Social Issue: On Economies - The Minimum Wage

Originally posted by zappafan1

posted by Spades:
Also, isn't THAT Communism? I mean, in a capitalist society we are supposed to be why are Billionaires being given Billions more by our government? Or is Socialism a good thing when the money doesn't go to the poor who needs it?

REPLY: You have it exactly backwards, and wrong. Communism is where the government owns the corporations, and also has control of all means of production.

Ahem.

Irony 101: Irony occurs when a statement is made, that is not literally true (nor intended to be taken as literally true), but which demonstrates an aspect of reality that ought to induce wry humor and reflection.

No, the government giving away money to billionaires is not Communism. However, it does have one characteristic of Communism that the economic right professes to detest: the government taking action to benefit certain classes economically and to redistribute wealth. Spades was merely pointing out that if you object to the state redistributing wealth downward, you ought also to object to the state redistributing wealth upward.

However, your response -- that this redistribution was not in reality a redistribution -- might have been predicted. I shall address that now.

Or, no. I'll address a legal absurdity first.

The Greenies love the idea of state and federal governments owning "public land", which is unconstitutional

Oh? Really? Unconstitutional? I think we're about to be treated to another of Zappafan's creative renditions of the U.S. Constitution, which will probably be entertaining.

Just for fun, though, let's see if the document in question has anything that I can see for myself to justify your statement.

Well, right off the bat, I see in Article I, Section 8, Clause 17, the following:

[Congress shall have the power] To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings

Hmm. Looks to me like this implies that the federal government is entitled to own public land. Granted, nothing is said about national parks, but if the government can purchase land for one purpose, I don't see why it can't do so for another, provided that said use does not violate some restriction in the Constitution.

Maybe you should explain to us just why you think the government owning land is unconstitutional. It sure ain't obvious.

The money the "billionaires" received was their money... they earned it!

Ah, yes. That common view of the economic right, that one's wealth consists of one's wealth before, not after, taxes, as if taxes were not a legal obligation and so a legal liability that ought to be calculated in when determining net worth. Why taxes should be treated any differently from any other debt or obligation in this respect isn't clear, but there's a more fundamental problem with this argument.

If we are to consider what one's wealth or income would be without taxes, we must also consider what it would be without all that taxes pay for. After all, no taxes = no government = no public functions. What would a billionaire's wealth be absent the military, roads, airports, enforceable law including property law and business law, etc., etc.? I submit to you that it would be nonexistent.

So no, that money did NOT belong to the rich recipients before the law lowering their taxes was passed. Prior to that, this money represented a tax obligation, a legal debt, and so belonged to the government. The law reduced the obligation and increased the wealth of the already-wealthy; thus, it certainly was a case of the government giving money to the rich.

What you propose is Marxism/Socialism

But wait. Didn't you just define Communism (which is to say, Marxism) as a situation in which the state owns the means of production? And I do believe that's the correct definition. I don't see where Spades is advocating any such thing.

On the other hand, I DO see where you are applying the word "Communism" to what is, in reality, liberalism, in fine fallacious name-calling and guilt-by-association.

Social Security is in trouble because, back in the early 70's President Johnson (Dem) took down the wall between the SS "Lockbox" and put all the money into the "General Fund"

That's largely true. What's worse, this action on Johnson's part gave Reagan an opportunity to pull a bait-and-switch, raising Social Security taxes to offset the revenue lost from his income-tax cuts, and continuing to put the money into the general fund in return for an IOU. Thus, what I'll bet you, Zappafan, believe was a tax cut by the Reagan administration was for most Americans actually a tax increase. And to be sure, he'd have had much more trouble if LBJ hadn't set the precedent years earlier.

Originally posted by GradyPhilpott
There's some good logic to your post, Vagabond, and I hate to be the one to tell you this, but Ray Krock has been dead for more than twenty years.

All the more reason he can't circulate his money. I was going to use Bill Gates but I just so happened to remember the plaque on the wall in McDonalds so I ran with it. (and, as I feared, I even spelled his name wrong).



Now I happened to catch a mention of "trickle down economics". I've got bad news for you "trickle downers": Money floats. The poor have to spend everything they've got to buy the things they need, and owners of the companies from which they purchase those items are the rich.

Money will not "trickle down" on its own. A trickle down must be catalyzed by an increase in consumer spending. The working and middle class do more consumer spending than the rich. A guy can only spend so much money. If I had a million dollars, I'd own the biggest flat pannel plasma TV on the market. If a tax break allows me to expand my business and make 5 million more, I'm not gonna be able to buy a bigger TV- I top out at a certain point, and then that money is really only good for investing in securing my lavish lifestyle for the long term by making wise investments and savings.

So you must propel money to the bottom by a tax cut, government spending, or a minimum wage increase, thus either creating jobs or increasing the takehome wage of those already employed. They in turn spend this money back up, catalyzing a second trickle down in new jobs.

You have to stir the economy from time to time or it will settle, and money settles at the top, not the bottom. The real irony? When money settles at the top, it's bad for the rich because the sales go down, the owner's income goes down, businesses fail and thus goods and services become more expensive or even unavailable.

You can shear a sheep many times but only skin it once... unless it's dead, in which case you can only shear it once either, which is why you must shell out the cash to feed the sheep.

"....the state redistributing wealth downward, you ought also to object to the state redistributing wealth upward.

REPLY: How can an intelligent person not see the difference between RETURNING someone's money to them, as opposed to giving someone elses money to someone who didn't earn it? That's called Marxism/Socialism, not Communism.

Communism Noun. def: A form of socialism that abolishes private ownership.

Your quote, above, therefore falls under your own post: "Irony occurs when a statement is made, that is not literally true (nor intended to be taken as literally true), but which demonstrates an aspect of reality that ought to induce wry humor and reflection."

It did.

Your quote of the Constitutional powers of the legislature has nothing to do with the ownership of lands for use as preserves, state or national forests, or similar, none of which pertain to: the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings," as set forth in that document.

".....I don't see why it can't do so for another, provided that said use does not violate some restriction in the Constitution.

REPLY: That you can't see the distinction is moot. It only has to come before the Supreme Court for clarification or decision, which unfortunately it probably never will.
My main issue of this is that we no longer control over 500 Million acres of our own land, which includes most every national park, as it is now under the control of UNESCO. Or didn't you know that? Want to see the list?

The law reduced the obligation and increased the wealth of the already-wealthy; thus, it certainly was a case of the government giving money to the rich.

REPLY: Geez... I ought to get paid for this; obviously it wasn't covered in your economics class. Actually it probably was, but about the only thing they still teach is that Marxism/Socialism can work.

A-The "rich" ratings go down to around $80K per year, so not all of those "evil rich" are in fact, rich.

B- No matter how wealthy, there is usually an overpayment to make sure the (illegal) IRS doesn't come calling. So, any overpayment is "the rich" getting their own money back.

C- When taxes are high, "The rich" will not invest their money, or little of it, as the return is low. When the tax rate goes down, money moves, and every time it moves it is taxed, which results in MORE money to the government. As it is, the top 5% of earners pay over 90% of the taxes. About 30% of the population pay little to no taxes at all. Those numbers may be a percentage or two off, but I have the numbers here somewhere. I can provide them if you wish.

The law reduced the obligation and increased the wealth of the already-wealthy; thus, it certainly was a case of the government giving money to the rich.

REPLY: It was a rate reduction (not a tax cut) across the board.

I DO see where you are applying the word "Communism" to what is, in reality, liberalism, in fine fallacious name-calling and guilt-by-association.

Lets see: "Progressive" used to be used as a replacement for the word "communism." Then it was "Liberal", and now being used again, means the same thing as "progressive" and "Communism." All of which are on the Left. A rose by any other name.

".... this action on Johnson's part gave Reagan an opportunity to pull a bait-and-switch, raising Social Security taxes to offset the revenue lost from his income-tax cuts, and continuing to put the money into the general fund.

REPLY: Clintons tax hike was the largest in American history, and it was against Social Security recipients.
Money goes into the General Fund according to it's own percentage of GDP. No president "puts" it there.

Thus, what I'll bet you, Zappafan, believe was a tax cut by the Reagan administration was for most Americans actually a tax increase.

REPLY: You really need to check the actual numbers.

Some numbers on Reagan's Rate Reductions:

After President George W. Bush sent Congress an outline of his tax reform plan on February 8, some critics immediately began to attack it as a return to what they portray as the fiscally irresponsible policies of the Reagan Administration.
According to these commentators, Congress should scale back--if not outright reject--President Bush's tax reform proposals because they are based on a period when the wealthy received excessive tax cuts and revenue was wasted on defense, even though most Americans struggled in poverty.
This is a revisionist view of recent history that ignores reality and denies the fact that President Reagan's sound policies and determination deserve much of the credit for the current economic picture. Congress should embrace President Bush's tax reform plan as a responsible return to the most successful economic policy of the 20th century.

President Ronald Reagan's record includes sweeping economic reforms and deep across-the-board tax cuts, market deregulation, and sound monetary policies to contain inflation. His policies resulted in the largest peacetime economic boom in American history and nearly 35 million more jobs.

Many critics of reducing taxes claim that the Reagan tax cuts drained the U.S. Treasury. The reality is that federal revenues increased significantly between 1980 and 1990:

Total federal revenues doubled from just over $517 billion in 1980 to more than $1 trillion in 1990. In constant inflation-adjusted dollars, this was a 28 percent increase in revenue.

As a percentage of the gross domestic product (GDP), federal revenues declined only slightly from 18.9 percent in 1980 to 18 percent in 1990.

Revenues from individual income taxes climbed from just over $244 billion in 1980 to nearly $467 billion in 1990. In inflation-adjusted dollars, this amounts to a 25 percent increase.

Contrary to popular myth, while inflation-adjusted defense spending increased by 50 percent between 1980 and 1989, it was curtailed when the Cold War ended and fell by 15 percent between 1989 and 1993. However, means-tested entitlements, which do not include Social Security or Medicare, rose by over 102 percent between 1980 and 1993, and they have continued climbing ever since.

HOW DID REAGAN'S POLICIES AFFECT THE FEDERAL TAX BURDEN?

Perhaps the greatest myth concerning the 1980s is that Ronald Reagan slashed taxes so dramatically for the rich that they no longer have paid their fair share. The flaw in this myth is that it mixes tax rates with taxes actually paid and ignores the real trend of taxation:

In 1991, after the Reagan rate cuts were well in place, the top 1 percent of taxpayers in income paid 25 percent of all income taxes; the top 5 percent paid 43 percent; and the bottom 50 percent paid only 5 percent. To suggest that this distribution is unfair because it is too easy on upper-income groups is nothing less than absurd.

The proportion of total income taxes paid by the top 1 percent rose sharply under President Reagan, from 18 percent in 1981 to 28 percent in 1988.

Average effective income tax rates were cut even more for lower-income groups than for higher-income groups. While the average effective tax rate for the top 1 percent fell by 30 percent between 1980 and 1992, and by 35 percent for the top 20 percent of income earners, it fell by 44 percent for the second-highest quintile, 46 percent for the middle quintile, 64 percent for the second-lowest quintile, and 263 percent for the bottom quintile.

These reductions for the lowest-income groups were so large because President Reagan doubled the personal exemption, increased the standard deduction, and tripled the earned income tax credit (EITC), which provides net cash for single-parent families with children at the lowest income levels. These changes eliminated income tax liability altogether for over 4 million lower-income families.

Critics often add in the Social Security payroll tax and argue that the total federal tax burden shifted more to lower-income groups and away from upper-income groups; but President Reagan's changes were in the income tax, not in the Social Security payroll tax. The payroll tax was imposed by proponents of big government over the past 50 years, and it is they, not Ronald Reagan, who should be held accountable for its distributional effects.

Nevertheless, even if one counts the Social Security payroll tax, the share of total federal taxes increased between 1980 and 1989 for the following groups:

For the top 1 percent of taxpayers, from 12.9 percent in 1980 to 15.4 percent in 1989;

For the top 5 percent of taxpayers, from 27.3 percent in 1980 to 30.4 percent in 1989; and

For the top 20 percent of taxpayers, from 56.1 percent in 1980 to 58.6 percent in 1989.

On the other hand, the share of total federal taxes, if one includes the Social Security payroll tax, declined for four groups:

For the second-highest 20 percent of taxpayers, from 22.2 percent in 1980 to 20.8 percent in 1989;

For the middle 20 percent of taxpayers, from 13.2 percent in 1980 to 12.5 percent in 1989;

For the second-lowest 20 percent of taxpayers, from 6.9 percent in 1980 to 6.4 percent in 1989; and

For the lowest 20 percent of taxpayers, from 1.6 percent in 1980 to 1.5 percent in 1989.

[edit on 26-7-2006 by zappafan1]

[edit on 26-7-2006 by zappafan1]

[edit on 26-7-2006 by zappafan1]

drop the minimum wage, and even more people will not be paying taxes!!! increase it a little, and more people will be!


[edit on 26-7-2006 by dawnstar]

Originally posted by dawnstar
drop the minimum wage, and even more people will not be paying taxes!!! increase it a little, and more people will be!


[edit on 26-7-2006 by dawnstar]

REPLY: No-one said drop it. Actually, if the free market were allowed to work as it should, wages would most likely rise.

by the way, as near as I can tell, there's no one in the US building the Lexus.....although there are a few plants that are making parts for the car.

and ummm....as far as the rich person's mansion, contruction is one of the industries that has been invaded by illegal aliens.....after that, the wages dropped....

I know for a fact that roofers don't make squat. unless of course they're real good and in business roofing the steeples of churches!!!

Just some facts about the minimum wage. True, this comes from our Australian friends, but it holds true for America as well; the same basic economic principles apply:

. . increased dispersion tends to create opportunities for low productivity workers. Thus, employment prospects for young people and the lower-educated are in influenced to a significant extent by their relative wages . . . and relative-wage inflexibility is likely to have significantly contributed to the concentration of unemployment among certain groups.

From: [link] www.brookesnews.com...

Originally posted by dawnstar
by the way, as near as I can tell, there's no one in the US building the Lexus.....although there are a few plants that are making parts for the car.

and ummm....as far as the rich person's mansion, contruction is one of the industries that has been invaded by illegal aliens.....after that, the wages dropped....

I know for a fact that roofers don't make squat. unless of course they're real good and in business roofing the steeples of churches!!!

REPLY: C'mon, Dawstar.... I was using that car as an example of the principle; it's the first one that came to mind. How about Honda, Mercedes, Volkswagon.... made in America!

As for the illegal aliens, for one example, 85% of those who do drywall are Americans, and it depends on where you live which determines how many illegals are in the workforce. Where I live there are none.... zero.... zilch, and if they come here the locals would'n't hire them until they were SURE they were here legally. That is, of course, if they weren't chased out in the first place. 300 Miles South there are some, and, if they work as hard as everyone else, they make the same per hour worked as eveyone else.

I don't know where you live, but even here roofers make a minumum of $10 per square, installing. One square per 20 to 30 minutes ain't bad. Tear-offs and re-roofing (sheathing, etc) is much more.

Zappafan:

It would help if you would not max out the character length of your posts. When you do, it becomes impossible to cut part of a "quoted" reply without deleting the whole thing. Thanks in advance.

How can an intelligent person not see the difference between RETURNING someone's money to them

It's not that, it's that someone as intelligent as I am is capable of calling that designation of the money as "someone's" into question. In fact, I already did. Maybe you replied to it. I'll see down the way I guess.

That you can't see the distinction is moot. It only has to come before the Supreme Court for clarification or decision, which unfortunately it probably never will.

That I can't see the distinction really has something to do with the fact that you haven't presented a shred of justification for it. Care to do so?

I realize the Supreme Court would have to make the decision; however, you haven't suggested any basis for the Court making the decision you're talking about.

My main issue of this is that we no longer control over 500 Million acres of our own land, which includes most every national park, as it is now under the control of UNESCO. Or didn't you know that? Want to see the list?

A list will not be necessary. Some documentation of the asserted fact that ANY National Park land is "controlled" by the U.N. or any of its agencies, however, is. Along with a definition of what you mean by "controlled."

Once you've established that basic fact, THEN we can talk about lists to see if there are any exceptions.

A-The "rich" ratings go down to around $80K per year

Excuse me? Since I was the one talking about "the rich," the only definition of the term that matters here is MINE, bub. You don't TELL me what I MEAN by that term, you ASK me.

B- No matter how wealthy, there is usually an overpayment to make sure the (illegal) IRS doesn't come calling. So, any overpayment is "the rich" getting their own money back.

Nuh-uh. We're not talking about annual tax refunds like most of us get. We're talking about an actual change in tax law that reduced the amount of tax liability (at least a trivial amount) for almost all taxpayers, and reduced it a whole bunch for wealthy people. That has nothing to do with overpayments to the IRS or refunds paid by same.

Care to explain why you think the IRS is illegal? (This ought to be good.)

C- When taxes are high, "The rich" will not invest their money, or little of it, as the return is low.

Absolute bollocks. The only truth to it is that the rich will not invest their money when the expected return is low. But taxes are about the least significant factor behind whether returns are expected. For investments in job-producing industries, the biggest single factor is consumer demand for the products to be produced. For other investments, such as precious metals or bonds, consideration of what the price of those items is likely to do down the road determines whether the investment is a good one.

The real proof that what you say here is nonsense, is that the economy has, over the years since World War II, consistently done BETTER, not worse, when taxes were higher. Now -- I don't think that's because taxes stimulate investments; they don't. What I think is that periods when taxes were higher, also tended to be periods when the government worked to reduce income gaps and spread the wealth around, through such measures as encouraging labor unions. And that, in turn, spurred investment.

But whatever the mechanism, if you were right, we would see the opposite effect from what we do see.

Lets see: "Progressive" used to be used as a replacement for the word "communism."

No, it didn't. And there goes your whole argument.

REPLY: Clintons tax hike was the largest in American history, and it was against Social Security recipients.

And I'll bet it's raining in the Congo basin right now, too.

Care to make a response to what I said (about Reagan) that actually has something to do with the subject?

Zappafan:

Your lengthy quoted material regarding Reagan's tax cuts did not in any way address what I was saying. Let me try again, as I don't think you understood my point.

Reagan cut INCOME tax rates for all taxpayers.

Afterwards, Reagan increased SOCIAL SECURITY tax rates for all taxpayers. He did not re-increase INCOME tax rates for anyone. (I think. Anyway if he did, that's still not what I'm talking about here.)

For most taxpayers, the TOTAL taxes paid, including BOTH income and Social Security Taxes, increased under the Reagan administration.

Your quoted material addressed ONLY income taxes -- and therefore did not answer my assertion in any way.

And, Zappafan, it seems you did not, after all, answer my point about who owns the money that is paid to the government in taxes. Let me repeat what I said above, and maybe you can try to do it now:



Ah, yes. That common view of the economic right, that one's wealth consists of one's wealth before, not after, taxes, as if taxes were not a legal obligation and so a legal liability that ought to be calculated in when determining net worth. Why taxes should be treated any differently from any other debt or obligation in this respect isn't clear, but there's a more fundamental problem with this argument.

If we are to consider what one's wealth or income would be without taxes, we must also consider what it would be without all that taxes pay for. After all, no taxes = no government = no public functions. What would a billionaire's wealth be absent the military, roads, airports, enforceable law including property law and business law, etc., etc.? I submit to you that it would be nonexistent.

So no, that money did NOT belong to the rich recipients before the law lowering their taxes was passed. Prior to that, this money represented a tax obligation, a legal debt, and so belonged to the government. The law reduced the obligation and increased the wealth of the already-wealthy; thus, it certainly was a case of the government giving money to the rich.




Have fun!

I think that the theory behind trickle down economics or supply-side economics was that in a capitalistic society, the more capital that is allowed to remain in the hands of the capitalists means more money will be reinvested in business, which will create more jobs and create opportunities for the rest of society.

I'll leave it to others to sort it all out, but that's the way I remember it.

Google Search

[edit on 2006/7/26 by GradyPhilpott]

The thing about the assumption of reinvestment is that nobody is going to invest in an industry if there isn't a market for its wares.

You can give Microsoft all the money you want, but they're not going to roll out a computer with even more bells and whistles if there aren't customers inquiring about one, and nobody is going to make that inquiry if they haven't got the money to be in the market for a new computer.

Originally posted by The Vagabond
You can give Microsoft all the money you want, but they're not going to roll out a computer with even more bells and whistles if there aren't customers inquiring about one, and nobody is going to make that inquiry if they haven't got the money to be in the market for a new computer.

This is classical Marxist dialectical materialism, which has been debunked ad nauseum. Marx's theories on the demise of capitalism ignore the dynamics and flexibility of the free market. That is why seizing (stealing) the "means of production" sentenced communist nations to a world of decrepit infrastructure. Without the carrot of personal success, there was no innovation.

Supply-side economics is not about giving Microsoft money. It is about letting Microsoft keep its money.



[edit on 2006/7/26 by GradyPhilpott]

I have listened to (and argued against) the Hegelian Dialectic (and its thousand other names) to no end thanks to its inexplicable continued application in sociology courses despite its lack of predictive value as demonstrated by the failure of the attempt to fulfill the prediction Marx derived from it.

My point has nothing to do with the failure of capitalism or dialecticism.

My point is that demand cannot be ignored. There will NEVER be a demand for human toenail clippings, at any price, regardless of supply. So the most elementary fact we must concede is that no amount of leniency in tax policy or minimum wages will cause commerce to take place in the absence of a need to be filled.

Next we must consider the interrelationship of supply, demand, and price. Whether you give money to or leave money with Microsoft (the line becomes blurred when you're dealing with transactions such as wages and taxes: does a lower price leave you money or give you money, or is there any distinction?) the fact remains that microsoft will only use that money to create more supply if there if changing supply and price will generate enough demand to financially justify expanding production.

You leave X dollars in Microsoft's hands, and it is enough money to generate Y in extra supply. If Y times the maximum price at which Y can be sold is greater than X, the supply-side play works. That is not always the case.

This means that tax and wage policies should be industry specific so that ineffective incentives are not offered and simply caused to stagnate in banks, especially in times where inflation is being guarded against, because of my previous point that too much money sitting around in banks represents a potentially glutted capital supply.

A demand side play works across the board. The money left to a given company will only be used in that company's industry, and demand in that sector will either make something of that or not.

Money left to consumers WILL generate demand somewhere however, because whereas microsoft is most likely to use that money within their sector, the consumer will put that money right where the demand is. This way the industries where the demand exists are expanding to meet demand and making their money on the back end as they make new sales as opposed to getting their money up front on the good faith of the government that maybe they'll put it back into the economy.

The poor have to spend what they've got because they're poor... or they're poor because they spend what they've got; however you care to look at it (i'm sure there are cases of each). If there's anything to be said for the poor, when you give them money to stimulate commerce, you get what you paid for. You can't always count on corporations to do that when the market isn't right.

Well, I can't say that I can argue with any of that, because I don't have any empirical data to dispute it, but your argument seems to focus on one corporation or market. Microsoft is only an example and the effect would be averaged across the market. The poor are, ideally, not a static group, but one that waxes and wanes according to personal and market circumstances, except for that class that perpetuates poverty through a willingness to live off the public dole, devalue education, and resort to criminal activity, and produce more children than they can afford.

But, remember, I'm not advocating Supply-side economics. I just tried to clarify a point or two, including the fact that, despite Marxist predictions to the contrary, capitalism thrives and offers opportunities to those who are willing to pursue their dreams, while communism exists only as totalitarian states that starve their populations so that a very few can live lives of luxurious paranoia.

by The Vagabond
You can give Microsoft all the money you want, but they're not going to roll out a computer with even more bells and whistles..."

REPLY You're absolutely correct, for the simple reason that they don't make computers!

I bet you thought you were going to get flamed, but it turns out you were correct.

by Two Steps Forward:
It would help if you would not max out the character length of your posts. When you do, it becomes impossible to cut part of a "quoted" reply without deleting the whole thing. Thanks in advance.

REPLY: No problem. I know my post was a bit long; actually I pasted the economic data in as it is from a PDF file from an economics class from a few years ago. My "quote" (ex) is way too long, and I already contacted a Mod about it. It was a long day, and I just couldn't type the entire thing.

By the way..... you can just right-click on the "Post Reply" button, and choose "open in a new window". Then you can copy/paste the relevant info, close the original window, then hit the ost Reply" button.

Ummmmmm.... If you overpay on your taxes, the money refunded to you is 'your' money.

I used your quote from the Constitution as to what the Legislature can do pertaining to owning/buying land

Originally posted by GradyPhilpott
I think that the theory behind trickle down economics or supply-side economics was that in a capitalistic society, the more capital that is allowed to remain in the hands of the capitalists means more money will be reinvested in business, which will create more jobs and create opportunities for the rest of society.

That's basically it. There was also the theory that cutting taxes would spur economic growth, leading to increased revenue even from the lower tax rate. But yes, basically the idea was to spur the economy by putting money onto the "supply side" of the equation.

BTW, what the Vagabond was talking about comes more from John Maynard Keynes than it does from Marx or Hegel. The idea behind "demand side" economics is that investment fails to occur, not because of scarce capital, but because of lax demand that cannot justify the investment with a promise of return. Capital is always invested, but not always in job-creating industries; sometimes it's invested instead in artwork, real estate, precious metals, foreign currencies, and so forth.

Demand consists of a desire to buy coupled with an ability to buy. No matter how much money I have, I won't buy anything I don't want; but no matter how much I want something, I won't buy it if I don't have the money. Demand-side thinking assumes a competency on the part of corporations that produce goods and services to produce desirable products, and so it's further assumed that the desire to buy isn't a problem across the board. (Although with specific products, of course it sometimes is.) So the demand related problem that isn't within the competence of private enterprise to solve, is the ability to buy rather than the desire.

For this reason, demand-side thinking would spread money around as equally as practicable, rather than trying to concentrate it. That way, the ability to buy is maximized, and then it's up to private enterprise to handle the desire to buy part.

It's not at all focused on a single industry or a single company. Microsoft's job is to produce and effectively market computer software (and now some hardware too) that people will want to buy. General Motors' job is to produce cars that people will want to buy. Both of those companies benefit (assuming they do their jobs right) when consumers have more money to buy both computer software and cars. And so on across the board, in all industries.

[edit on 27-7-2006 by Two Steps Forward]

by Two Steps Forward:
It would help if you would not max out the character length of your posts. When you do, it becomes impossible to cut part of a "quoted" reply without deleting the whole thing. Thanks in advance.

REPLY: No problem. I know my post was a bit long; actually I pasted the economic data in as it is from a PDF file from an economics class from a few years ago. My "quote" (ex) is way too long, and I already contacted a Mod about it. It was a long day, and I just couldn't type the entire thing.

By the way..... you can just right-click on the "Post Reply" button, and choose "open in a new window". Then you can copy/paste the relevant info, close the original window, then hit the "Post Reply" button.

Ummmmmm.... If you overpay on your taxes, the money refunded to you is 'your' money.

I used your quote from the Constitution as to what the Legislature can and cannot do pertaining to owning/buying land, which does not include the parks, etc, as mentioned. What's to justify?

As to the land I mentioned, here is a partial list. These are World Heritage Sites, run by the BLM, but controlled by UNESCO. I'll have to get the total acreage tomorrow.

ALASKA
Wrangell-St. Elias National Park and Preserve INSCRIBED 1979
Glacier Bay National Park and Preserve INSCRIBED 1992
ARIZONA
Grand Canyon National Park INSCRIBED 1979
CALIFORNIA
Redwood National Park INSCRIBED 1980
Yosemite National Park INSCRIBED 1984
COLORADO
Mesa Verde National Park INSCRIBED 1978
FLORIDA
Everglades National Park INSCRIBED 1979
ILLINOIS
Cahokia Mounds State Historic Site INSCRIBED 1982
KENTUCKY
Mammoth Cave National Park INSCRIBED 1991
MONTANA
Waterton-Glacier International Peace Park INSCRIBED 1995
NEW JERSEY/NEW YORK
Statue of Liberty National Monument INSCRIBED 1984
NEW MEXICO
Carlsbad Caverns National Park INSCRIBED 1995
Chaco Culture National Historical Park INSCRIBED 1987
Pueblo de Taos INSCRIBED 1992
NORTH CAROLINA/TENNESSEE
Great Smoky Mountains National Park INSCRIBED 1983
PENNSYLVANIA
Independence National Historic Site INSCRIBED 1979
VIRGINIA
Monticello and the University of Virginia INSCRIBED 1987
WASHINGTON
Olympic National Park INSCRIBED 1981
WYOMING/MONTANA
Yellowstone National Park INSCRIBED 1978

Excuse me? Since I was the one talking about "the rich," the only definition of the term that matters here is MINE, bub. You don't TELL me what I MEAN by that term, you ASK me.

REPLY: HA HA HA HA HA..... I supply figures as they pertain to the facts I submit.

Care to explain why you think the IRS is illegal?

REPLY: Gee..... so you don't know that the amendment (IRS) was never properly ratified or responded to in the correct manner by the states, and in some cases replies were not received within the time alotted.

"....since World War II, the economy has consistently done BETTER, not worse, when taxes were higher.

REPLY: Did you by chance go to the university of Wisconsin, Madison? Or Bezerlky in California? How wrong can one person be? The figures provided show you to be wrong; maybe it was too long for you to read?

Clinton's tax hike? Again, you need to do some studying. I'll check again about the Reagan SS hikes you think happened, but not tonight.

"A.... change in tax law that reduced the amount of tax liability (at least a trivial amount) for almost all taxpayers, and reduced it a whole bunch for wealthy people.

REPLY: The rich received a lower percentage of the rate reductions. You can give the average Joe a 95% rate cut, and a very rich person a 1% cut, and there will always be a very few people who's 1% represents more money than the guy with the 95% cut. It's not rocket science.

"Now -- I don't think that's because taxes stimulate investments; they don't. What I think is that..."

REPLY: Lower taxes ALWAYS results in more spending, by most everyone, including the "rich". And it ALWAYS results in more tax revenue to the government.
Look.... your local grocery store doesn't have sales (rate cuts) to lose money, they do it to make more money, though greater numbers of sales.
Whenever you reduce the cost of any economic activity, there's more of it. Simple economics.

The Kennedy, Reagan and Bush Jr. tax reductions are based on the Laffer Curve and, as an economical strategy (not political), it has worked every time. Talk at you tomorrow. This 13 hour day kicked my butt. Later.

[edit on 27-7-2006 by zappafan1]

[edit on 27-7-2006 by zappafan1]