EPTIn a purely free market this wouldn't happen. There would be no cluster of errors. The boom-bust cycle is generated by monetary intervention in the market, specifically bank credit expansion to business.
The US debt (proper debate) - Page 30
| Forum Index > General Forum |
|
BestZergOnEast
Canada358 Posts
In a purely free market this wouldn't happen. There would be no cluster of errors. The boom-bust cycle is generated by monetary intervention in the market, specifically bank credit expansion to business. | ||
|
Expurgate
United States208 Posts
On July 28 2011 09:14 BestZergOnEast wrote: The first question concerning the business cycle is "why is there a sudden general cluster of business errors?". Things are going smoothly and then kablamo, conditions change and the majority start taking losses. Their forecasting was off. Why? In a purely free market this wouldn't happen. There would be no cluster of errors. The boom-bust cycle is generated by monetary intervention in the market, specifically bank credit expansion to business. The Austrian Theory of Trade Cycles is not relevant to our current discussion of the U.S. debt. I have no further interest in attempting to foist reality on another Mises clone. | ||
|
ilovelings
Argentina776 Posts
I just had dinner  , but as they say in my country : What was promised, is also a debt.http://home.sprynet.com/~owl1/rand5.htm This is a entirely LOGICAL criticism to all libertarian ideas. Basically Spock meets ayn rands  It is really long but because its pure vulcan logic it cannot be debated. | ||
|
BestZergOnEast
Canada358 Posts
http://mises.org/rothbard/newlibertywhole.asp This is a great book that basically explains libertarianism from the ground up. A very important book by the most important intellectual of the 20th century. What did you have for dinner? I recently ate some shrimp / sausage Jumbalya that was quite tasty. Also Rand despised libertarians. She calls us "the hippies of the right". | ||
|
JonnyBNoHo
United States6277 Posts
On July 24 2011 04:25 farvacola wrote: Having people recognize the burgeoning debt as a problem is not the issue, not here in the US anyway. From what I gather, a huge number of people consider debt in general to be a horrible, terrible thing, when in fact the role that it plays in a healthy economy is vastly misunderstood. Unfortunately, partisan politics here in the United States revolves around buzzwords and "hot topic" issues, and for conservatives, the national debt is an easy jumping off point, as it allows them to attack taxes and government infrastructure all at once. Furthermore, instead of actually attempting to educate the masses in regards to the nature and function of debt in a healthy economy, they boil these issues down to mere "yes/no" or "good/bad" questions, further hurting any actual understanding, The worst part of all this, far and away, is how a huge number of Americans blame the lower and middle classes for the debt problem. Republican fear-mongering in regards to government programs has created a horrible socio-political environment, one in which those who are on desperate times are somehow most responsible for the nation's debt. Take this scenario for instance: A lot of republicans like to cite the recent data that suggests that 47% of Americans avoided federal income tax entirely, be it through entitlements or deductions that are part of the social safety-net. (additionally, a great many people think that all recipients of welfare or medicare are drug addicted pariahs, when in fact are usually simply disadvantaged minorities.) Anyways, back to the point. That 47% that avoided federal income tax? They make up a combined 2.99% of the economy in monetary terms, meaning that even if that entire 47% were properly taxed it would be a mere drop in the bucket. So, one may ask, where is the debt coming from, who isn't paying up? The answer is obvious and simple, big business. Corporations are singlehandedly killing this country through their tax evasion and savvy tactics, and if you doubt me, here is a small sampling of companies and their avoided government dues. 1) Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings. 2) Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion. 3) Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS. 4) Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009. The list goes on and on, some analysts suggest that if businesses in the US were held accountable for moving taxable infrastructure overseas and avoiding proper taxation, literally EVERY SINGLE monetary problem would be solved, and the national debt could be totally annihilated in a few years. In the end, the problem is political in nature. The people of the United States have the means necessary to solve these financial problems, only the maneuvering of political parties (mostly Republicans but Democrats are just as guilty for not bringing these issues to the forefront) occludes the visibility of those in power taking advantage of those who are not, and instead we are endlessly embroiled in class and racial conflict, all in the name of partisan politics. inb4 TL;DR lol BS!!!! Corporations do not receive refunds from the IRS on their income taxes. If a corporation loses money they can carry the loss forward to offset profits in future years. It's not a cash payment from the IRS. These loss-carry forwards are then held on the balance sheet until used - and if the company expects they will not earn a profit anytime soon they have to write them off (happened to General Motors before bankruptcy). Fact-checking here off of the SEC's EDGAR database... FYI this is for total income taxes paid which includes state / local / foreign (if applicable). 1) In 2009 Exxon's income before tax was $34 Billion Taxes paid were $15 Billion Net after tax $19 Billion (Tax rate of 47%) 2) Banks are complicated. In 2009 like you said they made $4.4 Billion in profits and recieved a $1.9 Billion loss carry-forward yet in 2010 they LOST $1.3 Billion and paid $915 Million in taxes. I'm not going to list all the reasons why this is the case... because I'm too lazy ;-) I think on average they pay about 35% (could be wrong here I didn't do the math). 3) GE is extremely good at taking advantage of legitimate tax loopholes - don't like it myself but perfectly legal. That said last year they paid $1 Billion in income taxes - of course that is not all to the US government but to 250 global tax jurisdictions involving 6,400 tax returns. Part of the issue is that as a global company they pay taxes in whatever jurisdiction they do the business in so not everything goes to the US government. Also, they can "pick and choose" what jurisdiction (be it US or China or whatever) they do certain business in to take advantage of tax credits / lower rates. 4) I don't see this information at all... 2010 paid $18 Billion in "taxes other than income" and $13 Billion in income taxes ... similar information for 2009 and 2008.... Hope this helps clear things up... Also, I totally agree that the whole "poor don't pay taxes" matra is complete BS. Tax the rich more on investment income - they've dodged taxes by "shifting" their income from salary to more tax-friendly forms (dividends and capital gains mostly). Many, many wealthy Americans agree that they aren't paying their fair share. Spending cuts are very necessary too, however. Total government spending (federal state and local) is about 40% of GDP - almost half the economy! | ||
|
TheFrankOne
United States667 Posts
Honestly, I think Lawrence O'Donnell has been right about what's going to happen. He has been saying for weeks now that this bluster will all fade into nothingness as just a debt ceiling increase is passed on Aug. 1. I still do not believe now is the appropriate time for almost any cuts or tax increases. With the exception of a hike on the cap gains tax, offset by reductions in the income tax and including a sunset. I know people say: we have to do it now, when else will we do it? My response is as soon as the unemployment rate drops below 8% would be a good time. | ||
Whitewing
United States7483 Posts
We could get rid of the majority of the department of homeland security (most of it is what's known as "security theater" anyway, and is essentially useless) and that would be a huge help. But frankly, what's most needed is the tax increase. This horseshit about tax breaks creating new jobs hasn't yet worked, and it isn't going to. Even Ronald Reagan (the Republican superhero) had taxes much higher than they are now for the wealthy. | ||
|
ShatterZer0
United States1843 Posts
TBH I think that a simple flat tax would fix our debt in a matter of months... a lower, but simpler, more concrete, and (most importantly) unavoidable via legal evasion. It would lower taxes of all those who actually paid their taxes and FORCES those who don't pay their due taxes to pay SOMETHING. The fact that General Electric pays NOTHING in taxes when it makes dozens of billions of dollars per year disgusts me. The super rich that throw their money in hidden vaults to evade that which is NOT rightfully theirs DISGUSTS me. Debt on the mind of an American? I could care less. Injustice within our own tax system that threatens to be a poisoned lance in the wrist of our nation? I care deeply about. | ||
|
Whitewing
United States7483 Posts
On July 28 2011 09:49 ShatterZer0 wrote: The United States has been in debt since before the nation existed except a small blip at the start of the 1800's. Debt can be utilized to a nation's advantage, and the problem with our debt is not that it exists or that it grows, but merely that it out paces our growth, both economic and political. TBH I think that a simple flat tax would fix our debt in a matter of months... a lower, but simpler, more concrete, and (most importantly) unavoidable via legal evasion. It would lower taxes of all those who actually paid their taxes and FORCES those who don't pay their due taxes to pay SOMETHING. The fact that General Electric pays NOTHING in taxes when it makes dozens of billions of dollars per year disgusts me. The super rich that throw their money in hidden vaults to evade that which is NOT rightfully theirs DISGUSTS me. Debt on the mind of an American? I could care less. Injustice within our own tax system that threatens to be a poisoned lance in the wrist of our nation? I care deeply about. Incorrect, we've had a surplus at a few points in our history, notably under Clinton. We've not always been in debt. A flat tax is also not going to fix it, we need a stronger progressive tax. | ||
|
ShatterZer0
United States1843 Posts
On July 28 2011 09:49 Whitewing wrote: As an economist, I feel fairly confident about the following: Major cuts in many programs are required, from defense spending (get rid of all those unnecessary overseas bases, hell, we've had 20 of them in Germany since the start of the bloody cold war) to welfare. Further, a significant increase in taxes are required for the top earners and for those with the majority of the wealth (top 95 percentile). We could get rid of the majority of the department of homeland security (most of it is what's known as "security theater" anyway, and is essentially useless) and that would be a huge help. Perhaps you're an economist, but even if the United States cut ALL of its armed forces budget it's STILL be bankrupt but 2050... Social Security and Medicare/aid are what will be the nation's real challenges, and no politician DARES even looking at them for fear of the Elderly vote. Both of them are SERIOUSLY broken and are in NEED of likewise serious revamping. Major cuts are fine, but significant tax increases would slaughter our already fragile economy, the United States never "buckles down" because the moment it does the capital fares market gets thoroughly splattered... already we increase minimum wages and slowly roll back W. Bush era taxes which tighten the noose on our utterly underemployed job market, increasing taxes significantly wouldn't actually increase the amount of income that comes from taxing anyway.... which as an economist you should know. | ||
|
BestZergOnEast
Canada358 Posts
Also the idea of a flat tax is very dangerous. the idea is to repeal the income tax, but knowing government they will just add the excise tax on top of the income tax and you are way worse off than before. Tax reform is not the answer. Abolishing taxes is. | ||
|
ShatterZer0
United States1843 Posts
On July 28 2011 09:52 Whitewing wrote: Incorrect, we've had a surplus at a few points in our history, notably under Clinton. We've not always been in debt. A flat tax is also not going to fix it, we need a stronger progressive tax. The Clinton era surplus was NOT a surplus because it included social security in the budget, which was total bullshit because there has NEVER been any real money in social security... otherwise known as the President's Cookie Jar... From its inception Social Security hasn't had a real dime to its name. A progressive tax creates a taxcode that is significantly harder to police. Unless you're willing to fight tooth and nail with lobbyists to SOMEHOW fight your way to a stronger progressive tax, there are those who WILL find ways to evade if evasion is possible. Policing such a system is so nebulous that our current system is all but obselete... and we have the most advanced "IRS" in the world by far. | ||
|
TheFrankOne
United States667 Posts
On July 28 2011 09:55 ShatterZer0 wrote: Major cuts are fine, but significant tax increases would slaughter our already fragile economy, Neither of those things are fine, there is nothing that makes cuts to government spending magically less harmful than equivalent tax increases. People get that money and they spend it. A flat tax is also a terribly unethical thing. Particularly since so much of gov spending is done by "borrowing" money from the fed or through foreign investor's bond purchases. Massive spending cuts tear the economy apart as well as tax increases. The UK's economy keeps downgrading forecasts for a reason. Edit: The Clinton surplus was a budget surplus, it was not an elimination of federal debt. It also was not a long term sustainable surplus, but it was a surplus, do you people know what these words mean? | ||
|
BestZergOnEast
Canada358 Posts
| ||
|
ShatterZer0
United States1843 Posts
On July 28 2011 09:59 TheFrankOne wrote: Neither of those things are fine, there is nothing that makes cuts to government spending magically less harmful than equivalent tax increases. People get that money and they spend it. A flat tax is also a terribly unethical thing. Particularly since so much of gov spending is done by "borrowing" money from the fed or through foreign investor's bond purchases. Massive spending cuts tear the economy apart as well as tax increases. The UK's economy keeps downgrading forecasts for a reason. A flat tax is not unethical is if reduces taxes for EVERYONE. Major cuts are fine in comparison, stop being so totally critical. Cuts would damage the economy slower in the short term than tax increases is all I'm saying. EDIT: Everyone but those who already don't pay taxes, who would be exempt anyway, I'm not saying to tax the impoverished, merely find a way to tax those who evade. | ||
|
BestZergOnEast
Canada358 Posts
| ||
|
JonnyBNoHo
United States6277 Posts
On July 28 2011 09:14 BestZergOnEast wrote: The first question concerning the business cycle is "why is there a sudden general cluster of business errors?". Things are going smoothly and then kablamo, conditions change and the majority start taking losses. Their forecasting was off. Why? In a purely free market this wouldn't happen. There would be no cluster of errors. The boom-bust cycle is generated by monetary intervention in the market, specifically bank credit expansion to business. Theoretically I think that is correct but there exists no purely free market in existance... and never has. So arguing for free markets to solve the boom-bust cycle is a moot point. Monetary intervention is designed to "smooth" out the booms and busts. Prior to the Federal Reserve the economy of the United States was MORE volatile than it is today. Economies are cyclical (boom and bust) by nature. It's a part of life - same as summer and winter. For example - its difficult to know how many buildings to build until you build too many and have empty homes or offices. At that point construction slows down. This slowdown creates a "whipsaw" effect down the supply chain - every step away from the final product (in this case buildings) feels the effect of the slowdown harder and if it is sever enough the entire economy will be pulled into recession. The same effect happens in reverse on the upside as well causing an economy to expand rappidly beyond it's natural long-term growth rate. | ||
|
ShatterZer0
United States1843 Posts
On July 28 2011 10:02 BestZergOnEast wrote: Spending cuts do not harm the economy, they help repair it. Wealth is created by the private sector and stolen and consumed by the public sector. Government does not work in tandem with free enterprise, it lives off it parasitically. Tax cuts leave money in the hands of individuals and free enterprise. That money gets spent, making peoples lives better, or saved and invested, making the economy stronger. When the government has money it goes into the hands of politically powerful pressure groups, to pay back supporters, to bribe foreign dictators for support, to use unarmed predator drones to murder paki children, to pay farmers not to grow crops, etc. etc. That's very one dimensional of a view, spending from the government is often used as an investment towards the people being taxed. Generally, spending cuts are more acceptable because it is possible to use them to streamline a system, but cutting vital systems is almost never a good idea. Too much up to chaos and human "ingenuity". xDDD | ||
|
chickenhawk
Portugal339 Posts
Spending cuts do not harm the economy, they help repair it. Wealth is created by the private sector and stolen and consumed by the public sector. Government does not work in tandem with free enterprise, it lives off it parasitically. Tax cuts leave money in the hands of individuals and free enterprise. That money gets spent, making peoples lives better, or saved and invested, making the economy stronger. When the government has money it goes into the hands of politically powerful pressure groups, to pay back supporters, to bribe foreign dictators for support, to use unarmed predator drones to murder paki children, to pay farmers not to grow crops, etc. etc. I dunno if you are trolling.. coming from a country with universal healthcare, public schools, police, judges, even roads and bridges. Ah and do not forget the people who pick up you garbage at night... | ||
|
ilovelings
Argentina776 Posts
On July 28 2011 09:59 BestZergOnEast wrote: The IRS can be shockingly ruthless. Case in point, Ed & Elaine Browne. It's ironic that people got their panties in a bunch about Bernie Madoff when social security is the most blatant ponzi scheme of all time. Social Security is the biggest ponzi scheme?? In my book, banks take that title. Also, social security works, if u make it work. The whole economic mess was created by THE FINANCIAL SECTOR, not the economy. The whole debt debate is bogus when u realize that no one wants to lend any money to anyone because of what happened with lehman brothers. Banks fuck up and somehow it's the States fault. | ||
| ||
