What ever happen to "Trickle Up Economy"?

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Does trickle down economy work now? Where the proof? What they say about those who don`t remember history.Are we going let these republicans take us over the "Cliff Again"?? We need to start a grassroot public bank,like yesterday.

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tayl44
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Clearly the repugs are still living in the fantasy land of tax cut and spend. Rewriting history is what they always do. But you have to see the beauty of it. Reagan passed the greatest tax increase in history, but they don't count that either because it was a payroll tax. Not an income tax, at least not on dividends and capital gains. The flip side is that deficits caused by Reagan don't count either because that was for military boondoggles and high end tax cuts.

Nothing will make a repugs head explode faster than showing them how to a ledger sheet. In their twisted heads, somehow the money borrowed from social security is income but the money paid out to social security is a giveaway. Hence all the right wing policies that allow the looting of employee paid pension plans. Of course that is the same voodoo accounting practices that caused Enron, S&L Scandal and the more recent Wall Street meltdown.

All that said, Obama is buying into it as well.

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babbaramma
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Apr. 6, 2010 5:21 pm

As far as I can tell, the Republicans are standing firm on ending/reducing deficit spending and so will not all extension in unemployment benefit payments or stimulus spending. Of course they will suggest tax cuts, when that has been proven to be a loser because providing an unemployment benefit extension results in $1.62 returning to the economy whereas tax cuts get hoarded because working people must spend their income, unemployment benefit, whereas wealthy people generally have a large reserve to survive on and can scale back their spending as most is discretionary.

Fundamentally, what is more important than simply returning to an unsustainable economy, that was based on speculation and spending today what one will earn tomorrow, is to change it to be sustainable. This means that it must not rely on credit to the degree it did, as the growth was due primarily to credit spending, and promote self financing and regulatorily end speculation in the markets and remove investor protections to help rationalize markets.

To simply get the economy running again without fundamental changes will result in more frequent and deeper recessions as the human animal has no capacity for delusion and irrational exuberence.

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jeffbiss
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Jul. 31, 2007 3:01 pm

There was a segment on Nova a couple of weeks back that asked students to trade a fictional stock, knowing that at a predetermined future cut-off point, that stock would be worth $0. I think all the test subjects continued to trade the stock past the point where they could "get out" before it became $0.

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m1jelke
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Jul. 31, 2007 3:01 pm

The only way you can start a "trickle",is have a souce to tricke from.The have-nots need to put their "2 cents" together to start the souce(public bank) the trickle up can be 0% loans(non-profit) Some of the trickle up can give us political power,then we can get some trickle down tax money. We need trickle up,to get trickle down.Sound "logical"?

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tayl44
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Jul. 31, 2007 3:01 pm

Jeff, the $1.62 is a very bad misnomer. I wish the left would stop using it. In reality it is only one step above a tax cut.The better approach would have been to put all the ARRA into infastructure, broadban and green energy technology.

Lets face it, the first "stimulus check" came before Bush left office, so we have been at this for over 2 years. You cannot simply give money away in the form of tax cuts or stimulus spending with no plan and expect things to turn around. The ARRA was mostly tax cuts we did not need with some infastructure and seed money. It kept the states afloat which was good but other than that I don't see much return on investment.

We need real investment in infastructure and green technology, not more stop gap stimulus and capitol gains tax cuts.

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babbaramma
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Apr. 6, 2010 5:21 pm

The real economy has been outsourced. Stimulous checks stimulated Chinese production. Mine stimulated a Chinese computer manufacturer. It gave employment to Chinese workers.

The only thing left is infrastructure spending or developing new technologies. Renewable energies could be a foundation for that.

There is always the option to repudiate our trade agreements and membership in the WTO...and bring manufacturing back home with tax policy that once again makes outsourcing unprofitable.. That's probably politically impossible. There are "special interests" to consider...though what makes their interests more "special" than the interests of the American people has yet to be explained satisfactorily to me..

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 3:01 pm

Yep that is pretty much the gist of it.

"Stimulous checks stimulated Chinese production. Mine stimulated a Chinese computer manufacturer. It gave employment to Chinese workers".-PC2

"The U.S. trade deficit expanded in May to its highest level in 18 months, rising 4.8 percent to $42.3 billion, the U.S. Commerce Department reported Tuesday.

The monthly trade deficit with China alone jumped $3 billion, to $22 billion, a figure that manufacturing groups said showed that a focus on exports alone was insufficient"-By Howard Schneider
http://voices.washingtonpost.com/economy-watch/2010/07/us_exports_up_but_higher_impor.html

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babbaramma
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Apr. 6, 2010 5:21 pm
Jeff, the $1.62 is a very bad misnomer. I wish the left would stop using it. In reality it is only one step above a tax cut.

It's not a misnomer. It is what it is. Unemployment insurance benefit payouts are payouts. The point is in the difference in result between tax cuts for the wealthy and unemployment insurance benefits as I stated in post #2. That's simply a fact.

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jeffbiss
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Jul. 31, 2007 3:01 pm

Polycarp2,you hit the problem right on.The problem of special interest not liking us(the people) making our own "stuff",is no problem.The problem is P.R.,we(most of us) know the economic kings are bankrupt in every way you can see them.A good PR plan showing how to bring back the real economy(Poly you know already,Public Bank) can get the trickle up economy going.We need to become the "special interests",controling our money,we will. While controling our money,we put the other "special interests" out of busness.We get two birds with one stone. We need "Good PR".Progressive Media where you? We have the"Solution",start spreading the "Word".Control our Money with Grassroots Public Banking.

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tayl44
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Jul. 31, 2007 3:01 pm

The problem is the fractional-reserve banking systemin which more money is owed than is ever in circulation.

Currently we have $38 trillion in the economy. $10 trillion from before and $28 trillion due to the "stimulus" however the debt is $1.5 quadrillion that we as Americans "owe" the Federal-Reserve with interest and penelties. Our state and federal income taxes go to just service the interest on the debt and does nothing to build roads, fund firefighters, or anything else in the public interest.

The 16th Amendment was improperly ratified hence un-Constitutional.

16th Amendment improperly ratified.‏

This is my absolute favorite anti-income-tax argument. Most claims that Americans aren't required to pay income tax rely on legal interpretations so tortured only a tax resister could possibly believe them. But the Ohio thing has just enough plausibility to give even sane people pause.
It all started when Ohio was preparing to celebrate the 150th anniversary of its admission to the Union in 1953. Researchers looking for the original statehood documents discovered there'd been a little oversight. While Congress had approved Ohio's boundaries and constitution, it had never passed a resolution formally admitting the future land of the Buckeyes. Technically, therefore, Ohio was not a state.
Predictably, when this came to light it was the subject of much merriment. One senator joshingly suggested that his colleagues from Ohio were drawing federal paychecks under false pretenses.
But Ohio congressman George Bender thought it was no laughing matter. He introduced a bill in Congress to admit Ohio to the Union retroactive to March 1, 1803. At a special session at the old state capital in Chillicothe the Ohio state legislature approved a new petition for statehood that was delivered to Washington on horseback. Congress subsequently passed a joint resolution, and President Eisenhower, after a few more jokes, signed it on August 7, 1953.
But then the tax resisters got to work. They argued that since Ohio wasn't officially a state until 1953, its ratification of the 16th Amendment in 1911 was invalid, and thus Congress had no authority to enact an income tax.
Baloney, argued rational folk. A sufficient number of states voted for ratification even if you don't count Ohio.
OK, said the resisters, but the proposed amendment had been introduced to Congress by the administration of William H. Taft. Taft had been born in Cincinnati, Ohio, in 1857. The Constitution requires that presidents be natural-born citizens of the United States. Since Ohio was not a state in 1857, Taft was not a natural-born citizen, could not legally be president, and could not legally introduce the 16th Amendment. (Presumably one would also have problems with anything done by presidents Grant, Hayes, Garfield, B. Harrison, McKinley, and Harding, who were also born in Ohio.)
Get off it, the rationalists replied. The 1953 resolution retroactively admitted Ohio as of 1803, thereby rendering all subsequent events copacetic.
Uh-uh, said the resisters. The constitution says the Congress shall make no ex post facto law. That means no retroactive admissions to statehood.
Uh, we'll get back to you on that, said the rationalists.
A call to the IRS elicited the following official statement: "The courts have . . . rejected claims that the Sixteenth Amendment . . . was not properly ratified. . . . In Porth v. Brodrick, 214 F.2d 925 (10th Circuit 1954), the court dismissed an attack on the Sixteenth Amendment as being 'clearly unsubstantial and without merit,' as well as 'far fetched and frivolous.'"
Just one problem. The Porth decision didn't specifically address the Ohio argument. It just sort of spluttered that attacks on the 16th Amendment were stupid.
OK, they're stupid. But great matters have turned on seemingly sillier points of law. It's not like the Ohio argument couldn't have been defeated on the merits. One suspects that from a legal standpoint "ex post facto" doesn't mean exactly the same thing as "retroactive." And of course the weight of 150 years of history, during which time everyone thought Ohio had been properly admitted, ought to count for something.
I'm not defending the crackpots. But if you're a parent you recognize that "because I said so" isn't much of an argument. Guess it's different if you're a judge.

Watch the Money Masters to see how fractional-reserve banking is the root cause of recession, Depression, and homelessness then feel free to spread it around.

The Money Masters.

http://video.google.com/videoplay?docid=-515319560256183936&q=The+money+changers&ei=Zd4QSMjvB47YqAKQtJmzBA

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Volitzer
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Jul. 31, 2007 3:01 pm

Volitzer wrote: The problem is the fractional-reserve banking systemin which more money is owed than is ever in circulation.

poly replies:Well, the system is abused by the banking industry. Fractional reserve has to be tied to productive output....enough to buy new production....have some tangible goods to back up the creation of money out of thin air by fractional reserve banking.

It has an inherent structural flaw.

The flaw is:: $40,000 grand to equal a car is great. Money/goods in balance.. However, money isn't created to pay the interest. Ultimately, there becomes a shortfall of money in the economy. from the interest extractions.

Trillions thrown at Banks and Wall St. aren't inflationary....the money is absorbed by financial paper and ends up in private, not-spent accounts. They are withdrawls from the real economy. That's why even with the trillions poured into banks and Wall St. by the Fed, there is no inflation....instead, we have deflation.

The Defense Budget is highly inflationary. A lot of money thrown into the economy without a corresponding increase in consumer goods to absorb it. We should be in a period of inflation rather than deflation...that is worrisome. It's a signal the economy is in much worse shape than is being recognized.

Money is merely a director of real capital (like a factory) to produce goods or create more capital..., another factory. Fractional reserve banking performs a useful function when it focuses on that.. It directs real capital to produce....to create additional real wealth to back up the loan.

Banks, operated as public utilities...providing money to direct capital to produce, wouldn't have near the problems we have today...while utilizing fractional reserve banking. at a lower level. A level that corresponded to the productive elements of the economy and interest rates just high enough to cover their expenses....wages, etc. Interest would be spent...rather than being withdrawn from the economy and plowed into financial paper.

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 3:01 pm

I agree,banks isn`t the root cause of boom and bust cycles.But they sure don`t help the situation.They can and do play the economy,as we know to their advantage. Taxes is no problem,if the government is "OK". $1.5 quadrillion is lot of money,i wonder who`s going to pay it back? Not me,i don`t believe in paying "ponzi debt". I`m ready to support a grassroot public bank printing money.

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tayl44
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Jul. 31, 2007 3:01 pm

Banks/wall street greed and regulatory captrue are the root cause of the problem. The repeal of glass/steagle and the CFMA have given the banks power over commoditiy prices, credit card rates and lending. The 2005 Bankruptcy Reform Bill eliminated all consumer protections from the bank and Wall Street price manipulation.

As examples of the CFMA look at what happened in CA with Enron, or more recently with food prices and $140 oil. Those are the results of the CFMA and regulatory capture. Banks and Wall Street have been incentivized to create pricing bubbles and then deflate them. They make money in both directions leaving the consumer and tax payer holding the bag for ballance.

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babbaramma
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Apr. 6, 2010 5:21 pm
Quote tayl44:

I agree,banks isn`t the root cause of boom and bust cycles.But they sure don`t help the situation.They can and do play the economy,as we know to their advantage. Taxes is no problem,if the government is "OK". $1.5 quadrillion is lot of money,i wonder who`s going to pay it back? Not me,i don`t believe in paying "ponzi debt". I`m ready to support a grassroot public bank printing money.

The U.S. has one. The state-owned Bank of N. Dakota. Like all banks, it doesn't "print" money. It just creates it with an accounting entry. as a loan. The bank enables the state to be self-financing. N. Dakota has its biggest budget surplus in history...while the rest are plunging into insolvency.

It doesn't participate in Wall St. ponzi schemes..It was created nearly a century ago as a response to private banks ripping off the people of the state...and was capitalized with tax receipts. Tax revenues are still deposited in the state bank.

Retired Monk - "dIeology is a disease"

polycarp2
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Jul. 31, 2007 3:01 pm

I agree,banks/wall st/economic kings is a big problem.The real problem is "capitalism". It has made money a "God". Hell is waiting for those that belive in false Gods.(I mean Hell on earth) Trade is ok,but trade only for profit,we have problems.Boom & busts and then banks and the then governments.We don`t get the root,problem not solve.

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tayl44
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The other way we're subsidizing Walmart...

Most of us know how taxpayers subsidize Walmart's low wages with billions of dollars in Medicaid, food stamps, and other financial assistance for workers. But, did you know that we're also subsidizing the retail giant by paying the cost of their environmental destruction.

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