Re: how to compare living standards


"tonyp" <tonyp@xxxxxxxxxxxxx> wrote in message
news:dKKdnYUcfpBRcLXZRVn-vg@xxxxxxxxxx

"Jim Blair" <jeb@xxxxxxxx> wrote

According to your logic (i.e. "demand side thinking") ...


Jim, this "demand side thinking" is _your_ invention, not mine.

Hi,

I think it meaningful to divide economists into 2 classes: demand side and
supply side.

http://www.wanniski.com/ssu.asp

see for example lesson#1: the general concept.

I agree that there can be some situations where a
less extreme demand side claim can be made.
That is, that a shift from saving/investing to immediate
consumption (not 100% consumption, but "more than now")
would improve the economy.


Good. Please note that the way this shift gets encouraged at the national
level is deficit spending by the government. We've had plenty of that,
recently. How much more "improvement" can the US economy stand?

Which is why I say that today in the USA, saving, investment, and "supply
side" is more appropriate than spending, borrowing, "demand side".

But:
On an individual level, sure sometimes it is wise to
borrow to spend money now that you don't have.
I did that to buy a house and it was one of the
best "investments" I made in my life.


I believe you. Please note that your house is an actual physical asset,
not
something like a REIT, let alone a dot-com stock. It pays you a
_tangible_
dividend, in the form of shelter.

The valuse of that as compared to the rent I would have paid otherwise makes
the investment a good one many times over.

....It will presumably pay the same dividend
to the guy you ultimately sell it to. He _might_ pay you more than the
net
present value of that dividend for your house -- if he expects the next
buyer to do the same for him.

Or maybe he will just want a place to live?

....But, until a buyer pays you _something_ for
your house, your ROI has been some years of shelter, not your home's
"appreciation".

I don't appreciate my homes appreciation since that just raises my property
taxes, already high in Madison.
(but worth it or else I would move somewhere else).


So we see the issue the same way? In the USA today,
will that marginal dollar be better spent by the government
or by a mutual fund?


There is no question that "the government", as staffed _today_, is
hell-bent
on spending its resources foolishly.

So you agree with me?


Again, when those rich (i.e. high imcome) Liberals
protested their income tax cuts, they did so by
giving the money they saved in taxes to what they
considered to be a "good cause". A better use of the money.
And NONE of them gave any of it to the US treasury
(or at least none that I read of).

Can't you see the irony of that? None thought the government
would spend the money in the best way.
Is that any way to protest a tax cut?


Tell you what, Jim: let's rewrite the tax code so that when there's a
unified Republican government, only Republicans pay taxes, and when
there's
a unified Democrat government only Democrats do. I mean, if _you_ insist
on
saying silly things, why shouln't I?

???? How is my statement silly? I say the protesters were just making
Bush's point: that THEY know better ways to spend their money than he does.

But your idea IS silly. And the idea is to tax the OTHER guys, but not your
supporters and your base.

But FICA transferres money from those who might have
spent it or might have invested it, and gives it to retirees
who are much more likely to spend it immediately
than to invest it for long term growrh. I mean when you are
over 65, long term investments don't look as attractive
as they did when you were 40 :-(


Jim, if people had the grace to die shortly after retirement, we would not
have to worry about supporting them in their twilight years when they are
(by definition) no longer "producers" but exclusively "consumers". Alas,
our investments in medical technology, among other things, have resulted
in
a growing cohort of elderly "consumers". They _will_ consume without
producing, no matter where their income is coming from. The only thing
available for them to "consume" is part of the output of the "workers".

But they need not be supported primarily by a tax on the wages of US workers
excluding the highest wages.

They could be supported by the growth of the Global Economy.



But a few big winners can offset a lot of losers. Because losers are
limited to what was invested, but the gains of the winners are
essentially
unlimited.


"Offset"? In what sense?

The overall effect is estimated by adding the "gains" of the winners and
subtracting the losses of the "losers". "Offset" was my attempt to convey
that concept.

"Unlimited"? In what universe?

-- TP

"Unlimited" in the sense that while there is a limit to the losers losses
(the total that was invested), there is no such limit on the gains of the
winners. "Not-limited" does not mean "infinite". And maybe during the last
5 years the winners gains didn't exceed the losers losses, but I doubt that.
Because I think the overall economy is better now than it was then.



,,,,,,,
_______________ooo___(_O O_)___ooo_______________
(_)
jim blair (jeblair@xxxxxxxx) Madison Wisconsin USA.
This message was brought to you using biodegradable
binary bits, and 100% recycled bandwidth. For a good
time call: http://www.geocities.com/capitolhill/4834


.

Relevant Pages

  • Re: Refuting supply-side economics
    ... > sharks will get their money back one way or another. ... The US economy will be ruined when the loan sharks refuse to ... Both help a nation to increase its productivity in the ... The US benefit greatly from the British investments in the US ...
    (sci.econ)
  • Re: WAY OT: Gas-Gouging Greenspan
    ... but they do not preclude expansion. ... >>> expansion comes from borrowed money most of the time. ... >>after tax spendable dollars being used for expansion. ... > affecting an economy. ...
    (alt.sports.football.pro.ne-patriots)
  • Re: Early retirees try to deal with tax deferred retirement
    ... Good article, but it just touches the tip of the iceberg of a problem that many retirees are beginning to face, How to invest your tax deferred retirement fund. ... It gives more flexibility in investing and 20% is not automatically withheld in anticipation of the taxes due. ... As long as you keep your money in an IRA there's no taxes being paid! ... Our qwerty friend has bought into the argument that getting the government to leverage your investment is sufficient to offset the tax advantages that one realizes from after tax investments. ...
    (soc.retirement)
  • Re: Atheists: Americas most distrusted minority
    ... Jsoh, after I've excvhanged my money for the softweare, it became Bill ... Gates' money, and thus he can pass it on to his heirs, give it a way, or ... Its a valuable part of the economy when it belongs to Bill Gates. ... Sure, but the boat tax was a particularly dumb tax, and really, the ...
    (rec.arts.sf.tv.babylon5.moderated)
  • Re: Why do I smell bacon when Dems say "Stimulus"
    ... :are going to need a tax cut, ... :taxes cut permenent. ... :economy and burst the housing bubble. ... One have only look at the money flow chart to ...
    (sci.military.naval)