Lets Tax The Shit out of the Rich.
- Thread starter Max E.
- Start date
Quit dodging the question, I have asked you this on 5 different pages and you refuse to respond.
"tell me how raising the tax rate on "the rich" by 5-10% is going to boost private sector wages." This is the argument Obama is trying to make in order to get re-elected, surely atleast 1 liberal will be able to explain this to me.
"tell me how raising the tax rate on "the rich" by 5-10% is going to boost private sector wages." This is the argument Obama is trying to make in order to get re-elected, surely atleast 1 liberal will be able to explain this to me.
Winner winner chicken dinner!
When W was in office the former head of the GAO flat out told America that we are going to default and there is nothing we can do about it on 60 minutes.
After a little bit of research, well, by golly he was right. This is all theatre folks.
Exactly. People have no clue. It's all a gigantic confidence game, now. If Bernacke or whoever came out and said, "guess what guys? the gig is up. we can't pay.", the Treasury market would collapse in a minute, yields would jump through the roof and the S&P would go limit down. The Great Depression we keep talking about would arrive, that day. Everything will collapse. Low rates and a strong dollar keep this joke of an economy alive. Imagine what will happen to consumer financing, car sales, and the mortgage market after interest rates on the 10 and 30 go +10%, +12%, +14%, +16%?
Alright, since you're all going to pussyfoot around the topic and argue over who asked what question first...
Ricter - You asked how the national debt affects ordinary citizens. The answer lies in interest rates and inflation and is two-part.
First, in interest rates: As more and more debt gets piled on to the national debt, creditors demand more compensation for the added risk in the form of higher interest rates. This forces higher payments to service the debt, but also drives up rates across the board - mortgage rates, credit card rates, auto loans, corporate debt, etc. because these rates are tied to the various rates of the US debt market (in terms of the prime rate rising). Thus, Joe six-pack has to pay more to service his own debt, even if he has a good credit rating and has borrowed responsibly - because the US has not borrowed responsibly.
Now, before you go on about how mortgage rates are at all-time lows (they are) let me refer you to several things. First, while mortgage rates are, credit card rates are not. Neither is corporate debt (although a dash for trash has been underway for quite some time now, but that's another story). The reason these rates are so low is because of my ol' buddy Ben Bernanke and his Merry Band of Keynesians.
The Fed has been in the debt market for several years now, buying up all sorts of crap to get it off the bank's books. When they do that, they "print" more money and send it gushing into the system. Their intent is to get banks to lend, of course, but banks don't trust each other or anyone else, so they take this money and turn around and throw it into speculative plays (commodities, stocks, etc) after they store it at the Fed in the form of reserves.
The Fed drives down rates artificially (which primarily affects mortgages) and thus services the gargantuan US debt pile through monetization or the famed "QE" (Quantitative Easing). This is nice for home buyers and those who are able to refinance (assuming the banks let them).
So why is this bad? Well, the creation of money is bad. It is being done in two major vehicles:
1. The aforementioned QE whereby the Fed buys crap from banks and gives them new dollars.
2. The ridiculously low Fed Funds rate that allows banks to borrow at next to 0 (near-free money) and then go out and buy treasuries or other debt which is "risk free" at ~3% and pocket the different in yield, creating even more money to be used to pump up asset prices.
As you know, the increase in speculation causes a rise in food commodities and energy commodities and that is what affects our consumer inflation rate (the full CPI, not the conveniently manufactured "ex food/energy" one).
So to sum up, stacking on debt causes interest rates to rise, which makes the Fed step in to service the debt by printing, and that printing causes inflation for everyone trying to eat and heat their home on a fixed income.
One additional problem with the artificially lowering rates - seniors and other savers who rely on interest rates for CDs and the like to save their money get zippo from the banks, because rates are so low. So savers and fiscally responsible individuals are punished.
Clear?
Ricter - You asked how the national debt affects ordinary citizens. The answer lies in interest rates and inflation and is two-part.
First, in interest rates: As more and more debt gets piled on to the national debt, creditors demand more compensation for the added risk in the form of higher interest rates. This forces higher payments to service the debt, but also drives up rates across the board - mortgage rates, credit card rates, auto loans, corporate debt, etc. because these rates are tied to the various rates of the US debt market (in terms of the prime rate rising). Thus, Joe six-pack has to pay more to service his own debt, even if he has a good credit rating and has borrowed responsibly - because the US has not borrowed responsibly.
Now, before you go on about how mortgage rates are at all-time lows (they are) let me refer you to several things. First, while mortgage rates are, credit card rates are not. Neither is corporate debt (although a dash for trash has been underway for quite some time now, but that's another story). The reason these rates are so low is because of my ol' buddy Ben Bernanke and his Merry Band of Keynesians.
The Fed has been in the debt market for several years now, buying up all sorts of crap to get it off the bank's books. When they do that, they "print" more money and send it gushing into the system. Their intent is to get banks to lend, of course, but banks don't trust each other or anyone else, so they take this money and turn around and throw it into speculative plays (commodities, stocks, etc) after they store it at the Fed in the form of reserves.
The Fed drives down rates artificially (which primarily affects mortgages) and thus services the gargantuan US debt pile through monetization or the famed "QE" (Quantitative Easing). This is nice for home buyers and those who are able to refinance (assuming the banks let them).
So why is this bad? Well, the creation of money is bad. It is being done in two major vehicles:
1. The aforementioned QE whereby the Fed buys crap from banks and gives them new dollars.
2. The ridiculously low Fed Funds rate that allows banks to borrow at next to 0 (near-free money) and then go out and buy treasuries or other debt which is "risk free" at ~3% and pocket the different in yield, creating even more money to be used to pump up asset prices.
As you know, the increase in speculation causes a rise in food commodities and energy commodities and that is what affects our consumer inflation rate (the full CPI, not the conveniently manufactured "ex food/energy" one).
So to sum up, stacking on debt causes interest rates to rise, which makes the Fed step in to service the debt by printing, and that printing causes inflation for everyone trying to eat and heat their home on a fixed income.
One additional problem with the artificially lowering rates - seniors and other savers who rely on interest rates for CDs and the like to save their money get zippo from the banks, because rates are so low. So savers and fiscally responsible individuals are punished.
Clear?
Dodged it again hey?
"tell me how raising the tax rate on "the rich" by 5-10% is going to boost private sector wages." This is the argument Obama is trying to make in order to get re-elected, surely atleast 1 liberal will be able to explain this to me.
Ill tell you what, if you admit that raising the taxes on the rich isnt going to do a damn thing to increase private sector wages, i will quit pursuing this, all i want is for a liberal to admit that Obama is a disingenuous ass hole.