You forget that capitalism is about generating capital. Confiscation of capital by the Government is not likely to further our ecomonic system.

China started it's march by generating capital. It allowed a one acre plot for private use. The owners of this small farm could sell their produce at market. Back 40 years ago they were producing capital at the rate of $3000 per year. This gradually led to where they are at today.

Capital begets Capital.

If you want to mess with the Capital Gains rates, how about this, add a rate for intermediate term Capital gain.
Short term, lengthen to 18 months, tax as ordinary income.
Add new intermediate term, 18 months to 10 years, split the difference between short and long rates.
Long term, over 10 years, tax the same a long term is now.

Now that encourages long term investing, and long term is job creation investment not get rich quick stuff.

If you mess with the rates, well, how about a phase in provision, starting at a million a year and stopping at ten million a year. Oh, bring back income averaging so the guy who gets the winning lottery ticket isn't wiped out.

Of course if you really want to put some cash in the Treasury, just change it so that if you are a board member or C level executive for a publicly traded company, capital gains on that company are not capital gains, they are wages and you owe FICA tax on them too, no dollar limit.

Or you could not change anything but the IRS rules on what a self employment job is. Anyone who makes more than a million a year in capital gains is self employed in the capital gains field and all of that is self employment income and not capital gains. There is a way to satisfy the "no new taxes" and get a pile of cash for the Treasury.

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Ah yes, no problem just don't worry about deficits.

Over the last 20+ years, the disparity between the VERY very wealthy and not only the poor, but the middle class has become quite severe. During that time, we've seen the middle class actually lose wealth, certainly their real wages have stagnated.

For a long time that was masked by the housing bubble (capital begets capital, right?) as well as the stock market and funky banking instruments (capital begets capital), but once all that bubble capitalism burst, the actual undermining of the middle class (plus an increase in poverty) became manifest.

There have been a few of these very severe cycles in the past, in the past though, the pain of the working class and emerging middle class was at least to a certain degree shared by the wealthy. Seems that hasn't been the case over the past four years. The thing is, at some point in time, folks other than the very wealthy just might take to resenting this fact and realizing that protection of the very wealthy (capital produces capital) isn't doing squat for the little guy.

For now, a large piece of the middle class and at least some of the working class are buying the 'it's all the fault of the poor' argument -- let's just shaft them more and all will be well.

The Norquistican Tea Party approach to balancing the budget accepts nothing about raising revenues. So the way to square the circle is to eliminate Medicare, Medicaid, unemployment insurance, food stamps -- then take the logical next step, eliminate the duty of care on hospitals and health care professionals -- that would surely balance the budget by letting the poor, the sick and elderly die off much more quickly.

Personally, think that approach fails a morality test -- but I realize that do the degree Norquistican Tea Party controllers can mask the end game, they might get more support.

You forget that capitalism is about generating capital. Confiscation of capital by the Government is not likely to further our ecomonic system.

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Oh, I understand the argument, in order to make sure that 40+% of the population who are not paying income taxes (but who do pay FICA, sales taxes, property taxes and the like), simply rewrite the tax code, eliminate the marginally (not really) progressive nature of the tax code, and make it regressive instead, or mask this by simply flat rating the tax code and establishing an high rate VAT.

Then, to make sure that the Norquistican Tea Party retains power, establish voter requirements based on capital.

You forget that capitalism is about generating capital. Confiscation of capital by the Government is not likely to further our ecomonic system.

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A Prez who is a Peace Prize Potus(That Nobel Thingee) is Stoking The Fires of Class Warfare.

As Only a Peace Prize Potus of His Cred can do.

In Addition to Other Wars or To Be Wars about The Globe.

Man 'O Live, what a Prez.

What's that New Book saying about Him and His Admin? hehehe.

Again, The Rich Pay an Exorbitant Amount of The Total Taxes. Be Rich and find out for yourself. Until then, ShadUp Already.

Dull

Indeed they are.

Norquistican Tea Party Presidential candidates who can't spell Peace Prize are Stoking The Fires of Class Warfare.

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Back to the economic malaise.

It seems to me that the cure to all of this is to bring back our manufacturing job base. There would then be more jobs, more pay and more money demanding goods and services that would employ others as well. All of this would produce more tax revenue.

If we don't do this then we will continue to be in our death spiral where fewer and fewer will be asked to increasingly fund the whole socialistic shooting match including the needs of those who want to work but can't find a job.

Right now our income is being sucked up by TAXES, the Gas Pump, food costs due to Ethanol for fuel, health care, and the Chinese who provide a too-large chunk of manufactured goods. There is precious little money left over for fueling the engine that provides the myriad of other less-essential goods and services, (vacations, new cars, home furnishings, etc). What little we do buy tends to come from China. It's hard for us to create wealth and capital by taking in each others washing especially when the washer needs repair and the price of soap powder and bleach is prohibitive.

Therefore we have two problems--lack of discretionary income and a diminished manufacturing base. This results in no jobs. Raising taxes exacerbates the problem.

What are your ideas on killing the "capital suckers" and in bringing back on-shore manufacturing to our homeland??

So: its all about jobs, stupid; not about raising taxes, not about continuing our wasteful Government profligacy.

This just remind me about a story.

One guy arrives to a motel in a small town and ask for a room and put 100 Euro bill on the counter as a deposit.

He says that he will check the room and if he finds it fit will stay there.

While he goes to check the room the Motel Owner grabs the 100 Eur Bill and pays it’s pending account at the Supermarket, then the Owner of the Supermarket goes to bakery and pays is overdue invoices with the same bank note, than the baker goes to the hooker that he usually call for services and pay the 100 Eur that he was owing to her, finally the lady of the night go the Motel and pays 100 Euros related with the use of the room in the previous night.

All this happens while our guy is checking if he likes the Motel Facilities. He finally arrives to a decision, he don’t find the Motel appropriated, grabs the 100 Euros that he left has deposit and go.

This is currently how world economy is working, so make the assumptions that you please.

Ah a good rant, but you need to give the Proposition 13 rant too.

Here's how it goes:
Way back in the bad old days local governments who have all the power got their cash to run from property taxes. They didn't care what was on the property.
Then came Howard Jarvis.
Now the local government gets it cash from sales taxes. Suddenly big box retail is what needs to be zoned in everywhere as it provides cash. Manufacturing, no sales tax as it is all sold "for resale"
What happens to high paying manufacturing jobs?

DUH!

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grabs the 100 Eur Bill and pays it’s pending account

So, if The Messiah gives me a Trillion Dollars, all I need to do is Spend The Trillion and it will work its way around The USA and finally come back to me in the form of A Job or something of Equal Value. Same with Everyone who Touches The Trillion. Sweet.

It's like someone saying "Change You Can Believe In" and repeating it A Trillion Times from person to person and Finally back to My Ears Again. And Viola!, there will Be Change I Believe In. Change For Everyone. Brilliant.

It's All in the Circle. Round and Round it goes.

Dull

I don't think that was the point of the story, Wormy.


I believe the moral of that story is too many people bank on income that is not guaranteed, which that borrowed money that may be taken away at a later point, leaving you twice as in debt as before.

In other words, stop spending money you don't have.

The point of my story is that the crisis that most economies have is not related with the performance of the economy agents but with liquidity.

Governments and central banks are afraid of injecting more money in to the economy, so therefore even if private consumers go to the bank and get loans that they will have difficulties to pay; the issue is that the cash they got is going around in circles.

If you look to Europe, is like European Union in the Euro zone, approve loans to countries to the less developed countries, then this countries will buy goods to the countries in the Euro zone that actually lend the money (like Germany and France). So money just goes around in circles and because is scarce is price just starts to get higher to the countries who don’t have it.

Just like in the US, is that the individual get a loan, even by using one it’s multiple credit cards, and then he don’t have any liquidity to pay back the loan, because is employer is having difficulties to receive from their customers.

So if the Fed or in case of the bank there is not an injection of new cash in the economy, the same bank note is just going around in circles and the interests of the debt are just increasing and increasing.

On the other hand, injecting more money into the economy creates inflation. The value of a dollar is based upon how many Federal Reserve Notes are in circulation. The more notes that are in circulation, the less valuable they are because there's more of them.

we are not currently at risk of the economy over-heating. It is becoming frozen solid.

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Janice

That is the point, economy is completely frozen. The agents’ needs stimulation, and increasing the debt is not the solution. I would prefer some inflation than to fall in to the risk of deflation.

I would prefer a central bank that injects cash in to the economy, than a government that raise taxes because it’s borrowing cash to pay a stupid debt caused by stupid reasons and miss government of expenditure.

US and EU economy have good fundamentals, at this moment the crisis that they have is a liquidity one. There is life beyond inflation, and no matter what it’s done i prefer a calculated inflation and a economy that is growing, than a economy that is shrinking or frozen and where the ghost of deflation is haunting.

we are not currently at risk of the economy over-heating. It is becoming frozen solid.

While feeding the fire with fuel may satiate our immediate desire for comfort, in the long run it will only devalue our supply. A lack of planning for the future based upon what we have on hand now is what got us in this mess in the first place.

That is the point, economy is completely frozen. The agents’ needs stimulation, and increasing the debt is not the solution. I would prefer some inflation than to fall in to the risk of deflation.

The problem with inflation and devalued currency is that in order for companies and individuals to earn the same level of profit or wages, they must then charge more for goods and services (including the services of the employee).

All this does is artificially increase the physical numbers that we deal with in ledgers, but it doesn't actually do anything to solve the problem.

Nice story -- I remember 'back in the day' (may have been at Woodstock) that what someone said that the way to make things work was to 'increase the velocity' of money. Move the money around quickly to pay for things and there would be more for everyone.

I think what has happened though is that over the past 30 years, that 'velocity' thing was changed into a massive bubble (real estate, banking, equity, *capital*) and the bubble burst big time in 2007/2009. Frankly aside from palliative actions, the only other thing the economic decision makers are trying to figure out is how to *reinflate* the *bubble* so we all *feel* better.

This just remind me about a story.

One guy arrives to a motel in a small town and ask for a room and put 100 Euro bill on the counter as a deposit.

He says that he will check the room and if he finds it fit will stay there.

While he goes to check the room the Motel Owner grabs the 100 Eur Bill and pays it’s pending account at the Supermarket, then the Owner of the Supermarket goes to bakery and pays is overdue invoices with the same bank note, than the baker goes to the hooker that he usually call for services and pay the 100 Eur that he was owing to her, finally the lady of the night go the Motel and pays 100 Euros related with the use of the room in the previous night.

All this happens while our guy is checking if he likes the Motel Facilities. He finally arrives to a decision, he don’t find the Motel appropriated, grabs the 100 Euros that he left has deposit and go.

This is currently how world economy is working, so make the assumptions that you please.

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But you see, there are at least some in the economics decision making cadre who believe that we need inflation to 'reinflate' the 'bubble'. If you had 're-inflation' in the housing bubble, real estate comes back from 'under water', folks feel *as if* they are not as poor as they have become over the past 30 years and spend more money. Inflation, when matched with artificially low interest rates also serves to 'reduce the value' of debt (of which we all have a lot and governments have more than a lot). We return to the happy daze of the decades long global Ponzi scheme.

On the other hand, injecting more money into the economy creates inflation. The value of a dollar is based upon how many Federal Reserve Notes are in circulation. The more notes that are in circulation, the less valuable they are because there's more of them.

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Is it my ear, or did our Prez sound anything but presidential at a bridge in Ohio today?

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