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Moody's Says "Permanent Extension Of Bush Tax Cuts Would Be Negative For US Sovereign Debt Rating", Spooks Treasurys
Today's sudden spike in yields across the curve is being widely attributed to a conversation between Moody's Steven Hess, Senior Credit Officer covering sovereigns, and Market News, in which Moody's has given the point blank warning that a permanent extension in the Bush tax cuts may lead to a downgrade of the US, putting yet more pressure on the president, who despite having shown a conciliatory stance recently vis-a-vis permanent tax extensions, may suddenly find himself boxed once again, and without much choice but to prevent an all out compromise. As the market has recently been running higher on expectations that a tax cut extension is pretty much guaranteed, today's announcement by Moody's pours cold water over yet another "priced in" concept, which suddenly may not materialize. The net result: a smackdown in the 10 Year which is slowly migrating to all risk assets.
From Market News:
Clearly, an extension of the tax cuts that had been implemented by the Bush administration in 2001 and 2003 “is not good” from a deficit/debt perspective, but such a measure, if temporary, would not immediately jeopardize the U.S. sovereign rating,” Moody’s lead analyst for the United States told Market News International Monday.
He cautioned, however, that, “A permanent extension of the tax cuts would be a definite negative.”
And over the medium term, pressures on the sovereign rating could develop if the country does not adequately address its debt trajectory.
And over the medium term, pressures on the sovereign rating could develop if the country does not adequately address its debt trajectory.
Yet there is still some time to deal with this issue, Hess told MNI.
Some additional views from Hess:
He added that despite the National Commission on Fiscal Responsibility and Reform’s proposals presented last week to correct the fiscal deficit and debt ratios of the United States, the important thing for the credit rating is “actual adoption of a plan” by the administration.
But he then told MNI, “Right now, the outlook for actual adoption of a plan in the near term is not good, although the dynamic of the new Congress remains to be seen.”
Congress must act on the Bush tax cuts or see them disappear at the end of the year.
“The deficit as a percentage of GDP is set to decline in any case, but the magnitude of the decline under assumptions of relatively subdued economic growth is not sufficient to stabilize or reverse the debt trajectory,” he added.
Besides, “The extension of the tax cuts is clearly not good from a deficit/debt perspective,” Hess told MNI, noting, however, that the
timing of their expiration in itself was not helping due to the “sub-par” economic conditions.So as, “Economic growth is an important factor in the government’s ability to deal with the deficit question over time,” he continued, “a temporary extension of the tax cuts, while undesirable from the debt perspective, would not have immediate impact on our rating.”
That said, “it would clearly make the task of finding measures to reduce the deficit even more urgent and more challenging.”
Still, the U.S. rating is not at risk in the near term.
“The U.S. has some time to deal with this situation, so the rating outlook remains stable,” Hess said, referring to the need to reverse or stabilize the debt trajectory of the country.
Check to the President, for whom the time to decide on what to do with the Bush tax cuts is, however, running out.
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"Yet there is still some time to deal with this issue". ahh, hope. They always seem to offer hope.
Or is this just a short term ploy for the TBTF banks to deploy POMO money into the 30 year ? Get them a "little more yield ploy" and then take yields lower again under the pretext of a crashing market sometime mid-Jan ?
Agreed, although the level of sophistication of this is up for debate.
Anyone who thinks Moodys, S&P, or Fitch will find their ethical groove by downgrading UST paper before it's too late is likely mistaken. I'd argue that since this titanic confidence game is so fragile and hyperdynamic, the men behind the curtain will use all means necessary to ensure UST paper doesn't get downgraded (or until they wish it). These guys aren't about to let one of the bumbling ratings agencies push over the first domino, that's for sure.
Personally, I'm morbidly entertained that $60 billion in tax cuts supposedly makes a difference while the fact the deficit is now being completely (indirectly) monetized is merely just something us "doom and gloomers" are worked up about.
What a joke this has become. I used to feel sympathy for the fact that we Americans are being robbed blind. Two years later, that sympathy has soured into contempt as most people continue to assume that our political, banking, and monetary system are being operated with their interests in mind.
I think it's more accurate to say that most people don't assume anything about our political, banking and monetary systems. Assuming would indicate some level of awareness or education about such things. Most people measure good times by what's on TV, how their diet is going and whether gas is more or less expensive.
right. I'm mostly shocked anyone listens, not to mention "reacts", to anything Moody's says anymore. How soon we forget their "AAA" stamp fest on bundles and bundles of worthless CDO's.
Hope... wasn't that the text of a bumper sticker in the 60's?
I'll ask my dad if he remembers anything about that.
The 10-year Treasury just hit 2.93. We live in interesting times.
http://www.marketwatch.com/investing/bond/UST10Y
Had written off my TLT puts. Suddenly they look good to me.
Yea, look at the TLT - double top at 108.5, retrace and then fail what around 106. Now off 11% from that level. With the increase in inflation expectations and the increasing fear/loathing of the Federal Reserve and the budgetary policies of this country - could a 'generational' top in the long bond/interest rates be in?
Did f'tard Bernanke inadvertently put the Low in on interest rates with his QE-2 Lite announcement ? If that turns out to be the case, thanks to his BFF Cramer with his "all-in Long" call on Gold the other day as a kicker.
So if they dont raise taxes on BK unemployed americans, thats a 'bad thing'...yea whatever. Hey Ben, why dont you raise that rate from 0-.25% up to just a historically very low 2%? Go ahead, I dare ya!
I'll raise the ante to a 'double dog dare' !
Moody's going to decide US policy. Isn't this the same guys that were giving triple A ratings to many securitized pieces of paper that proved to be worthless. Why does their opinion still matter?
The herd of elephants is easily spooked and they have long memories.
Moody's can decide with one mouseclick...
Mouse?
MOUSE!
MOUUUSSSSEE!!!!
AAAarrrrrhhhhhhhhhhhhhhHHHH!!!!!!!! RRRUUUUNNNNnn
"The herd" needs Moody's to tell them that the US credit score looks more like a bad cholesterol level?
Betcha betcha betcha betcha, that Timmy Gneither convinces His Highness that He Alone can Save America with one Swell Decision.
To Deny Any Extension of the Bush Tax Cuts on the Basis of Saving America's Debt Rating.
After all, He did take a Major Pasting on His Asian Trip, branded as an Economic Illiterate for all intents and purposes (everybody said hell no to the policies he put forth) and could respond in this manner ensuring both the Perception of His Economic Savvy and Perpetuation of His Original socio-politico-economic wealth redistribution ideals.
"Voila" as a some might say!
"Eureka" as ohers might chirp!
"Never waste a good crisis" as Rahm might advise, and this Crisis is a Doozie!
its from moodys - enough said
why should anyone listen to them?
There will a retraction later simply stating they were just "talking out loud" but didn't really mean it...
So the rating agencys are the new slave masters?
------------
the US will prove to the world that debtors have no sovereignty.
I don't get it. I thought our debt didn't matter. Now it does? This makes it aweful hard to decide what to do to preserve what little monies I have. I wish they would just make up their minds. Are we gonna play make believe or fo-real?
Fo-reelz...this Moody's article suddenly delving into tax policy makes me laugh. Moodys...these clowns are always a day late and a dollar short, adjusting ratings only after the house of cards has collapsed. They must have some more dogs in this fight we cant yet see.
Read it again. Deficit to GDP is
going down next year but we're not meeting this Moody's fucktard's ideal timeline for deficit reduction.
Treasuries capitulated across the curve on this? Bullshit.
How the hell can anyone predict what next year's GDP will look like much less the government spending?
I have no problem raising taxes on the top 1% to 2%. Polls show that most Americans agree with me.
The mob is fickle, brother.
We don't have a mob yet. A mob is what we get if a handful of plutocrats continue to vaccuum up 25% of the country's income for the next 20 years like they have for the last 20 years.
A lot of conservatives think back on the 40's and 50's as the golden times when America was strong and "on the right track." Well, one thing we did back then was tax the shit out of rich people.
I've never been able to figure out what a republican, a democrat, a liberal, or a conservative really is at all. Seems to me theyre all the same bunch of cornholers who all together got us in this mess.
no.
We had noncorrupt unions that forced disgorgement of profits to workers and a stock market that forced disgorgement of profits to stockholders via dividends.
There simply wasn't the money and board rubber stamping for these jackfuck executives to treat every corporation as if it is their own personal private disneyland with an ATM.
Noncorrupt unions?
Wow, and you said that out loud, and in public even.
I don't think you quite understand how institutionalized power works.
While the "non-corrupt unions" statement is somewhat questionable, Trav hits all the right notes: what is the point of holding stock in companies these days with a near zero dividend payout ratio? It's bullshit, profits should be distributed to shareholders.
Holding? What's that? The stock market is just a game to see who can level (poker term) whom faster and better.
Unions do serve the valid purpose of defending worker's rights. Unions did put a stop to de fact slavery during the depression (ie workers were not allowed to leave their compounds, and they weren't paid, or were forced to rack up huge debts at company stores, etc). When they started demanding benefits with threat of physical violence, they crossed the line.
Violence to resist violence or theft is acceptable. Violence to extract economic gain is thievery and thuggery.
Say that to the banks, which pay out 1% of GDP in bonuses. It's a fucking heist.
You just think that, Wesley.
Mouch.
In 1913, the 16th Amendment to the Constitution made the income tax a permanent fixture in the U.S. tax system. The amendment gave Congress legal authority to tax income and resulted in a revenue law that taxed incomes of both individuals and corporations. In fiscal year 1918, annual internal revenue collections for the first time passed the billion-dollar mark, rising to $5.4 billion by 1920. With the advent of World War II, employment increased, as did tax collections—to $7.3 billion. The withholding tax on wages was introduced in 1943 and was instrumental in increasing the number of taxpayers to 60 million and tax collections to $43 billion by 1945.
In 1981, Congress enacted the largest tax cut in U.S. history, approximately $750 billion over six years. The tax reduction, however, was partially offset by two tax acts, in 1982 and 1984, that attempted to raise approximately $265 billion.
On Oct. 22, 1986, President Reagan signed into law the Tax Reform Act of 1986, one of the most far-reaching reforms of the United States tax system since the adoption of the income tax. The top tax rate on individual income was lowered from 50% to 28%, the lowest it had been since 1916. Tax preferences were eliminated to make up most of the revenue. In an attempt to remain revenue neutral, the act called for a $120 billion increase in business taxation and a corresponding decrease in individual taxation over a five-year period.
Following what seemed to be a yearly tradition of new tax acts that began in 1986, the Revenue Reconciliation Act of 1990 was signed into law on Nov. 5, 1990. As with the '87, '88, and '89 acts, the 1990 act, while providing a number of substantive provisions, was small in comparison with the 1986 act. The emphasis of the 1990 act was increased taxes on the wealthy.
On Aug. 10, 1993, President Clinton signed the Revenue Reconciliation Act of 1993 into law. The act's purpose was to reduce by approximately $496 billion the federal deficit that would otherwise accumulate in fiscal years 1994 through 1998. In 1997, Clinton signed another tax act. The act, which cut taxes by $152 billion, included a cut in capital-gains tax for individuals, a $500 per child tax credit, and tax incentives for education.
President George W. Bush signed a series of tax cuts into law. The largest was the Economic Growth and Tax Relief Reconciliation Act of 2001. It was estimated to save taxpayers $1.3 trillion over ten years, making it the third largest tax cut since World War II. The Bush tax cut created a new lowest rate, 10% for the first several thousand dollars earned. It also established a slow schedule of incremental tax cuts that would eventually double the child tax credit from $500 to $1,000, adjust brackets so that middle-income couples owed the same tax as comparable singles, cut the top four tax rates (28% to 25%; 31% to 28%; 36% to 33%; and 39.6% to 35%).
The Jobs and Growth Tax Relief and Reconciliation Act of 2003 accelerated the tax rate cuts that had been enacted in 2001, and temporarily reduced the tax rate on capital gains and dividends to 15%. In 2004, the U.S. was forced to eliminate a corporate tax provision that had been ruled illegal by the World Trade Organization. Along with that tax hike, Congress passed a cornucopia of tax breaks, which for individuals included an option to deduct the payment of whichever state taxes were higher, sales or income taxes.
Two tax bills signed in 2005 and 2006 extended through 2010 the favorable rates on capital gains and dividends that had been enacted in 2003, raised the exemption levels for the Alternative Minimum Tax, and enacted new tax incentives designed to persuade individuals to save more for retirement.
Read more: History of the Income Tax in the United States — Infoplease.com http://www.infoplease.com/ipa/A0005921.html#ixzz15Oa1pVHz
Frequent spring rains through the month of May led to a year of cool temperatures and slow ripening, with an extended harvest that ended on November 2nd. A voluptuous garnet, the 2005 Opus One offers concentrated aromas of blueberry, rose petals, white truffle, licorice and nutmeg. Flavors of cassis, black olives, raspberry and dark chocolate culminate in a long and luscious finish.
glad your partial to blueberries. we would have something to talk about in the morning after getting take out last night, just sayin, T H O R?
Opus One, eh? That's funny...I named my dog "Opie One." As in "Opie One Canole(e)." Good thing he's a dog.
That such effort can go into describing fermented grape juice is proof of the undeserved opulence of modern people.
Progressive taxation+constant inflation=universal poverty.
Your hatred of the "rich" has sown a poverty that you and your progeny will reap. Enjoy those bitter oats, fool.
Psychobabble
How is that psychobabble?
You get hit in the head or something?
What I described has already happened (the income tax was originally only supposed to apply to the very rich, inflation made it apply to practically everyone). You are advocating an acceleration of it. You are a fool.
Taxes on the wealthiest have been cut relentlessly for 30 years. The indisputable result has been the greatest income inequality ever seen in this country.
Median incomes have dropped over the last ten years. It seems a lot easier to demonstrate that the tax cuts have increased poverty than to prove that progressive taxation does.
But I assume you feel that if we just cut their taxes a bit more the era of universal prosperity will dawn on the morrow?
But if the rich have to pay more taxes who's going to buy all those Coach bags and Godiva Chocolates?
http://www.google.com/hostednews/ap/article/ALeqM5jeJ755F8WCJ42YklDtsQLW0wqrUQ?docId=9caeb40592c74603a8396274ad4990e8
No, you have to cut spending.
The last time of true prosperity in this country was 1910. The US had had consistent economic policy for decades, and it clearly produced results, elevating the US from rural backwater to world power. Government spending as a percent of GDP was 2%, there was NO income tax. The situation in most of the rest of the world was fairly constant, with approximately the same amount of trade and war going on globally.
You seem to think that the 40's were some kind of a golden age. I suppose compared to the poverty of the war and economic intervention of the previous two decades they were, but they were not sustainable.
Inequality of income is always and has always been directly proportional to government intervention in the economy. The bankers are getting your money because it is being stolen through taxes and dollar depreciation. The bankers are the largest portion of those "rich" you keep talking about.
Fuck you assholes. I'm about ready to leave this shithole of a country after seeing your sentiment.
Where are you going to go, mosley? Honest question. Where is this paradise of no government and zero taxes that you wingnuts seem to think is out there somewhere?
I'll go to a tropical paradise, and take my wealth of knowledge of how to cure disease and cancers with me.
No nation taxes leisure, beyond a simple sales tax. You bastards seem to think that you can enslave anyone you want. Well guess what, salves are lousy workers. Stupid and lazy. Enslave the rich, and they will become that way as well.
Enjoy your spiral into oblivion, you ignorant fuck.
You both had a valid point.
The problem is you both want to target the lazy rich creditors, bankers, and people getting bailed out for buying AAA rated bonds.
But - you can't. So, you have to bite the bullet and decide how you're going to accomplish it by the macro. sucks, doesn't it?
In other words, you'll take the money you made here and go use it to treat a bunch of poor island people like YOUR slaves. It's a valid retirement choice, but I don't see it as the paragon of self-righteous virtue.
You don't pay slaves, you gibbering baboon.
Dude - you just shot your own argument about how all you poor little rich assholes are "enslaved". What the hell was your adjusted gross last year? Wish some of you pricks could walk a few light-years with us down here in the "lower-middle". Cry me a river about your GODAMN "marginal tax rates"
I see. You like class warfare as well. Funny, I guess theft isn't theft unless you are the one being stolen from.
I guess you missed the part where I repeatedly called for the ELIMINATION of ALL income taxes? I guess you don't like the idea of a 30-50% pay raise.
You will reap what you sow. When you sow the seeds of the destruction by force of those with more than you, eventually YOU will be the target.
I'm not "crying". I'm tired. I'm fucking tired of god damned communists and fascists thinking they are entitled to what isn't theirs. I work for a living. I am NOT super rich. I am somewhat wealthy from years of living beneath my means, and saving in specie. I don't own a lobbyist. Every time I have spoken to a politician, I have always personally expressed the desire for reduced spending and reduced taxation.
You truly are a cosmic train wreck. Karma is going to catch up to you some day. Pray it only asks you for a pound of flesh rather than the 95 pounds you seem to demand of the "rich".
As a top 2%er (when my income is combined with the wife's anway), I can assure you that my desire to see taxes raised on incomes over say $1M has nothing to do with class warfare (unless you meant to refer to the relentless campaign against those making less than $1M a year).
THANK YOU, Snow........ much more eloquent than me
I see. So rich versus richer isn't class warfare.
There are lots of top 95%ers who would love to see your taxes raised to 99.9%. Does that make it right?
Christ, it's like saying "I have no desire to do drugs, I just like shooting this stuff I get from the south side of town into my eyeballs", or "I have no desire to kill people, I just set off bombs in crowded areas".
Get a clue. Raising taxes on one group but not another is class warfare. Period.
You always end your sentences by insulting people, correct? I mean in public too, right? Or is just here behind the safety of your computer screen where someone can't punch you in the mouth for having zero repsect for honest disagreement. Please, calm down or you may never make it on the plane to escape all of us gibbering baboons.
If you can't tell the difference between a free man (paid for their labor) and a slave (the fruits of their labor are systematically stolen), then you certainly aren't of human intellect. Sorry if you can't understand that, master.
Are you talking to me? You talkin' to ME. No, seriously, are you. I asked you to calm down a bit for your own sake, I can almost see your heart flatlining. If you can't see how taxes are necessary you aren't an adult. The argument about who is taxed and how much is fair, but almost no one is saying all taxes should be eliminated for the simple fact we don't want to live under sharia law and cruise missiles don't build themselves ecept in your freemarket utopia. If men were angels, no gov't would be necessary. Perhaps you just don't like the U.S. I don't know. Taxes aren't theft.
Sharia law requires taxes to enforce, and can not be enforced upon an armed populace.
And what the hell do you want cruise missles for? Why do you want to murder people a half a world away? They aren't interested in you, at least not when you leave them alone to kill each other, like they have since the end of the Crusades.
Taxes aren't theft the way shooting people in the head isn't murder.
"your father was a hamster and your mother smelled of elderberries!"
Well don't let the door hit your ass on the way out, t.
Don't get hit in the head when all the pillars leave or fall, chet.
We'll soldier on without you somehow.
And likely be much happier for the welcome change.
Now you can cure cancer? How about turn water into wine.
Go ahead, move to a tropical paradise.
Paying taxes isn't enslavement, its contributing to society. Stop driving on the roads. Get a car without airbags, and antilock brakes. Don't collect social security. Don't call 911. Don't use your GPS, or cellphone. Don't use weather reports. Don't defend your country.
Asshole. You stand on the shoulders of millions when you turn water into wine.
Fine. You win. Freedom is slavery.
Later.
It is the ignorant point of view that the tax code exists to drag down the successful and spread their wealth that is responsible for much of the very inequality you seek to remedy.
The ultra-wealthy have the resources and ability to legally reduce their tax burden. Which means everyone between them and the middle class gets squished like a bug by the myopic "progressive income tax" code. The result is a widening gap of prosperity instead of a meritocratous spectrum of earning.
The solution is to stop taxing income, repeal the 16th amendment, and tax consumption instead. No hiding for the wealthy, but no reason to offshore their income either.
"The solution is to stop taxing income, repeal the 16th amendment, and tax consumption instead."
There is something that we can agree on.
>>"The solution is to stop taxing income, repeal the 16th amendment, and tax consumption instead."
>There is something that we can agree on
Please explain how one form of robbery is better than another?
How is taxation robbery? Can we please stop this nonsense that any form of tax is theft. In the words of the great Chief Justice O.W. Holmes, Jr.: I like playing taxes, with it I buy civilization. We can have honest disageements about who and what tot ax and by how much but to equate any form of tax to theft is juvenile and the kind of garbage you would here from pretesters who like to break other people's property.
The government has guns. If you don't pay your taxes, they send men with those guns to either kill you or put you in a big concrete box. If you are lucky, they just seize what they want and leave you on the street. How is that not robbery?
Liberals can never see the gun in their own hands.
Hang on, while I am by no means 'liberal', surely you must acknowledge that paying income tax for a somewhat stable society NOT filled with scavengers, and bands of opportunist bandits is a good thing from your perspective of retaining your wealth?
I'm not saying everything should be taxed to fucking oblivion - which seems to be the course of day over here in the UK (public sector spending as part of GDP is 53%!) - but there is a middle ground.
"you must acknowledge that paying income tax for a somewhat stable society NOT filled with scavengers, and bands of opportunist bandits is a good thing"
Not really. I like to choose between McDonalds, Burger King, or cooking at home when I have a hankering for hamburger. Likewise, I'd like to have a choice of police service providers, fire protection services, and judicial arbitration services, including the choice of going it alone if I wish. I don't like being forced to subscribe to services from a monopolistic provider which, being a monopoly, necessarily has lower quality and higher prices than what can be obtained on the free market.
I fear some people can only see the monopoly (government) solution because they've been brainwashed to only see it. Or they think it's necessary because that's where their food stamps come from. Somehow, people think that a monopolistic, monolithic government run by angelic beings who commit robbery is needed or human civilization will collapse.
Freely acting people can turn chunks of silicon into computers that process 10 billions of operations per second, but the technological feat of carrying around pieces of mail is something only the government can do.
Then go live in the woods all by yourself. Build a cabin, grow your own food. Are you a doctor? Try practicing medicine without govermment regulation. Prescribe unregulated drugs. In fact, make your own, because there aren't any regulated pharmacies. Make your own medical instruments, because there arent any standards or regulations. Your profession depends on government regulation. Unless you prefer opium and leeches. Asshole.
I see. It was, therefor it must be for all time.
Let's try to use our brains, shall we: http://mises.org/daily/4276
Also, yes, I do have the cure for prostate cancer all bundled up in a nice little bow. Hell, I'll even give you the name of the compound. Seleno-dehydrotestosterone. This will target any prostate epithelial cell in the body, and the selenium will oxidize it once it binds. This means that it will seek out the cancer anywhere in the body, even after metastasis. This also works as an irreversable method of chemical prostate removal (as opposed to surgical, which induces all kinds of nasty side effects). It would have been on the market ages ago, if we could have afforded the very expensive trials required of all new drugs. Instead, we decided to focus on medial devices, the first application of which was orthodontics (http://www.selectdefense.com/).
Incidently, I also have the cure for HIV, but I'm not going to give that one out just yet.
Wait, you think government regulations create medicines and medical instruments??
>Can we please stop this nonsense that any form of tax is theft.
Explain how it's nonsense?
If an armed man comes to your door and threatens you if you don't pay up, then it is robbery.
If 10 people hire an armed man to come to your door if you don't pay up, then it is robbery.
If 1,000,000 people hire armed men to come to your door if you don't pay up, then it is robbery.
>I like playing taxes, with it I buy civilization.
But what if someone doesn't want to pay taxes? What if someone lives on a rural farm and can afford their own security services, perhaps having their own neighborhood watch program? Why should they endure robberies? Why should I be forced to pay for services I don't want, like turning Iraq into a charnel house?
>to equate any form of tax to theft is juvenile and the kind of garbage you would here from pretesters who like to break other people's property
I don't follow. How does not wanting to commit robberies against others mean that I want to break someone's property? I'd be more afraid of a pro-robbery person breaking property.
It's a historical fact that freely acting people can provide their own services, such as fire and police protection, legal arbitration, and road construction and maintenance. There is only service that governments are better at than the free market, namely, securing people in ovens.
Without a strong military what language do you want to speak on your farm russian or standard mandarin ?
"Without a strong military what language do you want to speak on your farm russian or standard mandarin ?"
It's clear you have no way of defending the logical contradiction of a government that pretends to protect its subjects' rights while simultaneously committing robbery against them. You simply errect strawmen to help you feel better and help mask the fact that you are wrong.
Anyway, your statement raises several questions:
1. What makes you think I and my neighbors would not be able to raise a milita?
2. Assuming my farm was invaded, would more or less of my wealth be stolen than the 30%+ tax that the USA, with its strong military, takes regularly? Perhaps I'd even benefit from the invasion.
3. Why would someone want to attack my farm, when it is cheaper to simply trade with me? A farm run by a farmer will produce far more than a farm run by and destroyed by soldiers. People perform better when treated like people; those treated like cattle can give only cattle-like performances.
4. If it is the case that my farm should be shut down, and be replaced by a casino, then that fact will be made evident through the market signals of profit and financial loss and through consumer demand. An invading force, no matter how powerful, cannot possibly choose more wisely than a multitude of market participants can.
5. If I don't force my neighbors to errect tarriffs against the interlopers, or establish immigration restrictions keeping them off nearby lands I don't own, why would the invading force bother me?
Statements as questions on which the only answer is what you think is not an rgument I care to partake in. You obviously have strong hard beliefs and will not change them. Have you stopped beating your wife? See what I mean. I can play that game too. In any event, you will continue being "robbed" and also have a heart attack. Happy trails.
Remember, rulers have no right to do anything that you have no right to do on
your own. If you shouldn't do it, you shouldn't ask others to do it for you.
But what if I become filthy rich? I don't want to raise taxes for the rich because some day I may invent something spectacular or win the lotto or become a CEO.
"Taxes on the wealthiest have been cut relentlessly for 30 years."
That's good news. Ideally, the amount of robbery committed should be reduced to zero. I wish there were more rich people: a poor person has never offered me a job.
"The indisputable result has been the greatest income inequality ever seen in this country."
You cannot say it is a "result" without evidence of cause and effect. And I guess I'm worried about my own life and family; I don't want to steal others' hard-earned wealth just because I'm jealous of others.
"It seems a lot easier to demonstrate that the tax cuts have increased poverty"
Then demonstrate it. Alas, empirical data pertaining to an extremely complex market at a particular time in history for a particular geographicaly region involving a particular set of people can prove nothing about that market nor any other market. You can only prove your point using logical argumentation, and you will fail, because you are mistaken.
"But I assume you feel that if we just cut their taxes a bit more the era of universal prosperity will dawn on the morrow?"
Ceteris paribus, most people will prosper when the rewards of enetrepeneurial success are not transfered to and wasted on bureaucratic (government) endeavours that are not designed to answer to signals of profit and loss or consumer demand.
I'm a pragmatist Dr. A. We will all pay taxes in one form or another forever.
If you want to spend the rest of your life railing against all taxes, enjoy your ulcer (and the taxes you'll still be paying.)
What private boarding school did you grow up in?
i didn't grow up in mine at all.
And yet history says the exact opposite...fool.
To which history are you referring? Do you even know what you are saying? How about you form a cogent argument and get back to me?
American history. And yes, I do know what I am talking about.
As for a cogent argument, what were America's most prosperous years (specifically median income and economic growth)? Then look at the top tax rate and notice that the two mostly match up.
Are you going to call me a fool for noticing the trends?
Correlation is not causality
Yes, I will. Because you totally missed the part where the US for the first time gained the ability to print gold (Bretton Woods), and the part where the rest of the world was in ruins and we were the only shop left operating.
The end of America's real golden age came in 1913, and not a second after.
Within five years of WWII German industrial output was boommin and by 1960 it eclipsed anything ever achieved by the Nazis, so I'm not sure the whole the "only shop left on the block" thesis everyone always says is actually true. Right after the war it is but it is a moot point by the 1950s. So why were the 1950s so prosperous for the U.S. even with those tax rates on the rich? Please don't junk; I'm asking an honest question.
Bretton Woods persisted (which allowed the US to spend without immediately draining their gold reserves by printing dollars), and most of the "rich" who were charged such high taxes actually paid them, but rather began the practice of hiding capital abroad, or utilizing various exemptions and loopholes to avoid paying anywhere close to the real rate.
Kudos on the honest question. You are a bigger man than many others on this board.
Thanks for the reply! +1000 I understand better now.
Thank you for the kind words. I don't like being mean. Asking an honest question is the best way to diffuse a tense situation, at least it is with me.
The top tax rate in those years was a complete mirage. Only morons paid the top rate. Vast industries and investment structures were developed to help people avoid taxes. I'd be willing to bet the top effective marginal rate was in the high teens. See here for some numbers: http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=456
"blurf." there. "take that, mofo." i got "blurf" and "you don't." YOU'RE GOIN' DOWN!
Wait, but don't they give us jobs with their riches? And then trickle the rest down un us like candy sprikles on ice cream sundaes. Take 1% from them and unemployment goes up by 1%? And if unemployment goes up so does stocks right? So buy stocks?
I say let them expire for 350+ and make everyone pay something. Even if it is a token amount. This garbage with people actually making money off income tax with deductions is insane.
How about we just poll the folks that have to pay the tab and see what they say?
Regardless, the last thing our government needs is more money. Starve the beast.
Starving the beast while running huge deficits is what got us into this mess.
Really? When was the last time Americans' overall tax burden actually went down? The beast hasn't been starved, it is fat and happy.
Look at the amount of GDP that goes to paying interest on the debt!
That's a big reason why our overall tax burden goes up.
The lesson to be learned is that you cut spending first BEFORE you cut taxes. Otherwise you are in a self-defeating cycle.
How about we cut spending instead of raising taxes.
I'd suggest cutting both spending and taxes.
Also, US Treasury bonds should be defaulted on, as they are not legitimate contracts. Bonds are an immoral agreement between two parties to place a third party (including both living and unborn Americans) in bondage, i.e. slavery. Every American should insist that the immoral burden of US Treasury bonds be defaulted on.
Let the old government go bankrupt and call it a new government, it matters not how the default be accomplished. http://www.theonion.com/video/us-government-stages-fake-coup-to-wipe-out-nationa,14356/
Funny report, but seriously, how do we repudiate the entanglements these clowns have put on us without precipitating war?
Will a Nuremberg trial of these financial oligarchs be enough to to satisfy those that possess our debt instruments? If not, are we, the successors and inhabitants of the geographic landmass in question be willing to hand these "fellow citizens" over to the foreign entities now possessing our land titles? Just some real questions looking for real answers.
The beast is fat and happy (for now) because it has a printer.
make a statment and get junked and the person who wants 100s millions to suffer doesn't. And this is why this site will be gone in two years. Most people are reasonable just not on this site anymore it's a ideological BS and reminds me of Lenin. Not politically, but in the way he operated: who cares who suffers as long as my goals met. Sad really.
"How about we just poll the folks that have to pay the tab and see what they say?"
You mean the Chinese? They'd probably be pleased to see some stronger revenue backing their loans.
That our government will always spend money it doesn't have as long as we are operating with fiat currency has nothing to do with whether 2% of the US population deserves to get their wealth confiscated by the government based upon acquiescence of the apathetic 98%.
You think that 98% of the population is apathetic? Who did you inherit your money from redpill?
Inherit my money? Child, please.
I dont disagree with your underlying point, but you seem to be saying that only the top 2% of the population income wise is not apathetic.
If so, you are as big an idiot as the lefty.
They only ask 10% of the population of which nobody knows anybody or has even heard of somebody who filled in a poll to fill in the polls. All the rest doesn't matter.
The one thing I know is that when "rich" people feel less rich then poor people starve especially when it comes to contractors. Poor people don't tend to home expansions or put in pools or pay for yard work or add on another bathroom. I'd say a lot of this "get the rich" sentiment is cutting off your nose to spite your face.
American history says the exact opposite. When taxes on the rich were at the highest, the country prospered.
You are incredibly fucking wrong.
We became the most prosperous nation on earth WITHOUT an income tax.
When people can't be expected to be intelligent or educated enough to get even BASIC shit like this right, what hope is there?
NO THANK YOU to giving our government MORE money to spend on its cronies.
There is no other poster on this board who gets right to their point faster than you Trav. Everytime I see the yellow face and finger, I know I get high density information. salute.
Trav is right again, and again.
"The Eiffel Tower was the most striking and imaginative large structure in the world in the nineteenth cetury, and perhaps the greatest structural achievement too, but it wasn't the most expensive building of its century or even of its year. At the very moment that the Eiffel Tower was rising in Paris, two thousand miles away in the foothills of the Appalachian Mountains in North Carolina an even more expensive structure was going up - a private residence on rather a grand scale. It would take more than twice as long to complete as the Eiffel Tower, employ four times as many workers, cost three times as much to build, and was intended to be lived in for just a few months a year by one man and his mother. Called Biltmore, it was (and remains) the largest private house ever built in North America. Nothing can say more about the shifting economics of the late nineteenth century than that the residents of the New World were now building houses greater than the greatest monuments of the Old. America in 1889 was in the sumptuous midst of the period of hyper-self-indulgence known as the Gilded Age. There would never be another time to equal it. Between 1850 and 1900 every measure of wealth, productivity and well-being skyrocketed in America. the country's population in the period tripled, but its wealth increased by a factor of thirteen. Steel production went from 13,000 tons a year to 11.3 million. Exports of metal products of all kinds - guns, rails, pipes, boilers, machinery of every description - went from $6 million to $120 million. The number of millionaires, fewer than twenty in 1850, rose to forty thousand by century's end. Europeans viewed America's industrial ambitions with amusement, then consternation and finally alarm. In Britain, a National Efficiency Movement arose with the idea of recapturing the bulldog spirit that had formerly made Britain pre-eminent. Books with titles like The American Invaders and The 'American Commercial Invasion' of Europe sold briskly. But actually what Europeans were seeing was only the beginning. By the early twentieth century America was producing more steel than Germany and Britain combined - a circumstance that would have seemed inconceivable half a century before. What particularly galled the Europeans was that nearly all the technological advances in steel production were made in Europe, but it was America that made the steel. In 1901, J.P. Morgan absorbed and amalgamated a host of smaller companies into the mighty US Steel Corporation, the largest business enterprise in the world had ever seen. With a value of $1.4 billion it was worth more than all the land in the United States west of the Mississippi and twice the size of the US federal government if measured by annual revenue. America's industrial success produced a rollcall of financial magnificence: Rockefellers, Morgans, Astors, Mellons, Morgans, Fricks, Carnegies, Goulds, du Ponts, Belmonts, Harrimans, Huntingtons, Vanderbilts and many more basked in the dynastic wealth of essentially in exhaustible proportions. John D. Rockefeller made $1 billion a year, measured in today's money, and paid no income tax. No one did, for income tax did not yet exist in America. Congress tried to introduce an income tax of 2 per cent on earnings over $4,000 in 1894, but the Supreme Court ruled it unconstitutional. Income tax wouldn't become a regular part of American life until 1914, and in the meantime any money that was made was kept. People would never be this rich again."
- excerpt from Bill Bryson's recent book "At Home".
We became the most prosperous country on earth because we fouled the land and let people starve in the streets while the Robber Barons stole billions and flaunted it in the faces of the workers (See Panic of 1873). At the same time the government and the corporations joined together to crush any worker uprising with the power of money and the power of corrupt elected officials. Not fucking much has changed in this country in the last 150 years
Thank you! Someone knows something about history.
Despite your name-calling you are still wrong. High tax rates on the rich coincide with low unemployment rates and high median incomes. This was true through the 1940's through the 1970's.
Those are simple facts. That you don't want to admit reality means nothing to me.
Fuck your bullshit 40's bubble. The 90's looked nice and prosperous too, that doesn't mean thier economic policies were sound.
They were living off of the wealth that was created from the 1870's through the 1910's. They had the infinite benefit of being able to print money while the rest of the world had to earn it.
Take your bullshit, and shove it up your communist ass.
So we are living off of wealth created 140 years ago?
What branch of economics do you believe in again?
Industrial Revolution Inventors
Top 10 Significant Industrial Revolution Inventors
The Industrial Revolution that occurred in the 19th century was of great importance to the economic future of the United States. Three industrial developments led the way to Industrialization in America: (1) transportation was expanded, (2) electricity was effectively harnessed, and (3) improvements were made to industrial processes. Following is a list of key events and dates of the Industrial Revolution.
James Watt First reliable Steam Engine 1775 Eli Whitney Cotton Gin, Interchangeable parts for muskets 1793, 1798 Robert Fulton Regular Steamboat service on the Hudson River 1807 Samuel F. B. Morse Telegraph 1836 Elias Howe Sewing Machine 1844 Isaac Singer Improves and markets Howe's Sewing Machine 1851 Cyrus Field Transatlantic Cable 1866 Alexander Graham Bell Telephone 1876 Thomas Edison Phonograph, Incandescant Light Bulb 1877, 1879 Nikola Tesla Induction Electric Motor 1888 Rudolf Diesel Diesel Engine 1892 Orville and Wilbur Wright First Airplane 1903 Henry Ford Model T Ford, Assembly Line 1908, 1913http://americanhistory.about.com/library/charts/blchartindrev.htm
No offense to any achievements of the 19th Century, but how many steam engines, muskets, telegraphs, phonographs, etc. are still around?
What's more, how many of those that were built in the 19th Century are still around?
The claim that we are living off the wealth of the 19th Century makes absolutely no sense under any school of economics in the world.
People got wealthy in 20th Century America because people worked hard in 20th Century America. And we developed a middle class in the 20th Century because we didn't operate under the rules of the 19th Century.
I think this is what he was talking about. The begining of things ...
But from 40'-2010 your right. The USA has been booming intel ect...tech,meds,banking all kinds of innovation.
I'm saying the 40's-60's were a bubble, where the 70's were the bursting of that bubble, and 1980 was nearly the collapse of that bubble.
The same thing happened again with another bubble in the 90's, where the 2000's were the bursting of the bubble, and the next year or two are likely to show us the real collapse.
And yes, we are living off of wealth created 140 years ago. Companies and infrastructure from that era still exists, and has allowed our expansion, but we are OUT of savings from then. Now we survive on savings from abroad.
Understand, the reason I want you to die is because you are advocating for a violation of natural rights on a massive scale. For that, you should hang. Fucking thief.
"a violation of natural rights".
Now that's an interesting term. I don't believe that John Locke mentioned in any of his writing that progressive income taxes were a violation of anyone's rights.
So besides the fact that you don't have a real argument, I don't think you even understand the terms you are throwing around. No wonder you act so evil.
A. There were no progressive taxes anywhere in the world when John Locke was alive.
B. Taxes are theft. Sorry :(
C. Progressive taxes are an attack specifically on the "rich". Combined with persistant inflation, they inevitably become an attack on EVERYONE. Thus, your foolishness will inevitably lead to an assault on EVERYONE. So perhaps we ought to find a solution other than taxes on the "rich", hmm?
I don't believe in the libertarian utopia. I don't believe that you can get rid of all government in every form. It's not realistic.
I stopped listening to people who called themselves libertarians when many of them started telling me that the only right that mattered was property rights. It's a sign that they are simply anti-tax people who call themselves libertarians without actually caring about the real libertarian platform.
There is a very large difference between what you call a "libertarian paradise" and the actual libertarian platform. I am NOT a libertarian. I am an anarcho-capitalist. This is like the difference between a democrat and a socialist/communist.
Libertarianism is what we had in this country more or less from the begininning right up through 1913, minus the Civil War. That is what most Libertarians want to return to. I would gladly take a return to that level of spending. At that point, I would be too busy innovating to bother about reducing government spending from 2% of GDP to zero. I think there would be an exponential increase in every positive type of progress with the removal of those last few barriers, and if we were starting from whole cloth, it would thus be worthwhile to make the extra investment. A nation that went that direction would beat the libertarian US, in my opinion. I would certainly move there.
The simple fact is that the income tax was so riddled with holes back then that NO ONE paid the top rate, and many real wealthy paid no tax at all (hence the creation of the alternative minimum tax). Passive income, depreciation shielding, etc., etc. It is a huge fallacy to look at a simple chart of top tax rates and imply anything at all. You have to look at EFFECTIVE tax rates. Here's a more recent chart:
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=456
I'm sorry but that link didn't take me to any chart. Got a better link?
Google "historical effective tax rates" - it's the first hit.
It doesn't go back further than 1979
That's why I said a RECENT chart. See how the effective rate doesn't change much even though marginal rates come all the way down from 70% in 1979?
Pretty much shoots down your entire argument - no?
Wow. Just wow.
I really and truly hope you die. I really do. It is not often that I really and truly wish death upon a human being, but you just fucking earned it.
Well that certainly convinced me of something or other. Not sure what.
Oh yeah. It convinced me that you're a moron because your reaction to facts is to wish harm on others.
I don't want to convince you. I want you to die. You are a communist who wants to steal the world from anyone who has more than he does. You deserve nothing.
The funny thing is that I bet I have more money than you do.
A ridiculous comment.
Right. Because all sorts of independently wealthy people hang out on ZeroHedge during the day.
No, because I consider this sort of comment to be juvenile. "I have more then you do." You could have stated it like "I have plenty to lose under a high-tax regime, and still believe in it."
You'll note that I also called TM out on his comment, which I thought was equally childish. Your collective comments devolved from a legitimate debate to a couple of 12-year olds bickering.
I do bet that a lot of independently wealthy people hang out on ZH during the day. [Was that your point of above comment?]
Excellent, feel free to send it to me, then, if you want higher taxes for yourself.
No, I prefer you stay in poverty while hating yourself for being poor.
Ok, send it to someone else then. Someone "worthy". Perhaps Charlie Rangel?
TM, can understand your frustration and beliefs, and typically enjoy your posts. Not a fan of the wishing ill on someone - unless they are a member of the Federal Reserve, of course...