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Discussion in 'Off Topic [BG]' started by wilser, Sep 17, 2008.
Dr. Ron Paul. Look him up.
And that is all I have to add!
Our government has just infused a whole lot of cash into the finacial markets. Many other countries have done that same over the last few days. This is the equivalent of me getting a new credit card in order to make the minimum payment on the three cards that I've already maxed out.
And Wall Street cheers. "Hooray! Problem solved!"
At the risk of getting political, from a purely economic perspective...
Quote from http://www.rgemonitor.com/blog/roubini/:
That was before the AIG takeover. Roubini's got even more about that at the blog.
Because you're proposing the elimination of taxes that bring in hundreds of billions of dollars a year in revenue, with absolutely no answer for how to replace that money--at a time when we're already running up huge budget deficits. And how exactly would we "find a way" to pay off all the existing debt at the same time we would be massively reducing revenues? "Reining in private bankers" sounds like a way to demonize the Fed through words, but has no meaning in this context as far as I can see.
In this context the Fed failed to live up to one of it's core purposes: To maintain the stability of the financial system and contain systemic risk in financial markets.
I believe we may have gotten off track here with the initial topic, but my condemntation of the Federal Reserve must have gotten kicked off by my condemnation of personal income taxes. My point here is this:
Personal income taxes bring in only about 30% of our government's budget. My thought is to allow Americans to keep the money they earn, which will encourage brisker spending within the market place, and cut government spending down to a more reasonable level. The government makes most of it's money through taxes other than personal income tax, and if there's more money flowing around the system, the government only stands to gain more money in taxes through those other revenues. This, coupled with decreased spending could allow us to pay our debts and give our domestic economy a good swift kick in the butt.
The Federal Reserve, if anything, is helping to increase our national defecit. Eliminate the Fed, and a big chunk of our expenses dissappear.
Yes, it's overly simplistic, but I think the basic tenants could work.
Talking eilimating income tax is the way to crazy kookland IMO.
Here's a very interesting video from http://www.stopthehousingbailout.com/ - from July.
We're completely effed.
Just because something may seem like a kooky idea doesn't mean it couldn't work. I am not one of those extremist conspiracy theorists that think income tax is illegal and unconstitutional - I've read the original amendments, and I feel it is perfectly valid and legal. I just don't think it's necessary, especially when all of that money is being funneled into the Federal Reserve.
What's interesting is that the above video says that the great depression started because of a credit collapse due to excessive speculation - something that the Federal Reserve was supposed to curtail. Hmmm...
So it's global! Some british insurance and mortgage company in danger of bankruptcy was just acquired by one of England's leading financial giants.
Wow. You just don't get it......
So far neither of you have responded with any sort of conter-arguement other than short quips of incredulity. Either I'm so far off course here that I merit no arguement or correction, or you don't have a sufficient platform to debate.
I'm very willing to concede that I might be wrong, but you guys are going to have to do better than this.
The Fed can only do so much. Arguably, it provided too much liquidity at the wrong time. But it can't prevent banks from writing mortgages for those who can't afford them (leaving them with many bad loans on their balance sheets) or levering up using derivatives, it can't prevent consumers from taking out these foolish mortgages, and it couldn't prevent the wave of deregulation that helped pave the way for this madness.
Again, "only 30% of our government's budget" translates into, what, $400-500 billion? Yes, spending would likely increase if you eliminated the income tax, but that spending would then be taxed mainly at sales tax and capital gains tax rates, which are quite a bit lower. You're going to end up with a lot less revenue, IMO. You'd have to decrease spending quite a bit--which no one from either party has been able to do even slightly. "Wasteful" spending is in the eye of the beholder, the amount of truly silly spending (those pet projects you always hear about) is relatively low. You'd have to make real, very painful cuts that could deal a huge blow to various segments of our society and economy, depending on how you cut.
I have no idea what you're claiming here. How is the Fed responsible for a big chunk of our expenses?
I'm glad these financial institutions were run by people who know what they're doing. Imagine how bad it could be if they were run by people who didn't.
I agree with that 100%.
I'll also agree with that, to an extent. But methinks we could cut our military spending quite a bit, being that military stuff comprises 20% of our entire budget. Our personal income tax is extremely high, and for what? Our mean income tax percentage is around 30% - yet we have very little services for it. The average American pays upwards of 50% of their entire income to taxes, through income tax, property tax, sales tax, etc. etc. Yet the rewards for such taxation is relatively small. Methinks a smaller government with less taxation could mean a stronger economy in the long run.
What I'm meaning here is that our debt to the Federal Reserve - a bank our government created - is our biggest creditor. Our debt to the Fed comprises of 40.6% of our entire national debt. We pay a HUGE amount to the Fed just in interest. We keep borrowing money from the Fed to fund our pet projects, wars, and so on. Initially, the Fed was created to help our economy - now they own it. I don't think that's a good thing.
You mean like all of us?
I was being facetious, of course. But even back a couple years ago, when housing prices were climbing fast and fueled by high demand, with high demand fueled by loose credit, and loose credit bolstered by climbing housing prices, and investors buying up the mortgages by the devil-may-care mortgage companies, it looked to me like our financial institutons were engaged in a giant leaning-out-the-window contest.
I'm no finance expert, but I thought the scene looked ridiculous back then; I'm surprised, but really not surprised, that it got even close to where things are now.
Well, since this is all over the map, I thought I'd just drop in and mention that I think the idea of being penalized via taxes because you are successful is ridiculous. Patently ridiculous.