You Pay whatever your Taxes are Regardless of how much the Government Spends

Discussion in 'Political Opinions & Beliefs' started by akphidelt, Sep 14, 2011.

  1. akphidelt

    akphidelt Banned

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    I will never understand why people are terrified of Government spending. You have a tax rate and you pay that regardless of how much the Government spends. Even if the Govt spent $0 you would pay the same amount as if the Govt spent $6 trillion. Your taxes do not fund Govt spending. Your taxes actually come from Govt deficit spending.

    So if we have tons of unemployed people looking for work, tons of work to be done, and the only thing that is missing is a "medium of exchange"... then why not pay our human capital to get to work? Maybe one of those employees will come in to your place of business and give you that money.

    But regardless, no matter how much the Govt chooses to spend it has absolutely no effect on how much taxes you pay.
     
  2. webrockk

    webrockk Well-Known Member Past Donor

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    The delusional ramblings of one absolutely clueless or callously unconcerned with the enslavement of future generations to foreign holders of massive, and rising US debt.
     
  3. akphidelt

    akphidelt Banned

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    I simply talk about how are system works operationally. The people that do not accept how the system works operationally are the delusional ones.
     
  4. thediplomat2.0

    thediplomat2.0 Banned

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    I always here you make these vague, macro-economic based statements the United States debt and deficit, but I never see any models, graphs, and macro-economic facts that make them economically positive instead of normative. Where is the description of opportunity costs of the United States economy, and utilization of PPC's?
     
  5. akphidelt

    akphidelt Banned

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    [​IMG]

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  6. Trinnity

    Trinnity Banned

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    Hoo boy....the OP doesn't make sense, IMO.
     
  7. akphidelt

    akphidelt Banned

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    And I can keep going on and on. It is common sense that you pay the same amount of taxes regardless of how much the Govt spends. It has been that way for decades and will never change. The Govt sets a budget regardless of how much tax revenue it has coming in. And every year it increases the budget regardless of how big or small the deficit from the previous year was.
     
  8. akphidelt

    akphidelt Banned

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    Tell me what doesn't make sense and I will walk you through the steps as to why every thing I'm saying is 100% correct.
     
  9. thediplomat2.0

    thediplomat2.0 Banned

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    The United States government does not have the have a budget to have a deficit or surplus.
     
  10. akphidelt

    akphidelt Banned

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    I know... that is my point.
     
  11. Dr. Righteous

    Dr. Righteous Well-Known Member

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    Wrong. We have to pay the hidden tax of inflation to pay for this govt spending. There is no escape from that.
     
  12. akphidelt

    akphidelt Banned

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    So what you're saying is the country would be best off with $1 in circulation because all additional spending is inflationary?
     
  13. webrockk

    webrockk Well-Known Member Past Donor

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    Our system no longer "works operationally"....the negative effects global economic competition has on GDP simply cannot keep up with social "demands" on government forever without crushing private sector business growth...which presents a brand new set of problems....

    and there are too few individual tax payers asked to carry the burden of too much government and too many expensive government social "justice" services that exist well outside of basic, collective infrastructure like roads, bridges, and defense, etc.
     
  14. Dr. Righteous

    Dr. Righteous Well-Known Member

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    No, I'm saying that increasing the money supply faster than the rate of goods and services is increasing does not create wealth. You cant just create wealth by printing money, that purchasing power has to come from somewhere. It comes in the form of higher prices. So when money is created in that manner and the govt spends it, the govt gains purchasing power where taxpayers lost it. It's a transfer of wealth from taxpayers to the govt: artificial inflation is a hidden tax.
     
  15. akphidelt

    akphidelt Banned

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    None of what you said makes any logical sense and can not be backed with actual facts. Nice try though! I wish I can just spew out nonsensical comments and pass them off as fact with out ever actually having to back it up! Must be fun.
     
  16. JavaBlack

    JavaBlack New Member

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    I wouldn't go so far as to say that we should ignore spending because it doesn't automatically affect tax rates. That seems a bit myopic and short-sighted.

    But I do think we're in a situation where the short-term unemployment crisis is more urgent than the long-term debt crisis. And, indeed, most economists suggest we spend now, cut later.
    We've lost the opportunity to borrow while bond rates made it so borrowing was cheaper than spending taxes for fixing infrastructure (that was astounding), but it's still pretty cheap to do so.

    What gets me is that the main argument against Keynsianism that isn't dumb is the one suggesting that in the long run, the economy recovers to the same level more or less whether Keynsian policies are used or not.
    This overlooks the fact that if we use Keynsian policies, we:
    1. reduce suffering in the meantime.
    2. gain long-term benefit from investment on infrastructure.
    3. don't suffer long-term losses in human capital due to extended, mass unemployment.

    The deficit isn't going to go well either way (we lose revenues by waiting, we spend more by acting). The end result won't be different.
    It's really a matter of whether we prefer getting nothing done and watching people suffer until the recovery or getting something done and cutting the suffering in the meantime.
     
  17. thediplomat2.0

    thediplomat2.0 Banned

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    Our real problem is that the United States government beleives you can do it all. This is not the case. Economic policy has to take into account opportunity costs, which means that we give up something when we implement a certain policy. If we implement tax cuts, we give up increasing revenue. If we implement a closing of tax loopholes, we take away money from corporations that could be used for assorted investments.

    I am not an expert on macro-economic policy, as I am current studying it, and I don't know if the OP is an expert, or has even studied macro-economics, but that is something that he/she will have to clarify.
     
  18. akphidelt

    akphidelt Banned

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    What math do you use to calculate when there is too much money in the money supply?

    What makes now the point of no return? Why wasn't it when the country only had $1 billion?

    And you bring up a good point. What is our productive capacity at and how does the fact that 16% of American's are underemployed or unemployed play in to your calculations of "hidden inflation"
     
  19. Dr. Righteous

    Dr. Righteous Well-Known Member

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    I don't know. I'm not a Keyensian economist, I don't believe that a proper money supply can be mathematically defined. The market would naturally set the appropriate money supply based on the law of supply and demand, which also cannot be mathematically controlled without disastrous consequences.

    The only point of no return is runaway inflation. We haven't reached that point...yet.

    The economy is in the shape it's in because of the central bank's policies of artificially low interest rates (attempted control of the law of supply and demand) and money creation (attempted control of the money supply). We're in the early stages of runaway inflation, and that is certainly not going to benefit the 16% of underemployed Americans.
     
  20. thediplomat2.0

    thediplomat2.0 Banned

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    So are you expecting a period of stagflation in the near future?
     
  21. akphidelt

    akphidelt Banned

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    But we don't live in this Utopian universe with out using mathematics. So what would you say is the limit to how much money is required to effectively give us the right amount of transactions to increase economic growth and not fall down the path of a deflationary spiral?

    Inflation deals with the fundamentals of supply and demand. Not how much quantity of money exists. It deals with how much money is out there exchanging hands.

    We have $15 trillion in real output... over a quarter of the world's output. We are the largest and most robust and spoiled economy in the history of the world. Our problems are that which would make history laugh... our economy is not as bad off as people make it out to be.
     
  22. thediplomat2.0

    thediplomat2.0 Banned

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    I think considering the unemployment of the United States through a PPC would indicate that the United States economy is suffering from inefficiency due to too many missed opportunities to produce more goods, which creates inefficiency in allocation. I have not been able to determine whether production has been worse than allocation, or the other way around.
     
  23. akphidelt

    akphidelt Banned

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    The United States is suffering for one and only one reason. We are much "poorer" than we thought and people are saving more and borrowing less.

    The economy can be explained through mathematics. When people save more money there is less velocity. When there is less velocity there is less growth. When people save more there is less tax revenue... etc, etc.

    It all stems from the fact that people are sitting on houses with no equity, portfolios with much less equity, retirement accounts with much less equity... etc. That is all it boils down to. The country needs money and a lot of it.
     
  24. thediplomat2.0

    thediplomat2.0 Banned

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    You are actually explaining this more of a conventional mathematical manner with a minor normative economic perspective, when you need to be explaining it through a macro-economic-based mathematical manner with more of a positive economic perspective. PPC's and opportunity costs explain the United States economy through other variables on a Macro-economic scale.
     
  25. webrockk

    webrockk Well-Known Member Past Donor

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    We are rapidly approaching 16 trillion in debt with a flat lined GDP...

    We have a business community that will not loosen their grip on the purse strings...investment/expansion/hiring... because they (we, I) know that increasingly punitive regulations/costs of doing business, and massive and growing debt will ultimately be our burden...

    and we have consumers who are getting smacked with rising necessity expenses...food/energy/fuel... that erode the disposable/discretionary income that drives our economic engine....25 million small businesses....

    and until spending and deficits are brought more inline with what a rapidly shrinking tax base that is gripped in uncertainty can comfortably support, the economy will remain stagnant until it falls off the cliff of insolvency.
     

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