26 Reply by Justinian I (edited by Justinian I 30-Dec-2012 19:39:39)

  • Posts: 3,373

Re: Fiscal Cliff

Kemp,

1. An appeal to authority is perfectly legitimate. It's a logical fallacy only when the authority's opinion is not representative among relevant experts, or the authority is not an expert in the field. So it's perfectly legitimate for me to appeal to the scholarship of Richard Dawkins to make a point about biology.

2. Central planning happens when all production is directed by the state. This is what characterized the economy of the USSR and Maoist China, and the experiences of these states has discredited an economy that is centrally planned. On the other hand, employing macro economic tools such as fiscal or monetary policy means that the state is influencing economic activity by manipulating the incentives of producers and consumers.

3. Yes, economies are demand driven. Goods and services are produced because people will buy them. Our country's problem is not that we don't have the productive capacity to produce more goods and services, but that consumers aren't spending because of debt payments (which resulted from poor government policy) and economic uncertainty. So reducing taxes on the rich will not help because they have no incentive to produce more when consumer spending is too low. Instead, the rich invest money in our enemies overseas where there are more profitable opportunities. Moreover, the rich have a lower marginal propensity to consume (MPC). That means giving Bill Gates a 10% tax reduction isn't going to affect aggregate demand as much as it would on the poor or middle class.

4. Yes, consumer spending will increase if prices drop. However, reducing taxes on the rich will have little effect because they currently have a minor impact on the cost of production.

5. There is no magic to macro economic policy. It's common knowledge among economists that demand-pull inflation is the logical consequence of stimulating the economy past its production possibilities frontier.

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27 Reply by V. Kemp (edited by V. Kemp 31-Dec-2012 06:49:40)

  • Posts: 4,369

Re: Fiscal Cliff

Justinian I,

An appeal to authority is an appeal to authority. It wasn't included as additional evidence, it was the whole of the content of your post.

Central planning has never been 100%, and to pretend that extents of central planning cannot be labeled as what they are unless they reach an impossible 100% is ignorant and silly.

"Yes, economies are demand driven. Goods and services are produced because people will buy them."

Which has nothing to do with government taxing and spending my money. I'll buy just as much food and consumer goods whether government taxes/prints more and spends it or not. In fact, I'll buy more consumer goods if they tax and print less. The notion that there will be more demand if government taxes money away from consumers and inflates their currency is baseless, and that's why you haven't even tried to make any argument for it here. You don't have one, just repeated talking points and rhetoric from those you acknowledge as your academic and intellectual overlords.

"ur country's problem is not that we don't have the productive capacity to produce more goods and services, but that consumers aren't spending because of debt payments (which resulted from poor government policy) and economic uncertainty."

Awwww the poor people spent irresponsibly because of government! The government is the parent and the people are the idiot children who, by your admission here, cannot take care of themselves!

Our country's problem is our government (including union coercive force which is a result of government) makes production here so expensive that competitors are underselling us in virtually every industry. Idiot consumers in debt are in debt because they're idiots. I'm not in debt. Government isn't why I'm not in debt. Are you in debt? If you are, government isn't why.

Consumers aren't spending because our current government policies make work and income harder to find. Consumers aren't spending because our current government spending directly results in massive inflation; they know they're gonna need every dollar they can save because those dollars are worth less every month.

"So reducing taxes on the rich will not help because they have no incentive to produce more when consumer spending is too low."

Consumer spending is low because of government; government is why they have less (taxes) and why what they have is being constantly devalued via inflation. Reducing taxes on the rich means increased investment capital which is essential for economic growth. It also means cheaper investment capital, which is beneficial to economic growth.

That you don't understand that reduced taxes on "the rich" helps free economies as a whole reveals your complete ignorance on the topic. I can understand naive arguments that reduced taxes on upper incomes supposedly don't help that much (a frequent ignorant communist talking point), but to pretend that there's not a certainty that reduced taxes on higher incomes helps economies grow _at all_ is just absurdly ridiculous.

"Instead, the rich invest money in our enemies overseas where there are more profitable opportunities."

That sounds like a whole lot of our fault. Why don't we stop being so uncompetitive, so as to receive those investments and benefit from them? Your argument here just points out that we need to fix our country. It's not an argument that reducing taxes on the rich isn't good for our economy, it's an argument that we're ruining all the reasons that it is.

"Yes, consumer spending will increase if prices drop. However, reducing taxes on the rich will have little effect because they currently have a minor impact on the cost of production."

Granted, we have many other problems. But other problems are no reason not to fix one.

Your common knowledge is ignorant garbage pushed on you by tyrannical overlords who want you to accept the need for the Fed and central planning, because that means more power to them and an ignorant populace who doesn't question when it's being robbed. What you advocate has been done with trillions of dollars over the past 5 years. How's that working for you? You have your experts, I have allllllll that evidence 100% in my favor.

Government is telling you they need your rights and your money; it's for your own good. And you believe them.

[I wish I could obey forum rules]

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28 Reply by Justinian I (edited by Justinian I 31-Dec-2012 08:20:45)

  • Posts: 3,373

Re: Fiscal Cliff

Kemp,

1. The economy of the USSR may not have been 100% centrally planned, actually it developed an active black market under Brezhnev, but the U.S. is far from that.

2. Yes, the government caused most of our economic problems. Yes, our government's laws, policies and regulations frequently reduce economic competitiveness.

3. Despite (2), fiscal and monetary policy still work.

4. The all items index in the U.S. only rose 1.8% from last November over the course of 12 months. That means low inflation.
CPI data here: http://www.bls.gov/cpi/cpid1211.pdf

5. Yes, lower taxes on the rich will help the economy grow... a little. But, a propensity to invest depends on estimated future profits. If consumers are afraid to spend money, then investors will be discouraged from investing as much as they would have otherwise. Yes, abolishing misguided government regulations and programs (like Obamacare) would stimulate demand because costs would drop, and a complete overhaul of our health care and business regulations are needed. But lowering taxes on the rich will have one of the least effects on consumer spending. Now, if taxes on the rich were 90%, then yeah, lowering their taxes to 20% would have a huge impact on consumer spending. But at present, the effective tax rate for the rich is very low.

6. Yes, I have debt. Debt can be a good thing depending on your equity.

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29 Reply by V. Kemp (edited by V. Kemp 31-Dec-2012 08:25:58)

  • Posts: 4,369

Re: Fiscal Cliff

You have no evidence of 3. Monitary policy is used to rob the working in the USA. It forces people to work harder and longer to make up for being robbed, so it increases economic indicators, but it never helps the working more than it takes away from them.

We know for a fact that all government spending is taxed from that government's people, just as we know that all creation of currency results in inflation. You can equivocate over the timing of what's hit so far, but this doesn't change the fact that we pay for all of this taxing and printing with very real standard of living decreases.

The policies big-government ideologues like you advocate are the reasons people are afraid to spend money and the reason companies/individuals are slow to invest. That problem should be dealt with. More government meddling--pretending to counteract the problem, rather than fix it--only makes the problem worse, not better.

You can't cite examples where corrupt monetary policy set by banks running the globe have helped people, because they never have and have never been intended to. The best revisionists can do is cite the New Deal and stimulus programs and pretend everybody's too ignorant of history to know that they not only didn't work, they slowed down recovery. Now you're claiming that stimulus wasn't big enough, despite the fact that such government wasteful spending is why consumers aren't spending as much and investors aren't investing as much as they would otherwise. Stimulus is wasteful government spending. Stimulus (and other corrupt spending) is why people aren't spending/investing, it's not a cure to them.

Multinational banks want to rob you and take away your rights. Monetary policy, supported by academics and educators they fund via massive government subsidies, is one vehicle by which they accomplish this.

[I wish I could obey forum rules]

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