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Chicago professor: It's tough to get by on $250K!

Discussion in 'Sports and News' started by Dick Whitman, Sep 24, 2010.

  1. doctorquant

    doctorquant Well-Known Member

    You have to get deserved out of this. No one deserves a nanny or a lawn man or anything ... the simple fact is that robust consumer spending is, on the margin, the heartbeat of our economy. And those affected by the expiration of these tax cuts account for a bit more than 25% of consumer spending. Like it or not, the economy's better when those folks are spending. And the risk being run in letting these tax cuts expire is that they'll stop spending, at least on the margin where it really matters.
     
  2. dreunc1542

    dreunc1542 Active Member

    Yes, things are so hard for the rich. Woe is them.

    There was a great series in slate about the growing divergence between the rich and the poor: http://www.slate.com/id/2266025/entry/2266026/.
     
  3. cranberry

    cranberry Well-Known Member

    As long as corporate profits increasingly outpace corporate job creation, I have a problem with extending any more tax breaks to them. We need to find ways to tie the two together and provide better incentives to create jobs in the U.S. It can be carrot or stick, I don't care as long as there are results.
     
  4. RickStain

    RickStain Well-Known Member

    The main reason we aren't creating jobs is that new technology and services aren't keeping pace with improvements in productivity. Not sure tax rates can change that.
     
  5. Baron Scicluna

    Baron Scicluna Well-Known Member

    Sorry, but I'd rather the people who are 75 percent of the consumer spending have more money in their pockets than the small group that accounts for 25 percent.
     
  6. Dick Whitman

    Dick Whitman Well-Known Member

    Paul Krugman would argue the opposite. For example, he thinks the stimulus wasn't nearly big enough, and we need another one. I believe I saw Joe Biden the other night say that the unemployment rate would be a lot higher without the stimulus.

    There is a very, very good debate over whether the money better serves the middle class in the hands of the wealthy spending it, or government putting it to use. Both sides can make equally compelling arguments.

    BTW, there was a really outstanding series on Slate recently by Timothy Noah about the growing income disparity in this country. He said the biggest reason has nothing to do with taxes and Reaganomics, but education. As the high school dropout rate has increased and public education has stopped getting better, that has added value to a college degree, in something of a zero sum game. So, fix public education, perhaps you fix the income gulf.
     
  7. Baron Scicluna

    Baron Scicluna Well-Known Member

    Without the stimulus, there would be millions of unemployed people (including myself) who would have exhausted their unemployment benefits and have zero income coming in. I'd shudder to think how much worse the country would have been off if not for the bailouts and the stimulus (poor fiscal management and bonuses to execs aside).
     
  8. RickStain

    RickStain Well-Known Member

    Devil's advocate: Those people on unemployment would have had to get real creative and maybe even start participating in some economic activity that they don't have to now. Maybe they start a small home side business that grows and a decade from now employs 30 people.

    Reverse devil's advocate: I bet more people would have just turned to crime.
     
  9. doctorquant

    doctorquant Well-Known Member

    Yes, but those 75% aren't going to get more money in their pockets. In fact, the risk is that if the 25% see a marginal rate increase, the 75% will ultimately wind up with less in their pockets. I am not saying that will happen, I am saying that is the risk.

    And income inequality studies such as these treat the national income as if it's a zero-sum game (i.e., if the gap is growing, therefore the wealth differential must be growing as well). But it's not. Think of it this way ... suppose everyone in the top 10% of earnings found some way to increase their income. The only way that matters to the other 90% is if the top 10% got the increase at the expense of everyone else. That's not what has happened in the U.S. Indeed, the other 90% -- whose real-wage stagnation remains a legitimate concern -- nevertheless found themselves wealthier because their incomes could buy more.
     
  10. YankeeFan

    YankeeFan Well-Known Member

    I'd like to agree with you, but in a global economy, I'm not sure how it would work.

    It's easy to say, but most of the "cures" are worse than the "disease".
     
  11. Pastor

    Pastor Active Member

    If the government pays for a study does that money magically disappear or does it go into the pockets of people that perform the study? If the government makes a sign, creates some mailings and other marketing materials does it disappear into the night or does it go into the pockets of people that make signs, create mailings and other marketing materials?

    Your argument about that money “not creating jobs” is facetious.

    You may be correct that it doesn’t go to a nanny, but that guy still needs daycare for his children. That means instead of a nanny, he’ll go to a daycare. That daycare, seeing a rise in children, will need to hire more daycare workers.

    Instead of the money going to a lawn guy, the money will be spent on a lawn mower. That goes towards the production of lawnmowers. The store now needs to keep a greater stock and have more check-out employees. Craftsman, having made the lawnmower, needs to hire more workers to produce more lawn mowers.

    The money isn’t just disappearing completely. It’s going in different sectors. The guy still needs to spend his money on certain items. He just won’t have as many “luxury” items as before.

    This is another silly statement. Just because this guy spent money on education doesn’t mean he earned a higher standard of living.

    If he’s a good lawyer and his wife is a good doctor, then they can and certainly will enjoy a higher standard of living. However, if he’s a lawyer that loses cases due to incompetence and his wife’s patients die because she removes a testicle instead a liver, I don’t care how much they spent on education they don’t deserve a higher standard of living.


    You’ll also noted that I cropped off the rest of your quote. That is mostly due to the fact that it’s a giant strawman. Nobody is penalizing success. The system is nourishing it and has in place multiple levels of assistance for people to come from the middle class to rise to the top. It is only fair that the people that have risen to the top recognize the assistance they received. Their response should be to give back so that other people will also have the opportunity to do the same. Instead, the response seems to be, “Well, I got mine and I’m certainly not going to help you!”

    Are you talking about the PATH train? That’s been around for quite some time…
     
  12. dreunc1542

    dreunc1542 Active Member

    You mean the series that I linked to like four posts above yours?
     
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