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I see. So the dot com bust was the worst crisis between 1962-2007 in terms of economic loss? And in the size of the worst crisis since the greaty depression (as the 2008 crash was said to be)? Goverment revenue says so.Quote:
Originally Posted by drone
I was more hinting that Bush's tax cuts quite clearly wasn't exactly the best idea, but I should've added the above comment to separate it from the dot com burst.
I'm genuinly curious about what caused the 1981 drop though.
The graph is government revenue vs. government spending, not really economic gain/loss. When the dot-com bust happened, revenue dropped since capital gains (stock sales) dropped, along with a small hit to income tax. The Bush(43) tax cut was signed in 2001, further reducing revenues. And, no, it was not a good idea. The peak above spending from '97-'01 is an aberration fueled by the bubble, drawing an imaginary line from about '95 to '02 is more reasonable when discussing normal taxation vs. spending. 2007-08 is what happens when capital gains plummet (housing crash) and unemployment kicks in.Quote:
Originally Posted by Ironside
I'm guessing '81 was caused by Reagan's tax cuts, the upper rate was reduced from 70% to 50% in 1982.
there was some stuff like Afghanistan and the Shah being deposed the beforehand I bet it affected revenue especially Iran due to oil.Quote:
Originally Posted by Ironside
Iran barely supplies any american oil. It was the Reagan tax cuts.Quote:
Originally Posted by gaelic cowboy
now it doesnt what about in the seventies.Quote:
Originally Posted by Centurion1
not enough to create a dip like that.
Seriously? :inquisitive:Quote:
Originally Posted by drone
A rough extrapolation then gives that the smaller piece of a bigger pie theory takes about 20 years (until 2001) until the state gains on it. And that's ignoring Regan's later tax hikes. And that times changes in 20 years.
So Reganomics were at best a sucessful stimulus package.
If higher taxes were used for better education, health and social services, plus infrastructure, that might help the disadvantaged to upskill, get better education and get better jobs. How are massive cuts to government services going to help the already disadvantaged? Without sufficient education especially, disadvantaged communities are generally going to be stuck with low paying jobs. How will the wealth from the mega rich "trickle down" to them exactly? When the millionaires hire an extra gardener or maid?Quote:
Originally Posted by PanzerJaeger
Hmm... where do you think the money is? Certainly a small portion is in savings accounts (which also indirectly help others through bank loans) bonds (which are crucial to government's ability to pay its employees), and commodities, but the vast majority of the monies out there are chasing a much higher return in the market.Quote:
Originally Posted by The Gutmensch
I think you vastly overestimate the amount of people it would take to build all that infrastructure. Just like we discussed earlier, construction is another manual labor intensive industry that has replaced people with machines in droves; and many of the people left are skilled professionals, not the people we're trying to target. You cannot pull a laid-off factory worker off the street and expect him to be able to learn how to operate a bitumen sprayer with any degree of competency. And how many do you really think would be able to graduate with an advanced degree in engineering or architecture?Quote:
Those on the federal payroll are already for the most guaranteed a middle class income for their job, which is great imo. A government should provide an adequate lifestyle for those that work for it.
I have said this in other threads, yes, government work can help. What this country needs is to complete the transition from an industrial economy to a post industrial economy by spurring demand for jobs that need education and by providing the education for workers.
We need new roads, new bridges, an entirely new power line infrastructure, a new high speed rail system so that amtrak doesn't have to piggyback on the freight car lines. All of this work will need to be done by many workers and will take years to build it all. Which will provide many of those that are unemployed jobs for the time being. After all this infrastructure is built, legions of new workers will be need to maintain and operate. These jobs will require engineers and tradesmen of all kinds to keep the new systems running and if the government provides the money for people to go through a trade school or a 4 year uni to get an engineering degree in return for a commitment from said worker for an x amount of years after their education is done, we can start to rebuild and strengthen our middle class again.
In contrast to your 'legions', I would be surprised if all that construction produced more than 100,000 genuinely new jobs - most of which would be transient and evaporate after it was completed. Even with all those new roads, bridges, and railways, it just wouldn't take very many people to maintain them these days - statistically speaking when compared to the national unemployment situation.
Infrastructure is great! I'm all for it. But it is not the answer to our unemployment situation. Even in the '30s, when much more construction was actually done by unskilled workers, the New Deal projects had very little impact on the greater Depression era unemployment. And what of the Stimulus? They threw money at all kinds of infrastructure projects at the cost of well over $100k per job created (of which, most have dried up) with little impact on the greater unemployment situation.
I don't assume, I hope. If not, I fear only attrition through aging and death will fix the situation. These people just aren't employable anymore.Quote:
Completely disagree. It is a fallacy to assume that the markets will always self correct and that we have no tools at our disposal. We do have the tools, we just have to make sure that the unused capital we are taxing is actively being used to create things that have value.
There are plenty of things government can do to help create an environment for economic growth, but that growth will only come from the private sector. Changing rates will do little to achieve that goal, however, and could actually have a negative impact by taking capital out of the market during such a tenuous economic period.
And yet the US government already spends buckets more than every other nation on earth on education at every level without much effect.Quote:
Originally Posted by Aimlesswanderer
Time for more charts!
http://mat.usc.edu/wp-content/upload...rnational3.jpg
And that monster Bush massively increased higher and re-education subsidies for this very purpose, not to mention the slew of new and up-funded programs aimed at dragging people out of poverty.
https://i4.photobucket.com/albums/y1...-2001-2009.gif
Exactly how much more spending on education is necessary to close the wealth gap?
I thought we were talking about how soaking the rich will help the poor and close the wealth gap.Quote:
How are massive cuts to government services going to help the already disadvantaged?
Who's arguing trickledown economics here? You highlighted the wealth gap as a reason to soak the rich. I'm asking you specifically how that tax revenue will be used to close the gap in a way that actually addresses the underlying economic problems that caused it. Throwing money at education and government work hasn't solved it so far; has it not been enough? What's left beyond that? More direct payments? A negative income tax can only be implemented to a certain point before it creates serious disincentives to work, not to mention the negative social implications such welfare schemes entail.Quote:
Without sufficient education especially, disadvantaged communities are generally going to be stuck with low paying jobs. How will the wealth from the mega rich "trickle down" to them exactly? When the millionaires hire an extra gardener or maid?
It seems the wealth gap argument is rooted far more in class warfare and punitive emotion than real solutions to the nation's problems. Despite the existence of the gap, the American tax system is actually highly redistributive. The wealthy already pay the vast majority of income taxes in this country while nearly half pay nothing and millions collect direct payments (a situation the hated Bush tax cuts made even more favorable to the poor). With the new healthcare law, there is little more the government can do to help the poor without disincentivizing work and trapping the poor in a cycle of dependence. If you think the rich aren't paying enough, that's fine; but you'll have to come up with a more coherent argument if you want to try and portray raising rates as some sort of solution to the economic problems of the poor. It can only hurt them in the long run.
Stats? I would like to know how much money that goes through the hands of the ultra wealthy goes to "constructive" things. I'm sure all of those bonuses that wall street gave themselves went back into the proper channels right?Quote:
Originally Posted by PanzerJaeger
I think you vastly underestimate the scope of what I am talking about. This isn't adding another lane to the 101 or building a dam in Tennessee. When I say a new electrical and internet infrastructure, I mean an almost brand new one. From coast to coast, across all states, penetrating everywhere. Do you feel like a task like this will take 6, 8 or 12 months?Quote:
I think you vastly overestimate the amount of people it would take to build all that infrastructure. Just like we discussed earlier, construction is another manual labor intensive industry that has replaced people with machines in droves; and many of the people left are skilled professionals, not the people we're trying to target. You cannot pull a laid-off factory worker off the street and expect him to be able to learn how to operate a bitumen sprayer with any degree of competency. And how many do you really think would be able to graduate with an advanced degree in engineering or architecture?
I understand there is training involved, which is why this will take time. I think maybe about 1% would be able to graduate with a degree. I feel that many more would be able to take the offer regarding trade skills such as electricians, plumbers etc...
Again, I feel you don't understand the scope. You think 100,000 people are going to rebuild a nation of 300 million in a couple months?Quote:
In contrast to your 'legions', I would be surprised if all that construction produced more than 100,000 genuinely new jobs - most of which would be transient and evaporate after it was completed. Even with all those new roads, bridges, and railways, it just wouldn't take very many people to maintain them these days - statistically speaking when compared to the national unemployment situation.
The point isn't the long term jobs. The point is the value gained from the construction which is needed in the first place and the demand created during this time to get more private sector jobs opening up.
I don't feel as if it is the end all be all in saving the entire economy. In the end the private sector has to step up with more permanent jobs. Great Depression project works like that have been part of the back bone of the American economy over the long run due to the benefits they gave and continue to give. As I have pointed out before, does anyone want to claim that without the government funded interstate highway system, that our level of efficiency and economic productivity would be anywhere near what it is today? Stimulus was a joke, most of it went into bankers pockets, that's no evidence.Quote:
Infrastructure is great! I'm all for it. But it is not the answer to our unemployment situation. Even in the '30s, when much more construction was actually done by unskilled workers, the New Deal projects had very little impact on the greater Depression era unemployment. And what of the Stimulus? They threw money at all kinds of infrastructure projects at the cost of well over $100k per job created (of which, most have dried up) with little impact on the greater unemployment situation.
Where is the capital flowing in now? The bubble burst back in 2008 and we are still at 9%-10% unemployment. Where are the heroes of industry coming in to direct capital to successful ventures?Quote:
I don't assume, I hope. If not, I fear only attrition through aging and death will fix the situation. These people just aren't employable anymore.
There are plenty of things government can do to help create an environment for economic growth, but that growth will only come from the private sector. Changing rates will do little to achieve that goal, however, and could actually have a negative impact by taking capital out of the market during such a tenuous economic period.
All I am saying is that we got this work that needs to be done, that isn't being done. We are all just sitting here waiting for the private market to do it's thing and meanwhile we got 1 in 10 people not doing anything. Just give them the jobs in the meantime. It is much better to have the unemployed man working for his unemployment check than just sitting at home.
No one knows because the money isn't going to the students. Much of it is going to admin and support.Quote:
And yet the US government already spends buckets more than every other nation on earth on education at every level without much effect.
Exactly how much more spending on education is necessary to close the wealth gap?
I personally find it rich that not until now did Congress, with their majority vs a Democratic president, decide to stand firm on the debt ceiling. Nevermind when they held a huge majority under Bush. Nevermind the last two years of his presidency where Bush spent as much as he did the previous 6.
This "battle" has been in the works for quite some time.
Where do you think it goes? The worst thing a wealthy person can do with her money would be to hold it in a checking account or hidden in her mattress.Quote:
Originally Posted by The Gutmensch
Money follows returns. That's Finance 101. Sure you could argue that certain commodies and currency trading do not create value, but the speculative risk involved in those activities relegates them to very small percentages of most portfolios.
The best returns are found in the market, where money can turn a low value asset into a high value asset. That's why the wealthy tend to put their money into start-ups, private equity, and hedge funds, which all serve as value creating activities for the larger economy.
Ok, let's be super generous and say such projects will generate 1,000,000 new jobs. That's still a drop in the bucket.Quote:
I think you vastly underestimate the scope of what I am talking about. This isn't adding another lane to the 101 or building a dam in Tennessee. When I say a new electrical and internet infrastructure, I mean an almost brand new one. From coast to coast, across all states, penetrating everywhere. Do you feel like a task like this will take 6, 8 or 12 months?
I understand there is training involved, which is why this will take time. I think maybe about 1% would be able to graduate with a degree. I feel that many more would be able to take the offer regarding trade skills such as electricians, plumbers etc...
...
Again, I feel you don't understand the scope. You think 100,000 people are going to rebuild a nation of 300 million in a couple months?
The point isn't the long term jobs. The point is the value gained from the construction which is needed in the first place and the demand created during this time to get more private sector jobs opening up.
I agree. As I said before, government has a definite role in creating an environment for economic growth, and infrastructure spending is a huge part of that.Quote:
I don't feel as if it is the end all be all in saving the entire economy. In the end the private sector has to step up with more permanent jobs. Great Depression project works like that have been part of the back bone of the American economy over the long run due to the benefits they gave and continue to give. As I have pointed out before, does anyone want to claim that without the government funded interstate highway system, that our level of efficiency and economic productivity would be anywhere near what it is today? Stimulus was a joke, most of it went into bankers pockets, that's no evidence.
However, the question wasn't: should the government spend money on infrastructure? It was: how will raising margins on the rich help the poor and close the wealth gap? If the answer is through massive infrastrucure projects, I just don't see much evidence that such projects - while valuable in their own right - would effect the macro employment situation to any notable degree or create the type of high paying technical jobs that fuel the middle class in any significant amount.
You also must consider the value of the lost capital that will fill government coffers instead of funding business start-ups and expansions. Remember, Roosevelt financed the New Deal through debt, as did Obama with his stimulus. You... err... Aimlesswanderer wants to finance these new projects through higher taxation, which takes money directly out of the economy and moves it somewhere else.
Sitting on the sidelines. It will return with demand, which will return with consumer confidence - none of which has anything to do with tax rates. Further, government efforts in stimulating demand - whether it be through mass employment projects, directed tax cuts, or direct payments - have never amounted to much. And doing it through soaking the rich comes with its own set of negative effects on demand.Quote:
Where is the capital flowing in now? The bubble burst back in 2008 and we are still at 9%-10% unemployment. Where are the heroes of industry coming in to direct capital to successful ventures?
Unfortunately it costs far more these days to employ an unemployed man in a government job than to just send him a check.Quote:
All I am saying is that we got this work that needs to be done, that isn't being done. We are all just sitting here waiting for the private market to do it's thing and meanwhile we got 1 in 10 people not doing anything. Just give them the jobs in the meantime. It is much better to have the unemployed man working for his unemployment check than just sitting at home.
That's hardly a ringing endorsement for taxing the rich to pour more into education, unless you're trying to make some kind of abstract demand side argument based on bloated education administrators leading America out of the recession. :laugh4:Quote:
No one knows because the money isn't going to the students. Much of it is going to admin and support.
The wealthy have a million and one loopholes to direct money away that isn't taxed or lost but isn't being put to good use either in any of the options you have listed. It's why the bill Obama is proposing gives 1 trillion dollars in additional revenue just from closing such loopholes.Quote:
Originally Posted by PanzerJaeger
The wealthy before 2007-2008 also poured trillions into derivatives regarding the housing market, all of which was lost because the whole setup was a fraud to begin with. Not exactly constructive stuff here. We are the richest country on earth, and yet our economy is stagnating, people don't have jobs but somehow the wealthy have been doing their jobs correctly in directing all their capital towards constructive things such as start ups, private equity and hedge funds?
Let's say that the work lasts for 18 months. That is a million paychecks paying off debts, or adding to consumption, prompting the demand for more supply and thus jobs to be created. It's a good start and I feel extremely worth it.Quote:
Ok, let's be super generous and say such projects will generate 1,000,000 new jobs. That's still a drop in the bucket.
I disagree. The jobs needed to maintain a new, modern infrastructure maybe not enough to hire even 10% of those currently unemployed, but even if it provides half a million people with a permanent job with steady pay that is better than nothing. And I feel that it would be more than that.Quote:
I agree. As I said before, government has a definite role in creating an environment for economic growth, and infrastructure spending is a huge part of that.
However, the question wasn't: should the government spend money on infrastructure? It was: how will raising margins on the rich help the poor and close the wealth gap? If the answer is through massive infrastrucure projects, I just don't see much evidence that such projects - while valuable in their own right - would effect the macro employment situation to any notable degree or create the type of high paying technical jobs that fuel the middle class in any significant amount.
You also must consider the value of the lost capital that will fill government coffers instead of funding business start-ups and expansions. Remember, Roosevelt financed the New Deal through debt, as did Obama with his stimulus. You... err... Aimlesswanderer wants to finance these new projects through higher taxation, which takes money directly out of the economy and moves it somewhere else.
I am trying to come up with some ballpark estimates to see what the number of permanent jobs would be, but it is nearly impossible to give an accurate answer considering there are so many different things to take account of.
But people won't have confidence until they start to see jobs opening up. So it is a feedback loop of industry holding off due to people worrying, and people worrying because industry is holding off. If they are not going to do anything with it, than that is wasted capital. Take it, use it. Break the loop, get the thing moving again. Hell, at least go for it for the sake of trying something. Are we to stand around and just wait for people to cheer up so they start buying again? Because with default on everyone's mind, I highly doubt that the public is going to start opening their own wallets anytime soon.Quote:
Sitting on the sidelines. It will return with demand, which will return with consumer confidence - none of which has anything to do with tax rates. Further, government efforts in stimulating demand - whether it be through mass employment projects, directed tax cuts, or direct payments - have never amounted to much.
Elaborate please.Quote:
Unfortunately it costs far more these days to employ an unemployed man in a government job than to just send him a check.
I ain't making the case wanderer is making. I am just making a point that the amount of spending is completely broken from performance because it isn't being directed towards the students.Quote:
That's hardly a ringing endorsement for taxing the rich to pour more into education, unless you're trying to make some kind of abstract demand side argument based on bloated education administrators leading America out of the recession. :laugh4:
If the education system downsized the expensive admin and hired cheap private companies to take care of the logistics as long as they satisfied the schools standards, the education system could still shave off some money because then our cost-performance ratios in the chart you provided would start to look similar to other countries.
No, I only want to tax the rich so we can build more golden gate bridges, have fiber optics running to every house and business and have a high speed rail connecting major clusters of cities together for easier mid range mobility. I agree that education does not need any of that money because at this point it is a beast that feeds all but the teachers and students.