Romney

Not really free healthcare however. More like forced medical insurance with employers footing most of the bill from how i understand it.

 

Hiding costs and "free" are not the same thing. It has never had a majority support from voters and its popularity is only worsening especially since Americans are finding out the true costs of the act were either outright lies or the estimates were in error by between $300-500 Billion dollars and we haven't even started it yet.

But I'm verging on about the 57th time of diverting a thread headlong into re-arguing the ACA.

 

Fair enough, I don't pretend to have a firm (if any) grasp of american politics. But it seems debating the value of any single man is pretty pointless. In the UK any argument about who should be PM is pretty pointless, it's the party lines that are more important.

 

republican-line may not have been the best choice of words but what I am referring to is the general ideology behind most of the policies and the historical tendency of the party, less tax, minimal state, free market and the idea that making the rich richer makes everything better. Ideas that never worked in the way they are meant to, the crisis in the 20's should be more than evidence enough (look up Hooverville)

I am not saying that Obama is the best there is, he just seems to be the lesser of two evils (as politics usually are). And I cannot deny that things does look bleak however I still fail too see that Romney could do it even marginally better.

One example of one of Romney's intentions:

Eliminate taxes for taxpayers with AGI below $200,000 on interest, dividends, and capital gains

Now how is this to help, well it is going to give some relatively rich people more money, so they by a Audi in stead of a Ford. The stock market is going to get a bit of a boost, giving companies marginally more money to use, but for what? They are already selling as much as they can (no demand) so there is no need to hire more people, the only thing they can do is to either pay more dividends or simply pay back whatever loans they have.

Give a million to someone who has ten and he will by a bigger car or house, give 1000 people $1000 dollars and they are going to buy smaller stuff, new stuff, get a haircut or go to the movies creating new jobs to those people and getting the economy going. At this point the companies will have someone to sell their stuff to and will have to hire more people, in economy this is called the multiplier effect, however everything starts with creating demand.

 

I know what Hoovervilles were, they were a full decade after the '21 crash. Hoovervilles where dubbed in response Hoover's response to the '29 crash, a lot of cash and experimentation happened. Then FDR took office and spent more money creating the so called "demand" and things didn't get better until 1946 overseeing the longest record of unemployment and economic decline in our country's history. More money also creates inflation.

Read up on Henry Morgenthau's diary about FDR's policies and contrast that with the accomplishments of Andrew Mellon to contrast the effects of the two fundamental schools of thought and the results.

“No, gentlemen, we have tried spending money. We are spending more than we have ever spent before and it does not work. ...I say after eight years of this Administration we have just as much unemployment as when we started.”

Studies have concluded that approach prolonged the the great depression by 7 years.

Milton Friedman addressed this demand theory in his book Money Mischief using dropping cash from a helicopter to create demand and what actually happens vs what economists models not based on actual history or human nature show what should happen.

 

I had to read up on Mellon as I had never heard of him but I really can't see what his accomplishment were, he was behind tax cuts and a decrease in depth when everything was improving and getting war money from Europe, not that impressive a feat. Also remember that many of these effects of the political initiatives takes time to work, in case of the US you would properly not see the effects for the first few years. Hereafter WW2 meant that all economic theories and actions of that time are impossible to use as examples.

Increasing demand is one of the only ways to get growth and while not perfect and very much at the mercy of the people (if they decide to save the money in stead of using it) I still fail to see how giving tax cuts to rich people is going to help.

I will have to get to my university library to get Money Mischief so I cannot give a proper response on that one any time soon, (sorry) But I will look it up.

 

You don't have to read the whole thing. His "helicopter theory" is available for consumption readily - but this short book is recommended and is eye opening when it comes to how currency actually works. I didn't intend to give you a homework assignment, just citing my sources.

Increasing GDP growth AND revenues to the government is what happened. It's less gratifying to politicians and planners but it works for everyone over all. You would think that increasing revenues to the government would only make politicians happy but it doesn't, it reveals what they are really interested in which is power and credit (credit=reelection).

Demand is not a generator of growth but a conveyance - or indicator - of it. Demand is always there but it manifests itself in an economy when people are able to satisfy their demands. Redistributing wealth or printing money to prime the pump only does it artificially for a short period of time (just enough time for the proponents to run to the cameras to claim credit for what they did and then run and hide when the fallout occurs later).

For me it comes down to the results over time. Politically speaking, if you take $1,000,000 from a productive person and distribute it to 1000 less productive people essentially what you have done is lost one vote and purchased 1000 votes with someone else's money. Whether the rich guy is buying the the Audi in your example or the government is taking it by force and arbitrarily redistributing it, the money is multiplied in both cases (The Audi dealership doesn't just deposit the check and sit on that money) it's just that one case has a political and intellectual payoff for people who want to plan other people's lives and the other does not.

If everything you say is true about demand, then the Great Depression would have never happened because attempting to create artificial demand has never been attempted on that scale in our history and it was a disaster and yet, FDR kept getting re-elected with 25%+ unemployment and plummeting GDP.

The closest thing to the '29 crash in scale that we have had since is the crash of '87, Reagan was highly criticized for doing nothing and that crash is hardly even referred to in contemporary conversation because the recovery was so brief - same as the '21 crash.

Another good book on the subject is Amity Shlae's "The Forgotten Man" which chronicles the Great Depression in great detail and is an easy read. (Again, not intending to fill your free-time with reading assignments, just citing sources in case you are sincerely interested in another POV)

I agree with you about measures taking time to see the effects which is one of the reasons why I'm not a big supporter of Obama's approach to the economy. He's a "fiddler" just like FDR, constant fiddling creates uncertainty and uncertainty has a powerful effect on company's and individual's economic behavior and why a lot of people are sitting on cash right now which effects the velocity of currency which is a big factor in all these "stimulus" schemes.

 

Then how come Bush was such a disaster ? if that is really how it works Bush should have left the American economy in better shape than ever.

True however the ability to satisfy their demand usually depends on them having an income, not the amount of goods produced. you do not give people the ability to satisfy their demand by giving the ones who already has the ability a bit more money. Again the multiplier effect happens both ways however again a rich person will simply by something that is a bit more expensive and a poor person will by an entirely new product. The difference lies in that a more expensive car does not require that much more labour to produce but hundreds new haircuts does.

In order for this so called productive person to actually be productive is for there to be some sort of demand, you cannot just start producing products if there are no one to by them, who are you going to sell them to ? What is best a "productive" person with a million with no reason to be productive or 1000 people with money giving the productive person a reason to be productive.

The measures instituted by FDR may have failed for a number of reasons, the main one properly because people saved up the money in stead of using it, essentially negating most of the effect. However these methods have been used with success for many years in Europe, the tax rate of Denmark has been increasing the last fifty years and our balance of payments are on the plus side and while we have some state finance problems they are far from as bad as that of the US or Italy. If demand manipulation didn't work well then Denmark should be in worse shape than the US at this point.

 

Revenues increased starting in 2006 but Government spending outpaced revenues. Medicare part D was a huge part of that. The vast majority of our government spending are unfunded mandates from programs like Social Security (product of FDR) and Medicare and Medicaid (products of LBJ). Spending was never put under control even though more money was rolling in as a result. It's the same story with all the other examples of increased revenues to the government except one, the Harding/Coolidge cuts had corresponding cuts in spending.

Saying that producing a car doesn't produce as much labour as much as hundreds of haircuts:
A: Fast forwards the story of the production of the car to the moment it rolls off the assembly line and ignores the building of the factory, robots, factory workers, the sourcing of the raw materials like plastic, rubber, alloy metals that have to come from the ground and founded in a specific way and all the designing and all the tools involved in the design work... I could go on and on.
B: People would be better off cutting people's hair than building and distributing sophisticated products that have been proven to be in demand by customers like an Audi. I can cut my own hair but I can't build a car. And the production of that car involves a whole lot more people in a coordinated effort than some guys standing in a room pushing scissors.

Under this line of thinking, I shouldn't vote for a guy like Romney, who has purchased failing companies, turned them around into productive companies and just look for the nearest out of work barber to run for office.

Planners in India think that people would be better off hand-looming rugs instead of encouraging innovators and automators. Yes, it keeps a lot of people "busy" but production doesn't create wealth without the ability to create efficiency. Picking people out to hand money simply on the basis that they have never proven the means to create wealth doesn't advance an economy, it only slows it down.

He's not "so-called" productive because I say he is and he's not not-productive because you use the term "so-called". He is productive because he has $1,000,000. That money doesn't fall from the sky like mana from heaven, he earned that money. A vast majority of people in America that have money like that are first generation wealthy. They gained that wealth by serving other people, by proving to them that their money would be best served by someone like him for whatever product/service he provides better than any of the alternatives. Arbitrarily applying personal merit whether he "deserves" that money more than someone else who could be cutting people's hair or people who need haircuts doesn't change that fact and pulls into the topic one of "social justice' the driving force behind most redistribution schemes - one I reject.

I don't think people saving money was the reason. Everything was incredibly scarce and I don't see any evidence to that fact but even if it's true, it proves my point and illustrates the "Chess Piece Fallacy" of economics that event the best sounding plans come up by grand thinkers can't and don't take in account that people engaged in an economy don't just get moved around and do what they are told. They respond to incentives and constraints. To blame the millions of people that the plan is supposed to help for not doing what certain people thought they would do is not a weakness of the people, it's a weakness of the plan.

Europe, you mean like Italy, Greece, Spain and even France? I'm glad you are working things out in Denmark and I'm not saying that there aren't valuable lessons to learn by any successes others may have.

My perspective, getting back to the OT, is one of a voter in this country under these circumstances with the options available. I don't have any confidence in the current crop. Bush was inept in economic affairs. But to hitch my wagon to Obama who endorsed every emergency spending policy Bush proposed and extended the Bush-era tax cuts. When running for office, he chastized Bush for spending to much and then proceeded to out spend him in 3 years what took Bush to spend in 8.

http://www.youtube.com/watch?v=DyLmru6no4U

 

You know, this has made for some very interesting reading. What I can't see, however, is how any candidate is really in it for us. Due to fear of Medicaid budget cuts, my son was denied oxygen cylinders until July. Not even because cuts have been made, just because threats have been passed around. But it gets worse. I'm up for a series of life-altering (for the better) surgeries, but I was sat down and told my charity care would be going away. They may or may not take actions that would save my life because the city's charity hospital is shutting down, and they're gonna have to take all of them on. Since I don't live in the county, even though I have an ultrarare disease that they're studying me for the money just wouldn't be there to save me.

But let's keep pushing austerity, and let's target Medicaid and Medicare, because the elderly, infirm and children should bear the brunt of our cuts, not the Congress that's a leech upon the lifeblood of the people.

I know that you are not suggesting people act like this, Eddie. In fact, I'm pretty sure you think those actions are deplorable. The issue I find is that when the concept of austerity is tossed about, health care and support for those who don't have (and I'm not including welfare in that, though I have plenty to say on that subject) is the first to go. With the cost of some health care, the government's the only organization that's got the ability to pay the costs anyway-you don't want to total up what the surgeries needed to keep me alive and out of a hospital bed permanently cost. And I'm no longer having to talk about what ifs here-they literally took away my son's travel oxygen. We have our concentrator, so he won't die, but what happens if we need even to get him to the hospital? They told us to call an ambulance, it's not their problem.

These are the dangers of austerity, and it's not because spending less money is necessarily a bad thing-it's because everyone scrambles to make sure that they don't lose any money in the process. It's a catch-22 of the concept-while on the surface spending less money makes sense, the reality is they take what little the poor have and give it to the rich. People die under this kind of austerity. And it's not planned, nor is it something I think people support. In fact, I'm pretty sure people DON'T want others to die because of their moneysaving measures, but the truth remains that it's happening. I stand to be one of the first casualties. But at least I know that's not what people intended.

 

KayinBlack, obviously, no one wants anyone to die as a result of a government policy - especially people who are incapable, for whatever reason, but I'm a person that thinks of big-picture things like this from a very-basic economic standpoint.

I subscribe to the vision of the world that there are no solutions, only trade-offs, often times referred to the "Tragic" side of the argument - meaning that man is flawed and anything conceived of, or involved in, will inherently have flaws.

When posed with a difficult situation or problem involving people, and a premis is posed to me in a challenging way is to ask the question "Compared to what?" Meaning, I don't assume any idea or plan is, in fact, a solution - meaning nothing else will ever need to be done to modify or improve the idea and that it needs to be put into context of what has been tried in the past. You would be surprised how often a "new" idea has been tried over and over again to horrible results and the new version is just the same approach under a new package. One of my favorite quotes is from historian Paul Johnson that ended his book that had monumental influence on me Modern Times:

The second question I ask myself after my initial consideration of what I think is the right thing to do is to take the idea and extend it out past stage 1 and ask myself the question "Then what?" Many ideas work marvelously at stage one but as people go about their own affairs certain things that weren't considered or couldn't even be expected happens and we get what are called "unexpected consequences" Life is riddled with that.

Regarding your personal situation, my response would be not necessarily how to get you and yours what you need immediately by any means possible but what can be done so we, as a society, have the freedom and ability to diminish it less and less. Bad things happen and even a country like France who does everything it can from protecting its citizens from bad maladies still had something like 10,000 elderly and sick people die during a heat wave.

The problem with personal tales of genuine distress like yours is that people inherently want to respond but because of that, third parties are very encouraged to exploit that situation in a way that systematically costs everyone regardless of how compassionate they are. You can go crazy by considering simple facts like, what if you were born 20 years ago and the ability to even diagnose your condition wasn't even a reality or portable and affordable oxygen not available. Is it wrong that you were born when you were? Some things can be accomplished under the means that are available and some are not.

I am advocating an economy where the most people can pursue the most options creating the most wealth so even those who cannot fend for themselves can be helped by others who have the means. The history of this country is one where just that has happened. At some point, the government assumed that responsibility in an ever greater capacity, people now feel like it should be taken care of someone else and every new appeal is answered with "I already gave on April 15th".

One other point regarding "austerity" is the way information is being manipulated. Using what is called base-line budgeting, lesser increases in spending can be portrayed to constituants as "cuts". If the budget automatically builds in 6% increase in spending but they decide instead to spend only 2%, they run to the camera and say that Grandma is going to eat dog food even though billions more are being spend than the year before. People are saying that this painful austerity is ruining Europe. But check out this chart showing that there haven't been the draconian cuts in spending. Even Paul Ryan's plan spends more money that previous years, just less so. Bringing spending more in proportion with revenues is the type of thing I am advocating. Spending more when you make more is fine, spending more than you bring in is never a sustainable financial plan on any scale.

 

So it took five years before any benefit of the policy was seen? That destroys everything you said about Mellon as any effects of what he had done would actually fit in with when FDR was in office, meaning that his policies was the fault for the worsening of the recession.

Another example is Bill Clinton, cutting taxes for the low income class and rising it for the top 1,2 percent the result being a surplus and constant growth, in other words the opposite of what should have happened, or exactly what should happen looking from a demand perspective.

You miss understood that part, I am not saying that buying a car doesn't create jobs I am saying that producing an Audi in stead of a Ford doesn't create jobs. The rich would have bought a car regardless but simply bys a more expensive one, sure it may take a few extra man ours to build but not nearly as many as the five cheaper cars the 1000 poor people may have bought.

Ask yourself if more people get jobs if you by one Audi R8 for $200 000 or ten Ford fiestas for $17 000. (darn cars are cheap in the US)

And you believe that the many people aren't productive, that most of America are lazy bums that would never even try to make a company were they to get a thousand extra bucks on hand? The productive guy is going to become wealthy regardless of the tax, at least we still have wealthy people in Denmark despite our 65-70 percent top tax.

Wouldn't this be the case of your theory as well, that people doesn't always react as foretold?

Could you give me a very simple way of explaining how decreasing tax for the rich increases the overall wealth of the nation? because form my standpoint I only see a slight increase in investment and a major increase in rich peoples bank accounts. It is not like all the companies wish they had more money so they could comply the "huge" demand, no it is the other way round, more investment doesn't help as the companies easily produces the goods that are demanded, they can't sell any more than what they already do so giving them more money does nothing.

 

I'm for people being able to make their own accommodations not abiding by a prescribed bigger scheme.

I'll try to give a typical example and dispel the "Trickle Down Theory" at the same time. You have this rich straw man that we have both been using as an example and let's leave behind my point about what he has is already a result of his productivity and just establish what happens to his excess.

Using your example, it just sits in his bank account, only it doesn't. Banks, on average leverage their money 3 to 1 meaning they retain deposits to cover three times the monetary activity the administer. They don't just put his money in a vault until he comes to get it, they loan it out to, let's say someone who is going to build a gas station in the form of a small business loan. The new business owner uses that money to either lease or buy some land - that land owner benefits immediately from the sale/lease. Then he hires a contractor to build the structure who buys materials and hires tradesmen of varying talents to get the building up as soon as possible - they get paid immediately. Then the power and phone is hooked up - those companies and their employees get paid immediately. Then he has to stock the gas tanks - the petrol company gets paid immediately. The store needs to be packed with food, sodas, and cigarettes - those suppliers get paid immediately. Lastly, he hires employees to work the store, they get paid from day one and all he has to show for it is some assets and debt.

Most companies fail. Most successful companies lose money the first few years of business until finally making a profit. But everyone in this small, typical chain get paid up front and the business owner is in the red. The bank has only made a modest amount of interest at this point.

Fast forward several years later, the business owner now has a chain of stores because, through his experience, he has figured out the business, how to satisfy customers and avoid activities that cost his business money - perhaps bought out some competitors who have made too many bad decisions to stay in business. Now he has an extra several hundred thousand in the bank, the cycle begins again.

Or you could just take the money and give it to random people who have not been doing as much and they can go pay for the gas at one of his stores a few times...

I trust people making decision with their own livelihood on the line more than Government bureaucracies who have no stake in the outcome choosing where to siphon money to and from. Fundamental rule #1 for me is that people don't nearly treat other people's money anywhere nearly as careful as they do their own.

 

Republican party = free-market and minimal state? LOL

sorry, just messin that was an interesting exchange to read while I agree with most of what eddie_dane has to say here.

The only other thing I would add is that the one tax that doesn't get enough attention is the inflation tax - the most regressive tax of them all and it hugely stifles growth and drives down peoples' wages - that occurs from deficit spending and quantitative easing. This is why I would argue that liquidating debt and making drastic spending cuts is actually one of the most 'progressive' things a government could do in the longer run.
I don't see the political will for any government around the world to take these necessary steps, however, because even if they did understand that their next big micromanagement strategy won't work they also understand that it risks too much for their next election inevitably only a few years down the line. Which of course is where any politician's real interest lies.

 

Yes, inflation is taxation without consent - one of the most egregious things politicians do to get what they want at other's expense.

 

Want more wars? Want more support for Israel's crimes against the Palestinians? Want spending cuts in public services? Want regressive labour laws and attacks on the minimum wage? Want to maintain the worse health care system in the industrial world? Want more tax cuts for the rich? Want even less regulation of the finance industry?

That's what you'll get if you vote for Romney.

Anyone who votes for him is voting for corporate America. Simple as that. Obama is the lesser of two evils in a one party state.

Don't give the Republicans another chance to ruin the world, which is what they very well could do if they are given another chance to invade Iran and set off a possible nuclear war in the middle east (no exaggeration here).

If you live in a swing state, vote Obama to keep them out. If you don't, vote for who you like.

Ralph Nader's positions would be the most sensible for America, in my opinion.

 

No, Mellon was Harding's secretary of Treasury during the '21 crash. Their policies led to a decade of "roaring" recovery. He was still there when Hoover was president but they butted heads constantly. A point of fact is look what Harding did vs what Hoover did and why it was the end of Mellon's career.

Clinton did nothing. The budget wasn't in a surplus until after the Republican majority was elected into the House of Representatives where the budget originates. The surplus was mostly a result of welfare reform by passing down federal money to the States in the form of block grants. The rise in upper tax brackets was a symbolic compromise. The constant threats of, and later actual, government shut downs was indicative of how much Clinton went into the process kicking and screaming.

Proof of the fact that it wasn't the tax increase that created the surplus is that after Bush was elected, the rates stayed there until 2003 but the Republican majority started ramping up spending mainly in the name of security after 9/11 but had already been overspending prior to that.

 

Eddy and lp1998 I would really like to hear your opinions on the Ted talk above. You two are the only people I know who have studied economics and I would value your points of view The lecture talks about inequality, politics and taxation so it is semi-relevant to the thread. I find the part were he compares Japan and Sweden very interesting; one achieves equality through it's culture, the other by progressive taxation. An interesting quote from the video relevant to the two of you in particular.

 

Not really. Technically, the price of the oil is pretty static. It is the problem with the value of currency which is dropping. How is US solving the crisis ? "We will print more US dollars". How is EU solving the crisis ? "We will print more Euros". How does oil exporters react to that ? You print more dollars, you print more euros, that means your dollars and euros are worth less, so here you have it, oil prices "rise" in these lower value dollars and euros.

 

Taxation is often theft without extent. It's not like the two things are qualitatively different in how much of a violation of individual rights they are.