The Poor Are the Engine of Prosperity

[jaeger19]

Of course it does. Wealth comes from a healthy economy and an economy is nothing but spending.

Wrong.

In fact.. an economy that is nothing but spending is the weakest economy.

 

[jaeger19]

Im all for cutting spending, but trade wars are not the solution to foreign competition. Youll just cause business to never come here in the first place. Youre creating the problem with regulation, and then "fixing" it with more regulation.

We are one of if not THEE richest nation in the world. You really think that companies won't take advantage of all that spending power? I know that I do.

 

[Joe Steel]

Wrong.

In fact.. an economy that is nothing but spending is the weakest economy.

What else comprises an economy?

 

[Critter7r]

What else comprises an economy?

^^^ Came to ask this ...

 

[JohnfrmClevelan]

What else comprises an economy?

Investment. But I do the same thing you do, I just assume that investment is going to happen and I lump it all in with spending. I don't think it's a stretch to assume that the farmer is going to buy seed and a tractor, and the baker is going to buy flour, etc.

 

[Critter7r]

Investment. But I do the same thing you do, I just assume that investment is going to happen and I lump it all in with spending. I don't think it's a stretch to assume that the farmer is going to buy seed and a tractor, and the baker is going to buy flour, etc.

Call me crazy, but a farmer investing in a tractor is no different than me "investing" in an automobile. Or a couch. Or an iron skillet.

 

[JohnfrmClevelan]

Call me crazy, but a farmer investing in a tractor is no different than me "investing" in an automobile. Or a couch. Or an iron skillet.

Right, it's all spending. But it's not worth the bother to argue this.

 

[winston53660]

Call me crazy, but a farmer investing in a tractor is no different than me "investing" in an automobile. Or a couch. Or an iron skillet.

Yes you are crazy. A farmer investing in a tractor has the objective of earning producing. OTOH what can you earn and or produce with a couch?

 

[JohnfrmClevelan]

Yes you are crazy. A farmer investing in a tractor has the objective of earning producing. OTOH what can you earn and or produce with a couch?

But to the guy selling the tractor? Just another sale.

 

[MTAtech]

Right, it's all spending. But it's not worth the bother to argue this.

Economics Is not a Morality Play

Weaponized Keynesian

 

[Objective Voice]

trickle up economics?

Why not? It solves alot of problems. Since our economy is based on consumption, put more money in the hands of consumers and they will spend it. :shrug: It's either that or raise people's salary at least enough to meet their basic survival needs AND expenses brought on by legalism (i.e., homeowners/renter/medical insurance).

No, a production and manufacturing middle class is the engine of prosperity. A solid use of a strong 4th and 3rd income quintile workforce will change things for us.

True, but until we can change our trade imbalance nothing we do here will change our macro-economic situation.

Just taxing (or confiscating) wealth and handing it out to the 5th income quintile will end in nothing economically sustainable.

From a micro-economic perspective, you're right. But this would explain why we need BOTH if we are to turn our economy around and enjoy greater, more sustainable prosperity for the long haul.

 

[Helix]

Why not? It solves alot of problems. Since our economy is based on consumption, put more money in the hands of consumers and they will spend it. :shrug: It's either that or raise people's salary at least enough to meet their basic survival needs AND expenses brought on by legalism (i.e., homeowners/renter/medical insurance).

we have a winner.

here's the thing : it's not trickle up or trickle down. both are directions that we can steer depending on the road. where both sides go wrong is that they fixate on only one direction and try to make that the solution to every scenario. in reality, economics really isn't that different than a food web.

right now, though? i would lean trickle up. send all of the kids to college or to post secondary training, rebuild the country, and reallocate funds in order to hire people to work.

 

[JohnfrmClevelan]

we have a winner.

here's the thing : it's not trickle up or trickle down. both are directions that we can steer depending on the road. where both sides go wrong is that they fixate on only one direction and try to make that the solution to every scenario. in reality, economics really isn't that different than a food web.

right now, though? i would lean trickle up. send all of the kids to college or to post secondary training, rebuild the country, and reallocate funds in order to hire people to work.

You don't have to be so generous. Money trickles up. Always has, always will.

 

[Helix]

You don't have to be so generous. Money trickles up. Always has, always will.

let me explain why i said that. there have been times when the top marginal tax rate was as high as ninety percent. if you cut that rate, then yeah, it will probably generate increased economic activity, and it might actually increase tax revenue. when it's at a historically low rate? not so much. we can steer it in either direction as needed. steering in only one direction for all situations means that you'll likely be off the road and driving in circles fairly quickly.

 

[Critter7r]

Yes you are crazy. A farmer investing in a tractor has the objective of earning producing. OTOH what can you earn and or produce with a couch?

Maybe I have an e-Bay business and generate my income sitting on the couch.

But it doesn't matter if I don't. The numbers are different, but they're still just spending. The economy doesn't care what I'm buying.

 

[Objective Voice]

we have a winner.

here's the thing : it's not trickle up or trickle down. both are directions that we can steer depending on the road. where both sides go wrong is that they fixate on only one direction and try to make that the solution to every scenario. in reality, economics really isn't that different than a food web.

right now, though? i would lean trickle up. send all of the kids to college or to post secondary training, rebuild the country, and reallocate funds in order to hire people to work.

Of course, all of that requires money and lots of it. So, the question is: "How to pay for it all and who would be eligible to receive such college/post-secondary training"?

Things aren't exact as they were during the Guilded Age or the Industrial Revolution. Those Five Men who Built America back then could use their wealth and influence (not to mention their egos in some cases) to build what they wanted, how they wanted and where. But that type of bravado, though it lead to certain levels of economic prosperity...for some...ultimately lead to monopolies and unfair labor practices. Fast forward to today and although the greed is still there, there's also been this acute concentrate of elitism, i.e., education, health services, executive compensation, with a small few whereas the masses (laborers) are being further and further left behind. So, how do you change that?

First, I think those at the top need to be made to understand the plight of those at the bottom.

Second, they need to understand that they really didn't become successful by themselves. They held help along the way beyond merely their immediate circle of friends, allies and business partners.

Third and most important, they need to understand that what they do impacts everything else within and without their marketplace, i.e., the price of oil futures impacts the price of food and other commodities; the rise in prescription drugs and health care premiums removes disposable income out of the pockets of consumers; stagnant wages forces people to either take on second jobs or use credit more recklessly in order to make up the difference in wage attainment which ultimately can (and does) lead to domestic credit defaults.

The time we can get convince those of significant wealth and influence to re-install "compassion" back into conservatism, that's when things will begin to change. Perhaps they (the movers and shakers in this country) need to watch the video below to better understand that "what they give, they'll get back in return 10-fold" as the old saying goes.

 

[jonny5]

the same reason they offshore or move to countries with cheaper labor...

They don't stop making money and close their profitable businesses and make NO profit.

so again.. I am in the medical business.. treating American patients in America...
Why would I close up shop and make NO money.. rather than put 3 million a year in my pocket each year?

Because you could move elsewhere and make 6 million, while the high tax country makes 0 million.

 

[jonny5]

We are one of if not THEE richest nation in the world. You really think that companies won't take advantage of all that spending power? I know that I do.

Not if you set a high tarrif.

 

[iliveonramen]

Wrong.

In fact.. an economy that is nothing but spending is the weakest economy.

Japan is a country where it's citizens have among the highest rates of income saved in the world. They've also gone through 3 decades of sluggish growth since exports hasn't been able to offset that lack of domestic consumption.

The only way to have low unemployment and high growth with a relatively high level of savings is through a huge trade surplus...it's just math.

 

[jaeger19]

What else comprises an economy?

Production,

 

[jaeger19]

Not if you set a high tarrif.

A tariff only applies to those that produce goods outside the united states. So to take advantage of all that spending power... It behooves companies to produce goods in the US. Which of course increases wages in the use.. decreases unemployment all which further increases that spending power.

 

[jaeger19]

Because you could move elsewhere and make 6 million, while the high tax country makes 0 million.

No.. because the spending power in the US is where I make my money. Try finding a country where I can make more money from their consumption than I can in the US.

China? Please.. not only are they too much protectionist regulations.. the average worker makes something like under 2 dollars an hour.

 

[Fenton]

Call me crazy, but a farmer investing in a tractor is no different than me "investing" in an automobile. Or a couch. Or an iron skillet.

No, not all investments are the same.

Buying a Car is sure, a investment, but what if I took that money and invested it in a new Bussiness, that provided new jobs ?

Then my employees could use their income to buy homes, care, furniture, etc.

Or they could save and break off and start their own bussiness.

 

[Helix]

Of course, all of that requires money and lots of it. So, the question is: "How to pay for it all and who would be eligible to receive such college/post-secondary training"?

i'd pay for some of it by ending the active wars and maintaining a peacetime force. send the kids to college and post secondary training instead. that might not cover all of it, so here are other ideas :

phase out the failed drug war, and release those who are in jail for non-violent drug crimes. i also support expunging their records so that they can actually get jobs instead of going right back out on the street and getting in trouble again.

tax all income as income above a cap, including investment income.

we could also consider a very modest national sales tax.

yeah, it would be expensive, but i think that the money we'd save on the back end by reducing the demand for long term public assistance would help.

who would be eligible? anyone who completes the degree or program. i support making everyone eligible anyway, but this is a compromise position. you complete the degree or program or pay the money back.

Things aren't exact as they were during the Guilded Age or the Industrial Revolution. Those Five Men who Built America back then could use their wealth and influence (not to mention their egos in some cases) to build what they wanted, how they wanted and where. But that type of bravado, though it lead to certain levels of economic prosperity...for some...ultimately lead to monopolies and unfair labor practices. Fast forward to today and although the greed is still there, there's also been this acute concentrate of elitism, i.e., education, health services, executive compensation, with a small few whereas the masses (laborers) are being further and further left behind. So, how do you change that?

First, I think those at the top need to be made to understand the plight of those at the bottom.

Second, they need to understand that they really didn't become successful by themselves. They held help along the way beyond merely their immediate circle of friends, allies and business partners.

that's true. their wealth is measured in US dollars, an imaginary currency that depends on a stable nation / society for it to be worth anything. they are able to use the ladder of society to climb. there are rungs missing now, and we need to put those rungs back in place.

Third and most important, they need to understand that what they do impacts everything else within and without their marketplace, i.e., the price of oil futures impacts the price of food and other commodities; the rise in prescription drugs and health care premiums removes disposable income out of the pockets of consumers; stagnant wages forces people to either take on second jobs or use credit more recklessly in order to make up the difference in wage attainment which ultimately can (and does) lead to domestic credit defaults.

The time we can get convince those of significant wealth and influence to re-install "compassion" back into conservatism, that's when things will begin to change. Perhaps they (the movers and shakers in this country) need to watch the video below to better understand that "what they give, they'll get back in return 10-fold" as the old saying goes.

my opinion is that capitalism is the best system that society has come up with so far because it has the potential to provide opportunity to the greatest number of people. however, when improperly regulated, it lacks a conscience. as inequality grows, capitalism resembles feudalism more and more. it's tough to find the right balance, and even more difficult when the whole country is basically divided into two teams that hate each other. either way, we need to at least take some measures to make sure that those who are starting the race at a disadvantage are given all of the tools they need to run. giving everyone debt free access to post secondary education and / or job training levels the playing field a bit.

 

[Critter7r]

No, not all investments are the same.

Buying a Car is sure, a investment, but what if I took that money and invested it in a new Bussiness, that provided new jobs ?

Then my employees could use their income to buy homes, care, furniture, etc.

Or they could save and break off and start their own bussiness.

But in the abstract, it's still just spending.

The argument wasn't that some spending is or isn't better than other spending. In fact, I've forgotten what the argument was by now, but it wasn't that.