The Atheist Communist Caliphate Made Flesh, Spread the Clusterfuck Around Thread

[TJ]

Not the best worded sentence, granted, but if you take money out of the pockets of well-to-do people instead of letting them spend it, it affects everyone.

They have less money to spend at porn shops and strip bars, cut back grocery spending, go out to restaurants less and have less money to give their drug dealers, and all of those industries then make less money, thus it negatively impacts all of them.

I'm not sure how you can disagree with that.

The problem is that rich people slow their spending after a certain point.

When well-to-do people get more money, it usually sits there on top of the pile.  If someone has $250 million in the bank, are they really going to go on a spending spree because they just grabbed another $2 million? 

But they're not putting $250MM in a savings account or into their mattresses.  Where do you think they're putting this $$?

[Eli]

Not the best worded sentence, granted, but if you take money out of the pockets of well-to-do people instead of letting them spend it, it affects everyone.

They have less money to spend at porn shops and strip bars, cut back grocery spending, go out to restaurants less and have less money to give their drug dealers, and all of those industries then make less money, thus it negatively impacts all of them.

I'm not sure how you can disagree with that.

The problem is that rich people slow their spending after a certain point.

When well-to-do people get more money, it usually sits there on top of the pile.  If someone has $250 million in the bank, are they really going to go on a spending spree because they just grabbed another $2 million? 

But they're not putting $250MM in a savings account or into their mattresses.  Where do you think they're putting this $$?

Probably wherever it can best trickle down to the needy, right?

[Thrillho]

Well, I do remember 1993, the last time the Democrats controlled both houses of Congress and the White House. We had the biggest tax increase in American history.

Up for debate. Some more detail:

http://www.slate.com/id/1037/

Good piece. I'd have to say that even though Dole proposed that tax increase, the Democrats controlled Congress and then Reagan approved it, that falls on them and not Dole.

The "most of the 1993 taxes fell on the affluent (paraphrased)" is too much of a generalization. If more of their money goes to the government and they can't spend it, then that hurts everyone.

If 'everyone getting hurt' = the Clinton era, well... come on, baby, make it hurt so good.

The Clinton era was balanced by the Republicans controlling Congress the final six years. That's why so much got done. I'm not knocking Clinton on this point, just saying it's not as simple as saying him being president is why the economy ran well in the 1990s, nor was it just because of Reagan that the 80s went well.

I'm just trying to highlight the fact that, for some reason, in late 2008, you're apparently predicting that the 1993 Clinton tax plan will "hurt everyone."

What I was pointing out was that story's overgeneralization that most of those taxes' effects were felt by the affleunt. It's my experience that when we resort to "taxing the rich" and those people have money taken away, everyone feels the impact.

This is your experience?

Or just your axiom?

Not the best worded sentence, granted, but if you take money out of the pockets of well-to-do people instead of letting them spend it, it affects everyone.

They have less money to spend at porn shops and strip bars, cut back grocery spending, go out to restaurants less and have less money to give their drug dealers, and all of those industries then make less money, thus it negatively impacts all of them.

I'm not sure how you can disagree with that.

The question is not whether taxes on the affluent, considered alone, take money out of the system. It's whether the negative effects of this outweigh the good.

And, given that we're still discussing a tax plan from a decade and a half ago, it would seem that there's some room here for at least some empirical considerations above and beyond a priori principles.

[TJ]

The problem is that rich people slow their spending after a certain point.

When well-to-do people get more money, it usually sits there on top of the pile.  If someone has $250 million in the bank, are they really going to go on a spending spree because they just grabbed another $2 million? 

But they're not putting $250MM in a savings account or into their mattresses.  Where do you think they're putting this $$?

Probably wherever it can best trickle down to the needy, right?

Absolutely.  If it's in the capital markets, it might be so a company can expand and add new jobs (good jobs, too).  Or it could be in the credit markets, where $$ are desperately needed so companies that need credit to keep their doors open can meet payroll.  Or it can be spent in the form of charitable giving, which apparently only bleeding hearts engage in according to DeJesus.  Or it can be spent on a couple more cars, (maybe even American cars if the domestic automakers built anything worth buying) or another house. Hell, it could even be used to overpay for a National League Franchise and a 94-year-old building.

[Gil Gunderson]

Well, I do remember 1993, the last time the Democrats controlled both houses of Congress and the White House. We had the biggest tax increase in American history.

Up for debate. Some more detail:

http://www.slate.com/id/1037/

Good piece. I'd have to say that even though Dole proposed that tax increase, the Democrats controlled Congress and then Reagan approved it, that falls on them and not Dole.

The "most of the 1993 taxes fell on the affluent (paraphrased)" is too much of a generalization. If more of their money goes to the government and they can't spend it, then that hurts everyone.

If 'everyone getting hurt' = the Clinton era, well... come on, baby, make it hurt so good.

The Clinton era was balanced by the Republicans controlling Congress the final six years. That's why so much got done. I'm not knocking Clinton on this point, just saying it's not as simple as saying him being president is why the economy ran well in the 1990s, nor was it just because of Reagan that the 80s went well.

I'm just trying to highlight the fact that, for some reason, in late 2008, you're apparently predicting that the 1993 Clinton tax plan will "hurt everyone."

What I was pointing out was that story's overgeneralization that most of those taxes' effects were felt by the affleunt. It's my experience that when we resort to "taxing the rich" and those people have money taken away, everyone feels the impact.

This is your experience?

Or just your axiom?

Not the best worded sentence, granted, but if you take money out of the pockets of well-to-do people instead of letting them spend it, it affects everyone.

They have less money to spend at porn shops and strip bars, cut back grocery spending, go out to restaurants less and have less money to give their drug dealers, and all of those industries then make less money, thus it negatively impacts all of them.

I'm not sure how you can disagree with that.

The question is not whether taxes on the affluent, considered alone, take money out of the system. It's whether the negative effects of this outweigh the good.

And, given that we're still discussing a tax plan from a decade and a half ago, it would seem that there's some room here for at least some empirical considerations above and beyond a priori principles.

What I've been wondering for about a day now on this thread.

[Chuck to Chuck]

The problem is that rich people slow their spending after a certain point.

When well-to-do people get more money, it usually sits there on top of the pile.  If someone has $250 million in the bank, are they really going to go on a spending spree because they just grabbed another $2 million? 

But they're not putting $250MM in a savings account or into their mattresses.  Where do you think they're putting this $$?

Probably wherever it can best trickle down to the needy, right?

Absolutely.  If it's in the capital markets, it might be so a company can expand and add new jobs (good jobs, too).  Or it could be in the credit markets, where $$ are desperately needed so companies that need credit to keep their doors open can meet payroll.  Or it can be spent in the form of charitable giving, which apparently only bleeding hearts engage in according to DeJesus.  Or it can be spent on a couple more cars, (maybe even American cars if the domestic automakers built anything worth buying) or another house. Hell, it could even be used to overpay for a National League Franchise and a 94-year-old building.

C+I+G=C+S

C is on both sides, so...

I+G=S

G is ideally 0 because, if budgets are balanced, G=C-t.

Therefore, S=I.

Savings = Investment.

Savings is good.

[Andre Dawson's Creek]

Not the best worded sentence, granted, but if you take money out of the pockets of well-to-do people instead of letting them spend it, it affects everyone.

They have less money to spend at porn shops and strip bars, cut back grocery spending, go out to restaurants less and have less money to give their drug dealers, and all of those industries then make less money, thus it negatively impacts all of them.

I'm not sure how you can disagree with that.

The problem is that rich people slow their spending after a certain point.

When well-to-do people get more money, it usually sits there on top of the pile.  If someone has $250 million in the bank, are they really going to go on a spending spree because they just grabbed another $2 million? 

But they're not putting $250MM in a savings account or into their mattresses.  Where do you think they're putting this $$?

In a bank in the Caribbean?

[GNM]

Not the best worded sentence, granted, but if you take money out of the pockets of well-to-do people instead of letting them spend it, it affects everyone.

They have less money to spend at porn shops and strip bars, cut back grocery spending, go out to restaurants less and have less money to give their drug dealers, and all of those industries then make less money, thus it negatively impacts all of them.

I'm not sure how you can disagree with that.

The problem is that rich people slow their spending after a certain point.

When well-to-do people get more money, it usually sits there on top of the pile.  If someone has $250 million in the bank, are they really going to go on a spending spree because they just grabbed another $2 million? 

But they're not putting $250MM in a savings account or into their mattresses.  Where do you think they're putting this $$?

In a bank in the Caribbean?

This is probably old economics, but didn't the Chicago School economists pretty much prove the validity of the Laffer Curve, and, by extension, prove that overtaxing the wealthly depressed the economy in the long term?

[morpheus]

The problem is that rich people slow their spending after a certain point.

When well-to-do people get more money, it usually sits there on top of the pile.  If someone has $250 million in the bank, are they really going to go on a spending spree because they just grabbed another $2 million? 

But they're not putting $250MM in a savings account or into their mattresses.  Where do you think they're putting this $$?

Probably wherever it can best trickle down to the needy, right?

Absolutely.  If it's in the capital markets, it might be so a company can expand and add new jobs (good jobs, too).  Or it could be in the credit markets, where $$ are desperately needed so companies that need credit to keep their doors open can meet payroll.  Or it can be spent in the form of charitable giving, which apparently only bleeding hearts engage in according to DeJesus.  Or it can be spent on a couple more cars, (maybe even American cars if the domestic automakers built anything worth buying) or another house. Hell, it could even be used to overpay for a National League Franchise and a 94-year-old building.

C+I+G=C+S

C is on both sides, so...

I+G=S

G is ideally 0 because, if budgets are balanced, G=C-t.

Therefore, S=I.

Savings = Investment.

Savings is good.

*Putting on Macroeconomist's hat*  I'm not sure what you're showing here, Chuck.  These are the national income accounts as I know them.

Y = Output
C = Consumption
G = Govt Spending
I = Investment
T = Taxes
       
Y = C + I + G (we will ignore trade here, speaking simply about national income accounts)

Rearranging,

Y - C - G = I

Adding in taxation, which is just a transfer from the private to the public sector:

(Y - T - C) + (T - G) = I

The first term is "private saving" and the second is "government saving" in that iteration.  The sum of those is just "saving."

S = I

[TJ]

The problem is that rich people slow their spending after a certain point.

When well-to-do people get more money, it usually sits there on top of the pile.  If someone has $250 million in the bank, are they really going to go on a spending spree because they just grabbed another $2 million? 

But they're not putting $250MM in a savings account or into their mattresses.  Where do you think they're putting this $$?

Probably wherever it can best trickle down to the needy, right?

Absolutely.  If it's in the capital markets, it might be so a company can expand and add new jobs (good jobs, too).  Or it could be in the credit markets, where $$ are desperately needed so companies that need credit to keep their doors open can meet payroll.  Or it can be spent in the form of charitable giving, which apparently only bleeding hearts engage in according to DeJesus.  Or it can be spent on a couple more cars, (maybe even American cars if the domestic automakers built anything worth buying) or another house. Hell, it could even be used to overpay for a National League Franchise and a 94-year-old building.

C+I+G=C+S

C is on both sides, so...

I+G=S

G is ideally 0 because, if budgets are balanced, G=C-t.

Therefore, S=I.

Savings = Investment.

Savings is good.

*Putting on Macroeconomist's hat*  I'm not sure what you're showing here, Chuck.  These are the national income accounts as I know them.

Y = Output
C = Consumption
G = Govt Spending
I = Investment
T = Taxes
       
Y = C + I + G (we will ignore trade here, speaking simply about national income accounts)

Rearranging,

Y - C - G = I

Adding in taxation, which is just a transfer from the private to the public sector:

(Y - T - C) + (T - G) = I

The first term is "private saving" and the second is "government saving" in that iteration.  The sum of those is just "saving."

S = I

I bet you went to some Eastern business school and work for some Swiss investment bank.

Elitist.

[Thrillho]

I bet you went to some Eastern business school and work for some BAILED OUT Swiss investment bank.

Elitist.

Beware the wrath of Morph'd

[morpheus]

Not the best worded sentence, granted, but if you take money out of the pockets of well-to-do people instead of letting them spend it, it affects everyone.

They have less money to spend at porn shops and strip bars, cut back grocery spending, go out to restaurants less and have less money to give their drug dealers, and all of those industries then make less money, thus it negatively impacts all of them.

I'm not sure how you can disagree with that.

The problem is that rich people slow their spending after a certain point.

When well-to-do people get more money, it usually sits there on top of the pile.  If someone has $250 million in the bank, are they really going to go on a spending spree because they just grabbed another $2 million? 

But they're not putting $250MM in a savings account or into their mattresses.  Where do you think they're putting this $$?

In a bank in the Caribbean?

This is probably old economics, but didn't the Chicago School economists pretty much prove the validity of the Laffer Curve, and, by extension, prove that overtaxing the wealthly depressed the economy in the long term?

My understanding of the Laffer Curve is that it indeed works as a broad concept, but it is important to know where on the curve you are, which makes it more difficult to use it as a policy tool at a given point in time.

[morpheus]

I bet you went to some Eastern business school and work for some BAILED OUT Swiss investment bank/asset management firm.

Elitist.

Beware the wrath of Morph'd

TRUTH'D.  (I work for the Asset Management unit.)

http://en.wikipedia.org/wiki/Bailout

A bailout, in economics and finance, is an injection of liquidity given to a bankrupt or nearly bankrupt entity, such as a corporation or a bank, in order for it to meet its short-term obligations.

This does not and has never described the firm I work for, nor the transaction it undertook that was mis-labeled by the wire services.

[Thrillho]

I bet you went to some Eastern business school and work for some BAILED OUT Swiss investment bank/asset management firm.

Elitist.

Beware the wrath of Morph'd

TRUTH'D.  (I work for the Asset Management unit.)

http://en.wikipedia.org/wiki/Bailout

A bailout, in economics and finance, is an injection of liquidity given to a bankrupt or nearly bankrupt entity, such as a corporation or a bank, in order for it to meet its short-term obligations.

This does not and has never described the firm I work for, nor the transaction it undertook that was mis-labeled by the wire services.

Where does a high-school drop-out learn big words like "liquidity" anyways?

The seedy gay finance underworld, that's where.

[RV]

I bet you went to some Eastern business school and work for some BAILED OUT Swiss investment bank/asset management firm.

Elitist.

Beware the wrath of Morph'd

TRUTH'D.  (I work for the Asset Management unit.)

http://en.wikipedia.org/wiki/Bailout

A bailout, in economics and finance, is an injection of liquidity given to a bankrupt or nearly bankrupt entity, such as a corporation or a bank, in order for it to meet its short-term obligations.

This does not and has never described the firm I work for, nor the transaction it undertook that was mis-labeled by the wire services. BAILOUT BAILOUT FREE MONEY SOCIALIZED BANK BAILOUT MORPH BAILOUT

Unadorned truth'd