@LWSleeth,
LWSleeth wrote:
Theory: Cut taxes, create an environment favoring investment; it will create jobs, everyone will have enough to get their needs met.
Reality: Low taxes also means schools suffer, roads, bridges etc. crumble, police lack funds, passports are impossible to get on time, veterans are neglected, and so on
Cutting taxes does create jobs. The Bush tax cuts created jobs. However, cutting taxes without corresponding reduction in spending, as I would advocate, is absurd and cannot last. Consider that one of the reasons that the government does such a horrible job with the essential functions you mentioned above is because a majority of its time and energy (i.e. beaurocracy) are devoted to regulatory activities, and an even larger majorty of its funds are devoted to social programs, esp. Medicare, Medicaid, and SS.
Quote:Investors build businesses, stockholders want dividends; worker pay and benefits are minimized/eliminated to enrich stockholders, the amount "trickling" down is sucked out by stockholders, executives, new investment (which doesn't always produce).
That does indeed happen sometimes. However, government intervention in the market via minimum wage laws, mandates re insurance and health care, regulation in every sphere and subsidies/tax incentives (to politically favored, not necessarily viable companies) 'fouls up the works,' so to speak. Prices and wages become functions of a decision in Washington, rather than economic realities. --> inefficiency.
Quote:Meanwhile, to keep money flowing in, consumers are fed marketing hype and extended tons of credit they shouldn't have; they are encouraged to consume, consume, consume. To consume at the rate needed to sustain the "top," consumers go into debt. Soon they are over their head, bankruptcies and foreclosures follow, spending stops, economy goes into a tailspin.
Here's the one that makes me smile. Marketing is the not the source of our consumer society. Our economy is driven by consumption, and ergo by the transative property, currently teetering on the brink of oblivion, because of our monetary policy, or rather or entire monetary system, along with the prevailing school of economics: keynesian. Per K. theory, demand is the basis of an economy and the engine of growth. Therefore, whenever there is a downturn/recession, the government enacts policies that stimulate consumption. Each time this happens, that sector of the economy is strengthened at the expense of the other, productive sectors; hence the replacement of domestic manufacturing by imports, and also our ever increasingly debt, public and private. These 'business cycles' that supposedly require a keynesian solution (which really is just a postponement, a borrowing of future prosperity, a sort of of pyramid scheme) are not a natural phenomena. Yes, in any economy, there will be periods of decline along with periods of growth, but the ossilation is magnified and made more frequent by our monetary policy, which brings us to the Federal Reserve.
The Fed is the worst sort of reactionairy; it tries to identify slowing growth and responds with lower interest rates (more credit and money in the economy) which creates an artifical prosperity (a bubble, such as recently popped in domestic real estate, and is about to pop in commerical), which creates inflation, to which the Fed then responds by lowering interest rates. What has happened? No prosperity is created, only the illusion of prosperity, and two other constants: inflation and debt. Since the creation of the Fed, and especially since the final abandonement of the gold standard in 1971, there has been a perpetual debasement of the $US and a perpetual and exponentially increasing debt-load, private and public. This all equates to a weakening of the productive capacity of the U.S., a loss of competieiveness and efficiency, but most directly, a transfer of welath via inflation and debt. When the Fed creates new money, the existing currency is devalued proportionately...eventually. Whoever has the money first gets to use its full purchasing power to acquire real assets; by the time it reaches the ordinary consumer, inflation has caught up. The manjor banks and the government are the first to use the money.
As for debt; do you know that the Federal Reserve is a privately owned corperation, the shares for which were sold in 1913 to the largest private banks in the world and are non-transferable, but which yeild a garanteed 6% dividend from the Fed's earnings annually. And where do those eanring come from? Interest on the part of the national debt which the government owes to the Fed, amounting to tens of billions annually. You might think that this sound sfair, that this private bank (the Fed) should earn interest on the money it lent the government...here's the kicker; the Fed has no money, it has nothing but the sole legal authority to print money. So, to summarize, the government has delegated its constitutional authority to coin money to a private entity, which prints that money and then loans it to the government at interest! Of course, lending this new money (which these days isn't even printed, just entered into a computer) to the government isn't even the most lucrative operation for the banking cartel (the Fed); they loan out much more money to other banks and private corperations, manipulating the markets to their own advantage and earning interest on money they invented out of thin air! This is HUGE drain on the economy. The profit of the major corperations ans the concentration of wealth associated with that pale in comparison to this operation sanctioned by the government. Of course, the Fed and its private owners win either way; in the event of loan defaults in the private sector, they take owndership of real assets. For example, right now, under the guise of 'the buyer of last resort' the Fed is preparing to purchase all kinds of securities and finanical instruments with newly printed money: in other words, for nothing. In the 30s something similiar occured but with the government. When Roosevelt devalued the dollar relative gold with the intention of providing keynesian stimulus, he issued an executive order confiscating gold, which was then given to the Federal Reserve in return for its support in financing government spending. Since then, much of that gold has been sold. Yes, the gold in fort knox and the Fed bank of New York is not owned by the people fo the united states, but rather by the private central bank.
One more thing needs to be mentioned to give you idea of what I'm talking about, which should be understood as a whole. The Federal Reserve Act was introduced by Senator Nelson Aldrich in 1913 in response to public outrage over the market manipulation by the 'money trust,' a group of the most powerful bankers and industrialists, which was beleived to have caused the banking panic of 1907. Nelson did not write the bill though(Nelson, btw, was the godfather of Nelson Rockafellar, hence the name). The bill was written by a group of men who travelled to Jekyll Island, a private resort island off the coast of Georgia, on the Sen. private rail car a few years before. Thet cottage where these men met actually has a plaque commemorating the event, so it's no secret. However, at the time, it was very secret, because these men were:
Frank Vanderlip, Henry Davison, Charles Norton, Benjamin Strong, and Paul Warburg, who respectively represented the National City Bank of New York, the J.P. Morgan Company, J.P. Morgan's First National Bank of New York, J.P. Morgan's Banker's Trust Company, and the European Kuhn, Loeb and Company; together, these men are conservatively estimated to have controlled at about one quarter of all the wealth in the world at that time.
Need I say more? We've been being looted for decades...not by free marketeers, but by a government sponsored cartel, supposedly working in the public interest and created to correct 'wild swings of capitalism,' which is has caused.
Quote:Solution: make sure the bottom is enriched enough to sustain a heathy market. Socialize or subsidize basic needs, leave the rest to the free market.
Then the free market won't work, and we'll all be poor. That sort of plan does nothing but make people dependent; welfare-esque programs do not fight poverty, they institutionalize it. Moroever, we're broke...that day is done even if we wanted to prolong it.
