or Connect
AppleInsider › Forums › Other Discussion › AppleOutsider › PoliticalOutsider › How Do We Fix The Economy?
New Posts  All Forums:Forum Nav:

How Do We Fix The Economy?

post #1 of 96
Thread Starter 
...and the government fiscal situation?

I don't see a thread where people discuss their ideas on what will work for both issues, which are obviously interrelated. Thought I'd start one, as I think we can all agree that action of some sort needs to be taken. We all share the same goal in seeing both "fixed," or so I would think.

So, what can the government do help ensure short and long term economic growth? What do we do about the national debt and the current deficit levels? What can we change about the tax code and the way we fund entitlements?

I'll write some thoughts a bit later. Off to teach the leaders of tomorrow.....
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
Reply
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
Reply
post #2 of 96
Quote:
Originally Posted by SDW2001 View Post

I'll write some thoughts a bit later. Off to teach the leaders of tomorrow.....

Yikes!
What is Faith? When your good deed pleases you and your evil deed grieves you, you are a believer. What is Sin? When a thing disturbs the peace of your heart, give it up - Prophet Muhammad
Reply
What is Faith? When your good deed pleases you and your evil deed grieves you, you are a believer. What is Sin? When a thing disturbs the peace of your heart, give it up - Prophet Muhammad
Reply
post #3 of 96
1. Freeze money market funds on a Friday before a long weekend, do not let anybody withdraw money for several months, and then only at 10% of their initial balance per month.

2. Pass a special law Friday night that puts the entire S&P 500 into expedited bankruptcy. All bonds, preferred stock, credit default swaps and other long term debt are converted to common stock at the Friday close prices, all 500 companies are given until the end of the long weekend to work out the details, and one week (where trading in those debt instruments is frozen) to make the conversions.

3. One year moratorium on corporate taxes and payroll taxes for everybody other than the S&P500, this is because the businesses smaller than the top 500 will need help competing with the newly debt-free companies.

4. Pass a much more extensive set of banking regulation, that un-does all of the deregulation of the last 40 years, updated for modern finance.

5. Put tens of thousands of bankers in jail for fraud

6. Close all foreign military bases, we can not afford them anymore

7. End all corporate subsidies, particularly farm subsidies

8. Single payer healthcare, I believe it will lower medical costs and we can't afford to pay the $42 trillion in net present value of the baby boomer medical costs as they age.
45 2a3 300b 211 845 833
Reply
45 2a3 300b 211 845 833
Reply
post #4 of 96
Quote:
Originally Posted by e1618978 View Post

1. Freeze money market funds on a Friday before a long weekend, do not let anybody withdraw money for several months, and then only at 10% of their initial balance per month.

Good God why???!!!


Quote:
Originally Posted by e1618978 View Post

2. Pass a special law Friday night that puts the entire S&P 500 into expedited bankruptcy. All bonds, preferred stock, credit default swaps and other long term debt are converted to common stock at the Friday close prices, all 500 companies are given until the end of the long weekend to work out the details, and one week (where trading in those debt instruments is frozen) to make the conversions.

Is this a joke?


Quote:
Originally Posted by e1618978 View Post

3. One year moratorium on corporate taxes and payroll taxes for everybody other than the S&P500, this is because the businesses smaller than the top 500 will need help competing with the newly debt-free companies.




Quote:
Originally Posted by e1618978 View Post

4. Pass a much more extensive set of banking regulation, that un-does all of the deregulation of the last 40 years, updated for modern finance.

How about we simply de-cartelize and de-monopolize (and then de-regulate) the baking and monetary system?


Quote:
Originally Posted by e1618978 View Post

5. Put tens of thousands of bankers in jail for fraud

Frankly, you'd have to put the entire banking industry (including The Fed) in jail if you're going to call fraud.



Quote:
Originally Posted by e1618978 View Post

6. Close all foreign military bases, we can not afford them anymore

7. End all corporate subsidies, particularly farm subsidies

Now you're starting to make sense.



Quote:
Originally Posted by e1618978 View Post

8. Single payer healthcare, I believe it will lower medical costs and we can't afford to pay the $42 trillion in net present value of the baby boomer medical costs as they age.

But then you stopped making sense again. Just because you believe it, doesn't make it so.

The state is nothing more than a criminal gang writ large.

Reply

The state is nothing more than a criminal gang writ large.

Reply
post #5 of 96
The very first thing that needs to be done is government spending needs to be reigned in...to balance...even surplus. There are plenty of options for spending cuts including both military and domestic spending. Ending all subsidies is a good (but small) start. Ultimately to achieve significant reductions will require tackling the welfare/entitlement programs.

The surplus should be "spent" on tax cuts and debt reduction.

Once this is achieved, tax cuts and tax simplification can begin. Tax reform should both reduce taxation and shift taxation away from income and savings and towards consumption.

Next, the Fed needs to stabilize the monetary and credit base by slowly raising reserve requirements and reducing open market operations. Both of these will help keep inflation in check. Ultimately getting back to a sound money system would be best, but this would have to be achieved gently and gradually.

Then open up trade. This probably starts (ironically enough) with ripping up NAFTA (it is not a free-trade agreement in any real sense of the meaning of the word "free"), et al.

Finally, some (the more the better) level of regulatory simplification needs to be tackled too. Most regulations (contrary to what most people think) is designed to protect incumbent industry players and prevent real competition. Think "regulatory capture." It's real and alive.

The state is nothing more than a criminal gang writ large.

Reply

The state is nothing more than a criminal gang writ large.

Reply
post #6 of 96
There's no way to do it without pain at the consumer level. The longer we let it go, the more pain will have to be endured eventually to fix it.

The government MUST cut spending. The government MUST pay down its debt.

These cannot happen without eliminating some of the largess that the government pays out to citizens (and non-citizens.)
People are going to have to forgo their "government benefits" because the population as a whole (the government) just cannot afford to continue to pay them.
The people who CAN afford it need to step up to the plate and help out their neighbor PRIVATELY... Charity is not a government function!


edit:... MJ put more thought into his post... he's "spot-on" !!!
From out there on the moon, international politics look so petty. You want to grab a politician by the scruff of the neck and drag him a quarter of a million miles out and say, "Look at that!" -...
Reply
From out there on the moon, international politics look so petty. You want to grab a politician by the scruff of the neck and drag him a quarter of a million miles out and say, "Look at that!" -...
Reply
post #7 of 96
Quote:
Originally Posted by KingOfSomewhereHot View Post

There's no way to do it without pain at the consumer level. The longer we let it go, the more pain will have to be endured eventually to fix it.

The government MUST cut spending. The government MUST pay down its debt.

These cannot happen without eliminating some of the largess that the government pays out to citizens (and non-citizens.)
People are going to have to forgo their "government benefits" because the population as a whole (the government) just cannot afford to continue to pay them.
The people who CAN afford it need to step up to the plate and help out their neighbor PRIVATELY... Charity is not a government function!


edit:... MJ put more thought into his post... he's "spot-on" !!!

Absolutely right. The pain will increase exponentially if it's not taken care of now. The Boomers are retiring, Gen-X and Y cannot sustain the vast number of retirees on our meager earnings. People are going to be dying in the streets and starving like dogs for the next 15 to 20 years. I anticipate waves of crime never before seen in the world committed by people just trying to make it to their next meal.

Proud AAPL stock owner.

 

GOA

 

Get the lowdown on the coming collapse:  http://www.cbo.gov/publication/45010

Reply

Proud AAPL stock owner.

 

GOA

 

Get the lowdown on the coming collapse:  http://www.cbo.gov/publication/45010

Reply
post #8 of 96
mj - the whole reason we bailed out people was because the 500 billion in bonds that Lehmann issued was all owned by money market funds.

If we put the S&P through bankruptcy, we need to freeze money market funds so that little old ladies don't lose all their money in the temporary market crash that would result. If you don't freeze them, people will panic and withdraw their money at the bottom. Bankrupting the S&P means that money market funds all break the buck, and turn into stock funds. If we don't get rid of corporate debt, we have no way of dealing with our zombie banking system that is killing the country.

Spending cuts by government will only make the problem worse, we can't do spending cuts until we get real economic growth back.
45 2a3 300b 211 845 833
Reply
45 2a3 300b 211 845 833
Reply
post #9 of 96
Quote:
Originally Posted by e1618978 View Post

Spending cuts by government will only make the problem worse, we can't do spending cuts until we get real economic growth back.

I'm afraid you have it exactly backwards. Someone has cast a Keynesian spell on you.

The state is nothing more than a criminal gang writ large.

Reply

The state is nothing more than a criminal gang writ large.

Reply
post #10 of 96
Have any evidence to back that up?
45 2a3 300b 211 845 833
Reply
45 2a3 300b 211 845 833
Reply
post #11 of 96
Quote:
Originally Posted by e1618978 View Post

Have any evidence to back that up?

Pretty much the entire history of economics and government spending.

The state is nothing more than a criminal gang writ large.

Reply

The state is nothing more than a criminal gang writ large.

Reply
post #12 of 96
Quote:
Originally Posted by MJ1970 View Post

Pretty much the entire history of economics and government spending.

too vague. If you want to know the end result of your plan, or something like it, look at Ireland. Austerity = shrinking economy = lower tax revenues, it is just a bad idea all round to cut back government spending during a depression.
45 2a3 300b 211 845 833
Reply
45 2a3 300b 211 845 833
Reply
post #13 of 96
Quote:
Originally Posted by e1618978 View Post

too vague

There's plenty out there for you to read and study. In brief Keynesian economic theory is bullshit. It is flawed to the core. It is intoxicating. It is tempting especially for politicians (to whom it gives an excuse to spend large sums of money) and those who think that the government needs to "do something!" But it is wrong. Government spending does not revive the economy. Exactly the opposite. Think about it carefully (and logically) and you'll easily see why this is.

The state is nothing more than a criminal gang writ large.

Reply

The state is nothing more than a criminal gang writ large.

Reply
post #14 of 96
Thread Starter 
Quote:
Originally Posted by segovius View Post

Yikes!


Ahhh, the fish are biting today, I see....
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
Reply
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
Reply
post #15 of 96
Thread Starter 
Quote:
Originally Posted by e1618978 View Post

1. Freeze money market funds on a Friday before a long weekend, do not let anybody withdraw money for several months, and then only at 10% of their initial balance per month.

That's looney.

Quote:

2. Pass a special law Friday night that puts the entire S&P 500 into expedited bankruptcy. All bonds, preferred stock, credit default swaps and other long term debt are converted to common stock at the Friday close prices, all 500 companies are given until the end of the long weekend to work out the details, and one week (where trading in those debt instruments is frozen) to make the conversions.

THIS is the problem with the economy?

Quote:

3. One year moratorium on corporate taxes and payroll taxes for everybody other than the S&P500, this is because the businesses smaller than the top 500 will need help competing with the newly debt-free companies.

How about just "one year moratorium on corporate taxes?"

Quote:

4. Pass a much more extensive set of banking regulation, that un-does all of the deregulation of the last 40 years, updated for modern finance.

Yes, regulation. That's the ticket!

Quote:

5. Put tens of thousands of bankers in jail for fraud

Really...which ones?

Quote:

6. Close all foreign military bases, we can not afford them anymore

Here again...both extreme, dangerous, and not the problem to begin with.

Quote:

7. End all corporate subsidies, particularly farm subsidies

I don't know about "all" subsidies, but I'd like to take a few of them out back and put them out of their misery, so to speak.

Quote:

8. Single payer healthcare, I believe it will lower medical costs and we can't afford to pay the $42 trillion in net present value of the baby boomer medical costs as they age.

It will lower costs!?!


I just...well.....WOW.
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
Reply
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
Reply
post #16 of 96
Quote:
Originally Posted by SDW2001 View Post

THIS is the problem with the economy?

Yes, that is the problem with the economy. Too much corporate debt, particularly in the banking sector. The banks actually have more debt than assets - WAY more debt than assets, and they can't lend as a result.

And the bankers who should go to jail are the ones that committed fraud. There are tons of them - no new laws, just punish the lawbreakers.

MJ - I was editing my post when you were replying. Why do you think Ireland's austerity programs made their situation worse?
45 2a3 300b 211 845 833
Reply
45 2a3 300b 211 845 833
Reply
post #17 of 96
Quote:
Originally Posted by e1618978 View Post

If you want to know the end result of your plan, or something like it, look at Ireland. Austerity = shrinking economy = lower tax revenues, it is just a bad idea all round to cut back government spending during a depression.

Wrong. What you are seeing is not the end result. It might be the short term pain or consequences but not the end result. The situation in Ireland is also more complicated than you (and Krugman) seem to assume.

The Real Lesson About Ireland's Austerity Plan:

( this is a lengthy but worthwhile read )

Quote:
For commentators like Paul Krugman and Joseph Stiglitz, it’s become an article of faith that credit markets will punish some of the governments that are pursing austerity plans or bold reductions in public spending. Their case study is Ireland. Krugman has asserted that Irish credit spreads have widened in spite of the austerity measures; Stiglitz has said “the belief that markets will get new confidence [from austerity] has been shown wrong” by Ireland’s budget cuts. Should Ireland seek a bailout from the International Monetary Fund (IMF) or European Financial Stability Facility (EFSF) – as now seems increasingly likely – look for Krugman and Stiglitz to blame it on fiscal consolidation.

This argument reflects a fundamental misunderstanding of the scale of the problems facing Ireland. It also badly mischaracterizes the policy steps taken by the Irish government. The problems facing Ireland are far greater than the solutions the government has proposed to date. It should be no surprise that market confidence has not returned because there is no reason for Irish creditors to be confident that they will be repaid in full.

Quote:
The initial austerity measures taken by the Irish government – tax increases and large cuts to public employee wages – seemed ambitious, but they turned out to be a drop in the bucket relative to the cost of the bank rescue.

Quote:
Analysts on the political left are using the implosion of the Irish economy to advance their mistaken narrative about the supposed dangers of reductions in public expenditures. This overlooks that any savings generated by spending cuts were more than offset by outlays associated with the €90 billion NAMA to acquire bad loans in the banking system. While Ireland has made additional pledges to reduce the deficit to 3% of GDP in the medium term, its “consolidation plan would benefit from greater specificity,” as the IMF diplomatically puts it. In other words, Ireland has no credible plan to bring spending and revenues in line and has not done what is necessary to “reduce the uncertainties associated with the consolidation process.”

Large spending cuts can only succeed when they remove uncertainty and change private sector expectations about future disposable income growth and the cost of government. Ireland’s cuts failed to do that because they were dwarfed by the growth in the expected cost of the bank bailout. This means that the government’s implied cost to households and businesses has continued to grow despite the fiscal tightening. Implied government spending continues to grow.


Here's another article that points out the complexities involved with Ireland.

The state is nothing more than a criminal gang writ large.

Reply

The state is nothing more than a criminal gang writ large.

Reply
post #18 of 96
Thread Starter 
Quote:
Originally Posted by e1618978 View Post

Yes, that is the problem with the economy. Too much corporate debt, particularly in the banking sector. The banks actually have more debt than assets - WAY more debt than assets, and they can't lend as a result.

And the bankers who should go to jail are the ones that committed fraud. There are tons of them - no new laws, just punish the lawbreakers.

MJ - I was editing my post when you were replying. Why do you think Ireland's austerity programs made their situation worse?

I disagree. I'm not saying debt is not a problem, because it is. The problem with the economy is that people and small businesses don't have any money. The US economy is based on consumer spending to the tune of about 70%. People are unwilling to spend money (or unable) for a variety of reasons.

I'll use myself as an example. I have a good job, as does my wife. I'm buying my home. I have two nice cars, minimal credit card and other debt and a stable home value. But I'll tell you what I don't have: Cash. In order to maintain my standard of living and save for retirement/college, I have to spend nearly what I make. This leaves very little disposable income for things like: Vacations, electronics, meals out, short-term travel/getaways, etc. In the past, financing some of these things made sense. I could buy furniture with no interest and no payments for a year, and it was fine. I was willing to take on the debt because I knew I could pay it off. But now, there is uncertainty. I'm unwilling to have consumer debt, even at low interest rates (which really don't exist anymore if you've checked your credit cards....we're paying for everyone that didn't act responsibly).

I believe there are millions of people in my exact situation. Every person I speak to (literally...everyone) is in the same boat. No one has any money, but no one is broke, either. So, we spend more time at home. We get takeout instead of going to a steak restaurant. We watch the game on TV instead of going. We don't take that vacation or buy a blu-ray home theater, or a new drill, or whatever. We just wait. Multiply this by about 50,000,000 and one starts to see what the issue is.
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
Reply
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
Reply
post #19 of 96
Quote:
Originally Posted by SDW2001 View Post

I disagree. I'm not saying debt is not a problem, because it is. The problem with the economy is that people and small businesses don't have any money. The US economy is based on consumer spending to the tune of about 70%.

This is not quite right. And, actually, is a somewhat Keynesian view. While it appears that the economy is driven by consumer spending, the reality is that the economy is driven by production. Production always comes first. The real problem right now is that production has been throttled back. There are several reasons for this. Some of it is general economic uncertainty, some of it is certainly regime uncertainty, some of it is concern about future monetary and fiscal policies, some of it has to do with a diminished capital base which is based on savings (deferred consumption.)

What needs to be done is for government, in particular, to get out of the way of producers. Stop inhibiting and punishing them.

Consumption vs. Production, or...The Anatomy of a Stimulus:

Quote:
We can not improve the general standard of living simply by boosting consumption. The apparent chicken-and-egg of production and consumption has an essential fulcrum: the productivity of labor. Progress in prosperity is only made by figuring out and applying ways to do more with less. More goods with less effort and/or less material.

Increasing the productivity of labor makes the real cost of goods go down. As labor is valued by how productive it is, through increasing the productivity of labor, you also increase real wages. Cheaper goods and higher wages are the source of true prosperity and progress.

How do you increase the productivity of labor?

Not by handing consumers more spending money through a stimulus package. That approach fails on two accounts. First, consumer spending is a relative dead end. Items are purchased, enjoyed and consumed. Some businesses benefit, but the effect soon peters out, unless the stimulus keeps coming. Since the money has to come from somewhere, without production, this method is unsustainable.


Consumer Spending Doesn’t Drive the Economy:

Quote:
Thus the truth is just the opposite: Consumer spending is the effect, not the cause, of a productive healthy economy.


Production, Not Consumption, Drives the Economy:

Quote:
The simple fact of the matter is that production must take place before consumption becomes possible. The primary economic task is getting things produced. Getting things consumed is a secondary matter. Consumption is relatively passive or reactive in the economic process. The active positions of economic leadership reside on the production side of the economy. What is of central importance is the strength of incentives that people have to invest in productive enterprises. The chief forms of stimulus in this respect lie in having low taxes and mild regulations.

The state is nothing more than a criminal gang writ large.

Reply

The state is nothing more than a criminal gang writ large.

Reply
post #20 of 96
Quote:
Originally Posted by SDW2001 View Post

...and the government fiscal situation?

I don't see a thread where people discuss their ideas on what will work for both issues, which are obviously interrelated. Thought I'd start one, as I think we can all agree that action of some sort needs to be taken. We all share the same goal in seeing both "fixed," or so I would think.

So, what can the government do help ensure short and long term economic growth? What do we do about the national debt and the current deficit levels? What can we change about the tax code and the way we fund entitlements?

I'll write some thoughts a bit later. Off to teach the leaders of tomorrow.....

Start a WPA which FDR started when he was the president. Put people back to work building infrastructure such as roads, bridges, highways,and etc.Regulate the banks and wall street.Let the Bush cuts expire and tax the rich at least 40% of their earnings they can afford it those making over $350,000 per year.Mainly start with the WPA Project now!
post #21 of 96
Quote:
Originally Posted by gerald apple View Post

Start a WPA which FDR started when he was the president. Put people back to work building infrastructure such as roads, bridges, highways,and etc.Regulate the banks and wall street.Let the Bush cuts expire and tax the rich at least 40% of their earnings they can afford it those making over $350,000 per year.Mainly start with the WPA Project now!

Bzzzt! Wrong answer. Try again.

The state is nothing more than a criminal gang writ large.

Reply

The state is nothing more than a criminal gang writ large.

Reply
post #22 of 96
Thread Starter 
Quote:
Originally Posted by MJ1970 View Post

This is not quite right. And, actually, is a somewhat Keynesian view. While it appears that the economy is driven by consumer spending, the reality is that the economy is driven by production. Production always comes first. The real problem right now is that production has been throttled back. There are several reasons for this. Some of it is general economic uncertainty, some of it is certainly regime uncertainty, some of it is concern about future monetary and fiscal policies, some of it has to do with a diminished capital base which is based on savings (deferred consumption.)

What needs to be done is for government, in particular, to get out of the way of producers. Stop inhibiting and punishing them.

It's not Keynesian at all. What I said is actually quite the opposite. It's still supply-side. Remember, I also said "small businesses." Many small businesses report on personal returns. This is why "tax cuts for the wealth" work, because they have a stimulative effect on small business. They also stimulate demand by giving consumers more of their own money back.
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
Reply
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
Reply
post #23 of 96
Quote:
Originally Posted by SDW2001 View Post

It's not Keynesian at all.

Yes it is.


Quote:
Originally Posted by SDW2001 View Post

What I said is actually quite the opposite. It's still supply-side. Remember, I also said "small businesses."

As to the business part of your statement, this is correct. But the overall gist of your statement is incorrect.


Quote:
Originally Posted by SDW2001 View Post

Many small businesses report on personal returns. This is why "tax cuts for the wealth" work, because they have a stimulative effect on small business.

Correct. Mostly.


Quote:
Originally Posted by SDW2001 View Post

They also stimulate demand by giving consumers more of their own money back.

Eh, not as much.

The state is nothing more than a criminal gang writ large.

Reply

The state is nothing more than a criminal gang writ large.

Reply
post #24 of 96
Thread Starter 
Quote:
Originally Posted by gerald apple View Post

Start a WPA which FDR started when he was the president. Put people back to work building infrastructure such as roads, bridges, highways,and etc.Regulate the banks and wall street.Let the Bush cuts expire and tax the rich at least 40% of their earnings they can afford it those making over $350,000 per year.Mainly start with the WPA Project now!

One has to wonder if you're trolling. I'll assume you're not..for now.

The WPA was a disaster, along with most of FDR's New Deal. It deepened and lengthened the Great Depression. The Keynsian view of stimulating through spending on roads, bridges, highways (etc) is fatally flawed and has been proven not to work.

The "banks and Wall Street" are regulated. In fact, it's the government who pushed banks to make loans to people that they couldn't afford, which is partially what started this whole mess. No one is arguing against all regulation, but here again--it's not the problem and won't solve anything.

Letting the tax cuts expire and raising taxes on the wealthy: It amazes me that there are people in the world that wish to do this, even after such actions have been proven not to help anything...including government revenue. Doing so will simply hurt the economy. Punishing the rich will not help the poor or middle class. They're also the ones paying the taxes. Good move there.
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
Reply
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
Reply
post #25 of 96
Quote:
Originally Posted by MJ1970 View Post

...The real problem right now is that production has been throttled back. There are several reasons for this. Some of it is general economic uncertainty, some of it is certainly regime uncertainty, some of it is concern about future monetary and fiscal policies, some of it has to do with a diminished capital base which is based on savings (deferred consumption.)

The first three are irretrievably intertwined. Arguably the fourth is as well - consumers are reluctant to spend without confidence of a predictable income. That's difficult to have, given an unemployment and under-employment rate not seen since the 1930s.

Businesses can't plan for the future without some assurance of their future expenses. Therefore they can't invest, they can't hire, they can't do much of anything at all except survive until such assurances become apparent. The only factor that is preventing the US economy from a devastating collapse is an overall perception that Obamacare and next year's looming tax increases will be repealed, diminished, or at least deferred, after the composition of Congress's composition changes next week.

Look at the markets recently... bets have been made that some reduction of government's unprecedented expansion is on the horizon, but for now everyone is simply marking time.

If Obamacare is implemented as written, everyone's expenses will increase (except for insurance companies). The degree to which it will increase expenses is difficult or impossible to forecast. At the very least, tax reporting requirements will increase. If it is not repealed, small businesses will need to fire employees, but the number is unknown. Large businesses will either have to pass on increased insurance premiums, contribute more of their own revenue to them, or both. Lastly, they could elect to eliminate insurance altogether, and pay a simple "fine" for compliance, but does anyone really expect the "fine" to remain unchanged year after year? Of course not.

From Apple's recent 10-K:

Quote:
Changes in the Companys tax rates, the adoption of new U.S. or international tax legislation or exposure to additional tax liabilities could affect its future results.

This language, or something like it, appears in every company's annual report. At present, large tax increases for next year are certain.

Arguably, companies don't pay taxes. Consumers who buy their products do. The effect on tax increases on both companies and individual consumption is difficult to predict, but suffice to say that taxing an activity always results in less of it. So we're back to your point #4.

What about the apparent winners - insurance companies? Insurance is a low margin, high volume business. Smaller ones will disappear, leaving fewer companies to compete for lower premiums. It looks like the larger ones will succeed, but what happens when they're unable to compete with the nonprofit "cooperatives" encouraged by Obamacare? We'll begin see them disappear as well. The big problem with nonprofit entities is not only that they produce no profit... they don't produce anything.

Therefore... no one is safe.

Quote:
What needs to be done is for government, in particular, to get out of the way of producers. Stop inhibiting and punishing them.

Precisely.
A is A
Reply
A is A
Reply
post #26 of 96
Quote:
Originally Posted by SDW2001 View Post

The "banks and Wall Street" are regulated. In fact, it's the government who pushed banks to make loans to people that they couldn't afford, which is partially what started this whole mess.

FHA loans dropped from 10% of all loans in 1998 to 2% in 2008. It wasn't the government pushing the banks to make low income loans, it was the government deregulating the banks which allowed them to commit fraud which caused the problems.
45 2a3 300b 211 845 833
Reply
45 2a3 300b 211 845 833
Reply
post #27 of 96
Thread Starter 
I haven't chimed in on my thread...just responding to others, so here goes:

We need a short term boost and long term reform on both taxes and spending.

In the short term, I would suspend all payroll taxes for 3 to 6 months. This would give every worker nearly a 50% raise, and save companies SS taxes as well. This would be financed in the short term with both budget cuts and deficit spending.

Spending: Federal spending would be cut by 40%. Every department would be asked to submit a budget with significant reductions, not just reductions in increases or "0%" budgets. Those who failed to cut significantly would go into consideration for total elimination. Let the agencies compete for dollars, especially the ones operating in non-security related areas. Entire departments would be eliminated or vastly reduced, including the Dept. of Education, the IRS, and so many more (see http://en.wikipedia.org/wiki/List_of...deral_agencies).

Taxes: The IRS and its thousands of employees and 12 billion dollar budget would essentially be gone. A new tax system would be instituted. Corporations would pay a 10% tax on profits after expenses for equipment/reinvestment/employment. Individuals would pay a 5% flat tax on every dollar they earn with no deductions. Once an individual surpasses 125% of the federal poverty line, he would then be taxed progressively based on additional income...with a maximum marginal rate of 20%. The only deductions allowable would be for business expenses, child care, housing and transportation. Every taxpayer would use a form the size of an index card. Enter your income, your tax withheld, your deductions, and find your tax. Now, pay or get a refund. Done. The capital gains tax would be reduced to 10%. Thousands of other taxes would be eliminated, from the gasoline tax, to telecommunications taxes.

Social Security and Medicare taxes would be eliminated and replaced with 2% national sales tax on everything. Once the payroll tax holiday expired, people would still get an approximate 12% raise---6% from the employer no longer paying, and 6% in payroll tax.

A balanced budget amendment would be passed. Deficit spending would be outlawed (after the short term stimulus) unless an emergency situation was declared by a supermajority of Congress (war, etc).

A Debt Elimination Act would be passed, requiring any surpluses resulting from reform to be applied to paying down the debt, and requiring monthly principal and interest payments on the national debt to be budgeted for.
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
Reply
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
Reply
post #28 of 96

The state is nothing more than a criminal gang writ large.

Reply

The state is nothing more than a criminal gang writ large.

Reply
post #29 of 96
Quote:
Originally Posted by MJ1970 View Post

There's plenty out there for you to read and study. In brief Keynesian economic theory is bullshit. It is flawed to the core. It is intoxicating. It is tempting especially for politicians (to whom it gives an excuse to spend large sums of money) and those who think that the government needs to "do something!" But it is wrong. Government spending does not revive the economy. Exactly the opposite. Think about it carefully (and logically) and you'll easily see why this is.

Making myself a note that once time travel is perfected, send Terminator back in time to assassinate Keynes... it'll save us all a lot of trouble in the future... er, past.

Proud AAPL stock owner.

 

GOA

 

Get the lowdown on the coming collapse:  http://www.cbo.gov/publication/45010

Reply

Proud AAPL stock owner.

 

GOA

 

Get the lowdown on the coming collapse:  http://www.cbo.gov/publication/45010

Reply
post #30 of 96
Quote:
Originally Posted by MJ1970 View Post

This is not quite right. And, actually, is a somewhat Keynesian view. While it appears that the economy is driven by consumer spending, the reality is that the economy is driven by production. Production always comes first. The real problem right now is that production has been throttled back. There are several reasons for this. Some of it is general economic uncertainty, some of it is certainly regime uncertainty, some of it is concern about future monetary and fiscal policies, some of it has to do with a diminished capital base which is based on savings (deferred consumption.)

What needs to be done is for government, in particular, to get out of the way of producers. Stop inhibiting and punishing them.

Consumption vs. Production, or...The Anatomy of a Stimulus:

Consumer Spending Doesn’t Drive the Economy:

Production, Not Consumption, Drives the Economy:

You obviously have never owned your own business, because you don't understand the first rule if you sell products. The #1 thing: You must have a customer. If you do not have a customer for what you are offering, then you will not risk design, manufacturing and production... you have no business. Where these backward notions come from is beyond me.

Proud AAPL stock owner.

 

GOA

 

Get the lowdown on the coming collapse:  http://www.cbo.gov/publication/45010

Reply

Proud AAPL stock owner.

 

GOA

 

Get the lowdown on the coming collapse:  http://www.cbo.gov/publication/45010

Reply
post #31 of 96
Quote:
Originally Posted by SpamSandwich View Post

You obviously have never owned your own business, because you don't understand the first principle of making money if you sell products. The #1 thing: You must have a customer. If you do not have a customer for what you are offering, then you will not risk design, manufacturing and production... you have no business. Where these backward notions come from is beyond me.

I have. I do. But I also understand the fundamentals of economics. What I said makes perfect sense even if, at first, it seems counter intuitive.

The state is nothing more than a criminal gang writ large.

Reply

The state is nothing more than a criminal gang writ large.

Reply
post #32 of 96
Quote:
Originally Posted by gerald apple View Post

Start a WPA which FDR started when he was the president. Put people back to work building infrastructure such as roads, bridges, highways,and etc.Regulate the banks and wall street.Let the Bush cuts expire and tax the rich at least 40% of their earnings they can afford it those making over $350,000 per year.Mainly start with the WPA Project now!

Oh, hell no... to everything you said.

Proud AAPL stock owner.

 

GOA

 

Get the lowdown on the coming collapse:  http://www.cbo.gov/publication/45010

Reply

Proud AAPL stock owner.

 

GOA

 

Get the lowdown on the coming collapse:  http://www.cbo.gov/publication/45010

Reply
post #33 of 96
Quote:
Originally Posted by MJ1970 View Post

I have. I do. But I also understand the fundamentals of economics. What I said makes perfect sense even if, at first, it seems counter intuitive.

Why would I, as a manufacturer, commit to creating product if I have no buyers? Please explain.

Proud AAPL stock owner.

 

GOA

 

Get the lowdown on the coming collapse:  http://www.cbo.gov/publication/45010

Reply

Proud AAPL stock owner.

 

GOA

 

Get the lowdown on the coming collapse:  http://www.cbo.gov/publication/45010

Reply
post #34 of 96
Quote:
Originally Posted by SpamSandwich View Post

Why would I, as a manufacturer, commit to creating product if I have no buyers? Please explain.

Entrepreneurs commit to production all the time only on the basis of prospective customers. In fact it is this action of producing that turns people into customers. What you're not getting is that demand already does exist first (it always exists), but production is what turns demand into real products and drives the economy forward. Either way, in this context, you cannot drive an economy forward by simply giving money to the demanders (which what basic Keynesian preaches.) Honestly, read the links I posted. They explain this far more eloquently than I can.

The state is nothing more than a criminal gang writ large.

Reply

The state is nothing more than a criminal gang writ large.

Reply
post #35 of 96
Quote:
Originally Posted by SDW2001 View Post

... Entire departments would be eliminated or vastly reduced, including the Dept. of Education, the IRS, and so many more

The Dept of Education employs 5000 people. Its budget is $68 billion this year, up from $42 billion before NCLB. Programs like it have had dubious success if any, and impede and interfere with the proper functions of locally elected and supported school boards.

It educates no one. Kill it.
A is A
Reply
A is A
Reply
post #36 of 96
Quote:
Originally Posted by SpamSandwich View Post

Absolutely right. The pain will increase exponentially if it's not taken care of now. The Boomers are retiring, Gen-X and Y cannot sustain the vast number of retirees on our meager earnings. People are going to be dying in the streets and starving like dogs for the next 15 to 20 years. I anticipate waves of crime never before seen in the world committed by people just trying to make it to their next meal.


I agree with you guys on this. Things are going to be very difficult and the economy is not going to make any conventional sense of recovery anytime soon. It breaks my heart to put our elderly, disabled, dumb, etc out on the street but these entitlement systems were meant to be a safety net. These have ended up being abused and depended on. We need to realize that we don't each get to live in our own house/apt and are going to have to consolidate with family and friends to help take care of each other. Let us not forget the mentality of some that we can hand the military a blank check in the name of security. I know we will all supposedly be kill by suicide bombers if we don't stay in the Middle East but you can NEVER hand out blank checks.
post #37 of 96
The Dow is back to 11,000. Corporations are making record profits again. Wall street is fine. The biggest lesson they learned from this mess is that even with 9.6% unemployment, they can make a metric fuck-ton of money. Why bother hiring back all those who were fired when those remaining do more work for less money and are too scared of losing their jobs to complain about it or try to find work elsewhere?

How do we fix this country? Easy.

End the culture of GREED.

 

“The nitrogen in our DNA, the calcium in our teeth, the iron in our blood, the carbon in our apple pies were made in the interiors of collapsing stars. We are made of starstuff.” 
-Sagan
Reply

 

“The nitrogen in our DNA, the calcium in our teeth, the iron in our blood, the carbon in our apple pies were made in the interiors of collapsing stars. We are made of starstuff.” 
-Sagan
Reply
post #38 of 96
Quote:
Originally Posted by john galt View Post

It educates no one. Kill it.

Are you trying to be the poster boy for this message?

 

“The nitrogen in our DNA, the calcium in our teeth, the iron in our blood, the carbon in our apple pies were made in the interiors of collapsing stars. We are made of starstuff.” 
-Sagan
Reply

 

“The nitrogen in our DNA, the calcium in our teeth, the iron in our blood, the carbon in our apple pies were made in the interiors of collapsing stars. We are made of starstuff.” 
-Sagan
Reply
post #39 of 96
Quote:
Originally Posted by BR View Post

The Dow is back to 11,000.

The Dow is likely over sold at this point and due for an "adjustment." It is not a good indicator of economic health. It certainly isn't a good indicator of the future, which is what businesses are looking at right now.


Quote:
Originally Posted by BR View Post

Corporations are making record profits again.

That's debatable. More companies are returning to profitability, yes. All are making "record profits?" No.


Quote:
Originally Posted by BR View Post

Why bother hiring back all those who were fired when those remaining do more work for less money and are too scared of losing their jobs to complain about it or try to find work elsewhere?

Do you believe that by hiring additional employees they will make less profit or more profit?


Quote:
Originally Posted by BR View Post

How do we fix this country? Easy.

End the culture of GREED.

How do you propose to do that? Is it only greed for money that you wish to end or greed for power and control also?

The state is nothing more than a criminal gang writ large.

Reply

The state is nothing more than a criminal gang writ large.

Reply
post #40 of 96
Quote:
Originally Posted by MJ1970 View Post

Entrepreneurs commit to production all the time only on the basis of prospective customers. In fact it is this action of producing that turns people into customers. What you're not getting is that demand already does exist first (it always exists), but production is what turns demand into real products and drives the economy forward. Either way, in this context, you cannot drive an economy forward by simply giving money to the demanders (which what basic Keynesian preaches.) Honestly, read the links I posted. They explain this far more eloquently than I can.

Apparently, we're not understanding each other. I asked if I had no customers, why would I commit to manufacture?

I understand how a business can or will reposition it's offerings to attract new customers with new needs or create new products at new price points, but if customers aren't buying, they aren't buying. Yes, it's a far-fetched example and in an open, competitive market there will always be some way to find a buyer for something, but one almost never... NEVER... commits to production on something that has no proven buyer. It's just not done. Look at all of Apple's offerings. They find areas of the market that are under-served or not served at all, BUT there is a pent-up demand for a solution. A solution, not a specific product.

Proud AAPL stock owner.

 

GOA

 

Get the lowdown on the coming collapse:  http://www.cbo.gov/publication/45010

Reply

Proud AAPL stock owner.

 

GOA

 

Get the lowdown on the coming collapse:  http://www.cbo.gov/publication/45010

Reply
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: PoliticalOutsider
AppleInsider › Forums › Other Discussion › AppleOutsider › PoliticalOutsider › How Do We Fix The Economy?