Speaker Mike Johnson: "We Are On An Unsustainable Track With Our Debt"

[Ahlevah]

There is a whole list of tricks they use:

Tricks to do what? Keep more of their own money? 90% of the tax burden isn’t enough? There is nothing remarkable about not selling an appreciating asset or offsetting income from one business with an ego-stroking investment like a sports team that has hundreds of millions of dollars in future guaranteed income from media deals. Professional sports teams have done nothing but appreciate in value. In the meantime, you can entertain your friends in sky boxes with top-shelf liquor and Honduran cigars while cheering for your team on to the Super Bowl or NBA Finals.

Tell me how they are poor victims getting overtaxed or will you ignore that Propublica article?

Who said they’re poor victims? I said they already pay 90% of individual income taxes. Their companies pay billions more. Many of these people will end up giving away all or substantially all of their money. They can’t create companies like Space-X and Blue Origin that employ people and innovate if the government just takes their money to pass it out to poor people who will just spend it on cigarettes and Powerball tickets.

Maybe read an article before dismissing it next time.

If you have a point to make I’m all ears.

"There were multiple culprits. Trump’s tax cuts, especially the sharp reduction in the corporate tax rate to 21% from 35%, took a big bite out of federal revenue. The CBO estimated in 2018 that the tax cut would increase deficits by about $1.9 trillion over 11 years."

CBO estimates are notoriously inaccurate, especially estimates that would extend out 11 years. The United States needed a fairer, lower corporate income tax rate to better compete with foreign corporations and stop tax inversions, and to not hit one one industry with punitive taxes while favoring another. Now our corporate rate is more closely aligned with other countries.

Also, this is basic accounting, credits, and debits, less taxes means less revenue coming in, it's like saying a company can survive solely on spending cuts without bringing new money in.

We have to ensure that the capital stock of the country is replaced at a rate at least as fast as what is being depreciated. Recently the U.S.’ net national savings turned negative. If this continues for any length of time it has serious negative ramifications for future economic growth.

1. Canada has the same defense the US has, geography. Besides the US, it's very difficult for a country to invade Canada, because it's so far away from other countries. Reaching and attacking Canada would be a Herculean effort for any country, save the US.

Canada benefits from open sea lanes and trade and peaceful relations with other countries just like we do. European wars, especially, are bad for business. But the Arctic is thawing, and there’s a lot more Arctic oil and gas and Russian border near Canada than there is near us. What would you do if Russia or China decided to set up camp in Canada’s Exclusive Economic Zone? Call up reinforcements of club-wielding Eskimos?

https://www.cbc.ca/news/canada/north/russia-arctic-ocean-canada-united-nations-continental-shelf-1.5983289

2. Even if this were not true, the US would defend Canada regardless, why? Because having a friendly nation on its Northern border is better than having a hostile power there.

Putin holds personal grudges and hates your president. What if he wants a piece of Canada’s oil and gas wealth in the Arctic? If Trump is president he might just let him have it. Seriously. Or maybe Russia will make a deal with China to develop it. They might even give you the opportunity to resettle the polar bears.

 

[Yes_Minister]

Tricks to do what? Keep more of their own money? 90% of the tax burden isn’t enough? There is nothing remarkable about not selling an appreciating asset or offsetting income from one business with an ego-stroking investment like a sports team that has hundreds of millions of dollars in future guaranteed income from media deals. Professional sports teams have done nothing but appreciate in value. In the meantime, you can entertain your friends in sky boxes with top-shelf liquor and Honduran cigars while cheering for your team on to the Super Bowl or NBA Finals.

And can a middle class citizen do any of those things? If not, well it does seem like the rich people have a leg up in the tax code.

Who said they’re poor victims? I said they already pay 90% of individual income taxes. Their companies pay billions more. Many of these people will end up giving away all or substantially all of their money. They can’t create companies like Space-X and Blue Origin that employ people and innovate if the government just takes their money to pass it out to poor people who will just spend it on cigarettes and Powerball tickets.

Please, they are hardly innovating anything nowadays:

The Rot Economy

HI! I no longer update this Substack. Please visit this link to continue using Where’s Your Ed At! At the center of everything I’ve written for the last few months (if not the last few years), sits a cancerous problem with the fabric of how capital is deployed in modern business. Public and...

ez.substack.com

If you have a point to make I’m all ears.



CBO estimates are notoriously inaccurate, especially estimates that would extend out 11 years. The United States needed a fairer, lower corporate income tax rate to better compete with foreign corporations and stop tax inversions, and to not hit one one industry with punitive taxes while favoring another. Now our corporate rate is more closely aligned with other countries.

The UK tried this and became such an economic basket case it had to sack it's PM at the time:



Do you understand how debits and credits work?

I am beginning to think this is some article of faith on your part, rather than something you can prove with evidence.

We have to ensure that the capital stock of the country is replaced at a rate at least as fast as what is being depreciated. Recently the U.S.’ net national savings turned negative. If this continues for any length of time it has serious negative ramifications for future economic growth.

So why didn't Trump's tax cuts pay for themselves then? Why did the debt massively increase under Trump and a GOP Congress?

Trump’s Wasteful Tax Cuts Lead To Continued Trillion Dollar Deficits In Expanding Economy

If tax cuts actually paid for themselves, they would reduce deficits based on faster growth. Deficits shot up in the wake of the 2017 supply-side tax cuts. And CBO forecasts that those deficits will continue to stay high -- the opposite of tax cuts paying for themselves.

www.google.com

Canada benefits from open sea lanes and trade and peaceful relations with other countries just like we do. European wars, especially, are bad for business. But the Arctic is thawing, and there’s a lot more Arctic oil and gas and Russian border near Canada than there is near us. What would you do if Russia or China decided to set up camp in Canada’s Exclusive Economic Zone? Call up reinforcements of club-wielding Eskimos?

https://www.cbc.ca/news/canada/north/russia-arctic-ocean-canada-united-nations-continental-shelf-1.5983289

What evidence do you have that Russia would want to travel across the Artic to attack Canada?

Do you understand how logistics and supply lines work?

 

[Cynical]

When I say the U.S. is in a "bubble economy," what I mean is a significant portion of the liquidity that was added by the Fed in recent years has flowed and continues to flow not into the real, productive economy, but has fueled speculation in unproductive assets like crypto currencies, stocks, underutilized office buildings, and single-family residences. About the only asset class that's been largely ignored up to this point would be commodities, likely because they're viewed as inflation hedges and we've had a long period in which inflation largely sat relatively dormant. I have a feeling that's about to change.

Among other things, legendary investor Sir John Templeton is remembered for the following quote:



If he were alive today, where might Sir John, in his opinion, tell us we are today? I don't know, but while he is counting daisies, we have access to the insight of another legendary investor, current billionaire and former hedge fund manager Jim Rodgers, co-founder with George Soros of Quantum Fund, most noted for their massive bet against the British pound back in the 1970s. In an interview with Adam Taggart on Wealthion, Rodgers said:

Stocks, bonds, and real estate are all bubbles set to pop - and a harsh recession is on the horizon, elite investor Jim Rogers says

Jim Rogers, the cofounder of George Soros' Quantum Fund, is bracing for the worst bear market of his lifetime and a debt-fueled economic disaster.

markets.businessinsider.com

You ask what evidence I have of a bubble economy? Open your eyes and look around you. Bitcoin has gone from less than $17,000 a few years ago to northwards of $60,000. A tech company like Meta or Nvidia can gain more market cap in a single day than IBM acquired in more than a century of doing business. We have companies with market caps that exceed the GDPs of major western industrial nations like France and Great Britain. It takes an income of almost $100,000 for an average family just to be able to afford a typical house, and this is with at least half of its income going into debt service, property taxes, casualty insurance, and maintenance. This is unsustainable.

None of this is to say markets can't continue to climb ever higher. They can. This could continue to go on for quite some time, but I think with the inverted yield curve, stubbornly high labor markets, and real estate prices that continue to defy gravity coupled with a Fed determined to get inflation down to its 2% target, at some point before the next interest rate cycle we're going to be challenged again like we were at the start of the Covid-19 pandemic when trillions of dollars in monetary and fiscal stimulus was rained down from the Halls of Valhalla.

There's some who are raising concerns about what is considered an unsustainable fiscal path:

MSN

But the fresh-faced expert isn't afraid to step away from the pack if it means pushing presidential hopefuls for some answers. Gomes admits he's "probably" more worried than his colleagues about government debt, but refuses to stay silent on a broiling issue he believes will throw the global economy into disarray.

Gomes predicts America's $34 trillion debt burden may upset the world's financial markets as early as next year—should a president-elect announce a raft of expensive policies.

And remember the UK's mortgage meltdown following a disastrous premiership under Prime Minister Liz Truss? That's on the cards as well, as Gomes said rates could spiral to 7% "or higher" if the topic is swept under the rug by Washington.

The warning isn't chiming alone. Since the beginning of the year an increasing cacophony of alarm bells has been ringing out: JPMorgan Chase CEO Jamie Dimon says there will be a market "rebellion" over the issue while Bank of America CEO Brian Moynihan says it's time to stop "admiring" the problem and instead do something about it.

 

[Greenbeard]

Most of it was added in the wake of the Great Recession and the Covid-19 pandemic. No one would have advised raising taxes then. But the problem is not that we tax too little. The problem is we spend too much, and a lot of that spending is not supporting productive investment in the economy. I mean, I'm all for affordable medical care, but is subsiding ACA premiums so insurance companies can charge even more for their medical plans the best way to do that? The cost of these plans is getting ridiculous, because the insurers just raise the premiums when the feds provide more money. So God help anyone who doesn't qualify for a subsidy because they worked hard and saved their money rather than taking cruises to Cancun or blowing their wad in casinos.

Under Biden, there's been a large increase in the available ACA subsidies for 2021, 2022, 2023, and 2024 so far (due first to the American Rescue Plan and then the Inflation Reduction Act). And here's the underlying benchmark premiums over that period relative to the prior three years.

No evidence that "insurers just raise the premiums when the feds provide more money."

 

[Ahlevah]

And can a middle class citizen do any of those things? If not, well it does seem like the rich people have a leg up in the tax code.

One of the things this tax bill stuck in congress would do would be to let parents carry over a child tax credit in years in which they don’t have taxes to offset future income. Which begs the question: why would you need a tax “write-off” if you don’t pay taxes?

But to answer your question further, can middle class people start a business? Plow money back into it and not sell it so they don’t incur capital gains tax? Pay themselves salaries to fund an IRA or incorporate their business and add shares to a Roth 401(k)? Write off losses in one business against profits in another? Sure they can. Why not? My parents were never wealthy. I would characterize them as upper middle class. My sister loved Arabian horses. When she was in high school my parents bought her one, and she went on to show and breed it. Her hobby made a great tax write-off for my parents for several years. Think of it as my family’s sports team, just on a smaller scale.

Please, they are hardly innovating anything nowadays:

The Rot Economy

HI! I no longer update this Substack. Please visit this link to continue using Where’s Your Ed At! At the center of everything I’ve written for the last few months (if not the last few years), sits a cancerous problem with the fabric of how capital is deployed in modern business. Public and...

ez.substack.com

That is simply not true. American companies and the American economy are among the most dynamic on the planet, employing millions of people around the globe, not so much because of government taxation and spending, but despite it.

Companies that don’t innovate eventually get kicked to the curb. At one point IBM was the largest computer manufacturer in the world, and had a veritable monopoly on mainframes. Its systems were fed with paper cards, cost millions of dollars, and could occupy the better part of a floor of an office building. Then came Intel with the microprocessor, Texas Instruments with the pocket calculator, and DEC and its minicomputers. Next came Sun Microsystems with its powerful workstations, Apple and IBM again with personal computers, Dell and IBM again with servers, Apple with a computer-in-a-hand that put IBM’s mainframes from a generation ago to shame, and now all of these companies with products that will incorporate powerful AI technology. And leftists love to hate on Elon, but he did create companies that built EV and battery storage industries, reusable rockets, and a network of low Earth orbit communications satellites. He’ll probably get to Mars before NASA does

No country has ever taxed its way to prosperity, or first created a prosperous welfare state that then went on to propel greedy capitalists to billionaire status. The rich people normally came first. China used to be poor with no billionaires and citizens living on subsistence wages when they weren’t dying in famines, kind of like socialist paradises like Venezuela and Zimbabwe with their massive natural wealth and fertile soil but starving citizens. Now China has lots of billionaires, and 800 million Chinese have been lifted out of poverty, propelling China’s economy to become the second-largest in the world after ours with its legions of greedy capitalists and hundreds of billionaires.

 

[Ahlevah]

The UK tried this and became such an economic basket case it had to sack it's PM at the time:

The UK at one time possessed THE world’s reserve currency, which was literally worth its weight in precious metal. But debasement of the pound sterling by British central bankers and politicians in order to reduce the real debt burden of creating a cradle-to-grave welfare nanny state have gradually eroded overall living standards for average British citizens, largely without them even realizing it since it’s been accomplished at such a slow and steady pace. But the lure of taxing rich people and corporations in order to give away “free” stuff voted in by the masses beckons like a siren song, probably until the entire financial system implodes like a supernova that collapses into a black hole.

Do you understand how debits and credits work?

Yeah, I do. Unfortunately, most politicians pandering to popular public sentiment demanding “free” shit don’t.

I am beginning to think this is some article of faith on your part, rather than something you can prove with evidence.

I know before Trump's corporate tax reforms American corporations were moving their headquarters to tax havens like Ireland in order to avoid paying taxes on their worldwide income. I also know corporate income taxes can fluctuate based on business conditions and the overall health of an economy, but corporate tax receipts in America have been rising to record levels recently. I also know the CBO has a poor record when it comes to making predictions, especially predictions made years in advance involving guesses of future human behavior and unknowable events in our complex and multifaceted economy.

 

[rickc]

Just look at what party protects/ increases the wealth of the wealthy. The wealthy have done a great job at convincing the white working class that they are in their corner. Nothing could be further from the truth.




And their tax cuts for the rich and borrow the money to pay for it is the reason for our spiraling national debt

 

[Ahlevah]

So why didn't Trump's tax cuts pay for themselves then? Why did the debt massively increase under Trump and a GOP Congress?

A $28 trillion economy doesn't turn on a dime. It can take years for capital to be deployed and reap dividends for an economy.

What evidence do you have that Russia would want to travel across the Artic to attack Canada?

Why would Russia need to attack Canada in order to partner with a nation like China to drill for oil and gas in Artic waters claimed by Canada? While it would require considerable expertise and investment, it could be done. And how would Canada prevent China from sending massive fishing fleets and factory ships helping feed billions of protein-starved Chinese into Canadian fisheries zones? Think of it as a bully muscling his way into your dice game and then daring you to do something about it. So if anyone did any attacking, it would have to be Canada, and they'd have to use those club-wilding Eskimos or Mounties tossing water balloons out of the windows of float planes to do it.

I don't think Sweden has any sense that it's under imminent threat from Russia, but it's hedged its bets by maintaining a capable military and defense industry. Russia would have to come across the Arctic to attack it as well. There's no sense that Sweden and Finland, which has its own history with Russia, are letting their guard down now that they're in NATO. They realize that a mafia state run by a greedy psychopath who doesn't always think logically doesn't need an excuse to initiate a war. And Canadians should not expect Americans to fund a Canadian missile defense capable of intercepting Russian missiles possibly fired at relatively close range from warships. Raytheon and Lockheed Martin don't provide their missile defense systems for free, not even to Americans.

 

[nvflash]

The GOP is continuing to make excuses for redistributing trillions of dollars of public wealth to a handful of billionaires.

Apparently, it’s not enough to take gobsmacking sums of our public money and give it away to billionaires. We also need to take away the meager scraps of public funds that actually go to average Americans.

This really illuminates the divide here. There are true republicans, billionaires and multi-millionaires who benefit greatly from crooked GOP politicians. Then there are the GOP politicians and pundits, they are paid actors/puppets who make excuses for, what essentially amounts to, robbing us blind. The last group is the largest and most depressing: republican voters. These are the rubes, the lynchpins, the captive fools who continue to wildly contort their thoughts into pretzels to make excuses for it all.

You truly don't understand that it's the debt based spending that is the give away to billionaires.

Letting people keep more of the money they earn is not a give away, you are just letting them keep what they worked for.

Sure we got to fund the government, but ever since the income tax was instituted it was understood there was always a tradeoff between taxes being too high and an actual fall in government revenue. You look for the balance point, just like you do with government debt.

Too little debt and the GDP doesn't grow, too much debt and interest rates and inflation eat up all the gains.

It matters what you spend the money on, infrastructure vs war. One builds wealth for everyone and helps people build better lives, the other ends lives and destroys wealth.

You know a dollars worth of diplomacy is worth more than $100 billion in bombs, but you speak softly and carry a big stick.

A lot of mealy mouthed words with no real followthrough is why we are neither feared nor respected.

Somewhere between where conservative are and liberals are is the right place to be, and that's where the American people are. A little more on capital gains and a little less on marginal income taxes. Less on wars that in no way affect our security and more on public works.

It's not all that goddamned hard to figure out!

 

[Yes_Minister]

One of the things this tax bill stuck in congress would do would be to let parents carry over a child tax credit in years in which they don’t have taxes to offset future income. Which begs the question: why would you need a tax “write-off” if you don’t pay taxes?

But to answer your question further, can middle class people start a business? Plow money back into it and not sell it so they don’t incur capital gains tax? Pay themselves salaries to fund an IRA or incorporate their business and add shares to a Roth 401(k)? Write off losses in one business against profits in another? Sure they can. Why not? My parents were never wealthy. I would characterize them as upper middle class. My sister loved Arabian horses. When she was in high school my parents bought her one, and she went on to show and breed it. Her hobby made a great tax write-off for my parents for several years. Think of it as my family’s sports team, just on a smaller scale.

So an average middle-class family can have billions in write-offs like Bezos can:

https://www.barrons.com/articles/amazon-avoided-5-2-billion-in-taxes-report-it-wont-under-new-law-51664232832

I don't see how these guys are overtaxed.

That is simply not true. American companies and the American economy are among the most dynamic on the planet, employing millions of people around the globe, not so much because of government taxation and spending, but despite it.

Companies that don’t innovate eventually get kicked to the curb. At one point IBM was the largest computer manufacturer in the world, and had a veritable monopoly on mainframes. Its systems were fed with paper cards, cost millions of dollars, and could occupy the better part of a floor of an office building. Then came Intel with the microprocessor, Texas Instruments with the pocket calculator, and DEC and its minicomputers. Next came Sun Microsystems with its powerful workstations, Apple and IBM again with personal computers, Dell and IBM again with servers, Apple with a computer-in-a-hand that put IBM’s mainframes from a generation ago to shame, and now all of these companies with products that will incorporate powerful AI technology. And leftists love to hate on Elon, but he did create companies that built EV and battery storage industries, reusable rockets, and a network of low Earth orbit communications satellites. He’ll probably get to Mars before NASA does

No country has ever taxed its way to prosperity, or first created a prosperous welfare state that then went on to propel greedy capitalists to billionaire status. The rich people normally came first. China used to be poor with no billionaires and citizens living on subsistence wages when they weren’t dying in famines, kind of like socialist paradises like Venezuela and Zimbabwe with their massive natural wealth and fertile soil but starving citizens. Now China has lots of billionaires, and 800 million Chinese have been lifted out of poverty, propelling China’s economy to become the second-largest in the world after ours with its legions of greedy capitalists and hundreds of billionaires.

Please, everything from Google to Uber is worse now and Facebook can waste 42 billion dollars on this Meta nonsense and not get punished by the market, but the stock will go up if they have more layoffs.

Google is getting worse as it loses its fight against search engine spam

Aggressive SEO tactics are ruining search results on Google, Bing, and DuckDuckGo, a team of researchers in Germany says.

www.businessinsider.com

Meta’s Reality Labs loses record $4.65 billion ahead of Apple's Vision Pro launch

Meta's Reality Labs has now lost more than $40 billion dating back to late 2020.

www.cnbc.com

 

[Yes_Minister]

A $28 trillion economy doesn't turn on a dime. It can take years for capital to be deployed and reap dividends for an economy.

Okay, better question, when have these massive tax cuts not created a huge debt load? Name an example.

Because when it's done by the US, UK, or a state Kanas, a giant debt load always seems like the result.

Also, you avoided addressing my articles where everyone from Dickcheney to Rush Limbaugh will admit that conservatives will lose interest in the debt as soon as a Republican is in the White House. I wonder why you did that.

Why would Russia need to attack Canada in order to partner with a nation like China to drill for oil and gas in Artic waters claimed by Canada? While it would require considerable expertise and investment, it could be done. And how would Canada prevent China from sending massive fishing fleets and factory ships helping feed billions of protein-starved Chinese into Canadian fisheries zones? Think of it as a bully muscling his way into your dice game and then daring you to do something about it. So if anyone did any attacking, it would have to be Canada, and they'd have to use those club-wilding Eskimos or Mounties tossing water balloons out of the windows of float planes to do it.

I don't think Sweden has any sense that it's under imminent threat from Russia, but it's hedged its bets by maintaining a capable military and defense industry. Russia would have to come across the Arctic to attack it as well. There's no sense that Sweden and Finland, which has its own history with Russia, are letting their guard down now that they're in NATO. They realize that a mafia state run by a greedy psychopath who doesn't always think logically doesn't need an excuse to initiate a war. And Canadians should not expect Americans to fund a Canadian missile defense capable of intercepting Russian missiles possibly fired at relatively close range from warships. Raytheon and Lockheed Martin don't provide their missile defense systems for free, not even to Americans.

That's speculation, you have no evidence that Russia is planning on sending an invasion force to conquer Canada.

And you are doing this to avoid talking about waste in the military by talking about fantasy military scenarios? Do you think the US overspends on protecting Canada, do have evidence to back it up or are you making bad-faith arguments?

 

[Cynical]

One of the things this tax bill stuck in congress would do would be to let parents carry over a child tax credit in years in which they don’t have taxes to offset future income. Which begs the question: why would you need a tax “write-off” if you don’t pay taxes?

But to answer your question further, can middle class people start a business? Plow money back into it and not sell it so they don’t incur capital gains tax? Pay themselves salaries to fund an IRA or incorporate their business and add shares to a Roth 401(k)? Write off losses in one business against profits in another? Sure they can. Why not? My parents were never wealthy. I would characterize them as upper middle class. My sister loved Arabian horses. When she was in high school my parents bought her one, and she went on to show and breed it. Her hobby made a great tax write-off for my parents for several years. Think of it as my family’s sports team, just on a smaller scale.



That is simply not true. American companies and the American economy are among the most dynamic on the planet, employing millions of people around the globe, not so much because of government taxation and spending, but despite it.

Companies that don’t innovate eventually get kicked to the curb. At one point IBM was the largest computer manufacturer in the world, and had a veritable monopoly on mainframes. Its systems were fed with paper cards, cost millions of dollars, and could occupy the better part of a floor of an office building. Then came Intel with the microprocessor, Texas Instruments with the pocket calculator, and DEC and its minicomputers. Next came Sun Microsystems with its powerful workstations, Apple and IBM again with personal computers, Dell and IBM again with servers, Apple with a computer-in-a-hand that put IBM’s mainframes from a generation ago to shame, and now all of these companies with products that will incorporate powerful AI technology. And leftists love to hate on Elon, but he did create companies that built EV and battery storage industries, reusable rockets, and a network of low Earth orbit communications satellites. He’ll probably get to Mars before NASA does

No country has ever taxed its way to prosperity, or first created a prosperous welfare state that then went on to propel greedy capitalists to billionaire status. The rich people normally came first. China used to be poor with no billionaires and citizens living on subsistence wages when they weren’t dying in famines, kind of like socialist paradises like Venezuela and Zimbabwe with their massive natural wealth and fertile soil but starving citizens. Now China has lots of billionaires, and 800 million Chinese have been lifted out of poverty, propelling China’s economy to become the second-largest in the world after ours with its legions of greedy capitalists and hundreds of billionaires.

Good post. There seems to be this belief by many that the combination of massive taxation of the rich along with mass migration of the world's poverty into the country will lead to a socialist utopian free stuff for all society? Seems so simple and easy to achieve, which is why I assume it has such an appeal?

 

[Ahlevah]

Just look at what party protects/ increases the wealth of the wealthy. The wealthy have done a great job at convincing the white working class that they are in their corner. Nothing could be further from the truth.

The snow job is you can keep spending money like a drunken sailor handing out "free" goodies and it won't cost working-class families anything. The reality is real incomes have not kept pace with the erosion in the value of the dollar. In August, 1971, when Nixon took the United States off the last vestige of the gold standard, one once of gold was worth $42.71. Median household income that year was $10,290. That would have bought you about 241 ounces of gold. In order to buy that same 241 ounces of a historical measure of purchasing power not subject to manipulation by a contrived government index that changes its measuring criteria from time to time in order to hoodwink the public into thinking things aren't so bad, that same household would need an income of $501,928.29 based on the Friday closing price for gold of $2082.69. If anyone is wondering why people, especially those who work for wages and don't own assets like homes or stocks, are feeling poorer that probably has something to do with it.

https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart

 

[Ahlevah]

Good post. There seems to be this belief by many that the combination of massive taxation of the rich along with mass migration of the world's poverty into the country will lead to a socialist utopian free stuff for all society? Seems so simple and easy to achieve, which is why I assume it has such an appeal?

Yeah. Notice that the poor people fleeing from the Sahel or failed states in Latin America or the Middle East aren't flocking to, say, Cuba, with its free medical care for all and where they can enjoy a massive safe space, surrounded by pristine, white sandy beaches with their cool breezes and populated by other people who mostly look like them but are nonetheless working on their suntans. No, they'd rather settle in the countries where they can be flagellated by greedy, white, capitalist, colonialist oppressors.

 

[Absentglare]

You truly don't understand that it's the debt based spending that is the give away to billionaires.

Letting people keep more of the money they earn is not a give away, you are just letting them keep what they worked for.

Jeff Bezos is out there collecting the median annual income every few minutes. He didn’t “work for” all those dollars, he benefits from a system that issues him a lot of tokens.

Sure we got to fund the government, but ever since the income tax was instituted it was understood there was always a tradeoff between taxes being too high and an actual fall in government revenue. You look for the balance point, just like you do with government debt.

Then you would agree that the GOP cutting taxes over and over again is bad policy.

Too little debt and the GDP doesn't grow, too much debt and interest rates and inflation eat up all the gains.

It matters what you spend the money on, infrastructure vs war. One builds wealth for everyone and helps people build better lives, the other ends lives and destroys wealth.

You know a dollars worth of diplomacy is worth more than $100 billion in bombs, but you speak softly and carry a big stick.

A lot of mealy mouthed words with no real followthrough is why we are neither feared nor respected.

Somewhere between where conservative are and liberals are is the right place to be, and that's where the American people are. A little more on capital gains and a little less on marginal income taxes. Less on wars that in no way affect our security and more on public works.

It's not all that goddamned hard to figure out!

Middle ground fallacy.

 

[Ahlevah]

So an average middle-class family can have billions in write-offs like Bezos can:

An average family doesn’t need billions in write-offs, because they don’t have billions in income. I mean, duh!

I don't see how these guys are overtaxed.

Warren Buffett would agree with you. He likes paying taxes. But, again, the problem we have in this country is no matter how much tax revenue the government collects, it’s never enough to fund everything on Bernie’s and The Squad’s shopping lists: Medicare for all; free college; free or subsidized housing for the poor; the Green New Deal to save the planet from climate change. We don’t have a tax problem. We have a spending problem.

Please, everything from Google to Uber is worse now and Facebook can waste 42 billion dollars on this Meta nonsense and not get punished by the market, but the stock will go up if they have more layoffs.

Worse than what? Would you rather go back to Yahoo! for search, Myspace for social media, and Yellow Cab to pick you up at the airport? And what’s it to you if Meta wants to blow tens of billions of dollars perfecting virtual reality goggles?

All of these technologies will continue to evolve and improve, because they are market driven. No one really needs Google or Facebook or Uber. There are alternatives. IBM thought it had a monopoly on computers. The government sued it on antitrust grounds and maintained a consent decree against it for forty years. Then other people came along and built a better mousetrap. Now it’s happening again. The iPhone 15 is looking pretty chumpy compared to Samsung’s Galaxy S24. And I hate Android phones.

 

[Ahlevah]

Jeff Bezos is out there collecting the median annual income every few minutes. He didn’t “work for” all those dollars, he benefits from a system that issues him a lot of tokens.

So what? Why the envy? Who’s stopping you from starting a company that could make you filthy rich? He’s employing people, and filling a need, which is exactly what capitalists do.

 

[rickc]

Just look at who the defenders of the wealthy are on this forum. Bet they are 1%ers.

The wealthy have done a great job at convincing the white working class that they are in their corner. Nothing could be further from the truth.

 

[Yes_Minister]

An average family doesn’t need billions in write-offs, because they don’t have billions in income. I mean, duh!

So Bezos avoiding paying 5.2 billion dollars squares with him paying 90% of the taxes, how does that work?


Also I thought Trump said the economy was controlled by evil globalists, who rigged it against the American worker, was he wrong about that?

Warren Buffett would agree with you. He likes paying taxes. But, again, the problem we have in this country is no matter how much tax revenue the government collects, it’s never enough to fund everything on Bernie’s and The Squad’s shopping lists: Medicare for all; free college; free or subsidized housing for the poor; the Green New Deal to save the planet from climate change. We don’t have a tax problem. We have a spending problem.

And yet social democracies like Sweden has a lower per GDP as debt rate then the US, how does that work?

Country comparison Sweden vs United States Government debt. Percentage of GDP 2024

Country comparison, you can compare any two countries and see the data side by side. Here you have the comparison of Sweden vs United States, Government debt. Percentage of GDP

countryeconomy.com

Worse than what? Would you rather go back to Yahoo! for search, Myspace for social media, and Yellow Cab to pick you up at the airport? And what’s it to you if Meta wants to blow tens of billions of dollars perfecting virtual reality goggles?

Did you actually look at the articles I posted about Google? I don't have the space to post the entire article on this post.

So does the Free Market mean anything if Meta can waste 42 billion dollars and it will get punished by the Market?

All of these technologies will continue to evolve and improve, because they are market driven. No one really needs Google or Facebook or Uber. There are alternatives. IBM thought it had a monopoly on computers. The government sued it on antitrust grounds and maintained a consent decree against it for forty years. Then other people came along and built a better mousetrap. Now it’s happening again. The iPhone 15 is looking pretty chumpy compared to Samsung’s Galaxy S24. And I hate Android phones.

Or they find new ways to nickel and dime their customers to increase the growth of their stocks? Again maybe you should look at the articles before dismissing them.

Are video games better with microtransactions? Is anything built today better than anything built in say the 50s or 60s, because planned obsolescence means companies make things that break down quicker so they sell a new unit quicker.

These are guys who need another tax break?

 

[nvflash]

Liberals won't be happy until they drive out all the entrepreneurs and capitalists so they can have their socialist utopia.

Joke will be one them when their is no rich left to tax at all.

Good luck paying the interest on that 30+ trillion in debt when you cut your revenue by 90%.

Truth is liberals don't care how much of someone else's money they spend as long as they get to spend it.

Is no reasoning with these people, to reason assumes the others are of sound mind, and liberals are not.

Can't do basic math!

Retards and moral degenerates.

 

[Yes_Minister]

Liberals won't be happy until they drive out all the entrepreneurs and capitalists so they can have their socialist utopia.

Joke will be one them when their is no rich left to tax at all.

Good luck paying the interest on that 30+ trillion in debt when you cut your revenue by 90%.

Truth is liberals don't care how much of someone else's money they spend as long as they get to spend it.

Is no reasoning with these people, to reason assumes the others are of sound mind, and liberals are not.

Can't do basic math!

Retards and moral degenerates.

I thought Trump said the economy was controlled by evil globalists who rigged the economy against the American worker, was he wrong?

So when a company moves a manufacturing plant to Mexico or China, is that just part of the free market or is it proof of a rigged system?

 

[Ahlevah]

So Bezos avoiding paying 5.2 billion dollars squares with him paying 90% of the taxes, how does that work?

Your Barrons article is behind a paywall. How did you come up with with Bezos “avoiding” $5.2 billion in taxes that he didn’t owe? I mean, Amazon is a public company, and Bezos only owns about 10% of it. And if a company has a capital loss carried forward, a tax credit, or legitimate deductions, it isn’t “avoiding” anything. The use of that word in reference to taxes normally implies a nefarious attempt to skirt one’s legal obligation to pay a tax. But I get it. He’s rich, so he must have stolen it. Either that or we should all just admit that anything a rich person owns really belongs to the government.

Also I thought Trump said the economy was controlled by evil globalists, who rigged it against the American worker, was he wrong about that?

If there are “evil globalists” they’re probably sitting on the tax writing committees of congress.

And yet social democracies like Sweden has a lower per GDP as debt rate than the US, how does that work?

Sweden has a 20.6% corporate income tax rate, which is slightly less than our 21% rate. But it also has among the highest total tax burdens in the world that supports its social welfare spending. It also has chronically-high unemployment, with ongoing sclerotic growth that's typical of many European countries these days:

STOCKHOLM, Dec 21 (Reuters) - The Swedish government on Thursday lowered its growth forecast for 2024 and said an ongoing downturn was likely to drag on until 2025 even as inflation gradually loosened its grip on the economy.

The government predicted gross domestic product (GDP) would rise by 0.6% in 2024, down from a previous expectation of a 1.0% rise. The economy was seen contracting 0.5% this year, up from a 0.8% decline seen previously.

"We are in an downturn, an economic winter. Prices are still high even though inflation is on the way down," Svantesson told a news conference. "We see the slump continuing in 2024 and also into 2025."

https://www.nasdaq.com/articles/sweden-cuts-2024-growth-estimate-sees-downturn-until-2025

Did you actually look at the articles I posted about Google? I don't have the space to post the entire article on this post.

You don't have to post the entire article. In fact, I'm not here to debate an article. It would be better if you would just lift a relevant portion that supports whatever point it is you're trying to make, or just give me the gist of it, because I don't have unlimited time to devote to reading all of this content. That way you give me something to focus on.

The solution here is pretty simple. If Google sucks, don't use it. If you don't like Facebook, don't use it. If you own stock in it and it goes up, congratulations! You made money.! Meta stock actually turned around when they said they would slow don't on their metaverse kick and focus more on their bread and butter: targeted ads.

So does the Free Market mean anything if Meta can waste 42 billion dollars and it will get punished by the Market?

Yeah. People can sell their stock if they don't like the way the company is being run. But they seem to like it, especially since it's almost tripled in price in a year:

Are video games better with microtransactions?

Don't know, don't care.

Is anything built today better than anything built in say the 50s or 60s, because planned obsolescence means companies make things that break down quicker so they sell a new unit quicker.

I'm sure I could name a lot of products that have been improved if I thought about it. My first cellphone was a clunky, analog monstrosity made by Audiovox. Cars are generally built better today than they used to be. They used to have big, clunky cast iron engines that would have to be rebuilt after 100k-150k miles or so. 300k-500k Toyotas were unheard of. Tires sucked, too--bias ply tires that might last 30k 40k miles instead of steel-belted radials that could go 60k-80k miles. I've had some of these modern tires dry rot before they wore their tread out.

 

[Yes_Minister]

Your Barrons article is behind a paywall. How did you come up with with Bezos “avoiding” $5.2 billion in taxes that he didn’t owe? I mean, Amazon is a public company, and Bezos only owns about 10% of it. And if a company has a capital loss carried forward, a tax credit, or legitimate deductions, it isn’t “avoiding” anything. The use of that word in reference to taxes normally implies a nefarious attempt to skirt one’s legal obligation to pay a tax. But I get it. He’s rich, so he must have stolen it. Either that or we should all just admit that anything a rich person owns really belongs to the government.

So is Bezos actually paying 90% taxes if he can have 5.2 billion dollars be immune from his tax bill?

If there are “evil globalists” they’re probably sitting on the tax writing committees of congress.

Nice dodge, Trump said the globalists control the economy and rigged it against US workers, is he right or wrong?

Sweden has a 20.6% corporate income tax rate, which is slightly less than our 21% rate. But it also has among the highest total tax burdens in the world that supports its social welfare spending. It also has chronically-high unemployment, with ongoing sclerotic growth that's typical of many European countries these days:

https://www.nasdaq.com/articles/sweden-cuts-2024-growth-estimate-sees-downturn-until-2025

But why does Sweden have less debt than the US?

You don't have to post the entire article. In fact, I'm not here to debate an article. It would be better if you would just lift a relevant portion that supports whatever point it is you're trying to make, or just give me the gist of it, because I don't have unlimited time to devote to reading all of this content. That way you give me something to focus on.

Dude, space is limited on these posts and you write a lot, it's kinda for me to fit quotes in at this point.

The solution here is pretty simple. If Google sucks, don't use it. If you don't like Facebook, don't use it. If you own stock in it and it goes up, congratulations! You made money.! Meta stock actually turned around when they said they would slow don't on their metaverse kick and focus more on their bread and butter: targeted ads.

Yeah and is there a search engine that is as good as Google was 10 years ago?

Yeah. People can sell their stock if they don't like the way the company is being run. But they seem to like it, especially since it's almost tripled in price in a year:

View attachment 67496207

Seems like the market doesn't work if it will reward Facebook for just wasting 42 billion dollars.

Don't know, don't care.



I'm sure I could name a lot of products that have been improved if I thought about it. My first cellphone was a clunky, analog monstrosity made by Audiovox. Cars are generally built better today than they used to be. They used to have big, clunky cast iron engines that would have to be rebuilt after 100k-150k miles or so. 300k-500k Toyotas were unheard of. Tires sucked, too--bias ply tires that might last 30k 40k miles instead of steel-belted radials that could go 60k-80k miles. I've had some of these modern tires dry rot before they wore their tread out.

And your few examples makes up for all the products that are worse due to planned Obsolescence?

Planned Obsolescence: How companies are deliberately making their products worse - Idea to Value

If you ever had the feeling that products don’t last as long as they used to, you might be right. It turns out that in order to keep consumers buying products year after year, some companies are actually deliberately reducing the quality of their products. In some especially nefarious...

www.ideatovalue.com

Do the companies using planned Obsolescence deserve a tax cut? What are they innovating exactly?

You have been avoiding a lot of my points to make your case. You haven't addressed conservative elites like Rush Limbaugh and Dick Cheney saying debt doesn't matter when a Republican is in the White House. I when I mentioned waste in defense spending, you pivot to a fantastic scenario to avoid discussing it.

You haven't provided an example of a government who did these massive tax cuts and managed to lower debts. You haven't said why there were not Tea party protests during the majority of the Bush administration or the entire Trump administration. Is this is why I think fiscal conservatism is a scam.

 

[Cynical]

So what? Why the envy? Who’s stopping you from starting a company that could make you filthy rich? He’s employing people, and filling a need, which is exactly what capitalists do.

What always gets me on this argument is that we all are involved in making these people rich but then get made at them for being rich because of what we did?

 

[Visbek]

You ask what evidence I have of a bubble economy?

Yup.

Open your eyes and look around you.

That's not evidence; neither is quoting permabears. Let's see what you've actually got.

Bitcoin has gone from less than $17,000 a few years ago to northwards of $60,000.

Yes, and crypto has already gone through numerous bubbles. In fact, that bubble burst in 2022, and it's already revving up again. That's because it's a relatively small market that is prone to speculation and manipulation, as well as fools who are willing to be parted from their hard-earned cash.

A tech company like Meta or Nvidia can gain more market cap in a single day than IBM acquired in more than a century of doing business.

lol

Sorry, but you need more than a handful of volatile / meme stocks to prove that the entire market is in a bubble.

Nor does your theory about left-over credit due to low Fed rates from years ago pan out. How do you think that works? Do you think that the Wall Street Bets crowd borrowed millions of dollars in 2021, and sat on it for 3 years? Nope. If they are trading on margin, they are paying today's interest rates, not 2021's.

And I've already shown how the Shiller PE Ratio is not a valid predictor of recessions or stock market crashes.

We have companies with market caps that exceed the GDPs of major western industrial nations like France and Great Britain.

lol... We're comparing Apple(s) and oranges now, I see?

This comparison makes no sense whatsoever. Market cap isn't a measure of annual production; GDP isn't a measure of a company's current or future value.

It takes an income of almost $100,000 for an average family just to be able to afford a typical house, and this is with at least half of its income going into debt service, property taxes, casualty insurance, and maintenance.

Yet again! High housing costs are not proof of a bubble, because there are actual underlying economic factors driving up housing prices. Bubbles are driven by speculation, not fundamentals.

This is unsustainable.

Unless it is.

For example, we're not going to see a huge crash in home prices; that simply isn't possible, because there isn't enough inventory. Home prices hit a peak in June 2006, and it took almost 5 years for prices to bottom out (25% drop) and for the number of home sales to be cut by around 40%. And that was with the national real estate and financial markets seeming to screech to a halt in 2008.

Your "analysis" is failing to recognize that home sales are falling; that interest rates are highly likely to drop without the US experiencing a recession first; that home prices won't drop until more homes are built; or that people will adjust.

And yes, people definitely can and will adjust. In the short term, young people are likely to live with their parents longer, and apartment dwellers are more likely to get roommates. We're already seeing cities blocking short-term rentals, in order to reclaim some of those units for regular housing.

In the longer term, developers may even -- shudder gasp! -- build smaller homes and apartments, build faster, or optimize prefab construction. Communities may need to stop the NIMBY nonsense and accept higher density. ADUs are already growing.

None of this is to say markets can't continue to climb ever higher. They can....

This is what Phil Tetlock refers to as a "hedgehog" mentality of prediction.

Hedgehogs make big, bold, splashy predictions (often of doom), refuse to adjust their predictions based on changing conditions, and refuse to admit when they're wrong. They are wrong a higher percentage of the time than "foxes" (who do adjust predictions and admit mistakes), but treat their few successes as justification for their strategy.

And again, I've already shown how your strategy here could easily backfire. Again, if you yank your capital out of the stock market today, you're likely to miss out on big gains. You can't know when the market will peak and when it will bottom out, meaning you're all but assured to miss out. This is why dollar cost averaging is a good strategy for those who don't make their money by playing with other people's money.