Perfect example of how demand-side economic incentives are vital to our economy.

[tonton]

http://www.huffingtonpost.com/john-seery/joe-the-plumber-meets-sam_b_135399.html

I don't care about that. If I'm making money, I don't care. I'll pay my taxes. But I'm not going to make any money if the middle-class guy doesn't have money in his pocket to buy my gas or my food. I don't need the big tax cut right now. That's not going to bring the customers into my gas stations.

To make it simple for all the Jubelums and Larsons out there, if the average low and middle class consumer doesn't have the money to spend, Joe or Sam businessman has no money to be made. No amount of tax cuts to Joe and Sam, and not to the lower and middle class, can put money in Joe or Sam's pockets. Only the lower and middle class can put money in Joe and Sam's pockets.

[FloorJack]

The antidotal exception proves the rule huh?

[Northgate]

At the moment of crisis, let's starve the beast. Hmmm.

[groverat]

Is that an "antidotal" exception?

[hardeeharhar]

I think he means anecdotal but you never know with Scott PhD...

[tonton]

I think he means anecdotal but you never know with Scott PhD...

It's not an attack on FJ personally, but i think it's important to state that I think that it's seriously sad that our education system can produce a PhD that doesn't know the correct term.

And no, it is not "proof". I never said that. I said it is an example.

Meanwhile, Joe the Plumber is an average American who will be hurt by Obama's plan (even though he's not and it was all a lie)... :rolleyes:

[FloorJack]

It's not an attack on FJ personally, but i think it's important to state that I think that it's seriously sad that our education system can produce a PhD that doesn't know the correct term.

And no, it is not "proof". I never said that. I said it is an example.

Meanwhile, Joe the Plumber is an average American who will be hurt by Obama's plan (even though he's not and it was all a lie)... :rolleyes:

I just type fast and don't get the spell checker.

[@_@ Artman]

I just type fast and don't get the spell checker.

Ya oughta check Firefox's website for an anecdotal checker add-on too.

[trumptman]

http://www.huffingtonpost.com/john-seery/joe-the-plumber-meets-sam_b_135399.html



To make it simple for all the Jubelums and Larsons out there, if the average low and middle class consumer doesn't have the money to spend, Joe or Sam businessman has no money to be made. No amount of tax cuts to Joe and Sam, and not to the lower and middle class, can put money in Joe or Sam's pockets. Only the lower and middle class can put money in Joe and Sam's pockets.

This post and a few others that have woven themselves among threads really seem to be debates about the limits of monetarism. Considering we are watching the fed fight a deflationary asset bubble by means of inflationary currency policy it isn't surprising that this is coming up ten different ways.

Money, it would be argued by myself and others is always just a proxy for bartering be it labor, information, services etc. One of the arguments against a hard currency is of course that it isn't flexible enough to deal with quick economic growth or quick distortions within the economy. What we practice now, be it under Democrats or Republicans is monetarism. I'm not going to claim to know how to completely rectify the excesses and problems I see in monetarism. I'm not a gold bug nor am I advocating a strict hard currency. However it is clear that I disagree with some monetarist notions.

Your claim here is basically that money does matter. Regardless of how it is earned or the value actually assigned to it, it matters and that making more of it, be it by a printing press or somehow trying to grab the value and redistribute it from others, makes a large difference in our day to day lives. I'm going to disagree with that strongly. In my opinion, value is value and trying to steal it via printing or attempts at redistribution leads only to an increasingly array of distortions that eventually all come crashing down.

The lower and middle classes can put money into Joe and Sam's pockets but is that money really worth anything if it was just printed or created instead of derived from value of some sort? The value doesn't have to be gold, but from something that in the end still represents a trade of some sort. My view is that without a true trade the lower and middle classes can't really put money into Joe and Sam's pockets.

You can print the dollars. You can loan them the dollars. You can attempt to extract the value from Joe and Sam and have it float back into their pockets via service to the lower and middle classes but in the end all these things are just distortions. Either there is something to trade of value or there isn't.

This is the same argument at the core of minimum wage. Numbers are really just attempts to quantify the value. You can raise them but all it does is alter the numbers everywhere else to bring everything back to the same value but with different numbers.

Value is value and while monetarism is a solution to hard currencies, it still hasn't solved the fact that value is value. Instead of occasional hard falls, it has in my view, inflated away the problems leading to softer landings in the short run but perhaps the largest fall of all in the end. We clearly are presiding over an ever expanding and increasing array of bubbles that simply reshuffle the deck chairs. Eventually the problem of value will sink us. I suspect we will be close to hyperinflation with the dollar before that problem is confronted.

[groverat]

Money, it would be argued by myself and others is always just a proxy for bartering be it labor, information, services etc.

Who would argue otherwise?

The lower and middle classes can put money into Joe and Sam's pockets but is that money really worth anything if it was just printed or created instead of derived from value of some sort?

The question has built within it the assumption that all money acquired is money earned in some intrinsic sense. Unless I am wrong and misunderstand the question.

[hardeeharhar]

This isn't an attack on monetarism at all.

Obama's tax cuts are about trying to balance who pays for government services. That is all. It isn't some redistribution ploy. It is about letting the vast majority of consumers keep more of their money so they can use it where they would like. More people will pay less in taxes -- that means there are greater numbers of rational choices being made with money that would have ended up in government hands, this should HELP the economy grow and has nothing to do with printing more money or redistribution of money.

It is about rebalancing who pays for government services.

[trumptman]

Who would argue otherwise?

There are several schools of economic thought that don't completely agree.


The question has built within it the assumption that all money acquired is money earned in some intrinsic sense. Unless I am wrong and misunderstand the question.

I did not state that at all. I simply said it is a proxy for value. The value can be separated from the money and often is with our attempts at social engineering. We feel better and think our intentions good but the outcome really isn't different, just the numbers.

This isn't an attack on monetarism at all.

Obama's tax cuts are about trying to balance who pays for government services. That is all. It isn't some redistribution ploy. It is about letting the vast majority of consumers keep more of their money so they can use it where they would like. More people will pay less in taxes -- that means there are greater numbers of rational choices being made with money that would have ended up in government hands, this should HELP the economy grow and has nothing to do with printing more money or redistribution of money.

It is about rebalancing who pays for government services.

First you can't receive a credit for a tax you didn't pay and claim it is about paying for government services. That is straight up income redistribution. Second, I'm not arguing that it is wrong for Obama to do this, rather I'm arguing that the numbers will move but the value will not. It is possible to separate the numbers from the value they represent. As I noted this has been brought up several different ways from subprime loans to tax credits, my opinion is that you cannot create value via legislation, even legislation that attempts to move money around to represent that value.

[hardeeharhar]

First you can't receive a credit for a tax you didn't pay and claim it is about paying for government services. That is straight up income redistribution. Second, I'm not arguing that it is wrong for Obama to do this, rather I'm arguing that the numbers will move but the value will not. It is possible to separate the numbers from the value they represent. As I noted this has been brought up several different ways from subprime loans to tax credits, my opinion is that you cannot create value via legislation, even legislation that attempts to move money around to represent that value.

We don't honestly know the particulars of the 95%, it is indicated that the 95% are working adults who pay income tax and that the vast majority of the 95% are merely getting a tax reduction.

It isn't a matter of creating wealth, it is a matter of creating driving force in the consumer economy as opposed to the investment economy. It is also coupled to a job creation policy set that runs circles around McCain's...

[@_@ Artman]

http://farm1.static.flickr.com/80/262600004_47298cf6f2.jpg

I'm off shopping, have a great day!

Great discussion all, keep it up.

[FloorJack]

This isn't an attack on monetarism at all.

Obama's tax cuts are about trying to balance who pays for government services. That is all. It isn't some redistribution ploy. It is about letting the vast majority of consumers keep more of their money so they can use it where they would like. More people will pay less in taxes -- that means there are greater numbers of rational choices being made with money that would have ended up in government hands, this should HELP the economy grow and has nothing to do with printing more money or redistribution of money.

It is about rebalancing who pays for government services.

There seems to be a fundamental misunderstanding among Obama devotees. The refundable tax credits can take a tax filers (notice I didn't use the word payer) taxes owed into the negative numbers. When a refundable tax credit takes the taxes owed into the negative numbers then they get money from the government. It's not a refund on taxes paid it's a direct transfer from the treasury to the individual.

Now some might argue that this makes up for taxes paid in the payroll tax or medicare tax. It may be true. It may also be that even when those taxes are taken into account the tax filer still comes out ahead. I've never run the numbers. BUT if the payroll tax is too high and unfair then .... change the payroll tax. If medicare tax is too high or unfair ... change that tax.

There's a good argument to be made that a regressive tax scale that can go negative for poor people is a great way to help people out while not creating a disincentive to earn more. I kind of like the idea but that's not what Obama is selling. He's selling the lie that "95% of tax payer are going to get a tax cut".

In the Obama-McCain race to toss money at problems the discussion of what tax policy might be best is lost.

[@_@ Artman]

In the Obama-McCain race to toss money at problems the discussion of what tax policy might be best is lost.

It is just not cut and dry, cast in stone and approved yet. When Obama receives the budget records from the Bush administration (which we know are cooked) and realizes the truth of the deficit and waste they accumulated, all bets may may off and plans could change. It's happened before... (http://www.pbs.org/wgbh/pages/frontline/shows/clinton/chapters/2.html#3)

Reich: Well, we knew the deficit was large. In fact, years before [Reagan budget chief] David Stockman had referred to '$200 billion-a-year deficits as far as the eye could see." And during the campaign, the president did talk about the importance of reducing the deficit, but it had been of second order priority to investing in education, in job skills, in health care, and a lot of other things that the country needed to do. But, obviously, when the president is on the cusp of actually governing the country, he's got to know how bad that deficit projection really is, how much damage has been done, what he's inherited in terms of an economic mess.

And so I headed over to the Treasury Department to talk to officials over there, officials in the Bush administration, and try to get the best estimate I possibly could as to how bad the numbers really looked, how bad that deficit was going to be the next year and likely to be in years to come.

And you found out it was going to be worse than you had been told, and on December 7th I think it was, you go to tell the president the news. What's his reaction?

Reich: The president was not happy when he heard that the projected deficit was much larger than we had assumed, larger than we had been told, larger than the Bush administration had told the public. He knew that it meant that we couldn't do everything that he wanted to do, everything that he had promised the public. Now, he was both upset, but he was also -- I remember this very vividly, and I was surprised at the time because he was also kind of excited. He said, "Gee, that's a great challenge. We're going to really, really have to work on that." And I remember sitting there thinking, "Now, wait a minute. This is going to set a lot of our plans back. Certainly this is going to put a major crimp in all of this public investment.

Rubin: By the time we got toward the end of the transition, the Bush administration had come out with new deficit forecasts and they were much higher than anybody expected.

So, clearly, that was creating whole new pressures. On January 7th of 1993, during the transition, we had a six-and-a-half hour meeting in Little Rock, the incoming economic team with the president, the vice president, and Hillary. And one of the political advisors said to me just before the meeting that our recommendation of very strong deficit reduction was going to require the president to defer a lot of things that he cared deeply about, and that you couldn't possibly expect the president-elect to make that decision at that time.

So, we'll see what Bush's Budget Necronomicon holds in store for Obama. I predict quite a jarring surprise.

[FloorJack]

It is just not cut and dry, cast in stone and approved yet. When Obama receives the budget records from the Bush administration (which we know are cooked) and realizes the truth of the deficit and waste they accumulated, all bets may may off and plans could change. It's happened before... (http://www.pbs.org/wgbh/pages/frontline/shows/clinton/chapters/2.html#3)



So, we'll see what Bush's Budget Necronomicon holds in store for Obama. I predict quite a jarring surprise.

Pure nonsense. Obama is part of the legislative branch that sends the budget to the president. The OMB and the CBO feed information to the congress constantly. If Obama doesn't know what kind of budget mess he's getting into then it's on him and not on Bush.


I guess that's the future spin. Two years down the road when Obama is failing the spin will be ... BUSH LIED about the budget and screwed Obama. May as well start paving the road now.

[midwinter]

I think that it's seriously sad that our education system can produce a PhD that doesn't know the correct term.

My PhD program had a 16-week course on the difference between "antidote" and "anecdote." :lol:

[franksargent]

Pure nonsense. Obama is part of the legislative branch that sends the budget to the president. The OMB and the CBO feed information to the congress constantly. If Obama doesn't know what kind of budget mess he's getting into then it's on him and not on Bush.


I guess that's the future spin. Two years down the road when Obama is failing the spin will be ... BUSH LIED about the budget and screwed Obama. May as well start paving the road now.

What the f*ck are you talking about?

Bush 43 will have increased the public debt by well over $5,000,000,000,000.00 by the end of this fiscal year.

Bush 43 will leave eight straight years of deficit spending for someone else to attempt to correct.

So far through fiscal year 2008 Bush 43 has had a total of $2,131,405,000,000.00 in deficit spending, by the end of fiscal year 2009 that number will likely be at least $2,600,000,000,000.00

The only other period of record deficit spending and increased public debt?

Reagan-Bush 41, where the public debt went from less than $1,000,000,000,000.00 to over $4,400,000,000,000.00 with 12 years of budget deficits totaling $2,450,000,000,000.00

It has become very self evident that Republicans totally suck at fiscal responsibility and that they don't know where the buck stops.

Note all numbers above are either from Treasury, OMB, and CBO with some SWAG on my part for fiscal year 2009, over and above the OMB and CBO fiscal year 2009 estimates which were made before the current financial crisis occurred.

Bush 43 + Reagan-Bush 41 = Hooverville! Part Deux

[midwinter]

No, but before you get a PhD, you get a Master's Degree. Before you get a Master's you get a Bachelor's. Before that, you need a high school Diploma. Along every step of the way, there should be papers to be written, countless volumes to be read, current events to be followed...

In my MA program, we did special advanced coursework in the difference between "sale" and "sell." For my two Bachelors degrees, I had to take "Introduction to Not Spelling It 'Batchelors.'"

In high school, we just watched the movie versions of everything. ;)

[midwinter]

Now that I think about it, I wonder if it was just a Freudian slip. The term would seem to suggest a latent belief that the anecdote is actually the antidote, wouldn't it?

[tonton]

Now that I think about it, I wonder if it was just a Freudian slip. The term would seem to suggest a latent belief that the anecdote is actually the antidote, wouldn't it?

Well, demand side incentives are an antidote to the horrific effects we've seen under Reaganomics, after all.

[FloorJack]

What the f*ck are you talking about?


....

Are you reading the thread? Artman posted that Obama wouldn't know the full details of the federal budget until he gets to the while house and found all of Bush's secrets. I'll bold it for you...


It is just not cut and dry, cast in stone and approved yet. When Obama receives the budget records from the Bush administration (which we know are cooked) and realizes the truth of the deficit and waste they accumulated, all bets may may off and plans could change. It's happened before... (http://www.pbs.org/wgbh/pages/frontline/shows/clinton/chapters/2.html#3)



So, we'll see what Bush's Budget Necronomicon holds in store for Obama. I predict quite a jarring surprise.

There is no surprise to come out. Everything is know because the budget and the tax receipts are known to the legislature. So Artman's premiss is wrong.