Great Depression of 2016

[hemet dennis]

Sorry but what is my incentive to buy US made goods? At one time they were better made, that is not true any more...


I buy KC brand lights cause they are the best. I buy Lodge cookware cause its the best. I pay more for these products cause they are better not cause they are made in the US. If a US based company wants my business they need to be able to compete on price or have a product so good its worth the extra cost. Just being made in the US is not worth 2 to 3 times the price....

I buy American made gun-nails at $5 to $6 more for a 50# box. Because they're American made and they don't jam very much. You can build a complete house with only U.S. made material for about $1500 more then with material made overseas.
Tell me something that is 2 or 3 times as much because it's made here ?

 

[hemet dennis]

Quote: As I said First you need jobs to even think about addressing the debt. When you're in a hole the first step is to stop digging ! People that have jobs don't need other peoples money.

One thing that would employ a lot of people is fixing our roads and bridges. But if we did that with borrowed money we would be back to digging the hole deeper. We need to raise the fuel tax !
A 10 cent a gallon increase in the fuel tax would create about $1,500,000 a day in funds for the roads. that would employ a lot of workers, who in turn would employ more Americans. How many wouldn't be collecting from the government and instead would be paying taxes to the government.

Another thing is why is federal money used to pay for airports ? The taxes paid on the tickets is to pay for the airports. How many people fly each year ? If the tax doesn't cover the cost then we need to stop spending borrowed money to pay for them. if you are paying taxes and don't fly you are subsidizing the people that do fly. Would you not fly to visit grandma because the ticket was $5 more ? 730 million people fly each year so $5 would increase revenues by over $3.5 billion every year.

Just allowing the Keystone pipeline puts over 4 billion dollars in to the U.S. economy.

If you're expecting to solve a problem like the debt in a short time you can expect to fail.

 

[caychris]

As I said First you need jobs to even think about addressing the debt. When you're in a hole the first step is to stop digging ! People that have jobs don't need other peoples money.

One thing that would employ a lot of people is fixing our roads and bridges. But if we did that with borrowed money we would be back to digging the hole deeper. We need to raise the fuel tax !
A 10 cent a gallon increase in the fuel tax would create about $1,500,000 a day in funds for the roads. that would employ a lot of workers, who in turn would employ more Americans. How many wouldn't be collecting from the government and instead would be paying taxes to the government.

Another thing is why is federal money used to pay for airports ? The taxes paid on the tickets is to pay for the airports. How many people fly each year ? If the tax doesn't cover the cost then we need to stop spending borrowed money to pay for them. if you are paying taxes and don't fly you are subsidizing the people that do fly. Would you not fly to visit grandma because the ticket was $5 more ? 730 million people fly each year so $5 would increase revenues by over $3.5 billion every year.

Just allowing the Keystone pipeline puts over 4 billion dollars in to the U.S. economy.

If you're expecting to solve a problem like the debt in a short time you can expect to fail.

Public works projects and higher taxes actually hurt jobs and the economy. Doing the infrastructure similarly to how the fed is buying securities now would be good (or at least better than many of the other things) You have to remember that every tax dollar sent to the government must first be earned in the private sector. Keystone would be good for sure. Debt in and of itself is not the issue it is what we are going into debt for. Im not against government doing some of these things but they need to be done and financed correctly. Everyone has to remember that government does not actually create any money it just redistributes it. Revenues that are sent to the government are a portion of other productive work. The more of that productive work it siphons off and uses to subsidize otherwise failing sectors of society the harder it is to actually grow the economy. This is why the supply side economics like Reagan worked so well. They used debt to finance operations and allowed the money in the private sector to grow the economy resulting in greater revenues through a lower percentage of a greater whole. It works but government cannot continue to create debt indefinitely or at a faster rate than the growth of revenues. There has to come a point when the government says stop no more. But that has not happened yet and eventually it will. I believe we have passed a point when the debt and promised programs (Medicare and Social Security) will consume all future revenue creation if they are not curtailed now. Otherwise they fail and the enormous chaos that will ensue will be frightening. On the back of those failures other govt backed programs and our fiat currency will fail as well. We will not have any safety net and in fact what little the government will be able to control will be done though rather draconian means.

Getting the economy going is the key you are correct but it must be accompanied with an axe to the budget. The path is unsustainable we have promised too much and made too many dependent upon those promises.

 

[hemet dennis]

Quote:
So you think public works projects and 10 cents that's used to employ people hurts jobs and the economy ? Please explain that.

Do you realize that the FED is buying securities with money created by the government. I know you said "Everyone has to remember that government does not actually create any money it just redistributes it" but the fact that the government does it every day shows you're wrong.

But please explain how creating jobs without borrowed money is bad for jobs and hurts the economy ?

 

[rebelcowboysnb]

Tell me something that is 2 or 3 times as much because it's made here ?

Harley Davidson....


KC Daylighters are $150 a pair when I can get imports for about $40. The KCs are worth the extra though.

Wrenches...

Lodge cookware. Also worth the extra...

http://www.huffingtonpost.com/2012/...the-luxury-label-will-cost-you_n_1891127.html
Quote: I have close to 10 years in my $50 imported Brahma boot I got at walmart. I dont own any other shoes ether.. Got about 10 years out of the last pair too..
I have imported Rustler jeans that I got back in the 90s for under $20 at walmart. $60 in jeans has got me threw most of my adult life. I just got more lately cause I gained weight..
I think I pay $6 a pack for Hanes T-shirts. I stain them up faster than I can wear them out.

 

[caychris]

Quote: First things first the 10 cent fuel tax is just redistributing from 1 tax payer to another. The increased cost of fuel drives costs of goods up and purchasing power down. Every 10 cents of tax is 10 cents less actual fuel bought. (or rather 10 cents of something else) by the person who earned the 10 cents. It is then put in the hands of another person who can only buy 90 cents of fuel from every dollar he gets from the tax that pays his wage. The forced redistribution is not nearly as efficient.

Second the fed is buying securities these securities are the product that is of value the fed is simply buying them by printing money. this in effect is allowing those creating the securities to inflate the value of their security and essentially print their own money. Its not government creating the security instrument (even treasury bonds are a shell game against future tax revenue) Revenue taken from the private sectors products. All government does is print money to ensure that there is enough liquidity in the market for exchanges to take place. The actual value behind that money is created (even if its artificial) by the private sector. Even a government bond is a request for the government to use funds it would collect in taxes now rather than when they are collected. Those taxes represent a portion of the productive private sector. The real trouble when the Fed starts buying these govt securities which are nothing more than a bet that the govt will be able to continue to collect taxes. So instead of actually having to convince the productive sector that they can and will collect the taxes to pay both principle and interest on the bond. They just tell the fed to take these IOU's which the Fed has now real power to collect on. Then the govt spends that money flooding the market with cash which makes prices rise through inflation ( too much money chasing too few goods) All essentially backed by the future productivity of the private sector which in turn is now less productive due to inflation.

Thirdly I said creating jobs on borrowed money is better than creating jobs with tax revenue. Both are not long term viable strategies but temporary deficit spending is preferable to increased taxation.

There is some economic growth created by the redistribution but it is more accurate to say that it more than likely simply offsetting the natural contraction at the lower end by preventing or slowing the expanse at the larger end. Any differential can on occasion be seen as growth but it is always meager at best.

I'm not one to advocate complete hands off by govt but the current policies (not just Obama's) are unsustainable and accelerating towards doom.

Many would quote Atlas Shrugged as prophetic in a way (I don't think it is completely accurate) but the general principle that it is the productive private sector is the motor of the world.

 

[hemet dennis]

Quote:
OK slow down, you got yourself all confused and are talking in circles.

Isn't me buying a 10 cent candy just redistributing from one person to another ?

Keep it short please.

 

[caychris]

OK slow down, you got yourself all confused and are talking in circles.

Isn't me buying a 10 cent candy just redistributing from one person to another ?

Keep it short please.

no you are getting the candy and the person who made the candy earned 10 cents of what ever productive thing you did that caused you to have 10 cents.

however if your 10 cents came form a govt paid job the person making the candy could not make the additional 10 cents of candy that he could sell so he will earn less because he had to pay a portion of your salary. in order to make up the difference he will now be charging 11 cents for his candy which your 10 cent salary cannot buy

 

[hemet dennis]

Quote:
It doesn't matter where I got the 10 cents, but lets just say I did earn it in on a government job. In fact I earned it fixing a pot hole in the highway, i was paid by the fuel tax and now the people using that highway will not have damage to there cars that would take more money from their earnings so now they can also buy a candy. If that person with the car hadn't paid that 10 cent fuel tax I wouldn't be employed, I would be collecting from the government and not be able to buy the candy and the person with the car wouldn't be able to buy a candy because he had to use his money to repair his car. So now the candy man wont be paying taxes on the earnings from the candy sales.

So the person driving the car didn't pay the 10 cent tax but had to pay more to repair his car.
Because the 10 cent tax wasn't paid I'm collecting from the government and have no extra money to buy candy.
The candy man is earning less so he buys less supplies to make candy.
The supplier to the candy man earns less so he also doesn't buy as much from whoever he buys from.
And we all pay less taxes so to pay for my welfare check the government has to sell treasuries to the FED that has the government create more money to pay for the treasuries.

 

[caychris]

It doesn't matter where I got the 10 cents, but lets just say I did earn it in on a government job. In fact I earned it fixing a pot hole in the highway, i was paid by the fuel tax and now the people using that highway will not have damage to there cars that would take more money from their earnings so now they can also buy a candy. If that person with the car hadn't paid that 10 cent fuel tax I wouldn't be employed, I would be collecting from the government and not be able to buy the candy and the person with the car wouldn't be able to buy a candy because he had to use his money to repair his car. So now the candy man wont be paying taxes on the earnings from the candy sales.

So the person driving the car didn't pay the 10 cent tax but had to pay more to repair his car.
Because the 10 cent tax wasn't paid I'm collecting from the government and have no extra money to buy candy.
The candy man is earning less so he buys less supplies to make candy.
The supplier to the candy man earns less so he also doesn't buy as much from whoever he buys from.
And we all pay less taxes so to pay for my welfare check the government has to sell treasuries to the FED that has the government create more money to pay for the treasuries.

But it does matter where you got the 10 cents. Because that 10 cents represents a portion of the product of someones labor. What you are doing by working for that 10 cents of tax money is replacing their labor with yours. Its a zero sum game it doesnt grow the economy any more than if the tax had not been placed and the 10 cents had been used by the original producer. However by taxing the producer he is restricted in extracting full value from his product thus he has to inflate the remaining product to compensate. When taxation reaches too high a percentage this effect actually causes the economy to shring as the value of the products are not reflected in their price and economic activity is slowed.

Now there are billions of these transactions happening all the time and some behaviors out of necessity off set others but the aggregate result is a stagnation and eventual contraction of the economy as more and more value is siphoned from exchange system because more and more people are simply churning the same money over and over without actually adding to the overall amount product.

In order for all these exchanges to take place seamlessly money serves as the medium. If we produced only a single dollar bill it would be very difficult for the wheat producer and the milk producer and the buggy whip guy to all use the same system of exchanges for their products. The amount of money in the system needs to reflect the aggregate value of all of these goods and services. The value of some goods also fluctuates over time. Some appreciating while most depreciate. This aggregate pool of money should be growing in a healthy market even if at a slow pace because of the multiplicative effect of the exchange.

Lets assume for a minute that Bob produces carrots and sells them for a dollar each and John produces bread and sells it for a dollar a loaf. How much money needs to be out there in the hands of consumers to support each of their businesses. At least one dollar for every carrot and load produced right? The ability to trade dollars for goods is called liquidity and the fed is responsible for ensuring that the lack of actual dollars does not hurt the exchanges or that a flood of dollars does not result in inflation out of control. This is called the money supply. If the economy is making more carrots and bread than the bank can effectively manage the money supply then we have problems. Conversely if it isnt make enough of these things then the money stacks up and loses value. The money supply is always in some flux with normal economic behaviors. Any way its late Im really not interested in arguing details about these things. The general idea is that taxing something causes you to have less of it so how can adding taxes actually help the economy.