Re: how to compare living standards


"tonyp" <tonyp@xxxxxxxxxxxxx> wrote in message
news:MOOdnbb3SIPKl4zZ4p2dnA@xxxxxxxxxx

"Jim Blair" <jeb@xxxxxxxx> wrote

How would the FICA's "lost money" be made up?
The same way the money "lost" to the treasury
because of the IRS IRA deduction is "made up".
Namely: unspecified ;-)


Arthur Laffer would no doubt deny that any revenue is _ever_ lost to the
treasury, since of course _any_ tax reduction _always_ grows the economy.
Among us grown-ups, however, there's nothing "unspecified" here.

Hi,

By "unspecified" I mean that there is no specified way that the money "lost"
to the treasury by the IRA deduction is made up. And there was also no
specific way that the proposed FICA reduction would be either.

As for whether or not, or just how much money the treasury "loses" by money
that is invested in individual IRA's, I agree that Arthur Laffer and tonyp
would probably have different numbers. The reality is that no one really
knows. Plus the "time shift" problem: money the treasury loses today may be
gained back in the future.

I say that when people invest in stocks and bonds rather than spend on
immediate consumption, economic expansion is enhanced which generates
revenue for both state and the federal governments. And even when the money
is invested rather than being collected by the US government, the economy is
enhanced. But you two probably don't agree.


Lost_revenue = Reduced_spending + Increased_borrowing.

to which I add another term +/- changes in tax revenue resulting from
economic growth.


The equation still holds even when a Bush, or a Reagan before him, makes
Reduced_spending a negative quantity.

But note that since Reagan lower tax rates are producing much higher tax
revenue.

As a nation, we do not save enough, period.

Er, which I would encourage more individual saving by making IRA's more
attractive, and more available to those with lower incomes.

....Shifting some of our saving out
of the "Social Security Trust Fund" and into "IRA"s does nothing to
ameliorate that problem.

That is not obvious to me. Do private companies make better use of money
than the US government does?

To save more we need to spend less.

OK

....That means, for instance, buying fewer
Chinese goods ....

???? We buy the Chinese made goods largely because they save us money.

...and instead investing in the Chinese factories that make those
goods. See the problem?

-- TP

"invest more"? As in put more money into an IRA?

As for reducing US imports, the problem here is not "China" but oil. The
most effective way to reduce the US trade deficit is to reduce our oil
imports. Like hydrogen powered cars and trucks burning H2 made from water
using nuclear or wind power.


,,,,,,,
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jim blair (jeblair@xxxxxxxx) Madison Wisconsin USA.
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