Gonna just reply to a few points which I think highlight the flaws in your argument:
Smasharoo wrote:
No. I think you need to pause and think about the simple arthmetic here. I didn't say that the group of people who were elite/powerful was getting smaller, I said they're getting more and more of the money. That money comes from the middle class. If two middle class families become poor families and one rich family becomes middle class...what happens?
Think it through, you'll get it.
Ok. I get it Smash. So show me the stats. Show me how many middle class people each year are now "poor". Then show me how we're defining "poor". Until you do that, it's pure rhetoric and speculation and "the sky is falling" style fearmongering.
What's happened over the last half century is that people like you have redefined what "poor" is. It used to be if you couldn't afford to put food on the table regularly, you were poor. There was not even an assumption that anyone who didn't own a home, or afford a college education for their children, or pay for medical care was an indicator of being poor. Most people (like the vast majority of the population) did not own homes or have college degrees or have more then the most rudimentary medical care.
But today, you add your "list" of things that "everyone is entitled to have". That's your list Smash. Not mine. You then decide that everyone who doesn't have those things is poor.
Smasharoo wrote:
It isn't. The Hilton's wealth is in Hilton hotels. Where it's been for the past century. They're not putting it back into industry. They're leaving it right where it's been. They're not funding new buisnesses. They're not outlaying capital. They have no reason to.
Ah. So the Hilton company hasn't built a new hotel in the last 100 years. Is that what you are saying? They haven't hired a single person in that time. They have not expanded their business at all. They haven't upgraded the services they provide, or the quality of the rooms. They never added those newfangled things called "air conditioning" into their hotels, did they? After all, that would just cost them money fromm their money vaults, and would only benefit the people who build ACs and the people who install them, and the customers who'll use them, right?
C'mon Smash. That's a ludicrous argument to use. They spend their profits expanding and updating the product they sell. The end result is a competitive product that provides
more value to the consumers. Yet. Interestingly enough, the cost in relative dollars to spend the night in a Hilton probably isn't any higher then it was 50 years ago. Odd that? Swimming pools, AC, bigger rooms. We got all that extra value in the product. Why? Because we allowed the investement capital required to make those improvements in the hands of the people who can make them.
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Where does this particular bizarre fantasy come from? Let me say for the millionth time, to which you never once respond, Raising taxes on the wealthy has never, ever, not one single time, been shown to impact industry negatively in any way. Ever.
Really? Aside from opinion, where do you get that? You're touting an economic theory (which I happen to disagree with) as though it's fact Smash. Admittedly, I'm doing the same. The difference is that I can at least verbalize *why* I think my theory works better then your's. All you seem to do is keep repeating the theory like a mantra: "Increasing taxes on the wealthy doesn't affect industry. Increating taxes on the wealthy doesn't afffect industry...". Do you really think that if you just keep saying it over and over, it'll become true?
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That's fine. That works. Now explain to me how it stunts industry since you've determined it's going to be put back into the sytem regardless. The point is the middle class will have less debt and more net worth at the end of the day, be it in a svaings account or in their kitchen in the form of a new blender. That increases everyone's quality of life. Placing a higher tax burden on the middle class lowers quality of life.
I have "explained it" to you. Many time. You don't seem to grasp what I'm talking about though.
It's a very simple concept. It goes like this:
"You can't buy a product that isn't on the shelves".
You are correct that both the supply and demand cycles are two parts of the same circle. Money put in either end goes through the whole cycle over and over. So. Your argument is:
"Why not inject money into the demand side so we can ensure that everyone has the ability to buy/obtain a particular level of goods that we've decided everyone should have?"
Honestly. It's a good argument. It makes a lot of sense. After all, the failure with keeping the money in the supplly side is that you have no guarantee that the money will reach the demand side even semi-equitably. Basically, we can't guarantee that everyone has a job, and since employment is the way that money "trickles down", it can't ensure that everyone has food on their table.
I accept that totally. Which is why I'm not at all opposed to very basic demand side spending programs. Let's make sure we don't have anyone starving. That's a good thing. The problem though is when you get people like you that think that if a little demand side spending is good, then a lot of demand side spending is better, right? After all, the Supply side doesn't ensure equity, and all the money goes through the same cycle, so why not take as much as we can from Supply in the form of taxes, and shuttle it into demand in the form of entitlements? That makes total sense, right?
And it would, except that there is a failure on the Demand side as well. It's the sentence I wrote up above: "You can't buy a product that's not on the shelves".
In the same way that supply side money only get to the consumer (demand side) via the mechanism of employment, demand side money only gets to the supply side via the purchase of goods. What this means is that as you increase the taxes to supply and shift that to demand, you allow existing products to be purchased easily by consumers. This allows those companies to get the money back in the form of sales. The problem is that the tax cycle that puts that money back into the demand side happens *before* they can do anything with those profits. They are only left with the remainder. What this means is that there is significantly less money for things that don't result in the immediate sale of a product. If you take the remainder of profits after taxes and turn it into more product, you'll get that money back and the cycle continues. If you set that money aside for R&D, you've effectively lost it. You don't get *more* profits from those future products. You've basically got a heavy amount of demand, and a supply that is tight. When consumers have lots of dollars to spend, they don't demand "the best" product. They don't shop around. They just consume. So there is very little profit in building a "better" product. Everything is slanted the opposite way.
Thus. No matter how much demand side money there is, none of that results in new products on the shelves. Everyone has plenty of money to buy products that already exist and to keep making more of those products, but the release of "new" products is retarded.
How much did a flat screen plasma TV cost 20 years ago Smash? Infinite dollars. Because no one had built them yet. How much did a microwave oven cost 50 years ago? Same answer. How about a DVD player 20 years ago? Yup. Once again, you can't buy a product that isn't on the shelves, no matter how much money you have to spend. You have to give the supply side money to make them first. Taxing "the wealthy", particularly capital gains is removing the money that's used to research and develop those new products. Those new products increase our overall standard of living.
I'll freely admit that "staple" goods don't follow those cycles. After all, it's kinda hard to make "better" bread. Certainly, homes are more expensive today then 40 years ago relatively speaking. Um. But a lot of that has to do purely with population levels and land costs. It would happen whether we taxed the top percentages higher or not. However, the goods we put in our homes, and the things that make our lives better are much cheaper today then they used to be. More importantly, we have things that just didn't exist back then. We can argue the relative merits of things like color TVs and DVDs and microwaves in another topic, but the fact is that we have those things today and didn't have then back then. Not just "only the rich could get them". They didn't exist, for anyone, at any price.
That's the failure of the demand side Smash. You can't see it because you're just looking at the money cycle and nothing else. But where the money is injected (or not removed as the case may be) has a huge impact on what is done with the money.
If we'd started taxing investment and "the wealthy" heavily 50 years ago, and put that money into providing free housing education and health care for everyone, we could certainly have done it. And it might even prevent the concentration of wealth that you are complaining about today (although I'm not sure of that). However, it's virtually guaranteed that we would be driving cars very similar to the ones we drove in the 50s, and living in homes with wiring and building techniques very similar to the 50s, and we'd have phones that looked and operated just like the ones in the 50s, and we'd likely not have computers, certainly not for home use. Microwaves would probably not exist. We'd probably have color TVs, but not nearly as nice as today. DVDs and CDs would likely still be something people are still dreaming about but no one wants to spend the money to develop.
Or some of those things would exist, but they would have been developed and designed in other countries (like Japan and Korea). We'd be a second class economy as a result.
It does have an effect on industry Smash. It's just more long term then you are looking at.