In the US, taxes do not fund federal spending.
- Thread starter abandonconflict
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tampee
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The more traffic the better the ad revenue I'm actually making the site good money I feel like I should be paid. Lol
tampee
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At least I can afford drugs. And still eat.20 seconds before this post:
Fogdog
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tampee
Well-Known Member
Did you ignore me?OK, well then, take a pay cut
abandonconflict
Well-Known Member
Well, my well researched thread regarding complex economics has become a Tampee the pedo tweaker thread.
If the Berners had swarmed in and derailed it as revenge for my relentless meme barrage, I wouldn't really complain, but an ignorant alt-right troll has defiled intelligent conversation with its presence. I'm a little bit butt hurt.
If the Berners had swarmed in and derailed it as revenge for my relentless meme barrage, I wouldn't really complain, but an ignorant alt-right troll has defiled intelligent conversation with its presence. I'm a little bit butt hurt.
Fogdog
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Back on track, we started talking about payment in exchange for services.
Fogdog
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How about this then. The first post provided me with an excellent understanding of why the 1% absolutely go for cutting taxes whenever they can. One purpose laid out in the paper is redistributing wealth. A use that has been neglected for some time.
abandonconflict
Well-Known Member
I think people have some kind of mental image of rich people carting stacks of cash on wheelbarrows to the irs so it can be given to unemployed people standing in lines. Nothing could be further from the reality. Taxes are not collected for any such purpose. The purpose of fiscal policy is to maintain strong currency. The stability and purchasing power of currency is directly proportional to the demand for it. A nation implements taxes payable in its own currency to stabilize demand for the currency. It then maintains money supply based on GDP.
Another function of taxes is to set policy based on public demands. So the two numbers (revenue vs spending) are not related but also are not set arbitrarily. Expansion of money supply can not exceed production growth proportions.
Fogdog
Well-Known Member
"to express public policy" is not the same as "to redistribute wealth" OK
Taxes on wealthy takes money out of their hands.
Spending money on infrastructure and subsidies puts money into less wealthy hands.
on balance avoids expansion of money supply while shifting distribution of wealth. Of course, those same workers will use that income to purchase goods, and it (money) ends up back in the hands of the wealthy.
I'm missing something here
Taxes on wealthy takes money out of their hands.
Spending money on infrastructure and subsidies puts money into less wealthy hands.
on balance avoids expansion of money supply while shifting distribution of wealth. Of course, those same workers will use that income to purchase goods, and it (money) ends up back in the hands of the wealthy.
I'm missing something here
abandonconflict
Well-Known Member
Well there is the fact that in this form of Keynesian stimulated economy, the spending drives growth which benefits all. You see, the function of (for example) food stamps, is not to feed the poor. It is to subsidize agriculture. That it feeds the poor is a side effect which is then used to gain popularity and votes. It is smart business, not charity. The growth which is driven by this then trickles its way back up.
This also ignores that it is the very gov't which has made the privatization possible that is doing the taxing. That the taxation stabilizes the dollar, making it possible to have an economy makes the rich the biggest beneficiaries of the system overall.
Consider those graphs that show overall growth going straight to the rich while wages stagnate. There is growth, but only the rich see it. So the redistribution thing is just bullshit. There is only enough to stimulate production, all of that is returned to rich accounts and the growth stimulated by it also goes straight to them.
PCXV
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Newborns, infants, disabled, elderly... No limit to your stupidity.
abandonconflict
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Thanks @Fogdog , I appreciate your willingness to take part in this discussion. So The next logical question should be, what does the gov't spend if not tax revenue? Well it seems logical in any case, as we will see, it is intuitive, but actually assumes incorrectly regarding the creation of money.
To answer this, I must first point out that "tax revenue" is an oxymoron. You see, it is very intuitive to assume that the gov't taxes the people to generate revenue and this is an assumption I have long made as well. It is intuitive, but completely wrong. In fact it is backwards. Gov't spending is revenue.
Taxation does not generate revenue. Taxation removes dollars from the money supply. The gov't can create dollars whenever it wants to. It does so by spending. Gov't spending is the creation of dollars. So an expansion of the money supply only occurs when the gov't spends more than it taxes. The gov't must not expand the money supply in such a way that outpaces GDP growth, otherwise inflation occurs. Taxation can then remove those dollars from the supply in order to control inflation, restoring their value. However, if it does so excessively, this can lead to a form of recession, falling aggregate demand.
To answer this, I must first point out that "tax revenue" is an oxymoron. You see, it is very intuitive to assume that the gov't taxes the people to generate revenue and this is an assumption I have long made as well. It is intuitive, but completely wrong. In fact it is backwards. Gov't spending is revenue.
Taxation does not generate revenue. Taxation removes dollars from the money supply. The gov't can create dollars whenever it wants to. It does so by spending. Gov't spending is the creation of dollars. So an expansion of the money supply only occurs when the gov't spends more than it taxes. The gov't must not expand the money supply in such a way that outpaces GDP growth, otherwise inflation occurs. Taxation can then remove those dollars from the supply in order to control inflation, restoring their value. However, if it does so excessively, this can lead to a form of recession, falling aggregate demand.
a senile fungus
Well-Known Member
This.
Also thanks for the coral. I visi puerto rico all the time and I've noticed the coral dying for over a decade. I visit the same beaches every time i go, i see the decline.
When i die i wanna be cremated and turned into a coral sanctuary.
Sorry for OT
abandonconflict
Well-Known Member
Right on. I did some diving in Guanica. There are some good diving sites there, world class wall diving actually. I found it a tad expensive considering the quality offered around Bayahibe, Dominican Republic or in Roatan. Even Belize is cheaper and that is by far the best in the Caribbean in my opinion. In fact, it is very possible to take a cheap flight to the Philippines and do 20-30 dives in Bohol for what it costs to go to PR for as many dives.
Have you ever checked out this company?
http://www.eternalreefs.com/
Fogdog
Well-Known Member
Last decade we saw an increase in spending and a cut in taxes. 2001 there was a cut in income tax rates, estate taxes and lowered taxation on money placed into retirement accounts. 2003, there was a increase in exemption on Alternative Minimum Tax. The argument made at the time these changes would increase growth in the economy. Per Wikipedia, in 2001, the Heritage Foundation estimated the changes Bush eventually set in place would pay off the national debt by 2010.
What we actually saw, I think, is what you said previously. Any growth during that time went mostly to the wealthy, while other income classes were stagnant in terms of income growth. And yet, the economy did expand until 2007. Was the growth during this time due to the tax cuts or were they due to increased spending, particularly in military and other defense spending?
And then the crash of 2008-2009. I always have believed that it was due to deregulation and improper policies implemented by big banks. Do you have a counter view on this? Perhaps the crash was mainly due to the by now beleaguered middle class who used lax home loan policies to sustain their standard of living while taking on more debt? The hypothesis here is that the Bush era tax cuts are a factor in the crash because it stifled spending by the middle and lower income classes. The rise in debt delayed effects on growth which led to a crash rather than a recession.
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abandonconflict
Well-Known Member
I would say the growth was indirectly due to spending. GDP growth can come from many sources. This includes military spending, as @biostudent pointed out in another thread, before I wrongly assumed he was extolling the virtues as opposed to simply stating the facts.
So expansion of the economy (GDP growth) means there is a dividend, it's like saying, "you can safely increase the money supply by this much". Tax cuts and increased spending are not GDP growth, those are money supply expansion. Not the same but one often leads to the other.
The temporary growth that occurred had to do with the housing bubble as you mentioned. This was a result of derivatives trading that led to investors profiting from subprime mortgages all over the market. So the money there was created by the bank in the form quantitative easing of rates for home loans which because of the derivatives trading was a gift to shady investors. Prices went up as the bubble grew and everyone's equity swelled for a while, then the bubble popped and everyone's equity fell, well almost everyone, some markets weathered well, such as Manhattan and San Diego. When that equity dropped, the purchasing power of the working class fell which had a direct effect on aggregate demand. This was a bad situation, a spiral because it could not simply be fixed by expanding the money supply. It had to be done carefully.
Yeah that was about as short of an answer as I could give to a very complex economic swindle, sorry. You pretty much have the same thought as I have though so it's more of a confirmation of your suspicion than anything. I think all I really did was point out the difference between GDP growth and money supply expansion.
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Fogdog
Well-Known Member
Libraries of books have been written about this. I was finding it refreshing to talk about an idea rather than conduct yet another session of drivel responding to @tampee , who is blessedly on ignore an no longer fouling my screen at the politics forum. It's also a question I asked because I am interested in what somebody who has thought on this would say.
so, thanks for that.