War

[john doe]

Your reasoning only makes sense if you suppose that it is good economic policy to allow the bulk of the nations wealth to accumulate in the top 1% of the economy. I suppose you do. I guess you must be in that top wealth echelon, otherwise I would think that you might favor rules that distribute the wealth downward.

So, is that socialistic or communistic thinking? I don't believe in stealing from the rich and giving it to the poor. Robin Hood was a criminal, no matter how much the poor loved him. And where in this logic stream of yours and the government's is the provision that estate taxes go directly to the welfare system? Does it not go into the general fund? How does this help the poor?

But don't the living wealthy already pay the vast majority of taxes now anyway? What is the justification for taking a dead person's money?

[Snow]

Originally posted by Cal+Sep 25 2004, 11:04 PM--></span><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Cal @ Sep 25 2004, 11:04 PM)</td></tr><tr><td id='QUOTE'>

Originally posted by -Snow@Sep 25 2004, 05:45 PM

<!--QuoteBegin--Cal@Sep 25 2004, 03:54 PM

Bush's massive tax give away made no sense because the bulk went to the rich.

Yeah, that's another thing.

What's with the John Kerry routine? Two days ago you said it was a giveaway to the rich. Yesterday you corrected yourself and stated that it wasn't a givaway but rather a tax burden reduction. Now today you are back to giveaway.

Can you pick one position and stick with it.

What, pray tell, is the difference between a giveaway and a tax burden reduction? You are simply playing semantics. However you couch it, the rich pay less taxes. You must be desperate for issues to raise.

Nonsense. It is a matter of factual difference. A giveaway is when you take money from one taxpayer and GIVE it to another person as in welfare.

What you are referring to is no giveaway. It was a cut. The well-off pay the lion's share of the burden and there was, so the thinking went, a surplus. Bush returned some of it to those it had belonged to, those you are paying the lion's share to begin with.

You are trying to play a semantical game by calling it a giveaway - like it is not something they deservce - like it was gifted to them.

[Snow]

Originally posted by lindy9556@Sep 26 2004, 01:01 AM

I didn't understand why the job was given to Halliburton and there wasn't a chance for other companies to bid on the job.

Okay,

Which companies do you think should have been involved?

[Lindy]

Originally posted by Snow+Sep 26 2004, 09:23 AM--></span><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Snow @ Sep 26 2004, 09:23 AM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin--lindy9556@Sep 26 2004, 01:01 AM

I didn't understand why the job was given to Halliburton and there wasn't a chance for other companies to bid on the job.

Okay,

Which companies do you think should have been involved?

If I knew of any companies by name....I would have named them as potential bidders. I don't-so I didn't.

[Faerie]

so cal.."weath redistribution"...are you a communist or something? since WHEN do the "poor" DESERVE the money that the "rich" have worked so hard to EARN?? DH and I are considered "middle class", we have a beautiful home in a nice suburb and we drive new cars...however we were once considered to be in the "lower class" close to welfare status..does that mean since we're now making more money we should have to turn around and give most of it back to those who are too lazy to try and make something of themselves? give me a break...

[Guest TheProudDuck]

Lindy -- Halliburton did bid for the Iraq reconstruction contracts, in the sense that it competitively bid and won the Army's LOGCAP III contract.

A little background: Bidding for government contracts takes forever. The military often has needs that can't wait for the ordinary bidding progress to be worked out. Accordingly, there's a program called LOGCAP (can't remember what it stands for). Basically, companies with a proven ability to perform large-scale logistics duties can bid for the LOGCAP contract. If they win, they're essentially placed on stand-by, to be called if the military needs logistics services on short notice.

I can't remember how long the LOGCAP term runs, but it comes up for new bidding at least every few years. Halliburton won the LOGCAP contract late in the Clinton administration. The contract was activated in both the Bosnian and Kosovo conflicts. Halliburton, accordingly, went to work on logistics without additional bidding.

Another company (can't remember which) won the LOGCAP contract around 2000, and then Halliburton won it again around 2003. (I think the term is about three years.) Again, the contract was activated to provide logistics and reconstruction services after the Iraq conflict.

So when people say Halliburton got a "no-bid" contract, what they're essentially saying is that LOGCAP shouldn't have been used for the Iraq war. I think they're totally wrong; the short notice, large scope, and urgent priority of Iraq reconstruction are precisely the kinds of considerations that the LOGCAP program was designed for. Putting reconstruction out for general bidding would have delayed the start of reconstruction for months, which was deemed too risky.

[Lindy]

So when people say Halliburton got a "no-bid" contract, what they're essentially saying is that LOGCAP shouldn't have been used for the Iraq war. I think they're totally wrong; the short notice, large scope, and urgent priority of Iraq reconstruction are precisely the kinds of considerations that the LOGCAP program was designed for. Putting reconstruction out for general bidding would have delayed the start of reconstruction for months, which was deemed too risky.

Thanks PD for the info. I understand a company being placed on stand-by, "to be called if the military needs logistics services on short notice." I even understand that Halliburton was the company that was activated to start reconstruction services in Iraq. Your insight helped to put things into perspective for me.

Oh.... I had to look it up.... Logistics Civil Augmentation Program= LOGCAP

I think it's just the whole Cheney tied up with Halliburton thing that gets my goat. I would think that the company stock helped to make the rich man.....richer. Not that I have anything against rich people... I think that everyone should have one in their back pocket :) As luck would have it....my back pocket had a hole in it the day they were handed out!

[Guest bat]

edited

[Cal]

Originally posted by john doe@Sep 26 2004, 07:52 AM

Your reasoning only makes sense if you suppose that it is good economic policy to allow the bulk of the nations wealth to accumulate in the top 1% of the economy. I suppose you do. I guess you must be in that top wealth echelon, otherwise I would think that you might favor rules that distribute the wealth downward.

So, is that socialistic or communistic thinking? I don't believe in stealing from the rich and giving it to the poor. Robin Hood was a criminal, no matter how much the poor loved him. And where in this logic stream of yours and the government's is the provision that estate taxes go directly to the welfare system? Does it not go into the general fund? How does this help the poor?

But don't the living wealthy already pay the vast majority of taxes now anyway? What is the justification for taking a dead person's money?

Dead people don't have money, their estates have money. In order for capitalism to work you have to have money in the hands of the consumer. However, the way our system is set up, without checks on the ability of the capitalists to accumulate wealth, virtually all of the wealth can end up in the hands of the few. How? By paying low wages and paying no taxes companies could, if they got their way, turn the country into a haves and have-little economy.

It has nothing to do with socialism or communism---the government needs to control the distribution of wealth in order to keep a balance between corporate greed and excesses, and the ability of the consumer to spend. Without BOTH the economy falls apart.

The Bush folks seem to favor the accumulation of wealth in the hands of the few--without a substantial number of us calling them on that, we could all end up in trouble. You have a problem with the rich paying a large portion of the taxes--that is as it should be; except some of the Repubs would like that to change. They want to do away with the capital gains tax, they want no Estate taxes etc. All I can say is, I hope they are all part of that top 1%, because if they are not, watch out for the Bush camp.

[Guest Traci]

Originally posted by Outshined@Sep 24 2004, 03:28 PM

This will be my last post here for a few weeks. I'm going to the National Training Center in California for more desert training. We all hope it doesn't mean what we think it means.

I won't waste any more of my time addressing Cal's insults and name-calling. For Cal I have an equal measure of contempt and pity, and absolutely no respect.

Oh, I'm so sorry to hear that. Keep your head down and don't become a dead hero.

[Snow]

Originally posted by Cal@Sep 27 2004, 07:30 AM

Dead people don't have money, their estates have money. In order for capitalism to work you have to have money in the hands of the consumer. However, the way our system is set up, without checks on the ability of the capitalists to accumulate wealth, virtually all of the wealth can end up in the hands of the few. How? By paying low wages and paying no taxes companies could, if they got their way, turn the country into a haves and have-little economy.

It has nothing to do with socialism or communism---the government needs to control the distribution of wealth in order to keep a balance between corporate greed and excesses, and the ability of the consumer to spend. Without BOTH the economy falls apart.

The Bush folks seem to favor the accumulation of wealth in the hands of the few--without a substantial number of us calling them on that, we could all end up in trouble. You have a problem with the rich paying a large portion of the taxes--that is as it should be; except some of the Repubs would like that to change. They want to do away with the capital gains tax, they want no Estate taxes etc. All I can say is, I hope they are all part of that top 1%, because if they are not, watch out for the Bush camp.

Such a bogus argument.

Bush wants to concentrate wealth unfairly

Cal wants to distribute wealth fairly.

Bull, do you think everybody is an idiot? Those that favor lower taxes generally believe that those that earn ought to be able to keep more of what they earned while those that favor higher taxes believer that the earners should retain less of what they earn.

[Cal]

Originally posted by Snow+Sep 27 2004, 05:08 PM--></span><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Snow @ Sep 27 2004, 05:08 PM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin--Cal@Sep 27 2004, 07:30 AM

Dead people don't have money, their estates have money. In order for capitalism to work you have to have money in the hands of the consumer. However, the way our system is set up, without checks on the ability of the capitalists to accumulate wealth, virtually all of the wealth can end up in the hands of the few. How? By paying low wages and paying no taxes companies could, if they got their way, turn the country into a haves and have-little economy.

It has nothing to do with socialism or communism---the government needs to control the distribution of wealth in order to keep a balance between corporate greed and excesses, and the ability of the consumer to spend. Without BOTH the economy falls apart.

The Bush folks seem to favor the accumulation of wealth in the hands of the few--without a substantial number of us calling them on that, we could all end up in trouble. You have a problem with the rich paying a large portion of the taxes--that is as it should be; except some of the Repubs would like that to change. They want to do away with the capital gains tax, they want no Estate taxes etc. All I can say is, I hope they are all part of that top 1%, because if they are not, watch out for the Bush camp.

Such a bogus argument.

Bush wants to concentrate wealth unfairly

Cal wants to distribute wealth fairly.

Bull, do you think everybody is an idiot? Those that favor lower taxes generally believe that those that earn ought to be able to keep more of what they earned while those that favor higher taxes believer that the earners should retain less of what they earn.

If there is anything bogus about it, you have YET to show how. Your grand pronouncements in protest do little to erase the fact that the Repubs tend toward favoring the rich at the expense of the average joe. You may like that that policy, but you have yet to show how that is best for the country as a whole.

[Snow]

Originally posted by Cal+Sep 27 2004, 05:16 PM--></span><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Cal @ Sep 27 2004, 05:16 PM)</td></tr><tr><td id='QUOTE'>

Originally posted by -Snow@Sep 27 2004, 05:08 PM

<!--QuoteBegin--Cal@Sep 27 2004, 07:30 AM

Dead people don't have money, their estates have money. In order for capitalism to work you have to have money in the hands of the consumer. However, the way our system is set up, without checks on the ability of the capitalists to accumulate wealth, virtually all of the wealth can end up in the hands of the few. How? By paying low wages and paying no taxes companies could, if they got their way, turn the country into a haves and have-little economy.

It has nothing to do with socialism or communism---the government needs to control the distribution of wealth in order to keep a balance between corporate greed and excesses, and the ability of the consumer to spend. Without BOTH the economy falls apart.

The Bush folks seem to favor the accumulation of wealth in the hands of the few--without a substantial number of us calling them on that, we could all end up in trouble. You have a problem with the rich paying a large portion of the taxes--that is as it should be; except some of the Repubs would like that to change. They want to do away with the capital gains tax, they want no Estate taxes etc. All I can say is, I hope they are all part of that top 1%, because if they are not, watch out for the Bush camp.

Such a bogus argument.

Bush wants to concentrate wealth unfairly

Cal wants to distribute wealth fairly.

Bull, do you think everybody is an idiot? Those that favor lower taxes generally believe that those that earn ought to be able to keep more of what they earned while those that favor higher taxes believer that the earners should retain less of what they earn.

If there is anything bogus about it, you have YET to show how. Your grand pronouncements in protest do little to erase the fact that the Repubs tend toward favoring the rich at the expense of the average joe. You may like that that policy, but you have yet to show how that is best for the country as a whole.

Even under Bush the top 20% of earners pay 80% of the income taxes. You think what, that they ought to pay it all? The reason that the well off received a large share of the tax refund (not a give away - they earned the money in the first place - it belonged to them) is because the are the ones that pay the disporportiately high share of the taxes to begin with. You don't get refunded on what is not yours to begin with.

I don't pretend to know what percentage of the tax load the top 20% should pay. Is it the actual 80%? 73.5%? 91%? You however act as if you do know. That's what's annoying. Not that there aren't flaws in the tax code and destructive flaws at that. But for you to say that the rich are getting give aways and not carrying the load is at odds with the truth. They carry most of the load. If it were really fair, at least one way of looking at it, make every one pay the exact same federal tax, say $10,000/person/year. Even a flat tax rate penalizes the high earners by taking more of their absolute wage. What? Do people making $120k breath more air? Wear off more asphalt from the road?

[john doe]

Dead people don't have money, their estates have money. In order for capitalism to work you have to have money in the hands of the consumer. However, the way our system is set up, without checks on the ability of the capitalists to accumulate wealth, virtually all of the wealth can end up in the hands of the few. How? By paying low wages and paying no taxes companies could, if they got their way, turn the country into a haves and have-little economy.

But don't most dead people have heirs, usually multiple heirs? I always thought that one of the biggest reasons many people accumulate wealth is so their children or spouse can live comfortably after they die. It seems to me that most times when people inherit money, many of them spend that money, thus putting people to work and driving the economy. Or if they are smart, they will invest that money, loaning it to businesses, thus driving the economy. If the government takes their money, what percent do you think actually goes back into a productive portion of the economy? And how many beaurocrats are scrambling and fighting to get their grubby hands on it for their little fiefdoms?

Question-- how well do you think your ideas worked for the Soviet Union? They took the money from the evil rich and "redistributed" it to the poor. I don't recall anyone during the cold war talking about how well that drove their economy. Perhaps you could enlighten me? It seems to me that the eventual downfall of the Soviets was the fact that their economy was doing so poorly that the government crumbled under the weight of it.

Another question-- if the government is going to take money from the wealthy, where is the incentive for someone to do well in business? If everyone knows that Big Brother will always cover them even when they make mistakes, where is the incentive to ensure that you don't make mistakes?

And as long as we're dragging this into a political scrap, why doesn't John Kerry's wife want anyone to know how much money she has? Why is she refusing to disclose her net worth? If she truly espouses these same values that you are touting, what would be wrong with her announcing that if her husband is elected she will donate half of her money to the government? I'm sure she could still live like a queen on what would be left over.

[Cal]

Originally posted by Snow+Sep 27 2004, 05:49 PM--></span><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Snow @ Sep 27 2004, 05:49 PM)</td></tr><tr><td id='QUOTE'>

Originally posted by -Cal@Sep 27 2004, 05:16 PM

Originally posted by -Snow@Sep 27 2004, 05:08 PM

<!--QuoteBegin--Cal@Sep 27 2004, 07:30 AM

Dead people don't have money, their estates have money. In order for capitalism to work you have to have money in the hands of the consumer. However, the way our system is set up, without checks on the ability of the capitalists to accumulate wealth, virtually all of the wealth can end up in the hands of the few. How? By paying low wages and paying no taxes companies could, if they got their way, turn the country into a haves and have-little economy.

It has nothing to do with socialism or communism---the government needs to control the distribution of wealth in order to keep a balance between corporate greed and excesses, and the ability of the consumer to spend. Without BOTH the economy falls apart.

The Bush folks seem to favor the accumulation of wealth in the hands of the few--without a substantial number of us calling them on that, we could all end up in trouble. You have a problem with the rich paying a large portion of the taxes--that is as it should be; except some of the Repubs would like that to change. They want to do away with the capital gains tax, they want no Estate taxes etc. All I can say is, I hope they are all part of that top 1%, because if they are not, watch out for the Bush camp.

Such a bogus argument.

Bush wants to concentrate wealth unfairly

Cal wants to distribute wealth fairly.

Bull, do you think everybody is an idiot? Those that favor lower taxes generally believe that those that earn ought to be able to keep more of what they earned while those that favor higher taxes believer that the earners should retain less of what they earn.

If there is anything bogus about it, you have YET to show how. Your grand pronouncements in protest do little to erase the fact that the Repubs tend toward favoring the rich at the expense of the average joe. You may like that that policy, but you have yet to show how that is best for the country as a whole.

Even under Bush the top 20% of earners pay 80% of the income taxes. You think what, that they ought to pay it all? The reason that the well off received a large share of the tax refund (not a give away - they earned the money in the first place - it belonged to them) is because the are the ones that pay the disporportiately high share of the taxes to begin with. You don't get refunded on what is not yours to begin with.

I don't pretend to know what percentage of the tax load the top 20% should pay. Is it the actual 80%? 73.5%? 91%? You however act as if you do know. That's what's annoying. Not that there aren't flaws in the tax code and destructive flaws at that. But for you to say that the rich are getting give aways and not carrying the load is at odds with the truth. They carry most of the load. If it were really fair, at least one way of looking at it, make every one pay the exact same federal tax, say $10,000/person/year. Even a flat tax rate penalizes the high earners by taking more of their absolute wage. What? Do people making $120k breath more air? Wear off more asphalt from the road?

We seem to be arguing a point upon which we will never agree: Who should carry the greater tax burden, the rich, poor or middle class. I say the rich, as you correctly point out they do now. I never said they didn't. I just say that they should continue to do so, and Bush's efforts at changing that are misguided. The middle and poor's spending drive the economy. They spend a greater proportion of their earnings on consumer goods. The more they spend, the better the economy. The rich spend a lesser proportion of their wealth on goods. They tie up their money in stocks, bonds, RP etc. It does little to stimulate the economy. It makes good sense to keep as much revenue in the hands of the middle class and lower class.

This idea you have that the rich some how are morally more deserving than the rest of us, and should be able to keep all their "hard earned money" is a quaint idea. Problem is, it is our form of government and the sweat of the wage earners that make possible that wealth.

Bottomline is we come from two irreconcilable points of view, both of which have some merit.

John Doe---The soviet union fell apart because they had to spend so much of their resources on defense that there was nothing left to keep a consumer economy running. end of story.

[Cal]

Originally posted by Snow+Sep 27 2004, 05:49 PM--></span><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Snow @ Sep 27 2004, 05:49 PM)</td></tr><tr><td id='QUOTE'>

Originally posted by -Cal@Sep 27 2004, 05:16 PM

Originally posted by -Snow@Sep 27 2004, 05:08 PM

<!--QuoteBegin--Cal@Sep 27 2004, 07:30 AM

Dead people don't have money, their estates have money. In order for capitalism to work you have to have money in the hands of the consumer. However, the way our system is set up, without checks on the ability of the capitalists to accumulate wealth, virtually all of the wealth can end up in the hands of the few. How? By paying low wages and paying no taxes companies could, if they got their way, turn the country into a haves and have-little economy.

It has nothing to do with socialism or communism---the government needs to control the distribution of wealth in order to keep a balance between corporate greed and excesses, and the ability of the consumer to spend. Without BOTH the economy falls apart.

The Bush folks seem to favor the accumulation of wealth in the hands of the few--without a substantial number of us calling them on that, we could all end up in trouble. You have a problem with the rich paying a large portion of the taxes--that is as it should be; except some of the Repubs would like that to change. They want to do away with the capital gains tax, they want no Estate taxes etc. All I can say is, I hope they are all part of that top 1%, because if they are not, watch out for the Bush camp.

Such a bogus argument.

Bush wants to concentrate wealth unfairly

Cal wants to distribute wealth fairly.

Bull, do you think everybody is an idiot? Those that favor lower taxes generally believe that those that earn ought to be able to keep more of what they earned while those that favor higher taxes believer that the earners should retain less of what they earn.

If there is anything bogus about it, you have YET to show how. Your grand pronouncements in protest do little to erase the fact that the Repubs tend toward favoring the rich at the expense of the average joe. You may like that that policy, but you have yet to show how that is best for the country as a whole.

Even under Bush the top 20% of earners pay 80% of the income taxes. You think what, that they ought to pay it all? The reason that the well off received a large share of the tax refund (not a give away - they earned the money in the first place - it belonged to them) is because the are the ones that pay the disporportiately high share of the taxes to begin with. You don't get refunded on what is not yours to begin with.

I don't pretend to know what percentage of the tax load the top 20% should pay. Is it the actual 80%? 73.5%? 91%? You however act as if you do know. That's what's annoying. Not that there aren't flaws in the tax code and destructive flaws at that. But for you to say that the rich are getting give aways and not carrying the load is at odds with the truth. They carry most of the load. If it were really fair, at least one way of looking at it, make every one pay the exact same federal tax, say $10,000/person/year. Even a flat tax rate penalizes the high earners by taking more of their absolute wage. What? Do people making $120k breath more air? Wear off more asphalt from the road?

We seem to be arguing a point upon which we will never agree: Who should carry the greater tax burden, the rich, poor or middle class. I say the rich, as you correctly point out they do now. I never said they didn't. I just say that they should continue to do so, and Bush's efforts at changing that are misguided. The middle and poor's spending drive the economy. They spend a greater proportion of their earnings on consumer goods. The more they spend, the better the economy. The rich spend a lesser proportion of their wealth on goods. They tie up their money in stocks, bonds, RP etc. It does little to stimulate the economy. It makes good sense to keep as much revenue in the hands of the middle class and lower class.

This idea you have that the rich some how are morally more deserving than the rest of us, and should be able to keep all their "hard earned money" is a quaint idea. Problem is, it is our form of government and the sweat of the wage earners that make possible that wealth.

Bottomline is we come from two irreconcilable points of view, both of which have some merit.

John Doe---The soviet union fell apart because they had to spend so much of their resources on defense that there was nothing left to keep a consumer economy running. end of story.

[Jenda]

Originally posted by Cal@Sep 28 2004, 07:43 AM

John Doe---The soviet union fell apart because they had to spend so much of their resources on defense that there was nothing left to keep a consumer economy running. end of story.

Had to spend so much of their resources on defense? Sorry, that just made me laugh. Once WWII was over, who was threatening them so bad that they had to spend so much on defense. Please. They were the offense. They were the aggressors.

Defense my foot.

[Faerie]

The Soviet Union fell because Communism doesn't "work."

[Guest TheProudDuck]

Cal,

The rich spend a lesser proportion of their wealth on goods. They tie up their money in stocks, bonds, RP etc. It does little to stimulate the economy. It makes good sense to keep as much revenue in the hands of the middle class and lower class.

Spoken like a true Keynesian.

The problem is that this economic theory was pretty much demolished by the 1970s, when Keynesian economic theory was universally accepted ("we're all Keynesians now", said President Nixon) and consumer spending was thought to be the main driver of the economy. The result was runaway inflation without appreciable growth -- the "stagflation" that had "mainstream" -- i.e. liberal -- Western economists throwing up their hands in despair and seriously wondering whether the Soviets had a better economic model.

Inflation is classically understood to result from too much money chasing too few goods. That's the problem with the Keynesian model, which grew out of the mistaken perception in the 1930s that the Great Depression resulted from a glut of production and too little consumer purchasing capacity. By your earlier comments ("the government needs to control the distribution of wealth in order to keep a balance between corporate greed and excesses, and the ability of the consumer to spend. Without BOTH the economy falls apart"), it seems you still hold this view -- the cutting edge of 1930s-vintage economic thinking.

Modern economic analysis has revisited the Great Depression, and determined that it had less to do with a crash in consumer confidence and spending, than with investment spending. Investment virtually dried up during the Depression. It shouldn't have, because there were great moneymaking opportunities; in fact, in emerging sectors like aviation and entertainment, smart people made out like bandits. The problem was that there had been overinvestment in nineteenth-century infrastructure like railroads and heavy industry, and the economy was evolving into a different animal. The resulting correction in these sectors of the economy caused many investors to be skittish of investment in general. Coupled with President Hoover's unbelievable (in retrospect) error of increasing taxes at this point, reducing the return on investment, as well as a widespread hostility to business interests which led investors to reasonably expect still further restraints on expected returns, the result was that investment capital dried up almost completely until World War II.

But this revised analysis wasn't widespread during the 1970s, when policymakers responded to recessions with classic Keynesian tools built on the assumption that consumer spending was the problem and getting consumers increased purchasing power was the answer. Focusing almost exclusively on the demand side, all that the Keynesians' prescriptions managed was to set off runaway inflation.

"Supply-side" economics is often misdefined as "trickle down," further misdefined as giving money to the rich and hoping they spend it on the poor saps down the line. That's wrong. The supply-side idea is simply the recognition that there are two engines of economic growth, not just one: consumer spending AND investment spending. Supply-side economics tries to remove disincentives to investment spending, including tax inefficiencies.

Contrary to what appears to be your belief, the "rich" don't just stuff their money in mattresses or sit on piles of cash in vaults a la Scrooge McDuck. Investment capital -- especially high-risk venture capital, which has a disproportionate economic impact -- overwhelmingly comes from the affluent. If you limit tax relief to lower-income people, or adopt an explicitly redistributive tax policy, you emphasize consumer spending at the expense of investment -- which risks causing inflation and a 1970s-style credit crunch.

The recent recession was overwhelmingly caused by a collapse in investment spending (largely a response to the collapse of the Clinton-era Internet bubble). Consumer spending remained high throughout the 2000-2002 slowdown, and still remains high. A lack of consumer spending wasn't the problem; a lack of investment capital was. About the only positive fiscal tool the government has to encourage investment is to increase investment's real return by reducing taxation on it. (It also has a negative tool it can use to get the same effect -- it can decline to increase taxes. Senator Kerry's campaign proposes to repeat Herbert Hoover's ghastly mistake at the height of the Depression or raising taxes and creating disincentives to precisely the kind of economic activity the economy needs to recover.)

In summary: the idea that the government needs to take money away from the rich and give it to others to "get money in circulation" is outmoded thinking, proven ineffective and even harmful by experience. Both spending and investment need to advance for sustainable economic growth to occur. That means targeting tax relief at both consumers and investors.

[john doe]

John Doe---The soviet union fell apart because they had to spend so much of their resources on defense that there was nothing left to keep a consumer economy running. end of story.

And yet, the country that does not subscribe to your theories had a vibrant economy going, with more than enough left over to force the Soviets into submission, and to admit that their ideas do not work. A government taking from the rich and giving it to the poor does not work.

And just who were they trying to defend themselves from? It seems to me that their policies were much more aggressive and punitive to nonbelievers than the democratic movement was. I remember the "we will crush you" speech at the UN, do you?

[Cal]

Originally posted by Jenda+Sep 28 2004, 08:12 AM--></span><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Jenda @ Sep 28 2004, 08:12 AM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin--Cal@Sep 28 2004, 07:43 AM

John Doe---The soviet union fell apart because they had to spend so much of their resources on defense that there was nothing left to keep a consumer economy running. end of story.

Had to spend so much of their resources on defense? Sorry, that just made me laugh. Once WWII was over, who was threatening them so bad that they had to spend so much on defense. Please. They were the offense. They were the aggressors.

Defense my foot.

Sorry, buy you are simply uninformed. Whether you think they HAD to spend a high proportion of their resources on defense in not the point. They simply did. That is no real point of debate. Whether you chose to call it defense or offense is really irrelevant.

By the way, you have a real row to hoe if you think that the Soviet Union was any more offensive than we were. Their point of view was quite understandable: To begin with, who was the ONLY nation that ever used nuclear weapons on another nation? The Soviets knew there were plenty of US officials that advocated invading Russia,General McArthur for one. Even General Patton advocated pushing through into Russia at the end of WWII. Fortunately, wiser heads prevailed. Which nation had offensive weapons practically on the boarder of the other? We did, in Germany and Turkey. When they tried to put them on our boarder (in Cuba) we had a "hissy fit", as we should have; but that hardly made them less offensive (in their minds at least) than us.

In the minds of the Soviets WE were a threat to them, whether you think we REALLY WERE is not the point; THEY thought we were--and had pretty good reason to.

[Cal]

Originally posted by TheProudDuck@Sep 28 2004, 12:47 PM

Cal,

The rich spend a lesser proportion of their wealth on goods. They tie up their money in stocks, bonds, RP etc. It does little to stimulate the economy. It makes good sense to keep as much revenue in the hands of the middle class and lower class.

Spoken like a true Keynesian.

The problem is that this economic theory was pretty much demolished by the 1970s, when Keynesian economic theory was universally accepted ("we're all Keynesians now", said President Nixon) and consumer spending was thought to be the main driver of the economy. The result was runaway inflation without appreciable growth -- the "stagflation" that had "mainstream" -- i.e. liberal -- Western economists throwing up their hands in despair and seriously wondering whether the Soviets had a better economic model.

Inflation is classically understood to result from too much money chasing too few goods. That's the problem with the Keynesian model, which grew out of the mistaken perception in the 1930s that the Great Depression resulted from a glut of production and too little consumer purchasing capacity. By your earlier comments ("the government needs to control the distribution of wealth in order to keep a balance between corporate greed and excesses, and the ability of the consumer to spend. Without BOTH the economy falls apart"), it seems you still hold this view -- the cutting edge of 1930s-vintage economic thinking.

Modern economic analysis has revisited the Great Depression, and determined that it had less to do with a crash in consumer confidence and spending, than with investment spending. Investment virtually dried up during the Depression. It shouldn't have, because there were great moneymaking opportunities; in fact, in emerging sectors like aviation and entertainment, smart people made out like bandits. The problem was that there had been overinvestment in nineteenth-century infrastructure like railroads and heavy industry, and the economy was evolving into a different animal. The resulting correction in these sectors of the economy caused many investors to be skittish of investment in general. Coupled with President Hoover's unbelievable (in retrospect) error of increasing taxes at this point, reducing the return on investment, as well as a widespread hostility to business interests which led investors to reasonably expect still further restraints on expected returns, the result was that investment capital dried up almost completely until World War II.

But this revised analysis wasn't widespread during the 1970s, when policymakers responded to recessions with classic Keynesian tools built on the assumption that consumer spending was the problem and getting consumers increased purchasing power was the answer. Focusing almost exclusively on the demand side, all that the Keynesians' prescriptions managed was to set off runaway inflation.

"Supply-side" economics is often misdefined as "trickle down," further misdefined as giving money to the rich and hoping they spend it on the poor saps down the line. That's wrong. The supply-side idea is simply the recognition that there are two engines of economic growth, not just one: consumer spending AND investment spending. Supply-side economics tries to remove disincentives to investment spending, including tax inefficiencies.

Contrary to what appears to be your belief, the "rich" don't just stuff their money in mattresses or sit on piles of cash in vaults a la Scrooge McDuck. Investment capital -- especially high-risk venture capital, which has a disproportionate economic impact -- overwhelmingly comes from the affluent. If you limit tax relief to lower-income people, or adopt an explicitly redistributive tax policy, you emphasize consumer spending at the expense of investment -- which risks causing inflation and a 1970s-style credit crunch.

The recent recession was overwhelmingly caused by a collapse in investment spending (largely a response to the collapse of the Clinton-era Internet bubble). Consumer spending remained high throughout the 2000-2002 slowdown, and still remains high. A lack of consumer spending wasn't the problem; a lack of investment capital was. About the only positive fiscal tool the government has to encourage investment is to increase investment's real return by reducing taxation on it. (It also has a negative tool it can use to get the same effect -- it can decline to increase taxes. Senator Kerry's campaign proposes to repeat Herbert Hoover's ghastly mistake at the height of the Depression or raising taxes and creating disincentives to precisely the kind of economic activity the economy needs to recover.)

In summary: the idea that the government needs to take money away from the rich and give it to others to "get money in circulation" is outmoded thinking, proven ineffective and even harmful by experience. Both spending and investment need to advance for sustainable economic growth to occur. That means targeting tax relief at both consumers and investors.

Your run away inflation was NOT caused by Keynsian economics, it was caused by a combination of things--the main factor was the dramatic increase in the cost of energy. Of course, the other was a dramatic increase in government spending brought on by the Vietnam war.

As to the rest of your comment, we differ on mostly LABELS. You have mischaracterized my economic philosophy as purely Keynsian--in the most extreme sense. This is something of a strawman argument on your part--I am not advocating that the wealthy forego all of its wealth. I don't think that that is what Keysians advocate anyway.

I do think you have misinterpreted the causes of the problems with the economy of the 1920's. It was not JUST that consumers had too little to spend, which WAS true, but that the equity markets had too LITTLE control on trading practices. Why do you think the SEC regulations came into effect in 1933 and 1934? And you are dead wrong about whether a government can SPEND its way out of a depression. That is exactly what Rosevelt did when we entered WWII. Intentional or not, and to the dismay of the conservative economists who believed otherwise, putting government money into the hands of consumers, in the form of wages payed for the production of war materials, pumped up the economy big time--stimulating further production of consumer goods when the war was over.

Left unchecked by governement regulation, capitalism can run an economy into the ground. You have identified several relevant factors---taxation, government spending, control of the money supply. I don't know anyone who has the magic wand that can keep it all in perfect balance. What I DO know is that massive tax cuts accompanied by excessive government spending, in an economy that is not highly depressed (as ours is not) is probably going to lead to inflation, unless there is a dramatic increase in productivity-as there was in the latter 1990's due to the efficiencies brought about by dramatically improved communications (computers).

By the way--Reagan had his opportunity to demonstrate the effectiveness of "supply-side" economics. It didn't work any better than what you characterize as "Keynsian economics. What the prosperity that Clinton gave us ( and I don't mind giving him credit since Repubs don't hesitate to blame him for things that were not necessarily his fault) was a pretty clear picture that improved productivity coupled with less goverment spending, does actually work. What is happening now is that dramatic government spending on defense is threatening to bring on the same kind of inflation that post-Vietnam gave us. We're just lucky that energy prices have not really risen by the proportional amount of the 1970's, and that consumer productivty remains relatively high---though Bush is managing to threaten that with his encouragement of over-seas production of goods.

On your point about the rich and their investment potential. Your comment would have made sense if the rich DIDN'T have plenty of investment capital. The problem today is NOT lack of investment capital. It is UNEMPLOYMENT. What good is investment capitalization when people can't buy the good whose production you are INVESTING in. Under Clinton unemployment went down dramatically, improving consumer demand while the costs of production went down due to improved efficiency. That was a formula that WORKED.

[Jenda]

Originally posted by Cal+Sep 29 2004, 03:52 AM--></span><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Cal @ Sep 29 2004, 03:52 AM)</td></tr><tr><td id='QUOTE'>

Originally posted by -Jenda@Sep 28 2004, 08:12 AM

<!--QuoteBegin--Cal@Sep 28 2004, 07:43 AM

John Doe---The soviet union fell apart because they had to spend so much of their resources on defense that there was nothing left to keep a consumer economy running. end of story.

Had to spend so much of their resources on defense? Sorry, that just made me laugh. Once WWII was over, who was threatening them so bad that they had to spend so much on defense. Please. They were the offense. They were the aggressors.

Defense my foot.

Sorry, buy you are simply uninformed. Whether you think they HAD to spend a high proportion of their resources on defense in not the point. They simply did. That is no real point of debate. Whether you chose to call it defense or offense is really irrelevant.

By the way, you have a real row to hoe if you think that the Soviet Union was any more offensive than we were. Their point of view was quite understandable: To begin with, who was the ONLY nation that ever used nuclear weapons on another nation? The Soviets knew there were plenty of US officials that advocated invading Russia,General McArthur for one. Even General Patton advocated pushing through into Russia at the end of WWII. Fortunately, wiser heads prevailed. Which nation had offensive weapons practically on the boarder of the other? We did, in Germany and Turkey. When they tried to put them on our boarder (in Cuba) we had a "hissy fit", as we should have; but that hardly made them less offensive (in their minds at least) than us.

In the minds of the Soviets WE were a threat to them, whether you think we REALLY WERE is not the point; THEY thought we were--and had pretty good reason to.

You are the one that said they HAD to spend so much on defense, I only questioned what you said. I don't disagree that they did, I disagree that they HAD to.

And your arguments for why they did are strawman arguments. Yes, we bombed Japan. As I recall, they were the only ones. Did France start fortifying itself, or Mexico, or Canada, or anyone else? We fought next to Russia, to relieve Europe and them (Russia) from the threat of Germany. I would have thought that they would have been a tad grateful to have the help. And just because one or two people wanted to invade them, doesn't mean that the country does. They were the ones who slowly but surely invaded and took over all the countries surrounding their border, so I can understand why the US might have gotten a bit paranoid when they tried to establish relations with Cuba. And don't kid yourself, they had all their nuclear weapons trained on us, too.

I just can't believe how blind you are. We did not even want to be involved in a Euroasian war. We were dragged into it (by Japan), we stayed there as short a period of time that we could, we gave of our resources to rebuild Europe and did not aggress on anyone, and they (and you) felt it was justified that they HAD to defend themselves against us? That is why it is so laughable.

[Guest TheProudDuck]

Cal,

On your point about the rich and their investment potential. Your comment would have made sense if the rich DIDN'T have plenty of investment capital. The problem today is NOT lack of investment capital. It is UNEMPLOYMENT. What good is investment capitalization when people can't buy the good whose production you are INVESTING in. Under Clinton unemployment went down dramatically, improving consumer demand while the costs of production went down due to improved efficiency. That was a formula that WORKED.

It's not a "lack of investment capital" that causes problems during a recession. Money doesn't just disappear. It's the velocity of money that goes away. When they perceive a high-risk economic climate, investors move away from higher-yield, higher-risk investments like IPOs and ventures towards lower-growth, lower-yield ones like cash and Treasuries. The result is a decline in capital investment and productivity, which can depress the economy still further, create an even greater atmosphere of risk, and create a downward spiral.

Investors invest based on a ratio of risk to return. By lowering marginal tax rates, government can increase the real return on investment. All things being equal, this will tend to result in increased investment.

If unemployment is such a problem today at 5.5%, then President Clinton wasn't being honest when, campaigning for a second term in 1996, he touted the then-5.6% unemployment rate as a sign of a strong economy. As for your analysis of Clinton's economic "model" (i.e., supposedly increasing consumer purchasing power by decreasing unemployment), if you look at the statistics, neither factor moved all that dramatically. Consumer spending remained virtually constant throughout the 2001 recession, and accordingly wasn't a substantial factor in either the recession or the recovery.

As you correctly pointed out, the key to the (fleeting) spike in prosperity halfway through Clinton's second term was increased worker productivity. Which measures proposed and enacted by President Clinton to you credit with causing that increase?

This is something of a strawman argument on your part--I am not advocating that the wealthy forego all of its wealth. I don't think that that is what Keysians advocate anyway.

No, it's not. I didn't say they did, or that you are. What I'm saying is that you are focusing exclusively on consumer spending as the key to recovering from recessions, and ignoring the importance of investment. That's the Keynesian fallacy.

I do think you have misinterpreted the causes of the problems with the economy of the 1920's. It was not JUST that consumers had too little to spend, which WAS true, but that the equity markets had too LITTLE control on trading practices.

The stock market crash was caused by speculation in an overheated, unsupervised market. But markets have crashed regularly throughout American history, and while they caused recessions, it took some spectacularly stupid government interventions to create the full-blown, decade-long Depression. Start with Hoover's tax increase, add old Utah Senator Smoot's tariff (which also helped give us Hitler, thank you very much), include the SEC's regulations (some of which were needed, and others of which discouraged investment altogether), combined with the anti-business atmosphere of the 1930s, and you turned a garden-variety recession into a national calamity that, but for the resilience of American institutions, could have left us a socialist or fascist state, as happened in other countries.

By the way--Reagan had his opportunity to demonstrate the effectiveness of "supply-side" economics. It didn't work any better than what you characterize as "Keynsian economics.

Take a look at economic indicators from the 1970s and compare them with those from the 1980s, and explain to me what you're talking about.

Part of the supply-side argument is that there comes a point when increased tax rates do not produce increased revenue. The clearest example of this would be to take things to extremes -- say, a 50% tax rate vs. a 100% tax rate. Under a linear model, a 100% tax rate would result in twice as much tax revenue as a 50% tax rate. But that's absurd; nobody would work for free. Instead of a 100% increase, the result of a doubling of tax rates from 50% to 100% would likely be that no taxes were collected at all.

The tricky part is finding the optimum point where marginal tax increases start discouraging economic activity enough to result in fewer tax revenues. I think it's probably around 33%. Certainly the 70% marginal tax rates that President Reagan eliminated were past that point.

Re: outsourcing -- see the following. Bottom line, it's a hugely exaggerated issue.

http://www.nytimes.com/2004/09/29/opinion/.../29drezner.html

[Cal]

Originally posted by Jenda+Sep 29 2004, 04:53 AM--></span><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Jenda @ Sep 29 2004, 04:53 AM)</td></tr><tr><td id='QUOTE'>

Originally posted by -Cal@Sep 29 2004, 03:52 AM

Originally posted by -Jenda@Sep 28 2004, 08:12 AM

<!--QuoteBegin--Cal@Sep 28 2004, 07:43 AM

John Doe---The soviet union fell apart because they had to spend so much of their resources on defense that there was nothing left to keep a consumer economy running. end of story.

Had to spend so much of their resources on defense? Sorry, that just made me laugh. Once WWII was over, who was threatening them so bad that they had to spend so much on defense. Please. They were the offense. They were the aggressors.

Defense my foot.

Sorry, buy you are simply uninformed. Whether you think they HAD to spend a high proportion of their resources on defense in not the point. They simply did. That is no real point of debate. Whether you chose to call it defense or offense is really irrelevant.

By the way, you have a real row to hoe if you think that the Soviet Union was any more offensive than we were. Their point of view was quite understandable: To begin with, who was the ONLY nation that ever used nuclear weapons on another nation? The Soviets knew there were plenty of US officials that advocated invading Russia,General McArthur for one. Even General Patton advocated pushing through into Russia at the end of WWII. Fortunately, wiser heads prevailed. Which nation had offensive weapons practically on the boarder of the other? We did, in Germany and Turkey. When they tried to put them on our boarder (in Cuba) we had a "hissy fit", as we should have; but that hardly made them less offensive (in their minds at least) than us.

In the minds of the Soviets WE were a threat to them, whether you think we REALLY WERE is not the point; THEY thought we were--and had pretty good reason to.

You are the one that said they HAD to spend so much on defense, I only questioned what you said. I don't disagree that they did, I disagree that they HAD to.

And your arguments for why they did are strawman arguments. Yes, we bombed Japan. As I recall, they were the only ones. Did France start fortifying itself, or Mexico, or Canada, or anyone else? We fought next to Russia, to relieve Europe and them (Russia) from the threat of Germany. I would have thought that they would have been a tad grateful to have the help. And just because one or two people wanted to invade them, doesn't mean that the country does. They were the ones who slowly but surely invaded and took over all the countries surrounding their border, so I can understand why the US might have gotten a bit paranoid when they tried to establish relations with Cuba. And don't kid yourself, they had all their nuclear weapons trained on us, too.

I just can't believe how blind you are. We did not even want to be involved in a Euroasian war. We were dragged into it (by Japan), we stayed there as short a period of time that we could, we gave of our resources to rebuild Europe and did not aggress on anyone, and they (and you) felt it was justified that they HAD to defend themselves against us? That is why it is so laughable.

Jenda--had the Soviets NOT spent on defense, so as to deter our aggression, we may well have unleased our war machine on them--that was how THEY saw it. And seeing it as such, what choice did they have?

By the way--when was the last time you studied any WWII history? You seem oblivious to the history as it actually took place. There were strong influences in our government that had a manic fear of communism and favored PREEMPTIVE nuclear strikes. MacArthur wanted to push into Red China after the Korean conflict and roll over the communists while we had the chance. Patton himself was relieved of his major roll in Germany because he advocated going after the "commies".

As to eastern europe, the soviets didn't invade much of anything. As part of the post WWII treaties we agreed as to what would be their "part" of the world and what would be ours. Go read some history, Jenda.