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Cliff Asness: "Nobody, Left Or Right, Really Thinks The Math Works, No Matter What They Say In Public"

Tyler Durden's picture




 

Originally posted at The American,

We Are the 98 Percent

The only way to finance a big European-style state is to have it paid for by massive taxation of everyone, mostly the middle class. Right now, we are avoiding honest debate on this fact.

The central issue of our time is the debate over the size and scope of government. Two unpleasant but undeniable mathematical truths limit the feasible policy choices. The recent sound and fury of the fiscal cliff follies in the end signified nothing because the resolution was in fact just a denial of both truths.

The first truth is that the current tax rates cannot support the promises made to middle-class Americans. The most unaffordable items in fiscal projections are Social Security for everyone and government-sponsored health care for the middle class. You cannot preserve these even with Draconian slashing of military, infrastructure, welfare, education, and other expenditures.

The second truth is that you cannot pay for the Life of Julia, or any vision of a cradle-to-grave welfare state, without massive and increasingly regressive middle-class taxes. The poor don't have the money to pay for a European-style welfare state, and the rich, rich as they are, don't have anywhere near enough.

Not only that, it's easy to tax middle-class assets and transactions — things like payrolls, sales, and real estate — but soaking the rich means taxing investments. Investments are complicated and can be restructured to minimize taxes. Also, investments are the lifeblood of economic growth. Raising significantly more taxes from the rich also requires higher marginal tax rates — and their rates are already quite high. High marginal rates distort the economy and yield less revenue than anticipated because they increase the rewards for legal and illegal tax avoidance.

That's not to say it's impossible to get more money from the rich, but it's tricky and past attempts have typically been less effective than forecast and often counterproductive. Moreover, even under the most optimistic assumptions, taxes on the rich — or taxes on businesses, financial transactions, or anything else aimed at the rich (and often hitting others) — will still not cover a large fraction of the costs of a European-style welfare state. Ask the Europeans — they’ve tried it all and failed.

To be in our political center today, you have to deny both these truths and pretend that if we sharpen our pencils and make a bunch of wildly optimistic assumptions, we can close a few tax loopholes, cut some waste from spending, and maybe nudge upper-income tax rates up a little, and continue merrily on the same big-and-growing-bigger government path without unfortunate consequences. This is a “balanced approach,” as it ignores both mathematical truths equally, but the denial of clear reality means this approach is doomed to fail.

Surprisingly, many progressive pundits are moving away from their traditional complaint that America’s tax code is too regressive, favoring the rich. They are starting to tell us, albeit only after an election mainly contested on these issues, the truth: to fund the European-style social welfare state which they advocate, we must tax everyone more.

For example, Ezra Klein, blogging for the Washington Post on December 7th, writes, “The need for tax receipts to grow underscores the necessity of finding an efficient way to collect them. Experts say that should include tax reform and new tax sources that take the pressure off the income tax, such as a value added tax or a carbon tax.”

Klein is mild compared to Eduardo Porter, who writes in the New York Times on November 27th, “Many Americans may find this hard to believe, but the United States already has one of the most progressive tax systems in the developed world” and “Taxes on American households do more to redistribute resources and reduce inequality than the tax codes of most other rich nations.” Mr. Porter, it is shocking to see you argue in the New York Times that the United States is a progressive paragon!  Those in the Occupy Wall Street movement must be surprised to learn that you, one of their standard-bearers, think the United States already does considerably more redistribution than Western Europe!

These pundits know the math. To achieve anything like the European-style entitlement state they advocate, we need to tax everyone a lot more, not just the 1 percent. Despite all the drum circles protesting the inequitable distribution of resources, the wealthy just don’t have enough. The middle class and even the poor must step up to carry more of the burden if this is our desired endgame.

In his November 27th op-ed, Porter also writes “The experience of many other developed countries suggests that paying for a government that could help the poor and the middle class cope in our brave new globalized world will require more money from the middle class itself,” and “Big-government social democracies, by contrast, rely on flatter taxes to finance their public spending.”

In a similar vein, Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities and a former economist for Vice President Biden, writes, "It's perfectly reasonable for the White House to begin collecting more revenue from folks who have done by far the best in pretax terms." But wait a moment for it — he then adds, "But ultimately we can't raise the revenue we need only on the top 2 percent."

Note the use of “2 percent,” a number the president himself has begun using more often. It is a small but telling evolution from decrying the “1 percent.” One wonders if the Occupy Wall Street protestors have corrected their signs to read “We are the 98 percent”? Are those in the 98th percentile already saying “They came for the 1 percent and I said nothing…”? According to the more honest progressive pundits above, it will not be long until the 50th percentile is saying it too.

If we take the logic of a Porter or Klein or Bernstein seriously — and we should — their prescription for taxes is nearly the opposite of the president’s public stance. Let’s say what Porter and others are saying but in plain English (or, failing that, let’s just underline a lot).

If we are to redistribute like Europe, we must tax like Europe. The middle class must pay more taxes and they must pay a larger share of the tax burden. The president, in contrast, is vowing to raise taxes on only the rich. One wonders if President Obama would have won the election if he had warned voters that “to pay for Obamacare, stimulus spending, increased regulatory oversight, and the rest of the big government wish list I believe important, we need to raise the level and share of taxes paid by the middle class”? One also wonders why more progressive pundits were not as clear about their goals and the necessities pre-election as they are starting to be now.

The choice the country faces is simple. We can have big government and the Life of Julia (at least for a while, but that is another essay), with everyone paying through the nose and the middle-class share of taxes rising not falling, or we can return to the American tradition of limited government, with everyone paying a smaller burden to the state, with relatively limited services for, and relatively light taxes on, the middle class. What we cannot have is the Life of Julia at no additional burden to 99 out of 100 of us. Nobody, Left or Right, really thinks that math works, no matter what they may say in public.

So what happens if we continue down the current path, with perhaps some small amount of revenue raised from some additional taxes on the rich? Remember, the only way to finance a big European-style state is to have it paid for by massive taxation of everyone, mostly the middle class. Right now we are avoiding honest debate on this fact, perhaps because those desirous of this change know the middle class would rebel if it saw the future bill it will have to pay. Instead, large government benefits are being continued and increased, and still new ones introduced, with little accurate discussion of who will ultimately pay.

What happens historically when benefits are bestowed without a bill also coming due is that we get hooked on them. Then, even when they become disasters not worth their cost, people are terrified to change them, as giving something up is indeed quite frightening.

Of course, as a byproduct of this growth in the state, many of us believe we also suffer a terrific erosion of liberty, free-enterprise, and individual responsibility and initiative.

Finally, after we become fully addicted to the latest increase in big government, the bill will ultimately be presented to everyone including, and in all likelihood over-emphasizing, the middle class and the poor. The people who were promised they would be untouched will see the largest proportional hikes. That’s exactly what has happened in Europe. We have seen this movie before, but this time we don’t need subtitles.

In other words, if we told everyone the ultimate destination right now, the country would likely reject it. But if built up in this piecemeal manner with benefits up front and the bill presented later, it can become reality.

The way to boil the frog of freedom is slowly.

We may, with open eyes, choose the reassuring security of big government with a far larger safety and subsidy net and far higher taxes for all — by no means just the “rich” but in fact more so on the middle class — and likely the sclerotic growth and dependency of Europe. Or we may choose the opposite. But we deserve an honest debate about this critical issue. A debate missing from the last election.

 

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Mon, 01/07/2013 - 15:51 | 3130400 francis_sawyer
francis_sawyer's picture

I vote for free shit from the treasury to be paid for by everyone else while I sit on my ass... But you'll also have to offer me some incentives to swing my vote...

Mon, 01/07/2013 - 15:56 | 3130425 trav777
trav777's picture

nevermind that a good portion of the "rich" work insane hours while the NOBLE middle class is out binge drinking and blowing off reporting for work. The people who complain about how they never get ahead are like the people who complain about how they can just never lose weight.  Even black car drivers in AFRICA of all places get this...

Mon, 01/07/2013 - 16:07 | 3130445 TruthInSunshine
TruthInSunshine's picture

2 + 2 = 5 (aka the "old" arithmetic is the enemy of the state & is terroristy).

 

Joint Obamney/Krugman/Military-WallStreet-Pharma/HealthInsurance-Banking Complex statement on our "economic" cure:

"We all know that the current level of [massive & debt accretive] governmental spending [and an incredibly bloated public sector along with a mammary gland-dependent bank-defense-healthindustry-WallStreet complex that is suffocating the private sector] is not the problem, nor is the problem that which the [dreadfully inefficient] governmental spending is used to [fail to] accomplish or [unnecessarily] purchase, but that our low level of taxation is the source of our ailment. If we raised marginal tax rates on the relatively few net-net taxpayers who remain amongst us to 90%, we'd raise enough additional revenue to reduce the increase in the national debt by 1% to 3% over the next 20 years."

Mon, 01/07/2013 - 16:22 | 3130532 negative rates
Mon, 01/07/2013 - 16:23 | 3130533 Zer0head
Zer0head's picture

happening Live NOW a Tanker has struck the BayBridge http://abclocal.go.com/kgo/livenow?id=8945116

Mon, 01/07/2013 - 16:26 | 3130541 negative rates
negative rates's picture

Did the editor die?

Mon, 01/07/2013 - 16:36 | 3130575 francis_sawyer
francis_sawyer's picture

Well that settles it... Pelosi & Feinstein need to get out a law BANNING all tankers & bridges...

Mon, 01/07/2013 - 20:11 | 3131174 Papasmurf
Papasmurf's picture

That'll buff out.

Mon, 01/07/2013 - 17:41 | 3130774 midtowng
midtowng's picture

Social Darwinism lives on in today's GOP, 100 years after it was declared dead.

Mon, 01/07/2013 - 19:46 | 3131128 Tango in the Blight
Tango in the Blight's picture

If you're rich and work insane hours you are either a penny pinching scrooge or an idiot. Your money should be able to buy labor that can lighten your workload. If it can't you're not rich.

Tue, 01/08/2013 - 00:56 | 3131853 mkhs
mkhs's picture

So why are the blue and green car drivers so less perceptive?

Mon, 01/07/2013 - 16:37 | 3130585 DoChenRollingBearing
DoChenRollingBearing's picture

Nailed it francis_sawyer.  Everyone one with half a brain or more knows this, but they vote these guys in anyway...

Mon, 01/07/2013 - 15:52 | 3130401 Fake Jim Quinn
Fake Jim Quinn's picture

He forgot the option the US has used for years: print, borrow, and kick the can down the road while the elite and the politically powerful groups suck at the government teat. Screw the children...it is their problem

Mon, 01/07/2013 - 15:53 | 3130402 nope-1004
nope-1004's picture

"It disturbs me that our country is going broke.  Stop spending foolishly ......  just don't stop sending me my unemployment / pension check."

 

Mon, 01/07/2013 - 15:52 | 3130404 hannah
hannah's picture

"The only way to finance a big European-style state is to have it paid for by..."....the us tax payer with federal reserve fiat. europe hasnt 'paid' for anything since before WW2.

Mon, 01/07/2013 - 15:53 | 3130411 Ying-Yang
Ying-Yang's picture

Nah.... just have the Treasury coin the trillion dollars coins.

Mon, 01/07/2013 - 16:10 | 3130492 Kitler
Kitler's picture

100% platinum and illegal to touch or assay by law under penalty of death.

The one with "Trust Me" embossed on it.

Mon, 01/07/2013 - 16:14 | 3130507 TruthInSunshine
TruthInSunshine's picture

The trillion FRN platinum coin should be engraved with Paul Krugman's likeness on one side, and Alfred E. Newman's likeness on the other side.

Mon, 01/07/2013 - 16:24 | 3130536 Kitler
Kitler's picture

In that case it should be embossed as follows:

"What, Me Worthless?"

Mon, 01/07/2013 - 16:17 | 3130520 Popo
Popo's picture

Hell, if that whole trillion-dollar coin thing actually worked, then why not print a few extra and we'll all be rich. 

Mon, 01/07/2013 - 16:43 | 3130605 Joe Davola
Joe Davola's picture

Save the platinum, use these instead:

http://www.youtube.com/watch?v=FjEmNRHwVxI

 

Mon, 01/07/2013 - 18:36 | 3130942 TruthInSunshine
TruthInSunshine's picture

I "coined" the concept for & name of the following fiat:

 

Krugmanrand: A gold colored powder-coated round, composed of 3% tungsten and 97% compressed sawdust, bearing the slogan "In Diocletian We Trust" and "To Infinity & Beyond!" on one side, alongside "CTRL+P," and having the other side enscribed with "What, Me Worry?" alongside an engraved likeness of one Ben S. Bernanke (Shakey McShakester).

Mon, 01/07/2013 - 15:55 | 3130416 asteroids
asteroids's picture

Amerika doesn't have a tax problem It has a spending problem It has had this problem for decades and refuses to deal with it. Eventually, the math catches up and someone must pay. Will it be the US citizen, Europe, China, I really don't know... I only know the end will come quick and it'll be awful.

Mon, 01/07/2013 - 19:15 | 3131062 Acet
Acet's picture

Yupes. All this bullshit about America not having enough money for European style social security is baloney.

It's very simple: stop spending so much money on the military and aim for a true defensive military rather than the wanabe imperial army that's only every used to prop-up a certain theological middle-eastern country that shall remain nameless and kill brown people so as to convince them to "open their markets" to certain well connected American companies.

As an upside, the end of the Industrial Military Complex would wipe out a lot of the "rich", 100% of which would be the corrupt, parasitical ones who make their money sucking from the tit of the state.

Next in line would be a cleanup of the Financial system. Lots of savings to be made in there and more parasitical "rich" taken to the cleaners (a process which would be accelerated by actually enforcing Securities Laws, which would result on the worse of the worse landing in jail and loosing everything through fines). As an added benefit, it would do wonders to reduce capital misallocation, deflating asset bubble and redirecting capital from gambling to real investement (today's rich don't invest in the sense of putting money into growing business opportunities, rather they gamble in the Markets - but with the unfair advantage of inside trading - and they pump up asset bubbles).

I'm sure we can come up with a lot more places to save money and stop the flow of wealth to the parasitical rich (I do believe procurement in the US Government is a joke).

At the end of all this government spending would be down, corruption would be much decreased (due to a lack of corruptors) and the remaining rich would me much more likelly to be the entrepreneurial types that bring true wealth to a country (and which at the moment are mostly being shafted by sleazy types with political connections).

Of course, this will never happen!

 

Mon, 01/07/2013 - 15:56 | 3130420 LetThemEatRand
LetThemEatRand's picture

"The second truth is that you cannot pay for the Life of Julia, or any vision of a cradle-to-grave welfare state, without massive and increasingly regressive middle-class taxes."

First, few are actually asking for that.  Most people just want to have some form of safety net.

Second, there are 400 individuals who have more total wealth than half the nation combined.  Much of that wealth was stolen, including by the creation of a massive police/military state funded by debt that was turned into cold hard cash for the top few.   The wealth of those few individuals measures in the tens of trillions.   If some of that wealth were taken back by properly recognizing the property rights of those from whom it was stolen, there would be abundant $$ to pay for reasonable social services.   Agree or disagree with that, but don't claim that massive and increasingly regressive middle-class taxes are necessary.  They are necessary only if you ignore where all the money went.

Mon, 01/07/2013 - 15:59 | 3130440 trav777
trav777's picture

Stolen?  Stolen from WHOM?  Who HAD IT that it was taken from them?

People don't want a safety net, you ignoramus, they want something for NOTHING.

I'd like to see what the saintly middle class EVER did to have had all that wealth that was supposedly stolen from them.

This the problem with all of you motherfking marxists, you conceptualize every inequality as some form of oppression.

Mon, 01/07/2013 - 16:20 | 3130526 dick cheneys ghost
dick cheneys ghost's picture

12 yr long, trillion dollars wars dont count, do they?

Mon, 01/07/2013 - 16:40 | 3130594 Cathartes Aura
Cathartes Aura's picture

especially when the VP of the "nation" was part of the revolving door corporate culture, CEO of Haliburton in his "off" years.

gov't embeds, that's where folks could start, though of course, it's much easier to hate the bennie-cardites.

Mon, 01/07/2013 - 18:14 | 3130856 Salon
Salon's picture

That much dynastic wealth is enough to influence and control our government. Most of it would have disappeared if we had let the banks fail. A healthy cleansing which allows a fresh start.

If people would stop at the 400 and go no further, then I say lets take half their wealth. It should have bern destroyed in the correction anyway.

Mon, 01/07/2013 - 18:34 | 3130927 secret_sam
secret_sam's picture

If you buy into the notion that taxation is theft, then *many* fortunes of our "great American industrialists" were stolen from the rest of the citizenry by a government that needed things like weapons and public infrastructure.

AT&T?  GE?  Ford?  Standard Oil?  Amtrak?

All paid for by plunder of the taxpayers and used as an excuse to redistribute wealth from the majority to the wealthy owners of those businesses.

Mon, 01/07/2013 - 16:04 | 3130469 Go Tribe
Go Tribe's picture

I might pay more taxes for Julia if she were really hot. But I'd want a new phone, so I could text her. And some of those SNAP cards as my swag for the lady.

Mon, 01/07/2013 - 16:18 | 3130503 CH1
CH1's picture

Most people just want to have some form of safety net.

What a load of crap. They want free shit. I spent way too many years working with these people.

Safety Net is how you sell the game to chumps.

Mon, 01/07/2013 - 16:36 | 3130580 NotApplicable
NotApplicable's picture

Anybody who wants a safety net may reconsider once they notice that its cords are the thing choking them.

Of course, that anyone is dumb enough to ask criminals for assistance in the first place...

Mon, 01/07/2013 - 18:17 | 3130874 Salon
Salon's picture

Yup. There are people who are doomed to shitty jobs for the rest of their life.

Genteel, idyllic poverty with food clothing shelter and healthcare paid for is a dream for them. They can always work a few hours a week for beer money or deal some drugs quietly on the side. Just enough to support their party habit.

I would do the same thing in their position

Mon, 01/07/2013 - 16:15 | 3130508 docj
docj's picture

First, few are actually asking for that.  Most people just want to have some form of safety net.

Bull. Shit.

"The Life of Julia" was the official campaign manifesto of the Democrat nominee for re-election to the office of President of the United Fracking States. You think he would have gone out there unless there weren't voting sheeple, numbering in the 10's of millions, already bleating for this? Seriously?

We in the US of A like us some Scandi-style social welfare state - we just don't like paying for it. So that'll be the problem for citizens yet to be born to figure out because Montel is on.

Mon, 01/07/2013 - 18:00 | 3130818 odatruf
odatruf's picture

Come on, LTER. Do you consider yourself a serious person or a bomb thrower?

If it is the former, then please tell us who among the 400 you mention gained their wealth via theft?  Looking at the Forbes 400 list (http://www.forbes.com/forbes-400/list/), I don't see bankster CEOs or other kleptocrats on there. Please isolate who you mean, rather than assert that "much" of it comes from that kind of rent seeking. I am sure there is some on there, but "much" is a bit, well, much.

And, while their wealth could be taken, ask yourself by what right it would be done?  Simply because it would bring it abundant $$?

And why can't one claim that massive middle class tax cuts are needed?  Isn't it that cohort that runs up the bills? Isn't it that cohort that demands benefit well beyond what they pay in?  Simply put, we can not contiue to allow the average person to get more than $300,000 in Medicare services in their post 65 life when they put in about $165,000 in present value funding.

I'll be the first in line with you to claw back ill gotten rent seeking. That goes for bankers, executives who used influence peddlers rather then the open bidding process to secure government contracts and anyone else who didn't get there by building a better mouse trap or offer a better service than someone else. While we are at it, I hope you'll join me in putting paid to those who handed out the goodies to connected friends while there were supposed to be working for us.

So what's it to be, LTER?  Will you respond?

Mon, 01/07/2013 - 15:55 | 3130421 Snakeeyes
Snakeeyes's picture

Proud to say that Cliff Asness took my mortgage-backed securities course at University of Chicago!

Mon, 01/07/2013 - 16:16 | 3130423 SgtSchultz
SgtSchultz's picture

Unless I am wrong, the use of baseline budgeting will see to it that the budget never will have year-over-year spending declines and will grow until self implosion.

Mon, 01/07/2013 - 15:56 | 3130424 q99x2
q99x2's picture

Fact is: Either grind your life away or join me at college. By getting involved in some extra-curricular activities you can stretch a PhD out to retirement age. That reminds me, time for my 10 mile jog along the sunny California coast.

Mon, 01/07/2013 - 16:39 | 3130590 NotApplicable
NotApplicable's picture

Well, unless you die the day after graduation, you're still quite fucked.

Mon, 01/07/2013 - 15:57 | 3130432 viahj
viahj's picture

which will win out, the MIC or the social welfare programs?  Europe had their choice made for them after WWII.  now, who will make that choice for the US?

Mon, 01/07/2013 - 16:34 | 3130571 seek
seek's picture

No brainer -- the MIC. They get cash they can give back to the pols -- social welfare programs don't send money upstream, and they only thing the have to offer is votes, a quick code update by Diebold fixes that issue.

Mon, 01/07/2013 - 15:58 | 3130437 centerline
centerline's picture

Is this stupid article day on ZH?  Wow.

Mon, 01/07/2013 - 16:43 | 3130604 NotApplicable
NotApplicable's picture

My thoughts too. I only clicked on the article to see who wrote this tripe. But wouldn't you know it, it's written under a psuedonym by some divide and conquer intelligence asset.

 

Mon, 01/07/2013 - 19:20 | 3131028 Ghordius
Ghordius's picture

And yet, note the novelty of someone advocating both spending less AND taxing more

I agree on the point that there is no frank discussion, and lots of partisan propaganda

Mon, 01/07/2013 - 15:58 | 3130438 youngman
youngman's picture

We just did vote for fee shit .....Obama won....the takers won...now we just have to wait unitl the rest of the world discards us....throws us out of the party like the kid who always shows up drunk to the party...they will stop taking us seriously...I think they have already quit buying our paper..we have lost a lot of credibility....and we are losing more every day..

Mon, 01/07/2013 - 16:13 | 3130505 Winston Churchill
Winston Churchill's picture

Bingo.

If the FedRes wasn't backstopping the PD's the auctions of UST's would

be no bid right now.As LoP points out,next go the supply lines.

Mon, 01/07/2013 - 16:53 | 3130641 Joe Davola
Joe Davola's picture

Bingo.

If the Fed didn't need to keep rates at 0 to avoid serious implosion (as we saw in the recent article on the effect of 1% change in rates)

seniors wouldn't be burning through whatever retirment savings they have

needing to keep jobs that 19-25 year olds should have

otherwise they need assistance (and legalized drugs)

so the revolution doesn't start

Mon, 01/07/2013 - 16:51 | 3130632 NotApplicable
NotApplicable's picture

"We just did vote for fee shit..."

Did you ever consider not voting for free shit?

I mean, just think of how hard it would be for them to steal all of the shit to give away if people merely stopped condoning it.

Mon, 01/07/2013 - 23:34 | 3131641 cranky-old-geezer
cranky-old-geezer's picture

 

 

TARP began the final stage looting of America.  Since then trillions of dollars have been "printed" and given to mega banks and the govt, which has escalated its looting to heights undreamed of even 10 years ago.  Deficits are looting, plain and simple.  An illegal tax.

This wide open final stage printing and looting will destroy the US dollar before much longer.  At some point USD will be rejected by the rest of the developed world, lose reserve currency status, and tumble fast after that.

Wall Street megabanks with trillions of bailout dollars sitting in Fed reserve accounts know a dollar collapse is coming, so they're quietly putting those reserves into things that will survive a dollar collapse, mainly the stock market, why stocks keep rising. 

They're doing the same thing PM "stackers" are doing, swapping dollars for tangible assets that will retain their value thru a currency collapse.

Mon, 01/07/2013 - 15:58 | 3130439 Hohum
Hohum's picture

What's this thing called "growth?"  As measured by GDP/total credit market debt it died in about 1970.  And it ain't coming back, whether tax rate is 0% or 100%.

Mon, 01/07/2013 - 16:00 | 3130446 trav777
trav777's picture

that's the year US oil production entered irreversible decline

Mon, 01/07/2013 - 17:03 | 3130672 Joe Davola
Joe Davola's picture

What would US fossil fuel production look like if ANWAR, Grand Escalante and numerous other exceptions never existed?

Sometimes I think setting aside fossil fuels may be crazy smart - we'll still have after the rest of the world's is burnt.  When people get cold, or can't Pin(terest), we'll see what their commitment to the environment is.

Mon, 01/07/2013 - 15:59 | 3130441 buzzsaw99
buzzsaw99's picture

...investments are the lifeblood of economic growth.

said the socialism for the rich parakeet.

Mon, 01/07/2013 - 16:01 | 3130454 trav777
trav777's picture

wtf do you think causes growth if not someone RISKING their own skin on something they hope earns a return?

Mon, 01/07/2013 - 16:10 | 3130486 centerline
centerline's picture

Risking someone else's skin for a return seems like a better deal to me.

Mon, 01/07/2013 - 18:02 | 3130827 odatruf
odatruf's picture

Socialized losses;privatized gain FTW.

 

Mon, 01/07/2013 - 16:17 | 3130515 CH1
CH1's picture

Wall Street investing is NOT the same as "someone risking their skin."

An investment in the local dry cleaner may be that, but Wall Street is a game of corporate fascism.

Mon, 01/07/2013 - 18:36 | 3130940 secret_sam
secret_sam's picture

It's usually "bullshitting money out of folks" and then gambling with it, if you want to be a bit more accurate about it.

Mon, 01/07/2013 - 16:01 | 3130457 Snakeeyes
Snakeeyes's picture

Cliff is right. The math doesn't work. Simply looking at the spending, entitlement and debt growth maps show it.

http://confoundedinterest.wordpress.com/2013/01/06/pennies-40-ton-trilli...

Mon, 01/07/2013 - 17:08 | 3130651 NotApplicable
NotApplicable's picture

But since it's the wrong question, analysis is moot.

Until we get back to the question, "Is theft by the elite criminal class under the guise of charity really the proper way to model a healthy society?" no solutions are forthcoming.

But since this question undermines the facade, it will NEVER be asked.

Mon, 01/07/2013 - 16:08 | 3130462 Meatballs
Meatballs's picture

While we're 'telling it like it is', the Fed continues selling out the country and shoveling it faster and faster out the back door. Anyone who's been in business for any length of time has seen and knows the symptoms of a failing 'enterprise'. This behavior is no different. Bring on the global collapse and let's get on with it. Continuing to watch this BS is slow motion is too much to bear for those paying attention. Can't wait to see the shock on everyone eles's face.

We also 'deserve' to see some semblance of the rule of law upheld but I'm not holding my breath- lmao. 

Mon, 01/07/2013 - 16:09 | 3130482 docj
docj's picture

Who knew that, in The Age of Obama, the likes of Ezra Klein and Eduardo Porter would be channeling Rush Limbaugh - who's been advocating (only somewhat tongue in cheek) that we "tax the poor" for about 20-years.

Kum-ba-ya, my lord. Kum-ba-ya.

Mon, 01/07/2013 - 17:11 | 3130688 NotApplicable
NotApplicable's picture

Well, knowing nothing about those two, I would've still bet on it.

Why? That's how sophists roll around the perimeter of the Memory Hole.

Mon, 01/07/2013 - 16:10 | 3130488 philosophers bone
philosophers bone's picture

Math doesn't work unless you monetize the debt.  Then, the math actually works, but nothing else does. 

Mon, 01/07/2013 - 16:10 | 3130489 Hobbleknee
Hobbleknee's picture

They're taxing 70% of my income in Sweden, and it's still not enough to pay for the welfare state.

Mon, 01/07/2013 - 17:05 | 3130675 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

We always need reporting from Europe.

Mon, 01/07/2013 - 16:10 | 3130491 mrktwtch2
mrktwtch2's picture

or another take the fed has sold 4 trillion worth of debt in the last 4 yrs with a weak dollar..when it rallys 50% from here guess what?? we get to payback the 4 trillon with only 2..not a bad scheme?? is it..ben the plan all along..

Mon, 01/07/2013 - 17:00 | 3130666 Salon
Salon's picture

Yes of course it's the plan.

Controlled devaluation and slow inflation.

There is no other way unless you prefer collapse and renewal

Mon, 01/07/2013 - 18:23 | 3130893 jmeyer
jmeyer's picture

Don't forget the next big tax, THE VAT.

 

Mon, 01/07/2013 - 16:10 | 3130493 DR
DR's picture

Man what is it with Zerohedge lately? It has gone from a great independent investment blog to one which just iterates political mishmash from various PAC sites.

 

I wanna learn how to make money, not prepare for the end of the world...

Mon, 01/07/2013 - 16:13 | 3130501 centerline
centerline's picture

Even better... you could learn how to make money in order to prepare for the end of the world.

Mon, 01/07/2013 - 16:29 | 3130549 Fake Jim Quinn
Fake Jim Quinn's picture

ZH is about a lot more than investments. ZH is trying to warn people in the USA that their freedom is being eaten away, boiling frog fashion. The politically connected groups and the the hyper-wealthy are benefitting, while the rest are the slaves and thankless. A warning well worth hearing again and again, even if only a few understand what is going on and can act on it

Mon, 01/07/2013 - 17:28 | 3130741 Pareto
Pareto's picture

+1  Can't hear it enough in my opinion. Keeps me grounded and aware of just how large the disparity is between the information being flogged on MSM  and the real information I glean off this site.  Should I have been long the market since Jan. 2?  maybe.  but my willingness to particpate is inversely proportional to the the degree of this disparity.  Until this changes, I am happy to sit it out, and stack rounds instead.  Besides, I have more fun.

Mon, 01/07/2013 - 16:31 | 3130557 Toolshed
Toolshed's picture

If the hedge funds can't make money in this market what makes you think you can? If you aren't a politician or insider of some sort, then it is your PATRIOTIC DUTY to lose money! Who do you think you are? Jamie (I like Dick) Dimon?

Mon, 01/07/2013 - 16:34 | 3130572 Poster_Boy
Poster_Boy's picture

I think the blog must have been sold by the creators to some third-party, most likely a Koch brother supporter who liked the conservative-mindedness of its followers. The problem is that instead of great anlaysis like the site had in 2009-11, it is now a political site that mainly targets the poor welfare seeker as if he was the problem and by just cutting welfare all our problems would be solved. Bullshit. You could get rid of welfare and unemplomyent entirely and it would have very little effect. The big problems like the banks, the defense contractors and multi-national corporations are just not acknowledged as problems by this site anymore. The real Tyler Durden is living the good life now and probably got a pretty penny for his creation (as he should have) but the site is not the same. it never will be.

Mon, 01/07/2013 - 18:22 | 3130887 Encroaching Darkness
Encroaching Darkness's picture

"You could get rid of welfare and unemplomyent entirely and it would have very little effect."  Great - let's do it! Uhh, HOW do you eliminate welfare, exactly? Same question for unemployment?

If you just chop all welfare & UE payments off, a lot of people will die, nearly immediately. Weaning people off welfare by work-fare was tried in the 1980s, and seemed to work. How did the welfare rolls come to rise again?

How do you eliminate unemployment? By reducing the size of government, the taxes it takes from the productive economy, and re-investing those revenues in productive businesses?

"The big problems like the banks, the defense contractors and multi-national corporations are just not acknowledged as problems by this site anymore." Hint: MIC stands for Military-Industrial Complex, a term coined by Eisenhower. Zh posters bitch about it all the time. ZH continually bashes banks, Goldman Sachs, Citigroup, Wells Fargo, all of them - what other ZH site have you been reading, which doesn't?

"most likely a Koch brother supporter who liked the conservative-mindedness" OHHH, I see now - you have the wrong website. Huffington-Post is down the hall and across the web, keep looking and you'll find it.

Good Luck!

Mon, 01/07/2013 - 22:39 | 3131541 Poster_Boy
Poster_Boy's picture

How does it feel to be so close-minded and not able to accept the simplest of criticism? The site was gold for years and has now descended into politics. That's all I said. If you don't see the change you havent been readin cause I have been here since the beginning.

Tue, 01/08/2013 - 15:56 | 3133836 Encroaching Darkness
Encroaching Darkness's picture

Troll, you fail to make your case. First, you aren't criticizing me - I am libertarian, as those who have read my posts over the last two years should have noticed. I gave examples - see "MIC" in comments upstream in this very thread. And you picked a side in the red state - blue state division: both red and blue parties have raised government spending for decades, and are trying to do so again. The ZH political bent is against BOTH - hating bankers, MIC spending, entitlement spending, endless deficits and debt - these aren't red-blue issues, as you seem to imply.

" Koch brother supporter who liked the conservative-mindedness": these are left-thinking talking points - and that's all they are. Whether you detest Koch Brothers (the villains of the Right, according to the socialists) or George Soros (the villain of the Left, according to the neocons) you are missing the point. Talking points are designed to delay ACTION - and action is needed now, whether it's cutting government spending, punishing financial fraud by bankers (see Robosigning, foreclosure fraud, MF Global, etc.), or reversing the slide of representative government into totalitarian rule (all nations).

The site hasn't descended into politics - politics has intruded (even further) into financial matters than it ever has been. There has always been political influence in finance, but now it's so pervasive you have to analyse the political action to make money. Those who bought GM bonds lost money because Barry O. warped settled bankruptcy law to favor his union friends - how can you make money in bonds if the rules can change to suit a political payoff? John Corzine isn't in jail, and doesn't look to be headed there, or even fined - how is that not a political payoff?

I am not close-minded; my eyes are open, and not beclouded by political maneuvers. How about you?

Mon, 01/07/2013 - 18:00 | 3130823 James-Morrison
James-Morrison's picture

Once the 800 ton Godzilla broadened it's reach into every facet of our lives, it's impossible to ignore it. 

Mon, 01/07/2013 - 18:26 | 3130904 jmeyer
jmeyer's picture

"I wanna learn how to make money"

 

First buy some tungsten and paint with gold colored paint and then advertise on Fox.

Mon, 01/07/2013 - 16:15 | 3130509 tooriskytoinvest
tooriskytoinvest's picture

Peter Schiff & Eric Sprott & El-Erian: We Are In The Biggest Ponzi Scheme Of All-Time. Get Real Money, Gold and Silver – As The Fed Will Not Stop Printing Money. Asset Prices Are Getting Even Farther Away From Their Fundamentals.

 

http://investmentwatchblog.com/peter-schiff-eric-sprott-el-erian-we-are-in-the-biggest-ponzi-scheme-of-all-time-get-real-money-gold-and-silver-as-the-fed-will-not-stop-printing-money-asset-prices-are-getting-even/

Mon, 01/07/2013 - 16:18 | 3130523 sansnobel
sansnobel's picture

In a world with a seemingly unlimited amount of money I dont really think paying for it by just printing it up is that bad of an idea. I mean look at it  !!!!  We are 5 years into the Central bank money orgy and the world goes right on without missing a beat.  It will be paid for with inflation not direct taxation.

Mon, 01/07/2013 - 16:27 | 3130524 Mercury
Mercury's picture

Remember, the only way to finance a big European-style state is to have it paid for by massive taxation of everyone, mostly the middle class.

Except that even Europe can't finance a big, European-style state for very long, even with a mostly free military.

Remember kids:

There is no free lunch.
Incentives matter.

Mon, 01/07/2013 - 16:33 | 3130563 AccreditedEYE
AccreditedEYE's picture

Well, no free lunch *except* for buying the dip Merc.

Tue, 01/08/2013 - 01:10 | 3131890 mkhs
mkhs's picture

When did we decide we wanted a European-style state?

Mon, 01/07/2013 - 16:26 | 3130540 Toolshed
Toolshed's picture

"soaking the rich means taxing investments, and problematically, investments are the lifeblood of economic growth"

Ok. So someone explain to me why taxing investments is taboo, yet taxing my income, which reduces my ability to consume and therefore REDUCES the need for the necessary investment to facilitate my consumption, is the chosen path. Seems a bit dishonest to me. And if you are going to whine about double taxation, don't bother. My income is double taxed, and more, every time I purchase a good or service, again reducing my ability to consume and the need for the relavent capital investments.

Anyone able to come up with a realistic explanation?

Mon, 01/07/2013 - 17:06 | 3130678 Salon
Salon's picture

There is no economically justifiable reason to tax labor differently than other income.

Asset prices will settle at an equilibrium level based on taxation. Growth remains the same, assuming all income from all sources everwhere is taxed the same.

And of course assuming the overall level of taxation is not so high as to produce noneconomic incentives but we arent even close yet.

Mon, 01/07/2013 - 17:54 | 3130803 Toolshed
Toolshed's picture

Better answer.

Mon, 01/07/2013 - 17:17 | 3130701 NotApplicable
NotApplicable's picture

Taxation is theft. So... take your paragraph, replace "taxed" with "stolen" and voilà, and suddenly it's obvious that the entire premise is MOOT!

As I keep stating today, if you can get people asking the wrong questions, then the answers DO NOT matter.

Mon, 01/07/2013 - 17:52 | 3130796 Toolshed
Toolshed's picture

Good answer, but wrong. Replacing taxing with stealing does not change a thing. My question now is why are they stealing so much of my income and yet they steal so comparatively little of the wealthy investor's income. Again.......WHY?

It is obviously a rhetorical question. We all know why......don't we.

Mon, 01/07/2013 - 16:39 | 3130545 linrom
linrom's picture

Yet another one perpetuating the myth that if you taxed the rich, that wouldn't amount to anything. WRONG!!!

In 2009 the top 25% of tax payers, paid $755 billion in taxes at an average rate of 14.7% of AGI.

Here is the link http://taxfoundation.org/article/summary-latest-federal-individual-income-tax-data-0

If you fix the rate at 35%-- which most people think the rich pay as implied by MSM---that would bring in $1.75 Trillion dollars alone-that's only accounting for top 25% of tax payers.

 

Here is another TAX tit bit: in 2009 the top 5% received $500 billion in tax CREDITS.

 

I know that some of my posts come as very banal and trite, but that's because I am sick of all the disinformation and misrepresentation of data and facts.

 

 

Mon, 01/07/2013 - 16:49 | 3130624 Zymurguy
Zymurguy's picture

No, you come off as assuming that the amount of money the government spends, borrows and promises in the first place is acceptable and that income and investment taxation is a legitimate directive of our government.  We must establish first what is the role of government in the first place, what it's enumerated powers are and what it's budget SHOULD be in the first place.  Then we can worry about HOW MUCH (if any) our incomes should be taxed to pay for it.

Mon, 01/07/2013 - 16:58 | 3130655 seek
seek's picture

The highest tax to GDP ratio every collected in the US via federal income tax was about 22%, right at the end of WW2.

If you think you'd maintain the same tax base moving rates to 35%, you're delusional. The US average income tax revenue to GDP for virtually its entire history is sub 20%. (This is essentially the data that supports the Laffer curve theory.) If you factor in state and local taxes, total taxes stand between 30 and 35% of GDP. There is not significant room to grow this without the tax base shrinking.

But let's say you can magically do this. Raise the rate on the top 25% of taxpayers to 35%, and bring in the $1.75T -- a $1T increase.

That doesn't even cover the current deficit! Seriously, you're moving the top quarter of the entire country into what was the highest tax bracket, and it doesn't fix it.

The argument isn't that taxing the rich won't amount to anyting, it's that it won't fix the problem. Until spending is cut, and far more importantly the gov't admits SS as it stands is a ponzi that would collapse without money printing -- the problem can't be fixed. GDP is 15T, tax revenues from all sources are ~5T, and governments are not only running deficits, the deficts are growing, and set to grow massively in the next 10 years due to SS and Medicare spending. Throw on top of this military spending that's a signficicant fraction of current SS spending, and you can't come up with any other conclusion that we're fucked until spending is cut massively -- on the order of 30% -- and not allowed to increase at all for decades.

 

Mon, 01/07/2013 - 17:05 | 3130673 NotApplicable
NotApplicable's picture

The fact is that you endorse theft as a beneficial social system. That alone is worth far more junks than you've yet to receive. All of your fighting concerning disinformation and misrepresentation of data and facts? Well, that's just you stupidly furthering the elite's divide and conquer strategies with your petty jealousy (no matter HOW justified it is "factually").

Quit being so fucking evil, and you'll find a lot more people will respect your opinion.

Mon, 01/07/2013 - 17:22 | 3130714 chunkylover42
chunkylover42's picture

that would bring in $1.75 Trillion dollars alone-that's only accounting for top 25% of tax payers.

ONLY the top 25% of tax payers?  Using your own link, I note that the top 25% of AGI earners made $66,000 and up in 2009.  If that is wealthy, it's news to a lot of people.  What you're talking about when you suggest to fix the rate at 35% is raising taxes on people well into the middle class, which is basically the same point Cliff is making.  I won't even get into the faulty assumptions you make about tax rates not influencing people's decisions to work when you assume you'll get $1.75 trillion if you crank the rate up to 35% for the top quartile.

Also left out of your comment is that that same top 25% paid 87% of federal taxes (despite having only 66% share of AGI), and that average tax rate of the 25-50% quartile was 5.6%.  That second quartile group paid $90 million in taxes, as compared to your $755 million for the top 25%.  The bottom 50% of taxpayers (HALF!) paid $19 million, or 1/40th of what the top 25% paid. 

Mon, 01/07/2013 - 16:30 | 3130555 AccreditedEYE
AccreditedEYE's picture

Hey Cliff, BTFD!!!

Mon, 01/07/2013 - 16:44 | 3130610 Zymurguy
Zymurguy's picture

There's only one way to solve the core problems we face in the U.S.

We need campaign finance reform - but congress will never vote themselves out of receiving the money they need to keep getting elected.

We need major tax law reforms - but congress will never vote themselves out of being able to manipulate the code and offer loopholes to special interests.

We need major foreign policy reform - but congress will never vote to pull back our troops or reduce the amount we spend on defense in any significant magnitude because they have personally invested in it.

We need major monetary structural reforms - but congress will never vote to pull powers away from the Fed' whom runs all the major banking and investment groups they depend on for their riches and influence.

You see, everything this country needs has been conscrtipted by congress and is not in their best interest to change.

Hence, it will never be changed under the existing status quo.

Therefore, we need some manner of tax revolution in order to force the elected representatives into making the neccessary changes our government needs.  It's the only (non-violent) leverage we have left.

After that, there's truly only one remaining option.

So, the wise and respected financial minds here... please devise a means to implement a tax revolution.  How can we cut off the food feeding the beast and make it easy for each corporation, small business and individual to join in should they choose to do what's right for our country?

 

Mon, 01/07/2013 - 16:49 | 3130616 reader2010
reader2010's picture

"soaking the rich means taxing investments. Investments are complicated and can be restructured to minimize taxes. Also, investments are the lifeblood of economic growth."

 

That's purely bullshit.  The fact is that the rich don't invest in real productions because they only speculate in financial markets with helps from their agents on Wall Street. I recommend the marginal tax rate on dividends and captial gains be rolled back to 93% , where it once was under the Eisenhower Administration.

Mon, 01/07/2013 - 16:53 | 3130637 Duke Dog
Duke Dog's picture

LMAO, not to add fuel to the divide and conquer meme, but these comments from backstabbed Big 0 supporters are hilarious:

http://fromthetrenchesworldreport.com/curl-obama-supporters-shocked-angry-at-new-tax-increases/30414/

jd.

Small sample:

"I know to expect between $93 and $94 less in my paycheck on the 15th,” wrote the ironically named “RomneyLies.”

“My boyfriend has had a lot of expenses and is feeling squeezed right now, and having his paycheck shrink really didn’t help,” wrote “DemocratToTheEnd.”

“BlueIndyBlue” added: “Many of my friends didn’t realize it, either. Our payroll department didn’t do a good job of explaining the coming changes.”

“Really, how am I ever supposed to pay off my student loans if my already small paycheck keeps getting smaller? Help a sister out, Obama,” wrote “Meet Virginia.” “Nancy Thongkham” was much more furious. “F***ing Obama! F*** you! This taking out more taxes s*** better f***ing help me out!! Very upset to see my paycheck less today!”

“_Alex™” sounded bummed. “Obama I did not vote for you so you can take away alot of money from my checks.” Christian Dixon seemed crestfallen. “I’m starting to regret voting for Obama.” But “Dave” got his dander up over the tax hike: “Obama is the biggest f***ing liar in the world. Why the f*** did I vote for him”?

Mon, 01/07/2013 - 17:27 | 3130736 krispkritter
krispkritter's picture

These are the same crybabies who had voters remorse in 2008. Fuck them and I hope they like the new deck chairs. 

Here's to gold-lined lifeboats!

Mon, 01/07/2013 - 18:39 | 3130948 Zymurguy
Zymurguy's picture

I guess the fucking socialists thought that by voting for him they were majically placed on a private list of people who wouldn't see a change to their payroll deductions?  Ponderous.

Mon, 01/07/2013 - 16:55 | 3130648 IamtheREALmario
IamtheREALmario's picture

Actual investment is no longer the lifeblood of growth. Fiat created out of thin air and derivatized bucket shop bets are now what people think of as investments.

However, true investments provide a return based on the creation of value from something of less value and do not depend on inflation or fraud to raise the price.

Mon, 01/07/2013 - 16:58 | 3130659 Salon
Salon's picture

The eternal desire to have one's cake and eat it too, hence history repeats

(first as a tragedy, then as a farce)

Mon, 01/07/2013 - 16:59 | 3130660 CharliePrince
CharliePrince's picture

why cant the middle class buy there own politicians and laws to protect them ????

Mon, 01/07/2013 - 17:21 | 3130710 NotApplicable
NotApplicable's picture

I guess there's just not enough of them?

Mon, 01/07/2013 - 20:23 | 3131210 secret_sam
secret_sam's picture

It's against the law for individuals to purchase politicians.  Only corporations can do that.  In exchange, they don't get to vote.  Maybe that seemed like a square deal sometime long past...

Mon, 01/07/2013 - 16:59 | 3130662 CharliePrince
CharliePrince's picture

<sic>

Mon, 01/07/2013 - 17:05 | 3130663 August
August's picture

"The way to boil the frog of freedom is slowly."

"Revenge is a dish best served cold."

- R. Montalban

(and by spending 59 years on a Green Card, the man appears to have had some sense)

Mon, 01/07/2013 - 17:15 | 3130696 Jeepers Creepers
Jeepers Creepers's picture

The problem is, the Left realy does seem to believe the math is irrelevant when you own the world's printing press.  And for a few election cycles, they might be right.  But the crash is going to be epic, and I almost blame our electorate more than our politicians. 

 

Tell voters that we can't afford entitlements like FHA, MediCaid, foodstamps, welfare, Social Security, Medicare etc, and see how long their career lasts.

Mon, 01/07/2013 - 17:18 | 3130702 michael_engineer
michael_engineer's picture

"Also, investments are the lifeblood of economic growth. "

I call bullshit on that. Unconstrained energy and unconstrained resource flows are the lifeblood and fundamental underpinning necessary for economic growth.

Mon, 01/07/2013 - 18:25 | 3130902 Salon
Salon's picture

How does that explain Africa? Or the rag head economies of the middle east that are dirt poor?

They have access to less energy per capita yet energy is still relatively plentiful worldwide. They face constraints other than the total level of world resources. Otherwise they would be caught up with us

Tue, 01/08/2013 - 01:25 | 3131922 Radical Marijuana
Radical Marijuana's picture

Resources are channelled through social systems of organized lies, operating organized robberies. Africa was a conquered continent, where the systems of lies and robbery were imposed upon it from outside, and thus, those systems are designed to transfer the value of the natural resources through to those who made and maintained the social systems. Energy resources do not have any human meaning outside of their flow through human systems. Africa is an example of how the ways that those resources are developed was done primarily for the benefit of people living outside Africa.

The fundamentals of natural resources ARE BASIC. However, those flow through human systems, which have a history. The social organization takes place through symbolic stories, backing up behavior. The primary social story with respect to natural resources is the monetary system. The monetary system operates through symbols. The ACTUAL global monetary systems are due to the history of imperialism, directed by international bankers, who were able to make money out of nothing, to then use to control the resources. Africa went from being militarily conquered to being monetarily conquered.

Therefore, wealth was extracted, and is still be extracted, since Africans do NOT control their own social systems. They were not able to evolve their own systems. They were forced to adopt alien systems. Therefore, despite the natural resource wealth of Africa, their social systems of organized lies, operating organized robberies, were primarily imposed on them from outside, and the ways that the African economy operates still does that, and therefore, does not benefit Africans.  Most of the world fits into the same ideas, because most of the world was colonized, and forced into the international banker's systems, whereby those who can make money out of nothing, as debts, are able to control the natural resources of the planet.

Mon, 01/07/2013 - 17:37 | 3130765 Sandmann
Sandmann's picture

The United States has a very expensive Welfare State but it is not organised the same way as in Europe where taxes on gasoline pay a large part of the cost and Social Security Taxes are not tax-deductible and Employer-funded Healthcare is taxed as income. It just happens that the US runs VA Hospitals, County Hospitals, Medicare, Medicaid and programmes that are as socialised as in Europe but organised differently and funded by Debt. Americans do not pay taxes for their living standards just as they did not pay taxes for Vietnam but simply used the Bretton Woods System to transfer the costs to other countries until 1971 when the strains on the Dollar became too much. Now no country can afford what it has - the Banks need everything

Mon, 01/07/2013 - 18:28 | 3130918 Salon
Salon's picture

USA! USA! USA!

Can't touch this!

It has been good to be an American. I am so grateful.

Mon, 01/07/2013 - 18:46 | 3130977 Salon
Salon's picture

Oh wait....

You said now the banks need everything now?

Uh oh

Mon, 01/07/2013 - 17:59 | 3130820 dark pools of soros
dark pools of soros's picture

and of course all these benefits just go up in price regardless of market factors since they have a steady supply of taxpayer promises... hey milk doubles?  then increase foodstamps right away..   hey you trying to earn a paycheck making $40 grand??  no raise for you!!! except in your taxes!!!

 

 

Mon, 01/07/2013 - 18:33 | 3130925 The Heart
The Heart's picture

"The choice the country faces is simple."

Yes it is. All we have to do is stop ALL the imperialistic war expenditures.

Backing up a little, why is it that the subject of cutting 90% of the military budget IMMEDIATELY never comes up on these talking puppet shows? Why do we not hear this from the supposed leadership in this country? It is hardly even discussed here. Seems to be the most avoided subject matter out here.

 
Has anyone ever done a study about how much could be cut by not supporting 800 military bases and those countries economies that host them, and instead spending all that money in the USA? How much more could be saved by bringing ALL our troops HOME to spend all their monies here too? What kind of impact would that have on the economy? Would it stave off the well  planned crash and multiple false flag calamities? Could it stop all the possible insanity that is coming along withthe Ides of March?

https://en.wikipedia.org/wiki/Ides_of_March

Yes the choices are plain and simple. Stop all the warmongering and the rottenchilds empire of the money god, follow the Iceland template, forgive all debts, or make those who borrowed the money to pay for the illegal wars responsible for the loans, not the American peoples tax money, and shazam!...all fixed! Heck, those bushes alone could pay off all the loans they took from the chinese and japanese alone.

Easy peazy...take it Kesey...lemon squeezy!

Mon, 01/07/2013 - 18:50 | 3130994 ramacers
ramacers's picture

paid for , essentially, through the barrel of the gun.

Mon, 01/07/2013 - 19:07 | 3131041 Bazza McKenzie
Bazza McKenzie's picture

"The only way to finance a big European-style state is to have it paid for by massive taxation of everyone, mostly the middle class."

Flawed assumption to start withIt is simply impossible for any country to "finance a big European-style state".  Why do you think Europe is now imploding, like the US, after devouring most of its production capacity for short term consumption?

Mon, 01/07/2013 - 19:22 | 3131083 ian807
ian807's picture

investments USED TO BE the lifeblood of economic growth

Then all production was moved offshore. The end.

Mon, 01/07/2013 - 19:27 | 3131098 ian807
ian807's picture

If we are to redistribute like Europe, we must tax like Europe.

 

Or how about this, we stop funding NATO. In fact, let's stop spending 19% of the USA's budget on militarily protecting Europe, Asia and everyone else. If they want protection, let them pay us. Make the military a cost center for THEM, not the American taxpayer. There should be plenty to redistribute after that.

Mon, 01/07/2013 - 20:19 | 3131194 nmewn
nmewn's picture

"There should be plenty to redistribute after that."

Änd who (or what) will be in charge of the redistribution?

Tue, 01/08/2013 - 12:12 | 3133023 ian807
ian807's picture

Who does it now?

Mon, 01/07/2013 - 19:54 | 3131141 kito
kito's picture

clifford the big red quant must be shaking in his algorithms...the boy got hammered in 2008, imagine what a deflationary collapse will do to his mathematical formulas...

Mon, 01/07/2013 - 20:10 | 3131171 knowless
knowless's picture

carbon taxes are asinine, as the burden would still fall on the urban/suburban poor, who rely on packaged foods absent their ability to produce any for themselves, you can't avoid industrial production as a family in an apartment in an industrial city, or cars in a sprawl, grow some tomatoes out your window maybe, plant an apple tree in the side yard, but that wont feed your family for a day.

maybe i'm misunderstanding the direction though.. and the VAT just cuts merchants.. it all sounds like encroachment.

the system/infrastructure was not developed for long term livability. everything now is just patches...

Mon, 01/07/2013 - 20:26 | 3131214 secret_sam
secret_sam's picture

Rural/suburban folks use a lot more energy per capita than the ultra-densely packed urbanites.  So you're mostly wrong on that.

Mon, 01/07/2013 - 21:14 | 3131363 Papasmurf
Papasmurf's picture

Carbon credits are just a scheme to trade worthless non-assets on Wall $treet.  It's will cause more flow of money from those who can least afford it to those who have too much already.  Additionally, carbon credits are nearly perfectly supply inelastic, so the scheme is guaranteed to cause a crisis.  Crisis is the intent.

Mon, 01/07/2013 - 20:23 | 3131208 QQQBall
QQQBall's picture

We could go back to the good ol' days if we weren't so far underwater

Mon, 01/07/2013 - 21:33 | 3131376 spooz
spooz's picture

Citizens of most developed countries demand more services as their countries become richer. A recent story in the New York times looked at how the US is different:

"Alberto Alesina, an Italian-born economist at Harvard, contrasts American individualism rooted in the belief that effort brings success with Europeans’ belief in state redistribution — born of Europe’s long history of inherited wealth. Americans who think they have a fair shot at striking it rich vote against high taxes on their expected future wealth. Europeans who believe wealth is mostly a matter of luck and connections are less resistant to paying taxes for collective welfare.

Support for taxes also depends on how the money is spent. In Italy and throughout Western Europe, every time a voter goes to the doctor, he or she sees taxes at work"

IMO, more people are starting to see how wealth in the US has become more a matter of luck and connections than hard work, and will demand the kind of services, like universal health care, that other developed countries take for granted.  The fact that many of today's economic royalists made their money off gaming the financial system is another reason the concept of fairness has taken on a new meaning. If creating financial bubbles is what "investment" and "growth" are all about, maybe we should take a closer look at the concept of growth.

http://www.nytimes.com/2012/08/15/business/economy/slipping-behind-becau...

 

Mon, 01/07/2013 - 21:41 | 3131421 rejected
rejected's picture

Mentioned everything except bringing the production back home along with the jobs. Everyone says thats impossible... I guess if everyone says it's impossible then it is....

Tue, 01/08/2013 - 01:11 | 3131892 Radical Marijuana
Radical Marijuana's picture

There is no way that an "honest debate" is possible, since that would have to begin with the human ecology questions, which are the context of the political economy questions. Our systems are designed to divorce reproduction from production: how many people, living what kind of life?

The ways that those question have actually been answered in the past was through conflicts, resolved by violence, which meant that those who were the best at deceits ended up prevailing ... which gradually produced the world we live in today, where what made War King, then made Fraud King.  Our entire financial system is based on the runaway fraud of privatizing the power to make money out of nothing, as debts, and those who gained that power are now so totally dominant that there are no practical solutions to that political problem. Therefore, these kinds of discussions about taxation are too superficial. To actually answer these kinds of questions, one has to recognize that taxation is robbery, and that power to rob has been more than 99% privatized already, while 99% of the people do not understand that, and do not want to understand that.

Those who did that, and understand that, HAVE a well established plan to deal with the REAL PROBLEMS. They are going to deliberately start genocidal wars, and impose democidal martial law.  The only genuine alternatives would require radical paradigm shifts in everything from militarism to the monetary systems, which faced the central facts that money is backed by murder, and taxation is robbery. However, since those realities have already been more than 99% privatized, in ways that more than 99% of the people do not understand, and do not want to understand, the REAL "solutions" are that there will be collapses into chaos, and psychotic breakdowns of the established systems.

In theory, there could be radically different taxation systems, but NOT as long as the fundamental fact that taxation is robbery is deliberately ignored, and especially NOT as long as the ways that those sovereign powers have already been more than 99% privatized is also ignored. Those who actually control the powers of sovereign states do so because they were the best at being dishonest, and backing that up with violence. Their morbid social habits are to do that even more than before. The morbid social habits of those to whom that will be done are to do nothing effective to resist it. Therefore, the runaway fascist plutocracy juggernaut has a "solution" to the real problems, by turning most of the world's population into the road kill of that runaway system.

Since the ONLY genuine alternatives MUST be based on alternative murder systems, and death controls, or else they are nothing but more false fundamental dichotomies, and impossible ideals that will backfire even more badly, what is almost guaranteed to happen is NOT enlightenment regarding human ecology and industrial ecology, and natural ecology, but rather, the continued runaway social insanities of all those things being organized through huge lies, backed up with lots of violence, where the violence can not make those lies become true, but only drive the entire established system to become increasingly insane. Thus, the end result of these kinds of bogus debates (which do not really happen) are hermetically sealed absurdities, which deliberately do not address the central social facts, that a tiny ruling class have already captured control of the sovereing powers to rob and to kill, due to almost total privatization of everything, while the vast majority of people just go along with that.

The REAL human situation is a tiny group of people who have habits to act like Vicious Wolves, and a large majority wo have habits to act like Zombie Sheeple. Therefore, the REAL solutions will probably be much more of that, going utterly mad, and starting irrational wars, along with martial law, so that NONE of the kinds of public debates discussed as being what should happen in this article will ever actually have a change to happen, since, instead, everything will be short-circuited by the runaway out of control triumphs of fraud, backed by force, preempting politics, with its own imperatives.

It is IMPOSSIBLE to make the current numbers add up within any sane solution set, since the numbers are nuts, since their basis is the runaway triumph of fraud, backed by force, whereby the sovereign powers of states to rob and to kill have effectively ended up almost totally privatized, and controlled by tiny elites, which are able to dominate almost every aspect of every significant social institution. IF there was going to any sane public political debates, then it would have to be based on facing the facts that there IS, and MUST BE, some murder system, which backs up the money system. It would have to be based on facing the facts that the debt controls depend on the death controls.

Taxation can not be discussed in isolation from human and industrial ecologies, or the overall natural ecologies, EXCEPT inside of our current systems, which are totally dominated by the biggest bullies' bullshit social stories, being the runaway triumphant frauds, backed by force, which are the actual systems that surround us. Saner public debates would have to admit that sovereign powers have been almost 99% privatized, because 99% of the people acted like political idiots, which allowed that to happen, because they could not effectively resist that from happening.

There are no reasonable grounds to expect a series of political miracles like that could happen. Therefore, the most probable futures are going to be the continued exponentially accelerating rush of the currently established systems, which means that the frauds backed by force will go insane on an even more astronomically amplified scale, in the form of genocidal wars, along with democidal martial law. The ONLY genuine alternatives MUST be radically different murder systems, operating radically different death controls. Although those are theoretically possible, they appear to be politically impossible from any practical point of view.

The idea that we could massively tax almost everyone is just more madness! Taxation is robbery, backed by murder. Massive taxation is massive robbery, backed by massive murder. I.e., genocides and democides. The only REAL ALTERNATIVES are to do that better, through a greater use of information, and a higher consciousness about that.  There is no sane way to avoid the questions regarding what kind of murder system, and death controls, should be, in order to actually maintain whatever kind of money system, and debt controls, that we think we should have.

When the public debates openly admit that, and politicians start telling people their answers to those basic questions, then I would believe there was some hope for a rational public debate about the issues raised in this article above. However, I would expect the chances of that happening are close to nil. Instead, the runaway recklessness of resolving those real problems through the means of maintaining the maximum frauds, backed by force, appear to be, by far, the most probable future scenarios. In that case, whatever we think we "should" debate will be trumped by the actual social realities collapsing into chaos, as genocidal wars, along with democidal martial law, preempt everything else, and take over, to provide their real solutions to what the murder system and death controls WILL BE ...

Tue, 01/08/2013 - 01:15 | 3131905 mkhs
mkhs's picture

When did we decide we need an European-style welfare state?

Wed, 01/09/2013 - 04:33 | 3135586 lmile61
lmile61's picture

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