demand-side economics

[Carl]

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x3785273

Any DUmmy thread about economics is good for at least a couple of laughs.

unblock (1000+ posts)         Tue Aug-12-08 06:14 PM
Original message
demand-side economics
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it's fairly obvious to me that what this economy needs is a SERIOUS push on the demand side.

the current crisis had its origins in many places, but the real problem at this point is that the american consumer is paralyzed. unable to get out from under great debt, facing mounting energy and other costs, and unable to significantly increase income. the result is that the suppliers and then the investors are paralyzed as well, waiting for the consumer to show signs of life before trying to extract yet more wealth.

quite aside from the fact that many people are hurting and deserve help, quite cynically, the economy and therefore the rich bastards NEED the consumer to get some serious help from the government. EVERYBODY will benefit from a major demand-push.

i propose the following:

- drastically increase the personal exemption for federal income taxes from $3,500 to something more like $10,000. so a family of 4 is income-tax exempt through the first $40,000 of income.Thinking that is probably already pretty close to the case with the earned income credit

- cut the payroll taxes in half (undo the reagan doubling). fund the difference out of the federal budget.Okay,splain this one to me

- dramatically increase taxes on personal income at higher brackets. after having exempted the first $40,000, even higher marginal tax rates will have a long way to go before catching up. once income exceeds something like $250,000, tax rates should be 40% or so, and income beyond $600,000 or so should be 70%.Yep,and they all will be more then happy to stay here and keep paying it unlike the tax exiles of the 70s from England.....You know all your idols of the British music industry who were being taxed at that rate and higher.

- tax all income the same. no fair taxing back-breaking labor higher than leisurely passive investing. tighten other exemptions.In other words make savings and investing a losing proposition.

- keep the minimum tax, but readjust it as if it had been indexed for inflation from its inception, and keep it indexed to inflation.


in short order, people will be paying off their credit cards and clamoring for houses and goods and services. sure, it will lead to a deficit in the short run, but that's what keynesian economics is all about.

once the consumer has cash in pocket, businesses will be clamoring to extract that newfound wealth. those earnings will return the budget to balance, as the economy starts booming again.Business won`t give a rat if the gov is going to take it all from them in taxes.


simple, huh? Yes,you are.


disclaimer: i plucked the actual numbers out of my butt. maybe somewhat different numbers would make more sense. the point is just to do something big. not this $300 stimulus crap. most people need quite a lot more than that, and if there's money in the hands of consumers, the economy will boom to try to extract it.That is called having low taxes and not killing initiative,not what dems or your plan will do.

GoesTo11 (1000+ posts)        Tue Aug-12-08 06:57 PM
Response to Original message
1. Hair of the dog?
   You've got two arguments here. One is about having more progressive tax policy - and thus more even distributions of income / wealth, the other is about needing more demand. But consumer demand is the dog that bit us. We could have high demand by giving a big tax cut to the rich too, they would just demand more yachts. Heck, we could even require that they spend it on yachts. But we don't really need to be buying more crap. Even progressive tax cuts that lead to crap buying wouldn't be that great. They would temporarily provide a little boost to production - although more in China than anywhere in the US. But after that, where would we be? What we really need is more spending on things of common value - infrastructure, human capital (education and preventative health care), public spaces, museums & arts, transportation, R&D, etc. All this stuff we have neglected for decades has impoverished us. We need more of that to stop the downward spiral. Fringe benefit: investing in that will get people back to work too. May not be as much profit in it, in the short term.

Stupid is as stupid does..

Selatius  (1000+ posts)        Tue Aug-12-08 07:41 PM
Response to Original message
6. Pass the Employee Free-Choice Act. Rebuild America's unions to renegotiate higher wages.
   The only reason why factory jobs paid as high as they did in the first place was because of the presence of unions and the unions' fight for better pay and benefits. When those factory jobs left, American workers were forced back to square one.

With the Employee Free-Choice Act, huge employers that are not manufacturing based could be struck and unionized, huge employers like Wal-Mart and Starbucks

Tell me genius how a company actually gets the revenue to pay higher wages and taxes.

[BannedFromDU]

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x3785273

Any DUmmy thread about economics is good for at least a couple of laughs.

unblock (1000+ posts)         Tue Aug-12-08 06:14 PM
Original message
demand-side economics
   Advertisements [?]

it's fairly obvious to me that what this economy needs is a SERIOUS push on the demand side.

the current crisis had its origins in many places, but the real problem at this point is that the american consumer is paralyzed. unable to get out from under great debt, facing mounting energy and other costs, and unable to significantly increase income. the result is that the suppliers and then the investors are paralyzed as well, waiting for the consumer to show signs of life before trying to extract yet more wealth.

quite aside from the fact that many people are hurting and deserve help, quite cynically, the economy and therefore the rich bastards NEED the consumer to get some serious help from the government. EVERYBODY will benefit from a major demand-push.

i propose the following:

- drastically increase the personal exemption for federal income taxes from $3,500 to something more like $10,000. so a family of 4 is income-tax exempt through the first $40,000 of income.Thinking that is probably already pretty close to the case with the earned income credit

- cut the payroll taxes in half (undo the reagan doubling). fund the difference out of the federal budget.Okay,splain this one to me

- dramatically increase taxes on personal income at higher brackets. after having exempted the first $40,000, even higher marginal tax rates will have a long way to go before catching up. once income exceeds something like $250,000, tax rates should be 40% or so, and income beyond $600,000 or so should be 70%.Yep,and they all will be more then happy to stay here and keep paying it unlike the tax exiles of the 70s from England.....You know all your idols of the British music industry who were being taxed at that rate and higher.

- tax all income the same. no fair taxing back-breaking labor higher than leisurely passive investing. tighten other exemptions.In other words make savings and investing a losing proposition.

- keep the minimum tax, but readjust it as if it had been indexed for inflation from its inception, and keep it indexed to inflation.


in short order, people will be paying off their credit cards and clamoring for houses and goods and services. sure, it will lead to a deficit in the short run, but that's what keynesian economics is all about.

once the consumer has cash in pocket, businesses will be clamoring to extract that newfound wealth. those earnings will return the budget to balance, as the economy starts booming again.Business won`t give a rat if the gov is going to take it all from them in taxes.


simple, huh? Yes,you are.


disclaimer: i plucked the actual numbers out of my butt. maybe somewhat different numbers would make more sense. the point is just to do something big. not this $300 stimulus crap. most people need quite a lot more than that, and if there's money in the hands of consumers, the economy will boom to try to extract it.That is called having low taxes and not killing initiative,not what dems or your plan will do.

GoesTo11 (1000+ posts)        Tue Aug-12-08 06:57 PM
Response to Original message
1. Hair of the dog?
   You've got two arguments here. One is about having more progressive tax policy - and thus more even distributions of income / wealth, the other is about needing more demand. But consumer demand is the dog that bit us. We could have high demand by giving a big tax cut to the rich too, they would just demand more yachts. Heck, we could even require that they spend it on yachts. But we don't really need to be buying more crap. Even progressive tax cuts that lead to crap buying wouldn't be that great. They would temporarily provide a little boost to production - although more in China than anywhere in the US. But after that, where would we be? What we really need is more spending on things of common value - infrastructure, human capital (education and preventative health care), public spaces, museums & arts, transportation, R&D, etc. All this stuff we have neglected for decades has impoverished us. We need more of that to stop the downward spiral. Fringe benefit: investing in that will get people back to work too. May not be as much profit in it, in the short term.

Stupid is as stupid does..

Selatius  (1000+ posts)        Tue Aug-12-08 07:41 PM
Response to Original message
6. Pass the Employee Free-Choice Act. Rebuild America's unions to renegotiate higher wages.
   The only reason why factory jobs paid as high as they did in the first place was because of the presence of unions and the unions' fight for better pay and benefits. When those factory jobs left, American workers were forced back to square one.

With the Employee Free-Choice Act, huge employers that are not manufacturing based could be struck and unionized, huge employers like Wal-Mart and Starbucks

Tell me genius how a company actually gets the revenue to pay higher wages and taxes.

      They think we have high inflation NOW? They don't like the Fed jacking with the economy as it is?

      God, these people are STUPID.

      What we need is for oil to continue to decline; the economy will perk up in a deflationary way.

[Zeus]

Selatius  (1000+ posts)        Tue Aug-12-08 07:41 PM
Response to Original message
6. Pass the Employee Free-Choice Act. Rebuild America's unions to renegotiate higher wages.
   The only reason why factory jobs paid as high as they did in the first place was because of the presence of unions and the unions' fight for better pay and benefits. When those factory jobs left, American workers were forced back to square one.

With the Employee Free-Choice Act, huge employers that are not manufacturing based could be struck and unionized, huge employers like Wal-Mart and Starbucks

Holy crap batman. Do you realize what higher wages will do to the cost of toilet paper and the Cost of living in general.You must work forBig paper.

[Vagabond]

A howler monkey has a better grasp on economic principles than most DUmmies.

[Zeus]

A howler monkey has a better grasp on economic principles than most DUmmies.

The "Intellectual Discourse" on the Ilse of Vile always reminds me of this Video...

[youtube=425,350]http://www.youtube.com/watch?v=_QgKkhJ0oag[/youtube]

[USA4ME]

Selatius

Pass the Employee Free-Choice Act. Rebuild America's unions to renegotiate higher wages.

The only reason why factory jobs paid as high as they did in the first place was because of the presence of unions and the unions' fight for better pay and benefits. When those factory jobs left, American workers were forced back to square one.

OK, corps have been fleeing the USA to go elsewhere because unions had them paying $20/hr for a job that's only worth $10/hr and you want to make them pay even more?

It's funny how they believe the US gov't can force corps to stay in the country and that, should they leave, creating huge tariffs on their products as punishment is going to hurt the corp and not the consumer.

.

[DumbAss Tanker]

i propose the following:

- drastically increase the personal exemption for federal income taxes from $3,500 to something more like $10,000. so a family of 4 is income-tax exempt through the first $40,000 of income.Thinking that is probably already pretty close to the case with the earned income credit  Pretty close, Married-filing-joint + eligible for EIC topped out at $39,000-something last year.

- cut the payroll taxes in half (undo the reagan doubling). fund the difference out of the federal budget.Okay,splain this one to me  Ruhhhh?  Scooby not understand.  Where does that ol' Federal Budget get its money if not from tax revenue?

- dramatically increase taxes on personal income at higher brackets. after having exempted the first $40,000, even higher marginal tax rates will have a long way to go before catching up. once income exceeds something like $250,000, tax rates should be 40% or so, and income beyond $600,000 or so should be 70%.Yep,and they all will be more then happy to stay here and keep paying it unlike the tax exiles of the 70s from England.....You know all your idols of the British music industry who were being taxed at that rate and higher.  "It's one for you, nineteen for me, yea-a-a-ah I'm the taxman...should five percent appear too small, be thankful I don't take it all..."  The flight of the rockstars to not-quite-so-toxic tax environments elsewhere went pretty far toward killing the golden goose in UK - even the 70% top rate in the US at the time looked good by comparison to them. 

- tax all income the same. no fair taxing back-breaking labor higher than leisurely passive investing. tighten other exemptions.In other words make savings and investing a losing proposition. I wouldn't actually have a problem with that if the taxes were at a reasonably low rate; an equal rate for passive income only penalizes saving and investing if there is a more-remunerative competing use for the money, which mostly hasn't been the case, and while the lower rate does incentivize investing it's a bit specious and self-serving to say it actually penalizes it in a real economic sense.

- keep the minimum tax, but readjust it as if it had been indexed for inflation from its inception, and keep it indexed to inflation. The dipshit is talking about Alternative Minimum Tax I believe.  If passive income was going to be taxed at the same rate as earned income, I'm not sure any rationale for AMT would still exist.

in short order, people will be paying off their credit cards and clamoring for houses and goods and services.  sure, it will lead to a deficit in the short run, but that's what keynesian economics is all about.  A bit difficult to see how, since the only suggested change so far that would affect mass numbers of low-level consumers is fiscally impossible.

once the consumer has cash in pocket, businesses will be clamoring to extract that newfound wealth. those earnings will return the budget to balance, as the economy starts booming again.Business won`t give a rat if the gov is going to take it all from them in taxes. And the business taxes will just be passed back through to the consumers in higher prices across the board, and caught in an upward spiral, wiping out any theoretical advantage to the consumer in a tsunami of inflating prices.


simple, huh? Yes,you are. Simply wrong.


disclaimer: i plucked the actual numbers out of my butt. maybe somewhat different numbers would make more sense. the point is just to do something big. not this $300 stimulus crap. most people need quite a lot more than that, and if there's money in the hands of consumers, the economy will boom to try to extract it.That is called having low taxes and not killing initiative,not what dems or your plan will do. The poor dipshit's goal isn't actually increasing demand, it is increasing supply - the supply of money available to the consumer.  It's actually a fiscal policy issue rather than supply and demand economics, but he's too damned innocent of economic knowledge to understand that.