Regulation is the great barrier that shut off all the air from the fire. Those fires are not eternal you know. They have to be stoked. Let me stoke the fire and if it gets too hot then the government can come in and build a great barrier around it to protect the people from all the hot profits.
Will Capitalism Survive/Fix This?
- Thread starter tommo
- Start date
Demand does not the only, or even the most important driver of production and growth. Consumer demand is now satisfied by Chinese production. If you give people money to stimulate demand, you are more likely to benefit Chinese production than U.S. production as you will tax U.S. production to pay people to buy Chinese goods. You need to get away from the consumption/circulation as driver illusion.
Innovation, the process of improvement and invention, creates new products and pricing efficiency that will drive demand (Check out book by Thomas K. McCraw, "Prophet of Innovation").
Lowering the price of a good creates demand and inventing a new good creates demand. Once you are in production, then you care about balancing demand and competition.
We had tires, but when the radial was invented, we discovered we needed new ones. Why did they invent the radial tire; why did they do research and development on better tires? Why did they spend money on this instead of maximizing profit and streamlining tube tire production? Why did they invent tubeless tires? I didn't ask for one, but I got one (The fellow who invented the process used to make the first radial tires, solved the problem of how to get the steel belts into the rubber, is a friend of mine...he didn't do it because there was a letter writing campaign the said, he we want steel belted radial tires!)
Look at Murray's book on UBI, mentioned above, he suggests a $10,000 UBI up to $30,000 income, then phasing out until income reaches $60,000.
Consider that the money has to come from production and that production creates growth and ultimately pays for all government tax and all government debt.
Consider again that real wealth is the risk adjusted discount of a possessory right to an after tax future income stream.
Consider also that it is production and wealth that you will be taxing to money, a UBI, to a segment of the population.
Increased tax on production reduces surplus profits that can be reinvested or increases price reducing the market; in both cases production growth will be slower than otherwise, growth will be slower, tax revenue may be lower even at a higher rate.
Tax on wealth, a tax that reduces the expected after tax return on a future income stream, immediately changes the risk and the discount to present value of that income stream so, even when you threaten higher tax on an income stream you immediately reduce the present value of the present wealth implied by that income (This is why you really can't re-distribute wealth, because the act of distribution destroys it).
So, lets not do these taxes on wealth and production, lets just borrow the money; we can issue treasury bills and have the Fed buy them with new money they create on their balance sheet that never really goes into circulation. Then we can give UBI to everyone and not burden production and everyone can be wealthy. That seems to be the plan. Lets hope the Germans, the Chinese, the Japanese don't then balk at our market treasury debt. If that happens, they might not want to hold our dollars as reserves. If that happens then all the UBI we are handing out won't be worth anything.
Innovation, the process of improvement and invention, creates new products and pricing efficiency that will drive demand (Check out book by Thomas K. McCraw, "Prophet of Innovation").
Lowering the price of a good creates demand and inventing a new good creates demand. Once you are in production, then you care about balancing demand and competition.
We had tires, but when the radial was invented, we discovered we needed new ones. Why did they invent the radial tire; why did they do research and development on better tires? Why did they spend money on this instead of maximizing profit and streamlining tube tire production? Why did they invent tubeless tires? I didn't ask for one, but I got one (The fellow who invented the process used to make the first radial tires, solved the problem of how to get the steel belts into the rubber, is a friend of mine...he didn't do it because there was a letter writing campaign the said, he we want steel belted radial tires!)
Look at Murray's book on UBI, mentioned above, he suggests a $10,000 UBI up to $30,000 income, then phasing out until income reaches $60,000.
Consider that the money has to come from production and that production creates growth and ultimately pays for all government tax and all government debt.
Consider again that real wealth is the risk adjusted discount of a possessory right to an after tax future income stream.
Consider also that it is production and wealth that you will be taxing to money, a UBI, to a segment of the population.
Increased tax on production reduces surplus profits that can be reinvested or increases price reducing the market; in both cases production growth will be slower than otherwise, growth will be slower, tax revenue may be lower even at a higher rate.
Tax on wealth, a tax that reduces the expected after tax return on a future income stream, immediately changes the risk and the discount to present value of that income stream so, even when you threaten higher tax on an income stream you immediately reduce the present value of the present wealth implied by that income (This is why you really can't re-distribute wealth, because the act of distribution destroys it).
So, lets not do these taxes on wealth and production, lets just borrow the money; we can issue treasury bills and have the Fed buy them with new money they create on their balance sheet that never really goes into circulation. Then we can give UBI to everyone and not burden production and everyone can be wealthy. That seems to be the plan. Lets hope the Germans, the Chinese, the Japanese don't then balk at our market treasury debt. If that happens, they might not want to hold our dollars as reserves. If that happens then all the UBI we are handing out won't be worth anything.
Well, I mean the essence of capitalism is a disruption. So, if it won't survive it's only because it's gonna accomplish its main function and be disrupted by some other form of an economic and political system.
Indeed, globalization vs UBI is not something I've seen properly addressed yet, but I will look into the Murray book.
That being said, why not just convert current benefit systems into a UBI to keep it cost neutral as a start? Who says we need to make extra debt before we have to?
There is no need for there to be a net loss of jobs. This is the great fallacy. Some jobs will disappear but other jobs can replace them. Right now we have millions of good jobs that could be created to tremendous benefit of everyone, but we aren't creating them. It is not because we couldn't. There is plenty to do of great benefit, but we are not doing it. If someone can make a shoe for $0.75/hr, let them. There are plenty of useful things we can do that no robot can, and that no one will do for $0.75/hr.
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My understanding of UBI is that its in place of a welfare system, so saves money on the bureaucracy and inefficiency of taking money off people just to hand it back.
But this misses out the one huge issue no politician or liberal seems to address. Human nature.
Despite the narrative of all poor people are just hard done by and no fault of their own. A lot of them are in that place because of bad decisions they made and which they will make again. If you give everyone an extra $15k a year or whatever just for being part of a society you will get a large proportion of those people spending it on tv's and holidays and cars because they dont know how to handle money. Then when they get sick/face an emergency they will have spent all their money and the state will rescue them.. again. So you are paying 2 bailouts instead of one.
Here in the UK they love to talk about what percentage of people in the UK living in poverty.. it isnt poverty.. its "relative poverty". Huge difference. Anyway, a recent study showed a THIRD of these people living in "poverty" income's went on cigarettes! I'm sorry but if you arent willing to help yourself the state isnt going to be able to help you.
But this misses out the one huge issue no politician or liberal seems to address. Human nature.
Despite the narrative of all poor people are just hard done by and no fault of their own. A lot of them are in that place because of bad decisions they made and which they will make again. If you give everyone an extra $15k a year or whatever just for being part of a society you will get a large proportion of those people spending it on tv's and holidays and cars because they dont know how to handle money. Then when they get sick/face an emergency they will have spent all their money and the state will rescue them.. again. So you are paying 2 bailouts instead of one.
Here in the UK they love to talk about what percentage of people in the UK living in poverty.. it isnt poverty.. its "relative poverty". Huge difference. Anyway, a recent study showed a THIRD of these people living in "poverty" income's went on cigarettes! I'm sorry but if you arent willing to help yourself the state isnt going to be able to help you.
2 schools on these things, one truly wants to help the poor
one is more concerned with wealth redistribution
dangerous Imho to mix the 2.
Pick a number any number let's say 20% and declare anybody with a net worth in the bottom 20% is poor regardless of how well or destitute they live. I would guess many with decent incomes still have a negative net worth. Almost certainly if you include student loans.
Exactly, most people i know earning "good" salaries (by that i mean 80-150k) are only about 2 months of savings away from going into arrears on their mortgage/debt obligations. Yet according to governments people earning 50k+ are considered "rich" and have to start giving up almost half their salaries.
Id struggle to argue against people earning millions a year not paying more to be honest. My issue is more that people that are clearly working hard to afford a middleclass lifestyle are the ones getting clobbered most in taxes.
Personally i think consumption taxes are probably fairer than income taxes. People should be encouraged to save. You cant do that when half of its siphoned off before it reaches your pocket. But sales taxes on areas that are overheating could "possibly" be a way to raise revenues, increase savings and divert money into other areas.
But to be honest all taxes that are not on a pay as you use basis make me very uncomfortable.. and im not a millionaire. I just think the fairest system is one where you use it, you pay for it. You dont use it, its not on your wallet that the burden falls
For me, taxes are everything. It is my only real interaction with the government. I can talk on the internet about the poor, ubi, velocity, min wage, but it is all just talk until money goes from me to the government. That's real.
Every tax plan I come up with always breaks down at some point. Income tax, but then what is income? Consumption tax breaks down, net worth tax breaks down, what else? Tariffs, user fees, vat, all have some place where it has unintended consequences or simply a loophole that only the wealthy can easily jump through.
Perhaps a vindictive tax where we tax all unapproved behavior. Of course all the vice taxes but more like a speeding ticket on everything bad. People complain that poor kids spend their money on this and that, well just tax this and that. Whatever you don't like just tax it. At least then you get some satisfaction when you see somebody doing something you disapprove of, "Well at least they're funding the government."
Every tax plan I come up with always breaks down at some point. Income tax, but then what is income? Consumption tax breaks down, net worth tax breaks down, what else? Tariffs, user fees, vat, all have some place where it has unintended consequences or simply a loophole that only the wealthy can easily jump through.
Perhaps a vindictive tax where we tax all unapproved behavior. Of course all the vice taxes but more like a speeding ticket on everything bad. People complain that poor kids spend their money on this and that, well just tax this and that. Whatever you don't like just tax it. At least then you get some satisfaction when you see somebody doing something you disapprove of, "Well at least they're funding the government."
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