Economics And Politics. Let's Talk About Waste!

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2010-06-21
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Economics and Politics. Let's talk about waste!
 Asura.Kingnobody
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By Asura.Kingnobody 2020-07-19 10:54:02  
Basically, we need a thread on it's own about the general economics of politics.

Since, you know, we are really bad about being off topic in other threads, so let's have one here!

Pulling from here.

Asura.Kingnobody said: »
Garuda.Chanti said: »
But guess what KN. Your tax dollars will be frivolously wasted futility defending the Trump administration, which will be long gone when this suit hits the courts, of administrative overreach and kidnappings under the color of law.
We can discuss wasteful spending all we want. Probably in it's own thread (look for that soon). I guess we are both guilty of going off subject.

Either way, yes, I'm not happy with the wasteful spending, but it happens (incoming grammar nazis) irregardless of which letter is next to the President's name.

But please (in the new thread about to be created), do tell us what "administrative overreach and kidnappings" there are.
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 Carbuncle.Skulloneix
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By Carbuncle.Skulloneix 2020-07-20 15:16:56  
Asura.Kingnobody said: »
Basically, we need a thread on it's own about the general economics of politics.

Since, you know, we are really bad about being off topic in other threads, so let's have one here!

Pulling from here.

Asura.Kingnobody said: »
Garuda.Chanti said: »
But guess what KN. Your tax dollars will be frivolously wasted futility defending the Trump administration, which will be long gone when this suit hits the courts, of administrative overreach and kidnappings under the color of law.
We can discuss wasteful spending all we want. Probably in it's own thread (look for that soon). I guess we are both guilty of going off subject.

Either way, yes, I'm not happy with the wasteful spending, but it happens (incoming grammar nazis) irregardless of which letter is next to the President's name.

But please (in the new thread about to be created), do tell us what "administrative overreach and kidnappings" there are.
In regards to Spending, I would rather not wastefully spend, or at least spend it wisely. I would not want to spend and tax like California. However I am very in support of Defense Spending. I totally want to have the biggest Military int he world and be ready for if and when someone wants to go a round with the U S of A.
 Asura.Kingnobody
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By Asura.Kingnobody 2020-08-10 11:08:59  
Let's Just Take Their Money: a Tax Policy

Quote:
Author: Hank Adler

Here it is, the progressives’ tax policy: “Let’s just take their money." And that is the deep thought that was put into the Make Billionaires Pay Act which was proposed in Congress last week. As Rob Emanuel famously said: “You never let a serious crisis go to waste. And what I mean by that is it's an opportunity to do things you think you could not do before.”

Senators Sanders, Markey and Gillibrand introduced the Make Billionaires Pay Act. Of course, it is supported by the regular cast of characters: Omar, etc.

The bill is very straight forward: (1) Calculate the fair market value of your assets on December 31, 2020 and (2) subtract the greater of $1 billion or the fair market value of your assets on March 18, 2020. Multiply the result by a 60 percent wealth tax. The plan is to raise $731 billion to fund health care.

Even Bernie Sanders cannot tie the cause of the pandemic to billionaires. His envy long ago turned to hate.

What could be wrong with this idea? Arbitrary and capricious. Unconstitutional.

If this is okay today, there are no limits to wealth confiscation and the wealth baseline could be $500,000 or any other amount next year or next week. And, of course, none of the impacted individuals could raise the funds to pay the tax without crushing the stock prices of their companies and therefore the wealth of their shareholders, be they individuals, pension funds, etc.

Arbitrary and capricious: In the accompanying press release, the bill’s authors promise that Mark Zuckerberg would pay $22.8 billion in his one-time wealth tax on a net worth of $92.7 billion, up from $54.7 billion at March 18th.

Where did March 18, 2020 come from? This was the lowest closing price of Facebook in 2020. (Facebook’s stock was $210 per share on January 1st, $147 on March 18th and $268 last Friday). Mr. Zuckerberg’s wealth at January 1st was about $72 billion. Stocks go up and down. The proposed tax on Mr. Zuckerberg would be essentially a little over 100 percent of his wealth accumulation thus far in 2020.

And exactly how would Mr. Zuckerberg generate the $22.8 billion to pay his one-time wealth tax? He would have to sell about $34 billion of Facebook stock paying about $12 billion in state and federal income taxes to pay this one-time wealth tax. (This ignores Joe Biden’s plan to double the capital gains tax and California’s recent proposal to raise its tax rate to 16.8 percent). If, for some reason, the Facebook stock price did not collapse from the flood of Zuckerberg stock sales (impossible), he would finish 2020 with his net worth down 25 percent Of course, the stock price would get slaughtered and everyone who owns Facebook stock would be hurt.

The proposers state that Jeff Bezos would owe $42.8 billion which would cause him to sell $54 billion of Amazon stock to raise the money to pay his income taxes and the wealth tax. (His home state has no income tax).

Why has the net worth of Jeff Bezos exploded in 2020? It is because his company, Amazon, quickly became every American’s gateway to purchase life’s necessities during the pandemic? This is a company that has never paid a dividend and reinvested every dollar of earnings into company growth since its inception. Where would most Americans and the U.S. economy be in 2020 without Amazon?

Unconstitutional: Yes, there are a few scholars who believe and argue with great passion that a wealth tax is constitutional based on their various theories that would need the Supreme Court to conclude that various previous Supreme Court cases over the past 100 years were wrongly decided. Chief Justice Roberts seemingly put this to bed in his brief discussion on direct taxes in N.F.I.B. v. Sebelius on 2012. A wealth tax is not constitutional.

If the Congress of the United States has the power to wake up on a Wednesday morning and decide to take an estimated $731.8 billion from a large handful of billionaires, the following Wednesday morning, they could decide to take anything from anyone. And that should scare everyone to death.

Yes, this is an opinion piece, but everything is said is true.
 Asura.Kingnobody
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By Asura.Kingnobody 2020-08-13 10:07:40  
When Puff the Magic Multiplier Goes Poof

Quote:
Author: Veronique de Rugy

When revenue shrinks by 1% of GDP and spending increases by 51% over 10 months, you get a $2.8 trillion deficit. That figure, according to the Congressional Budget Office, is significantly larger than the deficit Uncle Sam accumulated over the first 10 months of 2019. Yet, many in Congress demand that even more spending be enacted in the name of stimulating the economy.

More spending means more debt and more future taxes. That much we know. What we also know is that the calls for sustained spending -- in the form of unemployment checks, individual stimulus checks, small-business grants and payroll tax cuts -- which are made regularly in newspapers, political speeches and partisan punditry, are overblown to stay the least. The idea here is that if Uncle Sam continues paying people to stay home, their consumption will continue, and the economy will grow.

These calls are based explicitly or implicitly on the belief in an all-powerful federal spending multiplier, or the idea that if the government spends one dollar, the economy will grow by more than a dollar.

That's right; the belief is that when the government takes a dollar out of your pocket, puts that dollar through the political process and decides where to spend it (based on input from special interest groups), the economy will somehow return more money in growth than the money invested, even after Washington bureaucrats take their cut. It's magic! Sadly, these arguments ignore recent empirical evidence that the costs of increased government spending far outweigh the benefits to the economy.

For starters, contrary to the claims of pro-government spending proponents, economists are far from having reached a consensus about the actual return on government spending. While some economists find that a dollar spent by the government generates more of a return than the dollar spent, others find that the return is less than one dollar. And yet others find that if you take into account the future taxes needed to pay for the dollar that's spent, the multiplier is actually negative, and the economy takes a hit.

After reviewing the recent academic literature for the Mercatus Center's publication The Bridge, my colleague Jack Salmon and I found that most of "the empirical literature on fiscal multipliers conducted since then (2009) has found economic multipliers resulting from additional government spending ranging from a lower estimate of around 0.2 to an upper estimate of around 0.9." We go on to explain that in "(p)ulling the results from two dozen academic studies, we calculate an average multiplier at the low end of 0.31 and an average multiplier at the high end of 0.66."

Now, in fairness, there are narrow cases when government spending can stimulate the economy, but for that to happen, the environment in which the spending takes place is important. Work by economists Ethan Ilzetzki, Enrique Mendoza and Carlos Vegh on the impact of government fiscal stimulus shows that it "depends on key country characteristics, including the level of development, the exchange rate regime, openness to trade, and public indebtedness." Many other economists have found the same. Unfortunately for the proponents of fiscal stimulus, the United States has the features of a country where stimulus by spending does have an impact and, in fact, can have a negative impact on growth.

Making matters worse is the fact that, even if you had a country with little debt and the right environment, implementing the spending correctly is a key to getting a multiplier that's larger than one. As former Treasury Secretary and former Director of the National Economic Council Larry Summers has explained, stimulus spending needs to be timely, targeted and temporary. Unfortunately, evidence from the last recession shows that it rarely is.

There are always economists, journalists and pundits willing to assume that this time will be different and government spending will deliver on the promises made on its behalf by pro-spending advocates. Unfortunately, this is wishful thinking. It is also a dangerous game to play. If spending doesn't deliver on the promised economic growth, what it will undoubtedly achieve is more debt. That, sadly, is a scenario where future growth goes up in a puff of smoke.
 Leviathan.Celebrindal
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By Leviathan.Celebrindal 2020-08-13 12:00:36  
Yeah, but when Deficit Spending has been recognized as a legitimate economic policy vs complete lunacy, we end up where we are.

Tell ya what, Congress- let me borrow double what I make every year, never make a payment on that debt, and then borrow more next year. And the next. And the next. That should work out fine, clearly spending money is the way to get out of debt.

And let all 200 million of the registered voters in the United States do that.

...and they wonder why they're a joke?
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 Garuda.Chanti
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By Garuda.Chanti 2020-08-23 19:32:10  
I find this writer, Charles Mudede, to have a different view of economics than I have ever seen. Its liberal and post Keynesian. I learn stuff from him.

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