well of those three examples putting it an piggy bank/matress is not something someone who knows the value of investing is going to do.

paying of credit cards puts the money into the banking system to be lent out again (posititive)

and buying from another country when you have trade with and are therefore selling stuff to has a proportionately neutral effect (in the case of the US which has an over all trade surplus a positive effect).


And that makes sense when the public infrastructure investment happens as a PLANNED growth event. However when it is pushed out as a stimulus package that is not what happens. Projects that were planned to happen 3 years from now are pushed forward today. Which means 3 years of life expectancy is wasted to create short term jobs for your supporters.


no it is not i was responding to your sell stuff to pay off debt point. I know people will sell off stuff to move it into a higher yeilding investment (which translates into capital funding most profit maximizing companies = more jobs long term). I was trying to show you the beneficial effect of something you were discounting as not being of value.

Lower capital gains reduced the punishement from moving your money from one investment to another which causes money to flow from bad investments to good investments more quickly. That has a net positive effect to the economy which creates jobs.

The toxic assets is based on a lower than necessary asset reserves, which the infusion of capital was designed to resolve. The problem is when people pay off their credit card debts that is a LOST revenue stream from the banks. If they choose to recover it by investing that helps the economy. IF the best RIO comes from lending out that money that also helps the economy. WIN WIN either way.

which means it only has a cost allocation if it successfully stimulates the economy (back loaded cost) vs infrastructure investement which has to be spent first.

IF the physicological effect of reducing the punishement for moving your money from a bad investment to a good investment is eliminated. and it causes people to not just sit on their current stocks in the hopes it will go back up. The business that are first to turn around will get more capital. That will speed up recovery. And only when that happens does the cost of the tax cut actually kick in.

You just gave another reason why tax cuts are better than public works.


at least quote him properly
he said $1 will generate $1.50 in DIRECT stimulus.
There is a difference, because their is a massive multiplier effect from indirect (out of system stimulus).

Take the example of canadian auto industry, putting the stimlus into US auto industry caused the canadian government to do the same thing. The difference is the canadian plants BUY their parts for the car from the American Parts plants. The end result in the US gets a portion of our stimulus package (the value of the parts). Since the profits from the sale of the cars go back to the head office in the states you get a second part of our stimulus package.

When those net transfers the total value of a $1 going to business, is WAY more $1.5.

The U.S. has a trade surplus? So when we buy goods made in other countries it's proportionately neutral? (because they buy as much or more of our stuff as we buy of theirs?)

What the fuck are you smoking? Our trade deficit for Nov 2008 (the most recent month for which data is available) was over $40 billion.
http://www.census.gov/indicator/www/ustrade.html
40 billion deficit, for one month, and that's a typical month, and you think the U.S. has a trade surplus?

I didn't even bother reading the rest of what you wrote because this is so factually inaccurate and flat out stupid that if you believe it's true then nothing else you wrote is worth reading.

BTW, lower capital gains taxes don't encourage people to sell bad investments and move the money to good investments.
A bad investment would be one that lost money (or made very little), a good investment is one that makes alot of money...since the tax is only paid on the profit, selling a bad investment is not a taxable event, or in the case of a barely profitable investment, the tax is miniscule in relation to the amount of capital that will be freed by selling.

If anything, the low tax rate would encourage me to sell an asset (say a good stock) and then immediately reinvest all of the after tax proceeds into the same asset, thereby raising my cost basis for future taxes. (i.e. paying tax now at the lower rate on profits I've made so that if taxes go up later and I sell, the tax bill will be lower)
All this really does in the long run is cost the treasury money that it will have to make up for in another part of the economy.

GG has a habit of posting what he thinks will fit his version of the truth and building a case on that.

If the "West" had a neutral balance of payment with the "East" and some developing countries we would not have this crisis. We might even of ridden out the financial crisis created by financiers bankers.We would all be earning more and yes goods would be more expensive in the shops.

We have had over 20 years of importing cheap goods from countries that pay workers a fraction of what we earn, replaced the jobs with service, technology and financial industries. The result is clear to see.

A lot of the service, technology and financial industries are now based in the countries we had hoped would just be selling us cheap coffee percolators and shirts. And the system collapsed.

Under Chairman Mao Chine was a poor third world country where millions starved to death. With the new leadership and our leaders making them "favored trading partners" which in truth means they can sell us billions and buy little, look at the changes. If you want to know where your money went, you don't have to look very far.

The problem is those at the top profited from it, few of them lost their jobs, few of them took a pay cut and they still tell us protectionism is wrong. It is for them, not so good when your job and wages go East.

Nothing like a kick ass economic crisis to break the American DOllar down only to be replaced by the "Amero Dollar".

Trade between Canada, USA, Mexico and some Central American countires band together to all use the same currency system and the economies merged.

Sounds like we are definatly all in a state of Change.

It works with the completion of the transcontinental highway.
Its all part of the plan.

Please explain why you think this is the case because it looks like you are just trying to associate something everything agrees is bad, the current crisis, with something you feel is bad, the west buying too many cheap goods from the east.

You want me to explain why it's bad to import $100 worth of goods, services, etc. and export only $50 worth?

Are you joking?

No, I want you to explain how balanced trade would have prevented this crisis.

you are an idiot then because i quite clearly gave you an example of what i was talking about with the auto industry and canada.

Let me ask you a question to make that point
does the stats you are using document just the difference between inport and exports (cars and parts in my example) or does it include the transfer of profit back to the head office too.

Re read your data and you can see the difference you moron.

then go back and read what i am saying.

the last economic crisis was when bush sr lost to clinton. (it the economy stupid). The fact is there are virtually no stocks that have lost so much money in the last drop that it would wipe out all the gains that have happened since that last recovery. under that senerio give current average stockmart roi $200 is still worth $300 after the crash.
That a $100 i would have to pay tax on. Assuming that my current company was going to post a modest 5% growth and the capital tax rate was 50%. The act of switching would put 50 buck of profit into the new company. Which means it makes no sense to move my money unless the new company was making at least 10% (100 *5% - 50 *10%).
If that happens the country loses the extra 5% of economic growth that would have happened (and all the jobs that would lead too)

conversely if the tax rate was dropped to 25% then 75 bucks would go into the new company (100*5% < 75+10%) and the company which is growing faster has the capital it need to make that growth happen. Which results in an increase in the economy over all.


even if that were to happen that would put more money in the government coffers to pay for social services it need to pay for (unemployement, retraining) which still have a positive effect.

It a temporal diversion of tax revenue (getting more money now when the economy is bad, and getting less when the economy is good).

all without putting punitive on economic growth (higher taxes).

Because it would of kept more of the wealth we had in the West in the West and sent less to the developing world. The banks would of had more money, people would have more jobs creating wealth and over all more of the wealth we created would of stayed here.

By sucking in huge amounts of goods and services, cheap or otherwise you take money out of the system. And instead of a complete collapse we would of had a good old recession which hits every so often.

Recessions are not new, I have lived through at least 3 or 4. The system over inflates and then corrects itself by deflating. Because a lot of the wealth was still in the country we weathered it, yes people lost homes and jobs, but it was short term. This time the jobs are not there, they've been shipped out. Along with a lot of the wealth.

The only way we could fund the consumer society we had based on importing goods was with debt and to fund more consumer wealth we increased the debt. Then along comes a President who decides big business and Wall Street can do no wrong (sarcasm), a war that cost a fortune, a housing market about to collapse and you end up where you are today.

We would of had a recession, but it would of been something we could of managed.

It wouldn't have. Better regulation of the financial sector would have.

Paul went off on this free trade tangent because I was trying to explain to gideon that a tax rebate is less stimulative than direct government spending because consumers can use that money to buy goods produced elsewhere.

Gideon then tried explaining to me that American trade was balanced, based on whatever guerrila math he's using, so therefore the $40B trade deficit in November of 2008 wasn't really a deficit according to him. (Maybe it has something to do with time shifting?)

Trying to talk to gideon is kind of like trying to talk to that Joella girl from the biggest loser. His eyes are looking at you and his lips are moving, but he must be having a conversation with someone from a past life or someone on another planet because nothing he says makes any sense.

You're not just learning that now are you?

I learned that over a year ago, during the whole "unauthorized use of content by tube sites is not really stealing" argument he had going on.

Given enough rope he'll happily hang himself for weeks.

If there was better regulation of derivatives markets things would be nowhere near as bad as they are now. That is a big part of the problem. I've mentioned this in other posts. Putting the regulations we need in place would be relatively easy, but very painful for banks... Which is OK by me.

Macroeconomics 101... funny to see the sort of ramblings in a forum that is supposed to be formed by entrepreneurs :error:2 cents:

Whether it's theft, piracy, murder or high treason we are not going to do anything about it. Neither will anyone else. Dreaming we can close them because of the content is pointless. In fact it's worse than pointless because it stops us thinking of a solution.

Have the people who think tax cuts are a solution been on a desert island for the last 8 years?

We've tried that and it did not work. So let's cut taxes again and see if it works this time. :upsidedow

Reality.

Government needs $XYZ to run the country.
They will not get this from the expanding economy.
Most of that money should be spent in the country which provides jobs for workers. (OK GWB fucked that one with Iraq.)
Those workers earn money and pay taxes.

Giving tax cuts allows people to have more money in their pockets.
So they go to the malls and buy imported goods.
Employs a shop worker in the US and a factory worker in China.

OK in both instances there are variables, the Government does spend money overseas and they will buy Chinese computers or similar. But they are more likely to spend more of the money fueling the economy in the US than tax cuts will. The only way out of this short term is more investment inside the US, getting people to work. Long term better schools to train people and build the manufacturing base. Think about what you would spend an extra $100 a month on.

How much of it would be spent on something that will long term benefit the US and how much would be spent on imported goods?

We have had tax cuts for 8 years and look how great it worked.

To give tax cuts a Government has to have the money in surplus or cut services which means jobs or borrow the money from those who have it. Like the Chinese. Or print more.

Which one do you think is best so you can get an extra $100 each month in your wage packet?

Actually most people here are a long way from business men and the post you quoted proves it.

People have not been investing seriously in the US which is what got them into the mess they're in. They've been investing badly in stocks that crashed because they were GAMBLING or investing in a house which was over valued and they were mortgaged to the eye balls.

People seem to think that tax money is money lost. It's not. Next time you see a guy sweeping your street, a policeman, a road worker, social worker and a lot of other people you're seeing tax money being spent.

All those people are earning money supporting the world we live in and paying taxes to support the world we live in.

Next time you walk through a mall you see your tax cuts working for you. Employing a shop assistant to sell you goods you might not need made in a place a long way from the Mall.

It's more complex than that and both systems can be abused, GWB has shown how. But people have to realise there are no free meals or rides out of this.

All I can say about taxes is...the payroll tax has to be the most ingenius and sinister thing ever created.

If everybody in this country had to write a check to the govt. every quarter to pay their taxes we would have a revolt.

Instead they get it taken out of their pay before they ever see it. And they always take more than what is needed so the people are all happy when they get money from the govt. at the end of the year.

I'm always amused at guys rejoicing that they got 2 or 3 grand back from the govt and can't wait to buy those new tires for their pickup truck with that money. lol

Never realizing just how much the govt. just reached in and took and then KEPT for a full year without any interest owed.

Of course most of the real adult webmasters on here (not the surfers or guys who work for adult companies) that own their own business already know the truth. Last year I paid $19,000 in taxes every quarter. And if you don't think that hurt...

So yeah, I can definitely see where tax cuts would have helped me to hire someone. I just moved out here to Vegas in Oct. of 2008. And my first order of business was going to be to hire 2 more people to take some of the workload off of me.

But unfortunately the economy completely crumbled at the same time that I moved here.

Now if I could have had access to that $19,000 I paid the govt. in the 4th quarter, I still could have followed my plan and employed two more people. But as it stands now, I need every penny I've got.

Tax cuts do have a very positive effect on the economy, but not when you massively increase spending as Bush did.

Don't worry though. Once the bond market dries up, and it will soon, they will either have to print money full tilt (crashing the dollar), default (crashing the dollar) or massively increase taxes (crashing the economy even more).

The scary part of all of this... Europe is worse off than the US :Oh crap

So fucking true :2 cents: :2 cents: :2 cents:

You're confusing payroll tax with tax withholding.

Payroll tax is social security tax, paid on the first $97,500 in wages. You don't ever get that back, unless you become old enough to collect social security.

You're thinking of withholding tax, which is income tax that people basically overpay in order to get a refund at the end of the year.
I agree that it is pretty ridiculous to do it that way.


As for the rest, I think I need to let this thread die. I should have been more careful in wording the title because the discussion hasn't been about what I wanted it to be about (for the most part)

Next time I'll give more thought to the title so that the discussion stays on point.

But this might trigger a trade war and turn the recession into a depression. Look up the "Smoot-Hawley Act".

You say tomato I say tomatoe lol

When I think of payroll tax I think of withholding tax from a paycheck. When I think of what you are calling withholding tax, my mind shifts to FICA tax. You're probably right about the terminlogy, I just know how I think of it when I'm paying my employees, and then matching those funds for their FICA (social security)

From my vantage point the whole thing is b.s. I can only imagine how companies that not only have to pay matching FICA but also health benefits, vacation with pay, pension plans, etc. must feel...Like a giant dick being shoved in their ass would be my guess. lol

And then the fucking govt. uses my own tax money to do what? Prosecute guys like Max Hardcore? Or invade Iraq? Or the thousands of ways that they line their own pockets? Jesus, I can only imagine how much is going to fall into peoples' pocketes out of this latest debacle of hundreds of billions of dollars in this "economic stimulus" package.

Hell, you could snag a million here, and a million there and the figures are so astronomical nobody would catch you. So I guess in my opinion...I'd rather KEEP my money and do with it as I see fit than give it away to banks to loan to me! lol

If only our founding fathers could witness this grotesque ripoff of the people in this country. Giving our money to a bank so we can borrow it back. It's ludicrous when you look at it like that.

:2 cents:

except the same thing is true with the wages those people are paid.

so that arguement is total BS.



simple math
(exports + profits that returned to the head office )- (imports + profits that go out).
Total revenue comming in - total expense going out.

i don't understand why you are to stupid to get that.




i guess i have to speak to you like a cave man

government fix road 2 years early, roads life 2 years less. government waste money.

You missed the entire point of my post Paul, but... I forgive you.

http://www.gofuckyourself.com/showth...2#post15454022
this is getting worse and worse. The fucking democrats keep bending over the spineless mother fuckers.

So the Government does not take your $19,000 in payroll tax and you go out and employ someone to work for you. Great scheme. But the roads are in disrepair so he can't get there, no police so he has to stay at home to protect his house, no school to teach him to the level to get the job and you don't have a job because the Internet was originally funded by Government.

Or you pay $19,000 in sales, gas, land and other taxes. You seem to think this money is disappearing, it's not it's being spent to provide all the services you take for granted.

He cut taxes and spent, a recipe for a disaster.

No problem. :)

I'm getting pissed off with people posting about Tubes and them stealing content. They do nothing and the problem continues. Content is not the problem with these big Tubes.

Paul, we were led as a society to believe that paying a big ass sales tax on gasoline would take care of our roads. Bullshit. And we ALL pay a nice sales tax on every goddamn thing we purchase. It's a ripoff.

And of course the cops are paid for by our local taxes, the sheriff by our county taxes, and everything else by our state taxes. So NO, I do not appreciate paying the federal govt. all that money at all.

...and schools paid for by our property taxes.

In many states the government makes more money from the gas you buy than the oil companies make in profit.

The extra taxes we pay for gasoline are not sales taxes, but excise taxes I believe. Then there is sales tax on top of it.

Our first federal income tax was started to pay for the Civil War. Then it was brought back in 1913. The same year we got the Federal Reserve...

It's pretty ridiculous of you to stretch the argument that far and I'm sure you're the only one here who sees it this way.
You're so concerned with being right and not admitting that I have a point that you've created this alternate universe where the wages government pays to government workers are inefficient but dollars that corporations invest overseas are good for the U.S. worker.



This isn't simple math because you're counting exports twice. To calculate a trade balance you take goods you sell overseas, minus goods you buy from overseas.
If that number is positive you have a trade surplus, if that number is negative you have a trade deficit.

You can add all sorts of other things to the equation again, like you did above, because you don't want to admit you fucked up when saying the U.S. has a trade surplus....but that doesn't change the fact that we have the world's largest trade deficit and have for quite some time.





No geico man.

Government fix road that should have been fixed 5 years ago but money not there. Government also build new road that not there before.
Government make good pay job for people build road.
Other people spend less time commute and less money gas for driving on new road.


People with road job spend paycheck at store and store must hire more people. The circle is virtuous, government create demand where there was none as spender of last resort.