View Poll Results: Is signing Norquist's anti-tax pledge un-American?

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  • Signing Norquist's pledge is anti-American

    13 56.52%
  • Signing Norquist's pledge is pro-American

    2 8.70%
  • Other (please comment)

    8 34.78%
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Thread: Who are Norquist pledge-signers loyal to - the American People or someone else?

  1. #61
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    Re: Who are Norquist pledge-signers loyal to - the American People or someone else?

    Quote Originally Posted by TurtleDude View Post
    Remember what they say

    MONEY TALKS-BS walks.
    So you agree with me that these representatives are coerced?


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    Re: Who are Norquist pledge-signers loyal to - the American People or someone else?

    "Inequality is bad for growth, stability and efficiency. Inequality peaked both before the Great Depression and before the Great Recession, and it's not an accident. So basically, when we have a lot of inequality, demand goes down. All this inequality was offset by creating a bubble. The bubble allowed people to consume more. Now we have the inequality but we don't have a bubble, and that means that we will have persistent, weak demand, and therefore unless we create another bubble it's going to be very difficult for us to get back to full employment.

    A lot of the inequality that we have in the United States is created by distortions excessive financial sector, monopolies like Microsoft giving the oil companies, mining companies resources at a discount. These things distort the economy, while they create wealth at the top. So it's not wealth creation it's wealth redistribution, which makes the size of the pie smaller. ...

    "Redistributing the tax burden can do more to promote growth than lowering taxes across the board. The reason is that lowering taxes for everyone gives benefits -- needlessly -- to firms who have no plans to invest, tax cut or not. From an incentive point of view, that's wasteful. Money was spent that did nothing to generate investment. Had the money been used elsewhere, e.g. to promote investment among firms that might actually respond, then we would get more growth per dollar of tax cuts ("bang for the buck" ought to be just as important for tax cuts as it is with government spending). Thus, as Stiglitz says, we can take tax cuts away from firms who are not responding to them and redirect them elsewhere. That gives us the desired increase in investment and growth without increasing the deficit, and hence reduces the pressure to make cuts in social programs or to raise taxes elsewhere to compensate for all the money wasted on tax cuts given to firms who will not increase investment in response. Giving tax cuts to firms who will not react to them simply redistributes income without producing the desired outcome on economic growth. Once again, if anything this type of redistribution lowers efficiency and growth, the opposite of what is intended."

    Economist's View: Productivity
    Last edited by Catawba; 05-15-12 at 07:10 PM.
    Treat the earth well: it was not given to you by your parents, it was loaned to you by your children. We do not inherit the Earth from our Ancestors, we borrow it from our Children. ~ Ancient American Indian Proverb

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    Re: Who are Norquist pledge-signers loyal to - the American People or someone else?

    Catawba, excellent post. Thanks.

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    Re: Who are Norquist pledge-signers loyal to - the American People or someone else?

    Norquist's pledge starts with the best intentions. Eventually, it becomes a noose.


    Quote Originally Posted by Jetboogieman View Post
    This issue has been plowed more times than Paris Hilton.
    Quote Originally Posted by Oborosen View Post
    Too bad we have to observe human rights.

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    Re: Who are Norquist pledge-signers loyal to - the American People or someone else?

    Quote Originally Posted by Catawba View Post
    "Inequality is bad for growth, stability and efficiency.
    Income inequality is in general not bad for growth, stability, or efficiency. Sure, extreme income inequality would be bad for those reasons, but the US is nowhere near those levels.

    Inequality peaked both before the Great Depression and before the Great Recession, and it's not an accident.
    That's not surprising. It is the wealthiest who invest heavily, so a market crash causes them to lose more. The peak is a symptom, not a cause.

    So basically, when we have a lot of inequality, demand goes down. … All this inequality was offset by creating a bubble. The bubble allowed people to consume more. Now we have the inequality but we don't have a bubble, and that means that we will have persistent, weak demand, and therefore unless we create another bubble it's going to be very difficult for us to get back to full employment.
    Demand does not go down when you have inequality. People who make more consume more. Demand might be restructured, because people who make more demand different things than those who don't, but it doesn't just go down because of income inequality.

    And I'm not sure where you're going with the bubble argument. Income inequality is income inequality. Just because there was a bubble, doesn't mean that the reported income inequality was somehow an exaggeration of the actual income inequality.

    Also, we don't want a bubble. Bubbles are artificial inflationary events that cause far more harm than good. And full employment has nothing to do with bubbles. Full employment occurs when the perceived value of labor is equal to the market value of labor. Normally, the perceived value of labor is higher than the market value of labor, which is why we have unemployment.

    A lot of the inequality that we have in the United States is created by distortions – excessive financial sector, monopolies like Microsoft … giving the oil companies, mining companies resources at a discount. … These things distort the economy, while they create wealth at the top. So it's not wealth creation – it's wealth redistribution, which makes the size of the pie smaller. ...
    You're forgetting the biggest player in these distortions: the government. Through its complicated tax policy, the government can pick winners and losers, incentivizing and disincentivizing activities. Government bailouts and stimulus money is used to prop up companies, who but for the assistance would fail, and ultimately that money helps prop up inefficiencies inherent to the system.

    "Redistributing the tax burden can do more to promote growth than lowering taxes across the board. The reason is that lowering taxes for everyone gives benefits -- needlessly -- to firms who have no plans to invest, tax cut or not. From an incentive point of view, that's wasteful. Money was spent that did nothing to generate investment. Had the money been used elsewhere, e.g. to promote investment among firms that might actually respond, then we would get more growth per dollar of tax cuts ("bang for the buck" ought to be just as important for tax cuts as it is with government spending). Thus, as Stiglitz says, we can take tax cuts away from firms who are not responding to them and redirect them elsewhere. That gives us the desired increase in investment and growth without increasing the deficit, and hence reduces the pressure to make cuts in social programs or to raise taxes elsewhere to compensate for all the money wasted on tax cuts given to firms who will not increase investment in response. Giving tax cuts to firms who will not react to them simply redistributes income without producing the desired outcome on economic growth. Once again, if anything this type of redistribution lowers efficiency and growth, the opposite of what is intended."
    The problem is that this form of highly selective tax cuts and tax increases only propagates the wealth redistribution effect you complained about earlier. If you increase taxes on industry X, you decrease the incentive for people to participate in industry X, and ironically, because there would then be fewer players in industry X, it would actually be industry X that needs additional funds for expansion and investment.

    If you decrease taxes on industry Y, you would artificially be increasing the incentives to participate in that industry. Investment money would, at least temporarily, flood in, but market saturation would happen in short order. Then, industry Y would no longer be in need of those decreased taxes, because its not investing in anything.

    All this tax plan would succeed in doing is artificially changing the incentives to participate in certain markets through a redistribution of wealth. In the short run, sure, you might see additional moneys in certain industries (though, since they aren't there already, this money would, by definition, be inefficiently used). In the long run, it would fail to solve any problems whatsoever.


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    Re: Who are Norquist pledge-signers loyal to - the American People or someone else?

    Quote Originally Posted by Nick2253 View Post
    Sure, extreme income inequality would be bad for those reasons, but the US is nowhere near those levels.
    Yeah it is. No nation or society has ever in history survived with income inequality as severe as what we have in America today.

    Income inequality in America: The 99 percent | The Economist

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    Re: Who are Norquist pledge-signers loyal to - the American People or someone else?

    Quote Originally Posted by leftofabbie View Post
    Yeah it is. No nation or society has ever in history survived with income inequality as severe as what we have in America today.

    Income inequality in America: The 99 percent | The Economist
    So, here's the problem with your argument. The income inequality of the 99% hasn't change significantly. Real income is keeping pace with the CPI. On the whole, the rest of this country is not any worse than they were 50 years ago.

    But now, the top 1% has all this income. How does the fact that the 1% have all this income change the game for the rest of us?

    The short answer is that it doesn't. Income and wealth are not zero-sum games. The oft repeated talking point about how no other society has survived with our income inequality is because no other country has had income like we do. The top 1% in this country aren't dictators who are taking money through an abusive tax system, or cronies who benefit from the corruption of government. They are intelligent business owners who have provided amazing products that benefit the world over. A first world nation with our level of income inequality has never existed because our situation is fundamentally different from all others that have preceded us.

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    Re: Who are Norquist pledge-signers loyal to - the American People or someone else?

    Quote Originally Posted by Nick2253 View Post
    Income inequality is in general not bad for growth, stability, or efficiency. Sure, extreme income inequality would be bad for those reasons, but the US is nowhere near those levels.
    In fact, the US is ranked 4th in income inequality, with only Turkey, Mexico, and Chile having more extreme income inequality.

    10 Countries With The Worst Income Inequality: OECD


    Demand does not go down when you have inequality. People who make more consume more. Demand might be restructured, because people who make more demand different things than those who don't, but it doesn't just go down because of income inequality.
    That defies all logic and reason. The lower income classes spend much more of their income on consumables than do the rich. If what you believe were true, businesses would not be complaining of lack of demand, because the rich are the most wealthy they have ever been.

    And I'm not sure where you're going with the bubble argument. Income inequality is income inequality. Just because there was a bubble, doesn't mean that the reported income inequality was somehow an exaggeration of the actual income inequality.

    Also, we don't want a bubble. Bubbles are artificial inflationary events that cause far more harm than good. And full employment has nothing to do with bubbles. Full employment occurs when the perceived value of labor is equal to the market value of labor. Normally, the perceived value of labor is higher than the market value of labor, which is why we have unemployment.
    You missed the point of the article.

    You're forgetting the biggest player in these distortions: the government. Through its complicated tax policy, the government can pick winners and losers, incentivizing and disincentivizing activities. Government bailouts and stimulus money is used to prop up companies, who but for the assistance would fail, and ultimately that money helps prop up inefficiencies inherent to the system.
    The economy improved due to the stimulus.



    The problem is that this form of highly selective tax cuts and tax increases only propagates the wealth redistribution effect you complained about earlier. If you increase taxes on industry X, you decrease the incentive for people to participate in industry X, and ironically, because there would then be fewer players in industry X, it would actually be industry X that needs additional funds for expansion and investment.
    We had higher tax rates through most of the last half century and it never decreased incentive for people to participate in industry. Why should we continue to give people and companies tax cuts that do not invest in jobs in this country???
    Treat the earth well: it was not given to you by your parents, it was loaned to you by your children. We do not inherit the Earth from our Ancestors, we borrow it from our Children. ~ Ancient American Indian Proverb

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    Re: Who are Norquist pledge-signers loyal to - the American People or someone else?

    Quote Originally Posted by Catawba View Post
    In fact, the US is ranked 4th in income inequality, with only Turkey, Mexico, and Chile having more extreme income inequality.

    10 Countries With The Worst Income Inequality: OECD
    Relative income inequality, by itself, tells us nothing. Income inequality is only useful as a metric to compare an economy to an itself at an earlier or later time.

    That defies all logic and reason. The lower income classes spend much more of their income on consumables than do the rich. If what you believe were true, businesses would not be complaining of lack of demand, because the rich are the most wealthy they have ever been.
    Just because the rich have a higher percentage of income does not mean that they have more money.

    You missed the point of the article.
    Then please enlighten me. And I'm not sure what article you are referring to. Your link is simply to a category on a unabashedly liberal blog.

    The economy improved due to the stimulus.
    That's not surprising, because the stimulus was ultimately debt-financed, which means that it was an introduction of additional capital to the market, which would obviously result in an improved economy in the short term. The problem is that debt is not without its own externalities.

    We had higher tax rates through most of the last half century and it never decreased incentive for people to participate in industry. Why should we continue to give people and companies tax cuts that do not invest in jobs in this country???
    You're conflating a host of things with this statement. There are three things going on here:

    1) Marginal tax rate - while the marginal tax rate was higher during the last half century, the actual taxes paid were approximately the same, if not lower, than today.
    2) General tax level - higher taxes dissuade investment relative to lower taxes.
    3) Industry specific tax cuts - tax breaks for specific industries (likewise tax penalties for specific industries) create artificial incentives and disincentives to invest in those industries. In particular, these are the most damaging, because they amount to nothing more than a government imposed redistribution of wealth among companies. I'm not going to repost what I said above, but it all applies.

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    Re: Who are Norquist pledge-signers loyal to - the American People or someone else?

    Quote Originally Posted by Nick2253 View Post
    Relative income inequality, by itself, tells us nothing. Income inequality is only useful as a metric to compare an economy to an itself at an earlier or later time.
    Thanks for your opinion, but I'll go with the economists, history, and common sense that a consumer economy cannot prosper when most of the country's wealth is concentrated out of the consumers reach.
    Treat the earth well: it was not given to you by your parents, it was loaned to you by your children. We do not inherit the Earth from our Ancestors, we borrow it from our Children. ~ Ancient American Indian Proverb

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