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Paying your "fair share" of taxes

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Re: Paying your "fair share" of taxes [#permalink] New post 01 Mar 2009, 05:05
terp26 wrote:
Why is this a partisan debate? It's fine to blame the republicans for not investing in green technology, but you skipped over clinton/gore who were in power for 8 years. Clearly they could have started that revolution.


Well, obviously every administration could stand to be a little more forward-looking... but to be fair, this whole climate thing, and certainly our financial industry, weren't at the level of full-blown crises back in the 90s. Starting with Reagan, Republicans have ballooned federal spending while slashing taxes and handing big checks to corporate donors. It took eight years under a Democratic administration to get spending back under control and balance the budget. Bush has repeated this strategy with gusto, and now leaves office with the worst recession in however many years looming (and a deeply unpopular war that has irreparably damaged U.S. national interests for a generation to boot). It'll take this administration, thankfully with a Democratic Congress (which means not as beholden to special interests as the GOP), to get our government's budget back under control.

Obviously, there is a lot more going on in our economy than political changeovers. But it's hard to argue with history.
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Re: Paying your "fair share" of taxes [#permalink] New post 01 Mar 2009, 09:04
Toubab wrote:
terp26 wrote:
Why is this a partisan debate? It's fine to blame the republicans for not investing in green technology, but you skipped over clinton/gore who were in power for 8 years. Clearly they could have started that revolution.


Well, obviously every administration could stand to be a little more forward-looking... but to be fair, this whole climate thing, and certainly our financial industry, weren't at the level of full-blown crises back in the 90s. Starting with Reagan, Republicans have ballooned federal spending while slashing taxes and handing big checks to corporate donors. It took eight years under a Democratic administration to get spending back under control and balance the budget. Bush has repeated this strategy with gusto, and now leaves office with the worst recession in however many years looming (and a deeply unpopular war that has irreparably damaged U.S. national interests for a generation to boot). It'll take this administration, thankfully with a Democratic Congress (which means not as beholden to special interests as the GOP), to get our government's budget back under control.

Obviously, there is a lot more going on in our economy than political changeovers. But it's hard to argue with history.

HAHAHAHA!!!!! However much Republicans have abused the spending purse over 8 years, Obama is planning to double that mistake in just 4 years. By the end of his first term he will have added more to the deficit, over $5 trillion, than Bush did in 8 years.

Let's not debate and blame Democrats vs. Republicans. We can debate ideologies all day long, but let's try and leave the politics out of this. I apologize for my reply, but let's let not just repeat the Democratic or Republican talking points. Let's try and add some of our own unique thoughts and ideas, and keep the discussion civil.
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Re: Paying your "fair share" of taxes [#permalink] New post 01 Mar 2009, 18:55
Well I enjoy debating politics as much as (or more so) than the next guy... evidently a bunch of folks on this board do as well. It's true that the Obama administration's budget is, er, breathtaking in the amount of money they're about to spend. But it's pretty well agreed that in the history of governments responding to financial crises, the biggest mistake made has been not reacting swiftly or strongly enough - see the U.S. in the 30s, Japan, Sweden, etc. - which has had the effect of prolonging recessions, not solving them.

Also, as a share of GDP, isn't our spending on this budget merely a fraction of what the USG spent in the immediate post-war years? Paying down our debt won't be a problem if we can get the economy re-energized (that's how we did it in the 50-60s and during the Clinton era)... and if it's not, we'll have much more long-term problems than a national debt to worry about.

Like I said, politics isn't the primary agent affecting our economy. But obviously it is an actor. And if the Obama administration goes deeply into the red to save our economy from an even worse crash, I'll be thankful they did... it's not like they're spending all that money on bombing a bunch of Arabs who did nothing to deserve it, after all.
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Re: Paying your "fair share" of taxes [#permalink] New post 01 Mar 2009, 19:25
Since I love Peter Schiff so much, I thought I would add his take on Obama and Geithner's approach to fixing the economy here:

In his first televised speech before Congress, President Obama asserted that prosperity will return once the government restores the flow of credit in the economy. It may come as a surprise to him, but an economy cannot run on consumer loans. Furthermore, credit stopped flowing in the U.S. for a very good reason: there was no more savings left to loan. Government efforts to simply make credit available, without rebuilding productive capacity or increasing savings, are doomed to destroy what’s left of our economy.

The central tenets of Obamanomics appear to be that access to credit will enable people to borrow money to buy stuff, the spending will spur production and employment, and thus the economy will grow. It’s a neat and simple picture, but it has nothing whatsoever to do with how an economy works. The President does not understand that consumption is made possible by production and that credit is made possible by savings. The size and complexity of modern economies has obscured these simple concepts, but reducing the picture to a small scale can help clear away the fog.

Suppose there is a very small barter-based economy consisting of only three individuals, a butcher, a baker, and a candlestick maker. If the candlestick maker wants bread or steak, he makes candles and trades. The candlestick maker always wants food, but his demand can only be satisfied if he makes candles, without which he goes hungry. The mere fact that he desires bread and steak is meaningless.

Enter the magic wand of credit, which many now assume can take the place of production. Suppose the butcher has managed to produce an excess amount of steak and has more than he needs on a daily basis. Knowing this, the candlestick maker asks to borrow a steak from the butcher to trade to the baker for bread. For this transaction to take place the butcher must first have produced steaks which he did not consume (savings). He then loans his savings to the candlestick maker, who issues the butcher a note promising to repay his debt in candlesticks.

In this instance, it was the butcher’s production of steak that enabled the candlestick maker to buy bread, which also had to be produced. The fact that the candlestick maker had access to credit did not increase demand or bolster the economy. In fact, by using credit to buy instead of candles, the economy now has fewer candles, and the butcher now has fewer steaks with which to buy bread himself. What has happened is that through savings, the butcher has loaned his purchasing power, created by his production, to the candlestick maker, who used it to buy bread.

Similarly, the candlestick maker could have offered “IOU candlesticks” directly to the baker. Again, the transaction could only be successful if the baker actually baked bread that he did not consume himself and was therefore able to loan his savings to the candlestick maker. Since he loaned his bread to the candlestick maker, he no longer has that bread himself to trade for steak.

The existence of credit in no way increases aggregate consumption within this community, it merely temporarily alters the way consumption is distributed. The only way for aggregate consumption to increase is for the production of candlesticks, steak, and bread to increase.

One way credit could be used to grow this economy would be for the candlestick maker to borrow bread and steak for sustenance while he improves the productive capacity of his candlestick-making equipment. If successful, he could repay his loans with interest out of his increased production, and all would benefit from greater productivity. In this case the under-consumption of the butcher and baker led to the accumulation of savings, which were then loaned to the candlestick maker to finance capital investments. Had the butcher and baker consumed all their production, no savings would have been accumulated, and no credit would have been available to the candlestick maker, depriving society of the increased productivity that would have followed.

On the other hand, had the candlestick maker merely borrowed bread and steak to sustain himself while taking a vacation from candlestick making, society would gain nothing, and there would be a good chance the candlestick maker would default on the loan. In this case, the extension of consumer credit squanders savings which are now no longer available to finance other capital investments.

What would happen if a natural disaster destroyed all the equipment used to make candlesticks, bread and steak? Confronted with dangerous shortages of food and lighting, Barack Obama would offer to stimulate the economy by handing out pieces of paper called money and guaranteeing loans to whomever wants to consume. What good would the money do? Would these pieces of paper or loans make goods magically appear?

The mere introduction of paper money into this economy only increases the ability of the butcher, baker, and candlestick maker to bid up prices (measured in money, not trade goods) once goods are actually produced again. The only way to restore actual prosperity is to repair the destroyed equipment and start producing again.

The sad truth is that the productive capacity of the American economy is now largely in tatters. Our industrial economy has been replaced by a reliance on health care, financial services and government spending. Introducing freer flowing credit and more printed money into such a system will do nothing except spark inflation. We need to get back to the basics of production. It won’t be easy, but it will work.

President Obama would have us believe that we can all spend the day relaxing in a tub while his printing press does all the work for us. The problem comes when you get out of the tub to go to dinner and the only thing on your plate is an IOU for steak.

All I have to say is get ready for stagflation.
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Re: Paying your "fair share" of taxes [#permalink] New post 02 Mar 2009, 08:52
Here's proof that Obama has socialist and communist plans for the US:

http://www.whitehouse.gov/the_press_office/President-Obama-Announces-More-Economic-Plans/

White House Press Release wrote:
Signing the legislation, President Obama said, "All that we want to do away with is the miserable character of this inequality, under which the middle class lives merely to increase capital for the wealthy, and allowed to exist only so far as the interest of the upper class requires it."

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Re: Paying your "fair share" of taxes   [#permalink] 02 Mar 2009, 08:52
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