The Classic Strawman: But 47% Don't Pay Taxes!

Wow, how lame. The government kept $250 out of the $1000 she had taken out of her check, and you are claiming she didn't pay any income tax? Never mind the fact she had no access to that money while the government was using it to make more money just like a bank does.

You can't even grasp the concept correctly and yet here you are trying to argue the point. Do me and the rest of the nation a favor, GO BACK TO SCHOOL!

 

They didn't keep the 250 dollars. They gave her back $7,500 in her tax return.

How the hell do you put in $1,000 and get back $7,500 back?? Through Democrat vote buying schemes thats how.

Excuse the hell out of me but I grew up on the street, the school of hard knocks and thats all the education one needs in this country.

One should never put in a mere 1000 in withholding and get back 6,000.. that's wealth redistribution and I want it ended!

 

Actually that is a completely false statement. A person who owns a house that is being rented out has to cover all the exact same costs that a regular home buyer has, plus make money doing it. If people can't afford to buy a home, they sure as heck can't afford to rent it.

 

Look, if you put $100 in the bank, the bank makes $900 off of it in one year. They don't pay you that much in intrest, but the government can afford to help out the poor in that manner. If it was not being paid in the form of taxes it woul be coming out of tax payers pockets in some other form.

 

No, no, no. We do not live in a vacuum. This is a global economy where all currencies are pegged to values relative to each other. What one currency does impacts other currencies and therefore trade. Why do you think nations are so upset about China's manipulation of its currency?

Fiat has value, just like gold or silver. The differene is that the fiat value can be changed in a way that gold or silver cannot - the govt can print more fiat as you wrote. Printing more money inflates the money supply - the definition of inflation - which devalues the currency, which leads to increased prices.

Devalued currency (printing money) hurts citizens as well, by increasing the cost of living. Savings, annuities, retirement plans, all are devalued when the money supply increases. Some can be devalued to the point that a retiree has to return to work, or live in a lower state than planned for, possibly even in poverty.

Foreign nations absolutely expect the US$ to retain more value than other currencies. That is why the US$ is the world reserve currency.

Nations loan money to the US because they expect either a profit on their investment, or they want financial security. Nations are concerned that the US will pay off its debt by printing money (monetize the debt). What that does is create more US$ but devalues each dollar, the end result is that an investor country is repaid with US$ that are of lower value than the original loan. Its a ripoff. Bernanke and Geihtner have been saying for the past several years that we will not monetize the debt, even though that is exactly what the US is doing.

There are consequences to printing money. It is not free.

The flaw is that there is no federal surplus. There might be a temporary surplus in SS payments, but in the govt as a whole there is no surplus. That money pulled out of SS and spent elsewhere will have to be paid back through more federal debt.

The US did pay back the WW2 debt. From 1941-1945, about 75% of all federal govt spending was paid for through US citizens buying War Bonds. Those War Bonds were positively paid back to those citizens over a 30 year period.

Fiat currency is not "made up". It is not arbitrary. The US does not explicitly set the value of a US$, the govt can basically only increase or decrease the money supply, and play politics. Ina global economy, many factors outside our control contribute to setting the "value" of a US$.

 

I intended to comment on your ignorance in the first post but I see now that you need to come out of the darkness of liberalism before you can be reached. At least you backed into your hole, where so many of the liberal horde jumped in head first and can't get out.

The bottom line on redistribution of wealth is that you have two choices: take from the government and be dependent on a person who doesn't know you and who is not accountable to you in any way or you can work for a person who has the ability to start and run a business and if you don't like him or her you can quit and get a new job. Yes, in the worst of times good workers can change jobs or even careers. But the best beggar, dependent on the good will of a bureaucrat, can only do as he is told.

I was working as a commission mechanic after I got out of the USAF so that I had a fully equipped shop where I could work on my hot rods. We had always made 50% of the labor charged and I made more than the national average and the dealership needed me more than I needed them. In 1976 they came up with a great scheme that raised the price of labor to the customers but kept the mechanic at the same dollar amount for the job. A differential job paid seven hours and it took me three hours. The flat rate was $16/hour to the customer so I made $56 and the shop made $56 but after the change the customer paid $22/hour and I still got the same$56 leaving the shop making $98. I (*)(*)(*)(*)(*)ed but the die was cast all over town so I moved to south Texas and went to work in the oil field. I started on the floor and learned how to drill an oil well. Three years later my brother and I had a machine shop building drill bits that sold for from $13K each to $24K. The bit that I designed set five published world records in the first year. We sold bits in the North Sea, Mexico, Peru and all over Texas. In the end the company that is now part of a meg giant oil field service company was giving bits to our customers so we went into other aspects of the oil and gas industry. My brother buys and sells oil and gas properties and I design drilling tools.

 

Right - and that is why the income tax should be repealed immediately. It was unconstitutional to begin with. Everyone has the right to keep all that they earn. No one has to right to threaten sending armed men after people to shake them down for creating wealth or working to earn a living.

 

Would it be fair if taxes are paid as a percentage of wealth instead of income?

 

No, because the money is still being taken under threat of force, or force if the threat isn't sufficient.

 

Your point of view does not apply to this discussion since we are specifically referring the US, where the People delegated the power to Tax, to our elected representatives to government, to provide for the general welfare and common defense and paying the debts of the United States.

Would it be fair if taxes are paid as a percentage of wealth instead of income?

 

It does apply because the Constitution never delegated authority to ANYONE to impose a direct, unapportioned tax. There were no internal federal taxes from 1802 to 1860, and that was the original intent of the Constitution. Federal revenue was to come solely from trade tariff revenue.

No.

 

I am not sure how you reached your conclusion since the terms and conditions for the power to tax is clearly enumerated in Article 1, Section 9:

An enumeration could be any progressive form of taxation deemed necessary and proper under any form of capital based, mixed-market economy such as ours.

Would it be fair if taxes are paid as a percentage of wealth instead of income? If not, why not?

 

Who cares, that has nothing to do with paying off debts. You are comparing debt based in a commodity to debt in USD. They are completely different. We have no solvency risk for paying off our debts.

Increasing the money supply is not the definition of inflation. You guys all seem to leave out velocity when you talk about economics. More money does not always equal inflation which was apparent the past 3 years.

It hurts citizens who can not increase their worth. The rest of us who can increase our wages and our assets have a greater return than inflation, we are doing just fine with more money in the system. Inflation isn't going anywhere. It is not a secret, every nation in the entire world targets a level of inflation. There isn't some huge conspiracy going on that you guys uncovered.

Of course it does. But we are the world reserve currency because our stability and our ability to produce goods and services that the rest of the world wants. You are forgetting about productivity... and solely focusing on qty of money.

They loan money to the US because they have nothing else to do with it. Are they going to sell us products for slave labor prices than buy them back at a major premium with their USD? Of course not. There is nothing China or Japan can do with their trillions of dollars.

Of course, it is a pay as you go system.

Yes, that is how things used to work. Now the Federal Govt doesn't need any citizen or any country to buy their bonds in order to spend.

USD is as "made up" as it gets. Where is this USD tree that you pluck your dollar bills off of? We control our currency. If we want to debase our currency to pay off our debt we can debase our currency. No one else can tell us what we can or can not do. Of course we don't want to (*)(*)(*)(*) the world off, but it's not like we have any limitations on how much USD we can make.

 

Ask dairyair for the proper definition of 'fair'.

 

Fiat currency has a value which is set by multiple factors, some of which are not in control of the govt printing the money. We cannot just print money without consequences.

What do we do when we trade with another nation? If it costs $1,000 to build a tractor in the US, and it costs $1,000 Canadian dollars to build the exact same tractor in Canada, right there you have a ratio of the value of US$ to Canadian - 1 US$ = 1 Canadian. If we print lots of money, the cost of living in the US goes up, wages go up, and the cost of that tractor increases to US$2,000. Now 1 US$ = $0.5 Canadian. Now US$ aren't so popular because they aren't worth much, nobody is interested in buying US treasuries, so we have to increase the interest we pay on our treasuries to entice people to buy US debt. And the Canadian that bought a US treasury at the 1.0 rate is pissed because now he is being repaid with US$ that are worth only 0.5, half the value he expected.

Here you are partially correct. Increasing (inflating) the money supply is the classic definition of "inflation". The effects of inflation depends upon the velocity and availability of money. Over the past 20 years or so, the word "inflation" has been popularly used to mean the effects of inflation, that is not technically correct.

For the past several years, the money supply has been tremendously increased (massive inflation), but the result has not been massive price increases and devaluation of currency because most of the new money is not in circulation. The new money (and lots of "old" money) is locked in financial institutions and businesses and in individual savings. Nobody is spending or loaning. If the floodgates open, we are in trouble.

Thats the big gamble of the Fed and Treasury. They want to spur the economy by making money available and increasing confidence in the banking system, so they print lots of money. That didn't work the first time, people horded the money, so they did it again (QE2). They are gambling that when the economy takes off, they can withdraw money from the economy fast enough to keep inflation down, but not so fast that it kills the recovery. Its a dangerous gamble.

It has nothing to do with a conspiracy. Its basic economics.

As I wrote above, and you wrote before, the effects of inflation are not in full force due to the lack of availability/velocity of the money. If it does pick up, you will not be able to keep up. The price increases outrun the rate of increase of wages. Inflation lately is near 3%, that is managable.

During the Carter recession, inflation was around 12-14%, and the interest rate was above 20%. What do you think a home mortgage interest rate of 25% would do to the housing market? What about businesses needing loans, college loans, car loans, consumer loans of all types? People cannot afford to borrow. The economy is depressed.

Look at Brazil in the 1980's. "Inflation" was over 1,000%. Read about how people lived then.

That is naive. There are other curencies in the world and the US$ will not be world reserve for much longer. Already, some nations trade oil and other goods in currency other than US$. Many are looking at creating a new world reserve, or multiple world currencies. These talks have been going on foe over a decade and have accelerated.

Thats right. We can print as much money as we want and debase our currency and monetize the debt and (*)(*)(*)(*) people off. They cant stop us. But they will never buy our debt, there will be no trust in the US$, the US$ will not be the world reserve.

When you get right down to it, the US$ as fiat currency only has value because other nations will accept it. They trust that the US will honor its committments and will not do something stupid like devalue the currency.

 

We can also not print money without consequences.

What if more money leads to more tanks?

Yes, if the floodgates open. But if we didn't increase the money supply to handle the current problem we would be in much WORSE shape than having the potential of the floodgates opening.

QE1 and QE2 were not about getting the economy money. It was about loosening up the banks balance sheets so that they can lend money. It was also about driving down the yields on treasuries so that people try to find other places to park their money. None of it worked though. Yields on treasuries are almost below inflation levels and banks are not increasing their lending because there isn't enough qualified borrowers in this type of economy.

The influx of money came from the Govt's massive deficit spending. With out it we would have sunk immediately in to a depression.

You are failing to realize what would have happened with out the influx of money. We would have been in a depression. It is much better to handle the current economy and make sure people have food than to worry about what happens when people actually start borrowing and spending money again.

Why would that happen now? The Fed is in complete control over interest rates just because of the Carter disaster.

Yes, countries will eventually have to look elsewhere for currencies. Eventually countries will have too much USD and have to diversify. But honestly what will replace the USD? The Euro???? That is a complete disaster, the Yuan or the Yen?? No way anyone is going to trust the Chinese or Japanese. There is no currency that can replace the USD right now. The only thing they have been trying is to create baskets of currencies. Regardless, the USD as world reserve currency isn't going anywhere any time soon. We still produced a quarter of the world's output last year.

We have been printing money for the past 100 years. I don't get why people think all of a sudden it will be "too much" money. As long as we control inflation and increase growth we will be fine.

No, it has value because we have $15 trillion of real output representing it. Look at companies like Apple. They are the largest company in the world. People want American products, they want American education, they want American financial services, etc, etc. The second people stop wanting our products is the second the currency will fail.

 

In the USA religious cults do not pay taxes, and the broadcast media and their sub organizations do not pay taxes. So that is tens of billions the US Citizen is ripped off every year. These religious monopolies and media mogules are not american if they do not pay taxes.

 

Complete control? People always think they are in control. History is full of people that thought they knew it all and were in control, but were not.

Feb 20, 2004, Ben Bernanke, gave a speech to the Eastern economic Association, called "The Great Moderation Speech", in which he claimed that modern macroeconomic policy had solved the problem of the business cycle. The problems of the boom-bust cycle, depressions and recessions, had been solved. He was not alone, many of the leading economists declared success and control over the economy.

Look at where we are today. They were so in control.

There are always people that think they are so smart they can control anything. They never can and we all pay the price.

China, brazil, Japan, Russia, india, South Africa, and the UAE have all agreed to use their own currencies in trade instead of the US$. This includes oil purchases, which have historically been done in US$.

There are several proposals for replacements already in the works. Most are combinations of currencies from several nations.

The BRICS (Brazil, Russia, India, China, South Africa) have a proposal, the Arab oil nations have a proposal, the UN, and the IMF all have proposals.

Just last week the IMF issued a report proposing using Special Drawing Rights as a replacement of the US$ as the world reserve.

Its more than economics also. The US has great influence through its role as the world reserve currency, and we use that influence in many ways to get our way. Some other nations don't like it. Some nations - like China - want the power that being the world reserve brings.

The US is not going to be the biggest economic power for much longer particularly if Obama and company stay in power. Many other nations are surging up. If some of those nations combine forces and work togethor - such as the BRICS - the end will be coming very soon.

 

The Fed does not control the housing market.

Over $15 trillion in output last year. We are not that bad off... thanks to the Fed and the Govt.

Exactly what you are doing right now. I rather pay the price from those that know somewhat about what they are doing than pay the ultimate price from someone that has no clue what they are doing.

They are diversifying their portfolios by acquiring new currencies. The US as the world reserve currency is not going anywhere anytime soon. And the fact people put so much weight in to the "world reserve currency" is hilarious. That doesn't make or break America. It might make oil prices more or less expensive but other than that America still has a quarter of the world's productivity.

We will live with or with out the world reserve currency.

 

Oh. I see. You're all in favor of "separating Church and State" when it comes to religious expression in schools, but you drop the hammer when it comes to money.

Got it.

 

This is getting redundant so I will only address the one item.

Thats exactly the point. The Fed and Treasury thought they controlled the economy including the housing market. Read the Bernanke speech, they thought in 2004 that they could predict the economy and adjust its direction to avoid the boom and bust cycles, no more recessions. They literally claimed they had smoothed the business cycle to basically a flat line.

Turns out what they were doing was contributing to the housing bubble. They didn't control the economy.

There were economists and investors that warned of the housing bubble, but they were ignored by the govt (Bernanke, and Greenspan before him).

Those are the experts you trust so much.

Just because someone "knows somewhat about what they are doing " is not a qualification to run the economy. In fact, I would call that a standard that allows unqualified people to run the economy.

 

All you are doing is listing off the Govt and the Fed. What about the banks that reduced their lending standards? What about the insurgence of private mortgage lenders who gave money away like candy... packaged up the mortgages and shipped them off to Wall Street. What about all the Wall Street firms that leveraged their entire companies in to subprime mortgages?

This wasn't just the Govt's fault. You have to hold the borrowers, lenders, investors, and security dealers at fault also. It isn't like Wall Street is a little baby that has to be told what to do by Bernanke.

It's clear your entire agenda is anti-Govt. Which is why you never mention a single non-Govt entity when talking about the crisis.

Greenspan even came out and said that in his entire life he never imagined Wall Street firms would leverage their companies like they did. Some of the most historic firms came tumbling down because of their miscalculation of the housing industry.

 

That is EXACTLY my point.

Bernanke, Greenspan, et al thought they could control the economy (including banks and housing and every other aspect) through macroeconomic monetary policy. They didn't claim they could control the economy only under certain conditions.

They claimed the business cycle had been tamed. They claimed that the Fed/Treasury could control the economy on their own, they didn't need to partner with banks and the finance industry. Banks and finance were to be controlled, not teamed with.

NOW in hindsight they make their excuses. But before the collapse, when Bernanke gave his speech in Feb 2004, when things looked good and the economy was booming, after Greenspan had seemed so adept at predicting and manipulating the economy, they were sure they could control everything.

They were wrong, and now they know it. Greenspan admits it. As you wrote:

Pre-2008, Greenspan didn't know. What else does Greenspan and Bernanke and Geihtner not know that is going to come back and hurt us?

They are not experts. There are no experts who can control the economy.

 

No, the housing crash was brought about by new evolutionary changes in our banking system. Allowing Wall Street to merge with depository banks creating a system that allowed reckless lending.

If a doctor cures a disease but causes an unknown disease, you don't go ask your local mechanic how to fix it. The alternative you are suggesting has been tried, and without central control to monetary policy there is disastrous results. I don't understand what you are even suggesting other than the Fed missed the housing collapse.

 

Neither do you go back to that doctor.