6 ms·

The reason? Too much capital, not enough growth to invest in because demand isn't growing. Demand isn't growing because 60% of the population is barely scrapi

The reason? Too much capital, not enough growth to invest in because demand isn't growing. Demand isn't growing because 60% of the population is barely scraping by. How do you increase demand? Roll back the tax cuts to the wealthy who have nowhere to put that money except into speculation and bubbles. Redistribute it back to the working class in the form of tax cuts, credits, higher minimum wage, and social programs. They will immediately put it to work by spending on things they need to get by. Demand increases. That money trickles back up to the wealthy who receive the profits from that spending, and invest it back into the industries where demand is actually growing. Voila, more growth, fewer bubbbles.

Pxtl 9y ago
The problem is that conservatives find working-class-specific programs offensive, and liberals construct elaborate social programs where a hefty chunk of cash vanishes into overhead. Just give the money back to the working poor - if the problem is a shortage of money in the economy creating demand, then put the money directly into the economy by the most direct method possible.
- geon 9y ago
  coughUBI
  - VintageCool 9y ago
    cough EITC
    - geon 9y ago
      Wouldn't that be a "working-class-specific program"? My point was that UBI applies to everyone, an therefore is not specific to any group.
saint_fiasco 9y ago
Among the things that people can't afford and really need, the most common ones are healthcare and housing. The problem with giving people more money to stimulate demand for those things is that it only solves half of the problem. Healthcare is limited by the supply of doctors so no matter how much government subsidizes it, the amount of people who can be seen by the constant number of doctors will be the same. In practice, this means the price will increase every time you try to give people more money for healthcare. Housing is similar in that even if you give people money for new houses, everyone wants their house to be in a nice location and there are only so many houses that can fit in a constant amount of desirable real estate. Without reforms to medical school and medical residency programs, healthcare might never be affordable. Without reforms to zoning laws, housing might never be affordable. Without at least allowing for an increase to the supply of nice things, increasing the demand of nice things won't be very helpful.
- Nokinside 9y ago
  US spends significantly more money per capita to healthcare than other countries. US healthcare problem has nothing to do with lack of resources (human or financial resources). US could save money in healthcare while improving it by reorganizing the healthcare. Even wealthy people get worse treatment than they could because the way incentives work. https://www.reddit.com/r/medicine/comments/6addvo/the_wealthy_patient_dilemma/ https://www.reddit.com/r/medicine/comments/6addvo/the_wealth...
  - WhoIsSatoshi 9y ago
    healthcare sucks a lot more out of the customer in the US than elsewhere in the world, so the fact that the US spends more is combined with healthcare patients spending more money per capita in the US. Having experienced both, I can tell you that I am terrified of having a motorcycle accident in the US. Or breaking a leg.
    - Nokinside 9y ago
      There is this weirdly strict moral aspect of what someone 'deserves' in the realms of public policy. In private finances, deserving is not an issue at all. If pure cold economic calculation would be applied to public policy, it would become clear that healthcare is not just personal issue, good healthcare provides positive externalizes for all. Your neighbors good teeth are not completely unlike investing in a bridge or other public infrastructure. If someone stays healthy and can work full time 5 years more because he had free healthcare, he pays 5 years more taxes, generates more profits fro employer, and consumes less medical services during his lifetime.
autokad 9y ago
QE3 inflated the things in question, not 'tax cuts to the wealthy'. in fact, taxes have gone up on the richest and that bubble continued to inflate. if you want to make it about politics, (and if this is a bubble of bubbles), it was done under the fed under a liberal president - who claimed credit for its 'success'. when you put funny money in the market, tech booms, paper assets boom and investment in hard industry becomes less appealing. the investment in tech has failed to rise all boats. its only raising boats for some very select geographies, and perhaps that could have been changed if tech developed differently (less monopolies), but it didnt.
- bubbleRefuge 9y ago
  This is factually incorrect. No funny money is put in by QE. QE is an asset swap, treasuries for reserves, and it nets to zero. The goal of QE is to lower the price of money in hopes that people will borrow more but they are not. All of the lending/borrowing aggregates are going sideways and down. The reason that the stock market is up is the expectation that QE will someday work to bring get the economy growing faster, but it hasn't happened in 10 years. The only thing that will get this economy ( and the rest of the world) back to where it needs to be is massive deficit spending ala world war II. You need to physically put money into pockets. Tax cuts on middle class and Jobs( via large scale infrastructure spending) will do that.
  - abakker 9y ago
    I wonder when we’ll admit wholesale that interest rate and money supply just aren’t very good economic levers in the absence of fiscal policy? Re tax cuts, instead of tax cuts on the middle class, make wage increases tax deductible for corporations. As someone in the middle class, I don’t care what my rate is, I care what the take home is. Reward corporations for passing more money through to employees by lowering the taxes on their earnings.
    - diggernet 9y ago
      Wages are already tax deductible for corporations.
deleted 9y ago
[deleted]
raiyu 9y ago
Yes there is too much capital, after all the US printed over a trillion dollars to avoid the collapse of the financial industry. None of those banks except for two went bankrupt, which means that now you have an extra trillion dollars that will eventually funnel through the system. Well, look we are nearly a decade later from that moment so that money has gone through the system, aggregated usually with the 1% and then dispersed. Additionally the world continues to become more global. If you look at some of the main residential markets in America like NYC and Miami, you will see that a significant percentage of purchases aren't from US citizens, but instead, international buyers that are moving their money into a more secure asset offshore and away from their government. In Miami there is a lot of money from Russia and South America. In NYC it is a lot of money from China. Then consider that after the housing bubble popped it would only be natural that money would look for another asset class to invest in so it shifted to the stock market. Certainly there is speculation there, that's the nature of the stock market but the largest companies that have the majority of the growth are simply larger due to higher revenues. What made them successful five years ago are macro trends that are still playing out. As massive as Amazon is it's only a small percentage of overall sales, which still occur at retailers, however the macro trend of more sales happening online hasn't stopped so you are seeing that continuation. Apple could be argued is under valued, not over valued. Google is still continuing to grow. Sure, Tesla could be considered a bubble, but eventually it grows into the valuation or the irrational exuberance stops and the stock will decrease to it's real valuation. Similar to what happened to LinkedIn. But again, that is too small to really matter on the global scale. The question of reducing taxes to spur more demand, well that won't really work. Think of it this way, if you reduce taxes even 10% that isn't going to lead to more cars being bought. Sure things that you need like groceries and maybe making your rent, but you aren't going to be making massive purchases. That tax cuts would benefit the rich the most, because 10% of a $10MM salary means an extra $1MM of cash after you already have enough for savings, so that really does become discretionary spending money. But those people would again purchase the most expensive assets and drive up real estate prices. Also very unlikely that you could push through a tax cut for a single class or even two classes without a tax cut for the rich, otherwise it would be called socialism, which is misunderstood, but still hated and feared in America. These are just normal shifts of money moving depending on the barriers that it encounters. We all are exposed to inflation so money needs to be shifted as inflation is it's own version of having limited timeline. Leave the cash under a mattress and 50 years later be surprised by how much spending power you lost. If you look at the American economy manufacturing is only 10% of salaried positions and 80% is the service sector. So you are seeing how this plays out over time. The reality is that the world was never equal, and unless you want to move to communism where everyone has the same stuff, it will never be equal. As such there will be some winners and some losers. Now if you really want to reset this imbalance, it isn't about tax cuts for the poor, but instead massive taxes on the rich. That would then move those funds back to the government, they could focus on more infrastructure which is sorely needed, and it would be coming from the very class that can afford to lose that money. This would decrease some of the real estate prices, but that could lead to problems in building as well, which means that sector will lose jobs. The reality is that everything is interconnected, you can't change one thing without affecting everything else. But certainly if you want to tax those that have the most you could move forward. Plus, check out what the highest tax rate was on the largest income earners 80 years ago and be surprised by how high it was.
sol_remmy 9y ago
I like how you think comrade!
- geogra4 9y ago
  Keynesianism (or MMT) isn't socialism, bud.
gok 9y ago
> Roll back the tax cuts to the wealthy who have nowhere to put that money except into speculation and bubbles. This is pretty directly contradicted by the post. The real estate markets that have higher taxes on the wealthy are showing more bubbly behavior. Higher taxes on high earners may be a good idea but they’re not a solution to bubbles.
eighthnate 9y ago
> Voila, more growth, fewer bubbbles. It seems simple on paper. But the wealthy didn't get wealthy by giving away money. Asking the wealthy to hand back some of their "welfare" is going to be incredible difficult and unsuccessful. Think about it. It's easier to ask 1 million people to give up $1 each than it is to ask one person to give up $1 million dollars.

Pxtl 9y ago

The problem is that conservatives find working-class-specific programs offensive, and liberals construct elaborate social programs where a hefty chunk of cash vanishes into overhead. Just give the money back to the working poor - if the problem is a shortage of money in the economy creating demand, then put the money directly into the economy by the most direct method possible.

geon 9y ago
coughUBI
- VintageCool 9y ago
  cough EITC
  - geon 9y ago
    Wouldn't that be a "working-class-specific program"? My point was that UBI applies to everyone, an therefore is not specific to any group.

saint_fiasco 9y ago

Among the things that people can't afford and really need, the most common ones are healthcare and housing. The problem with giving people more money to stimulate demand for those things is that it only solves half of the problem. Healthcare is limited by the supply of doctors so no matter how much government subsidizes it, the amount of people who can be seen by the constant number of doctors will be the same. In practice, this means the price will increase every time you try to give people more money for healthcare. Housing is similar in that even if you give people money for new houses, everyone wants their house to be in a nice location and there are only so many houses that can fit in a constant amount of desirable real estate. Without reforms to medical school and medical residency programs, healthcare might never be affordable. Without reforms to zoning laws, housing might never be affordable. Without at least allowing for an increase to the supply of nice things, increasing the demand of nice things won't be very helpful.

Nokinside 9y ago
US spends significantly more money per capita to healthcare than other countries. US healthcare problem has nothing to do with lack of resources (human or financial resources). US could save money in healthcare while improving it by reorganizing the healthcare. Even wealthy people get worse treatment than they could because the way incentives work. https://www.reddit.com/r/medicine/comments/6addvo/the_wealthy_patient_dilemma/ https://www.reddit.com/r/medicine/comments/6addvo/the_wealth...
- WhoIsSatoshi 9y ago
  healthcare sucks a lot more out of the customer in the US than elsewhere in the world, so the fact that the US spends more is combined with healthcare patients spending more money per capita in the US. Having experienced both, I can tell you that I am terrified of having a motorcycle accident in the US. Or breaking a leg.
  - Nokinside 9y ago
    There is this weirdly strict moral aspect of what someone 'deserves' in the realms of public policy. In private finances, deserving is not an issue at all. If pure cold economic calculation would be applied to public policy, it would become clear that healthcare is not just personal issue, good healthcare provides positive externalizes for all. Your neighbors good teeth are not completely unlike investing in a bridge or other public infrastructure. If someone stays healthy and can work full time 5 years more because he had free healthcare, he pays 5 years more taxes, generates more profits fro employer, and consumes less medical services during his lifetime.

autokad 9y ago

QE3 inflated the things in question, not 'tax cuts to the wealthy'. in fact, taxes have gone up on the richest and that bubble continued to inflate. if you want to make it about politics, (and if this is a bubble of bubbles), it was done under the fed under a liberal president - who claimed credit for its 'success'. when you put funny money in the market, tech booms, paper assets boom and investment in hard industry becomes less appealing. the investment in tech has failed to rise all boats. its only raising boats for some very select geographies, and perhaps that could have been changed if tech developed differently (less monopolies), but it didnt.

bubbleRefuge 9y ago
This is factually incorrect. No funny money is put in by QE. QE is an asset swap, treasuries for reserves, and it nets to zero. The goal of QE is to lower the price of money in hopes that people will borrow more but they are not. All of the lending/borrowing aggregates are going sideways and down. The reason that the stock market is up is the expectation that QE will someday work to bring get the economy growing faster, but it hasn't happened in 10 years. The only thing that will get this economy ( and the rest of the world) back to where it needs to be is massive deficit spending ala world war II. You need to physically put money into pockets. Tax cuts on middle class and Jobs( via large scale infrastructure spending) will do that.
- abakker 9y ago
  I wonder when we’ll admit wholesale that interest rate and money supply just aren’t very good economic levers in the absence of fiscal policy? Re tax cuts, instead of tax cuts on the middle class, make wage increases tax deductible for corporations. As someone in the middle class, I don’t care what my rate is, I care what the take home is. Reward corporations for passing more money through to employees by lowering the taxes on their earnings.
  - diggernet 9y ago
    Wages are already tax deductible for corporations.

deleted 9y ago

[deleted]

raiyu 9y ago

Yes there is too much capital, after all the US printed over a trillion dollars to avoid the collapse of the financial industry. None of those banks except for two went bankrupt, which means that now you have an extra trillion dollars that will eventually funnel through the system. Well, look we are nearly a decade later from that moment so that money has gone through the system, aggregated usually with the 1% and then dispersed. Additionally the world continues to become more global. If you look at some of the main residential markets in America like NYC and Miami, you will see that a significant percentage of purchases aren't from US citizens, but instead, international buyers that are moving their money into a more secure asset offshore and away from their government. In Miami there is a lot of money from Russia and South America. In NYC it is a lot of money from China. Then consider that after the housing bubble popped it would only be natural that money would look for another asset class to invest in so it shifted to the stock market. Certainly there is speculation there, that's the nature of the stock market but the largest companies that have the majority of the growth are simply larger due to higher revenues. What made them successful five years ago are macro trends that are still playing out. As massive as Amazon is it's only a small percentage of overall sales, which still occur at retailers, however the macro trend of more sales happening online hasn't stopped so you are seeing that continuation. Apple could be argued is under valued, not over valued. Google is still continuing to grow. Sure, Tesla could be considered a bubble, but eventually it grows into the valuation or the irrational exuberance stops and the stock will decrease to it's real valuation. Similar to what happened to LinkedIn. But again, that is too small to really matter on the global scale. The question of reducing taxes to spur more demand, well that won't really work. Think of it this way, if you reduce taxes even 10% that isn't going to lead to more cars being bought. Sure things that you need like groceries and maybe making your rent, but you aren't going to be making massive purchases. That tax cuts would benefit the rich the most, because 10% of a $10MM salary means an extra $1MM of cash after you already have enough for savings, so that really does become discretionary spending money. But those people would again purchase the most expensive assets and drive up real estate prices. Also very unlikely that you could push through a tax cut for a single class or even two classes without a tax cut for the rich, otherwise it would be called socialism, which is misunderstood, but still hated and feared in America. These are just normal shifts of money moving depending on the barriers that it encounters. We all are exposed to inflation so money needs to be shifted as inflation is it's own version of having limited timeline. Leave the cash under a mattress and 50 years later be surprised by how much spending power you lost. If you look at the American economy manufacturing is only 10% of salaried positions and 80% is the service sector. So you are seeing how this plays out over time. The reality is that the world was never equal, and unless you want to move to communism where everyone has the same stuff, it will never be equal. As such there will be some winners and some losers. Now if you really want to reset this imbalance, it isn't about tax cuts for the poor, but instead massive taxes on the rich. That would then move those funds back to the government, they could focus on more infrastructure which is sorely needed, and it would be coming from the very class that can afford to lose that money. This would decrease some of the real estate prices, but that could lead to problems in building as well, which means that sector will lose jobs. The reality is that everything is interconnected, you can't change one thing without affecting everything else. But certainly if you want to tax those that have the most you could move forward. Plus, check out what the highest tax rate was on the largest income earners 80 years ago and be surprised by how high it was.

sol_remmy 9y ago

I like how you think comrade!

geogra4 9y ago
Keynesianism (or MMT) isn't socialism, bud.

gok 9y ago

> Roll back the tax cuts to the wealthy who have nowhere to put that money except into speculation and bubbles. This is pretty directly contradicted by the post. The real estate markets that have higher taxes on the wealthy are showing more bubbly behavior. Higher taxes on high earners may be a good idea but they’re not a solution to bubbles.

eighthnate 9y ago

> Voila, more growth, fewer bubbbles. It seems simple on paper. But the wealthy didn't get wealthy by giving away money. Asking the wealthy to hand back some of their "welfare" is going to be incredible difficult and unsuccessful. Think about it. It's easier to ask 1 million people to give up $1 each than it is to ask one person to give up $1 million dollars.