New Banks, Oil companies, Insurance Providers, etc

[sealybobo]

The rich keep telling us if we tax them or take away their tax breaks, they'll leave to other countries. So I thought, "why can't the government help a start up oil company, healthcare provider, mortgage company and bank get started to compete with the status quo?

So the government gives a loan to some people that want to start an oil company. We also give them some of the land the current oil companies are sitting on to these new start ups and they do it all NON profit. Of course their employees make a lot of money and the government gets their taxes from this company, but there are no profits. In other words, there is no desire for the company to gouge consumers. This new oil companies job is to get oil and sell it to other countries for the max they can so they can in turn sell it to us for cheap. Wouldn' this competition force Exxon to lower their prices? Wouldn't it stop Exxon from giving their CEO $100 million dollars a year in pay?

Or a new Healthcare provider. One that's goal is to provide good healthcare for cheap.

Etc.

Your thoughts?

 

[sealybobo]

And there may be profits, but they would put those profits back in the company. The Oil company would use any profits to fund alternative energy.

And this isn't socialism. The government just loans out the money, and expects their money back with interest.

But if corporations are going overseas, we should lock them out or charge them a tariff to import goods to us.

And this is just a rough idea that came to me when another poster threatened that companies would not hire if we raised their taxes or he said they would move out of the country.

Good read. Check out what the tax rates were before Reagan. It seems to me that compared to pre Reagan, Corporations don't pay jack as far as taxes go today.

ThomHartmann.com - Roll Back the Reagan Tax Cuts

After the Republican Great Depression, FDR put this nation back to work, in part by raising taxes on income above $3 to $4 million a year (in today’s dollars) to 91 percent, and corporate taxes to over 50% of profits. The revenue from those income taxes built dams, roads, bridges, sewers, water systems, schools, hospitals, train stations, railways, an interstate highway system, and airports. It educated a generation returning from World War II. It acted as a cap on the rare but occasional obsessively greedy person taking so much out of the economy that it impoverished the rest of us.

Through the 1950s, though, more and more loopholes for the rich were built into the tax code, so much so that JFK observed in his second debate with Richard Nixon that dropping the top tax rate to 70% but tightening up the loopholes would actually be a tax increase.

Reagan promptly cut income taxes on the very rich from 70% down to 27%. Corporate tax rates were also cut so severely that they went from representing over 33% of total federal tax receipts in 1951 to less than 9% in 1983 (they’re still in that neighborhood, the lowest in the industrialized world).

The result was devastating. Our government was suddenly so badly awash in red ink that Reagan doubled the tax paid only by people earning less than $40,000/year (FICA), and then began borrowing from the huge surplus this new tax was accumulating in the Social Security Trust Fund. Even with that, Reagan had to borrow more money in his 8 years than the sum total of all presidents from George Washington to Jimmy Carter combined.

In addition to badly throwing the nation into debt, Reagan’s tax cut blew out the ceiling on the accumulation of wealth, leading to a new Gilded Age and the rise of a generation of super-wealthy that hadn’t been seen since the Robber Baron era of the 1890s or the Roaring 20s.

And, most tragically, Reagan’s tax cuts caused America to stop investing in infrastructure. As a nation, we’ve been coasting since the early 1980s, living on borrowed money while we burn through (in some cases literally) the hospitals, roads, bridges, steam tunnels, and other infrastructure we built in the Golden Age of the Middle Class between the 1940s and the 1980s.

We even stopped investing in the intellectual infrastructure of this nation: college education. A degree that a student in the 1970s could have paid for by working as a waitress at a Howard Johnson’s restaurant (what my wife did in the late 60s - I did so working as a near-minimum-wage DJ) now means incurring massive and life-altering debt for all but the very wealthy. Reagan, who as governor ended free tuition at the University of California, put into place the foundations for the explosion in college tuition we see today.

There is much discussion of what the floor on earnings should be - the minimum wage - but none about the ceiling. That’s largely because effectively there is no ceiling, and those who control vast wealth in America are happy to have Americans fight over “How poor is too poor?” just so long as nobody asks “How rich is too rich?”

In the years since then, mind-boggling wealth has risen among fewer than 20,000 people in America (the top 0.01 percent of wage-earners), but their influence has been tremendous. They finance “conservative” think tanks (think Joseph Coors and the Heritage Foundation), change public opinion (Walton heirs funding a covert effort to change the “estate tax” to the “death tax”), lobby congress and the president (who calls the “haves and the have-more’s” his “base”), and work to strip down public institutions.

The middle class is being replaced by the working poor.

Since Bush has been president:

over 5 million people have slipped into poverty;
nearly 7 million Americans have lost their health insurance;
median household income has gone down by nearly $1,300;
three million manufacturing jobs have been lost;
three million American workers have lost their pensions;
home foreclosures are now the highest on record;
the personal savings rate is below zero - which hasn’t happened since the great depression;
the real earnings of college graduates have gone down by about 5% in the last few years;
entry level wages for male and female high school graduates have fallen by over 3%;
wages and salaries are now at the lowest share of GDP since 1929.
The debate about whether or not to roll Bush’s tax cuts back to Clinton’s modest mid-30% rates is absurd. It’s time to roll back the horribly failed experiment of the Reagan tax cuts. And use that money to pay down Reagan’s debt and rebuild this nation.

 

[BaronVonBigmeat]

The rich keep telling us if we tax them or take away their tax breaks, they'll leave to other countries. So I thought, "why can't the government help a start up oil company, healthcare provider, mortgage company and bank get started to compete with the status quo?

So the government gives a loan to some people that want to start an oil company. We also give them some of the land the current oil companies are sitting on to these new start ups and they do it all NON profit. Of course their employees make a lot of money and the government gets their taxes from this company, but there are no profits. In other words, there is no desire for the company to gouge consumers. This new oil companies job is to get oil and sell it to other countries for the max they can so they can in turn sell it to us for cheap. Wouldn' this competition force Exxon to lower their prices? Wouldn't it stop Exxon from giving their CEO $100 million dollars a year in pay?

Or a new Healthcare provider. One that's goal is to provide good healthcare for cheap.

Etc.

Your thoughts?

Suppose the president signs an executive order telling Freedom Oil (the hypothetical national company) to lower gas prices to say...$1.00 a gallon. The result will be that there are shortages. Shortages follow price controls just as surely as night follows day.

Anyway, if you want to push gas prices down artifically low, just pass a price control law. We did that in the 70's and had to wait in line for gasoline. If you want to stop their "greedy" profiteering, there is no need to start an expensive new oil company, simply tax their profits. Of course, this will leave less money for exploration, new technology, and plant maintenance, not to mention lower stock prices and dividends for retirees who depend on Exxon stock; but it would effectively accomplish the same goals.

The problem with trying to run a company without profits is, there is no way to know if you're allocating resources wisely. Whereas a private for-profit company knows quite well--if they are earning profits, they are adding value for someone. If they are losing money, that is the market's signal to shape up or find another line of work.

If you want a specific example, look at Pemex (Mexico's oil company) or Argentina's oil company. They are facing declining reserves because their oil fields have been mismanaged, and because the money for capital improvements has been skimmed off the top for political purposes instead of reinvested. If these firms were private, their expenses would soon exceed their profits (this may already be the case, not sure), stock prices would plummet, and new owners could scoop up the company at a bargain price. But since they are government entities, there is no chance of that. They will keep operating, and any losses will be covered by taxpayers.

 

[BaronVonBigmeat]

And there may be profits, but they would put those profits back in the company. The Oil company would use any profits to fund alternative energy.

And this isn't socialism. The government just loans out the money, and expects their money back with interest.

There is already a lot of venture capital flowing into alternative energy.

And your proposal is socialism (or economic fascism, technically). You'd be hard pressed to find a socialist who didn't like your idea. But it's not too far from what we're going to get, now that Uncle Sam is getting into bank ownership.

The rest of your stuff about Ronald Reagan is a farrago of hoary myths and half-truths.

First, yes the top tax rate was 91%. And it was full of loopholes. The bottom line is the size of government. From 1946-1980, the supposed golden era of bigger spending, we find that government consumed a smaller percentage of GDP.

Second, yes we were awash in red ink during the Reagan years. However, tax receipts went up during the 80's. Government was getting more money--lots more money. They could have easily, easily paid off the national debt by 1990. Instead, congress went on a spending spree. The main recipient was the military, but welfare state spending went up too.

Then he goes off and starts talking about reduced spending on infrastructure and college. What? I'd like to see any government-sourced numbers supporting these claims. The price of tuition used to be lower and yes, people used to pay their way through school by waiting tables. But the government has decided that everyone needs to be in college, so now all the people with grants who don't belong there have bid up the price of education.

 

[BaronVonBigmeat]

The middle class is being replaced by the working poor.

Since Bush has been president:

over 5 million people have slipped into poverty;
nearly 7 million Americans have lost their health insurance;
median household income has gone down by nearly $1,300;
three million manufacturing jobs have been lost;
three million American workers have lost their pensions;
home foreclosures are now the highest on record;
the personal savings rate is below zero - which hasn’t happened since the great depression;
the real earnings of college graduates have gone down by about 5% in the last few years;
entry level wages for male and female high school graduates have fallen by over 3%;
wages and salaries are now at the lowest share of GDP since 1929.
The debate about whether or not to roll Bush’s tax cuts back to Clinton’s modest mid-30% rates is absurd. It’s time to roll back the horribly failed experiment of the Reagan tax cuts. And use that money to pay down Reagan’s debt and rebuild this nation.

I won't disagree with this, however these are all symptoms of a Fed-created asset bubble. It benefits the rich by running up asset prices, but hurts everyone else by running up prices for housing, education, food, energy, etc.

The low savings rate is the same story. We have a negative interest rate. Inflation is higher than the rate you get from a bank. Who wants to put money in a savings account earning 4% when inflation is actually 11%? This isn't rocket science.

The loss of manufacturing jobs of course is nothing new, having started in the 70's right after Nixon took us off the gold standard.

Anyway, the democratic ideal of raising taxes to 91% isn't the answer. But neither is the republican plan of relying heavily on borrowing and inflation. It's just a stealth tax that hurts the middle class. We need to cut spending, there is no way around that.

 

[dilloduck]

I won't disagree with this, however these are all symptoms of a Fed-created asset bubble. It benefits the rich by running up asset prices, but hurts everyone else by running up prices for housing, education, food, energy, etc.

The low savings rate is the same story. We have a negative interest rate. Inflation is higher than the rate you get from a bank. Who wants to put money in a savings account earning 4% when inflation is actually 11%? This isn't rocket science.

The loss of manufacturing jobs of course is nothing new, having started in the 70's right after Nixon took us off the gold standard.

Anyway, the democratic ideal of raising taxes to 91% isn't the answer. But neither is the republican plan of relying heavily on borrowing and inflation. It's just a stealth tax that hurts the middle class. We need to cut spending, there is no way around that.

We can't cut spending. Someone is going to lose their job and/or lose a benefit they receive from government spending. People will not tolerate doing with less. We're just screwed until someone can convince people that the day of the free lunch is over.

 

[Paulie]

We can't cut spending. Someone is going to lose their job and/or lose a benefit they receive from government spending. People will not tolerate doing with less. We're just screwed until someone can convince people that the day of the free lunch is over.

This sums it all up.

 

[editec]

I have absolutely no problem if ATLAS shrugs off to Singapor or wherever they want to devise their libertopian paradise.

But we'd best prevent them from shrugging off with the capital they made off our labors (and their banking swindles) in the last century, first.

CAPITAL is now international, folks.

Citizens are not.

Hence CAPTIAL has an advantage which is so enormous that only law can prevent it from inheriting the earth.

 

[Zoomie1980]

I won't disagree with this, however these are all symptoms of a Fed-created asset bubble. It benefits the rich by running up asset prices, but hurts everyone else by running up prices for housing, education, food, energy, etc.

The low savings rate is the same story. We have a negative interest rate. Inflation is higher than the rate you get from a bank. Who wants to put money in a savings account earning 4% when inflation is actually 11%? This isn't rocket science.

The loss of manufacturing jobs of course is nothing new, having started in the 70's right after Nixon took us off the gold standard.

Anyway, the democratic ideal of raising taxes to 91% isn't the answer. But neither is the republican plan of relying heavily on borrowing and inflation. It's just a stealth tax that hurts the middle class. We need to cut spending, there is no way around that.

And there is really only two places that we can cut spending enough to matter. Entitlements and the Military. The entire military procurement process needs to be scrapped and rebuilt. It is a corrupt to the core and the life span of programs span the terms of several General officer's terms in their jobs leading to never ending streams of requirements changes. Medicare and Medicade need to be scrapped entirely and replaced with government premium assisted private insurance. The retirement age of SS (forget ever scrapping that, it is now a deep part of national culture so we have to live with it), needs to be tied to average life expectancy and the cap on income subject to taxation removed.

Domestically, eliminate Education and HUD entirely. Education has gone steadily DOWNHILL since the founding of the Ed Dept. HUD has never functioned, even minimally.