Taxes, equity, and gov bailouts

[Dracula Girl]

I read an article that mentioned how the increased debt from gov bailouts of things like investment banks can hurt the financial situation in the country right now because of the increased risk in those companies because they will have more debt instead of more equity. According to another article, one thing that S. Korea is doing or may do to protect itself from global fallout right now is to give tax cuts to investors. Could tax cuts for people who buy stocks right now be a beneficial thing for our economy?

[uberliber]

Tax cuts are always beneficial to the economy. However, you have to make sure it is preceded by a decrease in government spending.

Tax cuts for everyone, not just those on wallstreet would help a lot. We need to free up the market. It's not a coincidence that the three most successful economies in the world are the three with the most free markets.

[Dracula Girl]

Tax cuts are always beneficial to the economy. However, you have to make sure it is preceded by a decrease in government spending.

Tax cuts for everyone, not just those on wallstreet would help a lot. We need to free up the market. It's not a coincidence that the three most successful economies in the world are the three with the most free markets.

What are the three most successful economies?

[uberliber]

What are the three most successful economies?

United States, Japan, and Hong Kong. I think Indonesia and New Zealand are real close though.

[Darth Executor]

The US economy sucks. It's only on top because it's so big.

[uberliber]

The US economy sucks. It's only on top because it's so big.

It's on top because it is still one of the most free markets in the world. The more free, the more successful. Size has nothing to do with it.

[Darth Executor]

It's on top because it is still one of the most free markets in the world. The more free, the more successful. Size has nothing to do with it.

Not true. Ireland is more free but it's not more successful (at least not on an absolute level). There are small European countries that, % wise, beat the US both in terms of GDP and deficit (in fact, they have a surplus while the US has the biggest debt in the world), don't live in the perfect climate like the US and yet their markets are nowhere near as free as the US. While a free market will always be better than communism, it simply isn't true that free market directly correlates to a more successful economy regardless of all other circumstances. I'm willing to bet that a nation with a large COMPETENT government will beat a pure free market (which the US isn't anyway) any day.

[uberliber]

Not true. Ireland is more free but it's not more successful (at least not on an absolute level). There are small European countries that, % wise, beat the US both in terms of GDP and deficit (in fact, they have a surplus while the US has the biggest debt in the world), don't live in the perfect climate like the US and yet their markets are nowhere near as free as the US. While a free market will always be better than communism, it simply isn't true that free market directly correlates to a more successful economy regardless of all other circumstances. I'm willing to bet that a nation with a large COMPETENT government will beat a pure free market (which the US isn't anyway) any day.

First of all, no, Ireland is not more free. Look at the rankings. The production capacity of the US is way beyond anyone else right now...WAY beyond. And we have much less regulations and lower taxation than Ireland.

I will gladly take that bet that a government controlled economy could be more successful than a free market. We can either bet, or discuss it. What argument do you give?

Mine is this: The free market consists of nothing more than individuals participating in mutually beneficial exchanges, benefiting all parties at all time. The only things that are produced are goods that are in demand, so value is always created.

The value of the currency would be in a constant state of incline because more wealth would be created, but not more fiat money. There would be maximum efficiency, incentive, competition, and success.

How does a government controlled economy excel over the free market?

[uberliber]

Quick fix, You're right, Ireland just passed the US in terms of economic freedom as of 2008. Last time I actually looked at the list was in 2007, and things have changed a lot then.

The US is 5th now, and Ireland is 3rd. But they haven't had any economic freedom for that long it seems. As for them having such an awful economy, where are you getting that? Ireland has the 2nd highest GDP per capita in the world. That's not too shabby at all.

But either way, my challenge still stands from my previous post for you to show me any way that a government controlled economy is better than the free market.

[Eeset-Shadowgrl]

What are the three most successful economies?

That question needs a time frame. The U.S. is a very young economy and has been very "successful" only within the context of technology and only then when energy has been plentiful and cheap. By longevity you would have to look at such places as India, Iran and maybe The southeast Asia region. In the U.S. the standard of living accelerated from about 1885 through 1970. Since then it has been either level or declining. Much of the government data is continually massaged to obscure the reality of the last 40 years.

So I guess I would have to say your question needs refining before it can reasonably be answered.

[uberliber]

That question needs a time frame. The U.S. is a very young economy and has been very "successful" only within the context of technology and only then when energy has been plentiful and cheap. By longevity you would have to look at such places as India, Iran and maybe The southeast Asia region. In the U.S. the standard of living accelerated from about 1885 through 1970. Since then it has been either level or declining. Much of the government data is continually massaged to obscure the reality of the last 40 years.

So I guess I would have to say your question needs refining before it can reasonably be answered.

Right now, the US, Canada, and most of Europe is on top. But I would bet everything that I have that southeast Asia will be the economic powerhouse within the next 10-20 years. Hong Kong is dominating, Japan is always strong, and Indonesia is booming in production like no other.

[Darth Executor]

First of all, no, Ireland is not more free. Look at the rankings. The production capacity of the US is way beyond anyone else right now...WAY beyond. And we have much less regulations and lower taxation than Ireland.

Not corporate tax rates. I don't know about regulation, but if Ireland has more it just helps prove my point. And production on its own is irrelevant. For an economy to be successful, it needs to be self-sufficient. Massive production requires massive consumption. If there's no consumption there's no demand and the production becomes irrelevant. If anything the US currently consumes more than it produces (hence the growing deficit, both at federal level and in the lives of the average moron who insists on living a lifestyle well beyond what they can afford). What do you think will happen when the deficit becomes too big to ignore? Two options: dictatorship or collapse. Take your pick.

I will gladly take that bet that a government controlled economy could be more successful than a free market. We can either bet, or discuss it. What argument do you give?

Mine is this: The free market consists of nothing more than individuals participating in mutually beneficial exchanges, benefiting all parties at all time. The only things that are produced are goods that are in demand, so value is always created.

Fine. Here's mine:

The free market consists of three types of individuals:

Type 1: Individuals who seek to help others only and require only the base necessities for themselves.
Type 2: individuals who seek a mutually beneficial agreement.
Type 3: Individuals who seek only to benefit themselves regardless of the toll this takes on everybody else.

Since the first and second type of individual have restrictions on what they're willing to do while the third does not, the third type is guaranteed to prevail if given enough time. As such, a 3rd party is required to interfere, one that by its nature is required to benefit all other parties involved.

And since the marketer in me is just screaming out for a comment on yours: the free market can and does produce fake demand. The quickest way to get rich is to be a good salesman, and selling is the art of convincing people to buy crap they don't actually need.

The value of the currency would be in a constant state of incline because more wealth would be created, but not more fiat money. There would be maximum efficiency, incentive, competition, and success.

Yeah, for type 3. Everyone else is screwed. Since ethics interfere with efficiency, type 3 will be more efficient, allowing it to snuff out its competition and thus achieving a monopoly on an industry. The only thing that could possibly prevent it is pure luck (IE: every type 3 at a time is a complete dumbass, which allows the more common type 2 to outmaneuver them despite their own restrictions). But even so, in the long run the free market would evolve into an oligarchy where the type 3s eventually crush everyone else, and once they're in power they can benefit from mutual cooperation to screw everybody else. For example, if one type 3 owns the metal mining and processing industry, they can effectively kill competition for the type 3 who owns the auto industry, or the tool industry, since any potential competition can't get the raw materials necessary to even start.

A pure free market is fiscal anarchy, and will turn into fiscal dictatorship for the same reason normal anarchy does: because the most ruthless, Machiavelian business owners will get to the top.

How does a government controlled economy excel over the free market?

Who said anything about a government CONTROLLED economy? I specifically spoke out against communism which directly implies I don't support any such thing. A government controlled economy would just lead to the same problem a pure free market has: rampant abuse of power.

I support a free market with a degree of regulation from the government. Regulation that ensures a level of balance between corporations and workers.

[Darth Executor]

Quick fix, You're right, Ireland just passed the US in terms of economic freedom as of 2008. Last time I actually looked at the list was in 2007, and things have changed a lot then.

The US is 5th now, and Ireland is 3rd. But they haven't had any economic freedom for that long it seems. As for them having such an awful economy, where are you getting that? Ireland has the 2nd highest GDP per capita in the world. That's not too shabby at all.

I didn't say they have an awful economy. I said it's worse than the US on an absolute scale even though it's more free. Why? Size. The US is bigger, so the US is better than Ireland.

[uberliber]

I didn't say they have an awful economy. I said it's worse than the US on an absolute scale even though it's more free. Why? Size. The US is bigger, so the US is better than Ireland.

Russia is bigger than the US, and their economy is awful. Size has nothing to do with the economy being successful. Japan crushes most countries economically, and they are tiny.

[uberliber]

Not corporate tax rates. I don't know about regulation, but if Ireland has more it just helps prove my point. And production on its own is irrelevant. For an economy to be successful, it needs to be self-sufficient. Massive production requires massive consumption. If there's no consumption there's no demand and the production becomes irrelevant. If anything the US currently consumes more than it produces (hence the growing deficit, both at federal level and in the lives of the average moron who insists on living a lifestyle well beyond what they can afford). What do you think will happen when the deficit becomes too big to ignore? Two options: dictatorship or collapse. Take your pick.

Fine. Here's mine:

The free market consists of three types of individuals:

Type 1: Individuals who seek to help others only and require only the base necessities for themselves.
Type 2: individuals who seek a mutually beneficial agreement.
Type 3: Individuals who seek only to benefit themselves regardless of the toll this takes on everybody else.

Since the first and second type of individual have restrictions on what they're willing to do while the third does not, the third type is guaranteed to prevail if given enough time. As such, a 3rd party is required to interfere, one that by its nature is required to benefit all other parties involved.

And since the marketer in me is just screaming out for a comment on yours: the free market can and does produce fake demand. The quickest way to get rich is to be a good salesman, and selling is the art of convincing people to buy crap they don't actually need.

Yeah, for type 3. Everyone else is screwed. Since ethics interfere with efficiency, type 3 will be more efficient, allowing it to snuff out its competition and thus achieving a monopoly on an industry. The only thing that could possibly prevent it is pure luck (IE: every type 3 at a time is a complete dumbass, which allows the more common type 2 to outmaneuver them despite their own restrictions). But even so, in the long run the free market would evolve into an oligarchy where the type 3s eventually crush everyone else, and once they're in power they can benefit from mutual cooperation to screw everybody else. For example, if one type 3 owns the metal mining and processing industry, they can effectively kill competition for the type 3 who owns the auto industry, or the tool industry, since any potential competition can't get the raw materials necessary to even start.

A pure free market is fiscal anarchy, and will turn into fiscal dictatorship for the same reason normal anarchy does: because the most ruthless, Machiavelian business owners will get to the top.

Who said anything about a government CONTROLLED economy? I specifically spoke out against communism which directly implies I don't support any such thing. A government controlled economy would just lead to the same problem a pure free market has: rampant abuse of power.

I support a free market with a degree of regulation from the government. Regulation that ensures a level of balance between corporations and workers.

Production is intrinsically good in economics. It doesn't require massive domestic consumption at all. All it means is that we will bring more wealth into our country through exports. Production is never irrelevant. The production of goods demanded will always create wealth.

And what do you mean dictatorship or collapse? The free market would never collapse, only have ups and downs. And dictatorship must have just been a random statement, because a free market means no government. No government=No dictator.

Your description o the 3 types of individuals is completely false. People do not act one way all the time. Some people act for themselves sometimes, and at other times want to help others. There aren't different species of humans.

Even with greedy people, that greed drives them to be successful. That success benefits everyone. The reason they became successful in the first place is because people agreed that that business had goods or services worth their price. There is nothing bad about that. Economics is a purely consequential field, so motivation is irrelevant,

And the free market may have short spells of fake demand, but it cannot last. Sure things may be scams, but the moment that the scam is discovered, that business is done for. It can't last. And this short term scam cannot lead the nation into a depression, unlike fake interest rates, price fixing, building projects which there is no demand for, etc..

The market hardly has to do with needs. If a salesman is convincing people to buy something useless, that's irrelevant. People demand it, and it's being produced. End of story. Wealth is created because people have decided that this thing which is not need, has value.

So according to you, efficiency is evil and leads to a monopoly. Ethics in the market place do not matter. As long as transfers of wealth are voluntary, that's all that matters. Efficiency leads to success. Period. This success leads to cheaper goods and more jobs.

And monopolies are not coercive. Who cares if there is a monopoly? We control the prices, do people forget that? If one business has a monopoly on pencils, and decides to raise the price too high, we won't buy it. We will drive the price down by a decrease in demand. We control monopolies, and WE are the only one's that can give them power. If a monopoly behaves badly, it will fail. You have a pretty typical view on monopolies. They are these big evil things out of our control. Oh my God, they own the coal industry, what shall we ever do? We will find an alternative. We will cut back on demand, drive down prices. And no matter what you say, monopolies or not, it does not change into anything besides a free market. It doesn't become a Oligarchy like you say, or anything. It remains anarchy.

And yes, I agree with you. The free market is fiscal anarchy. But not just fiscal anarchy, it is pure anarchy. The economic system IS the government system. It defines the role of the state. And I don't care what you call these "Machiavellian" businesses, but it is called success. And contrary to what you believe, success is good.

And you are not a supporter of the free market. There are two categories: Statists and Anarchists. Statists are the people that believe in government, such as you. They are communists, socialists, totalitarians, libertarians, conservatives, liberals, everyone. Anarchists are those who believe in the free market.

If you believe in a free market, you are an anarchist. If you are an anarchist, you believe in government. And since you believe in regulations by the government, you do not believe in the free market, so don't say you do.

You DO believe in a government controlled economy. I didn't call you a communist, but you still remain a statist. The only thing is to what extent. You believe people should rule others, making you a statist, pure and simple.