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  1. #81

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    Quote Originally Posted by Jonnyboy View Post
    The central bank lends money to banks, who in turn lend out to businesses and consumers; thus, any interest rate changes which occur as a result of this theoretical decrease in savings will be offset (these new monies take the place of the lost savings). You are correct in your assumption that, in the long run, this will lead to inflation. Monetary policy will in the short run stimulate the economy, but in the long run production will return to its 'natural level'.
    I am still having trouble understanding this.

    I thought the money being borrowed/lent was a "pull" system (for lack of better wording). You can't lend money to people/banks, that don't want to borrow, right? I suppose you can lower the interest rate to entice people to borrow more with a lower interest rate, but if it's already at rock-bottom, what options are left?

    Accept the past. Live for the present. Look forward to the future.
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  2. #82
    resonance entropie's Avatar
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    Think the premise already needs fine-tuning. Banks dont lend money, they earn money.

    I've seen a good movie lately, its partly english partly german, if you are intrested here is the link:

    [YOUTUBE="http://www.youtube.com/watch?v=0kmGfu8qB0o"].[/YOUTUBE]
    [URL]https://www.youtube.com/watch?v=tEBvftJUwDw&t=0s[/URL]

  3. #83
    pathwise dependent FDG's Avatar
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    Quote Originally Posted by pure_mercury View Post
    There are a couple of elements to recommend this step. First of all, taxing income is, by definition, not the best way to encourage growth (i.e., the better you do economically, the more the government takes).
    Uhh yeah because consumption is just a small part of GDP, right? So we can tax that without potential recessionary troubles? O_o

    I propose a more radical solution: no taxes, a relatively minimal goverment financed only by budget deficits i.e. by borrowing a constant amount of money and rolling it over. It does have a minimal distortionary effect in terms of investment i.e. it will surely drive interest rates up, but at least you're not targeting taxes towards the part of the population with the maximum consuption-to-income ratio.

    A land value tax system would probably be the least market-distorting, but I have some doubts that such a system could be implemented smoothly at the federal level. I do support a citizens' dividend when the tax authority takes in more than the government's expenditure and debt servicing, as well.
    LVT isn't "probably" the least market-distorting, it is the only tax which is completely non-market-distorting, because the supply of land is fixed.
    ENTj 7-3-8 sx/sp

  4. #84
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    Quote Originally Posted by pure_mercury View Post
    Get rid of income taxes entirely and move to consumption-based taxation, excise taxes, a flat carbon tax, and user fees.
    That would be a great way to allow the super rich who inherited unearned wealth to accumulate even more wealth without having to produce anything in return.

  5. #85
    null Jonny's Avatar
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    Quote Originally Posted by ygolo View Post
    I am still having trouble understanding this.

    I thought the money being borrowed/lent was a "pull" system (for lack of better wording). You can't lend money to people/banks, that don't want to borrow, right? I suppose you can lower the interest rate to entice people to borrow more with a lower interest rate, but if it's already at rock-bottom, what options are left?
    You are correct, but this is regarding any changes which might take place as a result of decreased savings by the rich. This is based only on the assumption that taxes are increased on the very wealthy, their savings drops by an amount X, and as a consequence of X being so large, interest rates stand to increase as a result. Monetary policy may be used to counteract the effects that decrease in savings has on interest rates.
    [SIGPIC][/SIGPIC]

  6. #86
    Senior Member wildcat's Avatar
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    Quote Originally Posted by pure_mercury View Post
    Uhhhh. . . yeah. Sarah Palin? I'd like to see the clip of her advocating cutting ALL corporate subsidies, cutting defense significantly, and moving to a consumption tax rather than an income tax. Or are you just tripping on mushrooms and typing online again?
    It has rained for 28 hours, but I have not seen any mushrooms.
    Sit tight. I shall keep you informed of the situation.

  7. #87
    Senior Member Survive & Stay Free's Avatar
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    To be honest attacking the welfare system is not because its unsustainable or unaffordable, without increases in taxes but probably with a little restructuring the present public revenue could probably provide more generous benefits to all than it actually does.

    Its about norms and some people dont want benefits to be paid out whether they're affordable or not, suggesting they're unaffordable allows them to side step that issue, they can play the nice guy and say, well, we'd really like to but we simply cant, we're broke instead of, well, I dont think anyone should be entitled to anything, whether there's more than enough to go around or not.

  8. #88
    Senior Member MoneyTick's Avatar
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    That old debt ceiling jabber sickens me. Come on - they've already raised it eleven times in the past decade! Let them keep raising it another twenty until they look like ridiculous fools. They were having the same debate in 1979; that same fiery and controversial bulshiteering from the congressional theater of real-world drama is in re-play session. It doesn't mean a thing.

    The US Government has breached the 100% debt-GDP level, our deficit is worse than Greece (however, it bears less weight since we can yield higher growth), and it will take a decade or more just to pay the interest on our debt.

    We're still treading water only because of our world currency prerogative.

    However, the low-profile transaction Bill Gross initiated to short sell treasuries means a double dip is on the horizon. Thank goodness for short-selling! I can't wait to make some money off the harvest of barren regrets these fools in congress are cultivating. Another round of Zimbabwe style QE3 chemotherapy from Doctor Bernanke, and commodity prices will be on a rocket to space.
    got chaos?

  9. #89
    Order Now! pure_mercury's Avatar
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    And how is that, exactly? Because of the lack of an estate tax or an income tax? More importantly: why should that matter? Encouraging wealthy people to save and reinvest in the economy isn't the worst thing in the world, you know.
    Who wants to try a bottle of merc's "Extroversion Olive Oil?"

  10. #90
    Order Now! pure_mercury's Avatar
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    Quote Originally Posted by FDG View Post
    Uhh yeah because consumption is just a small part of GDP, right? So we can tax that without potential recessionary troubles? O_o
    I'd still cut government spending a good amount, and target for neutral or slightly lower tax revenues. I don't see how you could expect it would be any worse than our current income tax system.


    I propose a more radical solution: no taxes, a relatively minimal goverment financed only by budget deficits i.e. by borrowing a constant amount of money and rolling it over. It does have a minimal distortionary effect in terms of investment i.e. it will surely drive interest rates up, but at least you're not targeting taxes towards the part of the population with the maximum consuption-to-income ratio.
    If it were possible, I'd end taxation and have a night watchman state, too. That will not be on the table for these debt ceiling negotiations.


    LVT isn't "probably" the least market-distorting, it is the only tax which is completely non-market-distorting, because the supply of land is fixed.
    I would tend to agree, but I would want to see an LVT/Single Tax in action at a decently-sized level (like a big state) for a while before I'd feel completely comfortable making such a proclamation.
    Who wants to try a bottle of merc's "Extroversion Olive Oil?"

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