's not like they're literally playing poker with the money. Yes, there's risk, but every stock they buy is an investment in the company of that stock.
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There's more to the financial markets than stock.
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On February 08 2015 07:42 IgnE wrote:Those are percentage shifts. Increasing spending on entitlements is not the same as cutting spending on other things. This is usually the kind of stuff you correct other people on jonny. The biggest shift seems to be in defense spending. Are you arguing for more defense spending in place of entitlements?
Not sure what you're correcting me on. I wrote that entitlements have had the spending priority and that they've pushed aside other spending. That dynamic is shown in the NPR chart. If you think there's a difference between my statement and the chart, that's a failure on your end, not mine.
If you still think I got something wrong, just post the numbers.
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On February 08 2015 09:55 farvacola wrote:
There's more to the financial markets than stock.
Sure but it's the same dynamic that Millitron pointed out, more or less.
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"more or less"
Indeed, that's all there is to it.
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Cayman Islands24199 Posts
On February 08 2015 10:01 JonnyBNoHo wrote:Show nested quote +On February 08 2015 09:55 farvacola wrote:
There's more to the financial markets than stock. Sure but it's the same dynamic that Millitron pointed out, more or less.
talking about increasing trend of financialization. some of it is productive but the more significant activity is the unproductive poker game.
in general where there is advantage there is excessive profit or rent, for finance the whole implicit subsidy of size and importance to economy allows risk taking on society's dime.
outside of all this, having a bunch of dudes skimming 10% or whatever because they own stuff but do not actually do any productive work is just a drain on the economy. could tax that stuff heavily without much distortion
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On February 08 2015 10:06 farvacola wrote:
"more or less"
Indeed, that's all there is to it.
... har har?
Maybe you could raise a specific point? Stock, bond, commodity markets - they all serve important roles in the real economy.
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