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On July 27 2018 00:03 screamingpalm wrote:Show nested quote +On July 26 2018 23:53 chocorush wrote:
If you have an actual economics background, you should know better than to say that it's easy to understand that if X happens, Y will happen.
When a tax (on what, who? you seem to have strong opinions on what's going to happen without clearly defined premises) is increased, it's presumed that the revenue from the tax is being redistributed to a part of the population. That redistribution naturally has an upwards influence on aggregate demand. Depending on who it is distributed to, that effect can be greater than the downwards influence of the tax.
Depending on how the tax is used, it can also change the very nature of preference functions across the population. An extreme example is that people not dying because they have access to healthcare will obviously affect demand. The effect of a tax on the entire economy is indeterminate, because we aren't just looking at micro-economic functions where one variable changes. A tax is a drain on the economy. You are decreasing consumer spending power without federal spending to offset it. The redistribution is going towards a program, not financial assets. Show nested quote +On July 26 2018 23:53 JonnyBNoHo wrote:
Taxes reduce demand and government spending increases it.
Also, private savings reduces aggregate demand as well. So, the government borrowing (rather than taxing) increases AD, and households buying that debt (saving) reduces AD in turn.
In other words it's all a wash, unless certain components are out of sync with another. Yes, I agree with all of this. But, it isn't a wash when we are reducing the federal deficit and increasing taxes. As you sort of point out, taxing and spending are separate functions (at the federal level that is).
Yes - if you hold everything else constant and reduce the the government deficit, you will reduce AD. Doesn't matter if its through higher taxes or reduced spend. That's just how the maths work.
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On July 27 2018 00:48 screamingpalm wrote:Show nested quote +On July 27 2018 00:31 Broetchenholer wrote:
WIthout any background in economics i can tell you that there are examples a plenty of states having much higher taxes then the US which have a healthy economy. And then, what do you think happens with the money the taxes collect? Do you believe it is burned? Why do you believe your military economy is doing so well, because the public is not taxed and therefore can buy tanks and aircraft carriers? You have a massive military budget because you have taxes and that budget is used to fuel the economy that then pays workers who then buy stuff. Federal taxes are deleted in the US (you can also buy shredded money in DC). Our economy is set up much differently than Germany- who relies on exports. See: sectoral balances. As a net importer we need to run federal budget deficits. We are also not a member of the EMU and are monetarily sovereign- our federal government does not need, nor benefit from revenue and our debt is denominated in our own currency. Federal taxes serve the purpose of driving the currency and regulating inflation/spending power. (And sometimes as a sin tax). Also see under Components: Aggregate Demand. .
Okay, so if i understand you correctly, again, no economic background, you are saying that (one of) the purposes of taxes in the US is to delete money from the economy to balance inflation/deflation? Do you realize though that there are other purposes of taxes that the government could do. Like what do you mean your government does not need revenue? They are paying their employees, they are paying contractors. They need money. That's why they have budgets. Of yourse they could simply burn the money and then print new money to pay expenses but that would be a zero sum game.
What i believe you are saying sounds like pure trolling to me, could someone who is enligthened in the ways of the economies clarify this madness?
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On July 27 2018 01:09 Broetchenholer wrote:Show nested quote +On July 27 2018 00:48 screamingpalm wrote:On July 27 2018 00:31 Broetchenholer wrote:
WIthout any background in economics i can tell you that there are examples a plenty of states having much higher taxes then the US which have a healthy economy. And then, what do you think happens with the money the taxes collect? Do you believe it is burned? Why do you believe your military economy is doing so well, because the public is not taxed and therefore can buy tanks and aircraft carriers? You have a massive military budget because you have taxes and that budget is used to fuel the economy that then pays workers who then buy stuff. Federal taxes are deleted in the US (you can also buy shredded money in DC). Our economy is set up much differently than Germany- who relies on exports. See: sectoral balances. As a net importer we need to run federal budget deficits. We are also not a member of the EMU and are monetarily sovereign- our federal government does not need, nor benefit from revenue and our debt is denominated in our own currency. Federal taxes serve the purpose of driving the currency and regulating inflation/spending power. (And sometimes as a sin tax). Also see under Components: Aggregate Demand. . Okay, so if i understand you correctly, again, no economic background, you are saying that (one of) the purposes of taxes in the US is to delete money from the economy to balance inflation/deflation? Do you realize though that there are other purposes of taxes that the government could do. Like what do you mean your government does not need revenue? They are paying their employees, they are paying contractors. They need money. That's why they have budgets. Of yourse they could simply burn the money and then print new money to pay expenses but that would be a zero sum game. What i believe you are saying sounds like pure trolling to me, could someone who is enligthened in the ways of the economies clarify this madness?
it's simple: palm uses very very weird definitions. they may be internally coherent (i'm not sure myself one way or the other), but they definitely don't match up with standard parlance.
so mostly I just ignore him; cuz it's nonsense, either via a nonsense theory, or by using irregular definitions so that it's very unclear.
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On July 27 2018 01:09 Broetchenholer wrote:
Okay, so if i understand you correctly, again, no economic background, you are saying that (one of) the purposes of taxes in the US is to delete money from the economy to balance inflation/deflation? Do you realize though that there are other purposes of taxes that the government could do. Like what do you mean your government does not need revenue? They are paying their employees, they are paying contractors. They need money. That's why they have budgets. Of yourse they could simply burn the money and then print new money to pay expenses but that would be a zero sum game.
What i believe you are saying sounds like pure trolling to me, could someone who is enligthened in the ways of the economies clarify this madness?
Yes there are other purposes (i.e. sin tax). I listed the main purposes: drive the currency and create demand (so everyone doesn't just use bitcoin) and regulate spending power. Our government is the monopoly currency issuer. They alone have the privilege under Section One Article Eight of our Constitution. Dollars are created and spent when Congress authorized it- out of thin air. That's how government employees are paid as well. We are no longer on a fixed exchange rate- went off of Bretton Woods under Nixon. We no longer have a pool of gold that needs to be defended.
Yes, much of this is hard to swallow because of all the propaganda and brainwashing we have been subjected to over the years. It also doesn't help that economics courses still teach gold standard nonsense and neoclassical economics. Hopefully this will soon change (see my sig).
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On July 27 2018 00:48 screamingpalm wrote:Show nested quote +On July 27 2018 00:31 Broetchenholer wrote:
WIthout any background in economics i can tell you that there are examples a plenty of states having much higher taxes then the US which have a healthy economy. And then, what do you think happens with the money the taxes collect? Do you believe it is burned? Why do you believe your military economy is doing so well, because the public is not taxed and therefore can buy tanks and aircraft carriers? You have a massive military budget because you have taxes and that budget is used to fuel the economy that then pays workers who then buy stuff. Federal taxes are deleted in the US (you can also buy shredded money in DC). Our economy is set up much differently than Germany- who relies on exports. See: sectoral balances. As a net importer we need to run federal budget deficits. We are also not a member of the EMU and are monetarily sovereign- our federal government does not need, nor benefit from revenue and our debt is denominated in our own currency. Federal taxes serve the purpose of driving the currency and regulating inflation/spending power. (And sometimes as a sin tax). Also see under Components: Aggregate Demand. Speaking of our military economy, note that no taxes were raised to "pay for" the last budget (which Dems meet and beat what Trump asked for).
You should probably do some more thinking about your prior assumptions.
1) What does the budget deficit have to do with the trade deficit? Why does the existence of one necessarily result in the existence of the other.
2) If taxes are solely applied to delete money from the economy, why does this not have an upwards effect on real wealth of consumers?
3) What are the effects of paying for government expenditures solely through printing money?
4) Where does the equation for Aggregate Demand imply that the components are independent variables? Why do you believe that this is a reasonable assumption?
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Ryan: please comply with document requests.
Also Ryan: this dumb ass articles of impeachment isn’t going to be heard by the House.
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If Congress wants the DoJ to comply they should stop endangering the investigations by leaking everything within seconds and miss using everything for political grand standing rather then doing any actual oversight work.
They were warned this would happen when they started attacking intelligence and law enforcement agencies way back when.
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On July 27 2018 01:20 chocorush wrote:Show nested quote +On July 27 2018 00:48 screamingpalm wrote:On July 27 2018 00:31 Broetchenholer wrote:
WIthout any background in economics i can tell you that there are examples a plenty of states having much higher taxes then the US which have a healthy economy. And then, what do you think happens with the money the taxes collect? Do you believe it is burned? Why do you believe your military economy is doing so well, because the public is not taxed and therefore can buy tanks and aircraft carriers? You have a massive military budget because you have taxes and that budget is used to fuel the economy that then pays workers who then buy stuff. Federal taxes are deleted in the US (you can also buy shredded money in DC). Our economy is set up much differently than Germany- who relies on exports. See: sectoral balances. As a net importer we need to run federal budget deficits. We are also not a member of the EMU and are monetarily sovereign- our federal government does not need, nor benefit from revenue and our debt is denominated in our own currency. Federal taxes serve the purpose of driving the currency and regulating inflation/spending power. (And sometimes as a sin tax). Also see under Components: Aggregate Demand. Speaking of our military economy, note that no taxes were raised to "pay for" the last budget (which Dems meet and beat what Trump asked for). You should probably do some more thinking about your prior assumptions. 1) What does the budget deficit have to do with the trade deficit? Why does the existence of one necessarily result in the existence of the other. 2) If taxes are solely applied to delete money from the economy, why does this not have an upwards effect on real wealth of consumers? 3) What are the effects of paying for government expenditures solely through printing money? 4) Where does the equation for Aggregate Demand imply that the components are independent variables? Why do you believe that this is a reasonable assumption?
1) (G – T) = (S – I) – NX
One the left side of the equation you have government and on the right, the non-government. These MUST net to zero. "All cannot save". A federal deficit is equal, to the penny, a surplus for the non-government. Or, a budget surplus (as in the Clinton years) is equal to the penny, a deficit for the non-government. This is how he was able to fill the spending gap with bank money (private debt expansion). Re-read the sectoral balances link above.
2) Please rephrase the question so I am sure what you are asking here.
3) This depends on circumstances. If we are at full employment, and continue to attempt to spend on resources already employed... inflation.
4) I was simply pointing out that consumption is dependent on disposable income and marginal propensity to consume, which are heavily influenced by the level of taxation.
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On July 27 2018 01:33 Gorsameth wrote:
If Congress wants the DoJ to comply they should stop endangering the investigations by leaking everything within seconds and miss using everything for political grand standing rather then doing any actual oversight work.
They were warned this would happen when they started attacking intelligence and law enforcement agencies way back when.
"Send me a bunch of shit I won't read so I can have my underpaid staffers find excerpts to quote in extremely misleading ways"
"??? no"
"IMPEACH"
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On July 27 2018 01:18 screamingpalm wrote:Show nested quote +On July 27 2018 01:09 Broetchenholer wrote:
Okay, so if i understand you correctly, again, no economic background, you are saying that (one of) the purposes of taxes in the US is to delete money from the economy to balance inflation/deflation? Do you realize though that there are other purposes of taxes that the government could do. Like what do you mean your government does not need revenue? They are paying their employees, they are paying contractors. They need money. That's why they have budgets. Of yourse they could simply burn the money and then print new money to pay expenses but that would be a zero sum game.
What i believe you are saying sounds like pure trolling to me, could someone who is enligthened in the ways of the economies clarify this madness? Yes there are other purposes (i.e. sin tax). I listed the main purposes: drive the currency and create demand (so everyone doesn't just use bitcoin) and regulate spending power. Our government is the monopoly currency issuer. They alone have the privilege under Section One Article Eight of our Constitution. Dollars are created and spent when Congress authorized it- out of thin air. That's how government employees are paid as well. We are no longer on a fixed exchange rate- went off of Bretton Woods under Nixon. We no longer have a pool of gold that needs to be defended. Yes, much of this is hard to swallow because of all the propaganda and brainwashing we have been subjected to over the years. It also doesn't help that economics courses still teach gold standard nonsense and neoclassical economics. Hopefully this will soon change (see my sig).
Look, we can agree that in theory money has the value we attribute it to and that the federal government could simply burn the taxes they take in and then pay their debtors by entirely new money. I am not disputing that. But it's only a theoretical difference, the government has to pay their staff and this money cannot simply be added to the economy because, as you already said, this would increase the amount of money which would result in inflation and this is usually bad. So, whether the government takes money that is already in process to pay it's debtors or collects what it needs from the population and then gives it back to it's debtors makes no difference. Because not taking it from the population while still paying for stuff with money that is simply added to the economy results in a crash. Both these things result in the same, we have a relatively stable amount of money in the system and the government gives out some of it to pay for stuff it wants to pay for.
Would you agree that this is correct and that therefore one of the purposes of taxes is to redivert money out of the national economy from civial consumerism to national spending without increasing inflation? And for having to ask that question i feel trolled already.
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On July 27 2018 01:51 Broetchenholer wrote:
But it's only a theoretical difference, the government has to pay their staff and this money cannot simply be added to the economy because, as you already said, this would increase the amount of money which would result in inflation and this is usually bad.
Woah, hang on a moment. I did not say that simply printing money leads to inflation. And I assume we mean hyperinflation. There are different types of inflation, not all are necessarily undesirable. The main concern regarding hyperinflation is the availability of real resources, not necessarily the amount of money in circulation. This is also not just some crazy leftist notion- it is accepted from left to right.
See: Greenspan and Paul Ryan
+ Show Spoiler +
Here Ryan is asking about financial solvency for social security, but it could be about universal healthcare, free college, etc.
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On July 27 2018 01:37 screamingpalm wrote:Show nested quote +On July 27 2018 01:20 chocorush wrote:On July 27 2018 00:48 screamingpalm wrote:On July 27 2018 00:31 Broetchenholer wrote:
WIthout any background in economics i can tell you that there are examples a plenty of states having much higher taxes then the US which have a healthy economy. And then, what do you think happens with the money the taxes collect? Do you believe it is burned? Why do you believe your military economy is doing so well, because the public is not taxed and therefore can buy tanks and aircraft carriers? You have a massive military budget because you have taxes and that budget is used to fuel the economy that then pays workers who then buy stuff. Federal taxes are deleted in the US (you can also buy shredded money in DC). Our economy is set up much differently than Germany- who relies on exports. See: sectoral balances. As a net importer we need to run federal budget deficits. We are also not a member of the EMU and are monetarily sovereign- our federal government does not need, nor benefit from revenue and our debt is denominated in our own currency. Federal taxes serve the purpose of driving the currency and regulating inflation/spending power. (And sometimes as a sin tax). Also see under Components: Aggregate Demand. Speaking of our military economy, note that no taxes were raised to "pay for" the last budget (which Dems meet and beat what Trump asked for). You should probably do some more thinking about your prior assumptions. 1) What does the budget deficit have to do with the trade deficit? Why does the existence of one necessarily result in the existence of the other. 2) If taxes are solely applied to delete money from the economy, why does this not have an upwards effect on real wealth of consumers? 3) What are the effects of paying for government expenditures solely through printing money? 4) Where does the equation for Aggregate Demand imply that the components are independent variables? Why do you believe that this is a reasonable assumption? 1) (G – T) = (S – I) – NX One the left side of the equation you have government and on the right, the non-government. These MUST net to zero. "All cannot save". A federal deficit is equal, to the penny, a surplus for the non-government. Or, a budget surplus (as in the Clinton years) is equal to the penny, a deficit for the non-government. This is how he was able to fill the spending gap with bank money (private debt expansion). Re-read the sectoral balances link above. 2) Please rephrase the question so I am sure what you are asking here. 3) This depends on circumstances. If we are at full employment, and continue to attempt to spend on resources already employed... inflation. 4) I was simply pointing out that consumption is dependent on disposable income and marginal propensity to consume, which are heavily influenced by the level of taxation.
My point is that you are using examples where a certain outcome is true to prove broad general statements. The point of these questions is to actually think about what you're not understanding, and I'll leave it as an exercise for you to figure out what they mean. I will give you some hints though.
1) You are misapplying the identity. The existence of a trade deficit doesn't imply the existence of a government deficit. It implies that S - G < 0. Surely, you can't draw any reasonable conclusion about the sign of S or G without more information.
2) What happens when you remove money from the money supply? Can you really say that this has no effect on financial assets?
4) Again, you are misapplying the identity. A change in T changes the other variables in ways that are indeterminate without more information on the effects on the other variables. The only way you can definitively draw your conclusion that an increase in T is a decrease on Y is if the variables are independent, which they are not.
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On July 27 2018 01:37 screamingpalm wrote:Show nested quote +On July 27 2018 01:20 chocorush wrote:On July 27 2018 00:48 screamingpalm wrote:On July 27 2018 00:31 Broetchenholer wrote:
WIthout any background in economics i can tell you that there are examples a plenty of states having much higher taxes then the US which have a healthy economy. And then, what do you think happens with the money the taxes collect? Do you believe it is burned? Why do you believe your military economy is doing so well, because the public is not taxed and therefore can buy tanks and aircraft carriers? You have a massive military budget because you have taxes and that budget is used to fuel the economy that then pays workers who then buy stuff. Federal taxes are deleted in the US (you can also buy shredded money in DC). Our economy is set up much differently than Germany- who relies on exports. See: sectoral balances. As a net importer we need to run federal budget deficits. We are also not a member of the EMU and are monetarily sovereign- our federal government does not need, nor benefit from revenue and our debt is denominated in our own currency. Federal taxes serve the purpose of driving the currency and regulating inflation/spending power. (And sometimes as a sin tax). Also see under Components: Aggregate Demand. Speaking of our military economy, note that no taxes were raised to "pay for" the last budget (which Dems meet and beat what Trump asked for). You should probably do some more thinking about your prior assumptions. 1) What does the budget deficit have to do with the trade deficit? Why does the existence of one necessarily result in the existence of the other. 2) If taxes are solely applied to delete money from the economy, why does this not have an upwards effect on real wealth of consumers? 3) What are the effects of paying for government expenditures solely through printing money? 4) Where does the equation for Aggregate Demand imply that the components are independent variables? Why do you believe that this is a reasonable assumption? 1) (G – T) = (S – I) – NX One the left side of the equation you have government and on the right, the non-government. These MUST net to zero. "All cannot save". A federal deficit is equal, to the penny, a surplus for the non-government. Or, a budget surplus (as in the Clinton years) is equal to the penny, a deficit for the non-government. This is how he was able to fill the spending gap with bank money (private debt expansion). Re-read the sectoral balances link above.
So lower T and lower I? Why is this a good idea?
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On July 27 2018 02:03 JonnyBNoHo wrote:Show nested quote +On July 27 2018 01:37 screamingpalm wrote:On July 27 2018 01:20 chocorush wrote:On July 27 2018 00:48 screamingpalm wrote:On July 27 2018 00:31 Broetchenholer wrote:
WIthout any background in economics i can tell you that there are examples a plenty of states having much higher taxes then the US which have a healthy economy. And then, what do you think happens with the money the taxes collect? Do you believe it is burned? Why do you believe your military economy is doing so well, because the public is not taxed and therefore can buy tanks and aircraft carriers? You have a massive military budget because you have taxes and that budget is used to fuel the economy that then pays workers who then buy stuff. Federal taxes are deleted in the US (you can also buy shredded money in DC). Our economy is set up much differently than Germany- who relies on exports. See: sectoral balances. As a net importer we need to run federal budget deficits. We are also not a member of the EMU and are monetarily sovereign- our federal government does not need, nor benefit from revenue and our debt is denominated in our own currency. Federal taxes serve the purpose of driving the currency and regulating inflation/spending power. (And sometimes as a sin tax). Also see under Components: Aggregate Demand. Speaking of our military economy, note that no taxes were raised to "pay for" the last budget (which Dems meet and beat what Trump asked for). You should probably do some more thinking about your prior assumptions. 1) What does the budget deficit have to do with the trade deficit? Why does the existence of one necessarily result in the existence of the other. 2) If taxes are solely applied to delete money from the economy, why does this not have an upwards effect on real wealth of consumers? 3) What are the effects of paying for government expenditures solely through printing money? 4) Where does the equation for Aggregate Demand imply that the components are independent variables? Why do you believe that this is a reasonable assumption? 1) (G – T) = (S – I) – NX One the left side of the equation you have government and on the right, the non-government. These MUST net to zero. "All cannot save". A federal deficit is equal, to the penny, a surplus for the non-government. Or, a budget surplus (as in the Clinton years) is equal to the penny, a deficit for the non-government. This is how he was able to fill the spending gap with bank money (private debt expansion). Re-read the sectoral balances link above. So lower T and lower I? Why is this a good idea?
Not necessarily. How did you come to this conclusion? :D
It depends on how the economy is running. As a net importer (NX) it is preferable to lower T for sure and run a deficit (rather than have the private sector go into debt).
G - T > 0
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On July 27 2018 02:08 screamingpalm wrote:Show nested quote +On July 27 2018 02:03 JonnyBNoHo wrote:On July 27 2018 01:37 screamingpalm wrote:On July 27 2018 01:20 chocorush wrote:On July 27 2018 00:48 screamingpalm wrote:On July 27 2018 00:31 Broetchenholer wrote:
WIthout any background in economics i can tell you that there are examples a plenty of states having much higher taxes then the US which have a healthy economy. And then, what do you think happens with the money the taxes collect? Do you believe it is burned? Why do you believe your military economy is doing so well, because the public is not taxed and therefore can buy tanks and aircraft carriers? You have a massive military budget because you have taxes and that budget is used to fuel the economy that then pays workers who then buy stuff. Federal taxes are deleted in the US (you can also buy shredded money in DC). Our economy is set up much differently than Germany- who relies on exports. See: sectoral balances. As a net importer we need to run federal budget deficits. We are also not a member of the EMU and are monetarily sovereign- our federal government does not need, nor benefit from revenue and our debt is denominated in our own currency. Federal taxes serve the purpose of driving the currency and regulating inflation/spending power. (And sometimes as a sin tax). Also see under Components: Aggregate Demand. Speaking of our military economy, note that no taxes were raised to "pay for" the last budget (which Dems meet and beat what Trump asked for). You should probably do some more thinking about your prior assumptions. 1) What does the budget deficit have to do with the trade deficit? Why does the existence of one necessarily result in the existence of the other. 2) If taxes are solely applied to delete money from the economy, why does this not have an upwards effect on real wealth of consumers? 3) What are the effects of paying for government expenditures solely through printing money? 4) Where does the equation for Aggregate Demand imply that the components are independent variables? Why do you believe that this is a reasonable assumption? 1) (G – T) = (S – I) – NX One the left side of the equation you have government and on the right, the non-government. These MUST net to zero. "All cannot save". A federal deficit is equal, to the penny, a surplus for the non-government. Or, a budget surplus (as in the Clinton years) is equal to the penny, a deficit for the non-government. This is how he was able to fill the spending gap with bank money (private debt expansion). Re-read the sectoral balances link above. So lower T and lower I? Why is this a good idea? Not necessarily. How did you come to this conclusion? :D It depends on how the economy is running. As a net importer (NX) it is preferable to lower T for sure and run a deficit (rather than have the private sector go into debt). G - T < 0
That's not how it works. The identity doesn't mean that we lower T in order to facilitate a trade deficit. It means that the trade deficit exists because we have a combination of government expenditures and savings that implies that we imported more than we exported.
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On July 27 2018 02:02 chocorush wrote:Show nested quote +On July 27 2018 01:37 screamingpalm wrote:On July 27 2018 01:20 chocorush wrote:On July 27 2018 00:48 screamingpalm wrote:On July 27 2018 00:31 Broetchenholer wrote:
WIthout any background in economics i can tell you that there are examples a plenty of states having much higher taxes then the US which have a healthy economy. And then, what do you think happens with the money the taxes collect? Do you believe it is burned? Why do you believe your military economy is doing so well, because the public is not taxed and therefore can buy tanks and aircraft carriers? You have a massive military budget because you have taxes and that budget is used to fuel the economy that then pays workers who then buy stuff. Federal taxes are deleted in the US (you can also buy shredded money in DC). Our economy is set up much differently than Germany- who relies on exports. See: sectoral balances. As a net importer we need to run federal budget deficits. We are also not a member of the EMU and are monetarily sovereign- our federal government does not need, nor benefit from revenue and our debt is denominated in our own currency. Federal taxes serve the purpose of driving the currency and regulating inflation/spending power. (And sometimes as a sin tax). Also see under Components: Aggregate Demand. Speaking of our military economy, note that no taxes were raised to "pay for" the last budget (which Dems meet and beat what Trump asked for). You should probably do some more thinking about your prior assumptions. 1) What does the budget deficit have to do with the trade deficit? Why does the existence of one necessarily result in the existence of the other. 2) If taxes are solely applied to delete money from the economy, why does this not have an upwards effect on real wealth of consumers? 3) What are the effects of paying for government expenditures solely through printing money? 4) Where does the equation for Aggregate Demand imply that the components are independent variables? Why do you believe that this is a reasonable assumption? 1) (G – T) = (S – I) – NX One the left side of the equation you have government and on the right, the non-government. These MUST net to zero. "All cannot save". A federal deficit is equal, to the penny, a surplus for the non-government. Or, a budget surplus (as in the Clinton years) is equal to the penny, a deficit for the non-government. This is how he was able to fill the spending gap with bank money (private debt expansion). Re-read the sectoral balances link above. 2) Please rephrase the question so I am sure what you are asking here. 3) This depends on circumstances. If we are at full employment, and continue to attempt to spend on resources already employed... inflation. 4) I was simply pointing out that consumption is dependent on disposable income and marginal propensity to consume, which are heavily influenced by the level of taxation. My point is that you are using examples where a certain outcome is true to prove broad general statements. The point of these questions is to actually think about what you're not understanding, and I'll leave it as an exercise for you to figure out what they mean. I will give you some hints though. 1) You are misapplying the identity. The existence of a trade deficit doesn't imply the existence of a government deficit. It implies that S - G < 0. Surely, you can't draw any reasonable conclusion about the sign of S or G without more information. 2) What happens when you remove money from the money supply? Can you really say that this has no effect on financial assets? 4) Again, you are misapplying the identity. A change in T changes the other variables in ways that are indeterminate without more information on the effects on the other variables. The only way you can definitively draw your conclusion that an increase in T is a decrease on Y is if the variables are independent, which they are not.
1) Are you referring to S - I ? (the domestic private sector) The existence of a trade deficit absolutely implies the need for a government deficit- the only other sector that can go into deficit is the private sector (which is how we ran it under Clinton) and it was unsustainable, resulting in the "Bush recession". We did it again, and ended up with the Global Financial Crisis. See: "Minsky Moment"
2) I never said it had no effect on financial assets. Pretty much the opposite.
4) You aren't convinced then, that taxes lower disposable income and directly affect spending habits- certainly in cases where large amounts of revenue are taken for programs such as Medicaid?
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On July 27 2018 02:08 screamingpalm wrote:Show nested quote +On July 27 2018 02:03 JonnyBNoHo wrote:On July 27 2018 01:37 screamingpalm wrote:On July 27 2018 01:20 chocorush wrote:On July 27 2018 00:48 screamingpalm wrote:On July 27 2018 00:31 Broetchenholer wrote:
WIthout any background in economics i can tell you that there are examples a plenty of states having much higher taxes then the US which have a healthy economy. And then, what do you think happens with the money the taxes collect? Do you believe it is burned? Why do you believe your military economy is doing so well, because the public is not taxed and therefore can buy tanks and aircraft carriers? You have a massive military budget because you have taxes and that budget is used to fuel the economy that then pays workers who then buy stuff. Federal taxes are deleted in the US (you can also buy shredded money in DC). Our economy is set up much differently than Germany- who relies on exports. See: sectoral balances. As a net importer we need to run federal budget deficits. We are also not a member of the EMU and are monetarily sovereign- our federal government does not need, nor benefit from revenue and our debt is denominated in our own currency. Federal taxes serve the purpose of driving the currency and regulating inflation/spending power. (And sometimes as a sin tax). Also see under Components: Aggregate Demand. Speaking of our military economy, note that no taxes were raised to "pay for" the last budget (which Dems meet and beat what Trump asked for). You should probably do some more thinking about your prior assumptions. 1) What does the budget deficit have to do with the trade deficit? Why does the existence of one necessarily result in the existence of the other. 2) If taxes are solely applied to delete money from the economy, why does this not have an upwards effect on real wealth of consumers? 3) What are the effects of paying for government expenditures solely through printing money? 4) Where does the equation for Aggregate Demand imply that the components are independent variables? Why do you believe that this is a reasonable assumption? 1) (G – T) = (S – I) – NX One the left side of the equation you have government and on the right, the non-government. These MUST net to zero. "All cannot save". A federal deficit is equal, to the penny, a surplus for the non-government. Or, a budget surplus (as in the Clinton years) is equal to the penny, a deficit for the non-government. This is how he was able to fill the spending gap with bank money (private debt expansion). Re-read the sectoral balances link above. So lower T and lower I? Why is this a good idea? Not necessarily. How did you come to this conclusion? :D It depends on how the economy is running. As a net importer (NX) it is preferable to lower T for sure and run a deficit (rather than have the private sector go into debt). G - T < 0
you posted an equation, which has limited options to balance. You reduce T and you need to balance. Increase 'S'? OK that reduces consumer spending which reduces GDP. Net import? OK that reduces GDP too. Reduce I? OK that also reduces GDP. Net you aren't changing GDP just re-arranging.
To the extent that that is a good idea depends a lot on the context. Private borrowing is historically preferable to government borrowing, and borrowing from abroad is the riskiest. Depends on the details.
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On July 27 2018 00:48 screamingpalm wrote:Show nested quote +On July 27 2018 00:31 Broetchenholer wrote:
WIthout any background in economics i can tell you that there are examples a plenty of states having much higher taxes then the US which have a healthy economy. And then, what do you think happens with the money the taxes collect? Do you believe it is burned? Why do you believe your military economy is doing so well, because the public is not taxed and therefore can buy tanks and aircraft carriers? You have a massive military budget because you have taxes and that budget is used to fuel the economy that then pays workers who then buy stuff. Federal taxes are deleted in the US (you can also buy shredded money in DC). Our economy is set up much differently than Germany- who relies on exports. See: sectoral balances. As a net importer we need to run federal budget deficits. We are also not a member of the EMU (members are more similar to our states) and are monetarily sovereign- our federal government does not need, nor benefit from revenue and our debt is denominated in our own currency. Federal taxes serve the purpose of driving the currency and regulating inflation/spending power. (And sometimes as a sin tax). Also see under Components: Aggregate Demand. Speaking of our military economy, note that no taxes were raised to "pay for" the last budget (which Dems meet and beat what Trump asked for).
Ok I will bite.
Explain more in detail so that a layman can understand what you are trying to say. LAYMAN terms only and dont quote wikipedia on me. Use your own words.
Federal taxes are deleted in the US (you can also buy shredded money in DC).
As a net importer we need to run federal budget deficits.
We are also not a member of the EMU (members are more similar to our states) and are monetarily sovereign- our federal government does not need, nor benefit from revenue and our debt is denominated in our own currency. Federal taxes serve the purpose of driving the currency and regulating inflation/spending power. (And sometimes as a sin tax).
What are you trying to say?
Speaking of our military economy, note that no taxes were raised to "pay for" the last budget (which Dems meet and beat what Trump asked for).
What is your "military economy"?
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Oh no, math has become involved the US pol thread. Nothing gets TL members all hot and bothered like some good arguments about math.
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EPT
