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Killer300

Okay, there is a serious irresponsibility present in neo-liberals, along with many other parts of the right. It, simply put, is the inability of them to find a way to pay for the government. They keep on saying, cut taxes, not realizing the immense economic damage caused by it. It doesn't matter if you don't have to pay as much in taxes if that money is eaten up by other costs, like healthcare costs, wage cuts, and numerous other effects. That's assuming the government cuts spending the amount it needs to in order to accommodate certain types of taxes. You could also create massive debt, the very thing you try to avoid, because of reckless spending present in things like the military-industrial complex and subsidies.

My point? You want a big military? Plan to pay for it. You want to cut taxes? Be willing to cut military spending in equal, if not greater, amounts compared to everything else. The reason why the U.S. is in the debt situation it's in right now is because of reckless TAX CUTS, not reckless spending, although there is plenty of that in the military.

Going back to my main point here, schools like the Austrian School suffer immensely from never providing a time taxes can be raised, i.e. inflation or deflation, only saying to cut taxes. The problem is that the government has to be funded, and things like sales tax not only are unjust if the only income source, but also lack the needed income. Why? Simple, the more you raise sales tax, the less people consume by comparison to how much they used to. This can encourage black market elements if too high, and the next you know, there goes your budget. Income tax is mandatory, simply because it can provide the money needed to fund a modern state. Punishment taxes should at least be considered. Corporate tax is more iffy, although I don't find it to be a double tax, unless your income tax is already extremely progressive, not something that is universal. Inheritance tax I would support, on the grounds that otherwise you can get rich kids that never have to work a day of their lives, not a precedent you want to set. Rich kids need to be made to work like everyone else.

One of the main examples of hugely out of control tax cuts is in recessions(although not the great depression as I'll get to in a minute but wait.) If you cut taxes, that doesn't mean the people you cut taxes for have more money. The poor, for example, already don't pay very much in tax. So, a tax cut won't help them, at all. The middle class more, but both the poor and middle will be punished the most by budget cuts. They will lose much needed services, and many times, their jobs, if they work for the government. This creates a viscious cycle, where budget cuts slash jobs, reducing demands, causing more jobs to be slashed, causing less demand, and so on in spiral downwards until someone increases spending.

Now, for the Great Depression. Yes, there a tax raise that perhaps aggravated, however the government really messed up in two major ways, one in a bad intervention, the other in a lack there of. The first was that it imposed a tariff. Okay, tariffs have a place, but NOT during a recession, or a depression. It reduces demand for your exports, hurting the local economy significantly. The area it failed in is it did NOTHING spending wise. It didn't spend on the economy, not until the New Deal did the huge amounts needed get utilized. If the tax raise had an effect, it was tiny compared to the huge damage caused by the tariff and lack of economic intervention.

Not only do tax cuts not help in recessions as much as claimed, and not only do they humoungously damage budgets, but they don't even stimulate that well. Okay, yes, you can have punitive tax levels that hurt the economy, I'm not saying that isn't possible. What I am saying is that tax cuts aren't the solution that the right would like them to be. If you want to stimulate the economy, directly spend on it. Build infrastructure, invest government funds into education to get a smarter workforce, and invest in building a reserve to help in crashes.

On top of all this, tax raises can actually be immensely helpful for inflation. Why? They reduce out of control spending on the hand of consumers that probably played a huge part in the inflation. This is where sales tax can be great, as long as you cut it once the inflation is under control. Debt, another major cause of inflation, happens many times because of tax cuts. So the whole anti-inflation parade of the right isn't very truthful, for their methods of reducing inflation will only make things worse. Tax cuts means more money to spend in the ever rising out of control inflation. It also removes money that's needed to pay off debt.

So over all, tax cuts can't do what they're promised to, and simply put, are irresponsible. If you want to cut taxes, it has to be done carefully, not recklessly like lately with the Bush cuts, and I'm sure more upcoming cuts by the GOP. Also, why do you want to cut taxes? The reason has to be carefully examined, and it has be decided whether that is really the best solution, and frequently, that just isn't the case.

Triniteras

they just want you dead

Triniteras Wrote:
they just want you dead

Shame on you for saying this Oldno

Well the problem is, that those liberals praise themselves as having more knowledge in economics than others. How much a politician knows is nothing you can measure easily. But you can evaluate, if they're true to their word. Arguing, that they know more in economics, it seems that liberals would be those, who can rescue us from our high depts. But this assumption is a fatal mistake. The majority of the problem was already explained by Killer300.

Modern liberal parties always call for tax cuts. As explained by Killer300, those cuts have no social effects. People with low or middle income won't really notice those 5 euro more in their pocket. They already spend most of their income for living. Those 5 euro would be like a drop in the ocean. However, there are people who really would notice tax cuts - those who are rich. A tax cut of 5% would mean thousands of euros more in their pocket. But rich people don't need all their money to spend for their living. Even if they spend much more for luxery food, clothes, etc. they normally have a considerable amount of their income, which they can use to "work with". "Working money" (capital) has a much lower velocity, because you don't give it directly to those, who produce something real. So cutting taxes doesn't mean that the people in general spend more money (which would probably be good for the economy) but rather they would save more money.

Why this arguing? Because liberals claim, that they're way would be financially the best. Infact, it's maybe worse than other concepts. Anyways, it's definitely not good. Tax cuts does not help to pay the depts, they do the opposite! We would loose money from tax and we wouldn't get it back through economic growth.

By the way: it seems logical, that more spending increases economic growth and thus the national income. However, no one can really calculate if this rising national income outweighs the loss from tax cuts (not to mention that politicians use tax cuts for their popularity, which interferes with that fine plan by Keynes to raise taxes again).

At last some general explanation: I refer to liberals in Germany, mainly the party FDP. They call themselves liberal. However, I would acknowledge if someone says, they aren't. Those words like "liberal", "social" and so on aren't very well defined. Another definition of liberal would result in another political opinion of liberals and thus in another arguing from me. Please keep this in mind.


Greets,
BigBob

BigBob89 Wrote:
(...) Even if they spend much more for luxery food, clothes, etc. they normally have a considerable amount of their income, which they can use to "work with". "Working money" (capital) has a much lower velocity, because you don't give it directly to those, who produce something real. So cutting taxes doesn't mean that the people in general spend more money (which would probably be good for the economy) but rather they would save more money. (...)


First of all I totally agree with you on this one.

But before this thread turns into one of party-bashing & biased phrases (as they naturally do) I want to point out that this discussion, though mainly justified, is based on those party lines.
The liberals do this, conservatives do that...
I'd love to participate, if the argument does not degrade into a "who's-better" contest.

I think that the problem though, lies not so much in the peoples minds, but rather in the politicians. Too few brave potential figures dare to think outside partisanship.
Hell, I'd vote for CDU or Republicans, if they were making sense.

I know that's not the issue here, but I want you to keep that in mind.

That being said, the right and the left are often talking about the same thing but blaming the other that they want something different (the huge partisanship is blocking the sight here again...), e.g. President Obama announces that he will raise taxes. His opponents adress the small men and say: "You hear that? DEMOCRATS ARE TAKING YOUR MONEY! BE OUTRAGED!" But President Obama says: "I just raise the taxes of the wealthy. BUT YOUR TAX CUTS MAKE THIS COUNTRY BANKRUPT!"
And so it goes on and on.

In the combination of two opposing ideas lies something like a 'solution', somewhere.

Killer300

Don't worry, I'm not arguing on party lines. Mainly because parties like the Democrats, for example, haven't raised taxes enough, not nearly enough. The whole anti-tax propaganda constantly spewed by the right still has far too much influence.
Another irresponsibility is that they claim programs that drain so much cash really don't. Welfare spending, with the exception of Social Security as I'll get to it, doesn't come close to military spending. The military industrial complex wastes far more cash than any welfare program could ever hope to. Going back to Social Security spending, the problem is the government uses social security payments for things besides social security, which is abusing a system meant only to provide income for retirement.
More importantly, even if Social Security were the problem, the GOP will never touch it. Why? Too many elderly voters would immediately reject the party and move on to someone else. Not only elderly, but too many other voters who depend on Social Security.
Hence, really, the United States is stuck in a place without solutions. It can't cut spending anywhere it would matter, like corporate subsides, military, or maybe even social security, while it cuts too often in places like education.
So really, the right wing is incredibly irresponsible on this. You want a small government? Stop supporting massive corporate subsidies and massive militaries. Want a high tech military and corporate subsidies? Raise taxes for it all. You can't have both, you have to pick one, but they refuse to unfortunately.

Killer300 Wrote:
Don't worry, I'm not arguing on party lines. Mainly because parties like the Democrats, for example, haven't raised taxes enough, not nearly enough. The whole anti-tax propaganda constantly spewed by the right still has far too much influence.
Another irresponsibility is that they claim programs that drain so much cash really don't. Welfare spending, with the exception of Social Security as I'll get to it, doesn't come close to military spending. The military industrial complex wastes far more cash than any welfare program could ever hope to. Going back to Social Security spending, the problem is the government uses social security payments for things besides social security, which is abusing a system meant only to provide income for retirement.
More importantly, even if Social Security were the problem, the GOP will never touch it. Why? Too many elderly voters would immediately reject the party and move on to someone else. Not only elderly, but too many other voters who depend on Social Security.
Hence, really, the United States is stuck in a place without solutions. It can't cut spending anywhere it would matter, like corporate subsides, military, or maybe even social security, while it cuts too often in places like education.
So really, the right wing is incredibly irresponsible on this. You want a small government? Stop supporting massive corporate subsidies and massive militaries. Want a high tech military and corporate subsidies? Raise taxes for it all. You can't have both, you have to pick one, but they refuse to unfortunately.


I don't have the facts, but I agree on what you're saying.
I think one big factor not to be ignored, is that the US is a huge country. And a federal republic too. Though the important issues are decided in Washington, where there is a lot of black&white thinking going on.
How do you make a decision for 300 Million people?
California and New York are almost 4.000 km apart and have different customs, culture, behaviors, costs, wages, and so on.
And between these states there are 48 more, most of them very different from the other. I believe a big step for the US would be to distribute more entities and power to the states. It's more efficient if 50 governors run each their own state than Washington running the whole country.
You make a decision that might be good for 75% but there is still a quarter that feels left out in the cold and since everybody in America has a voice, there are people who will shout until the whole country hears them and those are the ones dividing the country.
A country that big, with that many stubborn opinions is hard to unite.

Hey guys,

Blackburn Wrote:
But before this thread turns into one of party-bashing & biased phrases (as they naturally do) I want to point out that this discussion, though mainly justified, is based on those party lines.


This is why I added, that I was talking about the doing of the German party FDP. I totally agree with you, that arguing in party lines does not suffice to solve the problems of today. We need to discuss our issues stuck to the facts. I was just trying to point out that this one example of a party line is nonsense. I didn't suggest any other party or ideology. And I won't, because no party that I know stands for at least 80% of what I think is right (and is reliable).

@Killer300: I agree with you again. Sadly, this is no problem just for the USA, but rather for the western world. Democracy demands to do, what ever makes a politician popular. Otherwise this politician would not become elected and thus would not count. It doesn't make you populr to raise taxes or to stop spending on something, because there are always people clinging to what ever you want to change. Sadly, the only people who have no power are the children. Result: it's easy to cut public spending for education. The poor people are many and thus have the power of many votes. The rich people have the power of money and thus can manipulate politicians (through corruption) and the people (with mass media). Children doesn't have a vote nor do they have power through money. They depend on the selflessness of the adults. You can see everywhere, how good this works.

Blackburn Wrote:
It's more efficient if 50 governors run each their own state than Washington running the whole country.


I do not agree with that at all. Sure, decisions get more and more complex when deciding for a rising number of people. But as far as I know, the states in the USA already have many rights to do what they like, undependent from Washington. I don't think that this is the problem. In Germany, it's the opposite: 16 different diplomas after school. How is it possible, that pupils from Hamburg are less valuable than pupils from Bavaria? Why didn't they both get the same chance?

But I will adopt you idea and put it in another thought. Things in modern economy has gotten far to complex to make reliable statements of the future. You can barely guess, what might happen. Being blessed with such a great country, with many people and many possibilities, I would use this to make wide area experiments. There are a lot of good ideas out there. They just need a try.

BigBob89 Wrote:
This is why I added, that I was talking about the doing of the German party FDP. I totally agree with you, that arguing in party lines does not suffice to solve the problems of today. We need to discuss our issues stuck to the facts. I was just trying to point out that this one example of a party line is nonsense. I didn't suggest any other party or ideology. And I won't, because no party that I know stands for at least 80% of what I think is right (and is reliable).


It wasn't intended to be an attack. I just wanted to note this problem.

BigBob89 Wrote:

Blackburn Wrote:
It's more efficient if 50 governors run each their own state than Washington running the whole country.


I do not agree with that at all. Sure, decisions get more and more complex when deciding for a rising number of people. But as far as I know, the states in the USA already have many rights to do what they like, undependent from Washington. I don't think that this is the problem. In Germany, it's the opposite: 16 different diplomas after school. How is it possible, that pupils from Hamburg are less valuable than pupils from Bavaria? Why didn't they both get the same chance?

But I will adopt you idea and put it in another thought. Things in modern economy has gotten far to complex to make reliable statements of the future. You can barely guess, what might happen. Being blessed with such a great country, with many people and many possibilities, I would use this to make wide area experiments. There are a lot of good ideas out there. They just need a try.


But the other way around doesn't work either, obviously. Also, a country with 300 Million people that need to make a living is no place for experiments.

Killer300

Experiments? No. Radical change? Yes. America is going to have to radically change soon anyway to deal with high debt. Possibly, the U.S. will not survive it, at all. (This has been talked about in another thread called Fall of the U.S., however that one can have... issues,) however there is another problem to deal with.

One issue with the U.S. that Germany doesn't have is this, Germany has parlimentary, i.e. parties matter more, while U.S. has only two parties, non parlimentary, which causes far too much focus on the President. More importantly, America is stuck with a radical right party that would probably be the laughing stock of a political party in Europe called the Republican Party. The Democrats are moderate left, which is ridiculous, because moderation can't counter extremism, not this kind anyway. Both parties have become completely useless. Really, if the U.S. is going to survive, it will need at least a four party system. It could be radical left, moderate left, moderate right, and radical right. Hence, the radicals would cancel each other out, and the moderates would also cancel each other out, forcing politics to the center. This would also force the parties to show results, for they would have competition in a way that they don't right now. Also, with that, we need to move the focus away from the executive branch, towards the other two. The President has far too much power, never something you want.
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