Cains 9-9-9 plan,or Perry’s flat tax will devastate the economy

Discussion in 'Politics' started by deepthunk, Oct 26, 2011.

  1. deepthunk
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    deepthunk Justadude with a keyboard

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    Put simply, my issue with Cains 9-9-9 plan and Perry’s flat tax is that they would have a devastating impact on the economy, and here’s why.

    Because the entire lower 50% of earners make only 12.7% of the income in America, their budgets are constrained, meaning that there are goods and services they would buy, but don’t because they simply don’t have the money. As a result any reduction in the income of the lower 50% of earners will result in an immediate point by point reduction in consumer spending. Because consumer spending is 70% of economic activity directly and indirectly impacts all other economic activity, reductions in the income of these earners result in a net loss of economic activity.

    The upper 50% of earners make 87.3% of the overall income with the top 5% making fully 35% of the income. This means that the budgets of the upper 50% of earners, and the top 5% in particular are bloated, meaning they buy all the goods and services they are going to buy regardless of increases or decreases in their income of less than 90% of their total earnings. The excess of earnings in these categories go into the earners stock portfolios where it artificially inflates the value of the stocks they invest in. Increases in stock prices not related to actual increases in profits from economic activity are what’s known as stock bubbles, which have a destabilizing effect on the economy.

    In short, increasing earnings by decreasing the tax rates of the upper 50% of earners by a few points will not have an impact on consumer spending, but will destabilize the economy by creating more and larger stock bubbles. Whereas the opposite is also true, increasing taxes on the upper 50% of earners will have a stabilizing effect on the economy by reducing the size of stock bubbles and increasing economic activity through increased government spending.

    However the opposite is also true with regards to the lower 50% of earners, reducing their income hurts the economy by reducing consumer spending and enlarging already existing stock bubbles on Wall Street through the decrease in economic activity. Likewise, increasing their earnings will cause an immediate increase in consumer spending resulting in increased economic activity. This will result in a stabilizing effect on the economy by creating real, sustainable economic growth that will shrink stock bubbles without reducing stock prices by providing real, sustainable increases in corporate profits.

    Perry and Cain talk about how “fair” their plans are, and their right, when we all live together in an economically devastated third world country it will be survival of the fittest, and what could be more fair than that?
     
  2. deepthunk
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    deepthunk Justadude with a keyboard

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    what, no one has anything to say. really?
     
  3. Soggy in NOLA
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    Soggy in NOLA Platinum Member

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    What's to say? We've already read hundreds of "tax the rich" threads.. try something original and fact based and get back to us.
     
  4. deepthunk
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    deepthunk Justadude with a keyboard

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    That’s cute but that’s not an argument. If you want to prove me wrong you must do so with logic and reason, otherwise you’ve proven nothing at all.

    What this means that the policies of the conservative candidates and elected officials as well as the super wealthy and corporate entities who use the political corruption in Washington the push policies that cut taxes for the upper class by raising them on the lower (because there are in fact only two classes in this country today) who have a harmful, even devastating effect on the economy, and that will in turn economically harm everyone even the people advocating such policies.

    When the raving babble of conservative’s on this forum ignore a post like that, or make states as you just made, it proves they cannot defeat the argument. If you cannot defeated the argument with logic and reason it is because you are wrong.

    If the policies of conservatives are wrong on this issue, the consequences could be severe.
     
  5. eflatminor
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    eflatminor Classical Liberal

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    You're making a giant assumption that undermines your argument. You assume we must continue to spend at the rate we currently do. Cut spending to live within our means and all current and proposed tax rates will bring in PLENTY of money, more than we need to run the government and begin to chip away at the debt.

    Stated otherwise, you're assuming a revenue problem when it's actually a spending problem.
     
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  6. VaYank5150
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    VaYank5150 Gold Member

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    You didn't hear Cain back away from the 9-9-9, plan already and replace it with his 9-0-9 plan?

    Cain's Revised '9-0-9' Tax Plan Raises New Doubts | Sunshine State News
     
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  7. Truthmatters
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    Truthmatters BANNED

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    Live within our means?


    You mean gut the social safety net in this country so the wealthy can riegn like kings over us by dangling jobs and or ripping them away.

    How did so many Americans get brainwashed into thinking the wealthy in this country are a gods who should rule over us?
     
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  8. eflatminor
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    eflatminor Classical Liberal

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    Sure, so let's keep increasing the size of that safety net to cover education, healthcare, welfare, etc, etc, etc so those wealthy are SURE to move your job overseas. Great fucking plan.

    States are free to tax their citizens in an attempt to create a "social safety net". The federal government has no such authority.
     
  9. deepthunk
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    deepthunk Justadude with a keyboard

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    The post says not one word about government spending.

    It outlines in plain English why raising taxes on the lower 50% of earners in order to cut taxes for the upper class harms the economy by reducing real economic activity in the form of consumer spending while increasing stock prices with overvaluation, or stock bubbles that have a destabilizing effect.

    Furthermore cutting government spending also has a negative impact on the economy by eliminating the jobs of civil servants from office workers to teachers and administrators, also reducing consumer spending while increasing investment on Wall Street. Again creating more stock overvaluation and again destabilizing the economy with stock price bubbles.

    Stock bubbles on Wall Street have actually risen and burst repeatedly, when the internet stock bubble burst we still had enough of a manufacturing base to absorb the loss. But now the outsourcing has left the economy too dependent on Wall Street and these policies are having a devastating effect on the economy.

    In case you haven’t noticed I have just logically disproven the conservatives entire economic theory from Reagan- omics on down the line like Perry Mason at a murder trial.
     
    Last edited: Oct 27, 2011
  10. eflatminor
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    eflatminor Classical Liberal

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    Exactly...and there's your problem. The rest of argument is tired old Keynesian/socialist bullshit. Countries in eastern Europe that have instituted a flat tax are outgrowing their progressive tax neighbors, but don't let real examples get you off your progressive horse...it's just so fun to ride...as long as someone else pays the bills.
     

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