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This is in itself is very short in analysis. What do you think people do when they get more money? They spend it. If they don't directly spend it either by cas

by whb07 9y ago

This is in itself is very short in analysis. What do you think people do when they get more money? They spend it. If they don't directly spend it either by cashing out, borrowing against it, etc. The fund manager controlling that savings fund will deploy some of that capital and put it to work. If the money is saved and then put to work like just established, then it becomes a multiplier. If the money is taken as a tax and spent by the government it doesn't become a multiplier. Take $10 sitting in savings. It can be spent/invested buying a good and that circulates to all the intermediaries and suppliers around the economy. That is not what happens when you tax Peter to pay Paul.

lovich 9y ago
Have you ever heard of junkies breaking into empty houses and stripping all the copper wiring out to sell at scrappers? It destroys 10s to 100s of thousands of dollars of value in the form of a completed home to get the scrapper a few hundred at most. If you dont think that companies are capable of doing the same sort of thing to society but at a larger scaled I don't think we can have a discussion on it. Not every transaction is zero sum at worst and growing the pie at best Also, you're saying what do people do with the money "they spend it", but when the government takes the money and uses jt, that just dissapears? I actually believe that can happen because I think individuals/corporations/governments can engage in destructive actions but the way you are arguing it is talking out of both sides of your mouth. When the government spends money it goes to people too
- whb07 9y ago
  I don’t know anything about junkies. But you’re missing the point, taxed money doesn’t come from creation rather than from someone else directly. Assume an economy valued at $100. If you taxed it and passed that money to another party, it’s not going to grow the $100 at all. Because all you’re doing is shifting that ownership of that money around and in between steps losing some to intermediaries. So taxing $10 and passing it around is really some value less than $100. Meanwhile that $100 could be used to grow to $300 and everyone is vastly better off. Now these are extremes, if you took some extreme tax like 90% then the whole thing falls apart and you have the state running things and we know how that goes. Same for the opposite side, at 0% tax then things like national defense and the like wouldn’t be supported and we’d have things like other nations/parties trying to invade etc. Clearly there’s a middle ground but I’d say it’s definitely not at the current ratio of tax burden which is what 30% roughly of GDP? Might be more with future liabilities
  - lovich 9y ago
    You are still valuing all government actions at zero dollars. When the government takes ten dollars of tax money and then spends it on a plane, how is that purchase different than if Delta spent 10 dollars on a plane? It's still a transaction and it goes into the economy to create something. On the flip side youre also valuing all private transactions as being a multiplier. How is it a multiplier when a monopoly just charges higher prices one day with no improvement to their product? That's just extracting money out with no equivalent increase in value, which does not make it a multiplier
    - paulddraper 9y ago
      whb07 is not valuing all government actions at zero dollars. They are valuing all government actions at substantially less than the original value in private hands.

by whb07 9y ago

lovich 9y ago

Have you ever heard of junkies breaking into empty houses and stripping all the copper wiring out to sell at scrappers? It destroys 10s to 100s of thousands of dollars of value in the form of a completed home to get the scrapper a few hundred at most. If you dont think that companies are capable of doing the same sort of thing to society but at a larger scaled I don't think we can have a discussion on it. Not every transaction is zero sum at worst and growing the pie at best Also, you're saying what do people do with the money "they spend it", but when the government takes the money and uses jt, that just dissapears? I actually believe that can happen because I think individuals/corporations/governments can engage in destructive actions but the way you are arguing it is talking out of both sides of your mouth. When the government spends money it goes to people too

whb07 9y ago
I don’t know anything about junkies. But you’re missing the point, taxed money doesn’t come from creation rather than from someone else directly. Assume an economy valued at $100. If you taxed it and passed that money to another party, it’s not going to grow the $100 at all. Because all you’re doing is shifting that ownership of that money around and in between steps losing some to intermediaries. So taxing $10 and passing it around is really some value less than $100. Meanwhile that $100 could be used to grow to $300 and everyone is vastly better off. Now these are extremes, if you took some extreme tax like 90% then the whole thing falls apart and you have the state running things and we know how that goes. Same for the opposite side, at 0% tax then things like national defense and the like wouldn’t be supported and we’d have things like other nations/parties trying to invade etc. Clearly there’s a middle ground but I’d say it’s definitely not at the current ratio of tax burden which is what 30% roughly of GDP? Might be more with future liabilities
- lovich 9y ago
  You are still valuing all government actions at zero dollars. When the government takes ten dollars of tax money and then spends it on a plane, how is that purchase different than if Delta spent 10 dollars on a plane? It's still a transaction and it goes into the economy to create something. On the flip side youre also valuing all private transactions as being a multiplier. How is it a multiplier when a monopoly just charges higher prices one day with no improvement to their product? That's just extracting money out with no equivalent increase in value, which does not make it a multiplier
  - paulddraper 9y ago
    whb07 is not valuing all government actions at zero dollars. They are valuing all government actions at substantially less than the original value in private hands.