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Not to be too pedantic, but the $200B is Bezos, not Buffett. Regardless, taxing the weathy can feed poor children by literally funding programs like food stamp

Not to be too pedantic, but the $200B is Bezos, not Buffett. Regardless, taxing the weathy can feed poor children by literally funding programs like food stamps. The covid payments are effectively unfunded, and taxes are the primary source of revenue for the government We're going to need to pay for these programs somehow. I'd personally be pretty happy with a lot of inflation, give how much my house cost, but I dont think that that would be the best solution for the country as a whole.

candiodari 6y ago
I think the point is that the government makes money. They can spend whatever they want, they can literally name any number and spend it in dollars. They have been limited in spending by the rule that they have to loan money, not just spend made up money (after screwing up pretty badly this rule was introduced). But that still gives them trillions per year to spend. Therefore incoming dollars do not matter, taxes do not really matter. Which I think is the point that we were trying to make. So there is no justification in taxing "the rich" in any need for increased spending. This is further complicated that "the 1%" is an annual income of 500k, or an individual income of 250k. A lot of people on this site who don't see themselves as rich (but are) will be included, and will point out that this does not give a "rich" lifestyle in San Francisco. Taxing them so their income drops to, say 160k (down 30% or so) will cost them very directly in comforts, apartments, ... they will fight this tooth and nail. If you then look at the income that can be generated for the government you quickly realize that you need to tax at least the top 30%. You'll see that this will mean increased taxes (and think 70-80%) for any income over, say 90k per person, if you indeed want to increase taxes. I don't think many people will find this acceptable, because they cannot possibly maintain their lifestyles with such taxes. This will effectively mean anyone not in the 1% is limited to ~120k per year, down 30-40% from what they have now, 100 million voters. More than enough to massively swing towards whichever party opposes this. So the question becomes if this fight is really worth it, since it will not actually allow for increased spending ... Much easier for any party to force interest rates to zero and spend infinite.
- dnadler 6y ago
  Well, actually the Fed is responsible for the money supply, and is pretty independent from the rest of the government (as much as it can be these days, anyway). So the claim that the government can just print money to pay for anything they want is technically true, but fails to understand the nuance of the system. Further, there are consequences to injecting large amounts of money. Namely, inflation. The great "mystery" of the past decade is why inflation hasn't manifested alongside the various forms of stimulus from the Fed and Treasury. However, theoretically, and historically, printing money to pay down government debt will result in inflation which can be harmful if done carelessly or out of necessity (eg. being a forced seller). To your last point about forcing rates to zero, the same principle applies. This would happen via market action undertaken by the Fed (who again, is not concerned with government spending, that's not their mandate). Even if the Fed did act in concert with congress in the manner you describe, they would do so by purchasing bonds in the open market. This would again require the injection of more currency into the economy and provide further upward pressure on inflation. I should say that I definitely agree with your points regarding the politics.

candiodari 6y ago

I think the point is that the government makes money. They can spend whatever they want, they can literally name any number and spend it in dollars. They have been limited in spending by the rule that they have to loan money, not just spend made up money (after screwing up pretty badly this rule was introduced). But that still gives them trillions per year to spend. Therefore incoming dollars do not matter, taxes do not really matter. Which I think is the point that we were trying to make. So there is no justification in taxing "the rich" in any need for increased spending. This is further complicated that "the 1%" is an annual income of 500k, or an individual income of 250k. A lot of people on this site who don't see themselves as rich (but are) will be included, and will point out that this does not give a "rich" lifestyle in San Francisco. Taxing them so their income drops to, say 160k (down 30% or so) will cost them very directly in comforts, apartments, ... they will fight this tooth and nail. If you then look at the income that can be generated for the government you quickly realize that you need to tax at least the top 30%. You'll see that this will mean increased taxes (and think 70-80%) for any income over, say 90k per person, if you indeed want to increase taxes. I don't think many people will find this acceptable, because they cannot possibly maintain their lifestyles with such taxes. This will effectively mean anyone not in the 1% is limited to ~120k per year, down 30-40% from what they have now, 100 million voters. More than enough to massively swing towards whichever party opposes this. So the question becomes if this fight is really worth it, since it will not actually allow for increased spending ... Much easier for any party to force interest rates to zero and spend infinite.

dnadler 6y ago
Well, actually the Fed is responsible for the money supply, and is pretty independent from the rest of the government (as much as it can be these days, anyway). So the claim that the government can just print money to pay for anything they want is technically true, but fails to understand the nuance of the system. Further, there are consequences to injecting large amounts of money. Namely, inflation. The great "mystery" of the past decade is why inflation hasn't manifested alongside the various forms of stimulus from the Fed and Treasury. However, theoretically, and historically, printing money to pay down government debt will result in inflation which can be harmful if done carelessly or out of necessity (eg. being a forced seller). To your last point about forcing rates to zero, the same principle applies. This would happen via market action undertaken by the Fed (who again, is not concerned with government spending, that's not their mandate). Even if the Fed did act in concert with congress in the manner you describe, they would do so by purchasing bonds in the open market. This would again require the injection of more currency into the economy and provide further upward pressure on inflation. I should say that I definitely agree with your points regarding the politics.