War and Tax cuts...Mutually exclusive?

[rtwngAvngr]

I find it amusing that one poster here referred to Clinton's strong economic position in 1997 to be because it was his FIRST term, and inherited it from Bush.

It was his second term, having been reelected overwhelmingly in 1996. Sometimes facts just have a nasty habit of getting forgotten.

Also, if that poster thinks it humorous to mangle Huckleberry's name, I can't WAIT to see what he's going to do with mine.

You're such a lame, nitpicking little girl.

 

[Huckleburry]

In my view here is the best course of action...
First, repeal the some of the tax cuts (and yes I will pay alot more taxes as a result) and shift others to middle and lower class families (I have posted extensivly on this so search for it if you want me to defend the reasoning behind this), next institute federal spending caps preventing any growth in federal spending. Two, shift federal spending programs, albeit not entirely, to non-millitary items. In particular education and programs aimed at young entrepenuers. The money multiplier spent on millitary hardware is generally the lowest when it is compared to other sectors. This is to say that millitary spending generates realitivly few linkages. Raise the federal interest rate and bring borrowing back to reality especially in regards to the housing market. Also, both Europe and the US need to further liberalize their economies especially in regards to agriculture and heavy industry. In my view perfect competetion truely will yield the most efficient markets possible.
I am quite busy these days so this is really quite a brief sketch of things I would do.

 

[MtnBiker]

Also, if that poster thinks it humorous to mangle Huckleberry's name, I can't WAIT to see what he's going to do with mine.

We could call you Viscous Silica

 

[Said1]

We could call you Viscous Silica

Isn't lava some kind of soap?

 

[MtnBiker]

Isn't lava some kind of soap?

Made with pumice to scour grimy dirty hands. It's probably to harsh for some people.

 

[rtwngAvngr]

In my view here is the best course of action...
First, repeal the some of the tax cuts (and yes I will pay alot more taxes as a result) and shift others to middle and lower class families (I have posted extensivly on this so search for it if you want me to defend the reasoning behind this), next institute federal spending caps preventing any growth in federal spending. Two, shift federal spending programs, albeit not entirely, to non-millitary items. In particular education and programs aimed at young entrepenuers. The money multiplier spent on millitary hardware is generally the lowest when it is compared to other sectors. This is to say that millitary spending generates realitivly few linkages. Raise the federal interest rate and bring borrowing back to reality especially in regards to the housing market. Also, both Europe and the US need to further liberalize their economies especially in regards to agriculture and heavy industry. In my view perfect competetion truely will yield the most efficient markets possible.
I am quite busy these days so this is really quite a brief sketch of things I would do.

Caps on federal spending are good. But tax cuts should remain and remain targetted at the richest. As we've already discussed adnauseum, tax cuts for lower classes only are only a short term spending jolt; they are not the ones who grow business in a meaningful way. The business class grows their businesses when they can keep a greater percentage of the the extra generated revenues instead of paying them away in taxes.

 

[nakedemperor]

Caps on federal spending are good. But tax cuts should remain and remain targetted at the richest. As we've already discussed adnauseum, tax cuts for lower classes only are only a short term spending jolt; they are not the ones who grow business in a meaningful way. The business class grows their businesses when they can keep a greater percentage of the the extra generated revenues instead of paying them away in taxes.

I've been reading a lot of magazine articles to the contrary. There's an acronym for some concept about how much of their tax cuts the rich generally re-invest, and how much they bank (compared to the middle and lower classes), and most of the conclusions I've read are that economic stimulation and propensity to spend/reinvest are a *lot* lower among the upper class.

 

[rtwngAvngr]

I've been reading a lot of magazine articles to the contrary. There's an acronym for some concept about how much of their tax cuts the rich generally re-invest, and how much they bank (compared to the middle and lower classes), and most of the conclusions I've read are that economic stimulation and propensity to spend/reinvest are a *lot* lower among the upper class.

Post a link to one of the articles and I'll tear it apart for you, so you won't be so misled anymore.


So the lower classes would definitely reinvest at 100% if they had the money? IS that what you're saying?

No one is forced to reinvest of course, but when people feel their efforts will not be taken by the government, their chances of striving to grow their business are greater. it's innately logical. Reinvestement is not 100 guarenteed, true, but they're not slaves. Do you wish they were?

 

[Huckleburry]

From a stickly growth perspective it is better for the economy to have people putting their money into bank accounts or bonds rather than the stock market because most of the capital that funds new ventures comes from banks or bonds. The stock market is actually a rather poor indication of the economy and does very little to grow new buisness or allow old buisness to expand.
Cheers Huck.
PS. Naked Emperor what those articles are refering to is called the Marginal Propensity to Consume (MPC). It is generally agreed upon that the lower and middle class has a much higher MPC than the wealthy.

 

[rtwngAvngr]

PS. Naked Emperor what those articles are refering to is called the Marginal Propensity to Consume (MPC). It is generally agreed upon that the lower and middle class has a much higher MPC than the wealthy.

I hate to jump in, but mere consumption is just a short term fix, reinvest in new capacity and r&d, is what creates jobs for others. The upper class performs this function, not that I'm against lower and middle incomers starting businesses.

 

[freeandfun1]

From a stickly growth perspective it is better for the economy to have people putting their money into bank accounts or bonds rather than the stock market because most of the capital that funds new ventures comes from banks or bonds. The stock market is actually a rather poor indication of the economy and does very little to grow new buisness or allow old buisness to expand.
Cheers Huck.

I was following you fairly well until you wrote, "The stock market is actually a rather poor indication of the economy and does very little to grow new buisness or allow old buisness to expand."

If people buy a company's stock, that company has cash to expand business and or start new operations. If what you say is true, why do companies go public in the first place? Not every corporation is just out to rape the investors. Company IPOs are used to raise capital to further their growth.

 

[Huckleburry]

If the goal is job creation then why not focus our efforts on creating jobs. Sure, many people from the upper class may create ventures that create jobs but is that because they are rich or is that because they are well educated, opportunistic, and have the right connections to start a new venture. I argue that it the combination of the latter attributes that creates new ventures, simply being wealthy does not guarantee that you will do anything for the economy. If job creation is the goal then why not target the tax cuts specifically at entrepreneurs. Rather than giving huge benefits to those people who may start new ventures why not give benefits and relief to those people who are starting new ventures. Would not this be a more efficient use of our tax dollars? Moreover, I would argue that dual strategy of middle class tax cuts and tax programs aimed at entrepreneurs would do the most to create a sustainable fix to our current economic troubles. Rather than give sweet heart tax breaks to the those who need it the least we should use those dollars to support education, entrepreneurship, and middleclass consumption.

 

[Huckleburry]

Free and Fun,
You are right companies do use stock to raise capital. However, when compared to the banking and bond markets the stock market actually contributes very little to the overall capital market (about two percent). IPO's are a way for the original investors to cash in on their long term and risky investment. Importantly, very little of the cash raised during the typical IPO is retained by the company. The majority of it goes to the original investors and the institutions that played a central role in the company’s success. The IPO is the light at the end of the tunnel for the founders, the big carrot that encourages people to invest early, however, in terms of the company, or the overall economy, the stock market does very little to increase the investment (economic not popular) capabilities of the firm and thus contributes very little to the growth of the economy.

 

[rtwngAvngr]

Free and Fun,
You are right companies do use stock to raise capital. However, when compared to the banking and bond markets the stock market actually contributes very little to the overall capital market (about two percent). IPO's are a way for the original investors to cash in on their long term and risky investment. Importantly, very little of the cash raised during the typical IPO is retained by the company. The majority of it goes to the original investors and the institutions that played a central role in the company’s success. The IPO is the light at the end of the tunnel for the founders, the big carrot that encourages people to invest early, however, in terms of the company, or the overall economy, the stock market does very little to increase the investment (economic not popular) capabilities of the firm and thus contributes very little to the growth of the economy.

Yeah. well. bank and bonds don't actually DO or PRODUCE anything. Companies actually doing stuff is kind of key. I say we invest in them.

 

[Huckleburry]

Banks and Bonds loan to companies and allow them to grow!!!! Investing in a companies stock does nothing to help that company unless it is a new issue. After the orginal sale you are just buying stocks from other individuals. Banks and Bonds are what allow companies to grow.

 

[freeandfun1]

Free and Fun,
You are right companies do use stock to raise capital. However, when compared to the banking and bond markets the stock market actually contributes very little to the overall capital market (about two percent). IPO's are a way for the original investors to cash in on their long term and risky investment. Importantly, very little of the cash raised during the typical IPO is retained by the company. The majority of it goes to the original investors and the institutions that played a central role in the company’s success. The IPO is the light at the end of the tunnel for the founders, the big carrot that encourages people to invest early, however, in terms of the company, or the overall economy, the stock market does very little to increase the investment (economic not popular) capabilities of the firm and thus contributes very little to the growth of the economy.

Wrong. The rules do not allow the founders to take the money raised from an IPO until a certain period of time has expired. Unless they are expressely, up front, selling off some of their private shares to investors. Normally this is less than 10% of the overall amount of shares outstanding. Furthermore, when filing for an IPO, you must provide a detailed use of proceeds which almost always has a provision that the proceeds cannot be used to pay any form of compensation, other than that declared in the section of the offering that covers "Management Compensation".

 

[freeandfun1]

Banks and Bonds loan to companies and allow them to grow!!!! Investing in a companies stock does nothing to help that company unless it is a new issue. After the orginal sale you are just buying stocks from other individuals. Banks and Bonds are what allow companies to grow.

But as a company's stock value increases, the more the company's value and therefore, the more they can borrow.

 

[rtwngAvngr]

We tag teamed this mofo good, ff! He'll be walking funny now.

 

[Huckleburry]

But as a company's stock value increases, the more the company's value and therefore, the more they can borrow.

You can't be serious. Stock value has nothing to do with the credit worthiness of a company. That is determined by banks (ever heard of risk management) and is based on the fundamentals NOT STOCK PRICE. Do you know what are you buying when you buy stock? because from the sounds of things you guys have some real misconceptions about the stock market and its role in the American economy.
Cheers
Huck

 

[rtwngAvngr]

You can't be serious. Stock value has nothing to do with the credit worthiness of a company. That is determined by banks (ever heard of risk management) and is based on the fundamentals NOT STOCK PRICE. Do you know what are you buying when you buy stock? because from the sounds of things you guys have some real misconceptions about the stock market and its role in the American economy.
Cheers
Huck

Stock price is a measure of a companies value. when the price rises they can sell some off and reinvest the revenue. You're a babbling idiot.