Socialism/Marxism and balance.

[Seth]

Watching a pair posters who've never run a successful lemonade stand try to debate macroeconomics is like watching them try to play Sibeleus.

A little help:

1. People don't stuff savings in a mattress or bury it behind the smokehouse, they overwhelmingly put it in banks and also loan it to others via mutual funds. Saving is very very good for an economy, as savings are continually spent.

Keerect! Also, billionaires do exactly the same thing. They don't sit on cash, they invest it and put it to work, and they create jobs in the process.

2. Welfare payments are spent quickly in the private sector, and eventually work their way into the hands of those who pay the taxes. They are in no way "Lost" to an economy.

I don't believe I ever said anything of the sort.

Welfare payments spent are vastly better for an economy and a society than an underclass left begging and often being hungry enough to steal.

This is very probably true, within limits. The problem is that those limits keep moving and the "underclass" is being created by government policy and is being permanently enslaved to the welfare state for reasons having nothing to do with charity or altruism and everything to do with maintaining political power by surgically sewing the mouths of the dependent class to the government teat.

But the fundamental question remains unanswered. What moral justification is there for taking the property of one person by force and giving it to another, even if the purpose is purported to be beneficial to society as a whole?

If you cannot morally justify the most basic transaction involved, you will have a difficult time justifying it on a large scale.

3. Money is not simply a measure of labor, but also of power and influence. It is much easier to make money when one has extra money than when one has to spend all his money to survive. "Borrow $20k, the bank owns you. Borrow $20m, you own the bank." "It is expensive to be poor, it is cheap to be rich." Any economic theory that does not thoroughly consider these two facts is shit.

Yes, so what? Nobody said life is easy or fair. How does that argue for or justify taking the property of one man and giving it to another to make it "easier" for him to get by?

4. A rich man who currently pays a lot of taxes is no more enslaved by his choices than a poor man who has to cough up a road toll to leave his property to buy food at the highest price the market will bear in a Libertarian world. If the poor guy can go die in a ditch if he don't like the way things are currently or in some economic ideal, then so can the rich.

Not quite. The issue is not "taxes" in general. The poor man has to pay the toll (just like the rich man does) because he chooses to use the road that somebody else paid to have built. The rich man has to do exactly the same when he consumes or enjoys benefits paid for by others. That's a "consumption" tax with which I have no quibble.

What we're discussing here is redistributive taxation that uses the authority and force of the government to take the property of one person, whom the government deems has too much property, and gives it to another whom the government deems does not have enough for no other reason than that the first person has more and the second person has less. Outside of government this is called "theft." And when the government uses force to compel the first person to labor so that there is excess property that the government can expropriate for the use of the second person, this is called "involuntary servitude" or "slavery" because the first person does not consent to having his property taken and given to another.

Two completely different kinds of "taxation." The former is reasonable and moral and the latter is not. Do try to absorb the distinction, it's important.

But history shows that if too many people start dying in ditches, the wealth will be redistributed.

And do you think that intelligent, mature, psychologically sound people might understand this and be willing to deal with people dying in ditches by helping them without the Mace of State being used to crush them? Historically in the US and many other nations and cultures the legitimate poor and disabled are cared for without force being initiated to fund it. But then there's the matter of the welfare leeches who could support themselves but choose not to do so (on the books) because the government has promised them largess from the public treasury, which is to say the pockets of those who do work and produce. Two different classes of "poor" and an important distinction between the two.

I'll leave it to the reader to decide if that shows the strength of the market, or the redistributionary powers of the poor, but the world is greatly more educated and has a lot better communication system than in any other time in history, which, at the end of the day, is not unrelated.

Extortion is extortion, and it's never a good idea to give in to it.

[Seth]

I'm pretty sure BG gets all this. His point about the rich "sitting on their money", while wrong, as you say, isn't property dismissed by saying they put it in savings accounts for reinvestment (or directly into share and other investments). The problem is that this approach to economic thinking (that Seth adopts) is that supply is what drives an economy, when it is patently obvious that demand drives an economy. Supply might top up a demand economy, but without demand, supply is pointless and a waste.

I have no idea where you came up with the notion that I believe that supply is what drives the free markets. That's ridiculous.

What I did say is that the demand created by a welfare leech spending someone else's money is identical to the demand that would be created if the actual owner of the money spent it himself. A welfare leech is not a "multiplier" in the economy, he's a net drain on the economy because every dime he spends has to be earned by someone else while he does not work at all while enjoying the fruits of the labor of others.

[Seth]

I understand all that, but investment "loans" are supply side. An economy is driven by demand.

Wrong. I have money to lend, you need money. I lend you money in return for a profit in the form of interest. It's no different than if I have a widget that you need that you are willing to pay me for. In this case the product happens to be currency, but so what? It's a commodity just like any other.

[Seth]

Of course they do (well, they have here in Australia). That's how we escaped the GFC without even going into recession. The government pump primed the economy with a big investment in infrastructure, and also handing out cash to poorer Australians. The government can also affect demand through subsidising or penalising various things. And quite simply, if the government taxed the rich 1% more and gave all that to poor people, that would instantly create 1% of shitloads worth of demand. (minus whatever part of that 1% that said rich people would have spent in the local economy with that surplus money).

Nonsense. One dollar comes out of the rich man's pocked and into the government's bank account, and maybe 50 cents of it actually gets to the poor person. The other 50 cents pays government bureaucrats and functionaries to supervise the transaction. More importantly, any demand created by a poor person having a rich person's money is offset completely by the LACK of demand from the rich person caused by the government taking his money.

In that respect, redistribution is at best a zero-sum transaction, and usually it's an egregious waste because much of it pays for useless bureaucracy. That's why giving a bum flying a sign on a street corner a dollar in cash is better than giving that dollar to a "charitable" organization, much less the government, which both waste a lot of that dollar that could be spent by the bum.

Remember, government produces NOTHING, ever. It only consumes wealth from the economy. It's a sometimes necessary evil of an expense that we put up with in order to have an organized society, but the purpose of government is to serve the people. The people are not there to serve the government.

[pErvinalia]

That [wartime economy] was one example that certainly grew your economy and generated a lot of employment and demand. If a strong economy is your metric for success (which it usually is for Seth and most people on the right, and a good chunk on the left), then why bag it? Unless you have an ideological objection to it, in which case you've got to provide strong reasoning to back up strong beliefs.

Not really.

What do you mean "not really"? Of course it was good for your economy (if you consider a good economy one with good econometrics).

You, however, have to provide a compelling reason for vast numbers of people to reject any status quo if you desire change in economic paradigm.

I thought we were having an intellectual debate. I don't need to convince vast numbers of people to change paradigms. If we are talking about convincing vast numbers of people to change paradigms, then yes, there is a problem. People like myself are up against a giant propaganda industry, and a self-fulfilling crony capitalistic political system. It's no wonder people like me despair horribly.

[piscator]

What we're discussing here is redistributive taxation that uses the authority and force of the government to take the property of one person, whom the government deems has too much property, and gives it to another whom the government deems does not have enough for no other reason than that the first person has more and the second person has less.
No one is forced to be an income earner, hence no one is forced to be a tax payer. This melodramatic and hyperbolic "theft/enslavement" shtick you run fails when one considers how much easier it is to make money when one has money. People are not forced to riches, but they are forced to poverty. It's The Big Lie to attempt to invert that in rhetoric.

What moral justification is there for taking the property of one person by force and giving it to another, even if the purpose is purported to be beneficial to society as a whole?
If you didn't give it to an accountable representative government, you'd give it to some other gang of thugs, and get less back for it.

Extortion is extortion.
Gravity is gravity. Your customers pay your taxes, not you.

[pErvinalia]

2. Welfare payments are spent quickly in the private sector, and eventually work their way into the hands of those who pay the taxes. They are in no way "Lost" to an economy.

I don't believe I ever said anything of the sort.

Yes you did when you claimed OPM can run out. That implies that you get less value from a poor person spending 'x' dollars than you get if a rich person spent it.

3. Money is not simply a measure of labor, but also of power and influence. It is much easier to make money when one has extra money than when one has to spend all his money to survive. "Borrow $20k, the bank owns you. Borrow $20m, you own the bank." "It is expensive to be poor, it is cheap to be rich." Any economic theory that does not thoroughly consider these two facts is shit.

Yes, so what? Nobody said life is easy or fair.

Yes, so what? Nobody said life had to be hard or unfair.

[Seth]

The rich do 'sit on their money', at least to some extent. They do this by spending that money on things that suck up the money while not creating more. Large houses. Yachts. Memorials etc. When wealth is tied up in white elephants, it is not stimulating the economy.

The hell it isn't! Who do you think builds houses and yachts? Elves? Do you know what happened to the American luxury yacht industry, which employed tens of thousands of people directly and hundreds of thousands indirectly as employees of suppliers, when Clinton imposed a "luxury tax" on yachts and big cars?

The whole industry disappeared in the US, which unemployed all those people who were previously generating wealth by building yachts for the wealthy. Then the industry moved overseas, to countries with tax structures more amenable to the building of luxury yachts.

Of course, this applies more to medium rich rather than ultra rich. The ultra rich do it too, but the percentage of their wealth tied up in 'white elephants' is less, and the percentage reinvested is more.

But the poor just keep the money moving.

Dude, the "rich" keep money moving much faster and in greater quantities than the poor do. Every luxury item they consume is created by a business that makes a profit, and employs people, in the process.

[Seth]

That [wartime economy] was one example that certainly grew your economy and generated a lot of employment and demand. If a strong economy is your metric for success (which it usually is for Seth and most people on the right, and a good chunk on the left), then why bag it? Unless you have an ideological objection to it, in which case you've got to provide strong reasoning to back up strong beliefs.

Not really.

What do you mean "not really"? Of course it was good for your economy (if you consider a good economy one with good econometrics).

You, however, have to provide a compelling reason for vast numbers of people to reject any status quo if you desire change in economic paradigm.

I thought we were having an intellectual debate. I don't need to convince vast numbers of people to change paradigms. If we are talking about convincing vast numbers of people to change paradigms, then yes, there is a problem. People like myself are up against a giant propaganda industry, and a self-fulfilling crony capitalistic political system. It's no wonder people like me despair horribly.

Maybe it's your expectations that are unreasonable, not the economy.

[pErvinalia]

I'm pretty sure BG gets all this. His point about the rich "sitting on their money", while wrong, as you say, isn't property dismissed by saying they put it in savings accounts for reinvestment (or directly into share and other investments). The problem is that this approach to economic thinking (that Seth adopts) is that supply is what drives an economy, when it is patently obvious that demand drives an economy. Supply might top up a demand economy, but without demand, supply is pointless and a waste.

I have no idea where you came up with the notion that I believe that supply is what drives the free markets. That's ridiculous.

Of course you do. Do you believe in tax cuts for the rich and corporations? If so, then you believe in supply side economics. Which you do, as is obvious from your years of statements slathering over the cocks of the rich.

What I did say is that the demand created by a welfare leech spending someone else's money is identical to the demand that would be created if the actual owner of the money spent it himself.

I've explained 5 times now why this is fallacious. The rich don't spend all their money in the local economy. Hence why there is something like $20 trillion dollars of our economy's money squirreled away in offshore tax havens.

And aside from that, you do believe there is a difference as you claim that OPM can run out. If there is no difference in who spends the money, then there is no concept of OPM being able to run out.

A welfare leech is not a "multiplier" in the economy, he's a net drain on the economy because every dime he spends has to be earned by someone else while he does not work at all while enjoying the fruits of the labor of others.

Like the rich people who do no labour to earn the rent they get from simply owning a piece of land?

[pErvinalia]

I understand all that, but investment "loans" are supply side. An economy is driven by demand.

Wrong. I have money to lend, you need money. I lend you money in return for a profit in the form of interest. It's no different than if I have a widget that you need that you are willing to pay me for. In this case the product happens to be currency, but so what? It's a commodity just like any other.

When the money is loaned for investment purposes, it is used on the supply-side. When it is given (or loaned) to a poor person, then it is spent on the demand-side.

[Seth]

What we're discussing here is redistributive taxation that uses the authority and force of the government to take the property of one person, whom the government deems has too much property, and gives it to another whom the government deems does not have enough for no other reason than that the first person has more and the second person has less.
No one is forced to be an income earner, hence no one is forced to be a tax payer.

Pettifoggery. If nobody earned any income, there wouldn't be any income to be taxed and redistributionism would be pointless because there would be nothing to redistribute, which is the situation that the USSR found itself in, and that Venezuela is wallowing in right now.

This melodramatic and hyperbolic "theft/enslavement" shtick you run fails when one considers how much easier it is to make money when one has money. People are not forced to riches, but they are forced to poverty. It's The Big Lie to attempt to invert that in rhetoric.

Wrong. People have little choice but to labor to earn money to support themselves and their families, except in a welfare state. But if some segment of the society doesn't labor and produce, there can be no welfare state because there is nothing to redistribute to the poor because EVERYONE IS POOR.

So the individual, who has a right to labor on his own behalf to support himself and his family, is enslaved to additional labor that does not benefit him or his family by a redistributive tax system that takes a portion of what he works for and plans to use for his own support, and gives it to someone else, which means he has to either labor more to make up the difference or become poor as well because he either cannot labor more or simply chooses not to labor at all because whenever he does, the fruits of his labor are stolen by the government and given to someone else. Eventually, as the labor force grows smaller and smaller and less and less efficient because of this negative inducement to labor, a tipping point is reached where the productive class no longer produces enough excess wealth to support the dependent class though redistributionary taxation. And the economy fails, just as it did in the USSR and is doing in Venezuela.

In short, if you're going to take my money to give to some crackhead whore welfare leech, I'm not fucking going to earn any money and I'm going to demand that YOU labor on MY behalf and support me too.

What moral justification is there for taking the property of one person by force and giving it to another, even if the purpose is purported to be beneficial to society as a whole?

If you didn't give it to an accountable representative government, you'd give it to some other gang of thugs, and get less back for it.

That's not a moral argument, it's a utilitarian one. Me, I'd not give my money to either, and if either attempted to take it, I'd kill them.

Extortion is extortion.

Gravity is gravity.

And the wages of extortion should be the same as the wages of trying to defy gravity: A sudden and permanent cessation of motion caused by the effects of inertia.

[pErvinalia]

Of course they do (well, they have here in Australia). That's how we escaped the GFC without even going into recession. The government pump primed the economy with a big investment in infrastructure, and also handing out cash to poorer Australians. The government can also affect demand through subsidising or penalising various things. And quite simply, if the government taxed the rich 1% more and gave all that to poor people, that would instantly create 1% of shitloads worth of demand. (minus whatever part of that 1% that said rich people would have spent in the local economy with that surplus money).

Nonsense. One dollar comes out of the rich man's pocked and into the government's bank account, and maybe 50 cents of it actually gets to the poor person. The other 50 cents pays government bureaucrats and functionaries to supervise the transaction.

So? That's labour. All of a sudden you hate labour now??

And in any case, the calculus is the same. Those bureaucrats spend the money locally. A rich person spends their surplus money on importing luxuries (or exporting themselves for luxury getaways) and/or hiding it away in tax havens. Or wasting it in unproductive financial speculation.

More importantly, any demand created by a poor person having a rich person's money is offset completely by the LACK of demand from the rich person caused by the government taking his money.

Repeating the same wilfully ignorant point, post after post won't make it true. Rich people spend less of their money proportionately on the local economy and more on foreign economies and tax havens.

In that respect, redistribution is at best a zero-sum transaction, and usually it's an egregious waste because much of it pays for useless bureaucracy. That's why giving a bum flying a sign on a street corner a dollar in cash is better than giving that dollar to a "charitable" organization, much less the government, which both waste a lot of that dollar that could be spent by the bum.

"Waste" in this lexicon is code for "I didn't get to spend it myself how I wanted to". But it's not wasted. It's recycled into the economy. Of course, too much bureaucracy is a waste, as the same job can be done with less people. But that's not what you are talking about here.

Remember, government produces NOTHING, ever. It only consumes wealth from the economy.

You really need to study economics or something. For god's sake.

[Seth]

I understand all that, but investment "loans" are supply side. An economy is driven by demand.

Wrong. I have money to lend, you need money. I lend you money in return for a profit in the form of interest. It's no different than if I have a widget that you need that you are willing to pay me for. In this case the product happens to be currency, but so what? It's a commodity just like any other.

When the money is loaned for investment purposes, it is used on the supply-side. When it is given (or loaned) to a poor person, then it is spent on the demand-side.

Nonsense. Money is a commodity. If you need money to build a factory you come to me and "buy" my money, which costs you more than the face value of the money you borrow. Your demand is met by my supply, just like any other transaction.

[pErvinalia]

I understand all that, but investment "loans" are supply side. An economy is driven by demand.

Wrong. I have money to lend, you need money. I lend you money in return for a profit in the form of interest. It's no different than if I have a widget that you need that you are willing to pay me for. In this case the product happens to be currency, but so what? It's a commodity just like any other.

When the money is loaned for investment purposes, it is used on the supply-side. When it is given (or loaned) to a poor person, then it is spent on the demand-side.

Nonsense. Money is a commodity. If you need money to build a factory you come to me and "buy" my money, which costs you more than the face value of the money you borrow. Your demand is met by my supply, just like any other transaction.

The question is: Why is the money being loaned? When it's an investment loan, it is being loaned to start or expand a business, say. THAT is supply side economics. An investor is expanding supply. The act of loaning money to each other all over the land isn't driving an economy, as absolutely nothing is being produced. It's not until that money is put back into the economy that it starts driving the economy. This is simple stuff.