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#102 Aug 19 2011 at 12:39 PM Rating: Excellent
My bad. It's a 17"

Smiley: laugh
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Allegory wrote:
Bijou your art is exceptionally creepy. It seems like their should be something menacing about it, yet no such tone is present.
#103 Aug 19 2011 at 12:41 PM Rating: Excellent
Nadenu wrote:
Friar Bijou wrote:
Jophiel wrote:
LockeColeMA wrote:
if we took half of their wealth (not income, but everything they own)

Plus, you need to find a guy to buy all those old futons, 14" CRTs and Nascar collectible plates.


You say 14" CRT like it's a bad thing.

No wonder you can't see anything.




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Smiley: lolSmiley: lol
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Allegory wrote:
Bijou your art is exceptionally creepy. It seems like their should be something menacing about it, yet no such tone is present.
#104 Aug 19 2011 at 1:40 PM Rating: Excellent
HAHA BIJOU IS BLIND!!
HAHA BIJOU IS BLIND!!


now he can see it.

Edited, Aug 19th 2011 2:41pm by Xsarus
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#105 Aug 19 2011 at 2:47 PM Rating: Good
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LockeColeMA wrote:
Fact check on a Daily Show clip I saw this morning. Stewart claimed that letting the Bush tax cuts expire on the wealthiest 2% of Americans would raise 700 billion over 10 years. Republicans argue this is unfair to the rich, especially when about 50% of Americans pay no income tax. He said that the poorest 50% of Americans own 2.5% of all the wealth in the US; and if we took half of their wealth (not income, but everything they own), it would equal the same amount raised (700 billion) as the income tax raise on the most rich. Granted, that would be "immediately," not over 10 years.

Anyone know if that's correct? The math seemed sound, but I don't know if the figures he was using were.


I don't like taking points directly from Daily Show, but last nights little bit was great. I especially liked that they made a big deal about 99.6% of poor people owning a refrigerator. Like somehow a fridge was some expensive luxury item that was a waste of money, rather than a relatively cheap, decade or longer investment that is almost a requirement to survive on a very low income basis (You have to have some way to store your bulk generic food purchases).
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#106 Aug 19 2011 at 2:58 PM Rating: Excellent
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Wouldn't most poor people (or at least many, don't hold me on "most") rent and therefore have a fridge as part of their rental dwelling rather than them throwing down $1,100 for a brand new Kenmore?

Edited, Aug 19th 2011 3:59pm by Jophiel
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#107 Aug 19 2011 at 4:58 PM Rating: Default
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LockeColeMA wrote:
Fact check on a Daily Show clip I saw this morning. Stewart claimed that letting the Bush tax cuts expire on the wealthiest 2% of Americans would raise 700 billion over 10 years. Republicans argue this is unfair to the rich, especially when about 50% of Americans pay no income tax. He said that the poorest 50% of Americans own 2.5% of all the wealth in the US; and if we took half of their wealth (not income, but everything they own), it would equal the same amount raised (700 billion) as the income tax raise on the most rich. Granted, that would be "immediately," not over 10 years.


That's a lot of statements. Did he bother to mention that if we did let the Bush tax cuts expire on the wealthiest 2% (and his numbers are correct) that this would only generate about 5% of the amount needed to balance the budget?

Doesn't this basically just support what I've been saying?

Quote:
Anyone know if that's correct? The math seemed sound, but I don't know if the figures he was using were.


Why does it matter? Why not talk about how much we'd save if we eliminated the Bush tax cuts on everyone? Or how much we'd save if we cut social spending across the board by 10%?
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#108 Aug 19 2011 at 4:59 PM Rating: Good
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#109 Aug 19 2011 at 5:09 PM Rating: Decent
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Someone posts about Jon Stewart doing exactly what I've been saying the left has been doing and you laugh? You honestly don't see how the combination of constant talk about how much money we'd save if we let the Bush tax cuts expire (but just on the rich!), condemnation and/or dismissal of any GOP ideas, and absolute lack of actual math comparing said savings to the actual deficit might just result in exactly the false "fairy tale" I've been talking about?

They're trying to thread the needle here. They want to keep spending the same (or increase it), and raise taxes to pay for it. They can't tell people they'll have to raise taxes on them to do this, so they do everything they can to make it seem like they're just going to raise taxes on "the rich". What do you think they're doing here?
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#110 Aug 19 2011 at 5:14 PM Rating: Good
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gbaji wrote:
Someone posts about Jon Stewart doing exactly what I've been saying the left has been doing and you laugh?

Bwahahahahahahahahaha!!!
Smiley: laughSmiley: lolSmiley: laughSmiley: lolSmiley: laughSmiley: lolSmiley: laughSmiley: lol


Edited, Aug 19th 2011 6:14pm by Jophiel
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#111 Aug 19 2011 at 5:15 PM Rating: Good
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Ya... the point wasn't so much that the money would solve everything, but that Fox News was going off about how the 700 billion is so insignificant, yet also going off about how 51% of the US citizens didn't pay any federal income tax. The point being that if that 700 billion from the top 2% earners is so insignificant to the debt, and 50% of every poor person in the US's entire worth would be ~700 billion... how significant do they think the federal income tax collected from people making less than 21,000 USD/year would be?

It's the Daily Show, it wasn't offering solutions to the national debt crisis, and instead just making fun of apparent hypocrisy of Fox News saying that 700 billion is insignificant yet millions not being collected from the poorest is outrageous. Followed by various statements of nickle and dime expenditures being so important as well. It's what the Daily Show does, comedy.
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#112 Aug 19 2011 at 5:29 PM Rating: Excellent
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TirithRR the Eccentric wrote:
Ya... the point wasn't so much that the money would solve everything, but that Fox News was going off about how the 700 billion is so insignificant, yet also going off about how 51% of the US citizens didn't pay any federal income tax. The point being that if that 700 billion from the top 2% earners is so insignificant to the debt, and 50% of every poor person in the US's entire worth would be ~700 billion... how significant do they think the federal income tax collected from people making less than 21,000 USD/year would be?

It's the Daily Show, it wasn't offering solutions to the national debt crisis, and instead just making fun of apparent hypocrisy of Fox News saying that 700 billion is insignificant yet millions not being collected from the poorest is outrageous. Followed by various statements of nickle and dime expenditures being so important as well. It's what the Daily Show does, comedy.


"That amount is only 700,000 NPRs!"

Edit; Oops, off by a magnitude of THOUSANDS Smiley: laugh

Edited, Aug 19th 2011 7:33pm by LockeColeMA
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#113 Aug 19 2011 at 5:31 PM Rating: Excellent
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Actually Stewart opened the segment with a joke about how the GOP said we could fix the debt with 100% spending cuts while Democrats had an opposite approach, saying we'd only need 90% spending cuts.

But, hey, why let that get in the way of a hysterical freakout if Gbaji is CERTAIN this proves his point!



Well, now it'll only be his opinion that Stewart said those things...
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#114 Aug 19 2011 at 5:32 PM Rating: Good
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TirithRR the Eccentric wrote:
It's what the Daily Show does, comedy.


It's also what gbaji does, accidentally, when he hilariously swings and misses trying to refute it.

It's weird when you can see how his views cause him to skew a point before it's even had a chance to be made.

Edited, Aug 19th 2011 7:32pm by Eske
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#115 Aug 19 2011 at 6:05 PM Rating: Decent
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TirithRR the Eccentric wrote:
Ya... the point wasn't so much that the money would solve everything, but that Fox News was going off about how the 700 billion is so insignificant, yet also going off about how 51% of the US citizens didn't pay any federal income tax. The point being that if that 700 billion from the top 2% earners is so insignificant to the debt, and 50% of every poor person in the US's entire worth would be ~700 billion... how significant do they think the federal income tax collected from people making less than 21,000 USD/year would be?


It's irrelevant though.

The primary argument conservatives make for a more "fair tax" isn't about deficit reduction or even remotely related to deficit reduction, or even brought up in the context of deficit reduction. The argument for changing the tax code so as to ensure that everyone feels some pain when total tax by the federal government increases is specifically about the danger in a democracy of having a large percentage (especially a majority) not paying any part of the bill, but potentially receiving the benefits of increased government spending.

It has *nothing* to do with deficit reduction. It has everything to do with the danger of creating incredibly corrupt vote-buying political processes.

When liberals argue about the Bush tax cuts, they are overwhelmingly making some kind of point in relation to the current deficit/debt situation.

So Stewart is creating a false dilemma.

Quote:
It's the Daily Show, it wasn't offering solutions to the national debt crisis, and instead just making fun of apparent hypocrisy of Fox News saying that 700 billion is insignificant yet millions not being collected from the poorest is outrageous. Followed by various statements of nickle and dime expenditures being so important as well. It's what the Daily Show does, comedy.



Sure. And along the way they just happened to reinforce the idea that eliminating the Bush tax cuts for the rich would be good for the economy, get in a jibe about how the GOP wants to ***** over poor people (is it election season yet?), suggest that cutting spending that's less than the Bush tax cuts wouldn't be worth our while, while at the same time managing to twist the fact that the only Dem idea that's actually openly on the table wont work into some kind of attack on GOP proposals.

But I'm sure all of that was just accidental, right? I mean, it's just a comedy show, right? No one actually forms any opinions based on what is said or is influenced in any way, right? Right!? Lol!

Edited, Aug 19th 2011 5:08pm by gbaji
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#116 Aug 19 2011 at 6:09 PM Rating: Good
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Dig in deeper, man
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#117 Aug 19 2011 at 6:46 PM Rating: Decent
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Ah.... The "I laugh when I have no counter" bit. It's a Joph classic!
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#118 Aug 19 2011 at 7:53 PM Rating: Excellent
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What counter? You're just babbling, you obviously hadn't seen the clip before you started babbling (who knows if you have by now) and are just spinning.

Gee, Gbaji, should I point out the errors so you can start yelling "It's just my opinion!!!"?

Or should I just laugh at the hysterical martyrdom complex on display before me?

Answer: Smiley: laugh
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#119 Aug 19 2011 at 8:21 PM Rating: Excellent
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gbaji, why do you care what the rich are taxed? It doesn't affect you at all.
#120 Aug 19 2011 at 8:38 PM Rating: Decent
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Nadenu wrote:
gbaji, why do you care what the rich are taxed? It doesn't affect you at all.


Why do you ask a question I've already answered 500 times on this forum?

I'll give you a hint: The second sentence you wrote is false. As I have said numerous times, when you tax the rich, you don't really take anything from that rich person. Most people we'd label as rich could pay several times as much taxes as they do and not have to reduce their own personal standard of living a single dime. But "someone" pays that tax, right? That someone is us. It's all the people their investments benefits. It's the people the money that was taxed away might have hired, or the products they might have made which are now just a little bit more expensive or less advanced, or any of the zillions of things that rich people do with their money.


Who do you think is actually paying the tax if a guy who earns $500M/year, spends $50M of it on himself, and then rolls the remaining $450M each year into his investment portfolio pays an extra $20M in taxes? Do you honestly think he's going to deduct that from his personal expenses? Or do you think he'll just put less of the remainder back into the market?


And I'll ask this question again: If you don't believe that money held/invested in the market actually affects the fortunes of regular joes, then why do you suppose a housing bubble collapse, which almost exclusively affected the total volume of wealth in the investment pools of large financial institutions caused a recession and made unemployment increase from 5% to nearly 10%? As I have also said repeatedly, clearly money invested in the market *does* affect all of us. If a reduction in that money causes us to lose jobs, then it's reasonable to argue that the presence of that money was what created those jobs in the first place (or at least sustained them). Not directly, but indirectly via market effects (yes, the dreaded "trickle down theory" that liberals have worked so hard for 3 decades to convince everyone doesn't work).


This can't really be in question anymore, can it? And if we accept that that money does help all of us, and not just the rich, and we accept that by raising taxes on the rich, we're really taxing that pool of investment money, why continue to think that it doesn't hurt us at all? Why on earth, after we just saw a reduction of investment capital in the financial industry caused by a bubble trigger a nasty recession would we refuse to believe that the same reduction caused by taxation would be any different? It might be slightly less dramatic, but it will have the same dollar for dollar effect.


That's why I oppose higher taxes on the rich. Because it does affect me, and everyone else.
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#121 Aug 19 2011 at 9:36 PM Rating: Excellent
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gbaji wrote:
why do you suppose a housing bubble collapse, which almost exclusively affected the total volume of wealth in the investment pools of large financial institutions caused a recession and made unemployment increase from 5% to nearly 10%?

Lack of real development and growth in other economic sectors from 2001-2008 (in fact, decay of those sectors in many instances) but rather relying entirely on the ephemeral props of a bubble economy to look good.

Smiley: thumbsup
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#122 Aug 19 2011 at 10:04 PM Rating: Excellent
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Gbaji, let's say increase the percentiles in the upper tax brackets instead of the middle tax brackets. These are not the poor, they have investments, which as you said help to build companies and are a component in growing the economy. Keep in mind that these are the only two taxation models available, as increasing the very bottom tier tax brackets is realistically not sufficient to generate any sort of income increase, as they don't have enough taxable wealth. Both potentially taxable groups will have to make changes in their investment choices, taxing no-one won't affect the policy decisions in nearly they way you want; as public debt isn't as strong a motivator for program reform as actual taxation, and will lead to higher taxes down the road.

If anything, higher taxation rates in the higher brackets (on investment income) would give a competitive advantage to broad based asset management, which would created less irrational markets and thus tighter and less rigid hi-low swings, since the fundamental mechanics get weird when investor size is enough to buyout swaths of market assets.

Sidenote: I'd actually like to make several entitlement adjustments, like a progressive welfare incentive system (ie. transitioning out the irregular income edge effects created by the mish-mash of current entitlements into a smooth income curvature for those working while on public assistance), similar reforms for those who have been laid off/are out of work (along with a decaying compensation scale), and a couple other smaller things. I haven't taken enough of a look at EoL care modeling to give any well balanced solutions for that.

Quote:
Why on earth, after we just saw a reduction of investment capital in the financial industry caused by a bubble trigger a nasty recession would we refuse to believe that the same reduction caused by taxation would be any different? It might be slightly less dramatic, but it will have the same dollar for dollar effect.


Yeah, no, it's not the reduction of capital that hurt the financial industry. It's a valuation problem.

If a bank is worth less than zero dollars (A solvency problem), it's not a problem that can ever be solved by increasing investment returns by cutting taxes on that investment. It is **** out of luck. (Barring a negative case bailout)

If noone wants to lend to the bank because they think it's worth less than zero dollars, due to unknown asset evaluations, it's not a problem that can be solved by increasing investment returns by cutting taxes on that investment. It's a problem that requires public evaluation (and subsequent correction), capital bridging (positive case public or private bailout) or increases in investment returns orders of magnitude above capital gains tax reduction, unless the tax is somewhere on the order of 50%+.

Please think things through here.
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#123 Aug 20 2011 at 4:38 AM Rating: Good
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gbaji wrote:
Nadenu wrote:
gbaji, why do you care what the rich are taxed? It doesn't affect you at all.


Why do you ask a question I've already answered 500 times on this forum?

I'll give you a hint: The second sentence you wrote is false. As I have said numerous times, when you tax the rich, you don't really take anything from that rich person. Most people we'd label as rich could pay several times as much taxes as they do and not have to reduce their own personal standard of living a single dime. But "someone" pays that tax, right? That someone is us. It's all the people their investments benefits. It's the people the money that was taxed away might have hired, or the products they might have made which are now just a little bit more expensive or less advanced, or any of the zillions of things that rich people do with their money.


Who do you think is actually paying the tax if a guy who earns $500M/year, spends $50M of it on himself, and then rolls the remaining $450M each year into his investment portfolio pays an extra $20M in taxes? Do you honestly think he's going to deduct that from his personal expenses? Or do you think he'll just put less of the remainder back into the market?


And I'll ask this question again: If you don't believe that money held/invested in the market actually affects the fortunes of regular joes, then why do you suppose a housing bubble collapse, which almost exclusively affected the total volume of wealth in the investment pools of large financial institutions caused a recession and made unemployment increase from 5% to nearly 10%? As I have also said repeatedly, clearly money invested in the market *does* affect all of us. If a reduction in that money causes us to lose jobs, then it's reasonable to argue that the presence of that money was what created those jobs in the first place (or at least sustained them). Not directly, but indirectly via market effects (yes, the dreaded "trickle down theory" that liberals have worked so hard for 3 decades to convince everyone doesn't work).


This can't really be in question anymore, can it? And if we accept that that money does help all of us, and not just the rich, and we accept that by raising taxes on the rich, we're really taxing that pool of investment money, why continue to think that it doesn't hurt us at all? Why on earth, after we just saw a reduction of investment capital in the financial industry caused by a bubble trigger a nasty recession would we refuse to believe that the same reduction caused by taxation would be any different? It might be slightly less dramatic, but it will have the same dollar for dollar effect.


That's why I oppose higher taxes on the rich. Because it does affect me, and everyone else.


Ok, that's not what I was getting at, but I should have known you'd go off on some tangent. Thanks.
#124ThiefX, Posted: Aug 20 2011 at 12:35 PM, Rating: Sub-Default, (Expand Post) You know what the truly funny (sad) part is? It's that you're too ******* stupid to realize how ******* stupid that question/statement was.
#125 Aug 21 2011 at 3:02 PM Rating: Excellent
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It's irrelevant though.


Gbaji's standard response to anything he can't think of a real answer to. Yawn.
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#126 Aug 22 2011 at 4:05 PM Rating: Good
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Jophiel wrote:
gbaji wrote:
why do you suppose a housing bubble collapse, which almost exclusively affected the total volume of wealth in the investment pools of large financial institutions caused a recession and made unemployment increase from 5% to nearly 10%?

Lack of real development and growth in other economic sectors from 2001-2008 (in fact, decay of those sectors in many instances) but rather relying entirely on the ephemeral props of a bubble economy to look good.

Smiley: thumbsup


Then why did we see increases in the aftermath of other such collapses in the financial sectors? As the S&L crisis progressed, we saw unemployment spike up to 8%. After the tech-stock bubble and 9/11 attacks, unemployment spiked up just over 6%.

Clearly, this is not a factor that is unique to some economic conditions which started in 2001 and can somehow be blamed on Bush and the GOP. This is *normal*. When the financial sector takes a hit, unemployment tends to increases. The effects of less capital held in the supply side "trickles down" and affects Joe public working at their jobs.


****. It's a very clear labor trend. Plug in a good starting date on that applet and look at the output.

What's interesting is that the low points for unemployment occur just before the "crash" in each case, with the high point occurring about 1-2 years afterwards. Crisis point for S&L crisis was 1989. Crisis point for techbubble and 9/11 was late 2001. Crisis point for housing bubble was mid 2008. While I'm sure a "correlation != causation" response is coming, given that both our arguments are based on an assumption that one is causative to the other, it's an unfair counter. If you're going to argue that the housing bubble caused false low unemployment and then high unemployment after it crashed, it's kinda absurd to argue that it *didn't* have the same effects in the others given that we see a very similar pattern.

This pattern is not "new" in any way. It's normal. There's just no data to support the supposition that Bush and the GOP made some fundamental change to our economic structure to make this recession "different" than the previous ones. Certainly, you can't make that argument just looking at the employment figures.

What is new is the lack of recovery though. And as I've been arguing all along, that's because of the difference in what our government did in response to the respective economic conditions. While the specifics of the events leading up to each crisis were different, the pattern of effect was very similar in all three cases. If we want to look at why the recovery is different in this case, we need to look at the differences. And in this case, those differences occurred *after* the crash, not before. The before-crash pattern is the same. It's what happened after that is different.

Edited, Aug 22nd 2011 3:06pm by gbaji
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#127 Aug 22 2011 at 4:10 PM Rating: Decent
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Nadenu wrote:
gbaji wrote:
Nadenu wrote:
gbaji, why do you care what the rich are taxed? It doesn't affect you at all.


<long explanation>

That's why I oppose higher taxes on the rich. Because it does affect me, and everyone else.


Ok, that's not what I was getting at, but I should have known you'd go off on some tangent. Thanks.


Huh? You asked a question which relies on an assumption that "higher taxes on the rich don't affect me at all". I responded by correctly ignoring the "complex question" fallacy you presented, and arguing against the false assumption you made.

So I'm supposed to respond to your question without addressing the assumption I don't agree with? I think that assumption is the core point at issue, don't you agree? It was important enough for you to include it in the question you asked, so I think it's fair for me to respond to it.

Edited, Aug 22nd 2011 3:12pm by gbaji
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#128 Aug 22 2011 at 4:16 PM Rating: Excellent
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gbaji wrote:
Then why did we see increases in the aftermath of other such collapses in the financial sectors? As the S&L crisis progressed, we saw unemployment spike up to 8%. After the tech-stock bubble and 9/11 attacks, unemployment spiked up just over 6%.

Clearly, this is not a factor that is unique to some economic conditions which started in 2001 and can somehow be blamed on Bush and the GOP.

It's normal to see a spike in unemployment and some economic downturn when a bubble pops because so much of the economy was tied up in that bubble. What you need is someplace else for that economy can turn as it recovers. The economy under Clinton was sounder than just the tech bubble, hence the tech bubble not causing the damage that Bush's housing bubble (or Reagan's S&L bubble if you insist) caused. Look at the market and employment numbers from the recession Reagan/Bush left Clinton with vs the "depth" of the tech crash. Notice anything...? Like, we were still doing better post-tech crash than before?

Look at the numbers for the depths of the tech crash vs. when Bush left office. Notice anything? Like how we were worse off post Bush housing crash than post "Clinton" tech crash? As in, the rest of the economy was shrinking while the bubble grew and the lack of that bubble put us in a deeper hole than before?

Were you trying to argue my point for me? Thanks! Smiley: smile

Edited, Aug 22nd 2011 5:26pm by Jophiel
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#129 Aug 22 2011 at 5:18 PM Rating: Decent
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Timelordwho wrote:
Gbaji, let's say increase the percentiles in the upper tax brackets instead of the middle tax brackets. These are not the poor, they have investments, which as you said help to build companies and are a component in growing the economy. Keep in mind that these are the only two taxation models available, as increasing the very bottom tier tax brackets is realistically not sufficient to generate any sort of income increase, as they don't have enough taxable wealth. Both potentially taxable groups will have to make changes in their investment choices, taxing no-one won't affect the policy decisions in nearly they way you want; as public debt isn't as strong a motivator for program reform as actual taxation, and will lead to higher taxes down the road.


You've left out a third option: Cut spending instead of raising taxes on either group.

I'm specifically countering arguments that we don't need to cut spending because we can simply raise taxes on "the rich" and it wont hurt us at all. My argument is not really about taxing one group versus taxing another. Um... But honestly, it would be less harmful to me to pay higher tax rates for my income bracket than to raise taxes on those in higher brackets. Because it's because of those higher bracket folks that I am in the bracket I am in. For many middle class people we're talking about a choice between paying a few more percentage points of their current income (or future potential income) versus a job that pays half as much instead of the one they have (or will have in the future).

The biggest tax effect on our workforce is the loss of good paying jobs.

Quote:
Quote:
Why on earth, after we just saw a reduction of investment capital in the financial industry caused by a bubble trigger a nasty recession would we refuse to believe that the same reduction caused by taxation would be any different? It might be slightly less dramatic, but it will have the same dollar for dollar effect.


Yeah, no, it's not the reduction of capital that hurt the financial industry. It's a valuation problem.


Methinks you don't know the definition of "capital". If the value of my capital decreases by 10%, it's the exact same effect as if the value stays the same but the quantity is reduced 10% (by say higher tax rates). There is no difference in terms of direct market effect (there are in some other ways though, but that's outside the scope of this discussion).

Quote:
If a bank is worth less than zero dollars (A solvency problem), it's not a problem that can ever be solved by increasing investment returns by cutting taxes on that investment. It is sh*t out of luck. (Barring a negative case bailout)


But if that bank is worth less than zero dollars, we wont collect any taxes anyway, so what's the point? Somewhat by definition, we're talking about those who would pay the taxes. And for those people/businesses, raising taxes reduces the relative amount of total capital valuation they have, while lowering them increases it.

Stop creating extreme all-or-nothing cases. Most of what we're talking about lies in the ranges well between those two endpoints.

Quote:
If noone wants to lend to the bank because they think it's worth less than zero dollars, due to unknown asset evaluations, it's not a problem that can be solved by increasing investment returns by cutting taxes on that investment. It's a problem that requires public evaluation (and subsequent correction), capital bridging (positive case public or private bailout) or increases in investment returns orders of magnitude above capital gains tax reduction, unless the tax is somewhere on the order of 50%+.

Please think things through here.


Why should I think through a process that has no bearing at all on our discussion? Again, that case doesn't affect anything. Raising taxes on a business in that state won't generate any revenue, right? You're losing sight of the question at hand: "Does raising taxes on the rich in order to pay down a deficit have positive, negative, or no effect on economic growth and/or employment rates?"


That is the question, right? Do you see how the case you brought up doesn't apply in anyway at all? Why not look at companies that are making profits today and ask what happens if tomorrow we increase the rate of taxes on those profits? That would be a much more relevant case to examine and IMO when we do examine that it's hard to come to any conclusion than that you're taxing away what they do with those profits. So decreased expansion of their businesses, with the attendant decrease in potential relative economic growth and employment. I think it should be obvious that a company with X% less profit from its operations will directly have that much less to invest in expansion *and* may make choices about what and where it puts future gains in order to offset that loss. Either case results in a negative effect on both domestic economic growth and employment.


The only real question is "how much negative effect?", followed by "Can we do more good with the tax dollars than the harm caused by collecting them?". That's the real question to ask, but it's telling that those who support the idea of higher taxes to pay for higher spending seem adamant at avoiding it by pretending that there's no economic harm to raising taxes on "the rich" at all.

Remember the question I was asked? Why oppose raising taxes on the rich when those increased taxes don't harm me at all? That's avoiding the issue.
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#130 Aug 22 2011 at 5:30 PM Rating: Decent
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Jophiel wrote:
It's normal to see a spike in unemployment and some economic downturn when a bubble pops because so much of the economy was tied up in that bubble. What you need is someplace else for that economy can turn as it recovers. The economy under Clinton was sounder than just the tech bubble, hence the tech bubble not causing the damage that Bush's housing bubble (or Reagan's S&L bubble if you insist) caused. Look at the market and employment numbers from the recession Reagan/Bush left Clinton with vs the "depth" of the tech crash. Notice anything...? Like, we were still doing better post-tech crash than before?

Look at the numbers for the depths of the tech crash vs. when Bush left office. Notice anything? Like how we were worse off post Bush housing crash than post "Clinton" tech crash? As in, the rest of the economy was shrinking while the bubble grew and the lack of that bubble put us in a deeper hole than before?

Were you trying to argue my point for me? Thanks! Smiley: smile


Wait!? So we recovered quickly from the S&L crisis because of sound economic decisions made *after* the crash, but we've failed to recovery quickly from the housing bubble crisis because of unsound economic decisions *before* the crash? Which is it Joph? You're trying to play them both ways. We recovered quickly in the 90s because of Clinton, but the lack of recovery today has nothing to do with Obama?

Kinda cherry picking how you view the data there, aren't you?


BTW, I agree that it's about what we do after a crash that determines how well we recover. And the common pattern we see is that in the early 80s, we recovered from the recession of that time (less of a bubble than a transition from high to low inflation period), in the early 90s we recovered from the S&L hit, and in the early 2000s we similarly recovered from an economic hit. But today, we have *not* recovered from the housing bubble. It's a pretty clear difference from the previous patterns of hitting a high point and then recovering fairly quickly.


What's the difference? In all those other cases we had either mixed GOP/Dem governments or GOP only governments. The only case where we don't see this recovery is the period when we have Dems in full control. Which is what I've been saying all along. It's because of what the Dems did after the crash that has prevented us from recovering as normal.

If you give credit to Clinton for a swift recovery in the 90s, then you have to blame Obama for the lack of such today. Right?
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#131 Aug 22 2011 at 5:36 PM Rating: Good
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#132 Aug 22 2011 at 5:44 PM Rating: Excellent
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gbaji wrote:
Jophiel wrote:
It's normal to see a spike in unemployment and some economic downturn when a bubble pops because so much of the economy was tied up in that bubble. What you need is someplace else for that economy can turn as it recovers. The economy under Clinton was sounder than just the tech bubble, hence the tech bubble not causing the damage that Bush's housing bubble (or Reagan's S&L bubble if you insist) caused. Look at the market and employment numbers from the recession Reagan/Bush left Clinton with vs the "depth" of the tech crash. Notice anything...? Like, we were still doing better post-tech crash than before?

Look at the numbers for the depths of the tech crash vs. when Bush left office. Notice anything? Like how we were worse off post Bush housing crash than post "Clinton" tech crash? As in, the rest of the economy was shrinking while the bubble grew and the lack of that bubble put us in a deeper hole than before?

Were you trying to argue my point for me? Thanks! Smiley: smile


Wait!? So we recovered quickly from the S&L crisis because of sound economic decisions made *after* the crash, but we've failed to recovery quickly from the housing bubble crisis because of unsound economic decisions *before* the crash? Which is it Joph? You're trying to play them both ways. We recovered quickly in the 90s because of Clinton, but the lack of recovery today has nothing to do with Obama?


I'm only half paying attention to this banter going back and forth, but I realize that Joph's statement was not that the previous bubble pops recovered more quickly because of decisions made *after* the crash, but instead by a stronger economy outside of the bubble available to fill the gap after it popped.
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#133 Aug 22 2011 at 6:34 PM Rating: Excellent
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Really, Gbaji? That was the best you had? A lack of literacy? Well... ya got me there.
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#134 Aug 22 2011 at 7:14 PM Rating: Decent
gbaji wrote:
It's because of what the Dems did after the crash that has prevented us from recovering as normal.


And that's your blind partisanship rearing it's retched head, yet again. The truth is, Dubya & Obama both passed stimulus bills that, if nothing else, lessened the impact of that crash & contributed to this deficit issue that's at the heart of the recent economic turmoil. Neither stimulus "fixed" the economy & both seem, in hindsight, incredibly wasteful. But the stock market didn't crash, some banks & car companies didn't fail, & we got some roadwork done.

And some fat cats on wall street got to keep their bonuses for crashing the economy. Hurray!

Unfortunately, Obama & congress weren't able to come to terms on the debt ceiling issue. Neither are solely to blame for this, instead I blame the perpetual re-election cycle for the complete & utter lack of compromise.

The debt ceiling should have been raised, spending cuts should have been made, & taxes should have been increased (Tax loopholes closed, roll back of Dubya's tax cuts, & rollback to tax rates on the upper 2% to 90s levels). That would have stopped the S&P downgrade &, hopefully, would have lessened the burden of the worldwide economic turmoil that has resulted because of the lack of compromise.

Instead the Dems swallowed a **** sandwich, the Pubbies "win", yet the economy, worldwide, gets to suffer because it didn't accomplish what could have/should have been done with raising taxes WHILE also cutting spending.
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#135 Aug 22 2011 at 7:16 PM Rating: Good
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TirithRR the Eccentric wrote:
I'm only half paying attention to this banter going back and forth, but I realize that Joph's statement was not that the previous bubble pops recovered more quickly because of decisions made *after* the crash, but instead by a stronger economy outside of the bubble available to fill the gap after it popped.


There's no data to support his assertion though. I know that's what he wants to believe because that finds a way to blame Bush for why we haven't recovered. But he's still failed to show how Clinton's economy was less reliant on some bubble than Bush's. And more strangely, he attempted to argue that the economy Reagan/Bush left to Clinton was somehow weak, when that lead to the strongest and longest lasting recovery of all the examples we have in the set.

He's interpreting the data inconsistently so as to support his assumption, instead of looking at what the data says all by itself. He's assuming that there was some additional weakness in the Bush economy which didn't exist when Bush's economy recovered from the recession that happened right after Clinton left office. But aside from some industrial jobs numbers which have frankly shown a steady decline for the last 30 years and don't indicate any specific trend change during Bush's term in office, he's shown absolutely zero evidence to support this.


As I've said repeatedly, it makes more sense to look at what was different in those cases. And the one glaring difference is that in 1982 we didn't massively increase spending and the economy recovered quickly. And in 1990 we didn't massively increase spending and the economy recovered quickly. And in 2002 we didn't massively increase spending and the economy recovered quickly. But in 2009 we *did* massively increase spending and the economy has not recovered like in the other cases. This is a very very clear correlation to make. It certainly would seem to be a much much more apparent cause of our lack of recovery than some phantom "the economy was weaker to begin with" argument that Joph is parroting.
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#136 Aug 22 2011 at 7:25 PM Rating: Good
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Omegavegeta wrote:
gbaji wrote:
It's because of what the Dems did after the crash that has prevented us from recovering as normal.


And that's your blind partisanship rearing it's retched head, yet again. The truth is, Dubya & Obama both passed stimulus bills that, if nothing else, lessened the impact of that crash & contributed to this deficit issue that's at the heart of the recent economic turmoil. Neither stimulus "fixed" the economy & both seem, in hindsight, incredibly wasteful. But the stock market didn't crash, some banks & car companies didn't fail, & we got some roadwork done.


The fact that two things are labeled the same doesn't make them the same. There's also a huge difference in scale. Between 2000 and 2002, spending increased by less than 1% of GDP. Between 2008 and 2009, spending increased a whopping 4.3% of GDP. You can't possibly equate the minor amounts of spending Bush did in response to the techbubble crash to the amount Obama spent.

And in case you're arguing that they were different scales or types of crisis, we can look at the S&L crisis. At the time it was the biggest financial crisis since the Great Depression, with nearly 50% of all banks in the US in or threatening to enter bankruptcy. Want to know how much we increased spending between 1989 and 1990? .7% of GDP. So a slight spending increase in response to the crisis (and partially to falling growth levels), but not enough to cause problems.


Can't you at least consider that we spent too darn much money? Or at least that this is a clear departure from other recessionary patterns?

Edited, Aug 22nd 2011 6:31pm by gbaji
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#137 Aug 22 2011 at 7:53 PM Rating: Excellent
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gbaji wrote:
There's no data to support his assertion though. I know that's what he wants to believe because that finds a way to blame Bush for why we haven't recovered.

Beautiful irony

Quote:
But he's still failed to show how Clinton's economy was less reliant on some bubble than Bush's.

You mean aside from it being considerably more resilient?

Quote:
And more strangely, he attempted to argue that the economy Reagan/Bush left to Clinton was somehow weak, when that lead to the strongest and longest lasting recovery of all the examples we have in the set.

Hahaha... Woooosh!

Keep circling the wagons.

No, I'm not going more in depth into it. If someone else is having trouble understanding, I might clarify to them but you have too much of a vested interest in defending Bush to bother. Go ahead and cry about that now.

As I've said before: I don't worry about convincing you that you're wrong, I just show everyone else that you're wrong while you insist it's not happening.
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#138 Aug 22 2011 at 8:19 PM Rating: Decent
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Jophiel wrote:
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But he's still failed to show how Clinton's economy was less reliant on some bubble than Bush's.

You mean aside from it being considerably more resilient?


That's a circular argument though. You assume that the reason the economy isn't recovering today is because the economy under Bush was less resilient, and then use the fact that the economy isn't recovering as well as in past recessions as proof that your assumption is true.

You have provided zero evidence to support your claim that the economy under Bush was any less resilient than the economies under Carter/Reagan, or Bush Sr, or Clinton. I have provided direct evidence proving that Obama increased spending more after the crisis point than Reagan, Bush/Clinton, or Bush did (respectively).

So on my side we have direct facts showing that there was a significant difference in the spending *after* the crash. And on your side we have you just repeating the claim that Bush's economy was less resilient to a crash because... well... because the economy didn't recover after the crash. Like I said, your argument is circular.

Quote:
No, I'm not going more in depth into it.


Of course you're not! Wouldn't want to actually have to look at facts or data or anything!

Quote:
If someone else is having trouble understanding, I might clarify to them but you have too much of a vested interest in defending Bush to bother. Go ahead and cry about that now.


This isn't about defending Bush. See. That's you projecting onto me. This is about pointing out why the economy isn't recovering. And that fault lies squarely with Obama and the Democrats. The amazing irony of this is that you're accusing me of doing what you are doing. It's your need to defend Obama and the Democrats that leads you into this amazingly illogical argument.

Where's your proof Joph? I've got proof of a radically different spending pattern after the crash. It supports my assertion that recovery has been hampered by that spending. Your assertion is that recovery has been hampered by some inherent weakness in the Bush economy prior to the crash. But you can't even show significant differences in economic factors under Bush than in other economies prior to other crashes, let alone connect those differences in any logical way to a lack of recovery.

It's amazing how strongly you attack when you know your own position is very very weak.

Quote:
As I've said before: I don't worry about convincing you that you're wrong, I just show everyone else that you're wrong while you insist it's not happening.


I'm wrong that the spending increase in 2009 was more than 4 times larger relatively speaking than the spending increase after any other economic crisis in the last 30 years?


I guess what I just find amazing about all of this is that we conservatives warned about exactly this outcome. We told you guys that if you spent that much money on stimulus that it could create a debt problem and would hamper recovery. We begged you not to do it. We got nearly all of our representatives in Congress to vote against that spending. We were attacked for being partisan, even as nearly all of your representative voted in lockstep for the very spending in question. And now that exactly the negative effects we conservatives predicted would happen has happened, instead of realizing that maybe we were right, you go looking for any other lame explanation you can to blame it on instead?


I thought you guys were supposed to be all about rational scientific thought? That seems particularly non-rational and non-scientific to me. Most sane people, if told "don't do X, or Y will happen", upon doing X anyway and having Y happen, would tend to give great credence to whomever told them that. But not liberals I guess! Can't possibly acknowledge that those evil conservatives could possibly have been right all along. Nosireee! Gotta spin up some other explanation that allows you to blame conservatives anyway.
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#139 Aug 22 2011 at 8:56 PM Rating: Excellent
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gbaji wrote:
Timelordwho wrote:
Gbaji, let's say increase the percentiles in the upper tax brackets instead of the middle tax brackets. These are not the poor, they have investments, which as you said help to build companies and are a component in growing the economy. Keep in mind that these are the only two taxation models available, as increasing the very bottom tier tax brackets is realistically not sufficient to generate any sort of income increase, as they don't have enough taxable wealth. Both potentially taxable groups will have to make changes in their investment choices, taxing no-one won't affect the policy decisions in nearly they way you want; as public debt isn't as strong a motivator for program reform as actual taxation, and will lead to higher taxes down the road.


You've left out a third option: Cut spending instead of raising taxes on either group.

I'm specifically countering arguments that we don't need to cut spending because we can simply raise taxes on "the rich" and it wont hurt us at all. My argument is not really about taxing one group versus taxing another. Um... But honestly, it would be less harmful to me to pay higher tax rates for my income bracket than to raise taxes on those in higher brackets. Because it's because of those higher bracket folks that I am in the bracket I am in. For many middle class people we're talking about a choice between paying a few more percentage points of their current income (or future potential income) versus a job that pays half as much instead of the one they have (or will have in the future).

The biggest tax effect on our workforce is the loss of good paying jobs.

Quote:
Quote:
Why on earth, after we just saw a reduction of investment capital in the financial industry caused by a bubble trigger a nasty recession would we refuse to believe that the same reduction caused by taxation would be any different? It might be slightly less dramatic, but it will have the same dollar for dollar effect.


Yeah, no, it's not the reduction of capital that hurt the financial industry. It's a valuation problem.


Methinks you don't know the definition of "capital". If the value of my capital decreases by 10%, it's the exact same effect as if the value stays the same but the quantity is reduced 10% (by say higher tax rates). There is no difference in terms of direct market effect (there are in some other ways though, but that's outside the scope of this discussion).

Quote:
If a bank is worth less than zero dollars (A solvency problem), it's not a problem that can ever be solved by increasing investment returns by cutting taxes on that investment. It is sh*t out of luck. (Barring a negative case bailout)


But if that bank is worth less than zero dollars, we wont collect any taxes anyway, so what's the point? Somewhat by definition, we're talking about those who would pay the taxes. And for those people/businesses, raising taxes reduces the relative amount of total capital valuation they have, while lowering them increases it.

Stop creating extreme all-or-nothing cases. Most of what we're talking about lies in the ranges well between those two endpoints.

Quote:
If noone wants to lend to the bank because they think it's worth less than zero dollars, due to unknown asset evaluations, it's not a problem that can be solved by increasing investment returns by cutting taxes on that investment. It's a problem that requires public evaluation (and subsequent correction), capital bridging (positive case public or private bailout) or increases in investment returns orders of magnitude above capital gains tax reduction, unless the tax is somewhere on the order of 50%+.

Please think things through here.


Why should I think through a process that has no bearing at all on our discussion? Again, that case doesn't affect anything. Raising taxes on a business in that state won't generate any revenue, right? You're losing sight of the question at hand: "Does raising taxes on the rich in order to pay down a deficit have positive, negative, or no effect on economic growth and/or employment rates?"


That is the question, right? Do you see how the case you brought up doesn't apply in anyway at all? Why not look at companies that are making profits today and ask what happens if tomorrow we increase the rate of taxes on those profits? That would be a much more relevant case to examine and IMO when we do examine that it's hard to come to any conclusion than that you're taxing away what they do with those profits. So decreased expansion of their businesses, with the attendant decrease in potential relative economic growth and employment. I think it should be obvious that a company with X% less profit from its operations will directly have that much less to invest in expansion *and* may make choices about what and where it puts future gains in order to offset that loss. Either case results in a negative effect on both domestic economic growth and employment.


The only real question is "how much negative effect?", followed by "Can we do more good with the tax dollars than the harm caused by collecting them?". That's the real question to ask, but it's telling that those who support the idea of higher taxes to pay for higher spending seem adamant at avoiding it by pretending that there's no economic harm to raising taxes on "the rich" at all.

Remember the question I was asked? Why oppose raising taxes on the rich when those increased taxes don't harm me at all? That's avoiding the issue.


Woah, I haven't seen such a poor grasp on finance since at least Thursday. First off: You were the one who brought the banking crisis into this, not me. I was merely trying to show you why you have no idea what you're talking about with said reference.

I was explicitly pointing out how changing the taxation rate on investment income DOES NOT work in the same manner that caused the banking crisis. You said:
Quote:
Why on earth, after we just saw a reduction of investment capital in the financial industry caused by a bubble trigger a nasty recession would we refuse to believe that the same reduction caused by taxation would be any different? It might be slightly less dramatic, but it will have the same dollar for dollar effect.

Which is not only false, but so demonstrably false on such a fundamental level that I can't even begin to see how you could make this kind of a mistake. So, again, so we are clear, the two mechanics ARE NOT analogous. I even pointed to the several ways the chips could have fallen, not one of which has the same effect as manipulation of taxation. You can be against raised those capital gains taxes but that rationale is farcical.

Quote:
Methinks you don't know the definition of "capital". If the value of my capital decreases by 10%, it's the exact same effect as if the value stays the same but the quantity is reduced 10% (by say higher tax rates). There is no difference in terms of direct market effect (there are in some other ways though, but that's outside the scope of this discussion)
But it's not the value of your capital changing in percentage of value rather the capital retaining it's full valuation, but the product derived from it lowered. This is different from a valuation where the actual value of an asset is unknown, but balanced against liabilities as if it were some value. If that value changes drastically from the assessed value it makes it either absolutely nonviable to invest in, or raises the risk in the case of negative value. Again this IS NOT a question of percentage yields but one where a number is either positive or negative.

Changing that tax rate funnels monies away from longer term investment, and toward more near term rewards, but almost no amount of raising that tax will draw above a certain level from it. It may make businesses make different decisions but not in investment per say, rather in how they shift money around. High transactional taxation can also decrease liquidity, which is an entirely different set of problems, but these things are conveniently situated such that you can discount gains vs losses in evaluating the net taxation, which helps somewhat with that.
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#140 Aug 22 2011 at 9:24 PM Rating: Excellent
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The fact that two things are labeled the same doesn't make them the same. There's also a huge difference in scale. Between 2000 and 2002, spending increased by less than 1% of GDP. Between 2008 and 2009, spending increased a whopping 4.3% of GDP. You can't possibly equate the minor amounts of spending Bush did in response to the techbubble crash to the amount Obama spent.


I wasn't equating stimulus spending by Dubya/Obama with post 9/11-techbubble spending. I was saying the stimulus' (and there were two: TARP for $700 billion & $170 billion economic stimulus/$200 checks packages) passed by Dubya & the $780 billion economic stimulus by Obama helped the recession not be as bad as it could have been.

Granted, none really helped with long term employment, but Obama's really did create some jobs (until the cash runs out) while Dubya's only did if you got a job as a TARP bureaucrat.

In Dubya's case, some of the TARP money has been paid back, but that money wasn't used to buy up the troubled assets it just infused sweet *** cash into banks & insurers whom would have gone bankrupt. If the economy dips again, TARP will HAVE to come to the rescue again or the entire US financial system will be in peril of failing AGAIN. The banks STILL own those troubled assets!!!

Yes, stimulus' increased the deficit, but it was pretty much that or the collapse of the economy. It's just too bad that:

A) Obama can't seem to inspire any sort of compromise

B) Congress can't get beyond their perpetual campaigning and, ya know, actually work together to solve our countries problems.
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#141 Aug 23 2011 at 6:01 AM Rating: Good
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gbaji wrote:
I guess what I just find amazing about all of this is that we conservatives warned about exactly this outcome.

Kind of like how Democrats... well, everyone really... warned for years about the accumulating weak indicators of the Bush economy: unemployment being shored up by lower paying jobs, wage stagnation, rising household debt, signs of housing trouble, collapse of domestic manufacturing, etc?

Oh, that's right. I forgot the brilliant Bush apologist response to this: "Well, uh, that only happened because you kept warning that it would happen so that doesn't count that you said it would happen!"

The really sad thing here is that admitting the obvious fact, that the Bush economy was based purely upon a bubble with nothing else supporting it, doesn't even preclude ******** about Obama or the recovery. You just refuse to admit it out of blind partisan allegiance. Which is why I'm not wasting a bunch of time trying to "convince" you that maybe Bush's economic acumen wasn't as great as you once thought as he left us in Jan 2009 with deeper unemployment, a weaker stock market and a housing market crisis far, far worse than even the depth of the early 2000's recession that Bush supposedly "saved" us from.

Edited, Aug 23rd 2011 7:03am by Jophiel
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#142 Aug 23 2011 at 6:27 AM Rating: Good
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Oh, that's right. I forgot the brilliant Bush apologist response to this: "Well, uh, that only happened because you kept warning that it would happen so that doesn't count that you said it would happen!"


To be fair, this is a known effect that happens in a market economy. Doesn't excuse not trying to fix the underlying problem, though.
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#143 Aug 23 2011 at 7:15 AM Rating: Excellent
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Timelordwho wrote:
To be fair, this is a known effect that happens in a market economy.

Which would make all the denials that everything else was rotting out from under the housing bubble and "Why won't you say Bush is the best president EVER, just look at his awesome unemployment numbers!" remarks all the more asinine, huh?
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#144 Aug 23 2011 at 7:53 AM Rating: Good
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It's obvious that the answer is yes.
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Obviously not obvious enough.
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#146 Aug 23 2011 at 8:40 AM Rating: Excellent
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It's obvious that the answer is yes.

I just wanted to hear someone say it before Gbaji went into Full Spin Mode denying it Smiley: laugh
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#147 Aug 23 2011 at 2:45 PM Rating: Decent
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Timelordwho wrote:
Woah, I haven't seen such a poor grasp on finance since at least Thursday. First off: You were the one who brought the banking crisis into this, not me. I was merely trying to show you why you have no idea what you're talking about with said reference.


You did an incredibly poor job of it though. Using only the case where a bank loses all valuation is meaningless for this discussion. I'm talking about the entire financial industry loosing a percentage of its valuation and the effect this had on the availability and liquidity of lending assets and the effect that in turn had on employment.

Quote:
I was explicitly pointing out how changing the taxation rate on investment income DOES NOT work in the same manner that caused the banking crisis. You said:
Quote:
Why on earth, after we just saw a reduction of investment capital in the financial industry caused by a bubble trigger a nasty recession would we refuse to believe that the same reduction caused by taxation would be any different? It might be slightly less dramatic, but it will have the same dollar for dollar effect.

Which is not only false, but so demonstrably false on such a fundamental level that I can't even begin to see how you could make this kind of a mistake.


And yet... you keep failing to actually demonstrate this. Saying it's demonstrably false doesn't make it so. You have to actually demonstrate this. You haven't.

Quote:
So, again, so we are clear, the two mechanics ARE NOT analogous. I even pointed to the several ways the chips could have fallen, not one of which has the same effect as manipulation of taxation. You can be against raised those capital gains taxes but that rationale is farcical.


No. You presented one counter case in which you assumed a single bank had its assets lose their value to zero. As I pointed out, that bank wouldn't be paying taxes on those assets either, so it's an unfair case to examine. Instead, look at a bank in which their assets lost 10% of their total value. Then compare the result to a bank in which increased tax rates result in 10% less relative profits. Over time, the two effects are identical in terms of the total available assets the bank has to lend.


Quote:
Quote:
Methinks you don't know the definition of "capital". If the value of my capital decreases by 10%, it's the exact same effect as if the value stays the same but the quantity is reduced 10% (by say higher tax rates). There is no difference in terms of direct market effect (there are in some other ways though, but that's outside the scope of this discussion)
But it's not the value of your capital changing in percentage of value rather the capital retaining it's full valuation, but the product derived from it lowered. This is different from a valuation where the actual value of an asset is unknown, but balanced against liabilities as if it were some value. If that value changes drastically from the assessed value it makes it either absolutely nonviable to invest in, or raises the risk in the case of negative value. Again this IS NOT a question of percentage yields but one where a number is either positive or negative.


As I stated, there are other effects and differences. I'm aware of this. But at the end of the day, for the purpose of this discussion, all we care about is the effect that has on a financial industry's ability (and willingness) to lend. Banks lend based on the assumed rate of return on their investment. If you change the rate of return (which raising taxes will do), it affects the lending decision. It affects how much risk they're willing to take. It affects the rates at which they'll lend.


I think what you're failing to grasp is that it's not the value of the capital that is so important but the value of what you gain from using that capital in some way. Let me give you the kind of demonstration you failed to provide. If I've taken my million dollars of capital and invested it such that I gain $50k/year, I care about the $50k gain. If my starting capital valuation drops by 10%, but the rate of return (5% in this case) remains the same, now I'm gaining $45k instead of $50k, right? The result is exactly the same as if someone taxed the gain 10%.

Now that's not to say that other factors aren't affected. Interestingly enough though, the biggest difference between the two is based on what I might do to avoid the effects themselves. So a capital valuation problem will result in folks moving to different types of capital (if possible of course). And a tax increase will result in folks shifting their assets into economic activities that will pay less tax. So they'll seek to avoid the taxes if they can. Which may have very negative effects, perhaps even more negative than just the effect of the dollars taxed themselves.

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Changing that tax rate funnels monies away from longer term investment, and toward more near term rewards, but almost no amount of raising that tax will draw above a certain level from it. It may make businesses make different decisions but not in investment per say, rather in how they shift money around. High transactional taxation can also decrease liquidity, which is an entirely different set of problems, but these things are conveniently situated such that you can discount gains vs losses in evaluating the net taxation, which helps somewhat with that.


Yup. But surely you see how this can be negative, right? We'll never collect as much taxes as we plan to because those being taxed will shift away from the higher taxed activities. If your purpose for raising taxes is to generate more revenue, it wont work as well as you want. But the really much more important factor here is that it will push economic activity away from those being taxed higher. So at a time when unemployment is high and we want big businesses and wealthy people to invest in things that might create more jobs, isn't the last thing you want to do or even talk about is raising taxes on the very things you need them to do?


That's why it's a bad idea. Heck. That's why the economy has been slow to recover. The spending is only half the problem. The result of that spending is high deficits, which create high debt. Too high to just ride out. Everyone in the market is looking at the looming possibility of higher taxes and thus (as you correctly say), moving away from longer term investments. Investments involving employment tend to have the greatest commitment and end out being the long term investments. Your own argument supports my position. It's because of the threat of higher taxes, driven by the high deficits which is causing our current high unemployment.


And that has to do with overspending. The point I'm making to you is that raising taxes on "the rich" is not the answer. Eliminating the overspending is a far far far better solution. It actually solves the problem instead of just treating the symptom, while creating other problems in the process.

Edited, Aug 23rd 2011 4:11pm by gbaji
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#148 Aug 23 2011 at 3:01 PM Rating: Good
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Omegavegeta wrote:
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The fact that two things are labeled the same doesn't make them the same. There's also a huge difference in scale. Between 2000 and 2002, spending increased by less than 1% of GDP. Between 2008 and 2009, spending increased a whopping 4.3% of GDP. You can't possibly equate the minor amounts of spending Bush did in response to the techbubble crash to the amount Obama spent.


I wasn't equating stimulus spending by Dubya/Obama with post 9/11-techbubble spending. I was saying the stimulus' (and there were two: TARP for $700 billion & $170 billion economic stimulus/$200 checks packages) passed by Dubya & the $780 billion economic stimulus by Obama helped the recession not be as bad as it could have been.


That's not what it looked like to me. I said that it was what the Dems did after the crash (spending specifically) which has prevented the economy from recovering. You responded by saying that both Bush and Obama did stimulus programs after their respective crashes. That sure looks like you were trying to say that the Dems didn't do anything different than the GOP did.


The point is that the Dems spent too much money, not just that they spent some money at all.

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Granted, none really helped with long term employment, but Obama's really did create some jobs (until the cash runs out) while Dubya's only did if you got a job as a TARP bureaucrat.


That's not the issue though. The issue is that the Dem's spent too much money. It doesn't matter what their intentions were, or whether it was successful or not. The very fact of spending that much money, put us too far in debt and has created a second crisis which did not happen in previous recessions where spending was more modest.

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In Dubya's case, some of the TARP money has been paid back, but that money wasn't used to buy up the troubled assets it just infused sweet *** cash into banks & insurers whom would have gone bankrupt. If the economy dips again, TARP will HAVE to come to the rescue again or the entire US financial system will be in peril of failing AGAIN. The banks STILL own those troubled assets!!!


It doesn't matter though, because... Bush didn't spend too much money. I'm trying to get you to understand that it doesn't matter what the money was spent on, who profited, or whether it helped the economy recover. That's a whole different issue. What matters is that in past recessions, only modest amounts of spending occurred as a result of the crisis itself (typically less than 1% of GDP). In this recession, spending jumped by over 4% of GDP.

It's too much of a jump in spending in too short a period of time. That creates a problem all by itself regardless of what other effects are going on.

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Yes, stimulus' increased the deficit, but it was pretty much that or the collapse of the economy.


No, it wasn't. Unless you honestly believe that spending money on alternative fuel subsidies was necessary to prevent the economy from collapsing, then I think it's safe to say that the total volume of money spent on various stimulus bills and amendments were not necessary.

We could have spent the TARP funds and maybe a couple hundred billion on stimulus checks and whatnot and the economy would have recovered just fine and we wouldn't be in our current predicament.


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It's just too bad that:

A) Obama can't seem to inspire any sort of compromise


It's too bad that Obama didn't compromise with Republicans back in 2009 and keep stimulus spending to about 1/10th of what he actually spent. Had he actually been willing to listen to the other side and reach across the aisle and all that wonderful stuff he promised when campaigning instead of ignoring it all and embarking on a partisan spending spree, the country would have been much better off.

You can't complain about compromise when you're utterly unwilling to do it yourself.

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B) Congress can't get beyond their perpetual campaigning and, ya know, actually work together to solve our countries problems.


As I've said many times, it takes two to disagree. Unfortunately, the Dems made this into an "all or nothing" situation when they showed clearly (and continue to show) that as long as they hold power in Washington, they will not stop spending and they will not stop working to raise taxes to pay for it. They've shown no willingness to compromise at all. The moment they had the power to spend, they did so. With no concern for the economic stability of the country, and while completely ignoring the warnings of the GOP. Their own partisan objectives were more important than good governance.

Which is why they're suffering one of the fastest political turnarounds in history. So a **** of a lot of people aren't happy with what they've done.

Edited, Aug 23rd 2011 6:19pm by gbaji
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#149 Aug 24 2011 at 1:07 AM Rating: Excellent
Gbaji wrote:
The point is that the Dems spent too much money, not just that they spent some money at all.


Um, Dubya spent almost as much $ on stimulus spending as Obama did. Yes, some of Dubya's has been paid back, but how the **** can you say, with a straight face, that Dubya's $700 billion in TARP spending isn't "too much" spending yet Obama's $780 billion stimulus is?

And when did the recession start, numb-nuts? December of 2007 is the commonly agreed time-frame, so it isn't a stretch to say Obama inherited it from Dubya- WHOM STARTED YOUR "TOO MUCH" SPENDING WITH TARP!!!

Gbaji wrote:
No, it wasn't. Unless you honestly believe that spending money on alternative fuel subsidies was necessary to prevent the economy from collapsing, then I think it's safe to say that the total volume of money spent on various stimulus bills and amendments were not necessary.

We could have spent the TARP funds and maybe a couple hundred billion on stimulus checks and whatnot and the economy would have recovered just fine and we wouldn't be in our current predicament.


Obama's stimulus ALSO propped up many States that were on their way to bankruptcy, which we can BOTH agree was necessary. Dubya's propped up banks/lenders & insurers, which was also necessary.

Oh, & Obama's stimulus included $281 billion in tax cuts- which I'm SURE you are for. So really, you're talking out of your *** here.

Was there waste? Yes to both. Did they help the economy?

Whelp, considering our economy officially got out of the recession in June of 2009 it certainly can be argued that they did. However, the constant running for office/fear of the tea party/tea party elected candidates ignorance prevented compromising on the debt ceiling (cut spending while raising taxes- just like his Dubya's Daddy did!). And, because of the shitty deal that resulted, we & much of the rest of the world, could be heading for another recession.

Awesome.

But keep on blaming Obama's stimulus if it makes you feel better: but it ISN'T the reason we may be heading for another Recession no matter how hard you try & make it so.

Gbaji wrote:
It's too bad that Obama didn't compromise with Republicans back in 2009


He didn't have too as he had the majority in both the house & senate, at the time.

Gbaji wrote:
They've shown no willingness to compromise at all.


Are you fucking kidding? The bill ***** (Yes, that's an intentional misspelling) passed on was a better deal for pubbies than the one that passed, & it lowered the deficit more than the one passed by including the closing of tax loopholes & the raising of taxes on the top 2%!

Are you fucking delusional or just retarded?!


Edited, Aug 24th 2011 3:11am by Omegavegeta
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#150 Aug 24 2011 at 3:22 PM Rating: Good
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Omegavegeta wrote:
Gbaji wrote:
The point is that the Dems spent too much money, not just that they spent some money at all.


Um, Dubya spent almost as much $ on stimulus spending as Obama did. Yes, some of Dubya's has been paid back, but how the **** can you say, with a straight face, that Dubya's $700 billion in TARP spending isn't "too much" spending yet Obama's $780 billion stimulus is?


I think you missed the point I'm making (or are sidestepping it). I'm not comparing Bush's spending in 2008 to Obama's spending in 2009/2010. I'm looking at four recessionary cycles which have occurred in the last 30 years and comparing them. I'm making note that in 3 of the four cycles, spending during the recession itself increased only modestly, but in one spending increased dramatically. I'm then noting that in the first three cases, the recession turned around almost like clockwork right around 2 years after starting, but in the fourth case, the one in which spending increased dramatically instead of modestly, that hasn't happened. Unemployment specifically has remained high, when in all the others you can see a very clear reversal.

I'm then speculating that the reason this recession is different than those others is because of the higher spending rate.

And as a side point, I'm also noting which parties were in power at the time. In the first recession we had a Dem congress and GOP president. In the second, we had the same. In the third, we had a GOP congress and a GOP president. In the fourth, the one where we haven't recovered, we very initially had a GOP president and Dem congress, but then the Dems won the white house and large majorities in both houses. The relevant point there is that Bush spent the necessary money on TARP (unfortunately with some extra spending the Dems slipped in as well). Then Obama doubled that amount in the Recovery Act. Then he and the Dems spent even more money in various stimulus amendments added into energy, omnibus, jobs, and education bills over the next year.

That's why the spending was so much higher. So if I'm right that the increased spending is why the economy isn't recovering, than it's pretty safe to put the fault squarely on the Dems.

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And when did the recession start, numb-nuts? December of 2007 is the commonly agreed time-frame, so it isn't a stretch to say Obama inherited it from Dubya- WHOM STARTED YOUR "TOO MUCH" SPENDING WITH TARP!!!


It doesn't matter who was there when the recession started. The question is who spent the extra money that pushed us from "enough to help" to "so much we're going to have a debt problem". That part of it clearly fell to the Dems. Let's also not forget that the Dems controlled congress in 2008 when TARP was passed. That bill was about half again as expensive as the original plan called for. The Dems dropped a bunch more money into it, and spent the money poorly IMO. It still worked, and it was still necessary, but TARP was more expensive than it had to be because of the Democrats.

Add in even more spending after that, and this is why we're in a deficit crisis today. The numbers are pretty hard to argue with. I'll post them if you want.

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Obama's stimulus ALSO propped up many States that were on their way to bankruptcy, which we can BOTH agree was necessary. Dubya's propped up banks/lenders & insurers, which was also necessary.


You can label anything as "necessary" if you try hard enough. The Dems spent too much money. Period. Neither you, nor I, probably want to go into so much detail to look at every dollar spent and where it went, but the end result was that far too much money was spent and this caused a second economic problem.

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Oh, & Obama's stimulus included $281 billion in tax cuts- which I'm SURE you are for. So really, you're talking out of your *** here.


Hahahahahahaha! Please tell me you're not going to repeat that bit of lie/rhetoric.

Very little of those "tax cuts" were really cuts in tax rates, or even deductions. They were "tax credits", which is basically increased spending laundered through the IRS. They are in no way at all what conservatives are talking about when we speak of cutting taxes. The fact that the only people who insist that those tax cuts were things that conservatives should have liked are liberals, while conservatives rejected them pretty universally as a scam should be your first clue that they weren't something that conservatives liked or wanted.

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But keep on blaming Obama's stimulus if it makes you feel better: but it ISN'T the reason we may be heading for another Recession no matter how hard you try & make it so.


First off, it's not just an official measure of recession that matters. Other factors in the economy matter as well, even if we're not in full recession. The rate of recovery has been anemic. Normally, there is a "bounce". We didn't get one this time. I'd also suggest that all those people who are unemployed right now aren't so thrilled with the fact that since GDP growth is positive instead of negative, that this means we're not in a recession, so everything is just peachy.

The jobs haven't come back. And that's something lots of people kinda care about.

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Gbaji wrote:
It's too bad that Obama didn't compromise with Republicans back in 2009


He didn't have too as he had the majority in both the house & senate, at the time.


Which would be a far better ringing endorsement if the decisions made didn't have such negative consequences. Consequences that the side he ignored and overruled warned about repeatedly.

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Gbaji wrote:
They've shown no willingness to compromise at all.


Are you fucking kidding? The bill ***** (Yes, that's an intentional misspelling) passed on was a better deal for pubbies than the one that passed, & it lowered the deficit more than the one passed by including the closing of tax loopholes & the raising of taxes on the top 2%!


Once again. It was such a great deal for the GOP that the only people insisting it was a great deal for the GOP are Dems and liberals. Does it ever occur to you that maybe it really wasn't such a great deal for conservatives and that's why they rejected it?


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Are you fucking delusional or just retarded?!


I'm not the one who sounds like the political equivalent of a used car salesman.

Edited, Aug 24th 2011 2:24pm by gbaji
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#151 Aug 24 2011 at 3:53 PM Rating: Excellent
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gbaji wrote:

I think you missed the point I'm making (or are sidestepping it). I'm not comparing Bush's spending in 2008 to Obama's spending in 2009/2010. I'm looking at four recessionary cycles which have occurred in the last 30 years and comparing them.


A general question

You hear a lot of people say this is the 'worst downturn since the great depression' wouldn't it make more sense for the various reactions (both market-based and government) to the downturn to be greater then in the previous cycles, and more akin to what we saw in the great depression?

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