The logic flaw of tax cuts.

[elektra]

So why foreign engineers have not been able to do the same in the US?

what are you talking about

 

[Mexicano]

When the top tax rate was 90% people making 40 K were in the 50% bracket be careful what you wish for,

Indeed, but the tax rates would have to be adjusted for inflation. 40 K in 1980 are about 120 K in 2020. That seems to be ok.

 

[Mexicano]

what are you talking about

The US has no high-speed railroad network at all.

 

[elektra]

The US has no high-speed railroad network at all.

so what

 

[task0778]

What particular statement do you find to "fly in the face of conventional macroeconomics"?
Yes, I have sources. But I need to know what specific statements you are referring to.

Okay, let's start with this:

The government can't run a balanced budget in the long run, unless the country gets a net inflow of money from the exterior ( exports, remittances, interest on loans).

Says who?


AND:

I have to challenge your notion that government doesn't create wealth

Where did you get this idea? Is this your own opinion or did you read it somewhere? The government takes money from some people and gives it to somebody else after wasting a bunch of it. That is not creating wealth, that is merely redistributing it.


AND:

The amount of money in an economy is given by the following equation

Money = sum over time( Government spending - Taxes + interests on bonds + ( loans issued - loan payments) + net flows from abroad)

Where did you read that?


AND:

What I am saying is it can't cut spending, especially when the private debt is higher than public debt.

Where did you read that?


AND:

government spending, as a general rule, is at least equal to taxation


Where did you get that idea? Government spending is ALWAYS greater than taxation (revenue). What is your source for this statement?

In fact, what is your source for ANY of these statements?

 

[Mexicano]

Okay, let's start with this:

The government can't run a balanced budget in the long run, unless the country gets a net inflow of money from the exterior ( exports, remittances, interest on loans).

Says who?


AND:

I have to challenge your notion that government doesn't create wealth

Where did you get this idea? Is this your own opinion or did you read it somewhere? The government takes money from some people and gives it to somebody else after wasting a bunch of it. That is not creating wealth, that is merely redistributing it.


AND:

The amount of money in an economy is given by the following equation

Money = sum over time( Government spending - Taxes + interests on bonds + ( loans issued - loan payments) + net flows from abroad)

Where did you read that?


AND:

What I am saying is it can't cut spending, especially when the private debt is higher than public debt.

Where did you read that?


AND:

government spending, as a general rule, is at least equal to taxation


Where did you get that idea? Government spending is ALWAYS greater than taxation (revenue). What is your source for this statement?

In fact, what is your source for ANY of these statements?

This statement
"The government can't run a balanced budget in the long run, unless the country gets a net inflow of money from the exterior ( exports, remittances, interest on loans)."
Is derived from the following formula

Money = sum over time( Government spending - Taxes + interests on bonds + ( loans issued - loan payments) + net flows from abroad)

That formula in turn comes from the MMT models created by Steve Keen. Analyzing the model in Minsky is not for the faint of heart, you can take a peek at the videos.
I find that particular formula to be quite intuitive, almost self-explanatory once you notice the economy is a set of interleaved balance sheets.




The models in turn were created by following the journal entries made by firms households and financial institutions when executing transactions.

Sectoral balances - Wikipedia

en.wikipedia.org

Me: Finally : Government spending, as a general rule, is at least equal to taxation
You :

Government spending is ALWAYS greater than taxation (revenue).

Well , not always. The argument can be made that running a surplus during the 1920s was one of the factors that triggered the 1929 crisis ( the other factor being the high private-debt to gdp ratio).

US federal budget history

Line chart and statistics of the US federal budget history, 1789-2019. Over the 119 years since 1901, including the government estimates extending through 2019, the federal budget is 89 times (75% of the time) on the red (deficit), and only 30 times (25%) on the black (surplus). Until 1949, the...

stats.areppim.com

 

[Mexicano]

so what

So , the explanation can't be "foreign engineers" there must be other factors that contributed to the constructuion of such a high-tech large rairoad network.

 

[Blues Man]

Considering public schooling is an almost universal world-wide policy , yes. Public schooling works just fine even at college level.

How do you explain China's success in building the largest high-speed railroad network in the world in spite of being a public project?

The US is not China.

We do not have access to slave labor and our environmental regulations are draconian compared to China's.

And no our public schools are in trouble and have been for a long time

U.S. Education Rankings Are Falling Behind the Rest of the World

The United States' education rankings are slipping. The country is losing out to China and other countries increasing their number of high-tech jobs.

www.thebalancemoney.com

 

[Blues Man]

Indeed, but the tax rates would have to be adjusted for inflation. 40 K in 1980 are about 120 K in 2020. That seems to be ok.

You think people making 120K a year should be in the 50% bracket?

Are you high?

 

[elektra]

So , the explanation can't be "foreign engineers" there must be other factors that contributed to the constructuion of such a high-tech large rairoad network.

are you being stupid on purpose, your ignorance is incredible.

China uses foreign engineers to construct these huge, technically advanced, projects. Why, because China does not have experience in these engineering projects.

 

[Mexicano]

are you being stupid on purpose, your ignorance is incredible.

China uses foreign engineers to construct these huge, technically advanced, projects. Why, because China does not have experience in these engineering projects.

Well Elektra, I have an opinion about you that mirrors your opinion on me.
1)What is your source?
2) IF those technically advanced projects are constructed thanks to "foreign engineers" why doesn't the US have that particular piece of infrastructure (high-speed railways) too?

 

[Mexicano]

You think people making 120K a year should be in the 50% bracket?

Are you high?

That's a marginal tax... only the income above 120K would be taxed at 50%. The rest of the income below 120K gets taxed at a lower rate.
...and yes.

 

[elektra]

Well Elektra, I have an opinion about you that mirrors your opinion on me.
1)What is your source?
2) IF those technically advanced projects are constructed thanks to "foreign engineers" why doesn't the US have that particular piece of infrastructure (high-speed railways) too?

what does what we have, have to do with china?

The USA does not use trains, because we like to fly, less time, less cost, that is why.

My source? I worked with the Chinese on a nuclear project, on four seperate trips.I have also talked to engineers in the USA that stated they were being recruited, offered jobs in China. China recruits the best engineers in the world to build their projects. Sometimes one sees what is happening because they are there. China also hires technicians in various fields to do work in China.

People in the USA are recruited by foreign Companies every day, to do the technical and engineering work.

 

[Toddsterpatriot]

This statement
"The government can't run a balanced budget in the long run, unless the country gets a net inflow of money from the exterior ( exports, remittances, interest on loans)."
Is derived from the following formula

Money = sum over time( Government spending - Taxes + interests on bonds + ( loans issued - loan payments) + net flows from abroad)

That formula in turn comes from the MMT models created by Steve Keen. Analyzing the model in Minsky is not for the faint of heart, you can take a peek at the videos.
I find that particular formula to be quite intuitive, almost self-explanatory once you notice the economy is a set of interleaved balance sheets.




The models in turn were created by following the journal entries made by firms households and financial institutions when executing transactions.

Sectoral balances - Wikipedia

en.wikipedia.org

Me: Finally : Government spending, as a general rule, is at least equal to taxation
You :

Well , not always. The argument can be made that running a surplus during the 1920s was one of the factors that triggered the 1929 crisis ( the other factor being the high private-debt to gdp ratio).

US federal budget history

Line chart and statistics of the US federal budget history, 1789-2019. Over the 119 years since 1901, including the government estimates extending through 2019, the federal budget is 89 times (75% of the time) on the red (deficit), and only 30 times (25%) on the black (surplus). Until 1949, the...

stats.areppim.com

That formula in turn comes from the MMT models created by Steve Keen.

So, you don't have a real source? LOL!

 

[Mexicano]

what does what we have, have to do with china?

The USA does not use trains, because we like to fly, less time, less cost, that is why.

My source? I worked with the Chinese on a nuclear project, on four seperate trips.I have also talked to engineers in the USA that stated they were being recruited, offered jobs in China. China recruits the best engineers in the world to build their projects. Sometimes one sees what is happening because they are there. China also hires technicians in various fields to do work in China.

People in the USA are recruited by foreign Companies every day, to do the technical and engineering work.

That is a better answer.
But to be fair the US has done that( hire talent from abroad) , to a lesser extent, through most of its history : Einstein , Tesla, Musk , Sergei Brin, and many other scientists as well as 23% of the STEM workers are foreign-born.

 

[task0778]

The Modern Monetary Theory (MMT) proposed by Steve Keen and others was developed to explain and support the logic of running larger government budget deficits to increase demand in the economy’s consumption and capital investment sectors so as to maintain full employment. But the enormous U.S. federal budget deficits from the Obama bank bailout after the 2008 crash through the Trump tax cuts and Coronavirus financial bailout have not pumped money into the economy to finance new direct investment, employment, rising wages and living standards. MMT increases the size and the role of government in economic activity, despite overwhelming historical evidence that governments tend to be inefficient users of capital in comparison to the private sector. I am unaware of any instance by any gov't at any time where increasing gov't spending has led to greater prosperity long-term. It is essentially all about demand and all but ignores the problems with inflation where the gov't pumps more money into an economy, expecting a corresponding increase in the production (supply) of goods and services that doesn't materialize to cover the extra money floating around.

 

[elektra]

That is a better answer.
But to be fair the US has done that( hire talent from abroad) , to a lesser extent, through most of its history : Einstein , Tesla, Musk , Sergei Brin, and many other scientists as well as 23% of the STEM workers are foreign-born.

SO? You make huge leaps from subject to subject. I do not understand what that has to do with anything posted before it

 

[Mexicano]

The Modern Monetary Theory (MMT) proposed by Steve Keen and others was developed to explain and support the logic of running larger government budget deficits to increase demand in the economy’s consumption and capital investment sectors so as to maintain full employment. But the enormous U.S. federal budget deficits from the Obama bank bailout after the 2008 crash through the Trump tax cuts and Coronavirus financial bailout have not pumped money into the economy to finance new direct investment, employment, rising wages and living standards. MMT increases the size and the role of government in economic activity, despite overwhelming historical evidence that governments tend to be inefficient users of capital in comparison to the private sector. I am unaware of any instance by any gov't at any time where increasing gov't spending has led to greater prosperity long-term. It is essentially all about demand and all but ignores the problems with inflation where the gov't pumps more money into an economy, expecting a corresponding increase in the production (supply) of goods and services that doesn't materialize to cover the extra money floating around.

MMT is not a blank check. What MMT states is that a country that has achieved monetary sovereignty has no monetary restrictions. Instead, it faces resource constraints.
The 2007 bailout was in fact the dark side of MMT. Steve Keen and Michael Hudson have argued that instead of bailing out banks the funds could have been used to rescue the debtors by providing a one-time income under the following constraints:
- If the person didn't have any debts the money would be deposited directly into his account
- If the person had any debts the money would be used to pay off the debt.

Regarding government efficiency: yes, the market and the need for profits provide an incentive to become more efficient ( as long as the firms are not a monopoly , monopsomy or oligopoly). Some sectors like electricity, water distribution, and treatment and roads are natural monopolies. I personally don't see any benefit of having them handled over the private sector. Banks have a social purpose: to increase production by expanding the money supply... the unruly behavior of the banking sector baffles me, it just makes me ponder if it is wise to keep it mostly in the private sector.

That said, the real matter for consumers is not the "cost" at which a company produces a good or service , but rather the price at which it sells it on the market.
Privat firms don't always offer their goods and services at a lower price on the market in spite of producing them at a lower cost than their state-run counterparts.

 

[Mexicano]

SO? You make huge leaps from subject to subject. I do not understand what that has to do with anything posted before it

Elektra, there are no leaps.
Your argument seems to be that most of China's high-tech achievements have been possible because they hire foreign engineers.
My argument is that the US has also achieved many technological feats by hiring foreign -born engineers. Actually 23% of steam jobs are filled out by foreign-born engineers.
It is unlikely China is using such a large number of foreign-born population simply because it is not a migrant friendly country ( starting with the language barrier), so I find your argument lacking.


"Second, by virtue of restrictive immigration policies and a relative lack of appeal, immigrants make up far less than 1 percent of China’s total population, in comparison to 14 percent in the United States."

The U.S. Is Still Beating China in Human Capital—For Now

Washington could lose its unique talent advantages unless it pushes reform.

foreignpolicy.com

 

[elektra]

Elektra, there are no leaps...
..."Second, by virtue of restrictive immigration policies and a relative lack of appeal, immigrants make up far less than 1 percent of China’s total population, in comparison to 14 percent in the United States."

The U.S. Is Still Beating China in Human Capital—For Now

Washington could lose its unique talent advantages unless it pushes reform.

foreignpolicy.com

I stated that China is using foreign engineers and you deny it because of China's immigration policy? Engineers and technicians do not have to immigrate to work in China.

China is nothing but American business, American factories, dismantled and shipped to China. Everything in China has been built by Americans or Europeans, and even Russians.

All the technology China uses, is foreign.