Tax Cuts

[NAOS]

Thanks for your response.

The position I've taken is based on my own assessment of what is right and what is fair. I wouldn't call it a political position as much as a philosophical one, because other than discussing my views I don't advocate for their enactment. I realize that if I were to have the power to enforce my economic views and I simply did away with everything I object to while promoting my version of what is right this country would sink into chaos and disaster. So, I'm not calling for a revolution. Heck, I usually can't even bring myself to support or vote for the occasional Libertarian candidate. I'm just trying to understand how things are justified, and can't see taking things from people by force as justified unless it can be established that the people things are being taken from are not otherwise fulfilling a legitimate obligation. Who's obligated and to whom are they obligated? That question is typically glossed over as people speak of inequality and need. Just because taking people's money fills a professed need does not mean that the taking of it was justified.

The very most common criticism I've seen is that people cannot be truly independent. I agree with that statement. The question to me is not whether or not a person can exist in the modern world without cooperating and working with others, it is how these relationships are formed. It is possible for a person to voluntarily create the relationships needed for their own success? Currently the relationships are formed automatically by virtue of your citizenship in the U.S. Because I live here I am obligated to support what others arbitrarily deem to be "the common good."

I have a specific issue with the notion that people are guaranteed a comfortable existence regardless of their own contribution to making that possible. That alone opens up so many different cans of worms that I know I can't do justice to the pitfalls it creates. But, my first concern is that if everyone is provided with a comfortable life, yet not all people contribute to making it possible, there are some in our society who are paying the tab for others, whether they want to or not, and regardless of their own contribution or lack thereof to the position other people find themselves in. My next concern is with the effect this has on people's risk/reward assessment for their own efforts. Obviously some people will see that they can have nearly as comfortable a life by being less productive and/or capable then they otherwise could be by working for a low wage. So we encourage people to be less valuable than they would have been otherwise, while still guaranteeing them a positive outcome. At the extreme end of this type of thinking you would create a competition in which people scramble to prove their own lack of worth and ability, while demonstrating the greatest amount of "need" in order to be considered deserving of the most benefits. The next problem is that when one person is paying to support the lifestyle of someone else they want a say in the nature of that lifestyle. "I'm paying for it, so I should have a say in how it works!" The problem is that to some extent we all receive some benefit from the government, therefore we all owe a certain amount of accounting for why we deserve that benefit. That takes a great deal of sovereignty away from the individual without the consent of the individual. My last problem (that I'm going to mention) is that calling someone rich and another person poor is completely subjective. Often what we do is grade on the curve, saying that the top x percentage of people are rich and the bottom x percentage of people are poor. But isn't it possible that all people could have a decent quality of life? One in which they have shelter, clothing, food, education, entertainment, etc. yet still fall into the bottom percentage? Is poor a relative term, simply defining people who fall far enough below the average amount of wealth, completely divorced from actual suffering or disadvantage? Is it necessary for all people to have equal material wealth for there to be political equality? Is there any type of equality that comes from giving all people the same amount of material wealth without equality of effort and value provided by that individual?

I'd like to point out our current immigration "crisis" as an example of some of the problems our current system has. One of the main problems people express with the "flood" of illegal immigrants is that they want to come here and enjoy all of the benefits without paying for them. If we lived in a place where it was stand on your own two feet or suffer the consequences then no amount of illegal immigrants would be a threat. In fact, I doubt there would be any such thing as "illegal immigration" because the boarders would be almost completely open. Another problem is that people feel like it is the government's responsibility to protect their job as well as their wage. So immigration (illegal or legal) poses a threat to those things, therefore we need to limit the number and "type" of people who are allowed to enter. When in reality you have no more a right to your job by virtue of being born here then anyone else has. It is a job offered by someone who needs some work done. Anyone willing to do that work should have the opportunity to do it for whatever wage they agree to. Funny that conservatives take the counter view on this issue.

I don't think I fall into the tinfoil hat wearing category. The federal government is pretty good at doing a lot of things. I also trust that for the most part the people involved in making decisions believe they are doing the best they can. It isn't that I see the federal government as some sort of bogeyman, but that they exert an unbalancing influence on our society and economy. I don't like the paternalistic relationship that has developed between "the people" and "the government."

Again, thanks for your post. I'm not an expert in any of this, so to have my ideas tested and to be presented with a reasonable counter argument is very valuable to me.

sorry, it has been a few days since I've had time to sit at a computer and be thoughtful. I'm afraid that I'm on the run again, so this is a bit of a rushed response. It's been on my mind though, so here it goes.......

For the most part you raise good points, and I'm inclined to say that they are perhaps better than you are giving yourself credit. If there is some sort of castrating energy here, which there seems to be, it might be in the impenetrability you give to the political process and entities. There is, of course, a vicious feedback loop here. For example, you erect what is truly a problematic distinction when you state that yours is more of a philosophical than a political position. These two modes can, for analytical sake, be split, but in actuality no such distinction holds. In fact, if you look at the questions in your post, the vast majority are insightful political-philosophical questions. No distinction. If you are asking these types of questions with this level of insight and also finding them removed from the political process, then perhaps you are unfairly separating "the personal" from "the political"? The personal is political. Collapsing this distinction can be liberating if you find where to put your energies.

Your relationship with money is sort of peculiar. Seems overly fixed to some idea of labor and productivity when, actually, it is a lot more abstract than that. A lot people get their hands on a lot of it without really being that "productive". The banking sector is a prime example. I'm certain that we could both agree that a massive tax overhaul is way overdue. I'd tax the **** out of people that make money from money. People that are more concretely productive and who are owners/innovators of processes that are productive (provided that this process does not tread on the environment or any other shared resource) should be taxed less. Right now we are not making these kinds of distinctions, which would, I think, address your concerns about who is obligated to whom in an interesting way. Perhaps this would even foster relationships in a way that doesn't so immediately default to the government mediating them?

You ask, "It is possible for a person to voluntarily create the relationships needed for their own success? Currently the relationships are formed automatically by virtue of your citizenship in the U.S. Because I live here I am obligated to support what others arbitrarily deem to be 'the common good.'" This is at once a very profound political-philosophical statement, then it is followed by an arbitrarily limited and very restrictive view of the nation. There are plenty of examples of trans-national monetary flows which are being used to create a locality that isn't fully subverted by the nation. I'm not saying that the nation doesn't come into play at some level, but it is by no means the end-all-be-all.

Your question about lifestyle is a good one, and where we draw the line is a difficult one. One of my favorite political theorists uses the dichotomy over-developed countries vs. the rest of the world instead of developed vs. developing. Certainly our lifestyle and consumption demands are way out of touch.

for what it is worth,
NAOS

 

[franklin]

I read the opening line and skipped to the bottom because we all know what was said in the middle. Basically, it's a bunch of dogmatically challenged know-it-alls spitting out a bunch of stupid bull **** even though they've never read a single NBER paper. Nope. You're either reiterating a mashed version of the Pauline Doctrine (Krugman) that was written to sell newspapers, or your copying Art Laffer's half truths that are written to sell books.

It's hard enough discussing anything economics with those who are actually in the industry. Many economists barely care about the actual mode of money creation and systemic functions. How the hell do you all think you know what you're talking about? That's rhetorical One Brow. I know you have a 10-page, circular argument with 1000+ tangents to make your points without actually saying anything meaningful.

So shut the hell up and leave the discussion up to people who actually know what they're talking about.

And oh, by the way, go read Obama's ex-chief economic advisor, liberal economist Christina Romer's paper on tax cuts and raises. As a real economist, doing a real study, her conclusion wasn't what the libs wanted. Then follow that up with Mark Haines recent article showing there is no correlation between tax cuts and coming out of recessions. So guess what folks, the economy is much more about we the people than government no matter what your worshiped talking heads tell you. Take that bitches!

 

[moevillini]

I have a question, not directly related, but at least tangentially so - - of the homes across the country in foreclosure, how many (what percent) were newly purchased and what percent were refinanced?

I could probably look it up, but I'm too lazy at the moment. I'm just wondering, because from the admittedly small sample size of people I know of whose homes have been foreclosed (3 families) - - all of them had owned the home for at least 7-10 years and had taken on heavy debt through refinancing (2 to invest in businesses which ended up failing, and one just spend it on fancy cars and a boat, plus a huge high-end home addition) One of these lost a home that had been in her family since the 1940's.

not that this has a whole lot to do with tax cuts, but I do think the fact that this ready source of money has dried up is largely responsible for the economic slump

but actually, I think we're now back to a more normalized state of economic affairs - - sort of settling back to where we would be if the stimulus of easy money from housing hadn't overstimulated the consumer economy

 

[franklin]

I have a question, not directly related, but at least tangentially so - - of the homes across the country in foreclosure, how many (what percent) were newly purchased and what percent were refinanced?...


not that this has a whole lot to do with tax cuts, but I do think the fact that this ready source of money has dried up is largely responsible for the economic slump

but actually, I think we're now back to a more normalized state of economic affairs - - sort of settling back to where we would be if the stimulus of easy money from housing hadn't overstimulated the consumer economy

I don't have any recent numbers, but the vast majority were sub-prime in the beginning (subprime were pretty much all newer vintage loans). The foreclosures eventually moved into the top tier as the recession deepened. House foreclosures are highly linked to equity. The prime had more equity to eat away before people found themselves underwater and unable to sell.

What you're saying regarding the refi credit card is correct. I don't think anyone would argue otherwise. I'll add that we're still below a long term average spending level on new homes since we still, after 3 years, have 6 million surplus housing units (that's in addition to the 7 or so million empty housing units that's "normal"). We're building just over 300K new units per year, but add 1.2 - 1.5 new households. A million units built adds a helluva lot of economic activity. Other than that, your correct in pointing out that we had false aggregate demand and have cleared it out. Unfortunately that costs jobs. But that's what recessions are all about. This one's been extra hard since we've tried to avoid them since Reagan.

 

[One Brow]

I read the opening line and skipped to the bottom because we all know what was said in the middle.

Your rant made it painfully clear you didn't know what was said in the middle.

How the hell do you all think you know what you're talking about? That's rhetorical One Brow. I know you have a 10-page, circular argument with 1000+ tangents to make your points without actually saying anything meaningful.

Before this post, I hade all of two lines and three sentences in this post, to point out that waste is seen in provate as well as government spending. I must have really upset you in the past.

So shut the hell up and leave the discussion up to people who actually know what they're talking about.

I see no reason to think that would be you.

So guess what folks, the economy is much more about we the people than government no matter what your worshiped talking heads tell you. Take that bitches!

I agree, actually. Tax cuts won't take us out of the recession, and you can't spend you way out of a recession, either. What you can do a ameliorate some of the worst effects of the recession with the spending.