U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 02-03-2019, 02:04 PM
 
Location: Aurora Denveralis
5,302 posts, read 1,772,436 times
Reputation: 8027

Advertisements

Quote:
Originally Posted by WRM20 View Post
The buying and selling of stocks set the price the companies can expect to receive if they sell more shares to finance the company. In that sense, they do help drive the economy.
The money invested in stocks is also, in theory, providing the working capital for the company. I suppose you could draw categories of investments that are "working" vs those that are just sitting idle. Companies whose market caps exceed the need for working capital by many multiples could be said to be "sitting" on money that would be more productive elsewhere. Those shares just produce more wealth for the already wealthy.
Reply With Quote Quick reply to this message

 
Old 02-03-2019, 02:51 PM
Status: "Loving the hilarity of CD." (set 29 days ago)
 
5,641 posts, read 2,566,054 times
Reputation: 5455
Quote:
Originally Posted by Quietude View Post
Starting with the ones who keep their econ textbooks open on the desk for arguments.
What is it about having a knowledge of economics that you would equate it with being a ďnut job?Ē
Reply With Quote Quick reply to this message
 
Old 02-03-2019, 02:56 PM
Status: "Loving the hilarity of CD." (set 29 days ago)
 
5,641 posts, read 2,566,054 times
Reputation: 5455
Quote:
Originally Posted by Quietude View Post
The money invested in stocks is also, in theory, providing the working capital for the company. I suppose you could draw categories of investments that are "working" vs those that are just sitting idle. Companies whose market caps exceed the need for working capital by many multiples could be said to be "sitting" on money that would be more productive elsewhere. Those shares just produce more wealth for the already wealthy.
What does market cap have to do with working capital?
Reply With Quote Quick reply to this message
 
Old 02-03-2019, 03:58 PM
 
4,547 posts, read 1,867,013 times
Reputation: 14281
A complete lack of data in that article to back up that screed.

And Keynesian economic has some baked-in flaws, namely that government allocation of resources is better for the economy than market forces. In truth, the government is pretty famous for misallocating and wasting resources. Anyone who has ever worked on a government contract would tell you as much. And if that were truly the case, the $800 billion in financial stimulus in 2009 would have done some good for the economy, yet it was famously ineffective. The other problem is that ratcheting up tax rates does not produce a corresponding increase in tax revenue. All it means is that those with that kind of wealth channel it into offer areas.
Reply With Quote Quick reply to this message
 
Old 02-03-2019, 06:04 PM
 
7,170 posts, read 4,653,739 times
Reputation: 12545
Quote:
Originally Posted by Elliott_CA View Post
...the global savings glut, where ultra-wealthy individuals and institutions have mountains of excess cash sitting idle and doing nothing, is grossly unproductive.
There may be something "corrosive" or otherwise abhorrent about billionaires. Or there may not. But that's a separate issue from whether their cash is or is not being productively deployed. We've had many posters in this thread make a convincing argument that the wealthy do indeed do productive things with their money. We must realize that "productive things" is quite distinct from personal consumption. The point isn't that billionaires buy lots of mansions, yachts and jets... but that they deploy their money in profitable ventures. Well, having all of those billionaires control all of that stuff may or may not be "fair" or optimal"... but let's not conflate that debate with the assertion that these folks have their cash buried in barrels, being eaten by rats.

Quote:
Originally Posted by Elliott_CA View Post
Why not tax a billionaire?
Your question does raise an interesting point: most nations have progressive marginal tax-rates on income (not the same as taxes on wealth!), but the top rate kicks in, at a fairly low level. In other words, $1M in annual income is taxed marginally at about the same rate at $10M, $100M, $1B and so forth. In such case, the person who's earning a mere $1M or $2M a year, is going to feel unfairly lumped with those who earn vastly more. There is merit in considering whether or not there should be higher marginal tax rates.

Quote:
Originally Posted by Elliott_CA View Post
[*]The velocity of money is at historic lows (chart). ...[*]...When cash on hand exceeds investment needs, cash goes into money markets and other short term bond instruments. Rates are low because when short term bonds go to auction, there's a crowd of investors and institutions with tons of cash outbidding each other, willing to accept low interest rates. Conversely, when capital investment is "hot" and cash is put to work, there's little interest in investing in bonds, so interest rates go up.
I’d opine that in both cases, the culprit isn’t lazy and unimaginative rich-people, but an overarching aversion to risk, where investors in general – rich or poor – lose their “animal spirits”, become timorous and withdrawn. Indeed, while we celebrate the risk-taking of Amazon or Apple (or in an earlier era, Microsoft or Dell), the very fact that these few giants are few, suggests that others aren’t taking requisite risk (or if taking it, are failing, becoming a cautionary example to others).

I’ve long argued, that our problem is less about wealth distribution, than about slowdown in productivity growth rate… which in large measure is all about risk-aversion.

Quote:
Originally Posted by Quietude View Post
...look at who we admire, and why, and what those people do to warrant any acclaim. Most extremely wealthy people are about as admirable and likeable as the grumpy old fart who runs the local wrecking yard...
But the thing is, that the prototypical “average man on the street” might admire billionaires as being heroic entrepreneurs, risk-takers and captains of industry… while vilifying mere millionaires, as being shiftless rentier fat-cat “elites”.
Reply With Quote Quick reply to this message
 
Old 02-04-2019, 10:58 AM
 
555 posts, read 404,227 times
Reputation: 1308
People do realize that the bulk of what these billionaires have is in stocks right? Would you force them to cash it and pay a tax? What would the % rate be since stock prices fluctuate daily.

It's hilarious people think this tax would stop with billionaires. After a decade it would move to hundred millionaires, then millionaires, then thousandaires... It would only be a matter of time as the goal posts move while political candidates fight to move more left then the last guy every 2 years. (I can hear it now, "it's not your fault your not rich... you are a victim and deserve more".) Someone will always have the "gotta-get-even-with-'em" mentality.

Who cares really. The Gates, Musk's, or Bezo's of the world ... they have no impact whatsoever on my life if they have or lost a few million. Would my life change if we taxed them more?

The whole "get even" mentality makes no sense to me (yes, it is out of jealousy regardless). Do people really lose sleep over this nonsense? If the government collected more millions from these people the gov would just spend tens of millions more then they collected anyways. Politicians can't help themselves. Gov taxation is akin to a dog chasing it's tail.

Last edited by 2Loud; 02-04-2019 at 11:12 AM..
Reply With Quote Quick reply to this message
 
Old 02-04-2019, 11:04 AM
 
4,651 posts, read 1,729,305 times
Reputation: 5974
Quote:
Originally Posted by MinivanDriver View Post
And Keynesian economic has some baked-in flaws, namely that government allocation of resources is better for the economy than market forces.
Government IS better than the private sector at allocating resources... during a recession, when the private sector isn't allocating anything at all and is in retreat. And where do a lot of those government resources go? To private contractors, helping them to regroup, priming the pump of the economy for a recovery.

We tried unregulated free market capitalism -- doesn't work, it's inherently unstable. 1920's and most of the 1800's, the U.S. lurched from boom to bust over and over again. The economy got better in the decades after the Great Depression precisely because the government became part of the economy. Our greatest prosperity occurred in the 50's and 60's, when Keynesianism was in favor and dominant.

Quote:
Originally Posted by MinivanDriver View Post
... the $800 billion in financial stimulus in 2009 would have done some good for the economy, yet it was famously ineffective.
"...the Recovery Act increased U.S. GDP by roughly 2 to 2.5 percentage points from late 2009 through mid-2011, keeping us out of a double-dip recession. It added about 6 million “job years” (a full-time job for a full year) through the end of 2012. If you combine the Recovery Act with a series of follow-up measures, including unemployment-insurance extensions, small-business tax cuts and payroll tax cuts, the Administration’s fiscal stimulus produced a 2% to 3% increase in GDP in every quarter from late 2009 through 2012..." -- TIME

2% GDP boost is a pretty good deal for only $800 billion. So far Trump's tax cuts haven't delivered anywhere near the promised 5% numbers.
Reply With Quote Quick reply to this message
 
Old 02-04-2019, 11:09 AM
 
555 posts, read 404,227 times
Reputation: 1308
Quote:
Originally Posted by Elliott_CA View Post
So far Trump's tax cuts haven't delivered anywhere near the promised 5% numbers.
So what is the number Elliot?
Reply With Quote Quick reply to this message
 
Old 02-04-2019, 11:09 AM
 
Location: Aurora Denveralis
5,302 posts, read 1,772,436 times
Reputation: 8027
Quote:
Originally Posted by 2Loud View Post
It's hilarious people think this tax would stop with billionaires.
Yes, yes, gotta watch them dominoes. Today Bezos and Buffett, tomorrow Grandma's tin can in the back yard.
Reply With Quote Quick reply to this message
 
Old 02-04-2019, 11:38 AM
 
4,661 posts, read 2,415,671 times
Reputation: 3969
Quote:
Originally Posted by Elliott_CA View Post
Government IS better than the private sector at allocating resources...
No they aren't. There isn't a real world example of this being true.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2019, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top