Quote:
Originally Posted by chickenfriedbananas
How did a tax increase trash an economy - when it had already been trashed for three years?
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7 years.
You went into a recession 2nd Quarter 1925 and came out 2nd Quarter 1926 (or maybe 3rd Quarter -- have to check my notes on that).
You went back into a recession 4th Quarter 1927 and that ended 2nd quarter 1929.
That whole thing starts back in 1916 with a Real Inflation spike. You get another brief spike in 1917 and then continues (rather tamely) through the end of 1928.
Then you have Real Deflation. That's what triggers the economic recovery and the economic recovery is what triggers the slide in stocks starting in June 1929, sliding harder by September and "crashing" in October.
Quote:
Originally Posted by chickenfriedbananas
That tax increase didn't occur until mid-1932.
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Well, shame on me, as I did erroneously say personal income taxes. Yes, personal income taxes did increase in 1932 and that only exacerbated the runs on banks.
That was actually a Republican Senate and a Democrat House. I meant to refer to all forms of taxation, and that refers specifically to the many outrageous federal excise taxes that were levied in 1930 (and 1928) by the Republican-controlled House and Senate.
Federal excise tax on matches. Your occupation could have been subject to a federal excise tax as well. Federal excise taxes on toiletries.
A federal excise tax on chewing gum (I kid you not).
Anyway, I hope you aren't relying on Pukipedia, because they're stupid and you'll get burned.
Previously, everyone paid 1.5% on the first $4,000 and then 3% on everything in excess of $4,000.
Then, there was the surtax.
There was no surtax on the first $10,000.
There was a 1% surtax on $10,000 to $13,999 (meaning you paid 1.5% on the first $4,000 then 3% on the amount over $4,000 and then you paid a surtax of 1% on the amount between $10,000 and $13,999).
At $14,000, you paid a flat fee of $40 plus 2% on the amount between $14,000 and $15,999 (meaning you paid 1.5% on the first $4,000 then 3% on the amount over $4,000 and then you paid a surtax of 1% on the amount between $10,000 and $13,999 then the $40 fee and 2% between $14,000 and $15,999).
At $16,000, you paid a flat fee of $80 plus 3% (to $17,999)
At $18,000 you paid a flat fee of $140 plus 4% (to $19,999)
And so on.
The new tax rates (1932) were much more oppressive.
It was now 4% on the first $4,000 and then 8% on everything in excess of $4,000.
What is the increase?
(4.0% - 1.5%) / 1.5% = 2.5% / 1.5% = a whopping 166% increase.
And still you have the surtax.
The limit is now $6,000 instead of $10,000, but other than that, everything else is the same.
You paid 4.0% on the first $4,000 then 8% on everything over that, then you paid 1% on the amount between $6,000 and $10,000.
At $10,000, you paid a flat fee of $40 plus 2% on the amount between $10,000 and $11,999 (meaning you paid 4.0% on the first $4,000 then 8% on the amount between over $4,000 and then you paid a surtax of 1% on the amount between $6,000 and $9,999 then the $40 fee and 2% between $10,000 and $12,999.
And so on.
Quote:
Originally Posted by chickenfriedbananas
That was three years after the crash on Wall St. That was two years after an even bigger drop on Wall St. that hardly anyone talks about because it occurred after the first major one in the Fall of 1929.
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I talk about it. I have a post on it somewhere here. Every time the economy tanks, the stock market performed superbly.
As soon as the economy started to recover, the stock market tanked.
I show that all the through the year 2000. Since the stock market has been performing well recently, it means that either your economy is floundering, or you have economically recovered and this is as good as it gets.
Quote:
Originally Posted by chickenfriedbananas
By the time the tax increase went into effect, it was a few months before FDR's inevitable election victory, and unemployment was at about 24 percent. Again, this was before FDR. Meaning, pre-FDR.
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Meaning what? I never said anything about FDR.
Quote:
Originally Posted by chickenfriedbananas
Hoover's response to the crisis was not to spend a single dime on the unemployed, and instead spent it on banks and businesses (sound familiar?). Hoover was on record as making balanced budgets a priority, even throughout the worst of the crisis (again, sound familiar?).
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How much money did Hoover spend on "banks and big businesses?"
One criticism of the Federal Reserve at that time is the US was experiencing a liquidity crisis and the Federal Reserve did not move fast enough to prop up failing banks.
By the time the Federal Reserve took action, it was too little too late, and worse than that, the Federal Reserve was acting in piecemeal instead of injecting cash into the system
en masse.
And what would be the purpose of spending money on the unemployed?
Industry was undergoing a technological revolution vis-a-vis assembly line production. That method resulted in over-production of goods which is what in part led to Real Deflation, and then the trade wars with other countries all but halted imports and exports.
Quote:
Originally Posted by chickenfriedbananas
Despite not spending money on unemployment, Hoover ended up with major budget imbalances anyway. Wanna know why? Because you can't have tax revenue when everyone's out of work and not spending any money -- that's why. I don't know why economics is so hard for people to understand for those who seem to advocate 'austerity'.
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What was the US National Debt at that time? Did the US National Debt exceed the Gross Domestic Product?
No. That didn't happen until about late 1940.
And I never advocated austerity. Why?
Because I have a BA in Economics and I know that austerity can be voluntary or
involuntary. You will be experiencing involuntary austerity up close and personal (sooner than you think).
Quote:
Originally Posted by chickenfriedbananas
Economic austerity basically ensures the opposite of what budget hawks say they aim for, which is a balanced budget. They end up doing exactly the opposite. One day, libertarians will understand that running a mixed economy is complex, and applying the same economic principles that are used to balance your own bank book is fallacious thinking.
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Where do you think money comes from? Well, your government gets tax revenues and then it sells debt for cash.
I take it you don't understand the implications of that. You can sell debt for cash only so long as investors are
willing and able to buy your debt for cash.
So the government spends $4 TRILLION, collects $2 TRILLION in revenues leaving a budget deficit of $2 TRILLION which the government hangs out for investors to buy.
And if no one buys, or only $1 TRILLION is sold, what happens?
Maybe you don't understand the implications, because you fail to apply foresight.
What is the public part of the National Debt, now, about $11 TRILLION? Do you think it is a wise thing for investors to have $11 TRILLION tied up in US treasury notes, bonds and bills?
4 years from now when your National Debt is $21 TRILLION (or more) and your public debt is $17 TRILLION, well, you don't see a problem there?
The rest of the world has $6 TRILLION to dump into your economy? You had best hope so, but I can tell you right now that won't happen, and you'll have Real Inflation to the tune of about 35%-45% annually ripping you to pieces.
You cannot continue to spend $4 TRILLION for a measly $500 Billion bump in GDP. That is a losing battle, and when you have lost that battle, you will know austerity whether you want to or not, because no one will have a choice in the matter.
You spend your way out of a recession if you have the money, and if your National Debt is less than your GD, and if there is a potential for job creation (there is none here), and if there is a potential to pay off the debts you incur.
Burying future generations in servitude so you can feel good now is not smart economics, but you'll figure that out soon enough.
Quote:
Originally Posted by chickenfriedbananas
I agree with a lot of what you've said above. The ugly reality is that global capitalism has come at the expense of higher-paying jobs in developing countries, with a perpetual race to the wage floor.
There are two ways we can address that problem. One way is to try and put the genie back in the bottle, which could be tried, I suppose, but I think we would find that there are major consequences for doing that. I don't think that's the answer.
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I must say that I am absolutely stunned to hear that from the mouth of Liberal, but then Liberals never fail to amaze me with their blatant hypocrisy.
Global Capitalism. What an Orwellian propagandistic phrase. Coming from you,
I'll take that as an admission that Capitalism is a success.
So you think Global Socialism or Global Communism would not be so much of a threat to the Extravagant American Life-Styleâ„¢?
Capitalism, Socialism and Communism are all Property Theories and they all require the same thing: Capital.
And Capital has an inherent need to expand, regardless of the type of Property Theory used.
It is even more absurd given the fact that the single driving force behind, um, you know, Global Capitalism is BRIC -- Brasil, Russia, India and China.
What a freaking hoot.
The US refuses to develop countries, because the primary goal of the US is to steal all of the natural resources, profits and wealth from a country.
And of course, if the US should develop a country, then that country would compete against the US and cause economic harm to the US and the Extravagant American Life-Styleâ„¢.
So *******s whine for decades about the plight of the poor and impoverished in 3rd and 4th World States, and then along comes BRIC who starts injecting massive Capital into those States for development and now they are competing against you and taking your jobs and you cry "Foul! Unfair!"
How refreshingly Liberal. We always knew Liberals were devoid of Morals and Ethics and you have proven it.
So you want to put the genie back into the bottle? That's extraordinary. What you like to do next?
Might I suggest you remove the rotary bays from B-52s and re-install the cantilevers so that you can carpet bomb all developing countries into submission instead of using expensive cruise missiles.
And you have the nerve to complain about Republican Warhawks?
Well, Obama has at least attempted to do his part to put the genie back into the bottle. The Boy King Obama illegally overthrew the Honduran government back in 2009 to ensure there was a puppet-dictator at the helm to economically oppress Hondurans so you can continue living the Extravagant American Life-Styleâ„¢.
And of course The Boy King Obama also approved military action in Libya to halt development there and return the people to poverty.
Quote:
Originally Posted by chickenfriedbananas
I would rather find ways to address the realities and to help people adapt somehow.
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Then issue library cards to people and tell them to go entertain themselves, or better yet, learn something.
It don't cost nothing, but I suppose people would clamor for government-backed low interest loans to study for free at the library.
Quote:
Originally Posted by chickenfriedbananas
Put money in their pockets while giving ourselves time to figure out what to do with displaced workers.
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No can do.
You're just going to have to wait it out. Like I said, I figure wages will double about every 10 years (in developing countries --- not post-Industrialized States) and by the year 2040, you should be able to start competing again.
If you don't like the present situation, the go scream at your parents and grand-parents who looked the other way (and profited) while your government and big corporations looted other countries.
Of course, had you done the honorable Christian Good Neighbor Thing and helped those countries develop, then you would never have risen above mere average mediocrity as a country, at least not in terms of life-style and standard of living.
Methinks you Liberals have a problem sharing [world resources] with others. You can talk the talk about whirled peas, but when it comes down to it, you can't walk the walk.
Never failing to be amazed...
Mircea
Quote:
Originally Posted by buzzards27
Force cuts in state, local and school payrolls. Force cuts in Federal spending to fill the gaps above. Force cuts in government contracts that create private sector jobs.
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I'd be more impressed if you would just show me the money.
Quote:
Originally Posted by buzzards27
Private sector sitting on mountains of cash....
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That's smart strategy. How do you as a corporation fend off a leveraged buyout or hostile take-over?
You take your mountains of cash and pay down debt, refinance the debt, and then use the rest of your cash to buy up your own stock to increase the value to prevent a take-over.
I guess you flunked out of business school.
Then again, maybe you would prefer all US corporations to be owned by foreign entities.
Built Dongfeng-Ford Tough
Wouldn't you rather be driving a Jianghuai-Buick?
Imagine Yourself in a Fiat-Mercury now.
Hyundai-Hyummer. Like Nothing Else
Always Pernod-Ricard-Coca-Cola
Did somebody say Becker Imbiß-McDonald's?
Like a good neighbor, Albingia-State Farm is there.
And then you'd have the unmitigated gall to whine that foreign corporations are exporting their profits from the US.
Quote:
Originally Posted by buzzards27
...and not hiring inspite of demand and need for workers.
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I see no evidence or reason for employers to hire. If it should be the case that employers are not hiring then, I would suggest you get off your ass and starting crunching the numbers to see how much one employee will cost under Obamacare.
That will remove a tremendous amount of the uncertainty related to operating costs for business and industry.
I've asked that question 50 times already and am very disappointed that no one has been able to answer it. Of course, the person who does figure out how much it will cost for one employee under Obamacare would be the Darling of Wall Streetâ„¢ and be rich beyond the wildest dreams of avarice.
Budget cutting...
Mircea
Quote:
Originally Posted by EinsteinsGhost
Would you like them to use the methodology from ten years ago?
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It was the same 10 years ago. The last change was in 1994, and yes I would like them to use that methodology because someone who is employed part-time because they cannot find a full-time job should never be counted as "employed."
That skews the picture.
Quote:
Originally Posted by EinsteinsGhost
The 115K (overall) you see up in the title of this thread comes from change in size of private sector + government sector payrolls.
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Which is meaningless.
There is a federal office in Cincinnati with 18 employees.
All federal employees? No.
Only 6 are federal employees, the other 12 employees are private sector employees under contract and not counted as government employees.
I see you don't exactly understand how government(s) operate.
Quote:
Originally Posted by EinsteinsGhost
Well, technically, the private sector payroll size has finally exceeded the number where it was when he took office.
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I don't see any evidence of that.
Where is the benefit of transferring a government job to the private sector? It's the same job, only the employer changes.
Quote:
Originally Posted by EinsteinsGhost
Or, was there a net increase in payroll size in private sector by 420K in 2001 (an average growth of 35K/month)?
Debunked.
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Debunked in your dreams. Where's your data? Obamabot Talking Points Memos don't count.
Quote:
Originally Posted by EinsteinsGhost
As long as you don't try to understand it.  |
And you obviously don't understand it.
That data is straight from the BLS web-site, not some biased private company conducting a survey with bizarre methodology.
Laboriously...
Mircea
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