Everyone says that Obama is a Keynsian economics fan. Did anyone see the Newsweek parody of this? "We Are All Socialists Now", this month. Yes big gov't spending in a downturn is a major Keynsian theory. However, cutting taxes at the same time to spur on the economy is the other part. When economy recovers, you make up the deficit with higher taxes Keynes said. 39% tax rate led to surpluses, but economy was good then, big difference. Raising taxes in this environment has historically been a huge mistake and goes opposite to Keynes thinking. Cut the Cap Gains tax and cut Corporate tax and he will be a true Keynsian, and a hero for pulling us out of this and we will be pushing to have him in for a third term after 8 years. Will never happen though, - politics. What we are seeing is Marxism.
Wouldn't seem so "reasonable to you" if you were one of them. It's not like somebody just GAVE them extra money and now they have to give some of it back..
If I said I am one of "them," would that change anything? Here is an article that is related to this topic: http://www.timesonline.co.uk/tol/money/tax/article1996735.ece
Ok, If we really all agreed that the deficit (which the previous Republican administration created to some unnecessary degree) was a problem, then why are we cheering all of the new government spending that is being rammed down our throats. 650B for healthcare on top of everything else??? How does that help lower a deficit? How efficient do you think ANY government program will be? In actuality the RICH are not going to pay for this. Most of the really rich (Net worth greater than 25MM) dont generate much ordinary income, and when they do its usually in an offshore trust, corporation or some other tax efficient entity. THE PEOPLE WHO PAY FOR EVERYTHING ARE THOSE WITH NET WORTHS UNDER 5MM WHO MAKE 250K+ A YEAR. ITS EASY TO BE A LIBERAL WHEN YOU ARE 25MM+ RICH. MARGINAL TAXES DONT AFFECT YOUR MUNI BOND INCOME.
I'll probably get flamed for this, but it seems that whenever the few manipulate prices that affect the many, this crap is going to come about. It was the same thing when oil shot into the stratosphere - people, senators, the mob, if you will, started going after speculators. Many people (on this site and elsewhere who traded) complained when the price fell through the floor: "Where are the cries about speculation now? The speculators are selling, why not prevent them from selling?" The answer, of course, is obvious - the mob, or general population, is not hurt by low gas/oil prices. But when prices are sky-high, then they have to figure out a way to pay their bills and make ends meet. The government hears the people say "why must all of us go without because a few fat cats are in control?" And I kinda agree with them. The same is true now with the market. Stocks fall through the floor, and this hurts the mob. The mob looks to those speculating on driving prices down. And I truly believe there are some out there doing this- to what effect they can is another argument. But when big money - or dark pools of liquidity out there - begin to cause pain to the mob, you'll always see something happen to try to stop it. One can argue that the government's job is to protect it's people. That essentially means the mob, but government is actually much better at protecting special interests. However, when things get extreme, as speculators tend to do (push things to the extreme) then you'll see an equally strong political/legal answer to try to balance it. It's just the way of things.
First, I don't think many people who know better (outside of the mob) are cheering any of this spending. Second, while the rich have - in the past - been great at hiding their income, I think you've seen the end of that era. Tax havens are drying up faster than a puddle in the desert. Gone are the days when you could hide your money so easily.
Ivan, My point is that RICH is not defined by ordinary income, its defined by net worth. Lets assume your average tax rate is 30% and you make 250K. This means after taxes you are taking home 14,500/month. Certainly you are not starving, but you are NEVER going to get anywhere close to rich. If one lived frugally (cheap house, cars, no travel) you could imagine saving 10K a month assuming you have no major expenses (unlikely). Maybe I have a skewed view of what "rich" is but I dont think this gets you close.
============================== Nice balance Tide31 Interesting thing about Citigroup,reliable reports let us know they complained privately about short sellers to the powers that be. Did not help Citigroup much @ all.Did not help LEH at all. Some of the smaller lenders & community lenders/givers may do well;,many reasons for that, for example they dont waste money on private corp jets[during downtrend] like Citigroup attempted. Thoughtful work here,Tide31.Yes this concerns many, but i dont know anyone who thinks[who really thinks/laugh out loud] that the gov can run GM or sickcare systems./health care systems. ========================================= And the courts/legal system can help a little bit-founder of weather channel said Algore should be sued for fraud. Best of times & the worst of times. %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
End of discussion. Any reasonable person can see the validity of the words of angrycat. The thread is closed in my book.