Yes, because there is a fixed amount of wealth in the world in all of history, and nobody ever increases society's wealth, correct?
Except that we weren't talking about wealth, we were talking about currency. And excluding stabilizing inflation mechanics, yes the currency is basically fixed.
To actually increase wealth, you need to have people being able and wanting to spend money on actual wealth refinement, and people able and willing to provide said work.
And if you want to know why so much of economic theory is bullshit, you just have to look at how much of it ignores if people actually are able/willing/wanting to spend/work.
You too it seems. Paying back debt in good times should be done if you are using a gold or otherwise non-sovereign currency.
When you have a sovereign fiat currency (as in the euro need not apply), the rule is different. In that case you should decrease outstanding currency (calling it debt is a misnomer) by reduce spending when there is no unemployment or when the production capacity of the country is close to maxed out.
Government spending as a total is actually to low. It is how you keep people unemployed in a fiat economy (in a non-fiat economy you keep people unemployed by simply being rich and withholding the currency), so that corporations can buy slaves cheaper.
That the government debt at the same time is high and rising is because the government is funneling money via both corrupt spending (as you mention) as well as a corrupt tax system that since the 1980s has been setup to allow the rich to slowly but surely drain money from the economy, hence forcing the government to inject more. (although as mentioned above, they deliberately inject less money than is needed to keep full employment rates)
It is the simple goal of supply side economy and always has been. Unemployment for the poor and government paying rent to the rich, all in one nice package.
And best of all. The left will defend the corrupt spending, while the right will defend the corrupt tax laws. It is the perfect fraud.
The US is a republic because pure democracy is a chaotic mistake, for the simple fact that The People, by and large, are idiots. As such, these laws are "democratically supported" because those who pass them were democratically elected. If you want different laws, elect different lawmakers or STFU.
One suggestion. If you want to complain about the problems with democracies and bring up the virtues of republics, then I highly recommend that you don't mention the US, as it basically is the poster child of what is wrong with the idea of republics.
If you actually look at the population density in Sweden, the vast majority of the population is located in the southern Providences, and even within those, centered around a few major cities. To include the northern wasteland in the average population density is a disservice,
Lappland is 25% of Sweden has 0.85 inhabitants per square km. Alaska is 17% of US and has 0.46 inhabitants per square km.
US by urban size groupings(year 2000 census) 200000+: 58.3% 50000-199999: 10.4% 5000-49999: 8.9% 2500-4999: 1.7%
Sweden by urban size groupings (year 2010) 200000+: 23.4% 50000-199999: 15.5% 5000-49999: 28.3% 2500-4999: 6.4%
Yup. The currency issuer (federal government) is not issuing enough money (running a high enough "deficit") to match private+foreign sector aggregate savings rates. This is directly evidenced by current unemployment rates.
There is also a secondary problem of mis-allocation of resources in the federal government, in other words, the federal government is spending money on the wrong things. But that doesn't change the fact that the current deficit is too low.
If I made an extra $10k this year, but Bill Gates made an extra $1B, I shouldn't be particularly upset about it, as my standard of living just went up.
Except that the real wage minimum wage hasn't gone up at all in the last 50 years while the real gdp per capita has gone up by 170%.
But don't let facts cloud your damaged brain. Go on believing the fairy tale lies about how everyone benefits from the rich getting richer.
Where do you think the government gets the money to repay its debts? There are two possibilities: tax revenue
The federal government never ever pay debts from tax revenue. Taxing is nothing more than a mechanism to reduce the aggregate money supply in the private sector. Once money has been taxed it is gone into the void. (for the federal government or any other currency owner that is)
The federal government doesn't own money. It doesn't make any sense, as it is the issuer and recaller.
As such, the only way for the federal government to repay debt is by creating new money. And with that realization, you quickly come to the understanding that the government doesn't have to borrow money if it doesn't want to. However, borrowing is a simple and easy way to manage interest rates and tie up private/foreign sector savings over a longer term so that it is impossible to flood the market with currency in a short interval. Hence, sovereign currency owners borrow to make the currency more stable.
As for Greece. They aren't a currency owner, so it sucks to be them.
Guild Wars did NOT do it, because Guild Wars is a completely different kind of game. Most of it is instanced. Meaning, the game client can do most of the work. There's very little server CPU usage, and little bandwidth taken up. You can't compare the two.
Interview with Jeff Strain, founding member of ArenaNet PC Games: "How do you plan to do this? Building such a complex world which is shared by all players without having monthly fees?" Strain: (laughing) "A very good question! Interestingly many people believe that the completely instantiated world was the reason for Guild Wars 1 to not need monthly fees. This is completely wrong! The existence or lack of a persistent world is totally unrelated to the running expenses which are needed to maintain an online roleplaying game." PC Games: "What do you mean by that?" Strain: "Really important are the innovative technologies which we developed for Guild Wars 1. They allow us to keep the running costs very low which then results in the huge advantage for the player: the absence of fees. We continue with that principle for Guild Wars 2: as soon as the game is available, we will begin our work on new content. Such content for which the player is free to decide if he wants to have it or not. Maybe that will be add-ons or complete campaigns or online-extensions with costs, we don't know. But one thing is very certain: we will again have in Guild Wars 2 the comprehensive support our fans are already familiar with!" (source: gw2 wiki)
The funny part of that quote is how it is misused in US politics to crack down on Democrats.
Which is quite laughable as the "omnipotent moral busybody" pretty much perfectly describes most Republicans who are driven by their ideology and moral believes. (there are exceptions of course, but the mainstream Republican is very much characterized in that way)
Democrats on the other hand tend to be the far more practical robber barons. Economic decisions are made to minimize the chance of rebellion, and the moral decisions they impose tend to be about protecting themselves or those they hold dear. Something any practical robber baron would do.
No, I don't. I simply believe that adding too much volatility to an already volatile system is bad. And that means that you place a decent part of taxes where they cause less volatility.
Btw, in your first post you basically claimed that it makes no difference where taxes are placed, so why are you so opposed to corporate taxes in the first place? Unless you have some ulterior agenda.
you seem to be of the view that all companies having identical profit margins is a desirable outcome of governmental policy
I simply can't see how you could have come to that conclusion, unless you think I am some kind of extremist that want 100% corporate no other taxes.
If anything, you are the one who keep referring to the perfect market that would make companies have identical profit margins.
you further seem to feel subsidizing less profitable (and therefore less economically efficient) enterprises by punishing (read: taxing) more profitable (therefore more efficient) companies is a good thing; I most certainly don't
Sacrificing companies just because they have a bad year. Talk about a job destroying policy. Because that is basically what you are advocating.
The more efficient company always win in the long run. But if you try to rush it you will destroy more than you create.
monopolies almost never occur in a free market with a level playing field - it's nearly impossible
Oh yes it does. In fact, the free market encourages monopolies, trusts and consolidation by its very nature. Too be fair, you said "level playing field", but that is an impossibility. There can never be a pure level playing field outside of textbooks.
Consider this: there isn't a single dollar which can flow through a corporation (and that's all money does: flow through corporations) which isn't already taxed:
So? Taxes has to payed in one way or another. Profit taxes tend to be very effective in that they hurt startups and companies who fall on rough times the least. They also as previously mentioned encourage reinvesting in the company and growth in general.
You sell a hundred bananas and, in so doing, generate $100 profit, however of that $100 you have to pay $50 in corporate taxes.
Meanwhile, a less profitable company only sold 50 bananas and end up making zero profits because of static costs as rent.
the net effect of eliminating that corporate tax would be a reduction in prices for your customers
No, the net effect would be that you would have to tax something else instead, like a $0.33 sales tax on the bananas.
The less profitable company will hurt far more by this as it can't afford to lower its prices, while the bigger company can afford it much easier than before. The end result is that the small company either goes bankrupt or is bought out, after which the big company turns around and raises the prices on the newly formed monopoly market.
New investors are unlikely to appear as startup companies tend to be less profitable, and in the environment that you created by removing the corporate taxes, that makes job creating investments far more risky.
When deciding if it's worth investing capital into a business, the decision is based upon
risk, reward and demands in the market. Profit taxes tend to have a very low negative effect on demand and as described also lower risks by creating less variation in profitability.
A fixed percentage could only ever be ideal if it was a wealth/capital tax and not an income or sales tax.
Fixed percentage income (and sales) taxes lead to positive feedback loops in wealth concentration, which at the very best hamper the economy severely and at worst causes a total economic collapse.
Of course a government can produce. Governments produce lots of things, and they so by charging taxes and printing money. Yes, governments are more forceful in taking your money than businesses, where you have more choice (although often not very much choice). But that doesn't mean that they don't produce goods and services.
so government cannot (in a meaningful way) save.
A fiat government can't save money, because it would be plain stupid to save a resources that you yourself have exclusive rights to create. And any excessive reduction off debt would create unemployment by reducing the ability for the private sector to save and pay for stuff.
But real prosperity doesn't come from money savings, but from productive investments. And the government can do that. Of course, it truly depends on how well your government uses unemployed labor.
I personally highly favor a decentralized approach to the government employing unemployed, like described in this article. Many anti-government people have the right idea in that having a huge centralized government is ineffective. And that is why you want to decentralize the decisions about project. The federal government should do what it fits best for, which is funding (being the fiat owner) and oversight. (ensuring that local corruption doesn't grow too large)
the government debt has exceeded the ability of the whole country to pay the interest on that debt,
A fiat government can always pay the interest as it has the money printing ability. In fact, it doesn't actually need to loan money either, and only does so to subsidize savings.
The real thing to worry about is the amount of production in a country. As how much is produced is what actually limits the government. That is why it is in the best interest of the government to make productive use of any unemployed. Inflation is just inflation, and doesn't matter to the government as long as enough things are produced. You simply can't get hyperinflation as long as production is going strong.
There is a common misunderstanding that governments tax the economy by demanding taxes. That is actually completely backwards. The government taxing occurs when it buys goods and services from the private sector. Meanwhile what is named as taxing is mainly inflation reduction by claiming its own money back, as well as a way to force the private sector to accept the currency in the first place.
Of course, all of this only applies to fiat economies, and not countries using some kind of currency standard like the euro countries.
In this way, it is much like Communism: "It only doesn't work because no one does it right!" The fact is, expecting a government entity to impose limits on itself in order to make a plan work is tautologically identical to saying it doesn't work.
And that is why fiat currencies are so superior to the gold standard. With a fiat currency you always have the ability to pay back any debt, but at the same time there is also no need for it as you can always print the interest you need to pay.
Government debt in essence becomes little more than a subsidize on private savings. Of course, governments can still screw up in the short term, but unlike with a more primitive system like the gold standard you aren't screwed in the long term.
Austrian school economists have been warning the world of the dangers of the Keynesian economics practiced by "mainstream" economists for generations now. It looks like we're heading for the "crack-up boom" they predicted
The Euro is a pseudo-gold standard for all the countries that are involved in it. And it only took 10 years for the inevitable monetary problems to occur.
Austrians, just like the modern neoliberal mainstream economists (so called keynesians as well as conservatives) seems to lack in their understanding of how monetary systems work and effect economics. Their failure to understand just manifest in different ways.
Slashdot Mirror
Yes, because there is a fixed amount of wealth in the world in all of history, and nobody ever increases society's wealth, correct?
Except that we weren't talking about wealth, we were talking about currency. And excluding stabilizing inflation mechanics, yes the currency is basically fixed.
To actually increase wealth, you need to have people being able and wanting to spend money on actual wealth refinement, and people able and willing to provide said work.
And if you want to know why so much of economic theory is bullshit, you just have to look at how much of it ignores if people actually are able/willing/wanting to spend/work.
I suggest you actually read some economic theory.
You too it seems. Paying back debt in good times should be done if you are using a gold or otherwise non-sovereign currency.
When you have a sovereign fiat currency (as in the euro need not apply), the rule is different. In that case you should decrease outstanding currency (calling it debt is a misnomer) by reduce spending when there is no unemployment or when the production capacity of the country is close to maxed out.
Government spending as a total is actually to low. It is how you keep people unemployed in a fiat economy (in a non-fiat economy you keep people unemployed by simply being rich and withholding the currency), so that corporations can buy slaves cheaper.
That the government debt at the same time is high and rising is because the government is funneling money via both corrupt spending (as you mention) as well as a corrupt tax system that since the 1980s has been setup to allow the rich to slowly but surely drain money from the economy, hence forcing the government to inject more. (although as mentioned above, they deliberately inject less money than is needed to keep full employment rates)
It is the simple goal of supply side economy and always has been. Unemployment for the poor and government paying rent to the rich, all in one nice package.
And best of all. The left will defend the corrupt spending, while the right will defend the corrupt tax laws. It is the perfect fraud.
There is a simpler answer. They are psychopaths the whole bunch of them and simply don't understand such concepts.
The US is a republic because pure democracy is a chaotic mistake, for the simple fact that The People, by and large, are idiots. As such, these laws are "democratically supported" because those who pass them were democratically elected. If you want different laws, elect different lawmakers or STFU.
One suggestion. If you want to complain about the problems with democracies and bring up the virtues of republics, then I highly recommend that you don't mention the US, as it basically is the poster child of what is wrong with the idea of republics.
If you actually look at the population density in Sweden, the vast majority of the population is located in the southern Providences, and even within those, centered around a few major cities. To include the northern wasteland in the average population density is a disservice,
Lappland is 25% of Sweden has 0.85 inhabitants per square km. Alaska is 17% of US and has 0.46 inhabitants per square km.
US by urban size groupings(year 2000 census)
200000+: 58.3%
50000-199999: 10.4%
5000-49999: 8.9%
2500-4999: 1.7%
Sweden by urban size groupings (year 2010)
200000+: 23.4%
50000-199999: 15.5%
5000-49999: 28.3%
2500-4999: 6.4%
Correction. Should have been 79% as of year 2000 for US.
Population density
Sweden: 21/km squared
US: 32/km squared
Population percentage living in urban areas (2500+).
US: 75% as of year 2000.
Sweden: 73.6% as of year 2010
Isn't there a budget problem?
Yup. The currency issuer (federal government) is not issuing enough money (running a high enough "deficit") to match private+foreign sector aggregate savings rates. This is directly evidenced by current unemployment rates.
There is also a secondary problem of mis-allocation of resources in the federal government, in other words, the federal government is spending money on the wrong things. But that doesn't change the fact that the current deficit is too low.
Two things:
* Lots of states have gone away from the ridiculously low federal minimum wage (http://oregonstate.edu/instruct/anth484/minwage.html)
* Your link points to household income, not minimum earning per hour.
who thinks everyone
should make at least $15/hr.
$15 is only 20 times that of the minimum wage in 1950. The gdp per capita has gone up by closer to 25 times in the same time period.
Those who are spoiled are those who exploit minimum wage workers as modern day slave labor.
Which is a fucktarded thing to protest.
If I made an extra $10k this year, but Bill Gates made an extra $1B, I shouldn't be particularly upset about it, as my standard of living just went up.
Except that the real wage minimum wage hasn't gone up at all in the last 50 years while the real gdp per capita has gone up by 170%.
But don't let facts cloud your damaged brain. Go on believing the fairy tale lies about how everyone benefits from the rich getting richer.
Where do you think the government gets the money to repay its debts? There are two possibilities: tax revenue
The federal government never ever pay debts from tax revenue. Taxing is nothing more than a mechanism to reduce the aggregate money supply in the private sector. Once money has been taxed it is gone into the void. (for the federal government or any other currency owner that is)
The federal government doesn't own money. It doesn't make any sense, as it is the issuer and recaller.
As such, the only way for the federal government to repay debt is by creating new money. And with that realization, you quickly come to the understanding that the government doesn't have to borrow money if it doesn't want to. However, borrowing is a simple and easy way to manage interest rates and tie up private/foreign sector savings over a longer term so that it is impossible to flood the market with currency in a short interval. Hence, sovereign currency owners borrow to make the currency more stable.
As for Greece. They aren't a currency owner, so it sucks to be them.
Tell that to the Greek.
Is Greece the owner (monopoly issuer) of a fiat currency?
Does Greece have all its debts nominated in that fiat currency.?
If you answered no to either of the two above questions, then government debt has to be repaid or defaulted on.
Guild Wars did NOT do it, because Guild Wars is a completely different kind of game. Most of it is instanced. Meaning, the game client can do most of the work. There's very little server CPU usage, and little bandwidth taken up. You can't compare the two.
Interview with Jeff Strain, founding member of ArenaNet
PC Games: "How do you plan to do this? Building such a complex world which is shared by all players without having monthly fees?"
Strain: (laughing) "A very good question! Interestingly many people believe that the completely instantiated world was the reason for Guild Wars 1 to not need monthly fees. This is completely wrong! The existence or lack of a persistent world is totally unrelated to the running expenses which are needed to maintain an online roleplaying game."
PC Games: "What do you mean by that?"
Strain: "Really important are the innovative technologies which we developed for Guild Wars 1. They allow us to keep the running costs very low which then results in the huge advantage for the player: the absence of fees. We continue with that principle for Guild Wars 2: as soon as the game is available, we will begin our work on new content. Such content for which the player is free to decide if he wants to have it or not. Maybe that will be add-ons or complete campaigns or online-extensions with costs, we don't know. But one thing is very certain: we will again have in Guild Wars 2 the comprehensive support our fans are already familiar with!" (source: gw2 wiki)
The funny part of that quote is how it is misused in US politics to crack down on Democrats.
Which is quite laughable as the "omnipotent moral busybody" pretty much perfectly describes most Republicans who are driven by their ideology and moral believes. (there are exceptions of course, but the mainstream Republican is very much characterized in that way)
Democrats on the other hand tend to be the far more practical robber barons. Economic decisions are made to minimize the chance of rebellion, and the moral decisions they impose tend to be about protecting themselves or those they hold dear. Something any practical robber baron would do.
you seem to believe profit is a bad thing
No, I don't. I simply believe that adding too much volatility to an already volatile system is bad. And that means that you place a decent part of taxes where they cause less volatility.
Btw, in your first post you basically claimed that it makes no difference where taxes are placed, so why are you so opposed to corporate taxes in the first place? Unless you have some ulterior agenda.
you seem to be of the view that all companies having identical profit margins is a desirable outcome of governmental policy
I simply can't see how you could have come to that conclusion, unless you think I am some kind of extremist that want 100% corporate no other taxes.
If anything, you are the one who keep referring to the perfect market that would make companies have identical profit margins.
you further seem to feel subsidizing less profitable (and therefore less economically efficient) enterprises by punishing (read: taxing) more profitable (therefore more efficient) companies is a good thing; I most certainly don't
Sacrificing companies just because they have a bad year. Talk about a job destroying policy. Because that is basically what you are advocating.
The more efficient company always win in the long run. But if you try to rush it you will destroy more than you create.
monopolies almost never occur in a free market with a level playing field - it's nearly impossible
Oh yes it does. In fact, the free market encourages monopolies, trusts and consolidation by its very nature. Too be fair, you said "level playing field", but that is an impossibility. There can never be a pure level playing field outside of textbooks.
Consider this: there isn't a single dollar which can flow through a corporation (and that's all money does: flow through corporations) which isn't already taxed:
So? Taxes has to payed in one way or another. Profit taxes tend to be very effective in that they hurt startups and companies who fall on rough times the least. They also as previously mentioned encourage reinvesting in the company and growth in general.
You sell a hundred bananas and, in so doing, generate $100 profit, however of that $100 you have to pay $50 in corporate taxes.
Meanwhile, a less profitable company only sold 50 bananas and end up making zero profits because of static costs as rent.
the net effect of eliminating that corporate tax would be a reduction in prices for your customers
No, the net effect would be that you would have to tax something else instead, like a $0.33 sales tax on the bananas.
The less profitable company will hurt far more by this as it can't afford to lower its prices, while the bigger company can afford it much easier than before. The end result is that the small company either goes bankrupt or is bought out, after which the big company turns around and raises the prices on the newly formed monopoly market.
New investors are unlikely to appear as startup companies tend to be less profitable, and in the environment that you created by removing the corporate taxes, that makes job creating investments far more risky.
When deciding if it's worth investing capital into a business, the decision is based upon
risk, reward and demands in the market. Profit taxes tend to have a very low negative effect on demand and as described also lower risks by creating less variation in profitability.
VAT isn't based on turnover either.
One meaning of the word turnover is sales revenue. And that is exactly what VAT is based on.
The better question is, "why do corporations pay tax at all?"
To encourage corporations to actually invest back into their products instead of stockpiling money that then is used to buy up competition.
it's simply built into the price you pay. So it's just effectively a VAT in different clothing.
Corporate taxes are on net profits, not turnover.
The tax should be a fix percentage, like 25%
A fixed percentage could only ever be ideal if it was a wealth/capital tax and not an income or sales tax.
Fixed percentage income (and sales) taxes lead to positive feedback loops in wealth concentration, which at the very best hamper the economy severely and at worst causes a total economic collapse.
just as government cannot produce
Of course a government can produce. Governments produce lots of things, and they so by charging taxes and printing money. Yes, governments are more forceful in taking your money than businesses, where you have more choice (although often not very much choice). But that doesn't mean that they don't produce goods and services.
so government cannot (in a meaningful way) save.
A fiat government can't save money, because it would be plain stupid to save a resources that you yourself have exclusive rights to create. And any excessive reduction off debt would create unemployment by reducing the ability for the private sector to save and pay for stuff.
But real prosperity doesn't come from money savings, but from productive investments. And the government can do that. Of course, it truly depends on how well your government uses unemployed labor.
I personally highly favor a decentralized approach to the government employing unemployed, like described in this article. Many anti-government people have the right idea in that having a huge centralized government is ineffective. And that is why you want to decentralize the decisions about project. The federal government should do what it fits best for, which is funding (being the fiat owner) and oversight. (ensuring that local corruption doesn't grow too large)
the government debt has exceeded the ability of the whole country to pay the interest on that debt,
A fiat government can always pay the interest as it has the money printing ability. In fact, it doesn't actually need to loan money either, and only does so to subsidize savings.
The real thing to worry about is the amount of production in a country. As how much is produced is what actually limits the government. That is why it is in the best interest of the government to make productive use of any unemployed. Inflation is just inflation, and doesn't matter to the government as long as enough things are produced. You simply can't get hyperinflation as long as production is going strong.
There is a common misunderstanding that governments tax the economy by demanding taxes. That is actually completely backwards. The government taxing occurs when it buys goods and services from the private sector. Meanwhile what is named as taxing is mainly inflation reduction by claiming its own money back, as well as a way to force the private sector to accept the currency in the first place.
Of course, all of this only applies to fiat economies, and not countries using some kind of currency standard like the euro countries.
In this way, it is much like Communism: "It only doesn't work because no one does it right!" The fact is, expecting a government entity to impose limits on itself in order to make a plan work is tautologically identical to saying it doesn't work.
And that is why fiat currencies are so superior to the gold standard. With a fiat currency you always have the ability to pay back any debt, but at the same time there is also no need for it as you can always print the interest you need to pay.
Government debt in essence becomes little more than a subsidize on private savings. Of course, governments can still screw up in the short term, but unlike with a more primitive system like the gold standard you aren't screwed in the long term.
You seriously link to Cato in regards to the economy? That is like linking to a neo-nazi site when discussing the holocaust.
Austrian school economists have been warning the world of the dangers of the Keynesian economics practiced by "mainstream" economists for generations now. It looks like we're heading for the "crack-up boom" they predicted
The Euro is a pseudo-gold standard for all the countries that are involved in it. And it only took 10 years for the inevitable monetary problems to occur.
Austrians, just like the modern neoliberal mainstream economists (so called keynesians as well as conservatives) seems to lack in their understanding of how monetary systems work and effect economics. Their failure to understand just manifest in different ways.