Republicans vote against their own self interests?

Discussion in 'Politics' started by w1z4rd, Sep 14, 2010.

  1. Jeff 152 Registered Senior Member

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    364
    I agree that most of the increased wealth has been to the wealthy, but certainly not all. Median income has generally increased over the past 30 years or so. And even if the poor haven't increased their income at all, I don't think you can argue that incomes are actually falling, and combine that with the fact that tax rates have been mostly falling for the past 30 year, and exemptions for the poor have been increasing; You can't argue that the tax burden on the poor has been increasing due to tax policy. Now I would argue that the real culprit is inflation, which is the unavoidable tax on everyone, but it especially hurts the poor. Now relative to the rich, of course, the tax burden on the poor has increased, but that's just a natural process of the concentration of capital, and those with capital can obviously make more of it more easily. But in absolute terms, with rising, albeit slowly, incomes and falling tax rates I don't see how the tax burden has increased on anyone in absolute terms (unless we're factoring in inflation, in which case I would agree)

    I also don't see how wealth concentrating with the rich where it is taxed at a higher rate decreases the taxable gdp? Unless you are saying the rich evade more taxes, which I would agree with. in which case, like I said, increasing the tax rate on them wouldn't really do much.

    I'm not really sure what you are trying to say in the last paragraph there. That the wars and bailouts have destroyed wealth? Obviously. That this subsequently increased the gap between spending and revenue? Of course. I don't really know what point you are making.
     
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  3. Jeff 152 Registered Senior Member

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    Actually at 100 to 1 if the rich have 250,000 then the poor have 2,500, which is an extremely low, certainly not the average "poor" person, even the bottom 10% have a median income of around 10,000. I think the point lizard was making is that 100 to 1 is an extreme case. If we take the bottom 10% with around $10,000 poor and the $250,000 as rich, then your multiplier should be 25:1, not 100:1. I would argue that even still this is pretty extreme, as you are comparing the top maybe 2% to the bottom 10%. If we take the top 10% with a median income of around 120,000, then we are talking 12:1.

    (numbers approximated form this chart) http://en.wikipedia.org/wiki/File:United_States_Income_Distribution_1967-2003.svg

    I agree with your conclusion that wealth tends to accumulate because capital begets capital, but I see a different implication. Unless inequality is growing so fast as to incite riot and destruction, I don't think it's all that bad. Also, as long as real incomes across everyone is increasing, then I don't see why relative income is any matter. But, as I said in another post, I think the real culprit that can hurt the poor is inflation.

    Most importantly, I see the concentration of wealth as a good thing. If it weren't for vast accumulations of capital, large ventures would not be possible. Only companies making a ton of money have the capital to invest in the big research, development, and construction projects that improve everyone's standard of living by inventing the next drug that cures a disease or a new product that revolutionizes an industry and makes our lives easier or build a huge new factory that employs thousands of people. It takes big capital investments to make leaps of progress, and it simply cant be done without an accumulation of wealth. Unless we deem that the government should be collecting all the wealth and making these investments, but I dont like that.
     
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  5. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Here are some facts showing how wealth is concentrating in the US and why just as my math proof of prior post predicted:

    “ Despite a decrease in {income} inequality during the 1940s, 50s and 60s, inequality has been increasing since.[15]… Between 1979 and 2005, the mean after-tax income for the top 1% increased by 176%, compared to an increase of 69% for the top quintile overall, 20% for the fourth quintile, 21% for the middle quintile, 17% for the second quintile and 6% for the bottom quintile.[23] For the same time span the aggregate share of after-tax income held by the top percentile increased from 7.5% to 14%.[23] The diminishing political clout of labor unions, resulting from declining union membership rates, and less government redistribution as well as decreased expenditure on social services are commonly cited as the main causes of this trend. …”

    From: http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States

    Billy T comment:
    Note in six years the top 20% has essentially doubled their share of the nation’s income and the bottom 20%'s increase of 6% (<1% per year) has not even kept up with inflation. – This is not a stable situation. Especially considering how many guns the bottom 20% owns.

    All hell will brake loose when they can no longer feed their kids. Use of food stamps and soup kitchen feedings are at an all time high and rapidly growing, but unsustainable so.
     
    Last edited by a moderator: Sep 27, 2010
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  7. Jeff 152 Registered Senior Member

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    We were looking at the same wikipedia page...It says on there twice and shows it in several graphs that incomes across the board have increased, even after adjusting for inflation, just that more of the gain has gone to teh rich.
     
  8. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    23,198
    Thanks for the correction. That is why I prefer to use algebra instead of numerical examples. However, I am defining poor to be a much smaller group than the bottom 10%. I am speaking of those who must eat at soup kitchen and / or use food stamps to live not people better off than the average Mexican or Canadian.
    I agree it is extreme. The hungy poor I am speaking of are a few percent at most, but they are the ones which will start the riots, initiate the "social instability" as they have so little to lose.
    It is. See my post just after yours.
    Yes as the data I just posted (post 203) shows even the bottom 20% has their real income dropping significantly now. Later by edit: It is only the bottom 10% with dropping real incomes. Their income has been dropping since 2000, but greatly accelerated down in 2008 with the recession, job losses, etc. Just to keep even with the growth of the work force in GWB's 8 years ~22 million net increase in jobs was required, but only 4 million net increase was achieved. That is why the drop in real incomes for the lower 10%, still continuing, started in 2000.
    Those are two entirely different things. I too am all for the accumulation of capital for the reasons you name; but destruction of the middle class' wealth now in progress and many rapidly losing purchasing power / the hungry with guns/ is not.
     
    Last edited by a moderator: Sep 27, 2010
  9. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    23,198
    No. A 6% nominal income gain, between 1979 and 2005, did not keep up with inflation. The poor I am speaking of are not that bottom 20% that did lose purchasing power, but the growing homeless (or living in "tent cities" near many cities in California now). When you are forced out of work for more than a year you are poor (and potentially dangerous).

    PS you referred to the graphs, but I quoted the text in post 203. Note also a 6% nominal gain in 6 years is less than 1% gain / year. In the 1979 to 2005 period the inflation rate, I think, was never below 1% So despite the graphs the bottom 20% was losing purchasing power; but it is the bottom approximately 2% I am calling poor and they were losing purchasing power much more rapidly.
     
    Last edited by a moderator: Sep 27, 2010
  10. Jeff 152 Registered Senior Member

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    364
    well i say you are talking about an extreme again. That is an issue of poverty elimination not the broader redistribution of wealth and talking about the middle class.

    The wikipedia page does not support that conclusion. If you are talking about the bottom half a percent or whatever you need a new source, because wiki only has teh bottom 10% and it is still increasing, inflation adjusted.

    http://en.wikipedia.org/wiki/File:Income_gains.jpg
    Inflation adjusted

    http://en.wikipedia.org/wiki/File:United_States_Income_Distribution_1967-2003.svg
    constant dollars

    and

    "Inflation adjusted income data from the Census Bureau shows that household income has increased substantially for all demographics, with larger gains experienced by those with higher incomes."
     
    Last edited: Sep 27, 2010
  11. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    23,198
    but it does show that the bottom 10% has been losing purchasing power since 2000. (Real income graph is turning down for the last three years shown). That graph only goes to 2003 - is seven years old. It does not include the hit everyone took with the current recession. So I don't think it in anyway contradicts my point that poor are losing purchasing power, even it the definition of "poor" is expanded to be the bottom 10%.
     
  12. Jeff 152 Registered Senior Member

    Messages:
    364
    well everyone took a hit in the recession (in fact, i'd imagine that the rich who had more of their wealth in the market actually lost worse than the poor)

    but you are right, it has been declining recently, I was talking about the broader trend is a slow increase. So I am talking broad trends for larger groups of people, you are talking shorter time frames for a smaller subset of people. Which is more relevant to the discussion? who knows. But I agree it's a problem but I don't think its a problem of taxation policy (which is what the thread was originally about). I dont think its a problem you can fix by redistributing income. Its a more structural problem that has to be tackled from the fundamentals.
     
  13. iceaura Valued Senior Member

    Messages:
    30,994
    Median wealth has not.

    Factoring out the bubble prices on real estate, and adjusting for the unusual factor of wealth in the elderly (who often technically have low incomes despite much wealth), essentially all of the increase in accumulated wealth since 1980 or so has gone to the upper 20% or so of the economy - certainly none has gone to the bottom 20% of the working class. The median net worth of a single black mother in her thirties with a full time job is now a negative number, for example.

    That is because wealth accumulation depends on relative, not just absolute, income - when the rich/poor disposable income ratio is 100/1, which is not at all unreasonable as a mental shorthand for discussion, all of the poor are bidding against each other for 1% of the produced wealth available to the rich.
    Tax rates on the lower 80%, and especially on the lower 20%, have been rising - mostly in local attempts to cover the shortfalls from the lowering of tax rates on the rich, which has been dramatic.

    It has been taxed at a lower rate these past couple of decades, and it contributes less to total GDP when piled up in just a few and less productive places as is typical of wealth accumulated by the rich.
    You are confusing concentration of wealth in a social class, where historically it has not been employed in such a manner, with modern legal and financial infrastructure such as borrowing against property, joint stock companies traded on public exchanges, and the like.

    Compare the economy of Egypt in the time of the Pharoahs with the US in the mid 1900s, for example.
    The lower 80% took a much bigger hit in this crash than the upper 20%. Many middle and lower class households lost their entire net worth, for example, or their entire income stream, or their sole residence - very few of the rich suffered anywhere near that proportional damage.

    I don't think so. The extreme poor lack the capability. Any riots will start among the larger and more capable population of working lower classes - capable people (with the ability to organize and riot) able to see the mechanisms behind newly visited hardships.

    More likely, I think, it is when the capable have been brought to the pinch of "nothing to lose" that trouble can start. We're a ways away from that.
     
  14. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    23,198
    I agree it is not entirely a tax problem, but the real earnings for the lower 10% did turn down with the election of GWB and his domestic economic policy centered on tax reduction, mainly for the rich. I.e. The amount of redistribution of the wealth was reduced and became inadequate under George. His reduction of some social programs also lower the redistribution rate.

    We do agree (must as the facts show it) than prior to 2000, the US had decades long history for both rich and poor making real advances in the purchasing power of their income. IMHO, the decrease buying power of the less well off and the increased investment of their "trickle down" tax relief wealth in China, etc. to build more modern factories than the US has is why we are headed for depression. Note I predicted depression was inevitable about two years before GWB left office. You can not do to an economy that is 2/3 based on consumer spending what George did* and expect it to survive.
    --------------
    * In his term as POTUS, GWB had two recessions start, started two wars, steadily reduced the purchasing power of Joe American, aided the rich to build more modern foreign factories, which with their cheaper labor forced US factories to close (or outsource millions of jobs to stay open). His 8 year net jobs deficit, handed to Obama, was about 20 million jobs.

    Unfortunately Obama has only been able to keep it from growing worse but is doing that by having US continue to go deeper and deeper into debt. A run on the dollar is coming, and before Halloween 2014 as I predicted when and because GWB was POTUS.
     
    Last edited by a moderator: Sep 27, 2010
  15. iceaura Valued Senior Member

    Messages:
    30,994
    Well, you agree with Karl Marx then.

    But "redistributing" income - taxing the higher incomes to pay for the society that generated their opportunity - seemed to work pretty well for about fifty years there in the US. Even through major wars and two technological changes of base, taxing the rich to pay for the stuff they used to become rich worked so well that even the rich became the envy of their contemporary peers and the apotheosis of their historical class.
     
  16. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    23,198
    That sure seems logical, but is not in accord with history - it was the very poor who charged the Bastille. More recently, the US riots in Watts, and in Detroit were by the very poor.

    To burn down your own grocery store or work place, etc. you need to be illogical, very angry, a so dispirate that you think you have nothing to lose.
     
  17. iceaura Valued Senior Member

    Messages:
    30,994
    It's more complicated than that.

    The people who rioted in Watt's and Detroit were not the poorest Americans - their very presence in those places was a result of recent migration to escape worse poverty elsewhere.

    The people who stormed the Bastille were not the poorest even of Paris, let alone France. The stormer the commander of the Bastille kicked in the balls, precipitating his own immediate death, was a pastry chef - a decent job, especially in a time of food privation.
     
  18. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    23,198
    Where does this come from? I knew it was a well guarded arms depot /prison, but admit to not knowing many facts about exactly who stormed the Bastille. I would like to know more about the people willing to die in the attack. I found this:

    "... On 14 July, the insurgents set their eyes on the large weapons and ammunition cache inside the Bastille fortress, which was also perceived to be a symbol of monarchist tyranny. After several hours of combat, the prison fell that afternoon. Despite ordering a cease fire, which prevented a mutual massacre, Governor Marquis Bernard de Launay was beaten, stabbed and decapitated; his head was placed on a pike and paraded about the city. ..."
    From: http://en.wikipedia.org/wiki/French_Revolution

    They certainly sound like an out of control, angry mob with little to lose, but that may not mean they were especially poor as I suggested; however most stories do suggest they were hungry people. You even mention "food deprivation" and when told the people had no bread, Marie Antoinette is reported to have said; "let them eat cake." I would tend to call chronically hungry people "poor."
     
    Last edited by a moderator: Sep 27, 2010
  19. iceaura Valued Senior Member

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    30,994
    If only the very poorest are going hungry, or everyone is going hungry, I predict no riots.

    In France, the ordinary people were going hungry and the rich were well fed - I've seen an estimated median of 5'0" in height and 100 pounds in weight for the French men both storming and guarding the Bastille - they were the size of an American girl just hitting her teens - while the court of King Louis the Whatever was world renowned for opulence.

    When the pastry chefs start going hungry like that, it's time to look out.

    (I got the account of the commander's death from a book long ago, but I'll bet it's on the net somewhere - the name of the pastry chef was Dulait)
     
    Last edited: Sep 27, 2010
  20. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    23,198
    If you are correct, then we should not have any food riots for a few years as food stamps, currently at an all time volume high, can still go higher, probably even if the Republicans do gain control of Congress.

    Some private soup kitchens have however been turning many hungry away as they lack funds to buy enough food now for the huge increase in needs**. One of the nation's biggest, based in Memphis Tenn with 600 small regional food distribution centers* as I recall, started turning hungry people away more than a year ago.

    ---------
    *Most of these centers do not serve any food/ soup etc. but have dry and canned good until their shelves are bare.

    ** A large US auto plant there completely closed and many have no work still, more than a year later. Many of those turned away had good jobs at the auto plant. - They were not chronic "bumbs." This is a growing problem in the US most will ignore, until food riots do start.

    I forget the name of that large distributor of free food, but it was something like: "My brother's keeper." There was a several page article on it in my local paper more than a year ago.
     
    Last edited by a moderator: Sep 27, 2010
  21. Jeff 152 Registered Senior Member

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    364
    I agree that GWB was bad and I by no means support him (or pretty much any politician for that matter) but at least try and be fair. He certainly didn't cause the dot.com bubble and subsequent recession, and the sub prime mortgage crisis was more a function of monetary policy and the actions of freddie/fannie. The wars I agree, bad idea (though the war on terror could have been justified had it been executed properly as this was a defensive retaliation, but it ended up poorly) But that is beside the point because both wars had popular support at their inception. So you can blame his handling of the wars (though that's really the military's problem), but not for starting them because the president after all is supposed to serve the will of the people.

    Long story short, I dont like Bush, but I mean you cant single handedly blame the downfall of a nation on one person, especially when unprecedented things like the dot.com bubble and 9/11 fall in his lap. The people who say Obama is singlehandedly ruining the country are just as stupid - he obviously had to start off in a recession and not only that but a recession thats different from past ones in that we cant just stimulate our way out of this one because we have reached the end of the line.

    That's why our country is great - no one person has enough power to do any serious damage. It does, however, allow people to slowly destroy the country over the past 50 years, republicans an democrats alike.

    It all just sucks. Honestly I think the people who think that one person or one party can ruin us or one person/party can save us are living in a fantasy. There's a radical change across everyone that needs to take place and I see no sign of it happening..

    Well that's enough ranting for one night.
     
  22. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    Republicans vote against their own self interest? - Not all of them.
    Hear Warren Buffett advocate raising taxes on the very rich (canceling the Bush tax cut for the top 2% as Obama wants) here:

    http://money.cnn.com/video/news/2010/10/05/f_mpw_buffett_taxes.fortune/

    Warren notes that the US needs to collect more money that it does. And that that can only come from corporations or individuals. He states it is better for the economy to get it from individuals. He points out that if the government takes a million less for the very rich, then they must get that million from somewhere else. (Or print it, but he did not mention that alternative.) When asked specifically if taxing the very rich more would not hurt the economy, he said no.

    I suspect Warren is feeling a little guilty about financing factories, like BYD, in China and understands that that caused US factories to close as they were no longer competitive with these more modern Chinese factories. GM became Government Motors etc.

    Warren's BYD car will be coming to the US in early 2011 and some time later the electric hybrid version, which will sells for half the price of the Chevy Volt and goes slightly further before the gasoline motor kicks in.

    PS - Warren can afford to pay a few million more in taxes. His investment in BYD motors earned him $10.1 million in just the second quarter of 2010. Paying more taxes may reduce the guilt for helping increase the foreclosures in the US as car factories closed.
     
    Last edited by a moderator: Oct 7, 2010
  23. Billy T Use Sugar Cane Alcohol car Fuel Valued Senior Member

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    “…To put pressure on Obama, and require a decision prior to the election, Congressional Republicans insisted upon a presidential decision {on Keystone pipeline} within 60 days. The intent was for the White House to turn it down before the high-campaign season begins, thereby providing fodder for the Republican attacks on sacrificing U.S. jobs and economic stimulus.

    {But the republicans will not be able to do much of that as they forgot}:

    U.S. statute, namely, §526 of the Energy Independence and Security Act (EISA) of 2007. This prohibits federal agencies from procuring (which includes importing) synthetic fuel unless its life-cycle greenhouse gas emissions are less than those for conventional petroleum sources. … Congress must change this legislation or the Alberta oil flow into the Lower 48 is not possible by statute. …”

    From: http://oilandenergyinvestor.com/2012/01/ultimate-fate-of-keystone-pipeline/

    Billy T comment: I.e. Obama can (and will) say: Not only did you want to rush to judgment on important issues, but I had to turn Keystone down as it is illegal until Congress acts to change the law. Note {...} are Billy T inserts in the quote.
     
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