I wonder what % of millionaires are wealthy because they inherited their wealth from their parents/family? What did THOSE people to earn their money?

Not every wealthy person is wealthy because they built themselves up for nothing

Don't forget the people who are awarded thousands and millions for frivelous lawsuits.

This is basically the fundamental base of all the current american right-wing economics arguments. Poor people deserve to be poor, rich people deserve to be rich, and interfering with either of those in any way is somehow just immoral because of some intangible divine mandate.

I do have one question for you though: Have I missed an academic-specific term or something because reagan started off the neoconservatives and you keep saying neo-liberal.

Well it goes back to the old days when it was much easier to make your way in the world, the problem is as the world changed the philosophy didn't. I just can't go out into the frontier, stake my claim for some land and start building a farm, the world just doesn't work that way anymore. Sure ambition and hard work can go a long way and some people are where they are right now because of it but conservatives need to start realizing that getting by in the world isn't that cut and dry anymore.

I've always wondered the same thing Derwood, how can somebody who comes from a wealthy family and gets the benefits of attending the best schools and a huge inheritance be held up as an ambitious, hard worker.

With all this talk about the growing millionaire class and its robustness even during a severe recession, it seems to me there isn't a problem with the current taxation in America.

That's not the point. I asked you how it would possibly happen. I can't picture it based on your original claim. Give me some scenarios. Demonstrate how it would go down in your view.

I don't see it. I don't see how the Democrats or the Republicans are leading to the destruction of America.

I support the capitalist approach because it has worked for myself and others I know. When I started working I had no assets, my pay wasn't much more than minimum wage, and I lived in marginal neighborhoods because that was what I could afford. I managed to find my way out of that situation without any government help, just going to work every day and working hard. I managed my finances conservatively and still avoid debt like the plague. So now I live comfortably.

I've helped others who wanted to improve their lifestyle as well, but the responsibility to improve themselves was their responsibility, not mine.

I've seen others do well in similar circumstances. In particular, I've respected Asians because I've seen so many of them start from little and manage to become successful.

Why wouldn't I support a system that has worked for me? Why on earth would I want to support a system which provides no incentive for people to work hard and which penalizes those who are successful?

So if you were to lose your job, dozilla, you would NOT apply for unemployment? Are you going to turn down Social Security and Medicare?

In other words, will you walk the walk, or are you just flapping your gums?

I'd be willing to give up unemployment since I haven't paid much into it. However, since the government has been confiscating some 12% of my salary for 35 years, that's a substantial amount of money that I will not give up. Bumping eligibility requirements a few years as has been proposed to keep Social Security funded would not bother me.

Medicare, again, some 3% of my pay over 35 years, so no, I'm not giving that up.

The above point is the key point where we diverge, and if we can not get past this, we will never understand each other.

Investors put money into things without first realizing the potential - yes, yes, yes. The people who do this change the world. In the next 60 seconds if you look around your surroundings, virtually everything you see, will be based on some person at some point in time investing into something without realizing the potential.

Take something like the internet. Sure, the folks who developed it saw potential - but what they saw was narrow compared to the fully realized potential as we experience it today - no human anticipated the internet. No human knows where it will be 100 years from today. However, people invest.

My gut tells me, I could give a list of 1,000 examples and it would not matter to your way of viewing this issue. But, one final comment - think of human history in terms of ages - prehistoric age, bronze age, dark ages, golden age, etc. and think of what these ages had in common and what triggered them. In each case I think we can point to humans "investing" without first realizing the potential. And in each case it was based on the initiatives of individuals.

Ace, I'm not saying that that type of investing doesn't happen. What I'm saying is that's not the type of investing that drives most of the economy.

For most investors, "the gut" isn't a good financial advisor.

What you're talking about is often the lure for speculative investors who probably aren't interested in long-term holds. They're the guys looking for short-term explosive growth before selling off and seeking out the next thing. These guys aren't the norm; many of them are contrarians. You don't see that kind of investing taking up a high proportion of the portfolios of retail investors. Heck, I could probably point out a number of institutional investors who don't do that kind of investing.

Besides, I think much of the speculation going on these days is in resources, not tech, and much of that action happens outside of the U.S. I could be wrong. Either way, speculative investing isn't what drives most of the economy. The average investor is more interested in funding the expansion of existing companies rather than hoping for some nobody to be the next big thing.

What about all the bad and average investments? For every world-changing, life-altering investment, there are hundreds and probably thousands or millions of bad/average investments. The law of probability says your investment won't do a whole lot for you. Especially in a tough economy, less people are willing to take that risk.

The economy will be stagnant (sure there is organic growth due to population, etc., but that is not what we are talking about), unless there is something that causes it to grow. Investment causes the economy to grow. Investment is the cause of change. Investment is the cause of productivity gains. Investment is the cause of quality of life improvements. Investment leads to the surplus' that feeds government.

I am not necessarily talking about investing in stocks and bonds. For example Facebook isn't public, but the founder invested in the company. The founder had an idea, that is now worth billions and has had a major impact on the world before anyone on Wall St. will be able to buy a single share of stock.

I am talking about guys like Hewlett and Packart who started HP in their garage.

---------- Post added at 07:51 PM ---------- Previous post was at 07:45 PM ----------

Who was it, who had 99 failures for each success - was it Edison. We simply need an environment where people who can change the world have an opportunity to do so. We need to celebrate success, not punish it.

Didn't Edison steal most of his successful ideas from other people?

Anyway how are we not celebrating success in this country? Anybody who puts the work into a billion dollar idea is still allowed to reap the rewards of that work on the other side if its successful. Nobody is being left penniless, the government isn't confiscating the vast majority of everybody's wealth or possessions, nobody is being forced to hand over his innovative idea over to Uncle Sam for the greater good. Sure we aren't allowed to keep 100% of our money and barriers exist beyond simple risk and reward, but we certainly aren't punishing people for their success.

I think we'd be hard pressed to find any other country on Earth friendlier to success the US.

capitalism!

YAY!!!!

Its fair game when I steal somebody else's innovation and leave them penniless, that's just capitialism at work. But when the feds ask me to pay taxes on it then I'm being victimized.

Ace, startups in people's basements aren't going to be the main fuel behind the recovery.

Patents and copyrights are just two amongst many of the jagged teeth in the jaws of the socialist menace!

Losing all your money because you invested in an automatic ass scrubber (you thought everyone would buy it) isn't punishment, that's just a terrible investment on a bad idea.

Edison was also one man, not an entire economy. Nobody will keep making losing investments 99 times before they finally obtain a positive investment.

there are so many problems with these supply side fictions that it's almost impossible to know where to start. you can't say that capital is unimportant in a capitalist setting, but it's lunacy to think of capital as all that matters, particularly given that capitalism stands in for a social system and not just a bunch of simple-minded hydraulic relations and simple-minded graphs. what's obviously a problem with these sycophantic milty freidmany supply-side fictions is that there's no account---at all---of production. it doesn't matter to the narrative. if you exclude production then on one side you fetishize the movement of capital. there's likely some hayeky backdrop to this (arguments about the opacity of a firm to itself)..but what has happened in the hands of the supply-side nitwits is that the history of commodity prices as an index of firms' relative performance has been replaced with the history of the performance of various financial devices---in a context wherein this circulation is more and more autonomous. running in another direction, the exclusion of production is of a piece with the wholesale exclusion of the social world from neo-liberal stories. which is a condition of possibility for hilariously fatuous bromides about ethics and/or virtue and/or responsibility coming from people whose economic viewpoints correspond to policies that are an unmitigated disaster for most people.

but because the main characters in supply-side fictions are investors, the social consequences of supply-side policies are erased.

again....again.....again, what i do not understand is why anyone takes this horseshit seriously after 30 years? obviously the right is reality-impaired at the level of conceptual accounts of the world and so cannot be expected to suddenly be able to offer a rationale for policies that would promote anything namby pamby like full employment or an equitable distribution of wealth or social justice. no no, what we get from these clowns is class war and a militarization of class relations. but i digress.

Dogzilla, your capitalist orthodoxy is, simply put, not the reality in which we live and breathe. Nor is your belief that the dreaded scourge of socialism is what's wrong with the world.

Pure capitalism would be a nightmare.
Pure socialism would be a nightmare.

The most successful economies in the world exist somewhere on a spectrum between the two. Getting the mix right is the difference between liberty and equality is the key. Too much of either is not a good thing.

roachboy, with the rationalization of capitalist dilemmas, the social aspect is a deviation, not a part of the equation. Production isn't tied into the social; production is an expense to be managed.

When did "becoming a millionaire" become the benchmark for success in this country? My family's household income is 10% of that, and we live quite comfortably. Am I 90% failure?

one of the many accomplishments of our pals in the conservative media apparatus is a construction of being-wealthy that has nothing to do with reality.

to wit:
Americans Vastly Underestimate Wealth Inequality, Support 'More Equal Distribution Of Wealth': Study

check out the report that's cited.

one conclusion is that for conservatives, "the wealthy" is an empty category that stands in for their own material ambitions. "the wealthy" then is just themselves, but tweaked a little. a projection of the super-ego, in freudian terms. and depending on the sector depending on the geography, there is some of this mobility, this self-made millionaire thing.

but overwhelmingly, the success that america rewards is the success of being born into a situation of inheriting money. but populist conservatives wouldn't find much to identify with about that. but look at the people who bankroll the ultra right. inherited money across the board...

i gotta go.

I don't think that is the benchmark. It's just proof that the middle class does have the opportunity to improve its lifestyle. Unlike some liberals here, I still see the US as a land of opportunity. It's just that nobody is going to hand you the success that goes with the opportunity. You have to work for it.

Also, if the number of millionaires is increasing, then the number of people in other income groups is also increasing. It's not like newly created millionaires are just appearing out of nowhere.

That's a completely unfounded correlation

That logic is completely illogical.

This whole idea that if you just work hard enough you too can join the ranks of people born into wealth is completely false. Sure some people come up with great ideas or manage to climb from one class to another but the data clearly shows the middle class is shrinking. And it's not because they're all joining the wealthy. Jobs have been lost nation wide, health and education costs have gone up. A lot of families who had decent family wage jobs are now working multiple jobs and struggling.

http://www.people.hbs.edu/mnorton/no...in%20press.pdf

one of the conclusions of this paper, which is the basis for the stub i posted earlier about conservative fictions around questions of wealth & its distribution, is that most people support the political worldviews they do because they are able to imagine that will bring us, collectively, to a **more** equitable distribution of wealth, far more equitable than is presently the case in the united states where the top 1% of the population controls over 50% of the wealth.

so there's obviously been ALOT of disinformation around concerning the realities of class stratification in the u.s..

qui bono?
kinda makes you wonder, don't it?

My favorite bit is that if people in middle or lower class advocate for tax and political policy that does not disproportionately favor the wealthy, that's CLASS WARFARE!!!, but if the wealthy advocate for tax and political policy that favors themselves, well that's just the natural order of things...

The information roach posted above reminds me of the polls taken on OBAMACARE...ask people about the policies without naming it, and they support it. Tell them what it is, and it's the unholy makings of Satan! Ask people what kind of wealth distribution they favor, they pick social democracy. Tell them its a social democracy, and they say they really want the wild wild west. Which they would never actually pick.

Here is where I get honestly confused. I am not sure if some really don't see it or if they simply try to protect their ideology or the irrational actions of some government officials.

*GM is a failed auto company. One reason is in their failure to recognize the need and their lack of ability to produce fuel efficient green vehicles that people actually want to buy.

*Obama bails-out GM. GM is a failed company propped up by tax payers.

*Obama talks about the new green economy as the future. Obama and Congress, in their wisdom, think they know the winners in this new emerging green economy.

*Tulsa Motors, a start up green company making electric vehicles. Has to compete with GM an old smoke stack company in the auto industry. Tulsa makes and sells electric vehicles, the type I might actually buy.

*The founder of Tulsa Motors used his own personal funds to start the company, a company that will compete with a government subsidized company like GM.

*Our tax policy taxes the founder of Tulsa Motors on virtually every dollar of income he saved before he could invest. And Obama would have taxed him more, and more, and more - perhaps to the point where the founder of Tulsa Motors would not have started his company.

*Tulsa Motors is located in California but incorporated in Delaware, why? Because that action would be less punitive. The founder is actually South African - he could have made that country his home base. If tax rates get too high, he might just do that. Taking jobs, technology, his tax base, income and consumption with him.

*In 2009 Mercedes, a German company, invests in Tulsa Motors, and now owns 10%. Tulsa Motors was founded in 2003.

* Also in 2009 Tulsa Motors became profitable. A group of Abu Dhabi investor acquired a stake in the company, and the US decided to give the company a low interest loan.

What if there was no government interference? How many Tulsa Motors don't exist because they can not compete or get funding due to our government picking winners and losers? How many Tulsa Motors are based in different countries because of our current anti-business environment?

Rhetorical questions certainly. I fully expect a few flip responses. But, the problem is this stuff is real and for every flip response I can come back with solid real word examples. Supply side is real, it works.

Why do you keep referring to the bailouts as an Obama program? Bush started them, including the auto companies. Obama simply continued Bush's program.

I wish I could fully put into words how wrong you are.

Established, mature companies in industries with the same characteristics, consolidate. It is the "new" that fuels growth. I assume the term "basement" is figurative and represents entrepreneurs creating new businesses and services or starting businesses in new markets.

Because Obama could have -stopped- them, and chose not to do so. Instead, he expanded them. Bush started a nasty house fire, Obama refused to put it out, tossed Kerosene in the windows, and is currently fishing around for some Thermite for the roof.

Start here:

There is always a known demand for a good or service before that good or service comes to market. T/F?

Innovative people who develop new goods and services, don't benefit society at large, don't improve the lives of those they employ, don't benefit government and national treasury. T/F?

---------- Post added at 03:54 PM ---------- Previous post was at 03:51 PM ----------

Are you saying Bush saved us from the "brink" or was it Obama? Forgive my confusion, I thought Obama was taking the credit (blame, IMHO) for saving GM. Either way, my opinion about the bailout is the same.

Well, if you can't, it leaves you in a position of being rather unconvincing. Sorry.

Here is one position that strikes at what I'm talking about. You're welcome to disbelieve it, refute it, or ignore it if you want. I myself think it's an important realization for the American economy.
Andy Grove: How America Can Create Jobs - BusinessWeek

I'm not saying startups aren't important. I'm saying that it will be up to existing companies and the recovery/expansion of their markets that will lead to a recovery.

The problem isn't a lack of startups; it's a lack of scaling. It's a difference between "some guy with an idea" who's looking for angel investors vs. a company who has already moved beyond that and has something ready to go on a large scale. This is both for young companies and older companies alike. Apple has been around for decades, yet look at the heavy scaling they've done in recent years. Now they're bigger than Microsoft, being the biggest tech company in the world. The challenge, of course, is for companies to scale in a way that helps the domestic job market, which isn't often the case with tech companies who manufacture elsewhere.

Well then, I'm sure you're out singing the praises of the small business bill that Congress is sending to the White House.

ace - are you talking about Tesla Motors?

Really? Then just where do you think these new millionaires come from? Is it some kind of miracle where each day a bunch of newly created millionaires just pops into existence?

---------- Post added at 01:02 PM ---------- Previous post was at 12:43 PM ----------

Well, it's not completely false. I've managed to improve my lifestyle significantly. Not to be a millionaire, but enough for what I want. I have friends and family who have done likewise. People have started companies on a shoestring and done really well. People have become millionaires by working for companies like Google and Microsoft.

On the other hand, I don't hear too much about people living on government assistance ever improving their lifestyle much. Maybe because there's no incentive for a government program to become successful because then a bunch of government bureaucrats might lose their jobs.

I'll take my chances with capitalism over liberal or socialist handout programs any day.

dogzilla, it's odd that you'd make it sound like you have to choose between capitalism, liberalism, and socialism—especially considering you've experienced the effect of each to get to where you are today.

And the thing about never hearing about people on government assistance improving their lifestyle: it's not as media-friendly as those among the "new money." Who cares about the impoverished becoming a part of the lower middle class, right? Oh, and most of those who receive welfare do so on a temporary basis. And, as you can imagine, the case is the same for those on EI. I think maybe disability payouts are bit more permanent, but what can you do?

SHOW YOUR CAPITALISTIC SPIRIT
Buy your Bracelet inscribed with
"I Believe in Capitali$m"***

http://www.ibelieveincapitalism.net/braceletad.html

this seems about the level of thinking that we're getting from the right, both in general and here in particular. so why not get some merch? it's a start up. soon everyone will be employed making plastic bracelets that extol the virtues of liking capitalism. everyone likes to like things and capitalism on this account is a thing AND a matter of faith but then again so are most things to the extent that it is really a matter of faith that keeps you from worrying about whether the monitor you are now looking at is going to fly into atoms in the next few seconds.

O-ho! Somebody's anti-union.

That's a smashing bracelet, however....

I'm simply saying that the addition of new millionaires doesn't necessarily mean there are also more $500'000'ers and so forth. You seem to think that the addition of new wealthy people means EVERYONE has seen a boost, which is statistically untrue

That assumes that Tulsa Motors would have been able to just wander in and fill the void left behind by the big auto companies and continue to thrive despite a massive collapse in our economy. They are still free to carve a place for themselves and if done right they will reap the rewards of the hard work they put into the company. The government bail outs where an extraordinary solution to an extraordinary problem, hardly punishment for success.

I agree that we can't keep subsidising failed companies but if there is nobody poised to fill in the hole and keep a massive sector of our economy functioning then we have to deal with that reality.

Well, if you read the article from businessweek dogzilla linked earlier, you will see the opening line "The millionaires’ club in the U.S. grew by 16 percent in 2009, following a 27 percent decline in 2008" which would seem to indicate that more or less some people who used to be millionaires were bit in the downturn, and now have recovered somewhat a year later...which is essentially what the npr article points out as well. Furthermore, this is completely in line with the criticism of recent tax policy in that our middle class is vanishing. In other words, a relatively small number of people are indeed becoming millionaires, and their children will likely remain millionaires, and large number of people are living in relative poverty with increasing numbers joining the bottom ranks.

And should we allow the tax cuts on the wealthiest 3% or so expire??? Of course not, our dominant conservative party has a plan.

...

I think before going too far down the "Tulsa Motors" rabbithole, we might want to confirm that we're talking about Telsa Motors, and then decide whether it makes sense to conflate a company which produces less than 1000 cars a year, each of which cost $100,000 and one of the largest employers in the United States. I am a huge fan of Tesla Motors, and I think Elon Musk is awesome, but the picture is a bit more complicated. And lastly for now..."Our tax policy taxes the founder of Tulsa Motors on virtually every dollar of income he saved before he could invest. And Obama would have taxed him more, and more, and more - perhaps to the point where the founder of Tulsa Motors would not have started his company." You might want to go read up on Tesla Motors and Elon Musk...he wasn't exactly making these things in his basement. He's a brilliant engineer and philanthropist who already had millions from PayPal before Tesla came along. Tesla which is solely aimed at early adopter electric vehicles until technology can catch up and make them cost and utility competitive with hydrocarbon based technologies. And I seriously don't think he's considering taking Tesla to S. Africa any time in the future. Hello...who in the hell in Africa is going to be able to afford $100,000 sports cars other than Robert Mugabe types?

further down in the same krugman edito that pig links above:

Yes, my error.

---------- Post added at 07:16 PM ---------- Previous post was at 07:00 PM ----------

Not really, it is just I have no magic dust to make you believe what you see all around you. I am not talking theory, I just give real examples.

In every state I am aware of contractors are required to be licensed, and you can go to state websites and look at those companies and check the status. Contractors are generally small, and start as "garage" businesses. In good times they spring up like weeds in the spring. In bad times they disappear. So do jobs. We are talking about, general contractors, roofing contractors, framers, cement, wallboard, electricians, plumbers, land graders, landscapers, window installers, painters, outdoor lighting, cabinetry, brick, pools, doors, inspectors, etc, etc, etc.

When the housing market rebounds, pick a state any state and monitor the activity and see what happens. Within months there will be thousands of new companies. Each of these companies may start with one, a few, a dozen or so employees - some will grow quickly to employ 50 or more, perhaps hundreds. And this is just one little segment involving licensed contractors. Within months you can see strong employment growth in this area that can have a measurable difference on a state's unemployment rate. Just from guys starting a business in the "garage"'. On the other hand any job growth from GM will be trivial in comparison.

I know, I know, unconvincing - what do you expect, some supe-rsized spaceship thing, job creator, that comes from the sky and drops jobs like paper leaflets?

---------- Post added at 07:22 PM ---------- Previous post was at 07:16 PM ----------

I don't like government picking winners and losers. Let the market decide. I want government to be neutral. Small business tax cuts are great for existing businesses making a taxable profit. It takes most new businesses some time before they reach that point. On the surface the bill is a good thing and perhaps better than them doing the opposite. But long-term this legislation is not the solution.

---------- Post added at 07:24 PM ---------- Previous post was at 07:22 PM ----------

In the normal course of events, businesses start, grow, consolidate, and some die. Nothing extraordinary about that.

---------- Post added at 07:27 PM ---------- Previous post was at 07:24 PM ----------

Go back and look at the history of the automotive industry, come back and we can discuss this further. We are not on the same page, even discounting my spelling error.

---------- Post added at 07:32 PM ---------- Previous post was at 07:27 PM ----------

GM employs less that 300,000 people, and employment at the company is in a declining trend. Why do you underestimate the power and potential in small start-up companies????

What was Microsoft to IBM about 30 - 40 years ago????Why do I have to point this stuff out???I don't understand you folks!I hope I spelled Microsoft correctly - and maybe it was 29 or 41 years ago!!!

{added} there are 15 million poeple unemployed, you would need GM to grow by a factor of 50 to absorb 15 million people, is that what you folks think will happen, is that what Democrats are waiting for? Walmart employs about 1.3 million, do we need Walmart to grow by a factor of 11.5? The US government employs about 1.3 million also, I got it now, the plan is to grow government by a factor of 11.5. I think I will get a one way ticket to Greenland.

There is when a massive chunk of that business sector is collapsing all at once and in turn that collapse will not only effect those with financial interests but everyone else around the globe as well. Regardless of how each company failed we can't just ignore the real world consequences in an attempt to adhere to a rigid theory about govt/economics because that's just the way it should be. No solution is right 100% of the time.

I'm beginning to think that maybe it's just that you aren't being entirely clear.

"When the housing market rebounds" is the key phrase here.

No, I expect investors, spenders, and a market for exchange, not just investors throwing good money after bad or playing high-risk games.

Look at the DOW companies 25/50/75/100 years ago. Look at the S&P 500 or the Fortune 500 over the same intervals. Come back and tell me if that changes your opinion.

---------- Post added at 08:03 PM ---------- Previous post was at 07:57 PM ----------

Yes, that is it. Like I said I wish I had the words to...

We have seen these patterns repeated time and time. Nothing new to these cycles, in housing or in other markets.

You are still in a theoretical plain. A professor at a university, who writes a book in his "garage" and it goes on to become a best seller and then he becomes a full-time writer and a filthy "rich" fat cat, employing a team including fact checkers, agent, publicist, consultants, etc., in my opinion did not play a game of "high-risk". To make this example more real, perhaps look at Stephan King.

Looking at the course of business over the last 100 years is supposed to change my opinion that no one solution is right 100% of the time? I'm not arguing weather or not the bailouts were right or wrong, I'm saying we need to be free to look at all viable solutions and find the one that best fits the situation we're facing (and then we can argue until we're blue in the face about weather or not it was right), not blindly applying one fix all solution, crossing our fingers and hoping it works again.

But that's not the point anyway. I'm saying that I don't buy into the rights hyperbole that we are punishing and not celebrating success in this country. Are there barriers that tend to make it more difficult sometimes? Sure but we hardly exist in a society that doesn't allow people to reap the reward of their hard work or at least given a chance to try.

But, as from the start, you are talking about the exceptions and not the rule.

You can dump all the money you want on startups, but if no one's buying anything, the money will be wasted.

You just mentioned the business cycle. Maybe we should have brought that up earlier. Right now we are in the "trough" phase, though some areas could still be considered in the contraction phase. Regardless, the trough phase is indicated by a continued recession due to falling demand and excess production capacity, but interest rates at this point are usually very low and possibly have been for a while. At this point, consumers tend to have pent-up demand that they consider fulfilling because, hey, interest is low (borrowing is cheap, saving cash isn't attractive). With this renewed spending, you tend to see stocks starting to rally (we've seen a slow but steady recovery of stocks over the past couple of years).

Now, this isn't a great recovery and so you get fits and starts, but what's at play here is spending spiking and receding. Once spending stays steady and increases once again, you're going to see stocks climb at a more steady rate as well. Without this spending, you get stuck in the trough and possibly even slide back into a contraction. This is the very real risk with the American economy right now (double-dip recession).

No amount of investor money on its own will fix this. Spending is required or nothing will happen. Spending will happen when consumers stop postponing their purchases based on their economic outlook.

No. I am talking about what drives economic growth. Through the ages the pattern repeats. I agree that most people are not entrepreneurs, but most people don't need to be.

Occasional it helps me if I understand people, so I ask a personal question:

How many times have you thought about writing a book? Or, how many times a day do you think about it? How many have you written? What was your motivation to write or not write a book? Would you base your decision on macro book selling trends or your passion for your craft? What would the consequence be if you wrote a book and no one bought it? What would the consequence be if they did? I think you should publish your book or tell us what you have written so some of us can buy it and stimulate the economy and perhaps make you "rich". If you get "rich" will others benefit?

I'm not going to keep talking economics 101 in this thread, ace, because it's not exactly related to the topic. I will finish with this: consumer spending is a key component of economic growth. Without it, "supply and demand" simply becomes "supply."

This is not to downplay the importance of what you're talking about. Innovation and emerging markets are generated from the seed that is "the guy with the idea." But when you're talking about economic recovery from a recession, there is a bigger picture not to be overlooked.

* * * * *

In other news, the Republicans have joined the Tea Party:

Republicans present "Pledge to America" agenda - The Globe and Mail

Well, more accurately, the Republicans have issued the Pledge to America, which is based on their Contract with America, which formed the basis for the Tea Party's Contract from America, but you get the point.

Everything's coming to a point with conservative anger, and now they're galvanizing and mobilizing for the election.

I don't have a problem with people getting rich like this. I don't believe any body here has a problem with it. This is the good type of Capitalism. But, our income tax laws don't differentiate between making money by innovating, or making money by stealing someone's work and sending it off to China to get a cheaper product. It doesn't matter if you were made a CEO of the family business and took a big salary while the company failed, or if you made some unscrupulous financial transactions that 'guaranteed' that you would make money from the little guys. Then the one way around income taxes (and FICA probably) that some upper management does is to take stock options instead of a salary.... 15% in long term gains sure beats the 37% + 7% + city (most likely 0) (estimated percentages), yet everyone thinks your such a good guy...

All I want is some basic rules so the consumer doesn't get screwed, corporations don't get to dictate the rules and run the country, and the higher-ups in the financial industry don't make millions by using borrowed money to make bad investments. I don't want people to buy homes they aren't going to live in, spend thousands of dollars they don't have on things they don't need to impress others, and take certain jobs that we don't need anymore of just to make money. There are a lot of problems. Yet, I didn't want the entire economy to collapse in a period of a month or two in order to sort it out.

ace: i honestly don't give a flip if you mispelled Tesla as Tulsa...I did want to make sure we were referencing the same company. From the details you provided I assumed that we were, but I thought I'd make sure. No need to get in a huff about it.

The point is - I hope Tesla is successful. There are technological hurdles in their way to making an electric vehicle that will be broadly commercially viable, they are aware of them and they are working on it. I really hope they come out strong, or else get bought out by a larger manufacturer (such as Daimler/Mercedes), if they/we can innovate a strong enough battery technology, or prices for petroleum-based energy storage elevate to a point where the break-even point is met.

I honestly am a little leery of the GM bailout myself, but I do know that they are one of the largest American companies going. Quick google search provided: linky with the largest american companies listed as:

I believe that Tesla employs less than 1000. Therefore, my point was that making an apples to apples comparison of the two isn't really viable (which you might agree with, but it did seem you were trying to do so), and Tesla is actually partnering with larger vehicle manufacturers such as Mercedes/Daimler and Toyota.

The main point however, is that Tesla wasn't started because Elon was not taxed an extra 3% on his personal income. It was started because he sees a potential market in the next 20+ years, and is willing to eat costs up front to gain early adopter market share. Our tax structure is not what is keeping Tesla in the United States - they are staying because of the potential market for early adopter customers (California, where their plant is) and the U.K. Incidentally, they are also looking for financing from other "bailout" beneficiaries like Goldman-Sachs.

The government isn't just looking to "pick winners, truth-be-damned, it's all Obama's secret Union-loving administration...". Union lobbying no-doubt has its influence, as all major companies have influence via bribery under the guise of first amendment freedom of speech. I believe the mantra of bailing out GM was that a massive failing by a company such as GM, along with the subsequent failure of all the OEMs who supplied GM, would have caused catastrophic collapse throughout our economy.

Incidentally, I'm fairly certain that Tesla has received government incentives, and that they have interaction with the United States Department of Energy via our Vehicles Technologies office. They're not exactly out-of-the-loop.

edit thanks - maybe this will work

Ace, I think you also need to know that demand is not only wanting a product, but also having the money to buy it. Like this: I want a Ferrari, but I don't have the money to buy one. My demand for a Ferrari is zero.

Let me get this straight: the Republicans are officially lining themselves up with the Tea Party? Is it "your enemy is my enemy, so we should be friends" deal?

I think it's more about the politics of anger. As in, "We're all angry about the same things, isn't that convenient?"

Or someone realized "oh shit, we're splitting the conservative votes here, and the Democrats are going to pants us in November! Quick, regroup!"

I'm confused about which actions of the government you're complaining about exactly...

Would you prefer if the government had let GM fail? Ok, that's a valid position to take. I would argue that, by temporarily propping up GM, the government helped stabilize the economy, by avoiding the effects of GM going bankrupt (thousands of layoffs, etc). Would you rather the government hadn't loaned tesla motors $465 million to encourage green development? I think that low-interest government loans to businesses help encourage competition and innovation. I think encouraging 'green' cars is a worthwhile use of my tax dollars. If we let the free market work, gas-powered cars will dominate the market because they're cheaper...polluting the atmosphere until climate change is truly devestating...until...the gas runs out...then...boom, there goes the economy.

I think it's pretty clear that the free market, on its own, tends to follow a boom-and-bust cycle...it's been that way since the free market began, and there doesn't seem to be any stopping it. IMHO, one of the roles of government in the economy should be to try to smooth out those booms and busts. That means that regulation will be a little bit of a drag on business profitability, and that taxes will be slightly higher to pay for that regulation, but I think things like a social safety net and reasonable regulation are worth it.

The free market is a great thing, but far from perfect. It's short-sighted as hell, and open to manipulation by powerful players (monopolies, for instance).

Obviously a 'planned' economy doesn't work, but neither does a completely free market.

And, fwiw, Obama's supposed anti-business attitude is nothing but rhetoric. He's a very few points more liberal than, say, W, but so far from the anti-business commie the right makes him out to be that it isn't even funny.

edit: Oh, and you also seem to be arguing that it's a bad idea for labor income to be taxed more than investment income. I've wondered about that a lot, and don't really understand the reasoning, or know if its a good idea or not.

What I'm saying is you constantly state this action was negative and you blame Obama for it which is simply telling a half truth.

Seems to me both the GOP and the Dems looked at this and came up with the same solution. If or how much that solution worked is completely debatable. Claiming it's "Obama's program" is being dishonest.

The concept of a free market is great in that it looks great as a philosophy rooted in absolute economic freedom. As you point out, it's short-sighted, but for reasons more than problems of monopolies. There are other issues such as global trade and the desire to instill protectionist measures to favour domestic industry.

Problems arise too with planned economies, especially the most absolute of these, being command economies. The way to look at it is that lassez-faire is the absolute state of a free market and a command economy is the absolute state of a planned economy.

There are historical examples that people often cite when pointing out the failures or the impractical aspects of command economies. The most-cited example is communism under the Soviet Union. A better example, in my opinion, is China, who moved away from communism towards a mixed economy when faced with the realities of global trade.

Because that's what it usually comes down to: mixed economies are the norm, and are generally considered the best approach to economic policy.

People don't often consider that there were near attempts at lassez-faire in places like 19th-century Europe and the U.S. There was a revolutionary shift after the early development of capitalism, the eventual demise of mercantilism, and the response to the publication of Smith's Wealth of Nations.

However, the 19th century in America produced an environment of robber barons, which in a sense meant entire industries consisting of monopolies and oligopolies, and not exactly of the natural kind but rather of the coercive kind that prevented new entrants to the market. It was a highly uncompetitive situation that would devastate our current antitrust sensitivities.

But in the end, it didn't matter. After the American Civil War, new protectionist and regulatory measures were enacted to stabilize the economy, as well as an income tax to help pay for infrastructure, etc. That in addition to public pressure for labour rights and freedoms lead to what we know today to make up the American economy: a decidedly mixed economy.

There is no such thing as an absolute free market. If you look at the history of economics, it has never existed. It could be argued that it's even less viable than communism---which is interesting, mainly because of the panic of the Tea Partiers when Obama uses the tools of a mixed economy. They fear a slide into communism when the issue is, in fact, a reaction to the policies that would sooner have had that pipe dream of the wealthy: a lassez-faire Shangri-La America.

Well Criag T. Nelson's done pretty well for himself and even though he states "I was on walfare, I was on food stamps... no one ever helped me out." I'd call all that government help. I think by reading your post you seem to think once someone is being assisted by the government it's a life long thing. That happens I'm sure but I've known a lot of people over the years that have ended up on a social program and worked their way to being independent.

I look at it as a hand up not a hand out and if the tea party folks get their way there will be no more hand ups. The result will be families, possibly endless generations of, people living in absolute poverty.

Also when you say "I'll take my chances with capitalism over liberal or socialist handout programs any day." Why does it have to be an either or situation? The US has always been a mix to some degree for well over 100 years. Why all the black and white, all or nothing mind set?

The probability of GM growing by a factor of 50 is close to zero. The probability of a company like Telsa Motors growing by a factor of 50 or more given where they are today is much greater than GM doing it. Our government gives favorable treatment to GM, hurting a company like Telsa Motors in the process.

Is that a proper role of government? I say no.

---------- Post added at 05:03 PM ---------- Previous post was at 04:56 PM ----------

Innovation has always come before major standard of living improvements.

Given the innovation in the auto industry, the actual gap in useful performance between the car you drive and a Ferrari is small. In fact depending on the performance measurement there are vehicles that can out perform Farrari's for 1/10 the cost.

Another way to look at this is that the car you can afford to buy today, is most likely a better vehicle than a Ferrari was 25 years ago. You can want a Ferrari or you can want Ferrari performance, there is a difference - and one can be very affordable the other not.

---------- Post added at 05:09 PM ---------- Previous post was at 05:03 PM ----------

Perhaps one reason gas powered cars are cheaper is because of government. The obvious - Our government wages war to keep the price of oil stable, what would the price be without the use of our military? If the price of oil was higher, perhaps the cost of gas powered cars would be higher, perhaps there would be a greater incentive for people to innovate in area that compete with gas powered cars. There are many layers in this analysis, and My point is that no person, no government is smart enough to address all of the consequences in trying to micro-manage our economy.

---------- Post added at 05:14 PM ---------- Previous post was at 05:09 PM ----------

I really, really don't like Obama. That as a given, I can be wrong - I did not know Bush bailed-out GM. Either way it was wrong.

I am sorry but I spend time listening to the wrod that come out of Obama's mouth. He takes credit for saving GM. Are you saying that he has been giving that credit to Bush???

gee, ace, the people krugman is talking about sound like you.
you know, those people whose markety metaphysics would rather see people starve than support efforts to defibrillate the us economy.
whose delicate aesthetic sensibility prefers pretty markety pictures and stupid supply curves to the messiness of reality.

http://www.nytimes.com/2010/09/27/op...ef=global-home

i suppose so long as it's not your right-wing ass that's starving, these reasons to do nothing are compelling.

That is real good. I want people to starve. Then you think a guy like Krugman or anyone else has the magic to defibrillate the US economy - if so, and assuming they don't want people to starve (virtually impossible to happen in the US, unless self imposed), why has it been done? what is Krugman's plan, the bailout wasn't big enough - that is convenient. An excuse he would forever be able to use. Oh, not big enough. If had been bigger last year. Oh, not big enough. If had been bigger six months ago...:shakehead:


Innovation always comes before standard of living increases. Innovation comes from innovators, those willing to take a risk to make things better, even if their motivation is selfish - everyone wins by the efforts of these people.

I will ask you a personal question.

If you became a billionaire, how many people would benefit?

What is a fair ratio between wealth creators becoming filthy rich and the number of people they take along for the ride? What would your ratio be? 1 to 100, 1 to 1,000, 1 to 1,000,000. If you becoming a billionaire would make the world a better place, and you apply your ratio, don't you have a moral obligation to become a billionaire? Why haven't you?

I got it you would prefer people starve! How sad.:sad::sad::sad:

So I gather that what Paul is saying is that the reason unemployment is so high is because there's no demand and that the government should invent some demand by another stimulus.

So let's see. Over the past years, people have been borrowing money like mad to finance their lifestyles with money they didn't have. So credit card balances and home equity loan balances went sky high so people could have all these neat things.

And the economy went nuts. Factories were working overtime to satisfy the demand for all these nice things.

Then people discovered that they had to pay back all this money that they couldn't because they way overextended themselves. So now they couldn't get any more credit to buy nice things and the economy crashed.

So now people are beginning to realize that maxing out your credit limit and maintaining a negative savings rate wasn't such a bright idea. Between that and maxing out their credit, they stopped buying things. So now factories are sitting idle and people are laid off.

So Obama and his liberal buddies like Paul come up with this brilliant idea to create some phony demand by borrowing even more money, thinking that this phony demand will bring the economy back to life.

So Obama tried this at least twice, with cash for clunkers and a homebuyer credit. Both times, demand went crazy because Obama's programs borrowed against future sales.

Then the programs ended. So did the demand and we are back where we started, except now we owe the Chinese even more money.

Obama is an idiot. Paul Krugman is an idiot.

Fortunately, elections are happening in another month and a half. Then maybe Obama will get the message. If not, then Obama will be out of work too.

Imagine the economy is a car that's stalled. The starter is busted, and you need to push it in order to get going again. Stimulus is that push. The problem is that the previous stimulus package was watered down, it wasn't enough to turn over the engine. If stimulus is going to be the way this thing gets going again, we need enough push so that when we pop the clutch, the engine turns over and starts running on its own again. That way we can drive it to the shop and do an overhaul (financial reform legislation).

Hooray for illustrations!

Just for kicks I looked into Ferrari California specs compared to a Telsa Roadster S. Both can go from 0 to 60 mph in less than 4 seconds. The Farrari needs 453 HP, 358 lbs/ft of torque at 13/19 mpg costing $192,000. The Telsa needs 288 HP, 295 lbs/ft of torque, zero tailpipe emissions, no gas, costing $128,500.

The GM Corvette ZR1 can also get to 60 in less than 4 seconds, it needs 638 HP and 604 lbs/ft of torque, at 14/20 mpg, costing $109,000 - if you can get one at that price. Is it a good thing that the US government subsidizes the Corvette?

Oh, for the record skilled auto workers can work for a company like Telsa Motors just as easily as they can work for GM.

And another thing - many motorcycles can get to 60 in less than 4 seconds, many costing less than $15,000 and some getting up to 50 mpg. And I know a guy who modified a Toyota Supra to a claimed sub 4 second 60. Given the noise it makes I don't doubt it.

---------- Post added at 07:38 PM ---------- Previous post was at 07:32 PM ----------

Now it becomes clear, what the problem may be.

If the starter is busted, you need to replace the starter (or rebuild it). Otherwise you are going to be push starting a heck of a lot. And, you need some good strong buddies that have to go every where with you - you'll need a lot of beer.:thumbsup:

Obama's last attempt didn't work. So how much is enough? $1 trillion? $2 trillion? Why not go big and spend $10 trillion? That's sure to work, isn't it? Never mind that our great-great-great-great grandchildren will still be paying the price for that stupidity if the Chinese don't foreclose on us first.

Maybe Obama needs to get Congress to pass a law requiring every household in the US to spend 150% of its income for the next five years.

Maybe Obama should just quit screwing with the economy before he gets into even more trouble.

so your solution is what, exactly?

What dogzilla said!

And the gift that won't stop giving...

So, the government gives a bailout to GM so they can make $100K+ Corvettes getting 14 mpg in the city so 50 year-old "rich" guys with bad mustaches can buy them subsidized buy the American taxpayer...

And that's o.k. with you folks???Come on, even if we disagree on everything else, that is pretty funny stuff, isn't it? Isn't it? Please, tell me you see the humor in this? Please.

---------- Post added at 07:54 PM ---------- Previous post was at 07:53 PM ----------

Government get out of the way and let innovators innovate.

so nothing. you have no ideas. you have no proposals. you have platitudes.

it's like the editorial says, almost to the letter.

First, no more stimulus programs.

Second, cancel any remaining funding that hasn't been spent on current stimulus programs.

Third, aggressively cut budgets for all federal programs. Eliminate federal programs and agencies that were power grabs from the states. Let the states administer local programs to suit their needs, not some one size fits all federal approach.

Fourth, start paying down the federal debt.

Once that's done, cut taxes to the point necessary to fund the smaller federal government.

Then work on legal reform to get rid of a bunch of laws that make it difficult to do business in this country. I'd start by eliminating class action lawsuits.

Nothing is better than negative.

The risks of the government trying to do good is full of unintended consequences. Government has done a poor job at picking winners, they do it at the expense of the rest of us. Surprised, you can't see that in the countless examples presented. Again, I can understand disagreement - but you don't even seem to understand the other-side of the argument. Get over the dribble about me wanting people to starve, and the you have no ideas, talking points - dig deeper for a better dialog.


And then there is your prize winning Krugman, who uses lots of words to say nothing - ah, should have been a bigger bailout, ah should have done that bailout sooner...

President Obama's last attempt was like a chipmunk trying to turn over a hemi, but we've still managed to make progress. Even the conservative American Enterprise Institute admitted back in January that the stimulus helped to boost the economy by 4%. So, actually, it did work. Whoever told you it didn't is a liar and a fiend.
Economists are saying we need a second stimulus, an investment that will pay off big time in the long-run. Do you understand the concept of investment? It's not the government writing a check and getting nothing in return, it's about saving a dying economy and perhaps saving our crumbling infrastructure in the process. And don't give me that "future generations" line. It was Republicans that spent us into this stupid mess, and I didn't hear a peep from the right while it was happening. Perhaps the drum beat to two expensive, unnecessary, and wasteful wars was too loud?

New rule: you don't get to call yourself a fiscal conservative if you ever supported the wars in Iraq and Afghanistan, the Bush tax cuts, or the prescription drug bill.

the right has specialized in using massive increases in military spending to prop up economic sectors that are in the main friendly to republican interests. that's been how the right has rolled since the reagan period. military keynesians they were called. the right coupled that with meaningless hoodoo about markets presumably to keep the chumps enthralled and to legitimate cutting social programs, which the right has opposed since the halcyon days of herbert fucking hoover, which is the last time that conservative markety bromides ran into a structural crisis and found that they have nothing to offer. letting the right into power now would be a recipe for complete economic and political disaster.

i don't think the obama administration was anywhere near social-democratic enough. but the way the bush people fucked up was so massive and so thorough-going that it was difficult to buy space for much in the way of policy-development. from before they got into office, the obama administration was managing crisis that conservative ideology produced.

but that's not the conservative talking point. the conservative talking point assumes no memory whatsoever and pushes the whole of this pile of shit onto obama. i figure you have to have some cognitive impairment to buy that line. and when i see the economic "ideas" presented here, i think that seems a powerful explanation.

In response to "it did work", I came across this and thought it interesting enough to share. It illustrates the folly in government's ability to manipulate GDP and why the correlation to unemployment may be more important in our current state of affairs.

Roach is gonna love this.

http://web.mit.edu/krugman/www/howfast.html

I did the bolding.

how?

Eliminate waste in government spending.
End duplicitous spending.
End contradictory spending, i.e. government hurting people needing help and often getting help - creating a cycle of dependence rather than independence.

Agricultural subsidy - Wikipedia, the free encyclopedia

But most important, our economy has to grow to eliminate the debt that has been accumulated. Our economy, the global economy needs the next big thing, whatever that is. We need innovation, we need the next "age" to start. We need to give the people capable of doing it an opportunity to do it. The information age started in the 90's may have another leg or two but we need to enter a new growth cycle.

Ace...all I see are more generalities and misconceptions from you and dogzilla.

Eliminate waste (where, when nearly 2/3 of the budget are entitlements, interest on debt and defense - absolutely cut defense, but conservatives wont touch it)...social safety net programs create a cycle of dependency (despite the fact that most recipients are relatively short-timers), eliminate programs that are power grabs from the states (despite the fact that most high dollar programs are classic federalism, with the feds setting minimum regs and states implementing with their own more specific regs)

I would also add that there is a growing consensus of economists who are of the opinion that the combination of federal policies/actions (TARP bank bailout, stimulus, Fed Reserve policies) prevented a further recession/depression and turned the economy around.

First, the 4% figure, even if true, includes stimulus spending and inventory replacement.

Second, Obama's stimulus program was in the range of $750 billion. Even attributing the growth in the economy entirely to the stimulus, with a $14 trillion GDP in 2009, that's about $560 billion return on $750 billion spending. So does Obama intend to adopt the old business maxim of taking a loss on every sale but making it up in volume?

Third, there were numerous articles at the time cash for clunkers ended and the homebuyer's credit ended about the resulting drop in revenue. Some stimulus. More like borrowing against future sales.

Fourth, if this was like a chipmunk trying to overturn a semi, Obama really should quit before he really fails.

Finally, speaking of amimal metaphors, the one I really liked was Obama after the 2010 elections as a neutered chihuahua :D

You really expect me to take a website named crooks and liars seriously? Or a document signed by a bunch of union bosses?

I don't know Will, I'd consider someone who has maintained a zero debt balance over the last 20 years and only buys things when he has cash to back that purchase a pretty solid example of a fiscal conservative, wouldn't you?

---------- Post added at 06:38 PM ---------- Previous post was at 06:36 PM ----------

You guys carry on about entitlements. Cite me the specific sentence in the Constitution that states that an entitlement program, once enacted by Congress, can't be revoked by Congress.

First, SO what would you have done in January 2009, after the loss of 8 million jobs and a year of negative GDP growth?

Second...about 2/3 of the stimulus program was not stimulus, in the classic sense of govt spending to create jobs.....1/3 was middle class and small business tax relief and 1/3 was to provide extended benefits (UI, COBRA) for those millions who lost their jobs before 2009 and remained unemployed.

Would you have provided temporary relief for those in need..or just screw'em?

---------- Post added at 06:44 PM ---------- Previous post was at 06:42 PM ----------

Putting the constitutional question aside because it has no merit.

So you want to revoke Medicare and return to the pre-1965 days when most seniors had no access to affordable health care?

DO you really think the private sector/free market will take on those high risk citizens?

I don't think extending unemployment for up to two years made any sense at all, especially when I read articles like this.

Despite economy, farm jobs still go begging - Business - Personal finance - msnbc.com

I don't think I would have done much. Maybe if the government spent less time screwing around with the economy we would all be better off.

So exactly why does this question have no merit? Either it's prohibited by the Constitution, in which case you can quote the sentence in the Constitution, or it's not prohibited, in which case revoking the program is a legitimate option.

Actually, we do that today, even with Medicare

$93,000 cancer drug renews debate on price of life - Health - Cancer - msnbc.com

No matter how much medical care you get, you aren't going to live forever.

Unemployment benefits put $1.90 into the economy for every $1.00 given to the unemployed, so extending them absolutely makes sense.

and saying "trim the fat", etc. is a great idea in a vague sense, but explain how this would happen within the current congress/system we have

answer, it won't. unless you fire everyone in Washington and start over, it just won't. too much corruption, too many lobbyists, too many shenanigans.

here in the real world, Ace and dogzilla's ideas would simply never work

There's no if. It's true. You're not entitled to your own facts.
That's a $560b return SO FAR. Unless we've reached the end of the republic and no one told me, the economy will continue to benefit from the stimulus for the foreseeable future. The fact we've already gotten such a return should be silencing critics.
Tell that to auto workers that managed to keep their jobs. Overall, the net benefit intended by Cash for Clunkers was reached. Sales were higher even after the program than projected by organizations like Edmunds. That's food on the tables of a lot of auto workers' families.
He's not willing to quit. He's not a Republican.
I expect an iota of intellectual honesty. Ad hom attacks are fallacies for a reason. They're breaks in logic which negate the argument. In other words, try reading the argument instead of attacking the arguer.
Not even a little. You see, this same person supported the invasion of two countries, neither of which attacked us, and had no plan in place to pay for them. This person was silent while the Republican president and Republican congress passed several significant tax cuts, also not paid for at all. What, you think because your checkbook is balanced the other stuff doesn't count? You've cost our country trillions. You, dogzilla, along with everyone that touted their fiscal responsibility while spending us into oblivion. It's dishonest and you're not getting away with it anymore. Republicans are not fiscal conservatives. You can't call yourselves that anymore, in fact you've been lying about it since 1980.

If there were actual fiscal conservatives I'd likely vote for them. But since I reached voting age they been telling me they're for smaller, more efficient government and spending as much or more then any other politician. The data shows it doesn't work, the people who promise to even try it forget all about it when voted into office.

Isn't the continuation of TBTC for the top 2% just another form of targeted stimulus? It's interesting how many 'fiscal conservatives' favor increased gov't debt via targeted stimulus plans when the beneficiaries of those plans are super rich, but not when the beneficiaries are regular Americans.

No, since the discussion is that the cuts stay in place for everyone. But as I've posted before, I'm willing to temporarily give up the tax cuts to pay off the federal debt as long as Obama stops spending like a lunatic and gets serious about paying off the debt. I won't go along with raising taxes to give Obama even more money to spend.

Fiscal conservatism is self-contradictory in the context of today's economic environment. It wants to reduce spending, which is fine if spending isn't getting the return it should. And I understand that with the reduction of spending, you will have an easier time balancing the budget, which is great. However, lowering taxes at the same time is counterproductive, especially when you think about actually paying off the public debt, and especially when taxes are relatively low to begin with.

Why reduce spending only to reduce income and still hope to balance a budget and pay down debt?

If you run up a debt to a level that you'd consider too high, it helps to both reduce spending and increase income.

I call that "fiscal rationalism."

Compare and contrast the difference between the value of tax collections to pay off debt vs. interest cost.

Maybe it's just because I live in "Soviet Canuckistan," but the tax issue in the U.S. just boggles my mind. The cry to reduce taxes, extend the Bush cuts, etc., is ridiculous considering the sore fiscal shape the U.S. is in. Spending in itself isn't the problem. It's how the money is being spent (and I'm not just talking about the stimulus here; I'm talking historically). It's the low tax rate and the high public debt.

Now it's time for some pretty pictures:
http://i170.photobucket.com/albums/u...axes_graph.gif

http://i170.photobucket.com/albums/u...ional_Debt.png

In a nutshell: thanks probably in large part to Reganomics, the top earners in the U.S. are paying far less in tax than they have historically. Moreover, the increases in national debt has outstripped the increases in spending. Why? Well, it's simple: fewer tax collections to pay for that spending (i.e. it's not just the interest).

The average tax burden is at a 40-year low. What an odd time to be paying less in taxes. What at odd time to demand paying less.

The fact remains, as most (other than the "fiscal conservatives") acknowledge, you cant reduce spending AND cut taxes AND expect to lower the annual deficit or paydown the debt, as proposed in the new Republican "Pledge to America."

No, no you can do all that and fight two wars, silly Dux.

Neither can you reduce the debt by increasing taxes and increasing spending like Obama and his liberal/socialist buddies want to do

Obama's current goal is not to reduce the debt. He was upfront about his goal from the beginning: managing economic crisis.

It requires a bit of a different strategy than does debt reduction. Really.

Reducing the debt is a lot like reducing the US dependence on foreign oil. Folks from all sides of the aisle talk a good game until they get elected then it's porky, pork time for their district. More Fed $ coming to their district is great to get them re-elected... sucks for the nation as a whole. I always admired McCain for keeping his nose out of the barrel. I think it'll be interesting to see what Miller does in Alaska. I predict the equivalent of "bridges to nowhere" but I'm more then willing to be surprised.

Absolutely.

In the short term, the priority was preventing a further recession/depression. Most economist shared the opinion that deficit reduction had to be temporarily put aside, while disagreeing on the specifics of a ""stimulus" (conservatives wanted more "trickle down" tax cuts instead of spending).

And in the long term, many recognize that economic growth will depend on a new strategy and not just restoring an old economy.... in large part on investing in innovation and being a leader in developing and advancing new technologies...ie, national broadband network, clean/renewable energy technologies - the next global industry in which the US has already fallen behind, cutting-edge health technologies, etc.

You have to spend money (govt investment) to make money....govt investment in emerging businesses/industries has always been the norm....from the industrial revolution, the creation of the railways in the 19th century to the aerospace industry and the computer age of the 20th century.

And, most also accept the value of investing in people.... that government has a viable role in providing a temporary safety net for those who, for short periods of time, have fallen through the cracks.

I gave the example of government farm subsidies. Cut them. A carry over from the 1930's when the nature of farming was very different than today. A program that subsidies a selected few at the expense of not only tax payers but to the people in third world nations trying to develop their own farming economies.

I gave a specific example of the problems with the GM bailout. Over the course of many posts I have given many other specific examples as well. Here is another odd government expenditure, according to this cite we subsidize tobacco, $944 million between 1995-2009.

United States Tobacco Subsidies || EWG Farm Subsidy Database

If there are misconceptions, isn't that what this board is all about - people post their views/beliefs/information and others present opposing views/beliefs/information? Just saying I am wrong or that I want people to starve - is pointless, don't you agree?

ace...the misconception to which I referred was the baseless notion that govt social safety net programs create a cycle of dependence (paraphrasing your remarks). It is one of those libertarian talking points based on anecdotes (welfare queens) not supported by the facts.

Spoke truthfully about business cycles and the underlying strength and resiliency of our economy. Confidence levels are not improving, there is a reason for this, and it has nothing to do with Bush.

Consumer, Business Confidence Both Weaken - ABC News

Ace, I still havent seen anything from you or dogzilla in the way of specifics in how you can cut spending AND cut taxes w/o having an adverse short-term economic impact.

Or how long term investment (govt spending) on R&D and supporting the development of emerging technologies is bad for the economy.

Libertarian talking points that have never proven successful anywhere, at any time, do not represent a strategy for deficit reduction or economic growth.

This is a fact?

First, reducing spending has nothing to do with tax rates. What we need to be concerned about are tax dollars collected. We need to cut spending regardless of the tax rate.

Second, our debt is so large at this point economic growth is the only thing that will eliminate it. We need to grow the taxable income base of our nation. Putting it bluntly, we need to create more billionaires - people who start with an idea and turn it into world changing products and services. Supply side stuff. Along the way, they pay a hell of a lot in taxes, and carry a lot of people along with them. Supply Side, Supply Side, Supply Side.

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Give a post number or link. You think I said it, prove it.

Why make stuff up? I want to starve people and now some make believe about welfare queens??? Where did that come from?