Wednesday Night Republican Debate

[Cache Landing]

Quote from achilles28:

Again, you missed the point.

The Fed COMBINED with the Income Tax is the cause of blank check lobbying efforts.

Using your example above, if no one will lend to you, the "project" gets mothballed.

The Income Tax and the Fed is one side of the same coin.

The Fed and Income Tax were passed in the SAME YEAR.

Thats how it works. Fiat money creation without removing money creates unsustainable inflation.

Our income tax pays the interest on ALL Federal Debt.

Take away the Income Tax and the Fed and the US Government has nowhere to finance its wars except from Citizens.

Capice?

I understand what you are saying, and I completely disagree with any type of income tax. I also don't think the Fed should exist. I think that money supply should be exactly related to population growth and increase in productivity, with no discretionary ability to change that relationship.

I just don't buy into your argument that the Fed is the cause of borrowing, or that the Fed is the cause of war.

There were wars and borrowing long before the Fed came about. The Fed simply makes borrowing easier.

 

[Jayford]

Just out of curiosity, since I don't follow Ron Paul:

How does he propose that the US earns money to fund itself without an income tax? Does he propose a national sales tax or something similar?

I tuned the guy out completely as soon as I heard him say he would eliminate the CIA completely. OK.....

Its a necessary evil in my book. As long as other countries have their spy networks, we need ours.

 

[Cache Landing]

Quote from Jayford:

Just out of curiosity, since I don't follow Ron Paul:

How does he propose that the US earns money to fund itself without an income tax? Does he propose a national sales tax or something similar?

I tuned the guy out completely as soon as I heard him say he would eliminate the CIA completely. OK.....

Its a necessary evil in my book. As long as other countries have their spy networks, we need ours.

He considers flat tax and consumption tax as punitive to the middle and lower class.

According to statements last month, he is against both a flat tax and a consumption tax. When he says he wants to abolish the IRS, he is saying that he wants to completely get rid of the revenue generated by income tax. This means a cut in revenues of about $1.2 Trillion on 2007 estimates. But then he also suggests letting younger people get out of the system, which implies no longer paying FICA. I don't know where he would draw the line; let's assume that means half of the $900 billion collected would be gone.

He consistently pushes for tax cuts on small businesses, to the tune of $50 billion. Also he wants complete eliminate of capital gains tax and inheritance tax.

When asked how the g-ment would get revenue to function, his response is that there is still revenue coming in from "tariff, excise taxes, user fees, highway fees".

Just to put things into perspective, and remember that I like and support Ron Paul, this is what 2007 would've looked like.

Tariff Revenue = $25B
Excise Taxes = $57B
Corporate Tax ~ $250B
FICA = $450B

Total Revenue = About $782 billion

Last year our g-ment spent about $2.7 trillion if I remember right. RP's plan would call for spending cuts, but as you can see from the numbers, he is suggesting a >70% cut in spending.

Let's assume that he actually could cut spending by 70%. He would have to increase tariff revenue by about 10X, maintain corp tax, and raise Excise Tax about 4X just to pay for a slightly slimmed down version of social security and medicare. That's of course assume there was little spending on military.

Can anyone knowing anything about economics even imagine what would happen to trade if we increased all tariffs by 10X? The Hawley-Smoot tariff act and the Great Depression comes to mind.

Excise taxes are mostly applied to gasoline, cigarettes, alcohol, autos, etc... He is anti-inflation so he can't apply large tax to gasoline and you can only tax tobacco and beer so much.

Obviously these positions lead to serious problems. There's no way we can raise tariffs and excise taxes that much without destroying our economy. So what it really comes down to for RP is that states must become responsible for healthcare and social security benefits must be slashed dramatically to those already receiving them. Defense is also a state issue for the most part as his federal budget would not allow for much national defense advancement.

I completely agree with him that there needs to be dramatic spending cuts and a tax overhaul, but it is glaringly obvious that he has never even remotely had to apply these concepts in the real world.

 

[bigarrow]

Quote from AAAintheBeltway:

I would have thought the country has had enough of the Bush family, after "Read My Lips" and Iraq, but the results of the primary season are leading me to believe that republican voters are unusually naive and gullible. So who knows?

Hey, what about Chelsea? Maybe she could run for mom's Senate seat, keep it in the family like the Kennedys do.

Why is it that voters claim to want "change" above all else, then they turn around and vote for the two biggest washington insiders in the respective races?

It's basic human nature. Change is hard and unknown. The mental effort required to act differently is just too hard for most of to overcome. It becomes an emotional choice, who makes the best sales pitch to America. It's always been this way and always will be.

 

[Hydroblunt]

Quote from Cache Landing:

First off, not everything RP says is correct.

This is true, he has mis-illusions about free markets.

There were very good reasons for dropping the gold-standard.

Name some.

Theories always work but RP has never been responsible for turning those theories into successful realities. Once theories begin implementation in the real economy, it usually turns out that they are quite flawed and very difficult to implement.

You must mean like Keynesian economics, the bible of the Fed and its proponents. LOL

The FED isn't the cause of borrowing.

This statement shows you do not understand what you are talking about. Simple math proves you wrong. Do you even understand the concept of having a nation's currency being issued by a private central bank at INTEREST.
Government borrows $100, has to pay back $105 one year later. Where can the $5 come from? Only from the central bank which ONLY issues money as debt.

Many times, wars aren't an issue of money, but rather an issue of power. The FED has nothing to do with this.

Except lend and extend the power of debt.

With free-market globalization comes wealth/power imbalance.

Free market as in Free Trade Agreements where only 10% of the agreement actually has to do with trade and everything else about restrictive regulation and corporate control?

Wars attempt to either widen the gap or narrow the gap.

What?

But also with this globalization comes advancement and even the poorest see a substantial increase in standard of living.

You must be smoking crack.

 

[ratboy88]

hydro you have more patience than i... when i read that post i threw my hands up in the air and just wrote the guy off. good job responding to the drivel.

 

[achilles28]

Quote from Hydroblunt:


This statement shows you do not understand what you are talking about. Simple math proves you wrong. Do you even understand the concept of having a nation's currency being issued by a private central bank at INTEREST.
Government borrows $100, has to pay back $105 one year later. Where can the $5 come from? Only from the central bank which ONLY issues money as debt.

Good point!

 

[ratboy88]

they(the fed) create this money out of thin air then charge us interest for what? this is the biggest scam known to mankind. it actually hurts my brain that when people are exposed to this swindle they don't care.

the fed never creates the money to pay back the interest. the debt will never be re-paid.... it can only grow exponentially. what we are seeing now is almost parabolic, thus elminating the reporting of M3 statistics.

this is why the mainstream media goes to unprecedented lengths to suppress Ron Paul and his message. Look for this dynamic to worsen. Ron Paul officially raised more money than any other republican last quarter. he isnt going anywhere soon.... they will have to deal with his message. THAT IN ITSELF IS THE STORY RIGHT NOW!!!!

did you people watch ex-cia Anderson cooper openly censor and lie to Ron Paul during the california debate? i guess when you are a Vanderbilt skull and bones family member you are priveledged and get to decide what the american public can and can't hear.

 

[Cache Landing]

Hydroblunt,

First off, in discussing the gold-standard, I should make a couple statements. I'm not suggesting that our current system is better. I'm only suggesting that the gold-standard isn't a perfect system either. I'm assuming we are talking about 100% reserve gold-standard. A couple problems with this are:

-The current quantity of gold is very small and hard to use on a global scale. Personally I think this is only a minor problem.

-The quantity of gold is not controllable. IMO, the quantity of money in circulation should change according to population growth and productivity increase/decrease. Gold doesn't allow for that. It encourages hoarding by the rich as the value of their gold increases naturally with productivity increase and population growth. The poor don't have the luxury of hoarding, so by simply having babies they are becoming more poor.

-On the flip side, if gold is mined faster than productivity increases, it could cause rapid inflation.

-I believe that deflation is worse than inflation. Gold is more vulnerable to deflation as mines dry up and no longer produce ore at the same rate. And no, I don't think that rapid inflation is any better. Don't confuse me with someone who hates the gold-standard. I just don't carry some grand illusions that it is the answer to our monetary problems.

-Gold is used for purposes other than currency backing. It is very conceivable that these uses would need to be abandoned as the price of gold might be drastically inflated.


When I was talking about theories I wasn't taking a side. Personally I support Laissez-Faire systems, but in our current form of government I don't think it is possible for it to work properly. Both main systems work better on paper than they do under a g-ment that tries to implement both at the same time.


With regard to your "FED is the cause of borrowing" response; I think I already argued my case on that one. To take that position one must suggest that borrowing didn't exist before the FED was created. The Fed simply makes it easy. Wars are the same. The existed before the Fed, so the best one can say is that the Fed's allowance of easy debt contributes somewhat to the cause of SOME wars.


With regard to globalism, you are arguing a different point. I argue that globalism is a good thing. You rebut with the idea that it is bad because the contracts are bad. Globalism is good, corrupt trade agreements are bad. You do a disservice to you argument by pulling in unrelated points.


Wars have to do either with the wealthy/powerful trying to maintain/increase their wealth/power, thus widening the gap. Or they are based on the the poor/impotent trying to narrow/eliminate the gap between them and the wealthy/powerful. I didn't think that statement would be that hard to understand, but I guess if your entire post was meant to disagree with everything I said, your response was adequate.


Globalization and free trade allow for the free-market to work. If something can be better produced at a different location then we are better off that it is. Are there cases when a certain group of people might be disadvantaged by globalization? Sure. But that doesn't lend to the idea that everyone else must be hurt by globalism. Free-trade allows for advancement which eventually makes a higher standard of living attainable even for the poorest of people.

 

[Jayford]

I don't get it.

Paul says the States will have to pay for the equivalent of Medicaid, etc?

OK,where are THEY going to get the money?

Increasing tariffs dramatically would kill trade. If you don't believe that you are delusional. I doubt a single economist on Earth would support that.

I would like us to severely cut military spending though. Bring almost ALL our boys home, and let the UN deal with being the world cop (this would mean there would not be one of course as the UN is toothless without the US pushing em). Preferable to what we are doing now however.