Posted by Tina
Okay we have all talked a lot about what we don’t like about government. Whether we’re for “fundamental transformation” or “limited government” we all seem to have opinions. But if you had to construct a platform of ideas and then run on them what would you suggest to the American people today? What would you be most concerned about and what would be your proposals to address those concerns. Let’s see how many bloviators can actually come up with ideas.
Here’s your chance to shine….
Priority 1: Stimulate demand. How do you do that? IMO, by pumping more money into the pockets of the poor and middle class. Venture capitalist has done a lot to promote “middle-out” economics where he argues that rich people like him do not create jobs, the middle class does. A business owner doesn’t create jobs for the heck of it; they do it to meet demand. If small business owners and economists can agree on anything, it’s that the key problem today is lack of demand. We need more stimulus and better paychecks for the average worker. That means stronger unions and a higher minimum wage, two things that have historically coincided with a healthy middle class.
2) End the welfare state. Start with corporate welfare and go down. Cut, slash and burn the oil, farm, and green energy subsidies. If corporations and the free market are so great, let them prove it without the government’s help. Also go after banking giants like HSBC who are shielded from prosecution because the government deems them “too big to fail.” Apparently possession and distribution of small amounts of marijuana is a jailable offense, but laundering millions in drug money for gangs, terrorists and rogue nations is not. End unfair government protections for the rich, including tax loopholes. Do what Reagan did and raise the capital gains tax so that it is equivalent to earned income–this way the government is not privileging investment over work.
Then, THEN we can start gradually ending welfare programs that target the poor. These programs did a lot of good at first, but for the past few decades they have been basically a band-aid holding back a flood. Most people are off of these programs within a few years and they certainly help many get by long enough to find success elsewhere, but the other solutions I’ve mentioned will help reduce income inequality, strengthen demand and worker protections enough that they will no longer be necessary in their current form.
The fourth sentence in the above should read, Venture capitalist Nick Hanaeur has done a lot to promote “middle-out” economics where he argues that rich people like him do not create jobs, the middle class does.”
Chris The idea that the well off don’t create jobs is accurate as long as you don’t include the investment of their disposable cash as part of the mix. Those people who are working on being rich often have some of their money in or savings accounts or CD’s (When the interest rate is decent). Banks use this money for loans. If you are talking about the guy who puts the add in the paper or online to attract employees it is the middle class that creates jobs. But these business owners usually get the money they need to buy machinery or start or expand their businesses from the well off, banks or venture capitalists.
The trouble with your two solutions for the lack of demand is that they are relatively small, targeted, and let’s face it, politically inspired.
Both raising the minimum wage and the formation of unions touch only some people and both are coercive rather than dynamic.
I’m all for cutting government. I would even be in favor of starting with corporate welfare if there was some assurance that it wouldn’t end there. Which is why I would prefer across the board cuts and elimination and consolidation of departments. right now the military is being cut but I haven’t seen a lot of interest in downsizing the bloated bureaucracy. CATO has an interactive chart with the major federal departments that show growth from 1970-2013. You can check a department at a time or compare one department to another or others.
Before you will ever see widespread prosecutions for white collar bankers and corporate types you will have to simplify the regulations. We need to clean house in Congress before that will happen. Even if we did that the staffers often remain and they are the ones who do the actually writing. Regulations are written so that the good Senators/Representatives buddies in business can beat the rap and pass some of the cash and perks on to them…at least those with the best lawyers who are well connected can…it’s all “legal”. This is one of the most urgent reasons for creating a smaller federal government and bringing the power closer to home.
“End unfair government protections for the rich, including tax loopholes.”
I’m for a simpler tax system sans loopholes. I am not in favor of a tax that is written just to “take” money from the rich. “They don’t need it” is just wrongheaded and anti-American. If the wealthy choose to contribute that’s one thing but taxing for redistribution? NO!
Taxing capital gains will not hurt the wealthy but it will hurt a lot of retirees who put thier money away to supplement their SS retirement. If we are going to make cuts to their medicare and change the SS rules (Which is probably inevitable) increasing cap gain tax rates is not a good idea.
“this way the government is not privileging investment over work.”
Instead it is punishing savings and investment! Americans need to be savers again. We will never find a way to live within our means if we do not teach, educate, our citizens on the value of investing in themselves and their own futures!
Take a look at the chart at the above link. SS has been going up steadily since 1970 and it is on course to explode with the retirement of the Boomers (All of the citizens born from about 1946 to 1964). this explosion is a double whammy because they also qualify for Medicare. These two programs must be reformed to make them sustainable and give our economy a chance.
We can raise taxes on things that people don’t need but raising them in ways that blunt buying power or business growth just won’t work.
Regarding Reagan, a look at the bigger picture is in order:
A good beginning. I’ll bet if we all try we can come up with more ideas for a solid foundation for America.
Thanks for jumping into the hot seat, Chris…takes guts. sSows you’ve given this some thought to!
Tina: “I would even be in favor of starting with corporate welfare if there was some assurance that it wouldn’t end there.”
Interesting.
Do you demand a similar assurance that it “won’t end there” whenever proposals are made to cut welfare programs to the poor? I haven’t seen you say, “Yes, we should cut social welfare, as long as it doesn’t stop there; I need an assurance that corporate welfare will be cut as well before I sign on.” You seem to be in favor of cuts to social welfare programs with no real conditions or strings attached.
Do you see how this helps perpetuate the idea that Republicans are asking the poor to sacrifice, with no similar request from the rich?
This statement does the same thing too:
“Before you will ever see widespread prosecutions for white collar bankers and corporate types you will have to simplify the regulations.”
You are literally suggesting that we need to make life easier for the rich, while making life harder for the poor.
“Taxing capital gains will not hurt the wealthy but it will hurt a lot of retirees who put thier money away to supplement their SS retirement.”
This just isn’t true. From the Washington Post:
While it’s true that many middle-class Americans own stocks or bonds, they tend to stash them in tax-sheltered retirement accounts, where the capital gains rate does not apply. By contrast, the richest Americans reap huge benefits. Over the past 20 years, more than 80 percent of the capital gains income realized in the United States has gone to 5 percent of the people; about half of all the capital gains have gone to the wealthiest 0.1 percent.
“The way you get rich in this world is not by working hard,” said Marty Sullivan, an economist and a contributing editor to Tax Analysts. “It’s by owning large amounts of assets and having those things appreciate in value.”
…The 400 richest taxpayers in 2008 counted 60 percent of their income in the form of capital gains and 8 percent from salary and wages. The rest of the country reported 5 percent in capital gains and 72 percent in salary.”
Very few ordinary Americans benefit from the low capital gains tax, but virtually all millionaires and billionaires do. There is no reason a billionaire should be paying a lower tax rate than you or me, but that’s exactly what happens since they make most of their money from investments and you and I make most of our money from work. The article goes on to describe how this situation has been partially responsible for the huge growth in income inequality.
We can’t continue the same policies that have helped the rich get richer and the poor get poorer.
Chris: “Do you demand a similar assurance that it “won’t end there” whenever proposals are made to cut welfare programs to the poor?”
Have such proposals ever seriously been considered?
You have no reason to be contentious with me on this issue, Chris, other than your own crappy attitude!
I have said we should make a ten percent real cut in spending in every department…all at the same time.
The bottom line for me is smaller federal government. That would require dramatic downsizing across the board and the elimination of many departments and bureaucracies. That doesn’t mean the poor will be left on their own. States still have power to deal with their citizens and I can seen with my own two eyes that charitable organizations have a much better track record than government has for helping the poor. I give to both, although one under duress. Charter school success, the success of public schools before the bureaucracy grew so big and the federal government got involved tell me that getting the federal government out and leaving it to the states would work better.
Your $h#t attitude gets in the way of your hearing that! it’s easier to be resentful and contentious than it is to consider alternatives.
“You seem to be in favor of cuts to social welfare programs with no real conditions or strings attached.”
My attitude is based on decades of watching Democrats create bigger government and greater numbers of needy people. My attitude is based on decades of observing Democrats blunting every effort to reform programs or significantly cut spending. My attitude is based on decades of watching Democrats promise cuts and then once elected never following through. My attitude is based on seeing military cuts made but calls for slight reform to social security or medicare demonized as hateful. My attitude is based on a track record of democrats talking about compromise but never giving an inch. You’ll excuse me if seventy years of democrats getting their way and not giving an inch makes me a bit skeptical that they can be counted on to keep their word or compromise on or reform anything!
“Do you see how this helps perpetuate the idea that Republicans are asking the poor to sacrifice, with no similar request from the rich? ”
What I see is that it is all in your head! you are a tool of the left. You don’t hear Republicans or get their intent. You respond to the characiture…and you wallow in resentment, hate and envy or covetousness. It will kill your aliveness and your future. Give it up!
“You are literally suggesting that we need to make life easier for the rich, while making life harder for the poor.”
No nimrod…I am suggesting that the law made simple, made clear, made resolute is the law made without wiggle room…without loopholes…without an area where people in positions of power and wealth can find a playground for their corruption and greed.
Unfortunately, I have run out of time until later this afternoon or evening. i will leave you with this thought…attitude makes all the difference. Your have created scales on your eyes and in your ears. I hope one day I will get to meet you and you will get to meet me for the first time.
Tina, I don’t believe it is fair for you to accuse me of not hearing you out. I have responded to your exact arguments, and I have done so in an intellectually honest fashion. When you ask that cuts to corporate welfare be accompanied by cuts to social welfare, but not vice versa, that does imply that you are asking the poor to sacrifice more than the wealthy. If we want to talk about “attitude,” this certainly doesn’t match the attitude of the WWII generation.
Even if all the problems you attribute to social welfare exist–and they do, though I think on a smaller scale than you believe–that doesn’t mean that corporate welfare doesn’t bring equally destructive problems. My argument is that the latter is actually more destructive, in addition to being less justifiable as necessary. That’s why I think we should start there. Redistribution to the poor may not be perfect, but there is at least a moral argument for it; redistribution to the wealthy is plain indefensible.
If you want to decrease loopholes and simplify the tax code, you should support making the capital gains tax the same as earned income. The New York Times points out that this actually causes a ton of complications and encourages the wealthy to use loopholes so that they pay the lower rate:
http://www.nytimes.com/2012/09/06/opinion/more-tax-tricks-private-equity-style.html
Making the capital gains tax the same as earned income is a simplification we could start with. I agree that many other areas need to be simplified, but why not start with something that clearly privileges investment over work? I’d even be willing to lower the top earned income tax rate in exchange for raising the capital gains tax, just as Reagan did. Since most billionaires make most of their money from capital gains tax anyway, this would be a reasonable compromise, and would probably generate more revenue anyway.
But it’s unlikely to happen because millionaires and billionaires have such a hold on Congress now. They are spending millions to convince members of Congress and the American people that a low capital gains tax is actually beneficial to the economy and the American people. It’s a sham.
“While it’s true that many middle-class Americans own stocks or bonds, they tend to stash them in tax-sheltered retirement accounts, where the capital gains rate does not apply.”
Once a retiree reaches the age of 71 e they are REQUIRED with some investments to take a percentage of the money out each year based on what they have and pay income tax. There are a lot of rules associated with SS that most people are unaware exist until they retire. We’ve been told since the eighties that we had better plan ahead because SS was unsustainable. Dividends and interest are one of the supplemental ways we do that.
Generally speaking it is unwise to tax that which spurs economic growth. The boomers are a big group. Your generation will pay for our SS…it needs reforming. That won’t happen if you don’t give this group incentive to agree.
“By contrast, the richest Americans reap huge benefits.”
Chris they do it with their property. What you suggest is that it is okay to just take peoples wealth. But the thing that really makes this plan stupid is that the rich will just change their investment strategy. Anyone would! Warren Buffet would…in fact he would make money as wealth is shifted to Birkshire Hathaway:
““It’s by owning large amounts of assets and having those things appreciate in value.”
Oh brother! You pay taxes as you earn. You pay property taxes on any home you buy. Taxes are paid on interest earned form savings. Any asset you sell is taxed when it a profit is made. You pay taxes on purchases. You pay taxes on the car you purchase, the license for it every year, the gasoline that goes into the tank. Liberals never miss an opportunity to tax and all of it takes money, and opportunity, out of the private market! When it redistributes the money it takes it from one pocket to give to another pocket and NOTHING is gained. The taxed persons buying power is diminished and the poor persons is greater. Growth and opportunity (jobs) are stagnant. Wealth accumulation is the accumulation of assets…but first a person needs a job. bloated governments and redistribution will not make growth and opportunity happen.
“There is no reason a billionaire should be paying a lower tax rate than you or me”
Why not? Have they not paid, and paid, and paid as they climbed the ladder,acquired things and services that others make or provide, and have they not contributed enough to society through job creation, production, investments and spending? Do they not do enough when they invest in research, build a hospital or clinic, contribute to higher education, the arts, and other charitable and philanthropic works? In addition to these contributions their tax bill is much higher year after year than either you or I will likely ever have to pay. Your sense of proportion and fairness is way off base because you only look at that which sounds offensive. I find that extremely offensive.
“The article goes on to describe how this situation has been partially responsible for the huge growth in income inequality.”
The article is pure political fodder for the duped!
“We can’t continue the same policies that have helped the rich get richer and the poor get poorer.”
BUT YOU ARE! You are all for them…you cheerlead for them. Wake up!
” When you ask that cuts to corporate welfare be accompanied by cuts to social welfare, but not vice versa>>>”
I have NEVER done that! I said I would not favor giving in to Democrat demands for ending corporate welfare unless Democrats were willing to support other cuts in spending. The point being that they can never be trusted to do the hard things. Republicans have gone along with cuts to military or offered to accept tax rate increases in exchange for spending cuts and the cuts never get done.The remark was about political strategy.
“redistribution to the wealthy is plain indefensible”
How is it redistribution when most of the money government collects is taken from them in the first place?
OC Register
CNN Money
Washington Times
“They are spending millions to convince members of Congress and the American people that a low capital gains tax is actually beneficial to the economy and the American people.”
The smart ones are because it is better for the economy and jobs.
The lefty wealthy don’t but let’s be honest. Warren Buffet will benefit greatly with higher investment tax rates as the wealthy move their money into his company to avoid the taxes. He was also against the pipeline because right now his rail cars make money transporting oil.
Taxing investment capital is just not a smart way to tax. You discourage investment and savings. That’s no way to spark the economy or create more jobs and higher salaries and pay.
The sham is the progressive agenda which does nothing for the except keep them in a form of bondage.
Me: ” When you ask that cuts to corporate welfare be accompanied by cuts to social welfare, but not vice versa>>>”
Tina: “I have NEVER done that! I said I would not favor giving in to Democrat demands for ending corporate welfare unless Democrats were willing to support other cuts in spending.”
OK, either you have a serious reading comprehension problem, or you’re just completely oblivious to your own arguments. You literally just rephrased what I said, and then denied that you ever said it! You also did this in our other conversation when you posted an article claiming that income inequality is not a problem, then denied that the right’s argument is that income inequality is not a problem. You also did that last week when you said that Rush didn’t say that gays were assaulting straight, when I posted a direct quote from his show where he said that straights were under assault by gays.
I’m seriously getting a little worried for you, Tina.
From Reuters:
Why are US corporate profits so high? Because wages are so low
By Jamie McGeever JANUARY 24, 2014
U.S. businesses have never had it so good.
Corporate cash piles have never been bigger, either in dollar terms or as a share of the economy.
The labor market, meanwhile, is still millions of jobs short of where it was before the global financial crisis first erupted over six years ago.
Coincidence?
Not in the slightest, according to Jan Hatzius, chief U.S. economist at Goldman Sachs:
“The strength (in profits) is directly related to the weakness in hourly wages, which are still growing at just a 2% nominal pace. The weakness of wages and the resulting strength of profits are telling signs that the US labor market is still far from full employment.
Companies have not been unable to raise prices much because of the economic recovery has been fragile. But they’ve still managed to boost profits beyond anything ever seen before because they’ve got away with employing as few workers as possible at as low a rate as possible…
…So, corporate profits are their highest ever and wage growth is near its lowest in half a century. But don’t expect the transfer of that cash from businesses to workers to start any time soon, says Hatzius:
“The bottom line is that the favorable environment for corporate profits should persist for some time yet, and the case for an acceleration in the near term is strong. Hourly labor costs would need to grow more than 4% to eat into margins on a systematic basis. Such a strong acceleration still seems to be at least a couple of years off.”
Even Bruce Bartlett, Reagan’s chief economist, disagrees that a low capital gains tax is good for the economy:
http://economix.blogs.nytimes.com/2012/02/21/tax-code-not-aligned-with-basic-principles/
There is almost no evidence for this position, Tina. We’ve seen no economic improvement due to lowering the capital gains tax. We have seen the wealthy gain a lot, but that gain has not trickled down.
” But they’ve still managed to boost profits beyond anything ever seen before because they’ve got away with employing as few workers as possible at as low a rate as possible…”
This woman is stupid politically and her expertise on economic conditions is, as a result, formed out of her stupidity.
A. Much of the corporate profits come from the government pumping money into the market and increased overseas sales.
B. QE, the war on energy, countless pages of new regulations, higher taxes, and the mess that is Obamacare have all acted to discourage business from producing, expanding, and hiring. The tech sector is better but they complain that science and math have not been emphasized and finding Americans qualified to hire is a challenge.
C. Wall Street business is holding cash because of the conditions created by the administration. Banking is stuck in a rut because of the artificially held down interest rates and the housing/loan mess that continues.
Businesses aren’t “getting away” with not hiring! They are forced into a no win situation and doing what they have to do to survive.
“We’ve seen no economic improvement due to lowering the capital gains tax. We have seen the wealthy gain a lot, but that gain has not trickled down.”
This has been especially true since the Democrats took control of the House in Bush’s last term and then won the super majority and won again by electing Obama. With Harry Reid blocking in the Senate the President’s policies stay in place…Democrats are causing the conditions that keep wealth tied up and in the hands of the rich. The poor have grown in numbers in the last seven years under Democrat control…wake up!
Of course. Corporations are making more money than ever but they can’t use that money to actually hire anyone or invest in the economy because Democrats are stopping them. Makes perfect sense!
Don’t you ever find it strange that you can’t bring yourself to favor even ONE policy which might have a slight adverse on the rich? Don’t you find it strange that every policy that groups like Heritage tells us is good for us ends up being REALLY good for the wealthy and corporations? I mean, do you really not see how amazingly convenient that is?
Chris: “Corporations are making more money than ever but they can’t use that money to actually hire anyone or invest in the economy because Democrats are stopping them.”
That’s a really stupid statement, Chris. Democrats have held power over a seven year period. two years prior to Obama’s election in 08 Democrats took control in the House. They had a super majority over some of the last five+ years and passed major legislation that impacts the economy. They have added trillions to our debt and invested to prop up the stock market while doing absolutely nothing for the poor and middle classes except offer them crumbs from the government table…food stamps, extended unemployment benefits. They have pushed for students to borrow and for small business to borrow which only puts individuals at greater risk long term. They have created conditions that make essentials like food, gasoline, home energy and shipping more expensive. They have raised taxes and increased regulatory burden. The healthcare situation has thrown that sector into chaos and made the lives of individuals difficult and in many cases more expensive. This is not something I made up or Republicans made up…this is the reality…the condition born of radical left policy. It is not a healthy condition; it is not an improving condition.
It is not surprising that companies are not hiring. It is also not surprising, or talked about much, that those in the middle class who own businesses are barely hanging on or have gone out of business and therefore cannot even begin to think about hiring.
It is not surprising that entrepreneurs within this group, those who create new mom and pop operations are rare in this atmosphere and therefore not creating jobs.
Democrats in power are not stopping them but they have done a lot to discourage and throw roadblocks up in front of them. They promise only that there will be more in future; that they intend to further blunt the ability to expand and hire. They promise that costs will continue to go up with their policies and they even seem proud to do it.
“Don’t you ever find it strange that you can’t bring yourself to favor even ONE policy which might have a slight adverse on the rich?”
I find it strange that you buy into the fairy tale of blessed redistribution and fairness. I find it strange that you think like a victim and expect the solutions to problems like not having enough money to feed my family will be permanently fixed by a government handout. I find it strange that after five+ tears you don’t see that leftist policies have only exacerbated the problems for the poor and greatly diminished opportunity for both the poor and middle classes.
“Don’t you find it strange that every policy that groups like Heritage tells us is good for us ends up being REALLY good for the wealthy and corporations? ”
Like what? What policy from Heritage has the current administration followed? What policy has led to massive debt, growing numbers of the poor, high unemployment, and high food and energy costs? What Heritage policy caused the housing bubble, the credit debacle, and the crash? Give me specifics.
Do you not see how you are being used?
Wake up, Chris.
“It is not surprising that entrepreneurs within this group, those who create new mom and pop operations are rare in this atmosphere and therefore not creating jobs.”
You’re right, it’s not surprising, because entrepreneurs do not create jobs. Consumers do.
Your understanding of economics posits the wealthy as the center of the economic universe. That’s just not so. Business people do not create jobs just for the hell of it. They create them to meet demand. You need to radically change your beliefs about economics. Middle class consumers are the real job creators, not businesses.
Chris: “You’re right, it’s not surprising, because entrepreneurs do not create jobs. Consumers do.”
So if I go out tomorrow and spend all my extra cash and everyone else does too new businesses magically pop up like spring flowers?
Neat trick! We just sew those dollars like grass seed and up pops a new In and Out Burger or Wendy’s…or hair salon or fancy restaurant or women’s clothing boutique.
Tell me Chris, why would I do that, especially right now? Why would I spend like? Why would anyone? Why would you buy more than you need right now?
“Your understanding of economics posits the wealthy as the center of the economic universe.”
Your bias does! You resist the heck out of the rich and that causes them to loom so large you see nothing else! You’re not only a slow learner you interpret through a biased filter.
You do recall that I am a business person? I have started a business and put myself and family at great risk to start my business. I learned a lot in the process. I am not speaking out of my hat!
“Business people do not create jobs just for the hell of it.”
So now business people (entrepreneurs are business people you know) do create jobs?
“They create them to meet demand.”
No nimrod, they go into business to make money. They won’t do it if conditions are unfavorable…high taxes, inflation, high energy, uncertainty about jobs (Customers need jobs).
They hope to make money by filling/meeting a demand for a product or service. If they are successful they are able to offer (create) jobs.
The more business friendly conditions are, the more likely this will happen.
Demand for stuff is part of the process but there will be a lot of pent up demand that will go unfilled when conditions are too risky or too costly to risk…like now. People are not in a big hurry to spend. People are concerned about the future and are being cautious. In a good economy there would be exuberance! People delay spending in poor conditions…like now.
People are not stupid when it comes to their own money…unfortunately, they can be terribly stupid when it comes to other peoples money! Taxing is about a select few spending other people’s money.
“Middle class consumers are the real job creators, not businesses.”
It isn’t that the middle class doesn’t represent the big spending driver Chris, it is. But the middle class does not take the risk or do the work of producing something to spend on…you should give credit where its due.
Investment money, likewise, is the money placed at risk that makes it possible for some of the business growth. Why is it smart to heavily tax this seed money and thus discourage its being put to use?
What the heck are you afraid of?