This puts our budget deficit in perspective
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carson
Well-known member
10% = tenth = tithe
catblaster
Well-known member
flat tax goooood, fair tax better.
Rancher Will
Well-known member
It's time we start facing economic facts and not be taken in by political propaganda.
Let's start with the myth that "shovel ready jobs" create economic benefits, when these jobs are "created" by the government. Yes, infrastructures, Roads, Bridges, etc., are necessary and beneficial, but they are an expense, not an economic profiable taxable benefit.
Remember that the Government does not create any job(s) except government jobs. And remember, the government only prints the money and does not create anything of value that is taxable. Only private enterprise can create and maintain any jobs that create a profit that is required to pay a net tax to the government.
The only source of income to the government is the taxes (in any form) that are paid by profit earning private enterprise. All other expenses, over the amount of taxes collected, are in the form of excess printed money that reduces the value of the Dollar for every excess Dollar printed over the amount of tax revenue.
The only jobs that can be of economic benefit to the nation are those that created and maintained by private business for profit since these are the only jobs that create a source of taxes that pay government expenses.
Any jobs "created" by the government that require government payment to pay for the job(s) are an expense and not a net profit enterprise. Such jobs do not benefit the economy. They actually increase the deficits and require more taxes to support them.
Think about this. We hear that the government must creat more jobs. If the government was to create all jobs, then where would the money come from to pay for them? There would be no source of money to pay. Naturally, no one asks the government to create all jobs. But the economic principle is there. Any goverment created jobs, and any amount, reduces the strength of the economy and reduces the actual profitabel jobs that could have been created by the private enterprise sector.
Any government that truely intends to "create" more jobs will enact policies for private enterprise to expand while reducing the size of the government. This requires the reduction of restrictions on private enterprise to permit private jobs to expand and continue to produce more profit for the economy. Any and all "jobs" "created" by government tax subsidies will always be counter productive for the economy and will restrict true profitable jobs in relation to the amount of cost of those jobs subsidized by the government.
Keep this in mind when we hear the statements that the government must create jobs.
Let's start with the myth that "shovel ready jobs" create economic benefits, when these jobs are "created" by the government. Yes, infrastructures, Roads, Bridges, etc., are necessary and beneficial, but they are an expense, not an economic profiable taxable benefit.
Remember that the Government does not create any job(s) except government jobs. And remember, the government only prints the money and does not create anything of value that is taxable. Only private enterprise can create and maintain any jobs that create a profit that is required to pay a net tax to the government.
The only source of income to the government is the taxes (in any form) that are paid by profit earning private enterprise. All other expenses, over the amount of taxes collected, are in the form of excess printed money that reduces the value of the Dollar for every excess Dollar printed over the amount of tax revenue.
The only jobs that can be of economic benefit to the nation are those that created and maintained by private business for profit since these are the only jobs that create a source of taxes that pay government expenses.
Any jobs "created" by the government that require government payment to pay for the job(s) are an expense and not a net profit enterprise. Such jobs do not benefit the economy. They actually increase the deficits and require more taxes to support them.
Think about this. We hear that the government must creat more jobs. If the government was to create all jobs, then where would the money come from to pay for them? There would be no source of money to pay. Naturally, no one asks the government to create all jobs. But the economic principle is there. Any goverment created jobs, and any amount, reduces the strength of the economy and reduces the actual profitabel jobs that could have been created by the private enterprise sector.
Any government that truely intends to "create" more jobs will enact policies for private enterprise to expand while reducing the size of the government. This requires the reduction of restrictions on private enterprise to permit private jobs to expand and continue to produce more profit for the economy. Any and all "jobs" "created" by government tax subsidies will always be counter productive for the economy and will restrict true profitable jobs in relation to the amount of cost of those jobs subsidized by the government.
Keep this in mind when we hear the statements that the government must create jobs.
F
FrankNSharon
Guest
And lets not forget that 500,000 employees that would be paid by the government to repair the roads, bridges, water systems, sewage systems, and tunnels are spending that money to purchase goods sold by private companies.
And that the government would BORROW the money to pay them, not print it. And BORROW it at unreasonably low interest rates. Now is the ideal time to borrow the money to finance that work, and every cent borrow would flow back into the economy in the form of purchases of goods produced by private industry, which would result in demand for products which would result in more people being hired to produce that produce.
And that the government would BORROW the money to pay them, not print it. And BORROW it at unreasonably low interest rates. Now is the ideal time to borrow the money to finance that work, and every cent borrow would flow back into the economy in the form of purchases of goods produced by private industry, which would result in demand for products which would result in more people being hired to produce that produce.
Rancher Will
Well-known member
Let me get this straight. I am just a dumb business man who has operated at a profit for a lifetime and think that I understand how economics seem to work.
As I understand it, if the government borrows money, even at a low interest rate, to pay for Government Jobs, then the government has to eventually pay off the debt with some money. That debt principal, plus interest, has to come from someone who earns enough to pay taxes or else the government must just print the money to pay off the debt.
If the government just prints money to pay off the debt than that debases the currency and causes inflation. If the government collects taxes from those who earn profits to pay taxes then those taxes are taken from the private sector to pay not only the actual cost of the government jobs but also the government overhead cost involved with the jobs.
Neither one of these options seem to increase the value on the economy since taking money value from the private sector, either by inflation or extra taxes, removes money that could have been used to create value in the economy. These options never increase the value of the economy. In fact, every dollar thus spent reduces the assets of the economy thus reducing the ability of the private sector to increase income and profit.
If it economically efficient for the government to take value from the private sector to pay for government jobs, then why would it not be efficient for the government to just stop all private enterprise, and take over all of the economy and create all jobs by the government and have no private jobs by profitable private business.
The Constitution provides that there are some duties of the Government that require taking earnings from the private citizens and businesses. For example, National Defense, the basic cost of operating the three branches of government, plus those enterprises delegated to the government as common good (roads, bridges, etc). These are recognized neccessary evils that we are willing to pay the cost while delegating these to a government for common benefit. Even these take earnings from private citizens and take money out of the economy, by common consent.
No government makes a profit. All governments' expenses require that the expenses of the government must be paid either by taking profits from it's citizens, taking profits from others (Colonial systems), printing currency (devaluing the currency), or multiplying the goverment debt, thus passing the destruction of the economy to future generations. All of these options reduce the ability of citizens to increase their welfare and the growth of the economy to the degree of removing the amount of earnings from private enterprise.
I remember the illustration in business classes describing the owner of a local town glass company cruising every night breaking all of the windows in all the buildings in town. The following days the glass company hires more and more employees to replace all of the broken windows and sell more and more windows. The owners of all the buildings therefore continue to pay for the increased employees who replace the broken windows every day.
This will increase jobs, increase money spent for what happens, but will also eventually use up all of the assets of the town so that the economy will never be able to make profits to stay in business. Is this what we want our Federal Government to be doing?
As I understand it, if the government borrows money, even at a low interest rate, to pay for Government Jobs, then the government has to eventually pay off the debt with some money. That debt principal, plus interest, has to come from someone who earns enough to pay taxes or else the government must just print the money to pay off the debt.
If the government just prints money to pay off the debt than that debases the currency and causes inflation. If the government collects taxes from those who earn profits to pay taxes then those taxes are taken from the private sector to pay not only the actual cost of the government jobs but also the government overhead cost involved with the jobs.
Neither one of these options seem to increase the value on the economy since taking money value from the private sector, either by inflation or extra taxes, removes money that could have been used to create value in the economy. These options never increase the value of the economy. In fact, every dollar thus spent reduces the assets of the economy thus reducing the ability of the private sector to increase income and profit.
If it economically efficient for the government to take value from the private sector to pay for government jobs, then why would it not be efficient for the government to just stop all private enterprise, and take over all of the economy and create all jobs by the government and have no private jobs by profitable private business.
The Constitution provides that there are some duties of the Government that require taking earnings from the private citizens and businesses. For example, National Defense, the basic cost of operating the three branches of government, plus those enterprises delegated to the government as common good (roads, bridges, etc). These are recognized neccessary evils that we are willing to pay the cost while delegating these to a government for common benefit. Even these take earnings from private citizens and take money out of the economy, by common consent.
No government makes a profit. All governments' expenses require that the expenses of the government must be paid either by taking profits from it's citizens, taking profits from others (Colonial systems), printing currency (devaluing the currency), or multiplying the goverment debt, thus passing the destruction of the economy to future generations. All of these options reduce the ability of citizens to increase their welfare and the growth of the economy to the degree of removing the amount of earnings from private enterprise.
I remember the illustration in business classes describing the owner of a local town glass company cruising every night breaking all of the windows in all the buildings in town. The following days the glass company hires more and more employees to replace all of the broken windows and sell more and more windows. The owners of all the buildings therefore continue to pay for the increased employees who replace the broken windows every day.
This will increase jobs, increase money spent for what happens, but will also eventually use up all of the assets of the town so that the economy will never be able to make profits to stay in business. Is this what we want our Federal Government to be doing?
carson
Well-known member
At the expense of possible being labelled a "Capitalist Pig" I hereby wish to nominate Rancher Will for the Nobel price for a sane, common sense economic theory.
Would you label this a 'political' post or just an educational post ?
A good way to flush out folks who understand what it takes to be self-sufficient and provide a great life for the family.
Anyone brave enough to give Will a thumbs-up?... or a thumbs-down?
Carson FL
Would you label this a 'political' post or just an educational post ?
A good way to flush out folks who understand what it takes to be self-sufficient and provide a great life for the family.
Anyone brave enough to give Will a thumbs-up?... or a thumbs-down?
Carson FL
PJ Stough
Well-known member
Thumbs down to Will. Also, there is a big difference between being able to run a profitable business, and understanding economics.
Paul
Paul
Hfx_Cdn
Well-known member
This discussion reminds me of our Canadian Tax Return we file every spring. It is far more simple than yours in the US and it goes something like this.
Question 1: How much did you earn last year.
Question 2: Please remit that amount by return mail.
As a very interested outsider, everyone should be commended for their civility as this is a topic that easily could digress into a shouting match. Unfortunately, economics is a theoretical science, and I don't believe us poor mortals will ever resolve or understand it fully. Our 2 countries are closely tied economically yet, we chose different paths. As for which is right, I say it depends on when you ask the question, or even where you look for the answer.
Ed
Question 1: How much did you earn last year.
Question 2: Please remit that amount by return mail.
As a very interested outsider, everyone should be commended for their civility as this is a topic that easily could digress into a shouting match. Unfortunately, economics is a theoretical science, and I don't believe us poor mortals will ever resolve or understand it fully. Our 2 countries are closely tied economically yet, we chose different paths. As for which is right, I say it depends on when you ask the question, or even where you look for the answer.
Ed
Pierat
Well-known member
What Paul said...
F
FrankNSharon
Guest
No one is suggesting that the government runs at a profit, yet that keeps coming up, guess I am too dumb to get the point.
This "sane" economic theory has been disproven over and over again through the years, but it keeps coming back up. The "trickle" down theory is one version of it, which never produced a job. Big business has been given 8 years to produce jobs and failed. The rich have been given massive tax breaks we were told would result in investments which would produce jobs, and it didn't. It is time to try something that works.
I am glad you are a successful business man, I too spent 45 years both self employed and running successful businesses. That has nothing to do with whether the government can stimulate the jobs market - I am not suggesting the government can make money, make a profit, or generate new jobs - I am suggesting that the government can stimulate the economy and the result will be for private industry to produce jobs.
If you are counting on big business to create jobs, forget it, they are laying off, off shoring and doing everything they can to kill off American jobs while they pocket record profits.
Small private businesses have been and will be the creators of most new jobs in this country.
This "sane" economic theory has been disproven over and over again through the years, but it keeps coming back up. The "trickle" down theory is one version of it, which never produced a job. Big business has been given 8 years to produce jobs and failed. The rich have been given massive tax breaks we were told would result in investments which would produce jobs, and it didn't. It is time to try something that works.
I am glad you are a successful business man, I too spent 45 years both self employed and running successful businesses. That has nothing to do with whether the government can stimulate the jobs market - I am not suggesting the government can make money, make a profit, or generate new jobs - I am suggesting that the government can stimulate the economy and the result will be for private industry to produce jobs.
If you are counting on big business to create jobs, forget it, they are laying off, off shoring and doing everything they can to kill off American jobs while they pocket record profits.
Small private businesses have been and will be the creators of most new jobs in this country.
F
FrankNSharon
Guest
An example of my "theory" would be WWII. We went into WWII still limping from the Great Depression. The government gave massive contracts to private industry, raised taxes to pay for those contracts and private industry responded by creating a massive economic boom that lasted for decades. The resulting jobs created provided the taxes to pay off the huge investment the government used to "stimulate" the economy.
The problem with our, and the worlds, economy today is the lack of jobs - jobs which would pay taxes to support the society we live in. Private industry has shown NO signs of creating jobs, so the government must step in and borrow more money to stimulate the economy and start the job creation cycle.
The problem with our, and the worlds, economy today is the lack of jobs - jobs which would pay taxes to support the society we live in. Private industry has shown NO signs of creating jobs, so the government must step in and borrow more money to stimulate the economy and start the job creation cycle.
taoshum
Well-known member
Seems to me there are only three ways to create wealth: grow something (for example, farming) that you can sell for more than it costs to process it; manufacture something (for example cars/trucks) that you can sell for more than it costs to build it; or, mine something (oil, iron, gold, etc) that you can sell for more than it costs to extract it. Everything else just moves wealth around, for example banks, lawyers, accountants, governments, wars, merchants, and so on. The type of organization that claims ownership of the means to create wealth varies from individuals, to corporations, to partnerships, to co-ops, some operated "for profit", some operated "not for profit"..., and many others. Saudi Arabia generates incredible wealth from mining oil... is that a "private" company or a government? I don't know. Exxon also generates massive amounts of wealth, but is owned by a spectrum of public and private entities including individuals, mutual funds, state pension funds, other corporations, other countries and so on. These days, China manufacturers a wide spectrum of products and sells this inventory all over the world. Some of the factories are owned by corporations, some by NFP's, some by the government of China, some by partnerships, some by other companies. The structures are many and many are very complex. The folks that grow and distribute "illegal" drugs also create massive amounts of wealth, BTW.
FWIW.
It also seems to me that the only thing economists agree upon is that each of them is right and the others are all wrong. Oh well... this could go on for a long time.
FWIW.
It also seems to me that the only thing economists agree upon is that each of them is right and the others are all wrong. Oh well... this could go on for a long time.
F
FrankNSharon
Guest
I agree -
The government already has a prepaid workforce to build and maintain the roads/bridges/etc. All they need is the supplies and equipment which private industry can provide (for payment). The workforce is the MILLIONS of able-bodied welfare/unemployed/etc folks who are not earning their pay. SS recipients are getting back what they paid in, they are not receiving anything 'free.' There are truly disabled people who could do office/paperwork type jobs to keep the system going--these tasks are necessary for any system to succeed. There are disabled people who can't do that. That's OK, they need our collective help. Their caregivers are exempt too since, well, they are caregivers and have a big job already. If the able-bodied folks don't like their job they can go find a different one. In the meantime, they can earn their pay. At least we taxpayers can get SOME value for many of our tax dollars. I know, sounds like the New Deal, TVA, etc. But why not????
This is not a stimulus or more borrowing (except for the materials, which we already buy, we will just need more of it). We already pay these folks, why not get some public good for the public paycheck?
This is not a stimulus or more borrowing (except for the materials, which we already buy, we will just need more of it). We already pay these folks, why not get some public good for the public paycheck?
I think I finally see what the TB&S (tax, borrow and spend) folks are saying. It's brilliant!
The government needs to tax the Holy Dog Doo out of anyone who still has a spare dollar (or a job?) and pass the money, in huge quantities, after administrative expenses of course, on to me and the other 14 million jobless, as a stimulus.
The 'Govment should require that each "stimulus" recipient create one job.
We (all 14 million of us) will simply take in each others laundry for a price (set by the 'govment, no doubt). This will ensure that each of us creates a job, and each of us receives a job.
Just think of it, 14 million instant jobs. WOW! (I told you it's brilliant)
The beauty of TB&S economics is that when the money runs out, and the cycle breaks down, our magnanimous 'Govment will be there with a "Bailout" and another stimulus.
I just hope that, when it happens, there are still some of those nasty rich folks left to tax so we can keep this new economy going.
Only in America!
The government needs to tax the Holy Dog Doo out of anyone who still has a spare dollar (or a job?) and pass the money, in huge quantities, after administrative expenses of course, on to me and the other 14 million jobless, as a stimulus.
The 'Govment should require that each "stimulus" recipient create one job.
We (all 14 million of us) will simply take in each others laundry for a price (set by the 'govment, no doubt). This will ensure that each of us creates a job, and each of us receives a job.
Just think of it, 14 million instant jobs. WOW! (I told you it's brilliant)
The beauty of TB&S economics is that when the money runs out, and the cycle breaks down, our magnanimous 'Govment will be there with a "Bailout" and another stimulus.
I just hope that, when it happens, there are still some of those nasty rich folks left to tax so we can keep this new economy going.
Only in America!
Rancher Will
Well-known member
Frank and Sharon's example of the economic boom following WWII is a good example of what remedy takes us out of a government created repression/depression. They do not give details though, so let me summarize.
I lived through "The Great Depression of the 1930's" and WWII, working for businessmen before I started my own business after I served in the military. We all know, or have been told that WWII got us out of the Drepression. That is true but many today do not know how it happened. History of those years can give us a lesson for today.
The "Great Depression" was actually a Double Dip Recession that evolved into a lasting Depression. The Recession of 1929, as serious as it was, was recovering by 1932. The Smoot Hawly Act of 1930 was taking effect by 1932 as werre the In 1931-1935 laws under the new administration. Our government enacted the New Deal laws that continued to put us into the Great Depression. The National Recovery Act of 1933, the Davis Bacon Act of 1931, The Wagner Act of 1935, and others, etc., all took effect as they were inplemented during the 1930's. These, along with the related government policies, kept us in the Drepression until WWII could not permit the Depression to remain in effect when the War II began.
In 1942-43 for obvious reasons after the Pearl Harbor attack in 1941 and the declaration of War against us by Germany and Italy, the President and Congress nulified (repealed) the Great Depression laws that were a road block to moving the country into a war time economy. These actions permitted private enterprise to go into production to preserve our freedom with freedom's Wartime Production, without the New Deal restrictions.
At the end of WWII, with the New Deal restrictions no longer in place, the same freedoms permitted the private sector to convert from war time to peace time since the New Deal Restrictions had been eliminated. Also the Marshall Plan required that New Deal type government restrictions could not be permitted since such would restrict recovery from war destruction in the Free World.
It was not government regulations and spending and higher taxes that enabled the great economic expansion after the WarII. It was the liberty from government restrictions for private enterprise, without the restricting government laws of the New Deal that permitted the greatest economic boom in history after 1945. Without the New Deal, entrepeneurs were permitted and encouraged to grow the economy, creating jobs for the millions of returning military plus the growth in our population. The freedom to develope, with modern technology, enabled the growth that resulted without government interference.
Remember that the next recession in the U.S. came along in early 1970 after the government had time again to start putting Socialistic policies in place again. And also remember that the recessions of the 1980's and 1990's decades came about after additional Socialistic government policies were implemented that impacted on private enterprise. And, we all know that the recession of the 2000's decades are the results of government actions that, as the Dems campaigned for, are "bringing back the policies of Roosevelts's New Deal".
Moderm technology has grown exponentially now but government interference has also grown exponetially over the post decades. This is why we are on the path that was started in the Great Depression and we are further along without anything on the horizon to reverse it. Government cannot create profitable jobs but government can get out of the way so private enterprise can do so. But will it?
I lived through "The Great Depression of the 1930's" and WWII, working for businessmen before I started my own business after I served in the military. We all know, or have been told that WWII got us out of the Drepression. That is true but many today do not know how it happened. History of those years can give us a lesson for today.
The "Great Depression" was actually a Double Dip Recession that evolved into a lasting Depression. The Recession of 1929, as serious as it was, was recovering by 1932. The Smoot Hawly Act of 1930 was taking effect by 1932 as werre the In 1931-1935 laws under the new administration. Our government enacted the New Deal laws that continued to put us into the Great Depression. The National Recovery Act of 1933, the Davis Bacon Act of 1931, The Wagner Act of 1935, and others, etc., all took effect as they were inplemented during the 1930's. These, along with the related government policies, kept us in the Drepression until WWII could not permit the Depression to remain in effect when the War II began.
In 1942-43 for obvious reasons after the Pearl Harbor attack in 1941 and the declaration of War against us by Germany and Italy, the President and Congress nulified (repealed) the Great Depression laws that were a road block to moving the country into a war time economy. These actions permitted private enterprise to go into production to preserve our freedom with freedom's Wartime Production, without the New Deal restrictions.
At the end of WWII, with the New Deal restrictions no longer in place, the same freedoms permitted the private sector to convert from war time to peace time since the New Deal Restrictions had been eliminated. Also the Marshall Plan required that New Deal type government restrictions could not be permitted since such would restrict recovery from war destruction in the Free World.
It was not government regulations and spending and higher taxes that enabled the great economic expansion after the WarII. It was the liberty from government restrictions for private enterprise, without the restricting government laws of the New Deal that permitted the greatest economic boom in history after 1945. Without the New Deal, entrepeneurs were permitted and encouraged to grow the economy, creating jobs for the millions of returning military plus the growth in our population. The freedom to develope, with modern technology, enabled the growth that resulted without government interference.
Remember that the next recession in the U.S. came along in early 1970 after the government had time again to start putting Socialistic policies in place again. And also remember that the recessions of the 1980's and 1990's decades came about after additional Socialistic government policies were implemented that impacted on private enterprise. And, we all know that the recession of the 2000's decades are the results of government actions that, as the Dems campaigned for, are "bringing back the policies of Roosevelts's New Deal".
Moderm technology has grown exponentially now but government interference has also grown exponetially over the post decades. This is why we are on the path that was started in the Great Depression and we are further along without anything on the horizon to reverse it. Government cannot create profitable jobs but government can get out of the way so private enterprise can do so. But will it?
No they won't. Right now business has been demonized. Any attempt to make profit is called greed (unless of course you are in entertainment or sports). We have been divided socially in so many ways by the very people that should be uniting forces. Too many of us look for what we can get or what we are owed, not what we can earn. Looking for others to 'pay their fair share' rather than working for their own future. These pervasive attitudes will make worldwide economic recovery a huge challenge.
PJ Stough
Well-known member
Rancher Will said:
That is almost a great fairy tale, except you forgot to start it with, Once upon a time...
What is stopping private enterprise from creating jobs now??? This malarky about regulations just doesnt add up!
If government regulations were stopping private enterprise from creating jobs, that would imply that there is an unmet demand for goods and services, and an unmet demand is the definition of shortages, and I dont believe anyone can say there are shortages of any goods or services in this country!
The same is true for "supply side economics". It assumes that there is an increased demand for goods and services, and a shortage of capital for businesses, and if businesses had more capital they could then expand production and hire more people, but again "supply side economics" implies that there are shortages of goods and services available, and again that is simply not the case in our current economy.
Our economic problems today are not all that unlike the Great Depression, and that is the concentration of capital. I didnt live through the Great Depression, but my parents did, and I remember them telling me that the biggest problem was that simply that almost no one had any money, and many people were reduced to bartering to get the necessities of life. With 51% of households in 2009 who filed Federal Income tax not making enough money to owe any Federal Income Tax, and 40% of the people in the USA with a credit score not having a high enough credit score to borrow money to buy a house or a car, it is easy to see why there is no increase in demand for goods and services that would cause businesses to hire more people and increase production.
But times are different now, so it isnt likely we will have some world war to stimulate the economy, and it isnt likely tax laws will be changed much, and borrowing by the Federal Government isnt likely to be expanded, and with the pressure to reduce Federal spending, the likely outcome is that we are now entering a new economy for the USA, and if you want to know what the economy of the USA will look like in a few years if we keep on the present economic track, all we have to do is look to Mexico where virtually all of the wealth is owned by a relative small group of people, there is a relative small middle class, but the vast majority of Mexicans live in abject poverty.
Lets welcome the USA to the Third World!
Paul
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