Money versus Money

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Been on here a couple days and I see an interesting trend in the commentary.

Money when owned by people is Evil, Money given to the government is Benevolent

Money earned from inevesting is Evil, Money earned from labor honorable

Money cant fix things if owned by people, but if the government takes it from the people or prints more the problems go away

People who pay taxes are asking for spending restraint, people who pay no taxes demand more free services & benefits

Why is that money held by people and used for their interest is worthless and evil and money taken by government can solve EVERYTHING?

Social Security is broke - Answer? Take more money from the people

Education system stinks - Answer? Take more money in taxes, pay teachers more (never mind that we had higher test scores when Dept of Ed had a $32B budget vice the $70B budget today)

401k's have postiive returns over 30 years - public sector union pensions are broke, but if the greedy rich just paid more they could fix that too

sheep4thom's picture
sheep4thom
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Jul. 26, 2012 1:36 pm

Comments

You can X my l*l if you believe I'm stupid enough to put my retirement into the private sector, the stock market, or any other shell game.

Especially considering that the US Justice dept. is just around the corner, coming for you manchurian americans that stole this country blind.

anonymous green
Joined:
Jan. 5, 2012 10:47 am

How interesting to hear what you have "learned." Where do you find the sources of this learning? Which posts? Do you appreciate why the money earned by the creation of real value in products or services is not the same as the money made my the financial manipulation of money? There is a lot of confusion about money, particularly on the Right. There is the brilliantly stupid idea that everything can be priced and that the natural law of the free market will sort it all out. In that world, Money is very much like the Holy Spirit in its authority. Total BS.

David Graeber's DEBT tells us that money is always the product of a great crime. When one is bought and taken from one's human context to serve the commercial needs of another, a considerable part of one's humanity has been "enclosed."

Economists see money as the energy of the economy, like electricity on the grid or the blood flowing through the body. Money is what makes the economic system work by providing the energy, but not the substance of wealth creation. It is there for the exchange.

Anyway, I hope you think a lot more deeply about money than this stupid assertion that "we" supposedly think that "government" money is great but "private" money is bad. "We" think that a lot of government money is doing bad things, but youse guys love the war and corporate payoffs or you would join with us in stopping this bad use of money. We also think that Main St. and the Middle Class ought to have the money needed to run good local businesses and have sound communities. That money is just fine with us. You need to learn so much!

drc2
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Apr. 26, 2012 11:15 am

Some have never understood the function of money in an economy. Sucking it from Main Street for their own private little treasuries has always collapsed economies in the long run.

When Rome switched from abundant, cheap copper coins to more scarce gold ones...only a few could obtain the gold coins. it went downhill from then on. 1/3 of the population had to be put on the dole to prevent open revolt.

Not even enough gold coins left to pay the army. They were in the pockets of a few...just as our currency of today is..

That sort of thing never changes. Periodic collapses aren't anything new..

If you want to know your future, watch it unfold in Greece, ireland, Italy and Spain. The faster the Money Masters suck every last dime from their Main Streets, the quicker their demise.

Retired Monk - "Ideology is a disease".

polycarp2
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Jul. 31, 2007 3:01 pm

Maybe the 'distinction' being offered here is which entity gives more money 'to the people'--government, or banks?

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Kerry
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Jul. 31, 2007 3:01 pm

Where does money come from? Simple questiion. When a bank puts money in your account in the form of a loan where do they get that money? Is there 700 trillion dollars worth of gold in Fort Knox to back up the money that's in circulation?

Banks create money out of thin air and profit off of it. That's the heartbeat of Capitalism. Everyone seems to be ok with that. However, let the government create money out of thin and and not profit from it and the conservatives and many liberals go balistic.

The whole point of a fiat system is to keep an economy strong. There is no need for anyone to suffer because of a lack of money.

Bush_Wacker's picture
Bush_Wacker
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Jun. 25, 2011 6:53 am

So, Bush_Wacker, are you saying that government gives more 'money to the people' than banks? If government can operate on a 'fiat system', why doesn't it just make up the money as it goes along--why does it actually have to 'tax the people' to get it?

Maybe you haven't figured out that, nowadays, government and banks are on the same side--and 'the people' become 'the sheeple' because of it....

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Kerry
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Jul. 31, 2007 3:01 pm

I agree Kerry. I was trying to make a point in response to the OP. Actually the government does make up the money as it goes along or we wouldn't have the national debt that keeps track of it. The national debt is just a statement showing what the government has spent. Taxes are used as an economy control valve. It is supposed to keep the super rich from eventually owning everything. If you don't force people to give up some of what they've got then there would come a time where one person would own everything. Through the use of loopholes and lower taxes on the rich we are getting closer and closer to that point in time.

Bush_Wacker's picture
Bush_Wacker
Joined:
Jun. 25, 2011 6:53 am
Quote sheep4thom:

401k's have postiive returns over 30 years - public sector union pensions are broke

Wow. Where to begin?

First: bullshit.

Second: How's your stock in Woolworth these days?

August 30, 1982

Allied Chemical

General Electric Company

Owens-Illinois Glass

Aluminum Company of America

General Foods

Procter & Gamble Company

American Can

General Motors Corporation

Sears Roebuck & Company

American Express Company *

Goodyear

Standard Oil of California

American Telephone and Telegraph Company

Inco

Texaco Incorporated

American Tobacco B

International Business Machines

Union Carbide

Bethlehem Steel

International Harvester

United Technologies Corporation

E. I. du Pont de Nemours and Company

International Paper Company

U.S. Steel

Eastman Kodak Company

Merck & Co., Inc.

Westinghouse Electric

Exxon Corporation

Minnesota Mining & Manufacturing

Woolworth

http://en.wikipedia.org/wiki/Historical_components_of_the_Dow_Jones_Indu...

chilidog
Joined:
Jul. 31, 2007 3:01 pm
Quote Bush_Wacker:

It is supposed to keep the super rich from eventually owning everything.

Hasn't done a very good job of it, lately, has it?

I don't think that it is coincidental that the Constitutional Amendment that allowed direct taxation of the people passed in the same year that the Federal Reserve banking system was created. And, when the middle men (in banking and government) can figure out how they can 'make (and adjust) the house rules' in that gamble to divert more and more money to themselves (directly or indirectly)....at the expense of the taxpayer and 'the people'.....then I believe you have 'the system' that we have now for 'the sheeple'....

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Kerry
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Jul. 31, 2007 3:01 pm
Quote Kerry:
Quote Bush_Wacker:

It is supposed to keep the super rich from eventually owning everything.

Hasn't done a very good job of it, lately, has it?

I don't think that it is coincidental that the Constitutional Amendment that allowed direct taxation of the people passed in the same year that the Federal Reserve banking system was created. And, when the middle men (in banking and government) can figure out how they can 'make (and adjust) the house rules' in that gamble to divert more and more money to themselves (directly or indirectly)....at the expense of the taxpayer and 'the people'.....then I believe you have 'the system' that we have now for 'the sheeple'....

When politicians get together to keep lowering corporate taxes and taxes on the wealthy then no, it doesn't work very well. The politicians themselves are lackeys. They don't profit nearly as much as the people they represent. It's the "silent partners" who have the shit eating grin on their faces.

Bush_Wacker's picture
Bush_Wacker
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Jun. 25, 2011 6:53 am
Quote Bush_Wacker:

The politicians themselves are lackeys. They don't profit nearly as much as the people they represent.

Oh, don't kid yourself, the politicians that are making such decisions on the corporations' behalf are profiting quite handsomely.....or, do you think that they are making such 'decisions' as 'ideological purists'?....that scheme is just for 'the sheeple's' sake (in this case, the 'conservative sheeple's sake')....like both major parties basically serving as Tweedle Dee and Tweedle Dum for the corporatists' interests--with their little interplay between each other (as if 'liberal' and 'conservative' served as a difference in the real political manuvers going on today) more as a show for the sheeple than as any real incentive for political change at all...that's why Obamacare passed 'constitutionality' in the Supreme Court....and will still be there whoever is president and whichever party has Congress....it is a boon for the health care industry.....again, at the taxpaying consumers' added expense...

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Kerry
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Jul. 31, 2007 3:01 pm

Bullcrap back

You can begin here.


http://quicktake.morningstar.com/index/IndexCharts.aspx?Country=USA&Symbol=SPX

http://allfinancialmatters.com/wp-content/uploads/2011/01/SP-500-20-Year-Rolling-Period-Returns-1926-2010.pd
f

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Redwing
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Jun. 21, 2012 4:12 am
Quote Bush_Wacker:Banks create money out of thin air and profit off of it.
How so? Please explain in your own words, not link to some video or website.

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WorkerBee
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Apr. 28, 2012 11:22 am
Quote WorkerBee:
Quote Bush_Wacker:Banks create money out of thin air and profit off of it.
How so? Please explain in your own words, not link to some video or website.

When you go to the bank and borrow 10 thousand dollars they don't pull it out of a drawer that holds trillions of dollars for loaning to people. They add 10 thousand dollars to your balance sheet with a computer. You don't pay it back with key strokes on a computer. You have to either earn money to pay it back or sell something of value to pay it back. It's all transacted from bank to private entity in cyberspace. Not only do they loan you money that they do not have but you pay it back to them with interest.

The authority to do this comes from the Feds Central Bank. Which is of course married to the US Government. The only "real" thing that backs our currency is assets of worth and future labor. There isn't enough Gold on the planet to back the money and loans that are in circulation right now. Play monopoly sometime and see what you do when the bank runs out of money. In order to keep playing the game the rules state that the "banker" must print more money or the game is over. Everything shuts down.

That's why the bank bailout was a true punch in the gut. The taxpayers are on the hook for bailing out businesses that didn't really need a bailout. They create their own money. It's not a free for all because it all has to be approved and regulated by the Fed.

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Bush_Wacker
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Jun. 25, 2011 6:53 am

Where did that $10,000 come from?

Why do they pay interest on deposits?

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WorkerBee
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Apr. 28, 2012 11:22 am

The dogs of the Dow over the last 20 years returned +10.8%

Over 10 years the Dow has returned 7.4%

http://quicktake.morningstar.com/index/IndexCharts.aspx?Country=USA&Symbol=$INDU

Social Security now has a negative return. What is your point?

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sheep4thom
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Jul. 26, 2012 1:36 pm

My point with the post is if an individual saves, spends, and uses their own money to support whatever causes, charities, or business enterprise they choose its somehow evil. Its evil because money is just a thing. Its evil because they are doing it of their own free will. It must be regulated, controled, taxed, and punished. Money is fiction, it cannot fix anything.

However when it comes to the Government, money fixes EVERYTHING! Education sucks, give them more money. Urban democratic cities suck, give them more money. Didnt get your fair share, tax the rich and take their evil dirty money. When the government gives out money it seems to fix things. Besides I have heard a DOZEN or more say the government can just print endless supply of currency. If they can just print it then why does taxing the rich even matter? Why do you need to tak funds from the wealthy if the government has endless supply that is uneffected by inflation or international competition?

If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it. ~Ronald Reagan

sheep4thom's picture
sheep4thom
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Jul. 26, 2012 1:36 pm
Quote WorkerBee:

Where did that $10,000 come from?

Why do they pay interest on deposits?

What 10,000? I hereby give WorkerBee $10,000 dollars. It doesn't work because I'm not a bank. If I were a bank I would have just given you 10 grand. Now if you want to you can take cash money out of my bank because I have plenty in there from deposits but most people just write checks against their bank balance. In which case the bank reduces your balance with a computer and increases the store's balance that you wrote the check to. All done with a computer.

How do you think a credit card works? It's a piece of plastic. It is married to your name so that whenever you swipe it a computer transaction takes place. A computer put's that amount into the account of the store you use it in. You are still on the hook of course for the purchase and it's all kept track of with a computer. Have you noticed that nobody has actually had to use any real money with any of this? Try and pay it back to the bank with an e-mail. It won't work. They want real money in the form of a check or cash.

Most banks are allowed to loan out up to 10 times what they have in customer assets. If they have a ledger showing assets of 1 million in deposits then they are allowed to lend out up to 10 million dollars. They don't have 10 million dollars to lend out but they are allowed to make "transactions" with their computers. When the economy is rocking the Fed reduces that amount available for loan and raises the interest rates in order to slow down borrowing to help keep inflation in check. When the economy sucks the Fed raises the amount available for loan and reduces the interest rates in order to encourage borrowing to get the economy moving again.

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Bush_Wacker
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Jun. 25, 2011 6:53 am

The educational system is so bad that the U.S. has zero doctors, physicists, chemists, engineers, architects, lawyers, psychologists, nurses, artists, or even teachers. But we have plenty of accountants.

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Robindell
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Jul. 31, 2007 3:01 pm

As I've read now, corporations are sitting on 2 trillion dollars that they aren't spending. Why? Because there's no demand. Why isn't there demand? Because most middle class people are barely scraping by on their income that hasn't kept up with production--all those profits went to the wealthiest top 1% (who got wealthier).

Ravi Batra (the SMU economist that has been on Thom's show quite a bit) made that point a long time ago. Batra offers the theory that it is wealth disparity that creates recessions and depressions. And, it does so because the wealthiest don't make the products when the average consumer doesn't buy it. And, the average consumer doesn't buy it when they have no expendable income to buy it with--which is directly as a result of wealth disparity (when the richest own more and more of the wealth making others own less and less--despite any claim that there is no such thing as a 'zero sum game in the economy', there is when someone has to mind the store--and there always has been). And, now, our wealth disparity in America hasn't been this much in the modern era since the 1920's.

Can government correct that? Thom points this out a lot on his show. Government has corrected that before with tax incentives and regulations. Now, thanks to the premise that 'we' have a 'free (supposedly "unregulated") market', it has resulted in those 'making the house rules' (and, like any gambling establishment, there's always going to be 'house rules' in how the interchange of the market works) being able to acquire more for themselves as they dispense out less for everyone else--resulting in wealth disparity. But, can this government correct it? Certainly not if you think something like Obamacare is 'helping' correct it--making 40 million more Americans either purchase health insurance (or get offered 'government benefits as if a right to it'). It's like what the Green Party candidate, Dr. Jill Stein, said of Massachusett's Romneycare, it pits the very poor up against the not quite so poor--and it sucks out more money for the application of health care to boot. More money taken away for people to have less money to spend on other things....but, again, that's why Obamacare was seen as 'constitutional'--it is a boon for the health care industry....and no one is minding the store, otherwise....

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Kerry
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Jul. 31, 2007 3:01 pm

Corporations are sitting on money for a few reasons reasons.

They dont like Obama and not going to do him any favors.

Global demand is down

They are drowning in a regulatory sea of red tape

Trying ot deside what November brings.... Romney, turn on the spigots, ramp up production, create jobs. Obama re-elected, move to Cayman Islands to escape.

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sheep4thom
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Jul. 26, 2012 1:36 pm

If there was the demand, the corporations would be responding with the supply.....and, despite any claim against 'regulations', somebody, or something, always makes the 'house rules' when it comes to the interchange of the very abstraction that is money.....it just depends upon who is doing it--and why....there is no such thing as a market being 'free without rules (or regulations)'....there's always a policy or price tag to follow....or, if you want to see it another way, the only truly and completely 'free market' would be two traders making the decision on their exchange at the time of their trade and that doesn't happen on the scale that our economy has now (ever)--and only in some isolated barter systems does it happen at all.....

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Kerry
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Jul. 31, 2007 3:01 pm
Quote Bush_Wacker:
Quote WorkerBee:

Where did that $10,000 come from?

Why do they pay interest on deposits?

What 10,000? I hereby give WorkerBee $10,000 dollars. It doesn't work because I'm not a bank. If I were a bank I would have just given you 10 grand. Now if you want to you can take cash money out of my bank because I have plenty in there from deposits but most people just write checks against their bank balance. In which case the bank reduces your balance with a computer and increases the store's balance that you wrote the check to. All done with a computer.

How do you think a credit card works? It's a piece of plastic. It is married to your name so that whenever you swipe it a computer transaction takes place. A computer put's that amount into the account of the store you use it in. You are still on the hook of course for the purchase and it's all kept track of with a computer. Have you noticed that nobody has actually had to use any real money with any of this? Try and pay it back to the bank with an e-mail. It won't work. They want real money in the form of a check or cash.

Most banks are allowed to loan out up to 10 times what they have in customer assets. If they have a ledger showing assets of 1 million in deposits then they are allowed to lend out up to 10 million dollars. They don't have 10 million dollars to lend out but they are allowed to make "transactions" with their computers. When the economy is rocking the Fed reduces that amount available for loan and raises the interest rates in order to slow down borrowing to help keep inflation in check. When the economy sucks the Fed raises the amount available for loan and reduces the interest rates in order to encourage borrowing to get the economy moving again.

This is completely false.

A bank loans out money from deposits while holding a fraction of it in reserve for deposit transactions. It is not "created" by the bank, if they could simply make up money and loan it out why would they pay interest on deposits?

Furthermore they cannot loan out more then they have in deposit, not sure where you get this "ten times" nonsense from.

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WorkerBee
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Apr. 28, 2012 11:22 am

You can live in the land of abstact currency. I get your undergrad macroeconomics example of what you are trying to say. What I am telling you in the real world is that currency is global & fluid. When the fluidity of the dollar or credit for that matter stops, the economy stops. When you print more dollars (even in fractional banking) the relative value of that currency to other commodities and currencies around the world drops.

Next time you go to put gas in your car, which was up again this week, ask the gas station if you can print and them some of your abstract dollars? What is the exchange rate between Abstract Dollars and USD/Yen/Pound/Canadian Dollar?

I had some abstract dollars once, my daughter turned them in at Chuckie Cheese for some trinkets & toys.

sheep4thom's picture
sheep4thom
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Jul. 26, 2012 1:36 pm

I agree that the banksters and the oil privateers would rather not admit that the moderate reforms Obama represents need to be granted. They have weathered the storm of the Second Great Depression, and now they want their robot Manchurian, the Ken Doll of Wall St. to let them steal all the rest and get out of town before the jig is up. (Unintended, but embraced ironic Obama pun).

What has been amazing has been the self-delusion of the hubris intoxicated banksters about how other people see them and what they do and have done. There is literally, no shame. They really do feel unjustly demonized by their victims and wonder why anyone is getting upset at their business ethics. The Mob understood where the lines were drawn and how to maintain a criminal enterprise without creating an outrage that had to be stopped. What do they think happened in '08, and why are they so blind to the human consequences?

Brings to mind the French Aristocracy before their revolution. I am with Poly on revolution; but the fact about war and violence is always that it is the result of FAILING to do the Politics of Peace. It would always be cheaper and a whole lot less lethal to do this tough work of peacemaking instead of falling into the cowardly weak path of war. If only the aristocrats could find their humanity instead of acting out their privilege.

drc2
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Apr. 26, 2012 11:15 am
Quote sheep4thom:

What I am telling you in the real world is that currency is global & fluid. When the fluidity of the dollar or credit for that matter stops, the economy stops.

No one, or nothing that someone is tracking (and influencing), 'directs' such 'fluid and global currency', sheep4thom? Bullshit. I realize the fallacies behind fractional banking but, despite your subtle insults, I think you are mischaracterizing how 'fluidity and global' economics functions--especially directed by banks 'too big to fail'.....even when they 'direct it wrong'.....

By the way, just like 'printing money to overcome the recessive economy' doesn't work, how does 'inducing austerity to overcome the recessive economy' work? For those who claim this isn't a 'zero sum' game, where's the balance of production to money supply (which would happen if someone were minding the store)? Or, does 'fluidity in the global economy' cover that somehow? And, how does it?

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Kerry
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Jul. 31, 2007 3:01 pm

They vote with their money, just like consumers. Flush with cash and feeling good you spend. Nervous and unsure you sit on money.

Money = Speech & Corporations are people! (The investors, the retired living on pensions & dividends, the union pension that invests in corporation, the workers, and the unionized labor) All the people of a symbiotic corporation!

sheep4thom's picture
sheep4thom
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Jul. 26, 2012 1:36 pm
Quote drc2:

If only the aristocrats could find their humanity instead of acting out their privilege.

Their 'privilege' includes 'inducing war', drc2. Even if it involves a war with a 'stateless enemy' like the terrorists. Now, I know I'm not as smart as some here claim to be, but, in the conceptual wonderland this has become, what is the difference between a 'stateless enemy' and a 'criminal'? Also, how is a war 'declared by a state' ever going to 'defeat' a 'stateless enemy'? But, the concept of the 'war on terrorism' can be instilled any time the 'privileged elite' in government and corporations deem it so, can't it? In perpetuity.....that's probably the main reason why there will be no real reform--the reformers will just be more 'casualties in the war on terrorism'.....perhaps even Obama realizes that....and that's even if Obama ever considered himself a reformer....

Kerry's picture
Kerry
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Jul. 31, 2007 3:01 pm
Quote sheep4thom:

They vote with their money, just like consumers. Flush with cash and feeling good you spend. Nervous and unsure you sit on money.

Well, I have a problem equating 'money with votes'--but, let's let that go aside for now. The point in Batra's ideas behind wealth disparity is that most consumers aren't 'flush with cash'--which is why they aren't spending (and Obamacare will take even more from them).....and, why would the wealthiest really have a problem with that? They are sitting on more cash than they will ever need....and they make all the 'house rules', anyway.....

Since you apparently know more about the economy than I do, sheep4thom, can you explain the second part of my post:

By the way, just like 'printing money to overcome the recessive economy' doesn't work, how does 'inducing austerity to overcome the recessive economy' work? For those who claim this isn't a 'zero sum' game, where's the balance of production to money supply (which would happen if someone were minding the store)? Or, does 'fluidity in the global economy' cover that somehow? And, how does it?

Kerry's picture
Kerry
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Jul. 31, 2007 3:01 pm
Quote WorkerBee:
Quote Bush_Wacker:
Quote WorkerBee:

Where did that $10,000 come from?

Why do they pay interest on deposits?

What 10,000? I hereby give WorkerBee $10,000 dollars. It doesn't work because I'm not a bank. If I were a bank I would have just given you 10 grand. Now if you want to you can take cash money out of my bank because I have plenty in there from deposits but most people just write checks against their bank balance. In which case the bank reduces your balance with a computer and increases the store's balance that you wrote the check to. All done with a computer.

How do you think a credit card works? It's a piece of plastic. It is married to your name so that whenever you swipe it a computer transaction takes place. A computer put's that amount into the account of the store you use it in. You are still on the hook of course for the purchase and it's all kept track of with a computer. Have you noticed that nobody has actually had to use any real money with any of this? Try and pay it back to the bank with an e-mail. It won't work. They want real money in the form of a check or cash.

Most banks are allowed to loan out up to 10 times what they have in customer assets. If they have a ledger showing assets of 1 million in deposits then they are allowed to lend out up to 10 million dollars. They don't have 10 million dollars to lend out but they are allowed to make "transactions" with their computers. When the economy is rocking the Fed reduces that amount available for loan and raises the interest rates in order to slow down borrowing to help keep inflation in check. When the economy sucks the Fed raises the amount available for loan and reduces the interest rates in order to encourage borrowing to get the economy moving again.

This is completely false.

A bank loans out money from deposits while holding a fraction of it in reserve for deposit transactions. It is not "created" by the bank, if they could simply make up money and loan it out why would they pay interest on deposits?

Furthermore they cannot loan out more then they have in deposit, not sure where you get this "ten times" nonsense from.

As a simple example of how the fractional reserve system works, consider a scenario of only one bank, a reserve fraction of 10%, and an initial money supply of $1000 cash that is initially deposited at our bank. This can effectively be turned into $9954 through 50 successive loans and redeposits. This is achieved as follows. Only 10% of the original $1000 is required to be held as reserve for the deposit, and so the remaining $900 can be loaned out to a customer who will most likely exchange it with another person for some goods or services. That person will most likely in turn redeposit it in another account within our bank. As only 10% of this new deposit must be held in reserve, the remaining $810 may then be loaned out again and subsequently redeposited, and so on and so forth. If we end the series after 50 iterations, we find that we have $9954 now in existence within the money supply.

The only real cash involved here is the initial $1000 dollars. The rest is not going to exist until the borrowers create it through labor and then pay it back to the bank. Until then it doesn't exist.

http://en.wikipedia.org/wiki/Fractional-reserve_banking

Bush_Wacker's picture
Bush_Wacker
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Jun. 25, 2011 6:53 am

how does 'inducing austerity to overcome the recessive economy' work?

1. The government can easily operate at or below 20% of GDP and provide all necessary services

2. Reducing the amount of US dollars would increase the value relative to other currencies. Strong dollar draws investors, creates demand, and stops inflation. Consumers have more purchasing power for global goods because the dollar buys more. Great analogy in a century ago one gold coin bought a really good suit ($1 gold coin). Its now 2012, a 1 oz gold coin is worth $1600 and still buys you really good suit. So the point is the value of the gold relative to the suit is the same, the amount of dollars it costs to buy either is up dramatically!

3. Raise the interest rates. Cheap money helps nobody except the government if you are elderly living off CD's & Savings bonds you are getting less than 0% rate of return. Inflation is increasing faster the the 1.1-1.5% you earn on a CD. Contract the money, raise the rates, create a stronger dollar. Peoples savings would be worth more.

4. The weak dollar benefiting global exports is silly the trade deficeit is so great into the USA, that having a weak dollar doesnt help. Other countries just tariff & tax our good to make them non-competitive in their markets.

5. Practice trase resiprosity. If Japan limits US cars in their market, the US should set the same limit. If Colombia taxes or levies tariffs on US good, we should return the favor. If EU countries subsidize the workers and companies we should put a proporational tax on their goods to keep american workers and companies competitive. Not a trade war, but being far, both working to same rules. (please dont hit me about minimum wages and cheaper labor centers, that is a different debate).

6. Austerity limits the role of government. Health care was 20% of our economy. Now the feds can crowd out private investment, jobs, and companies. That money is now out of the private market on the government books. Financial system is largely run by & backed by government. GM is owned by feds. If austerity forces contraction in the government things that were once private can flourish again. Austerity and contraction of government also reduces the need to increase taxes and take from the consumers money they would otherwise spend on goods & services.

sheep4thom's picture
sheep4thom
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Jul. 26, 2012 1:36 pm

Bush_Wacker is right. That is how fractional reserve banking works. Now multiply that by 8000 banks and make the loans $100,000 and figure out how much money that will create.

Brookesmith
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Aug. 3, 2012 6:00 pm
Quote Bush_Wacker:As a simple example of how the fractional reserve system works, consider a scenario of only one bank, a reserve fraction of 10%, and an initial money supply of $1000 cash that is initially deposited at our bank. This can effectively be turned into $9954 through 50 successive loans and redeposits. This is achieved as follows. Only 10% of the original $1000 is required to be held as reserve for the deposit, and so the remaining $900 can be loaned out to a customer who will most likely exchange it with another person for some goods or services. That person will most likely in turn redeposit it in another account within our bank. As only 10% of this new deposit must be held in reserve, the remaining $810 may then be loaned out again and subsequently redeposited, and so on and so forth. If we end the series after 50 iterations, we find that we have $9954 now in existence within the money supply.

The only real cash involved here is the initial $1000 dollars. The rest is not going to exist until the borrowers create it through labor and then pay it back to the bank. Until then it doesn't exist.

http://en.wikipedia.org/wiki/Fractional-reserve_banking

I understand, but this is quite different then how you presented it.

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WorkerBee
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Apr. 28, 2012 11:22 am
Quote sheep4thom:

Austerity limits the role of government.

But, how does austerity increase demand? Especially if Batra is correct and what creates recessions and depressions is the disparity of wealth where many consumers don't have the expendable money to increase demand? How does austerity answer that? Or, do you disagree with Batra's assessment that wealth disparity creates recessions and depressions? If so, can you explain where it is you think that Batra is going wrong in that assessment--and can you come up with an explanation that does explain recessions and depressions? And, how does the practice of austerity remove that recessive or depressive economic component?

And, what is austerity to you other than 'spending within your means' (whether that is government or each individual consumer doing so)? And, once again, if the consumer doesn't have 'the means to spend', how does austerity answer that to improve any economic recession or depression?

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Kerry
Joined:
Jul. 31, 2007 3:01 pm

Because as austerity reduces the size and cost of government two things happen. The private economy can grow to fill the void as government contracts. This creates jobs and when people have more money they spend more and demand increases. The second component is that government needs to tax less to pay for its essential services, leaving people with more money to invest, start business, or buy products creating demand.

sheep4thom's picture
sheep4thom
Joined:
Jul. 26, 2012 1:36 pm
Quote sheep4thom:

Because as austerity reduces the size and cost of government two things happen. The private economy can grow to fill the void as government contracts.

But, by 'private economy', you are talking about corporations, they are already sitting on 2 trillion dollars that they aren't using because there is no demand. And, what do you mean by 'filling the void as government contracts'--does government paying for those contracts go against the very premise of austerity? How does that really work out?

Quote sheep4thom:

This creates jobs and when people have more money they spend more and demand increases.

Yes, when people have more money, they have a tendency to spend more money. That is the point--with respect to the increase in productivity that the American economy has generated, their pay hasn't gone up--so, they have less money despite it. And, that's because most of that wealth has gone to the wealthiest people--creating a wealth disparity that Batra says is the primary cause of all recessions and depressions in any economy. How austerity answers that, I am still not sure--especially this 'special form' of 'austerity' you are describing that includes 'government contracts'.....

Quote sheep4thom:

The second component is that government needs to tax less to pay for its essential services, leaving people with more money to invest, start business, or buy products creating demand.

Well, leaving people with more money to spend is, indeed, the point, isn't it? But, you don't think people taking more from the top to leave less at the bottom has anything to do with that? Again, Batra claims it is wealth disparity that creates all recessions and depressions--and we haven't had as great a wealth disparity as we have now since the 1920's. How do you 'leave more people with more money' if they don't have the money to begin with? And, if 2 trillion dollars (that the corporations are sitting on now because there's no demand) isn't 'enough money to invest, start business, or buy products', what is enough to you? 3 trillion? 4 trillion? Where are they going to get that money? From 'government contracts'? Or, 'from measures of austerity'? Or, 'out of thin air'......

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Kerry
Joined:
Jul. 31, 2007 3:01 pm
Quote WorkerBee:
Quote Bush_Wacker:As a simple example of how the fractional reserve system works, consider a scenario of only one bank, a reserve fraction of 10%, and an initial money supply of $1000 cash that is initially deposited at our bank. This can effectively be turned into $9954 through 50 successive loans and redeposits. This is achieved as follows. Only 10% of the original $1000 is required to be held as reserve for the deposit, and so the remaining $900 can be loaned out to a customer who will most likely exchange it with another person for some goods or services. That person will most likely in turn redeposit it in another account within our bank. As only 10% of this new deposit must be held in reserve, the remaining $810 may then be loaned out again and subsequently redeposited, and so on and so forth. If we end the series after 50 iterations, we find that we have $9954 now in existence within the money supply.

The only real cash involved here is the initial $1000 dollars. The rest is not going to exist until the borrowers create it through labor and then pay it back to the bank. Until then it doesn't exist.

http://en.wikipedia.org/wiki/Fractional-reserve_banking

I understand, but this is quite different then how you presented it.

My apologies. Sometimes weird things happen to my thoughts on the way from my brain to my fingertips.

Bush_Wacker's picture
Bush_Wacker
Joined:
Jun. 25, 2011 6:53 am

First point - But, by 'private economy', you are talking about corporations, they are already sitting on 2 trillion dollars that they aren't using because there is no demand.

Example - Government takes over health insurance through AGGRESSIVE regulation of health insurance industry. Over regulation and government has the following impact.

Result - Insurance companies cannot innovate. Certain products are no longer allowed. Profit restricted, competition stiffled. Companies move to other products where profits are not regulated. Insurance premiums go up to comply with government standards. Employers find it easier to pay fee than offer accepted services and workers are pushed to federal/state exchanges where taxpayers pay more to subsidize insurance. Now there are less options. Less money because of taxes to pay for services (huge unfunded mandate), less employers (small business that cant pay required health care hire less or charge employees more), Insurance companies close and lay off more workers.

There are some more good examples. The private alternative to the TSA (Sacramento & few others) provide better services at a lower cost. Companies make profits, hire workers, compete for services. This is ONLY because they can fill the void created by removing a government monopoly.

Government now has a monopoly in security (TSA, DHS) there are roles for private industry

Government has a monopoly in agriculture and sets the market price, not the free market

Government has a monopoly in health care

Social Security is an insurance/retirement monopoly

IN all of those there is no competition. Get the government out and the bill to the tax payer falls (more money is good), Competition is good because several providers compete for your dollars (which you have more of because of lower taxes). You can vote with your dollar, its kind of like financial democracy! When the government is the ONLY provider your choice and freedom is limited.

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sheep4thom
Joined:
Jul. 26, 2012 1:36 pm

We are at a unique position in History! I just saw France wants a 75% tax on the rich.

http://www.nytimes.com/2012/08/08/business/global/frances-les-riches-vow...

The wealthy are already leaving!

Here are my predictions.......

1. The rich in France will all leave

2. Revenue to the French government drops

3. Economy comes to screaming halt and goes into recession

Here is our chance to see what the tax policies discussed here will do. If my three predictions come true, then we should avoid duplicating their bad decision. IF I am wrong and it works, maybe I can change my views on progressive abusive taxing. Good Luck, but based on what I am reading people making as little as 200,000 euros are looking for the exits. This is the BEST quote!

Many companies are studying contingency plans to move high-paid executives outside of France, according to consultants, lawyers, accountants and real estate agents — who are highly protective of their clients and decline to identify them by name. They say some executives and wealthy people have already packed up for destinations like Britain, Belgium, Switzerland and the United States, taking their taxable income with them.

sheep4thom's picture
sheep4thom
Joined:
Jul. 26, 2012 1:36 pm
Quote sheep4thom:

We are at a unique position in History! I just saw France wants a 75% tax on the rich.

The wealthy are already leaving!

And the Pharaohs walked toward the sea

Which parted, incidentally

and thinking it was safe to pass

they lifted Romney by his ass

and walked like Gods between the floods

with gold and diamonds in their mouths

to hide them from each other's eyes

Right here, where now calm waters rise

anonymous green
Joined:
Jan. 5, 2012 10:47 am

I want every progressive on here to watch France and take notes as the economy comes to screaching HALT with 75% tax rate on rich. I want you to take notes and remember, and next time I here someone talking about 90% tax on the rich (like the good old days before globalization), I am just going to say "REMEMBER FRANCE". ITs got a nice ring, kind of like "REMEMBER THE ALAMO". It can be a rallying cry to wake up the socialists here in US. It will be a permanent albatross around their necks and historic example of how their tax concept failed.

sheep4thom's picture
sheep4thom
Joined:
Jul. 26, 2012 1:36 pm

We need to emulate the measures the Canadian government took in the 1990s. They cut the government budget by 10% for two years and then held steady for another five years and since then thay have reduced their debt and the economy has grown for the last 15 years. BTW, the citizens love their health care system.

Brookesmith
Joined:
Aug. 3, 2012 6:00 pm

Quote,"Success: Away from the low growth and high regulation of an America under Washington's thumb, our northern neighbor is economically strong. As 2011 ends, Canada has announced yet another tax cut — and will soar even more.

The Obama administration and its economic czars have flailed about for years, baffled about how to get the U.S. economy growing.

In reality, the president need look no further than our neighbor, Canada, whose solid growth is the product of tax cuts, fiscal discipline, free trade, and energy development. That's made Canada a roaring puma nation, while its supposedly more powerful southern neighbor stands on the outside looking in.

http://search.yahoo.com/r/_ylt=A0oGdd4XxiFQTHcAo1pXNyoA;_ylu=X3oDMTE1dTIwOXJqBHNlYwNzcgRwb3MDMQRjb2xvA3NrMQR2dGlkA1ZJUDA0OV8xNTQ-/SIG=13imv7tdg/EXP=1344419479/**http%3a//news.investors.com/article/596263/201112291827/tax-cuts-give-canada-economy-a-boost.htm

We need to get rid of the idiots in DC. ALL OF THEM! In cluding the current community organizer in charge. Look what the Canadians have and are doing, dumbasses.

Brookesmith
Joined:
Aug. 3, 2012 6:00 pm

In 2010, Canada also REDUCED their corporate tax rate from 18% to 16.5%. Ours is 38% and the socialist here want it to be 45% or MORE!

I agree if we set the corporate tax rate at where Canada is the unemployment rate would drop a couple points in a couple quarters

sheep4thom's picture
sheep4thom
Joined:
Jul. 26, 2012 1:36 pm

BrokeSheep,

You two fools should get a room and stroke each other in private.

First, X my non-Manchurian American l*l.

anonymous green
Joined:
Jan. 5, 2012 10:47 am

WE should pay attention to Canada---

Quote, "

Prime Minister Stephen Harper has put out his own list of accomplishments for the year that just ended but here are a few of the key conservative minded actions that spring to mind for me.

  • Ending political welfare. The per-vote subsidy that made political parties lazy and unresponsive to the voters of this country and insulated them from angering their core supporters will be gone by 2015-2016. Legislation ending the subsidy has already passed but the parties are slowly being weaned off the money and will get smaller amounts each year until the subsidy is gone.
  • They saw the light of common sense and released the names of those on their wanted list of suspected foreign war criminals. These were people that officials admitted should not be in the country, had been ordered out but that were still in Canada. At first officials would only admit there was a list of suspected war criminals but not say who they were. After much pressure, common sense won the day.
  • Ending the insane rules that would see farmers from certain provinces jailed for daring to sell their wheat to the customer of their choice. The Canadian Wheat Board still exists for those that want to use its centralized system. For those that want freedom, they now have that choice.
  • While much attention has been paid to Bill C-10, the omnibus crime bill, the government has passed C-2 (the mega-trials bill), this bill will make it easier to conduct the mega-trials now associated with organized crime without infringing on the right to a fair trial.
  • While the bill to end the gun registry has not been passed yet, it has been introduced and will pass early this year.
  • Immigration. On this file the Conservatives continue to push for ever higher numbers of newcomers while keeping those skeptical of high immigration onside by cracking down on fraud, cleaning up the system and putting Canada first.

Another thought for those, often myself included, that like to say this government is not conservative enough."

http://search.yahoo.com/r/_ylt=A0oGdd4XxiFQTHcAvFpXNyoA;_ylu=X3oDMTE1OThhbHNqBHNlYwNzcgRwb3MDOQRjb2xvA3NrMQR2dGlkA1ZJUDA0OV8xNTQ-/SIG=141vj6mae/EXP=1344419479/**http%3a//winteryknight.wordpress.com/2012/01/01/what-could-obama-have-done-he-could-learn-from-canadas-success/

Brookesmith
Joined:
Aug. 3, 2012 6:00 pm

It's funny that now the right wing loves Canada.

anonymous green
Joined:
Jan. 5, 2012 10:47 am
Quote sheep4thom:

First point - But, by 'private economy', you are talking about corporations, they are already sitting on 2 trillion dollars that they aren't using because there is no demand.

Example - Government takes over health insurance through AGGRESSIVE regulation of health insurance industry. Over regulation and government has the following impact.

Result - Insurance companies cannot innovate......

What does 'innovation' mean to a health insurance company? More ways to configure the insurance policies in order to pay out less and make more profit? Or, like is done right now, more ways to use government (austerity and all) to cover more of the most expensive patients that, once again, allows insurance companies to make more profits off of the less expensive patients? When you are implying government is the problem with the health care industry, are you saying that the solution is to get government totally out of it? Or, is it just the 'regulation of the insurance industry' that's the problem as long as government stays in it to cover most of what is covered of the most expensive patients--like it does today.....

Quote sheep4thom:

Certain products are no longer allowed. Profit restricted, competition stiffled. Companies move to other products where profits are not regulated. Insurance premiums go up to comply with government standards.

Do you have any examples of this? Are you 'workingman'? We've already been through this if you are. First off, what 'products' are you referring to that are 'no longer allowed'? And, what's all this about 'insurance premiums go up to comply with government standards'? Do you have any examples of that in this health insurance industry? And, don't forget, the CEO's of health insurance industries are some of the highest paid CEO's in the country--sounds like their 'product' is making them lots of money and I don't see how that is possible unless they are taking in much more money than they are paying out (despite what government is doing). And, if a health insurance company can make CEO can make millions--to hundreds of millions--of dollars without seeing, and before financing, one patient, what does that say about the 'product' of health insurance--other than it takes more money in than it pays out.....a whole lot more.....right in line with Batra's wealth disparity issues in the economy that Batra says creates economic recessions and depressions to begin with....

Quote sheep4thom:

Employers find it easier to pay fee than offer accepted services and workers are pushed to federal/state exchanges where taxpayers pay more to subsidize insurance. Now there are less options.

What has that got to do with the application of health care? Does anyone have the right to the access of health care or not? If so, then I think it better handled by a single payer minding the store--it's the only thing that makes real sense. If not, why are we splitting this payment up between health insurance companies and government to begin with? When, you say 'getting government regulations out of the health insurance industry', are you, also, saying 'getting government subsidies out of the application of health care'? Is that part of your 'austerity measures' as you build up 'government contracts'?

Quote sheep4thom:

Now there are less options.

Less options for what? Health care? Or health insurance? And, why are people continuing to equate health care with health insurance? They are NOT the same thing.....so, again, if it is health insurance that you are talking about, what options are you saying are restricted when the incentive for the health insurance companies is to bring in enough money to keep those CEO's making millions--to hundreds of millions--of dollars without seeing, and before financing, one patient.....if you are saying 'less options for health care', please offer one example of what you mean.....

Quote sheep4thom:

Less money because of taxes to pay for services (huge unfunded mandate), less employers (small business that cant pay required health care hire less or charge employees more), Insurance companies close and lay off more workers.

Well, if you are 'workingman', we've agreed that EMTALA is an 'unfunded mandate'--but, it's been around for two to three decades. I suspect if it were an unaffordable 'unfunded mandate', we would have heard about it before now (In fact, if you haven't noticed, despite your mantra on 'government regulations', we still don't hear about it in the mass media even from FOX news--wonder why? I do have my ideas. For instance, why don't we have the Supreme Court determine the Constitutionality of EMTALA instead of just Obamacare? But, that would be too honest an approach and the consideration of the right to health care would have to be brought out in the light of court scrutiny---nah, won't happen.....too much money to be made splitting the difference....playing two halves against the middle....however you want to describe this ongoing collusion between corporations and govenment in the way our health care is applied and paid for...). But, the point is still the same, if EMTALA were an unaffordable mandate, why has it been around for over two decades? Did it just 'suddenly' become unaffordable? Or do those corporations want to suck more money out of the already weakened economy for health care and health insurance with Obamacare to have those CEO's and shareholders to profit even more off of? I strongly suspect it's the latter......

Quote sheep4thom:

There are some more good examples. The private alternative to the TSA (Sacramento & few others) provide better services at a lower cost. Companies make profits, hire workers, compete for services. This is ONLY because they can fill the void created by removing a government monopoly.

A private example of a government initiated industry supposedly being 'lower cost'. Do you believe the same goes for the prison industry? How do any of these actually represent a 'free market'? If it weren't for the government initiatives (are these included in your 'austerity measures'?), we wouldn't have anything like what the TSA has become--or any prisons at all. Do you also want to privatize the military? That makes them mercenaries....but, it might cost less. Who will be paying for any of this? Still government? How does that measure out in your 'austerity'?

Quote sheep4thom:

IN all of those there is no competition.

If health care is to be seen as available to anyone at least with respect to how EMTALA mandates it, as I know that I have asked 'workingman' before, how does competition handle a universally available 'product'? To maximize their profits, are they going to adjust policies to look like their cover more than they do? Are they going to rely on government to fill in the gaps? Or, are you proposing that health care shouldn't be seen as being universally available under any circumstance--even if, as EMTALA mandates, it is a life threatening, limb threatening, or active labor presenting condition--whether that person can pay or not.....and, remember, you do have to prove it isn't one of those conditions before you can get them out of the ER--and all that takes work-ups--sometimes, quite expensive work-ups.....then, if you find something that is a life threatening, limb threatening, or active labor presenting issue, you have to handle it further--whether they can pay or not....how does 'competition between health insurance companies' handle such 'universally accessible issues'? And, if you are going to get rid of universally accessibility, tell me, step by step, how you are going to do that with someone with a life threatening, limb threatening, or active labor presenting condition.....and I want to know your point in enough detail to realize you understand the problem.....otherwise, your mantra on 'competition in the health care industry' means nothing.....real 'competition' means the ability to turn people down that can't pay, doesn't it? That's not this.....

Kerry's picture
Kerry
Joined:
Jul. 31, 2007 3:01 pm
Quote sheep4thom:

We are at a unique position in History! I just saw France wants a 75% tax on the rich.

........................................

Here is our chance to see what the tax policies discussed here will do.

You don't have to go to France for examples of that, sheep4thom. We had such tax brackets before Reaganomics took over right here in the United States. Did the wealthy leave the U.S. then? Did the economy come to a screeching halt then? Was unemployment more then than it is now (and don't try to lie by using the different way unemployment was calculated at that time vs. post-Reaganomics initiatives--one being manuever a way to determine unemployment in way that it looks better with the trickle-downers than it really was--or is now). Was real wages to the average worker better than it is now? Was the purchasing power of the average American better than it is now? Was the disparity of wealth that Batra says causes all recessions and depressions less than it is now......why look at France? You have American history to go by......

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Kerry
Joined:
Jul. 31, 2007 3:01 pm

Canadian conservative politicians are putting Canada first and have gotten rid of corporate influence.

Brookesmith
Joined:
Aug. 3, 2012 6:00 pm

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The Death of the Middle Class was by Design...

Even in the face of the so-called Recovery, poverty and inequality are getting worse in our country, and more wealth and power is flowing straight to the top. According to Paul Buchheit over at Alternet, this is the end result of winner-take-all capitalism, and this destruction of the working class has all been by design.

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