The consumption of the rich does create jobs, true, but the consumption of the non-rich creates even more, because the non-rich spend a larger portion of their income. So, contrary to what you say, taxation that redistributes income does help the economy. The rich don't spend enough.
Sure they do. But if you double the income of someone who already has everything they need and most of what they want, their spending won't go anywhere near double. Double the income of someone in the middle/working class, sure, they too may save a little more but they'll surely spend a much greater percentage of their extra income than those who already can buy pretty much all they want.
[RANT ON]How does restoring the roaring 90s tax levels for the rich and relatively wealthy (I include myself in that category) translate into "oblivion?" A little further back in the thread someone else commented on their dad thriving in those wonderful post war 50s when the US was booming. Take a look at the marginal rates back then. Far from getting trashed, it seems to me that the rich have been elevated to a protected minority over the last three decades. Cut their taxes to the bone. Deregulate them so they can stick it to us with a sneer. Bail them out when they screw up.
We tried that. Some folks got those wonderful stimulus checks from the US govt. Then the pundits lamented that a lot of those nice folks paid down CC debt and didn't buy "stuff" so it didn't really work.
The middle class can't carry our economy back from the brink. The US has lived off of consumption from the middle class for 2-3 generations. Throw in tight credit for everyone and they can't even overmax their credit cards anymore............
We know what happened. Explain how it was a "misuse" of capitalism? If anything, folks on the left usually maintain that it was "capitalism run amok" or "too much free market." Every one of these examples you cite had willing buyers and sellers. With the housing bubble, one could make a case that the excesses resulted in large part because government significantly reduced the need for at least one party in these transactions to exercise due diligence because their risks were being underwritten by taxpayers. Regarding the financial bailout, Washington has now shown the Big Boys that their bad deals will be made good by taxpayers. We can complain about all this, but it's not correct to blame capitalism when the problem clearly lies in the excesses born of "improvements" to capitalism.
I want these discussions out in the open. No one in the government should be putting behind-the-scenes pressure on S&P to delay or modify their reports. It's different if the government requests that a news outlet avoid publishing sensitive information to protect lives, sources, or intelligence methods. This is an attempt to change the behavior of a rating agency simply for political purposes. I'll bet we get no investigation.
That doesn't follow. Even if it did, it would not show that income redistribution does not create more consumption.
GregLee said:
"My" redistribution? I'm not proposing redistribution. I pointed out that an argument made above that unequal distribution had the good effect of increasing consumption and therefore jobs was incorrect, and actually, a more equal distribution would increase consumption. I am also not agreeing with, or opposing, the previous poster's assumption that increasing consumption would increase jobs. You can't necessarily infer my views from the arguments I criticize. On occasion, I may even oppose an argument for a position I favor (on other grounds).
[RANT ON]How does restoring the roaring 90s tax levels for the rich and relatively wealthy (I include myself in that category) translate into "oblivion?" A little further back in the thread someone else commented on their dad thriving in those wonderful post war 50s when the US was booming. Take a look at the marginal rates back then. Far from getting trashed, it seems to me that the rich have been elevated to a protected minority over the last three decades. Cut their taxes to the bone. Deregulate them so they can stick it to us with a sneer. Bail them out when they screw up.
The disgraced CEO from BP gets to crawl away with a $1M/year pension. Goldman Sacks partners are swimming in bonuses. That's oblivion?[/RANT OFF] Have a nice day now
Let's tax the rich heavily, and give everyone a defined benefit plan..........wait, that WAS the 50's...........NM...........
Yes, but these transactions don't occur in a vacuum. If a "buyer" of these toxic assets could afford it and did so with full disclosures and understanding of what they were purchasing, AND if the failure of those toxic assets would not cumulatively wreck the economy or put taxpayers on the hook, I would agree completely that these are the consequences of "free market" transactions (at least if there was no fraud on the seller's part). People who choose to gamble must understand and accept that they may lose. The problem here is that when they gamble and lose, almost all of us are forced to lose with them even if we didn't gamble ourselves.
I think it's fair to say that we didn't "'quarantine' the negative impact of reckless borrowing, lending or speculating", in fact the government backing of Fannie and Freddie and the government decision to bail out the profligate risk-takers (AIG, etc) did exactly the opposite. That's a lot different from saying we couldn't do a lot to insulate society as a whole from these risks and to reduce the incentives for taking the risks in the first place. Step one: Stop subsidizing the risk takers with taxpayer money. Step two: Enforce the laws and lock up white-collar criminals who break them. Step 3: Too big to fail: Either limit the size of companies or institute meaningful (e.g. intrusive) government oversight of TBTF players and force payment into a fund big enough to clean up the messes.
Fannie and Freddie actually had tighter standards than the crap being written by mortgage brokers, clamored for by Wall Street, then packaged as AAA when it was really junk, which was pencil-whipped by Moody's and S&P, so the pig would have lipstick, which then was sold to people who didn't understand that AAA really wasn't...
Of course, so much money was being made that even Fannie and Freddie joined the subprime party. And, so much money was being made that clearer heads never prevailed...
Alan Greenspan himself remarked how surprised he was that the market didn't self-regulate.
As for the "bail-outs", the cascading bankruptcies that would have taken place without them would have been cold comfort.
Since everyone had a hand in it, no one deserves to feel much righteous indignation, either over the Great Recession, or the financial shape we're in as a country. Since neither side wants to reach an agreement at the expense of losing power, or, gasp, arrgh, compromise, we have the current situation.
