Re: Laffer Curve

From: Johnny Marcos (johnny5_at_yahoo.com)
Date: 07/02/04 

Date: Fri, 02 Jul 2004 16:40:27 GMT

The Trucker <mikcob@verizon.net> wrote in
news:cc402t02t06@news2.newsguy.com:

> "government is the enemy" mind set is caused by the fact that the
> people of the USA are not represented in the government of the USA.

There are more lawyers holding congressional seats than any other
profession - why aren't we voting in more common people? The voters can
change that if they want too - obviously they don't.

> This seems to say that war and other Republican crap causes inflation

War can cause a rise in prices where you have both the public and
military competing for the same goods.

> and that it would be better to tax than to just create money.

Yes, taxing makes the publics demand for the goods go down - the
military does not have to compete with the public - prices remain stable
and inflation does not hit the country.

> That is precisely what has been going on with each and every
> Republican administration and the latest one is the worst. It will be
> seen that the inflation (to the extent that it actually exists) will
> have been caused by this "back door" monetization and the blasting of
> the proceeds into the economy by military expenditures.

Ok. How do you as an individual investor suggest a citizen allocate 10K
in cash to keep from being hurt? Right now the holders of money are
getting NEGATIVE real interest rates - isn't this robbing the rich?

> It would be the same if the money was given to Willie the Wino. But
> at present inflation is being held in check by stomping all over wages
> and by moving the tax burden more and more onto wages and off of rent.

>From Krugmans new book:

Our analysis already tells us that when the price elasticity of demand
is much
higher than the price elasticity of supply, the burden of an excise tax
falls mainly on
the suppliers. So the FICA falls mainly on the suppliers of labor—that
is, workers—
even though on paper half the tax is paid by employers.
This conclusion tells us something important about our tax system:
namely, that
the FICA, rather than the much-hated income tax, is the main tax on most
families.
The FICA is 15.3 percent of all wages and salaries up to more than
$80,000 per year;
that is, the great majority of workers in the United States pay 15.3
percent of their
wages in FICA. Meanwhile, only about 20 percent of American families pay
more
than 15 percent of their income in income tax. So for about 80 percent
of families,
the FICA is Uncle Sam’s main bite out of their income

Krugman said the fica is the biggest tax burden on people then the
income tax - agreed.

> This, of course, is where I and Von Missus will part company. He
> wants to paint inflation as Satan incarnate because that is what the
> wealthy and the powerful paid him to do. Most pointedly "Inflation
> hurts people that have or who rely on a fixed sum of money".

My mother is on social security - I don't want her to be hurt - does
this make me an EVIL person?

> Inflation does not hurt those who have no money but as a secondary
> effect. If rent is controlled with a heavy tax then all productive
> persons will be winners in a climate of moderate inflation.

  From a
> Georgist standpoint if the price of land is held constant with a heavy
> tax on value, then all productive people will gain from inflation.

My mother is old, my grandmother even older - what do they gain?

> I am not a proponent of high inflation, but the amount of effort spent
> on demonizing inflation is just one more example of an economics
> profession dedicated to the benefit of the rich.

My mother lives in florida, and so does my grandmother - my grandmother
is currently in an old folks home - I have visited her and found she
lays in her piss for 2 or 3 days at a time - does inflation help her?

My mother needs energy to keep her AC going, her bill is going up, her
phone bill is going up, her tv cable bill is going up - how does
inflation help her?

It seems to me inflation is going to hurt the people LEAST able to do
anything about it - a young guy can go work harder or take on another
job perhaps - but my grandmother and mother - nope.

Relevant Pages

  • Re: Laffer Curve
    ... the US House of Representatives without first securing major funding ... > and inflation does not hit the country. ... >> and by moving the tax burden more and more onto wages and off of rent. ... So the FICA falls mainly on the suppliers of laborthat ...
    (sci.econ)
  • Re: Solution to Soc Sec problem
    ... >> Sure the US could give tax money to retirees. ... But Social Security IS funded by FICA and that does come chiefly from the ... > The usual Blair lie, ...
    (sci.econ)
  • Re: Salon: SS Reform: "Bushs Dirty Little Secret"
    ... >>that that increase is keyed to overall inflation, ... >the investment, and the amount of interest paid on the original purchase ... >tax, sales tax, so on and so on. ... fraction of total income, but earned income is taxed at a higher true ...
    (sci.econ)
  • Re: Voting Your Wallet..
    ... the ones regestered overseas avoid the tax, ... Obama will likely be blamed for the runaway inflation Dubya's Cabal ... Federal Reserve Notes out of currency because they read, ... is redeemable in Lawful Money at the US Treasury or at any Federal ...
    (alt.gathering.rainbow)
  • Re: Voting Your Wallet..
    ... the ones regestered overseas avoid the tax, ... Obama will likely be blamed for the runaway inflation Dubya's Cabal ... Federal Reserve Notes out of currency because they read, ... is redeemable in Lawful Money at the US Treasury or at any Federal ...
    (alt.gathering.rainbow)
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