The US Economy

Scrat, PLEASE ignore my opinions.

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Thomas wrote:

Scrat wrote:
"Savers" don't put their money in a mattress; they invest it in the stock market or put it in a bank.

This sentence involves a minor misunderstanding that may nevertheless cause trouble later in the discussion. I might as well clear it up now. The savers do put money in a mattress. Either that, or they spend their money on stocks and bonds, and then put these in their mattress. It is the people who sell those stocks and bonds who invest money by spending it on machines, houses, education and other forms of capital.

You seem to be suggesting that this disproves my point, but it merely makes it by restating it in s slightly altered form. The point is that the money is not taken out of the economy, it still gets used, gets spent by someone in some way. Of course, it seems reasonable to assume that some spending has a greater impact on the economy than does other spending, so perhaps your point is that allowing "savers" to keep more of the money they earn doesn't help the economy as much as allowing spenders to keep more of their money.

But I'm curious... with all the talk about the "equal protection" guaranteed us all by the Constitution, why is it liberals aren't arguing that all citizens should be taxed equally? Or to put it another way, doesn't the equal protection clause require government to give us each an equal right to retain the fruits of our labor? Isn't that the self-same argument being used by proponents of same-gender unions? (It certainly is the argument I'm using to justify them.) Isn't that a logical argument for those who clamor for equal treatment under the law to be making? Or is it only bad for government to use the law for the purposes of societal engineering when conservatives are the ones doing the engineering?

How can the government place a higher tax rate on any citizen and be meeting its obligation to treat all citizens equally under the law?

Just a thought. Confused

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Scrat wrote:

You seem to be suggesting that this disproves my point, but it merely makes it by restating it in s slightly altered form. The point is that the money is not taken out of the economy, it still gets used, gets spent by someone in some way.

And I was responding to a question of yours, in which you had highlighted a sentence from my earlier post saying the tax cuts are too focused on savers rather than spenders. I was trying to explain why it is bad policy to encourage saving when the problem is insufficient spending, and the explanation doesn't depend on money getting removed from the economy.

Scrat wrote:

So perhaps your point is that allowing "savers" to keep more of the money they earn doesn't help the economy as much as allowing spenders to keep more of their money.

If you prefer to phrase it this way, I have no problem with it.

Scrat wrote:

with all the talk about the "equal protection" guaranteed us all by the Constitution, why is it liberals aren't arguing that all citizens should be taxed equally?

"Taxed equally" would mean that everyone pays the same dollar amount in taxes, and nobody is advocating that -- including conservatives. So I'm afraid I don't see the point in you singling out liberals.

Scrat wrote:

Or to put it another way, doesn't the equal protection clause require government to give us each an equal right to retain the fruits of our labor?

No. Equal protection under the law means that you are subject to the same laws as I am. It doesn't mean that everyone should pay the same amount of taxes, or even the same tax rate, only that the law defining my tax rate be the same as the law defining your tax rate. A flat tax may well be a good idea -- I for one think it is -- but equal protection under the law is not the reason for it.

Scrat wrote:

Or is it only bad for government to use the law for the purposes of societal engineering when conservatives are the ones doing the engineering?

If this is a position you attribute to me, you are bashing a straw man.

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Thomas - Good comments. Let me focus on where I disagree, but please know that this doesn't mean I only disagree. :wink:

Thomas wrote:

Scrat wrote:
with all the talk about the "equal protection" guaranteed us all by the Constitution, why is it liberals aren't arguing that all citizens should be taxed equally?

"Taxed equally" would mean that everyone pays the same dollar amount in taxes, and nobody is advocating that -- including conservatives. So I'm afraid I don't see the point in you singling out liberals.

If that were true, we would measure equal employment opportunity by comparing a head count of whites and blacks and looking for numerical equality. A company employing 50 whites would be required to employ 50 blacks (or more likely 2 of each special interest group identified by the government :wink: ). But we don't do that; we look at the percentage of blacks in an area and check to see if the percentage employed suggests they are being given equal consideration in hiring and promotion.

Clearly there is more than one way to measure "equality". The one you suggest is illogical and clearly would not result in truly equal treatment. I have merely pointed out one that is logical and which I think would result in equal treatment. Surely the tax code is required to be applied equally, just as any other law, right? However you slice it, the current income tax code isn't "equal", and is in fact designed to place a greater burden on specific citizens.

Thomas wrote:

Scrat wrote:
Or to put it another way, doesn't the equal protection clause require government to give us each an equal right to retain the fruits of our labor?

No. Equal protection under the law means that you are subject to the same laws as I am.

If that were true, there would be no hubbub surrounding same-gender unions, since I am just as forbidden to marry someone of my gender as is anyone else in our country. Right? The government is not applying that law to some and not to others; it applies to everyone equally. (Are you ready to make that argument?)

Thomas wrote:

Scrat wrote:
Or is it only bad for government to use the law for the purposes of societal engineering when conservatives are the ones doing the engineering?

If this is a position you attribute to me, you are bashing a straw man.

No, just throwing it out there as a related point that may be of value to some others reading this. I formally and willingly acknowledge that you made no such point. Cool

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cicerone imposter wrote:

Scrat, PLEASE ignore my opinions.

Fair enough! Consider it done. Very Happy

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Here's an article that speaks to the issue of inflation that seems to downplay the higher cost of energy.

"Much of the increase in overall consumer prices was due to a big jump in energy costs, which were up 4.7 percent last month -- the biggest increase since March.

Gasoline prices rose 8.1 percent, the largest jump since last February, while fuel oil costs spiked 7.2 percent and natural gas prices increased 3.8 percent.

The energy price rises fed through to a sharp 1.7 percent increase in transportation costs, even though new car prices fell. And the higher price of heating a home helped push housing costs up 0.4 percent, the sharpest gain since March.

Some economists pointed to a 0.6 percent rise in tobacco costs as a possible factor in the higher-than-expected core inflation reading, but said it would likely prove transitory.

While most economists focused on the slow pace of core inflation, Dean Baker, co-director of the Center for Economic and Policy Research in Washington, said the quickened pace of overall inflation likely reflected a weaker dollar and could prove durable.

"While economists typically view food and energy price increases as fluctuating randomly around the core rate of inflation, it would be wrong to view the recent trend in this context," he said.

St. Louis Federal Reserve Bank President William Poole told reporters core inflation rates might be stripping out too much of what was affecting price pressures in the economy, but he declined to comment on Friday's figures."

*******
It seems to me, at least, that continuing to strip out higher energy costs to the inflation rate is unrealistic in the "real world" of economics. When my gasoline price jumps from $1.73 a gallon to $2.03 a gallon in one month, that's "real" inflation. To continue the rhetoric that inflation is still under two percent is ignoring the truth of what is happening in the "real world" we live in.

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Scrat wrote:

Clearly there is more than one way to measure "equality". The one you suggest is illogical and clearly would not result in truly equal treatment.

I'm not suggesting it -- except as evidence that the equal protection clause hasn't much meaningful to say about who should pay how much taxes. As a strict excercise in scholasticism, I see at least four logical ways to apply it.

1) Everyone should pay the same dollar amount of taxes. This is far to the right of even the most extreme Republicans.

2) Everyone should pay the same share of his income in taxes. This is right of the center of American politics, but within the conservative part of the mainstream.

3) Everyone is entitled to an equal after-tax income. This is so communist even the Communist party of America isn't advocating it.

4) Having observed that an extra tax dollar creates more unhappiness to a beggar than to a millionaire, legislators should design the tax system to impose an equal amount of unhappiness on every citizen. We'd need an objective measure of 'unhappiness' to be sure, but I guess this would likely result in a progressive income tax pretty much like the ones we have in modern democracies.

My point: There are good tax systems and bad tax systems, but the equal protection clause doesn't tell us which is which. I don't think it has value as a yard stick for tax justice.

Scrat wrote:

Thomas wrote:
Scrat wrote:
Or to put it another way, doesn't the equal protection clause require government to give us each an equal right to retain the fruits of our labor?

No. Equal protection under the law means that you are subject to the same laws as I am.

If that were true, there would be no hubbub surrounding same-gender unions, since I am just as forbidden to marry someone of my gender as is anyone else in our country.

I agree the equal protection clause is probably not a valid argument against prohibiting same sex marriage. But there are many other reasons to allow same sex marriage, so I disagree with your conclusion that there would be no hubbub.

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CI - The reason for defining a 'core' inflation rate with the more volatile parts stripped out is that monetary policy takes something between 6 and 12 months to work its way through the economy. The core inflation rate measures those components of inflation which the Fed can actually do anything about, and the Fed can't do anything about the fact that oil prices are up this month, down next month. It makes sense to have the core inflation rate, and its abuse for propagandistic purposes shouldn't discredit its legitimate uses.

But even if the skeptics in your quote are correct, it's a good thing inflation is ticking up a little. It's been too low recently.

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Thomas wrote:

My point: There are good tax systems and bad tax systems, but the equal protection clause doesn't tell us which is which. I don't think it has value as a yard stick for tax justice.

I don't see that as a compelling argument for exempting the tax code from being held up to the equal protection clause just like all other laws. Do you?

Thomas wrote:

I agree the equal protection clause is probably not a valid argument against prohibiting same sex marriage. But there are many other reasons to allow same sex marriage, so I disagree with your conclusion that there would be no hubbub.

You are agreeing with a point I have not made. I know of no other argument that has the weight to compel the government to allow same-gender unions except for the need to satisfy the equal protection clause. There is no Constitutional right to marry. Where else do you find a basis for forcing same-gender unions upon a largely unwilling populace?

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Scrat wrote:

Thomas wrote:
My point: There are good tax systems and bad tax systems, but the equal protection clause doesn't tell us which is which. I don't think it has value as a yard stick for tax justice.

I don't see that as a compelling argument for exempting the tax code from being held up to the equal protection clause just like all other laws. Do you?

As a practical matter, I don't think it makes any difference whether you exempt it or not. Even if you don't exempt it, you can use it to justify any tax code between extreme communism and extreme conservatism.

Scrat wrote:

I know of no other argument that has the weight to compel the government to allow same-gender unions except for the need to satisfy the equal protection clause. There is no Constitutional right to marry. Where else do you find a basis for forcing same-gender unions upon a largely unwilling populace?

I'm not an expert on the American constitution, but I'm sure it has some way of establishing freedom of contract. Marriage is, among other things, a contract between consenting grown-ups, so I expect your constitution to cover it through this channel. I'd have to read it to be sure though.

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Thomas, Makes sense, but the whole issue of government trying to control interest rates, ergo, inflation, seems to me somewhat similar to taxation. Some claim it's good for the economy to have higher taxes, while others claim the opposite. Seems like an awfully subjective game of cat and mouse. Thx, c.i.

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Thomas wrote:

I don't see that as a compelling argument for exempting the tax code from being held up to the equal protection clause just like all other laws. Do you?

As a practical matter, I don't think it makes any difference whether you exempt it or not. Even if you don't exempt it, you can use it to justify any tax code between extreme communism and extreme conservatism.[/quote]
I see no reasonable, rational way you can argue that the current code is an "equal" code. It was specifically designed with the intent of not being equal. Your interpretation of "equal application" of law would permit a law applying different criminal punishments to people based on hair color. The law would effect people unequally, but would be applied to everyone, right?

Thomas wrote:

I'm not an expert on the American constitution, but I'm sure it has some way of establishing freedom of contract. Marriage is, among other things, a contract between consenting grown-ups, so I expect your constitution to cover it through this channel. I'd have to read it to be sure though.

Seriously, if you think the Constitution offers any such right, please support that belief. I suspect you would challenge me if I simply wrote that I'm sure the Constitution allows for slavery, but I don't know how.

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Equal what? Equal payment? Percentage? Burden in relation to situation?

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More double talk from Greenspan. From Reuters: "Greenspan said he was confident that new jobs will replace those lost and said a pickup in hiring prospects lay ahead."

"We have seen encouraging signs of late that the labor market is improving," Greenspan said. "In all likelihood, employment will begin to increase more quickly before long as output continues to expand."

They just won't commit themselves to quote numbers and/or dates. In essense, they are saying nothing.

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We are losing on the average 77,000 jobs every month during this "expansion." As people lose their jobs, we lose what is euphamistacally called "consumers." I don't see how Greenspan can say "employment will increase more quickly before long." I call that voodoo economics.

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Important readings on consumer confidence from Reuters. "Job growth is slow, layoffs are still high, and actual factory output is not doing as well as the Institute for Supply Management survey says it should be doing."

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Scrat wrote:

Seriously, if you think the Constitution offers any such right, please support that belief. I suspect you would challenge me if I simply wrote that I'm sure the Constitution allows for slavery, but I don't know how.

Well, the constitution passed in 1787 did allow for slavery, though I couldn't cite the article saying that. But I know it did, because it took an amendment (not sure which number) to change it. Freedom of contract and freedom of association are basic human rights, so I expect any democratic constitution in the 21st century to support it in some way. I agree that such indirect evidence is far short of proof. Tough. This forum has members from 20 democratic countries, and I don't feel responsible for reading each of their constitutions and find out the exact way in which it protects human rights. I just bet they have someway of doing it and hope for the best.

As a matter of procedure, I'm always sorry if you don't like my evidence, but that's ultimately your problem. I feel responsible for stating honestly what my evidence is, but I do not feel responsible for making you happy with it. Ultimately, the only one who has to be happy with my evidence is me.

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The Bill of Rights, adopted in 1791, says nothing about slavery.
The Fifth Amendment, however, guaranteed that no person could "be deprived of life, liberty, or property, without due process of law." Slaves were property, and slaveholders had an absolute right to take their property with them, even into free states or territories.

U.S. Constitution: Fifth Amendment

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Thanks, Walter!

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Walter is correct: slaves were property. Except of course when it came to determining the electoral voting power of states and their representation in Congress - slave states were given credit in both for 3/5 of their slave populations. This, Northern resentment at the legal requirement to return escaped slaves, the utter incompatability of the Bill of rights with slavery, and the question of possibly extending the institution into new states in the west were the seeds of the Civil War.

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