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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: bentway who wrote (582672)	8/25/2010 7:56:02 PM
From: Tenchusatsu	1 Recommendation Read Replies (1) \| Respond to of 1572417

Bentway, Democrats recently raised taxes on Intel: pittsburghlive.com Meanwhile, Intel CEO Paul Otellini is publicly criticizing the Democrats: news.cnet.com > Otellini singled out the political state of affairs in Democrat-dominated Washington, saying: "I think this group does not understand what it takes to create jobs. And I think they're flummoxed by their experiment in Keynesian economics not working." Time for you and Ted to become "anti-Intel" ... Tenchusatsu

To: bentway who wrote (582672)	8/27/2010 1:27:32 PM
From: TimF	2 Recommendations Read Replies (2) \| Respond to of 1572417

– Bush’s ten-year tax cut was designed to end this year, so it’s not a tax increase. Correction - Bush's ten-year tax cut was designed to end this year, which is irrelevant to the question of whether its a tax increase. The tax rate will rise, so it is a tax increase. – Ending it for the rich simply returns them to the Clinton tax rate, which was hardly confiscatory (reminder: the Clinton years were damn good for business). With a lot of positive factors going on at the time (restraint in government spending, a tech stock boom, etc.) Now with a recession, and probably worse conditions even after the recession ends, we are not in as good of shape in terms of overcoming the harmful effects of a tax increase. Small businesses would barely be affected. False. Only 3 percent of small business owners earn over $250,000. And those 3 percent earn the majority of small business profits and wealth creation, and hire the majority of small business employees. And for those below that level, the possibility of reaching that level is a motivator, so the more you pile on to the $250K+ level business the more you disincentivize people from starting businesses or expanding them, even if they don't yet make $250K. And because it’s a “marginal” tax, the Clinton rate would apply only to the portion of their incomes over $250,000. The reduced amount they can keep from each additional dollar earned is what reduces the incentive to work hard and take risks to make that additional dollar. Yet extending the Bush tax cut to the richest Americans would give them a $36 billion bonus next year. 1 - No, it would let them keep $36 bil more of the money they earned. It isn't giving them anything. 2 - Only $36bil - So you support raising taxes and discouraging wealth creation during a recession, for an amount that is less than one percent of what the government will spend under Obama's latest budget proposal. And it wouldn’t even stimulate demand and jobs, because the very rich save (rather than spend) more of their disposable income than the rest of us. They invest in productive activities that help the economy. They save, which allows the money to be used for investment or consumption by others. They also spend a lot. To the extent your considering the effect on spending, consider that the rich are more capable of reducing their spending without significantly impacting their lifestyle. I can't cut my monthly spending in half without defaulting on my mortgage. Someone with a lot of wealth and a high income has more flexibility than I do. ending the Bush tax cut for the top is fair. Its very unfair, since your taking someone else's money by force, and since the rich (esp the rich near the levels where this extra tax kicks in, the mega-rich tend to be able to work around taxes better than those with $250K to $500K income a year) already pay a lot more in taxes than the non-rich. Combining other forms of federal taxation, and state and local taxes in various forms, and some of these people will be paying over half their marginal dollar to the government. That's highly unfair and unreasonable.

To: bentway who wrote (582672)	9/1/2010 1:37:55 PM
From: TimF	Read Replies (1) \| Respond to of 1572417

because the very rich save (rather than spend) more of their disposable income than the rest of us. In addition to the fact that the rich spend a lot (less as a percentage, but then they also have more ability to cut back on spending if taxes are increased, without harming their lifestyle compared to a middle class person with with a mortgage equaling a high portion of their income, or a poor person who's mainly consuming to stay alive). And the fact that savings allow for others to spend and invest. You have the point that the problem is not, or at least not primarily, a problem with consumption spending any more. ------------------------- Tyson’s Keynesian Confusion Posted by Mark A. Calabria UC-Berkeley Professor, and former Clinton economic advisor, Laura Tyson lays out why she believes we need a second stimulus. Her op-ed is a worthwhile read for understanding the basic assumptions behind modern Keynesian thinking. Foremost among those assumptions is a belief we are in a recession due to “a collapse in private demand.” In Professor Tyson’s world, if only everyone would buy more, everything would be OK (starts to sound a lot like President Bush in 2002). But what exactly has been going on with private demand? Judged by private personal consumption expenditures, it is actually up and higher than at any point during the boom, after reaching bottom in the Spring of 2009. The following chart, from the St. Louis Federal Reserve, nicely illustrates the direction in private demand. So if Tyson’s narrative that weak demand is holding back employment is false, or at least incomplete, then what is holding back unemployment? In a word: Investment. Unlike consumption, which has largely rebounded, investment today is about 20% below its peak. Of course we should keep in mind, that peak was a bubble. The good news is that investment in such things a equipment and software, are slowly, but steadily, climbing back. The real drag on investments is from the construction industry, particularly residential, which is still down about 50% from its peak. What most of this suggests to me is that unemployment is being driven mainly by a mismatch between skills of the unemployed and available job openings. You simply cannot, overnight, turn a construction worker into a nurse or computer programmer. Tyson seems to half-way recognize this when she argues for stimulus to be directed into education, although she only seems to be talking about future skills mismatch and ignores the mismatch facing the economy today. For if increased aggregate demand is all we need today to reduce unemployment, then wouldn’t the same hold true for future unemployment, removing the need for educational funding? At the end of the day, what we need to get employment increasing is to create an environment where business feel confident to invest. Mark A. Calabria • August 30, 2010 @ 12:43 pm cato-at-liberty.org

To: bentway who wrote (582672)	1/13/2011 8:00:57 PM
From: TimF	Respond to of 1572417

because the very rich save In addition to the fact that saving allows for other spending or investment (they don't save it under their mattress), apparently that statement is somewhat false in the context of our current economic situation. Its the middle class who save (paying down debt) to the greatest degree not the rich ---- Who Spends Stimulus the Quickest? By Megan McArdle Dec 9 2010, 2:47 PM ET 55 Matt Steinglass has an interesting follow-up to his post on the effects of stimulus: --------------- The average baseline recipients increased their total spending by 56.8% of the value of the check they received. Here's how the authors sum it all up: The point estimates suggest that low-income households spent a much larger fraction of their payment on total expenditures relative to the typical (baseline middle-income) household. In absolute terms for total expenditures, of the three groups, only the response for the low-income households is statistically significant. I think that "statistically significant" here means comparing the spending by people after they got their stimulus checks to the null sample of spending without any checks. As the authors note, the difference between spending by low-income recipients and spending by the average recipient was large at 77.5%, but with a standard error of 0.50 that difference wasn't quite statistically significant. What's interesting, though, is that total spending by both low-income and high-income recipients increased more than total spending by average recipients. In other words, though it's not a statistically significant result, both poor people and rich people seem to have been more likely to spend their stimulus checks than average people were. The authors suggest that the main factor in propensity to spend may be liquidity: results also showed that homeowners were less likely to spend their checks than renters. One might hypothesise that you're most likely to spend stimulus money if you're really poor, but if you're sitting pretty you're still more likely to spend it than if you're underwater on your house or saddled with credit-card debt. This would suggest that from a stimulus point of view, the people we really ought to cut out of the tax-cut extension are not so much the wealthy as the middle-class. Tax cuts for income under $35,000 and over $75,000, but not in between. "So because you are lukewarm, and neither hot nor cold, I will spit you out." But somehow that doesn't sound iike a political winner, and anyway there are some social-justice concerns involved there. ----------- This actually makes quite a lot of intuitive sense to me. In a recession, the poor are liquidity-constrained--they have immediate needs, and will use the extra resources to cover them. For the wealthy, the stimulus checks are not a large fraction of their income, so they may well get spent, the way you'd blow twenty bucks you find on the street on some minor treat. But people in the middle are liable to use the checks to enhance their financial stability--i.e., they save the money. As Steinglass notes, this finding is economically interesting, but politically useless. I doubt it will even result in a meaningful reduction in the number of people claiming that tax cuts for the rich get saved, while tax cuts for the middle class get spent. The supply of such folk wisdom seems to be pretty inelastic. theatlantic.com