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Without taxes , the value of any fiat currency will drop to zero. What sustains the value of a currency is mostly the demand created by the government by enacting taxe.You are so damn confused it is pathetic.
You little Leftest shits think raising taxes is always the answer to everything.
You always want to increase corporate taxes because like all dumbass Leftest assholes you hate those evil corporations. You were taught that in your commie indoctrination classes.
The only thing is that there is really no such thing as taxing corporations because the consumers of the goods and services supplied by the corporations are the ones that have to pay the tax.
Instead of starting a thread on why we should be increasing taxes on corporations you should be advocating decreasing government spending so that nobody has to pay more taxes.
You think you could do that?
Well, don't take my word on it. Read the Investopedia or any 101 economics textbook.Spending does not "create" money.
Loans do not "create" money
Bank Loans leverage money so as to do more with the same amount there is no money "created" what is created are assets and value.
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It's not money that is being "created" it is credit.Well, don't take my word on it. Read the Investopedia or any 101 economics textbook.
"However, the vast majority of the American money supply is digitally debited and credited to commercial banks. Moreover, real money creation takes place after the banks loan out those new balances to the broader economy."
"Do Banks Create Money?
Yes. Every time banks loan funds to consumers and businesses they create new money. That loaned money, in turn, gets deposited back into the banking system where it gets loaned again, creating more new money."
Understanding How the Federal Reserve Creates Money
Learn how the Federal Reserve targets and creates new money in the economy, and find out how the savings and loans system magnifies this process.www.investopedia.com
Wealth, in the form of real estate, is already heavily taxed. Other so-called 'wealth' has been obtained with after-tax income. Wealth in the form of savings has also already been taxed, and the interest earned is also taxed.
is to either tax capital gains or a tax on wealth.
We already tax capital gains.
Assume you borrow $100,000 from the bank to buy a house.It's not money that is being "created" it is credit.
Assume you borrow $100,000 from the bank to buy a house.
Your bank account gets credited with a matching deposit, and the asset account of the bank is also credited with $1000,000
You then pay the owner of the house $100,000, that money has now turned into a deposit into someone else account and is indistinguishable from a deposit created by depositing cash.
As succinctly stated by a member of the Bank of England: Loans create deposits
That's exactly what fiat money is: accounting records in financial institutions( M2) , also called broad money.Deposits are nothing but numbers in a ledger.
There is no money "created"
And it's not the amount of money in the economy that matters it is the velocity of that money.
That's exactly what fiat money is: accounting records in financial institutions( M2) , also called broad money.
By contrast, narrow money ( M1) consists of the bills and coins minted by the treasury. It is also called currency.
Leaving more money in that hands of the people who earn hat money is always the best choice.That's exactly what fiat money is: accounting records in financial institutions( M2) , also called broad money.
By contrast, narrow money ( M1) consists of the bills and coins minted by the treasury. It is also called currency.
Well , no , not really. It is good to leave it in the hands of people willing to invest it in actual businesses. The problem is that financial instruments have higher yields and are completely decoupled from actual productive activities.Leaving more money in that hands of the people who earn hat money is always the best choice.
Well , no , not really. It is good to leave it in the hands of people willing to invest it in actual businesses. The problem is that financial instruments have higher yields and are completely decoupled from actual productive activities.
For me, setting strict restrictions on financial instruments (banning most of them ) would work instead of increasing tax rates ( it would probably be better). Being realistic none of them will happen.
People invest in business every day they spend their money to buy something.Well , no , not really. It is good to leave it in the hands of people willing to invest it in actual businesses. The problem is that financial instruments have higher yields and are completely decoupled from actual productive activities.
For me, setting strict restrictions on financial instruments (banning most of them ) would work instead of increasing tax rates ( it would probably be better). Being realistic none of them will happen.
Corporations and people invest in all kinds of financial instruments unrelated to production: derivatives, non-IPO stock options, money market, cryptocurrencies.People invest in business every day they spend their money to buy something.
All stocks are coupled to the companies that issue them. All bonds are coupled to the issuer of those bonds. The only thing I know of that is pure speculation is crypto currency
The government does not invest in private businesses
Corporations and people invest in all kinds of financial instruments unrelated to production: derivatives, non-IPO stock options, money market, cryptocurrencies.
Non-IPO are decoupled from production. The revenue of a company may be flat and the stock can go up. Alas the stock usually goes up faster than sales.
Finally when the financial system collapsed in 2007 the government actually bought stocks from the banks as a collateral for the loans they gave them. That is actual socialism, but all the banks that were bailed out were totally fine with that.
So what?Corporations and people invest in all kinds of financial instruments unrelated to production: derivatives, non-IPO stock options, money market, cryptocurrencies.
Non-IPO are decoupled from production. The revenue of a company may be flat and the stock can go up. Alas the stock usually goes up faster than sales.
Finally when the financial system collapsed in 2007 the government actually bought stocks from the banks as a collateral for the loans they gave them. That is actual socialism, but all the banks that were bailed out were totally fine with that.
So what?
Your savings account is uncoupled from production too.
Where is it written that everything must be coupled to production?
And non IPO stock options are still stocks and all stocks are directly tied to the profitability of the company that issues them.
You know what is 100% uncoupled from production
The government.
The government produces nothing yet it employs more people than any business. The government costs most people more than they spend on actual assets and they get nothing for it.
yes the government will bail out the institutions that own the politicians and you want the government to have more of the people's money.
Tell me how that makes any sense at all.N
It is decoupled. The difference is that stocks and derivatives increase their value over time. How can something increase its worth without having the economy increase its worth at the same time.? It goes against logic, yet it happens that's why markets eventually collapse. There's even a term for it : Minsky Moment.Your savings account is uncoupled from production too.
Where is it written that everything must be coupled to production?
No. They are not the money that goes into the stock does not directly affect the performance of the company it is not money that goes into the company ( except for IPOs).And non IPO stock options are still stocks and all stocks are directly tied to the profitability of the company that issues them.
yes the government will bail out the institutions that own the politicians and you want the government to have more of the people's money.
It is decoupled. The difference is that stocks and derivatives increase their value over time. How can something increase its worth without having the economy increase its worth at the same time.? It goes against logic, yet it happens that's why markets eventually collapse. There's even a term for it : Minsky Moment.
"Minsky Moment refers to the onset of a market collapse brought on by the reckless speculative activity that defines an unsustainable bullish period. Minsky Moment crises generally occur because investors, engaging in excessively aggressive speculation, take on additional credit risk during bull markets."
It is not written anywhere. I am simply stating that such decoupling causes tons of problems: income inequality , asset bubbles and periodic crisis.
No. They are not the money that goes into the stock does not directly affect the performance of the company it is not money that goes into the company ( except for IPOs).
Gee, you haven't grasped anything of what I have said about money . It is not "the people's" money the bailout was done by the Fed by issuing bonds and swapping them for bank assets. That money didn't come from the taxes.
The problem is that supporting the banks in such a maner allowed them to continue their reckless behavior.
It is decoupled. The difference is that stocks and derivatives increase their value over time. How can something increase its worth without having the economy increase its worth at the same time.? It goes against logic, yet it happens that's why markets eventually collapse. There's even a term for it : Minsky Moment.
"Minsky Moment refers to the onset of a market collapse brought on by the reckless speculative activity that defines an unsustainable bullish period. Minsky Moment crises generally occur because investors, engaging in excessively aggressive speculation, take on additional credit risk during bull markets."
It is not written anywhere. I am simply stating that such decoupling causes tons of problems: income inequality , asset bubbles and periodic crisis.
No. They are not the money that goes into the stock does not directly affect the performance of the company it is not money that goes into the company ( except for IPOs).
Gee, you haven't grasped anything of what I have said about money . It is not "the people's" money the bailout was done by the Fed by issuing bonds and swapping them for bank assets. That money didn't come from the taxes.
The problem is that supporting the banks in such a maner allowed them to continue their reckless behavior.
If they don't collapse how did the term Minsky moment got created in the first place?Stock values are related to the economy overall as well as to the business issuing them.
The market doesn't ever really collapse. When the economy takes a downturn so does the market.
When the value of the financial products is artificially inflated that product will eventually be devalued. You don't have to buy those products.
The thing about the stock market is that it runs on emotion as well as the value of stocks. Investors know this. They also know that even if stocks prices fluctuate sharply that the majority of companies issuing stocks are still financially sound and will still turn a profit in the long run. If a business is not profitable it will lose value
If the stock market ever actually "collapsed " then all stocks would be worth ZEROIf they don't collapse how did the term Minsky moment got created in the first place?
Yes, they recover quickly in the US, for several reasons:
1) The US is a major recipient of capital from abroad
2) As new money is created and profits and savings accumulate the money flows back into the stocks.
Most of the real wealth comes from industrial production, and it has been stagnant since 2007. The rest of the "growth" has been the FIRE(finance, insurance, real estate) sector offering goods and services at a higher price.
Industrial Production: Total Index
View a monthly index of real output for all facilities located in the U.S. in manufacturing, mining, and electric and gas industries.fred.stlouisfed.org
