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Stimulus vs. Austerity

post #1 of 38
Thread Starter 

Republicans like to talk about how bad the economy has been under Obama. Things have been improving since Obama took office, but they aren't as good as they should be, and because Obama started during a bad recession, his term in office is still basically a net negative. This is a great talking point for Obama's opponents, and will be the primary message of Romney's campaign. 

 

 

595cb53ac83eaf0996940731b9e32b87.jpg

 

 

What Obama's supporters have to argue is more difficult: That things would have been worse under Republican policies than Obama's. 

 

But now there is a good counterfactual. When the Conservatives won in the UK, the Republicans here said we should do what the Tories were starting to do there. Cut spending. Austerity. Now we see what's happened to the UK under austerity policies: Double-dip recession. Mainstream, textbook economics was right. Spend, don't cut during a recession. Chart from this piece.

 

chart-of-the-day-real-gdp-rebased-to-100-in-2003-april-2012.jpg

post #2 of 38

You've got to count the credit cards too BRussell. Much like how some companies "purchase" marketshare with loss-leaders or by cutting deep into profit margins (see pretty much all Android phones) the numbers in isolation do not tell enough.

 

Obama added five trillion to the national debt. CBO has stated even within their pre-fed and doctored estimates that all we did was borrow from future growth and then lowered future growth due to increased costs in borrowing and the fact that the future growth now must pay back that five trillion.

 

Your chart is sort of like saying you had more cash in the till at the end of the shift, and neglecting to mention you borrowed $5,000 and put it in the till to come out $1,000 ahead.

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #3 of 38
Thread Starter 
First, Obama didn't add anywhere near 5 trillion to the debt. The stimulus package was less than 1 trillion over the three years. You've got to blame Obama for the recession that ended as he took office, for the Iraq war that he opposed and ended, etc., to get to that number.

Second, I wonder if you believe that the economy can have momentum, or can be kick-started. People work, people make more money, people buy stuff, that helps other businesses, etc. It's why economists talk about multipliers, and it's something that you guys seem to believe in when it comes to tax cuts. Really, really strongly believe in, to the extent that you guys used to say that they can completely pay for themselves.
post #4 of 38
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post #5 of 38

 

Quote:
Originally Posted by BRussell View Post

First, Obama didn't add anywhere near 5 trillion to the debt. The stimulus package was less than 1 trillion over the three years. You've got to blame Obama for the recession that ended as he took office, for the Iraq war that he opposed and ended, etc., to get to that number.

Second, I wonder if you believe that the economy can have momentum, or can be kick-started. People work, people make more money, people buy stuff, that helps other businesses, etc. It's why economists talk about multipliers, and it's something that you guys seem to believe in when it comes to tax cuts. Really, really strongly believe in, to the extent that you guys used to say that they can completely pay for themselves.

 

I'm sorry but only in crazy Obama-defender land is a president somehow not responsible for the debt added during their term. It is called governing and leadership for a reason. The man had enough votes to pass whatever he wanted including Obamacare. The stimulus was his but as for the recession, did Bush get to excuse his tax cuts and other measures necessary to end the recession caused by the bursting of the tech bubble and lay them on Bill Clinton's feet? Were his official numbers somehow adjusted? Not at all.

 

As an example, when Obama wanted the stimulus, he reopened FY2008 and inserted it. Normally his spending priorities wouldn't start until FY2009. However he wanted spending and so he reopened the year and got it. He could have done that with all the other things he promised like bringing home troops, etc. Obama is responsible for all spending during his term.

 

As for my believe in the economy and action, my main rule is that everything reverts to the norm and that without real savings and investment, regardless of party, you will not see returns. Calling spending investments or other such nonsense cannot change this fact. Tax cuts can pay for themselves in increased economic activity if the rates are prohibitive enough that they make people reconsider or stop engaging in certain economic activities. However I have also said that we are not on the side of the Laffer curve where that will happen right now. When Reagan took office, we clearly were though and the fact that companies are keeping billions abroad due to tax rates shows that they are deforming and preventing certain investment patterns. Apple as an example is one of those countries noting the problem there.

 

Could someone who is paying 75% of their income above certain levels decide to earn more income and become more productive if that income is only taxed at 35%. I believe yes, that they would raise their number of hours worked, seek opportunities, etc. I don't believe that will be the case if the tax rate drops to 32%. Likewise speaking in interest on student loans, I don't think students are suddently going to stop going to college if they have to pay 6.8% interest instead of 3-4% interest.

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #6 of 38

 

 

Yes, I've seen that complete bullshit before.  

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post #7 of 38

BRussell:

 

Quote:
Republicans like to talk about how bad the economy has been under Obama. 

 

Because it has been bad.  

 

Quote:
Things have been improving since Obama took office, but they aren't as good as they should be, and because Obama started during a bad recession, his term in office is still basically a net negative. This is a great talking point for Obama's opponents, and will be the primary message of Romney's campaign. 

 

Ehh...things really haven't been improving much.  The first chart (which is basically from the WH website) really just shows that massive job losses stopped.  However, the employment and growth numbers aren't enough to make any real progress.  The economy is what I would call "stagnant" at this point.  Given where it actually is, that's not good.  

 

 

 

Quote:

What Obama's supporters have to argue is more difficult: That things would have been worse under Republican policies than Obama's. 

 

 

That is correct, and it's the entire basis of Obama's reelection campaign.  "Things Could Have Been Worse: 2012"  

 

Quote:
But now there is a good counterfactual. When the Conservatives won in the UK, the Republicans here said we should do what the Tories were starting to do there. Cut spending. Austerity. Now we see what's happened to the UK under austerity policies:Double-dip recession. Mainstream, textbook economics was right. Spend, don't cut during a recession. Chart from this piece.

 

This is about much more than economic theory and austerity vs. stimulus.  Conservatives don't just want to cut spending because it will help the economy on its own...it won't. The problem is that we are running unprecedented deficits and have an unbelievable debt.  This is not from lack of revenue, either (though it's gone down due to the economy).  The problem is spending, which is not just too high, but utterly out of control.  No nation has ever done what we're doing, and one has to wonder how long we can get away with it.  Secondly, the massive spending is fueling a huge, bloated and ever more oppressive government which is stifling the private sector, the real driver of economic growth.  Third, without entitlement reform, those programs will go bankrupt.   So spending cuts are an absolute necessity.  The other part of equation is the creation of a new, simple and fair tax code where everyone contributes something.  Doubling capital gains taxes on "the rich" isn't the way to do this (mathematically it doesn't even work...it brings in less than $5 Billion a year). 

As for spending during a recession, we're tried that before.  When has it ever worked?  

 


Edited by SDW2001 - 4/28/12 at 5:09am
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post #8 of 38
Quote:
Originally Posted by SDW2001 View Post

 

 

Yes, I've seen that complete bullshit before.  

Oh, it's "bullshit"?  Good to know.

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post #9 of 38
Quote:
Originally Posted by Northgate View Post

Oh, it's "bullshit"?  Good to know.

 

It's complete nonsense and highly misleading.   It's based on VERY questionable assumptions and outright omissions.  So, yeah.  

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post #10 of 38
Quote:
Originally Posted by Northgate View Post

Quote:
Originally Posted by SDW2001 View Post

 

 

Yes, I've seen that complete bullshit before.  

Oh, it's "bullshit"?  Good to know.

 

If one has any sort of objectivity then yes. The chart assigns for example all the years the Bush tax rate were in effect, even during the Obama term. It also, for example assigns the spending that Obama and a fully Democratic Congress reauthorized those tax cuts for another two years to......Bush.

 

It assigns all the costs of the auto bailouts to.....Bush.

 

It assigns all the costs for the Obama "surge" in Afghanistan and even the costs for that war happening today to.......Bush.

 

If a president runs claiming he will fix something and then declares he isn't responsible for the costs because they happened on his watch but by golly, he didn't fix it and it is the prior guy's fault, he has just undermined his own argument for being elected or reelected.

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #11 of 38
Thread Starter 

Talk about bad campaign arguments, trumptman. The Republican campaign slogan is going to be "Democrats: they didn't reverse Republican policies fast enough!"

post #12 of 38
Quote:
Originally Posted by BRussell View Post

Talk about bad campaign arguments, trumptman. The Republican campaign slogan is going to be "Democrats: they didn't reverse Republican policies fast enough!"

 

They didn't reverse them much at all, all while proclaiming they are the problem. It won't be good for them at all. It will come across just like Bush and Iraq. He lied, people died, but I'm gonig to fight a better war than him and it will be the right war too.

 

That line of reasoning worked so well for them.

 

Democrats: We kept all the things we declared were bad because we are about solutions and leadership!

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #13 of 38

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

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post #14 of 38
Quote:
Originally Posted by BRussell View Post

Talk about bad campaign arguments, trumptman. The Republican campaign slogan is going to be "Democrats: they didn't reverse Republican policies fast enough!"

 

No, here's what they did.  They took a big pot and put it on the stove.  They took everything bad Bush and the GOP did, multiplied the recipe by 100, and threw it in.  Then, they took everything good and threw it in the trash.  And then they spiced it up by throwing in the worst possible policies:  Obamacare, Trillion dollar deficits, new regulations, green energy crony capitalism, massive growth of government, tax increase proposals, a Foreign Apology Tour™, anti-oil and gas policies and general incompetence (see:  British Petroleum).  Bon Appétit!!!!

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post #15 of 38

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

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post #16 of 38

MJ your article begins to hit the point but I haven't really seen one do it proper justice. Most of these "cuts" were exactly along the lines of what Republicans and some Democrats have proposed here though almost none of them have taken affect on either side of the Atlantic. I read a decent article in FT that noted most French cuts were in the rate at which they would continue to borrow money and in lowering their rate of debt acqusition.

 

So to "Ameicanize" our understanding of what has happened in Europe, we are borrowing over a trillion dollars a year. We declare that over the next ten years we are going to make sure we "borrow" a trillion less by "cutting" a trillion from the ten trillion we would have borrowed while still conducting massive spending and massive borrowing.

 

18 months from now when the economy still isn't fixed, we blame austerity.

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #17 of 38
Quote:
Originally Posted by trumptman View Post

MJ your article begins to hit the point but I haven't really seen one do it proper justice. Most of these "cuts" were exactly along the lines of what Republicans and some Democrats have proposed here though almost none of them have taken affect on either side of the Atlantic. I read a decent article in FT that noted most French cuts were in the rate at which they would continue to borrow money and in lowering their rate of debt acqusition.

 

So to "Ameicanize" our understanding of what has happened in Europe, we are borrowing over a trillion dollars a year. We declare that over the next ten years we are going to make sure we "borrow" a trillion less by "cutting" a trillion from the ten trillion we would have borrowed while still conducting massive spending and massive borrowing.

 

18 months from now when the economy still isn't fixed, we blame austerity.

 

That's pretty much it. And you point out something important. The word "cut" has a different meaning to politicians when speaking of the budget than it does to an ordinary person. To a politician it typically means a gut in the amount of increase. Dishonest indeed.

 

The analogy would go like this:

 

1. I spend about $12,000 in 2012 on groceries.

2. I'm expecting or proposing to spend about $13,000 in 2013 on groceries.

3. We decide to "cut spending", so we instead chose to spend only $12,500 in 2013 on groceries.

4. Democrats accuse me of trying to starve my family to death.

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post #18 of 38
The evil that we fight is but the shadow of the evil that we do.
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post #19 of 38
Quote:
Originally Posted by MJ1970 View Post

The austerity experiment

 

France "slashed" their retirement age from 60 to 62. Ironically unemployed youth rioted.

post #20 of 38

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post #21 of 38

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post #22 of 38
Quote:
Originally Posted by MJ1970 View Post

And still more...

 

'Austerity' in Britain

 

'Austerity' in France

 

This is what happens when the populace is addicted to the public dole in some manner or another.  

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post #23 of 38

A great article on why raising taxes is not the answer.  Even Obama's own advisors know that it decreases growth. And Obama himself said during his last campaign that he would raise the capital gains tax rate even if it meant less revenue for the government...to make things more "fair."  

 

Growth Be Damned

 

 

 

Quote:
Over the past three years, Obama has pursued the goal of higher tax rates as relentlessly as Captain Ahab pursued the great white whale.

 

 

Quote:

And we know from experience that when top rates are increased above Bill Clinton's 39.6 percent, the intake is always less than projected. Since World War II, federal revenues have never risen much over 20 percent of gross domestic product, whether the top rate was 28 percent or 91 percent.

The reason is that when rates get high enough, investors' animal spirits (John Maynard Keynes' term) are directed less at increasing productivity and creating wealth and more at avoiding taxes. And without increased productivity, you don't get robust economic growth -- which hurts everyone.

 

 

 

 

Quote:

Barack Obama doesn't seem to care about these things. In the 2008 campaign, ABC News' Charlie Gibson asked him whether he would increase the capital gains tax rate even if it meant reducing government revenue, as has happened in the past.

Yes, Obama said, "for purposes of fairness." 

 

 

 

 

 

Quote:

 

 

In contrast, Obama's former chief economist Christina Romer and her husband David Romer, in a 2010 academic paper, wrote that "exogenous" tax increases, like letting the "Bush tax cuts" expire after the recession is over, are "highly contractionary."

"Our estimates suggest that a tax increase of 1 percent of GDP reduces output over the next three years by 3 percent," the Romers wrote. "The effect is highly significant."

 

 

 

 

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post #24 of 38

The thing is here that there's been lots of growth, there's been lots of productivity gains showing just how much more the average worker makes for the companies they are working for. The real problem, the problem that our right of centre members want to minimise, is that the massive amount of new wealth is ending up not creating demand for goods by being spent, it's being tucked away. Not only are the rich taking the money their ruining your future, decreasing your chances of having a successful business or well paid job, cutting your services and creating a bigger debt. They are vampires.

 

I recommend reading the following-

 

 

"During the past 30 years, a growing share of the global economic pie has been taken by the world's wealthiest people. In the UK and the US, the share of national income going to the top 1% has doubled, setting workforces adrift from economic progress. Today, the world's 1,200 billionaires hold economic firepower that is equivalent to a third of the size of the American economy.

It is this concentration of income – at levels not seen since the 1920s – that is the real cause of the present crisis.

In the UK, the upward transfer of income from wage earners to business and the mega-wealthy amounts to the equivalent of 7% of the economy. UK wage-earners have around £100bn – roughly equivalent to the size of the nation's health budget – less in their pockets today than if the cake were shared as it was in the late 1970s.

In the US, the sum stands at £500bn. There a typical worker would be more than £3,000 better off if the distribution of output between wages and profits had been held at its 1979 level. In the UK, they would earn almost £2,000 more.

The effect of this consolidation of economic power is that the two most effective routes out of the crisis have been closed. First, consumer demand – the oxygen that makes economies work – has been choked off. Rich economies have lost billions of pounds of spending power. Secondly, the slump in demand might be less damaging if the winners from the process of upward redistribution – big business and the top 1% – were playing a more productive role in helping recovery. They are not.

Britain's richest 1,000 have accumulated fortunes that are collectively worth £250bn more than a decade ago. The biggest global corporations are also sitting on near-record levels of cash. In the UK, such corporate surpluses stand at over £60bn, around 5% of the size of the economy. This money could be used to kickstart growth. Yet it is mostly standing idle. The result is paralysis.

The economic orthodoxy of the past 30 years holds that a stiff dose of inequality brings more efficient and faster-growing economies. It was a theory that captured the New Labour leadership – as long as tackling poverty was made a priority, then the rich should be allowed to flourish.

So have the architects of market capitalism been proved right? The evidence says no. The wealth gap has soared, but without wider economic progress. Since 1980, UK growth and productivity rates have been a third lower and unemployment five times higher than in the postwar era of "regulated capitalism". The three post-1980 recessions have been deeper and longer than those of the 1950s and 1960s, culminating in the crisis of the last four years.

The main outcome of the post-1980 experiment has been an economy that is much more polarised and much more prone to crisis. History shows a clear link between inequality and instability. The two most damaging crises of the last century – the Great Depression of the 1930s and the Great Crash of 2008 – were both preceded by sharp rises in inequality.

The factor linking excessive levels of inequality and economic crisis is to be found in the relationship between wages and productivity. For the two-and-a-half decades from 1945, wages and productivity moved broadly in line across richer nations, with the proceeds of rising prosperity evenly shared. This was also a period of sustained economic stability.

Then there have been two periods when wages have seriously lagged behind productivity – in the 1920s and the post-1980s. Both of them culminating in prolonged slumps. Between 1990 and 2007, real wages in the UK rose more slowly than productivity, and at a worsening rate. In the US, the decoupling started earlier and has led to an even larger gap.

The significance of a growing "wage-productivity gap" is that it upsets the natural mechanisms necessary to achieve economic balance. Purchasing power shrinks and consumer societies suddenly lack the capacity to consume.

In both the 1920s and the post-1980s, to prevent economies seizing up, the demand gap was filled by an explosion of private debt. But pumping in debt didn't prevent recession: it merely delayed it.

Concentrating the proceeds of growth in the hands of a small global financial elite not only brings mass deflation – it also leads to asset bubbles. In 1920s America, a rapid process of enrichment at the top merely fed years of speculative activity in property and the stock market. In the build-up to 2008, rising corporate surpluses and burgeoning personal wealth led to a giant mountain of footloose global capital. The cash sums held by the world's rich (those with cash of more than $1m) doubled in the decade to 2008 to a massive $39 trillion.

Only a tiny proportion of this sum ended up in productive investment. In the decade to 2007, bank lending for property development and takeover activity surged while the share going to UK manufacturing shrank. While the contribution to the economy made by financial services more than doubled over this period, manufacturing fell by a quarter.

Far from creating new wealth, a tsunami of "hot money" raced around the world in search of faster and faster returns, creating bubbles – in property, commodities and business – lowering economic resilience and amplifying the risk of financial breakdown.

New Labour's leaders were right in arguing that the left needed to have a more coherent policy for wealth creation. That is the route to wider prosperity for all. But the central lesson of the last 30 years is that a widening income gap and a more productive economy do not go hand in hand.

An economic model that allows the richest members of society to accumulate a larger and larger share of the cake will eventually self-destruct. It is a lesson that is yet to be learned."

http://www.guardian.co.uk/business/2012/feb/05/inequality-leads-to-economic-collapse

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post #25 of 38

Hands:

 

T

 

Quote:
he thing is here that there's been lots of growth, there's been lots of productivity gains showing just how much more the average worker makes for the companies they are working for. The real problem, the problem that our right of centre members want to minimise, is that the massive amount of new wealth is ending up not creating demand for goods by being spent, it's being tucked away. Not only are the rich taking the money their ruining your future, decreasing your chances of having a successful business or well paid job, cutting your services and creating a bigger debt. They are vampires.

 

The question, Hands, is why are they tucking it away?  This is what our left of center members want to minimize...that taxation, policy and even rhetoric affect economic behavior.  The rich are no more greedy than they were 30 years ago.  Your solution seems to be forcing them to do what you want them to do.  That usually doesn't work out so well.  

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post #26 of 38

What do you think Romney would do if he GOD forbid   he becomes president in the tax problems we are facing now?
 

post #27 of 38

Guys, come on. "Austerity" is the excuse banks are using to get themselves out of the mess they made. Yes, Europeans in general all behaved badly and wasted money they didn't have. But if we think austerity is helping "right the wrongs", we're being misled.

 

Also, as for Obama v Romney, as I mentioned before, I still believe this is relatively farcical. Wall Street, the Fed, the banks and China are the real Presidents of the USA. 

 

Yes, yes, I sound like a broken record, but so far only SDW has really challenged me on that.

post #28 of 38
Quote:
Originally Posted by Hands Sandon View Post

The thing is here that there's been lots of growth, there's been lots of productivity gains showing just how much more the average worker makes for the companies they are working for. The real problem, the problem that our right of centre members want to minimise, is that the massive amount of new wealth is ending up not creating demand for goods by being spent, it's being tucked away. Not only are the rich taking the money their ruining your future, decreasing your chances of having a successful business or well paid job, cutting your services and creating a bigger debt. They are vampires.

 

I recently read, it takes a pretty dumb rich person to become poor, but a really, really smart poor person to become rich.

 

Poor people always think they can have money so they get badly into debt. Rich people think they never have enough money so they keep making money.

 

For the US anyway, there are some fundamental issues that need to be addressed.

 

The "rich" can be taxed more. But they have so many loopholes it seems pointless. Not to mention government spending.

 

The "poor" can be given more opportunities. Again, no one seems to be able to administer this properly.

 

The "middle class" can be given better wages and more job security by companies. Only, Wall Street and the big financial casino that runs the world cripples business in the name of so-called "capitalism".

 

Mark my words, there is a foul stench afoot in these lands and all lands.

post #29 of 38
Quote:
Originally Posted by marvfox View Post

What do you think Romney would do if he GOD forbid   he becomes president in the tax problems we are facing now?
 

 

You can go look up what is platform is for yourself.  However, in broad strokes: 

 

 

  • Make permanent, across-the-board 20 percent cut in marginal rates
  • Maintain current tax rates on interest, dividends, and capital gains
  • Eliminate taxes for taxpayers with AGI below $200,000 on interest, dividends, and capital gains
  • Eliminate the Death Tax
  • Repeal the Alternative Minimum Tax (AMT)

 

Corporate: 

 

 

  • Cut the corporate rate to 25 percent
  • Strengthen and make permanent the R&D tax credit
  • Switch to a territorial tax system
  • Repeal the corporate Alternative Minimum Tax (AMT)

 

These would be a good start.  But as I've mentioned, perhaps even more important than policy at this time is market and consumer confidence.  The markets know that Romney is not anti-business.  They know he's not anti-capitalism.  They know he's not an American Apologist.  Our financial system is based on confidence more than anything.  And if Romney is elected, this one factor alone (IMO) will help the economy quite a bit. 

 

 

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post #30 of 38
Quote:
Originally Posted by nvidia2008 View Post

Quote:
Originally Posted by Hands Sandon View Post

The thing is here that there's been lots of growth, there's been lots of productivity gains showing just how much more the average worker makes for the companies they are working for. The real problem, the problem that our right of centre members want to minimise, is that the massive amount of new wealth is ending up not creating demand for goods by being spent, it's being tucked away. Not only are the rich taking the money their ruining your future, decreasing your chances of having a successful business or well paid job, cutting your services and creating a bigger debt. They are vampires.

 

I recently read, it takes a pretty dumb rich person to become poor, but a really, really smart poor person to become rich.

 

Poor people always think they can have money so they get badly into debt. Rich people think they never have enough money so they keep making money.

 

For the US anyway, there are some fundamental issues that need to be addressed.

 

The "rich" can be taxed more. But they have so many loopholes it seems pointless. Not to mention government spending.

 

The "poor" can be given more opportunities. Again, no one seems to be able to administer this properly.

 

The "middle class" can be given better wages and more job security by companies. Only, Wall Street and the big financial casino that runs the world cripples business in the name of so-called "capitalism".

 

Mark my words, there is a foul stench afoot in these lands and all lands.

 

It doesn't take a dumb rich person at all to become poor. Money habits and management yield their results regardless of initial state, intentions and claims related to intelligence. I've met dozens of people who were not the brightest bulbs but were incredibly consistent in the money principles they applied. In fact I'd argue that one of the major failing related to high intelligence is the belief that it can somehow suspend reality.

 

The reason the poor take on debt is because they do not understand or choose not to care enough to understand that the difference between owe, and own is much more than one letter. It isn't that rich people never have enough money, quite the opposite, I've seen several of them "shrug" when earning the money will not be worth their time, but they value what they earn and like to be in control of their life versus the reverse.

 

Have you ever noticed how the language of poor people is full of fatalism?

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #31 of 38
Quote:
Originally Posted by trumptman View Post

 

It doesn't take a dumb rich person at all to become poor. Money habits and management yield their results regardless of initial state, intentions and claims related to intelligence. I've met dozens of people who were not the brightest bulbs but were incredibly consistent in the money principles they applied. In fact I'd argue that one of the major failing related to high intelligence is the belief that it can somehow suspend reality.

 

The reason the poor take on debt is because they do not understand or choose not to care enough to understand that the difference between owe, and own is much more than one letter. It isn't that rich people never have enough money, quite the opposite, I've seen several of them "shrug" when earning the money will not be worth their time, but they value what they earn and like to be in control of their life versus the reverse.

 

Have you ever noticed how the language of poor people is full of fatalism?

 

 

This is a fair point, and I have seen this first hand this week (see my AppleOutsider thread). I woke up today, and at least here in Western Australia, I cannot imagine at this point in time, how anyone can be sad. Even in the US still, the quality of life is still extremely high ~ for those that can and/or choose to enjoy it.

 

I think the underlying issue as you mention is not intelligence, it's mental, physical and emotional health. There is no more doubt in my mind that this is the fundamental determinants of success, outside of certain uncontrollable factors such as diseases (including mental disorders like bipolar ~ but note that this is aggravated by anxiety issues*), accidents (hit by a bus), child abuse, and so on.

 

But for the most part, while there are some things in life that suck because as yet we have no control over them, mental, physical and emotional health is important.

 

In terms of saving money, it can be done healthily, it can also be done unhealthily, ie. hoarding because you feel there will never be enough.

 

Value-driven income earning, as you allude to, can be quite rare, I find, especially in Asia.

 

It's not widely reported but in Asia we are looking at the beginning of serious mental health issues. Those who have money are stressed they will lose it. Those who don't are bitter at those who do. Psychiatrists in Malaysia, for example, have massive patient loads. Many of my acquaintances, after a while, I realise, abuse sleeping pills, benzodiazepenes (eg. purchased on the black market from India), and so on.

 

In Asia, generally due to extremely stiff penalties related to "hard drugs" and cannabis, there is a huge rise in abuse of sleeping pills, benzos, things like erimin5 and so on. Note that accessible, ~quality~ medical care in general is still very expensive in Asia, including Malaysia, so black market pharmaceuticals, increase in generic pharmaceuticals and decreasing quality of mental health is a toxic storm.

 

Look out for Seroquel (Quetiapine)... The patent for this has more or less expired so once generic manufacturing ramps up, it will make housewives taking Valium look like eating chocolate.

 

The ability of Quetiapine to reduce anxiety, and significantly help in inducing sleep is nothing to be taken lightly.

 

The sad thing is that in the chase to be more like the West, they are also taking on the bad parts of the West and not much of the good parts. 

 

*Remember though that most body/mind diseases have distinct environmental factors (pollution, chemicals, allergies, diet, lack of excercise, etc.)


Edited by nvidia2008 - 6/2/12 at 10:59pm
post #32 of 38
Quote:
Originally Posted by trumptman View Post

It doesn't take a dumb rich person at all to become poor. Money habits and management yield their results regardless of initial state, intentions and claims related to intelligence. I've met dozens of people who were not the brightest bulbs but were incredibly consistent in the money principles they applied. In fact I'd argue that one of the major failing related to high intelligence is the belief that it can somehow suspend reality.

The reason the poor take on debt is because they do not understand or choose not to care enough to understand that the difference between owe, and own is much more than one letter. It isn't that rich people never have enough money, quite the opposite, I've seen several of them "shrug" when earning the money will not be worth their time, but they value what they earn and like to be in control of their life versus the reverse.

Have you ever noticed how the language of poor people is full of fatalism?

Quite a while ago the great, great, great grandfather of someone I dated for a few years became one of the richest people in the UK. My family and his were friends for a while, but it seems that the six generations rule is often true. He started from nothing, they now blame everyone else for their squandering. Many people who are wealthy now from nothing.. look at their families in six generations, most of them will be back to where they started.
We are nurturing a nightmare that will haunt our children, and kill theirs.
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We are nurturing a nightmare that will haunt our children, and kill theirs.
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post #33 of 38
Quote:
Originally Posted by Hands Sandon View Post


Quite a while ago the great, great, great grandfather of someone I dated for a few years became one of the richest people in the UK. My family and his were friends for a while, but it seems that the six generations rule is often true. He started from nothing, they now blame everyone else for their squandering. Many people who are wealthy now from nothing.. look at their families in six generations, most of them will be back to where they started.

 

Assuming this is true, why do you suppose it is so?

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

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

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post #34 of 38

It is true.

 

There's a sudden rise, and a very quick fall in relative terms, considering the size of their wealth. The nearest thing I can think of is the saying you can take the person out of the ghetto, but you can't take the ghetto out of the person.

We are nurturing a nightmare that will haunt our children, and kill theirs.
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We are nurturing a nightmare that will haunt our children, and kill theirs.
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post #35 of 38
Quote:
Originally Posted by Hands Sandon View Post

It is true.

 

There's a sudden rise, and a very quick fall in relative terms, considering the size of their wealth. The nearest thing I can think of is the saying you can take the person out of the ghetto, but you can't take the ghetto out of the person.

 

How...ummm...very progressive of you.

 

My guess, assuming this generational decline is widely true, would have more to do with subsequent generations getting further and further away from understanding the value of hard, diligent work and earned wealth they're more likely to get sloppy with it and squander it. Perhaps having had too much done for them they lose sight of how wealth is created and thus end up destroying it. I think we're seeing this in a broader, national way in the US. People have come to take for granted all that the previous generations have built and the wealth they've created and started to assume that government redistribution, largess and intervention are the pathway to prosperity and well-being. Having become disconnected from the reality of how these things come about, they become ignorant of it and end up destroying it.

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

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

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post #36 of 38
Quote:
Originally Posted by MJ1970 View Post

 

How...ummm...very progressive of you.

 

My guess, assuming this generational decline is widely true, would have more to do with subsequent generations getting further and further away from understanding the value of hard, diligent work and earned wealth they're more likely to get sloppy with it and squander it. Perhaps having had too much done for them they lose sight of how wealth is created and thus end up destroying it. I think we're seeing this in a broader, national way in the US. People have come to take for granted all that the previous generations have built and the wealth they've created and started to assume that government redistribution, largess and intervention are the pathway to prosperity and well-being. Having become disconnected from the reality of how these things come about, they become ignorant of it and end up destroying it.

 

True, people have also stopped understanding how money works. Not that they were particularly enlightened, but it was tied in with that hard work thing. Now people think they can just click "Like" on something to get free money and easy jobs (jobs where they can just sit around and click "Like" on things).

post #37 of 38

Former President Bill Clinton told CNBC Tuesday that the US economy already is in a recession and urged Congress to extend all the [Bush] tax cuts due to expire at the end of the year.

 

Quote:
"What I think we need to do is find some way to avoid the fiscal cliff, to avoid doing anything that would contract the economy now, and then deal with what's necessary in the long term debt-reduction plans as soon as they can, which presumably would be after the election," Clinton said.
 
"They will probably have to put everything off until early next year," he added. "That's probably the best thing to do right now. But the Republicans don't want to do that unless he agrees to extend the tax cuts permanently, including for upper income people, and I don't think the president should do that."

 

Sounds like he's admitting that raising taxes would contract the economy.

Malo periculosam, libertatem quam quietam servitutem.

(I prefer the tumult of liberty to the quiet of servitude.)

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Malo periculosam, libertatem quam quietam servitutem.

(I prefer the tumult of liberty to the quiet of servitude.)

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post #38 of 38

 

Obama went even further.  He admitted he would raise capital gains taxes even if it didn't bring in more revenue...he just wanted it to be more "fair."   Also, Clinton doesn't want Obama to win, according to Dick Morris.  

I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
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I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
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