1
   

Tough Times

 
 
Aedes
 
  1  
Reply Tue 27 Oct, 2009 01:20 pm
@Pythagorean,
Pythagorean;100129 wrote:
You are mistaken. The debt to GDP ratio has never been this high during peace time. It seems you aren't aware of the type of growth potential that awaited America in 1945 compared to the prospects today.
The debt/GDP was higher in the late 1940s, the entire 1950s, and in the early 1990s than it is now. Sure, the 40s and 50s were in the post-war period, but it WAS peace time (Korea doesn't count because we didn't have a war economy then).

File:US Debt Trend.svg - Wikipedia, the free encyclopedia

Pythagorean;100129 wrote:
I'm not talking about the level of health care in the last 100 years, I'm tallking about the total decline in the American economy as represented by the debt.
Well, no king has been overthrown because of national debt. People rise up because of their standard of living, and the standard of living has only improved.

Pythagorean;100129 wrote:
I would agree the health care is greater now than ever in the past. But I would stipulate that the original causes for such a high standard have crumbled long ago and we are now at a kind of peak.
Technologically we are only getting better. In terms of access we are stagnating, and the combination of access and health care economics are on the brink of self-destruction. The "original" causes for a high standard are reinventing themselves daily as evidence and technology and experience improve. But it comes at a grievous price.
Pangloss
 
  1  
Reply Tue 27 Oct, 2009 02:07 pm
@Elmud,
Aedes, that chart you posted looks like it is for government debt to GDP, not total national debt to GDP, which is what is more important when judging overall economic health. You can imagine why the whitehouse would rather just publish a nicer looking govt. debt to GDP chart, than total debt to GDP. When looking at total debt to GDP, Pythagorean is right, the only time it has been possibly higher than it is now, is around the depression era. But of course, it depends on whose data you are looking at. And, methods for calculating debt and GDP have not always been the same.

Now, there are a couple of frightening charts circulating that are supposed to depict this data, but Credit-Suisse recently came out with a new one, that is debatable. But even with their more conservative chart, you can see the ratio is sky high, and has been on the increase for some time. There's an article available on this here, with both charts, including CS's:

Debt-To-GDP Chart: Analytically Meaningless | Daily Markets

Credit-Suisse claims that this highly leveraged economy is not a problem, and that the total debt to GDP increase is completely healthy and sustainable. I can't really agree with this, because I don't understand the growth they are predicting that will be able to offset the debt. But they also do note that there are many other factors to look at when gauging economic health than debt-to-GDP, though I think it's still important.
0 Replies
 
Aedes
 
  1  
Reply Tue 27 Oct, 2009 02:18 pm
@Elmud,
The chart is national debt to GDP, it's linked from this web page:

National debt by U.S. presidential terms - Wikipedia, the free encyclopedia

It may be meaningless, but that's a different question. When Pythagorean contends that we currently have the highest peacetime debt/GDP in history, he's mistaken, and so I'm confused as to why we should run with his apocalyptic tone about the current debt situation.

The following chart compares gross debt to public debt as a function of GDP. They're basically the same, i.e. parallel. But it's not federal policy that's creating the excess of total debt -- it's retarded mortgage arrangements and overdrawn credit cards and overleveraged private banks and firms that are doing it.

File:USDebt.png - Wikipedia, the free encyclopedia
William
 
  1  
Reply Tue 27 Oct, 2009 02:23 pm
@Khethil,
Khethil;99208 wrote:
Yea they are tough; and it's alarming that nefarious/spurious trading practices can bring us to this place.


You are so giving in that you only used nefarious and spurious, when there are so many more words you could have used also, like manipulating, conniving, underhanded, etc. These practices do seem to have us over a barrel, so to speak, in more ways than one as others are so very tired of being offered a circumstance the can't refuse. All will derive a way as we still don't understand what those derivatives are we were given fair warning about.

William
0 Replies
 
Pangloss
 
  1  
Reply Tue 27 Oct, 2009 02:34 pm
@Aedes,
Aedes;100181 wrote:
The chart is national debt to GDP, it's linked from this web page:

National debt by U.S. presidential terms - Wikipedia, the free encyclopedia

It may be meaningless, but that's a different question. When Pythagorean contends that we currently have the highest peacetime debt/GDP in history, he's mistaken, and so I'm confused as to why we should run with his apocalyptic tone about the current debt situation.

The following chart compares gross debt to public debt as a function of GDP. They're basically the same, i.e. parallel. But it's not federal policy that's creating the excess of total debt -- it's retarded mortgage arrangements and overdrawn credit cards and overleveraged private banks and firms that are doing it.

File:USDebt.png - Wikipedia, the free encyclopedia


Aedes, gross debt, national debt, and total debt are not the same. You can see, right from the wikipedia article that your chart came from, that:

Wikipedia wrote:
The United States government debt, commonly called the "public debt" or the "national debt", is the amount of money owed by the Federal government of the United States to holders of U.S. debt instruments. Gross Debt is the national debt plus intragovernmental debt obligations or debt held by trust funds like the Social Security Trust Fund.


Total debt would include gross debt, plus private debt. Here is another chart, showing total debt as a percentage of national income:

http://mwhodges.home.att.net/nat-debt/debt-total-ratio-trend.gif
0 Replies
 
Pythagorean
 
  1  
Reply Tue 27 Oct, 2009 02:40 pm
@Aedes,
Aedes;100163 wrote:
The debt/GDP was higher in the late 1940s, the entire 1950s, and in the early 1990s than it is now. Sure, the 40s and 50s were in the post-war period, but it WAS peace time (Korea doesn't count because we didn't have a war economy then).

File:US Debt Trend.svg - Wikipedia, the free encyclopedia




I am under the impression that the running account deficit of the federal government is 10%. I have heard repeatedly that it has never been higher during peace time. But I don't want to crunch numbers.

There is still the issue of growth potential which was so much greater in the 40's and 50's. Now let us examine briefly the recent history of the American economy.
There was the dot com boom which was really an earlier version of the most recent finance boom. The IPO's that were dropped during the dot com bubble were just as ridiculous as the sub prime mortgages were to become later.

The dot com boom was largely a sham in my opinion, it was pure speculation fueled bubble-mania. But my real point is this: why couldn't the Americans grow their economy in any other way during the dot com era? Why did the Americans need to rely upon an empty bubble in order to produce the illusion of economic vitality? The sad truth is that average wages for the workers in America have been stagnant since the 1970's.

Now let's look at the real estate bubble. I ask you, why did the Americans need to rely upon sub prime mortgages in order to have a pretense of economic health? Why couldn't we produce something that was not an immoral bubble? I will tell you why Aedes, it is because the manufacturing sector has all but vanished and there is no other way to produce real wealth without the production of actual goods. The 'service' economy is as phony as the day is long and the last two bubbles going back into the mid-1990's proves my point.


So why was it necessary to rely upon sub-prime to grow the economy in the first place?


Why did they have to rely upon phony IPO's?

What will the Americans do next?
I will tell you what the Americans are doing for an encore, they are borrowing absurd quantities of money and turning to the printing presses and literally printing their way into what you so falsely believe will be some magically produced economic health. Well, I say it will never happen because it can't happen. The dot com and the real estate chicanery have proven beyond any doubt that the Americans can no longer grow their economy in any sound or sustainable fashion.

I am right. And time will prove me right. All I have to do to win this argument is stay alive for a little while longer. And you will see! They grew the entire economy from post September 11th to 2008 with phoney shannanigans and anyone who can't see it is mistaken and anyone who thinks that we will magically return to economic health as an encore performance is wrong.


I would also remind you of the recent collapse of almost all of the major banks in the country. It seems you are forgetting this fact. So after collapsing the entire banking industry they are going to magically return to some type of viable economic practices? What would make anyone believe in such a thing? How are they going to come up with such sound practices? Will they pull them out of their butts, or what?


Aedes;100163 wrote:

Well, no king has been overthrown because of national debt. People rise up because of their standard of living, and the standard of living has only improved.


But they are printing money in order to bail everyone out and also to buy back some of their own debt. It is unfortunate but printing money without any real productivity or savings leads to inflation or sometimes in extremem cases hyperinflation. And hyperinflation does indeed cause revolutions as well it should. I am of course thinking Weimar here.


By the way the national debt is scheduled to be 19 trillion in a few years. The national debt is the money that the government borrows in order to function and pay all of its bills. This is different from the trade deficit of course which averages around 700 billion a year and is mostly the result of our dependence upon foreign imports of oil but also of technological and manufactured goods. We are permanently dependent upon these goods now so there is no way for us to meaningfully shrink the size of the trade deficit.
Fido
 
  1  
Reply Tue 27 Oct, 2009 07:04 pm
@Aedes,
Quote:

Aedes;100072 wrote:
So it's come to its end in a moral sense, you're saying but not a functional sense.

There are three problems with this moral idea, though:

1) There isn't an alternative that is fundamentally different yet will produce more good than evil, certainly not with the demographic and economic magnitude of the world in 2009.
There is an alternative, but it is not for me to give it, but for the people of the nation and world to decide upon what they want...Any ideal can never compete with the real, and the practical... I do not believe there is a one size fitzall form of economy or government... Nothing competes with the power of people to democratically defend themselves from criminals, even those criminals have state licence...

2) The transition to any other system might prove worse than stability within any given system. Look at how bloody economic revolutions can be, simply because haves turn into have-nots and vice versa.

3) There is no central moral arbiter.

Yes, to two... People crave stability until they come face to face with intractible government; government that can do anything but govern its own excess, or see through its ideals and principals to a practical good...Any change long delayed is accompanied with frustration, and pain... People once free suddenly realize how slavish they have been, and they seek not only freedom but revenge, and in that they test the limits of freedom...

There is a central moral sense... Community is morality, but capital works by producing individuals which is another word for victim... Capitalism as we know it would not be possible if everyone was a member of a healthy and strong community because every injury to honor would invite instant death... Well capital is nothing but an insult to honor...Think of all the times in your life you had to give eight hours to do a four hour job, or do a job for wages that had no redeeming social qualities... They have our lives for a pittance...Our time is all we have and to survive we must give it for nothing... Is this right that we should work longer hours than native Americans for little more of security to show for it and nothing of community or culture???
0 Replies
 
Aedes
 
  1  
Reply Tue 27 Oct, 2009 07:44 pm
@Pythagorean,
Pythagorean;100185 wrote:
I am under the impression that the running account deficit of the federal government is 10%. I have heard repeatedly that it has never been higher during peace time. But I don't want to crunch numbers.
Doesn't matter -- whether it's the worst or not, it's bad.

Pythagorean;100185 wrote:
Now let us examine briefly the recent history of the American economy...
We may have a manufacturing and export deficit, but one thing we do not have is a deficit in innovation. China may be a powerhouse of an exporter, and it indeed has world class universities, but nothing anywhere in the world competes with the United States in the sheer mass of invention, whether in academia or in private industry. And you just never know what industry will come next. It doesn't need to be raw materials and it doesn't need to be cars.

In other words, I'm not giving up on our potential to recover -- as long as it's based on real things and not based on turning $1 into $2 by some investment instrument.

Pythagorean;100185 wrote:
Now let's look at the real estate bubble. I ask you, why did the Americans need to rely upon sub prime mortgages in order to have a pretense of economic health? ... So why was it necessary to rely upon sub-prime to grow the economy in the first place?
The best explanation I've heard for this is on the utterly phenomenal Planet Money / This American Life collaboration, called "The Giant Pool of Money", which you can get for 99 cents on iTunes (it originally aired on NPR).

The subprime crisis would have never happened but for one critical phenomenon: the global treasury holdings (esp in China, India, etc) have literally doubled in value since 2000, to the tune of roughly $70 trillion. Treasurers everywhere have been looking for lucrative returns. And as is brilliantly explained in this show I reference, the return on securitized subprime mortgages was enormous -- particularly so because the interest rates were high and the penalties extremely high on these high risk mortgages. Brokers were motivated to sell to crappy buyers because they'd make a killing selling a group of mortgages to an investment bank, so they'd never have to live with the risk.

The low Fed interest rate had something to do with this mainly because the return on a treasury bond was so low that investors turned away from them.

Pythagorean;100185 wrote:
I am right. And time will prove me right. All I have to do to win this argument is stay alive for a little while longer.
You may indeed be right, but you also may not. There are variables at work that are beyond the prediction of the smartest, most experienced people in the economic world. The academicians have had 70 years to understand what happened in 1929 and they're still fighting over that. What makes you think you understand what's happening right now so completely, so conclusively, that you can carve this prediction in stone?

Pythagorean;100185 wrote:
I would also remind you of the recent collapse of almost all of the major banks in the country. It seems you are forgetting this fact.
Am I? I don't recall it being part of this conversation up until now.

Pythagorean;100185 wrote:
So after collapsing the entire banking industry they are going to magically return to some type of viable economic practices?
Not every practice of every bank was responsible for the problem. Plain old consumer banks were hit hard, but they weren't responsible for the crisis. Commodities trading wasn't the problem. Not even doomed industries (that still have bubbles) like credit cards and college loans were the problem. The problem came from investment banks, hedge funds, and a couple other players like Fannie/Freddy and AIG who were inseparably intertwined with one another and took extraordinary risks using a finite set of investment instruments and overleveraging.

In other words, the problem arose from a relatively small set of offenses -- the banking catastrophe was from the chain reaction that ensued once Lehman collapsed. Well, we're not out of the hole but we're not exactly worried about Bank of America collapsing anymore, and banks are starting to be profitable (somehow) again. They have a second life, and the way to prevent a relapse is for them to avoid pissing away $30 for every $1 in their pocket.

Pythagorean;100185 wrote:
But they are printing money in order to bail everyone out and also to buy back some of their own debt. It is unfortunate but printing money without any real productivity or savings leads to inflation or sometimes in extremem cases hyperinflation. And hyperinflation does indeed cause revolutions as well it should. I am of course thinking Weimar here.
We haven't exactly been experiencing anything resembling hyperinflation in the last year and that's despite the federal interest rate being near 0%.

Pythagorean;100185 wrote:
there is no way for us to meaningfully shrink the size of the trade deficit.
Probably not, but we're such large consumers that the entire world depends on our fiscal health -- which is why they'll always bail us out even before our own government does. If we didn't have an enormous trade deficit, then we wouldn't be able to live in deficit economies.
Pythagorean
 
  1  
Reply Tue 27 Oct, 2009 10:25 pm
@Aedes,
Aedes;100234 wrote:

We may have a manufacturing and export deficit, but one thing we do not have is a deficit in innovation. China may be a powerhouse of an exporter, and it indeed has world class universities, but nothing anywhere in the world competes with the United States in the sheer mass of invention, whether in academia or in private industry. And you just never know what industry will come next. It doesn't need to be raw materials and it doesn't need to be cars.

In other words, I'm not giving up on our potential to recover -- as long as it's based on real things and not based on turning $1 into $2 by some investment instrument.


That's what they said about the dot com boom. They said there was a "New Economy" based upon information. But the sector that prospered most during the dot com boom - and also during the real estate boom - was the financial sector. The financial sector is currently the largest sector of the American economy. What America produces or until recently produced was highly technical, innovative financial instruments designed by mathematicians at M.I.T. The book to read is Kevin Phillips "Bad Money" where he chronicles the rise of the financial sector.

This is all will-o'-the wisp. The so called New Economy has been revealed as a fraud. In order to understand the nature of this ongoing fraud you need to look at two things:

1. Productivity of real, tangible goods.

2. And the level of consumption compared to that productivity.

The Chinese and the Japanese are savers by nature and they will always be thus. The Americans beginning in the late 1970's are consumers who save very little.

The Chinese and the Japanese produce a great deal more than they consume. The purchase by the Chinese and the Japanese of American debt (e.g. T bills) is the means by which they dump or subsidize their highly valued manufacturing sectors. So that free trade ideology by the Americans produces an ongoing contraction of American manufacturing.

Americans consume more than we produce which leaves us with a large amount of ever increasing debt. The problem is that we are dependent upon this debt; we can no longer live without the basic necessities of life which we import. So the debt is continuously rising ever higher.

We are at a point where we cannot function without the debt and yet we cannot conceivably continue to function with the ever increasing amounts of debt.


Aedes;100234 wrote:

The best explanation I've heard for this is on the utterly phenomenal Planet Money / This American Life collaboration, called "The Giant Pool of Money", which you can get for 99 cents on iTunes (it originally aired on NPR).

The subprime crisis would have never happened but for one critical phenomenon: the global treasury holdings (esp in China, India, etc) have literally doubled in value since 2000, to the tune of roughly $70 trillion. Treasurers everywhere have been looking for lucrative returns. And as is brilliantly explained in this show I reference, the return on securitized subprime mortgages was enormous -- particularly so because the interest rates were high and the penalties extremely high on these high risk mortgages. Brokers were motivated to sell to crappy buyers because they'd make a killing selling a group of mortgages to an investment bank, so they'd never have to live with the risk.

The low Fed interest rate had something to do with this mainly because the return on a treasury bond was so low that investors turned away from them.


I am not interested here in the workings or the circumstances which brought about the real estate/banking disaster. You misunderstand me or I haven't been clear.

What I am asking is why was there a need for the Americans to rely upon such bad practices in order to produce a satisfactory level of economic growth? In other words, there was a reason, a cause for the implementation of these bad practices IN PLACE of facing the truth, which is that they could no longer grow the economy in any other normal fashion.

In a sense, for me, the American dream ended once and for all when Alan Greenspan lowered interest rates to near zero producing inflation in the real estate market. This inflation in the real estate market was necessary because there existed no other means to grow the economy. There was no technological innovation, for example, to rescue the economy after that last recession. So they relied upon inflation in the real estate market as a substitute for having to recognize the true extent of the economy: that it was smoke and mirrors.

The only alternative they had to creating housing inflation was to put up with an extended recession cum economic malaise (which of course came eventually in any event). So the gargantuan financial sector sold overly sophisticated financial instruments. They exported debt, and they monetized it.

So I ask you Aedes, why wasn't their a great technological killer app at the time when it was most needed during the late 90's early 2000's recession?? The only killer app the Americans could come up with was these sophisticated financial products. That is what we have devolved into. And I would add that the gall of such immoral dealings on behalf of the Fed and the banks is not much discussed for obvious reasons.


Aedes;100234 wrote:

You may indeed be right, but you also may not. There are variables at work that are beyond the prediction of the smartest, most experienced people in the economic world. The academicians have had 70 years to understand what happened in 1929 and they're still fighting over that. What makes you think you understand what's happening right now so completely, so conclusively, that you can carve this prediction in stone?


Because the evidence is already extant. We can logically deduce the outcome given the current circumstances.

Aedes;100234 wrote:

Am I? I don't recall it being part of this conversation up until now.


I was merely attempting to be comprehensive.

Aedes;100234 wrote:

Not every practice of every bank was responsible for the problem. Plain old consumer banks were hit hard, but they weren't responsible for the crisis. Commodities trading wasn't the problem. Not even doomed industries (that still have bubbles) like credit cards and college loans were the problem. The problem came from investment banks, hedge funds, and a couple other players like Fannie/Freddy and AIG who were inseparably intertwined with one another and took extraordinary risks using a finite set of investment instruments and overleveraging.

In other words, the problem arose from a relatively small set of offenses -- the banking catastrophe was from the chain reaction that ensued once Lehman collapsed. Well, we're not out of the hole but we're not exactly worried about Bank of America collapsing anymore, and banks are starting to be profitable (somehow) again. They have a second life, and the way to prevent a relapse is for them to avoid pissing away $30 for every $1 in their pocket.


Your view seems very narrow to me. You think that we can innovate our way to prosperity. But as I have said the debt that the bankers sold was the great Ameican innovation. It was the best innovation that America could come up with.

I have read papers from workers at the IMF. The consensus there is that there exists an oligarchy (their words) between high finance and the politicians at the federal level. But these 'too big to fail' institutions full of toxic assets are merely a symptom. The real problem is immorality, the outsourcing of jobs, the 'selling out' of America at every level.

It is a blindness when people come to believe that great financial events exist somehow seperate from the culture at large. They do not! There is a level of basic immorality afoot in America. The very fact that one would get one's country out of a recession by allowing the housing sector to expand is so ******* immoral its not funny.

I agree with you: there are basically two ways to expand an economy. One way is to increase or expand the productivity of real goods and the other way, as you say, is to increase or apply a new and higher level of technology and innovation. I keep coming back to the question: why didn't they use one of these two ways to get out of that prior recession? Why did they have to rely upon the pure nothing of these financial products? The answer should be obvious.


Aedes;100234 wrote:

We haven't exactly been experiencing anything resembling hyperinflation in the last year and that's despite the federal interest rate being near 0%.


It strikes me as odd that they are keeping interest rates this low. Isn't that how we got into this mess, with an easy money policy? The only reason the dollar hasn't completely collapsed is because it is the world's reserve currency. But that is a double edged sword because it allows us to go even deeper into debt than we would be able to otherwise.


Aedes;100234 wrote:

Probably not, but we're such large consumers that the entire world depends on our fiscal health -- which is why they'll always bail us out even before our own government does. If we didn't have an enormous trade deficit, then we wouldn't be able to live in deficit economies.



That's the heart of the problem. The Chinese and the Japanese are subsidizing their rightly treasured manufacturing industries by purchasing our debt. They are and have been 'bailing us out all along'. Without their support, without all of their money rolling in I don't believe the housing crisis would have been possible, and so without their wonderful support the banks the banks wouldn't have been able to fail on such a world-historical level.
Aedes
 
  1  
Reply Tue 27 Oct, 2009 11:00 pm
@Elmud,
Let me leave it at this:

I hear and I comprehend your point of view. While my perspective differs considerably, I also acknowledge that I've got no academic background in economics, and I know better than to pretend I can tell the future, so I'm not going to offer too much of a case of you being right or wrong -- I don't know.
Pythagorean
 
  1  
Reply Wed 28 Oct, 2009 12:05 am
@Aedes,
Aedes;100244 wrote:
Let me leave it at this:

I hear and I comprehend your point of view. While my perspective differs considerably, I also acknowledge that I've got no academic background in economics, and I know better than to pretend I can tell the future, so I'm not going to offer too much of a case of you being right or wrong -- I don't know.


It's not about telling the future, I'm not attempting to be a mystic here. It's more about trying to understand the past and the present and then just hoping tommorrow really comes.
0 Replies
 
Pangloss
 
  1  
Reply Wed 28 Oct, 2009 12:55 am
@Pythagorean,
Pythagorean;100243 wrote:
So they relied upon inflation in the real estate market as a substitute for having to recognize the true extent of the economy: that it was smoke and mirrors.


The myth of the great investment that is real estate is what really drove the subprime loans. People were taking out these ridiculous loans that they would never be able to afford, only because they were convinced by themselves, friends, and the friendly bankers, that their homes would appreciate in value so much, they'd be fine taking out a loan that they couldn't pay back. Hey, if they couldn't make the payments at some point, they could just sell the place and make a tidy profit anyway. :sarcastic:

Well, that didn't exactly work out for them...the buyers who actually knew what they were getting into were simply dumb speculators. They figured their property would skyrocket in value, so they could afford it. The rest just got duped by bankers who wanted to sell off the loan in the secondary market without caring one bit if it defaulted, like Aedes said. No money down mortgages are just insane, if you are realistic about the housing market. But both the buyers and sellers had motivation to not be realistic at all. If you look at the average return on a home over time, it essentially just mirrors inflation...and that's assuming your house is properly maintained, which costs more money. Now prices are coming back down to earth, and they'll continue to decline for a while.
Fido
 
  1  
Reply Wed 28 Oct, 2009 06:43 pm
@Pangloss,
Pangloss;100250 wrote:
The myth of the great investment that is real estate is what really drove the subprime loans. People were taking out these ridiculous loans that they would never be able to afford, only because they were convinced by themselves, friends, and the friendly bankers, that their homes would appreciate in value so much, they'd be fine taking out a loan that they couldn't pay back. Hey, if they couldn't make the payments at some point, they could just sell the place and make a tidy profit anyway. :sarcastic:

Well, that didn't exactly work out for them...the buyers who actually knew what they were getting into were simply dumb speculators. They figured their property would skyrocket in value, so they could afford it. The rest just got duped by bankers who wanted to sell off the loan in the secondary market without caring one bit if it defaulted, like Aedes said. No money down mortgages are just insane, if you are realistic about the housing market. But both the buyers and sellers had motivation to not be realistic at all. If you look at the average return on a home over time, it essentially just mirrors inflation...and that's assuming your house is properly maintained, which costs more money. Now prices are coming back down to earth, and they'll continue to decline for a while.

Long before the big bubble the price of property was inflated beyond all measure... When the Federal government began supporting itself on income tax instead of property tax, it forced up the price of money, and it allowed property to be held off the market for years with little expense... The supply was controlled and the price went up and up... Consider what it was like before when labor was dear, and property was cheap...If one did not make the money to pay the taxes the property would go on the market... Now those people who have property at all have residential property that earns no money, but which support many services... Even today, wages, which must pay profits and support the government, are driven down to the point were people cannot afford decent housing, and can only afford the money to buy property by paying outrageous interest...The thing is that interest is bleeding the whole country, and everyone says just a little bit more... Well we have reached the point where too few productive people are supporting too many service workers and free loaders... You can only take out of a country what nature and labor put into it, and what can be seen clearly enough is that the capital amassed by generations is going into fewer and fewer hands, and there is no sense denying that taxes have nothing to do with it... The Income tax was accepted by the people because it was only expected to affect 11 to 13% of the people...Now fifty percent pay income tax, and the rich complain, but the rest simply cannot afford to pay anything out of their want of income...
0 Replies
 
 

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