Forbes article about how economy works

[DreamOnDemOn]

That's one of many factors.

All other things being equal, people would rather try to earn a living in a place where they get to keep more of their paycheck?

This is a stuptifying revelation. Someone should let President Obama know of this discovery.

 

[ChrisL68]

All other things being equal, people would rather try to earn a living in a place where they get to keep more of their paycheck?

This is a stuptifying revelation. Someone should let President Obama know of this discovery.

all things can't be equal, because the zero tax countries are usually small havens of wealth or banana republics.

 

[RJKarl]

As Chris says, no tax places are like Monaco.

We have the lowest income taxes of the major industrialized nations. And almost all of our main competitors have 16-20% VATs.

no rational person could think there could be a modern society without taxes.

 

[DreamOnDemOn]

all things can't be equal, because the zero tax countries are usually small havens of wealth or banana republics.

Well we certainly don't want to be a haven of wealth. Do you think, though, that we might still eek out a civilized existence if the government spent a little less of our paychecks?

The same question from a different perspective: should Tennesse institute a state income tax?

 

[deacdiggler]

"Is this possible? Yes. Is it possible under Obama? No. Obama is the most virulently anti-investment president of the post-war era, and accordingly has delivered the worst economic performance of the post-war era."

Yep this guy doesn't have an ax to grind.

He's about as "fair and balanced" as Faux News.

Rj, please name a president in the post-war era who was more "anti-investment.". And one who had a worse economic performance.

 

[RJKarl]

Rj, please name a president in the post-war era who was more "anti-investment.". And one who had a worse economic performance.

W had a much worse economic policy. Since Obama has taken over the DJIA is up over 66%. Or don't those investors count.

U*nder W the DJIA was DOWN over 20%.

Obama has not raised taxes on capital gains and has had multiple tax cuts for business. But don't be bothered by reality.

 

[SkyDivingDeacon]

W had a much worse economic policy. Since Obama has taken over the DJIA is up over 66%. Or don't those investors count.

U*nder W the DJIA was DOWN over 20%.

Obama has not raised taxes on capital gains and has had multiple tax cuts for business. But don't be bothered by reality.

W's Economic policy had a 0% effect on the DIJA being down 20%. Just like Obama's Economic policy has 0% effect on the DIJA's being up over 66%.

It's a cycle folks, and a lagging one at that...

 

[ncsportsnut1]

Well we certainly don't want to be a haven of wealth. Do you think, though, that we might still eek out a civilized existence if the government spent a little less of our paychecks?

The same question from a different perspective: should Tennesse institute a state income tax?

This one I am qualified to answer because I work in Tennessee. Tennessee state budgets have not faced the fiscal crisis similar to North Carolina in recent years. Their sales tax is 9.5 or 10, and no income tax, and very little if any gas tax. North Carolina is one of the worst managed states in the country. NC has income tax, gas tax, and sales tax, yet their budget shortfall every year for the past few years has been huge. Tennessee just keeps humming along, and the roads are a helluva lot better than NC's too, since NC diverts the Transportation fund from the gas tax to other areas unrelated to roads!

Now, back to the economic discussions....have enjoyed reading the comments and learning from people who know more

 

[DreamOnDemOn]

This one I am qualified to answer because I work in Tennessee. Tennessee state budgets have not faced the fiscal crisis similar to North Carolina in recent years. Their sales tax is 9.5 or 10, and no income tax, and very little if any gas tax. North Carolina is one of the worst managed states in the country. NC has income tax, gas tax, and sales tax, yet their budget shortfall every year for the past few years has been huge. Tennessee just keeps humming along, and the roads are a helluva lot better than NC's too, since NC diverts the Transportation fund from the gas tax to other areas unrelated to roads!

Now, back to the economic discussions....have enjoyed reading the comments and learning from people who know more

And yet Tennessee seems to be a fairly civilized society. Maybe the less fortunate should not automatically assume that gouging the taxpayer is always the best alternative.

 

[RJKarl]

W's Economic policy had a 0% effect on the DIJA being down 20%. Just like Obama's Economic policy has 0% effect on the DIJA's being up over 66%.

It's a cycle folks, and a lagging one at that...

Then the concept that Obama's the worst POTUS for investment must be worthless jibber jabber.

 

[ChrisL68]

Part of Tennessee's lower tax burden for residents is offset by the higher taxes they charge all tourists from other states who visit Tennessee.

 

[ncsportsnut1]

Part of Tennessee's lower tax burden for residents is offset by the higher taxes they charge all tourists from other states who visit Tennessee.

are you talking about the sales tax? Tourism does seem to be good for the Tennessee economy. As a state they have a lot of same issues with unemployment but have weathered it better than a lot of states. This year they even added $60 million to their rainy day fund. That's just about unheard of these days.

 

[Caturday]

Then the concept that Obama's the worst POTUS for investment must be worthless jibber jabber.

Uh, you're confusing economic and financial investment they aren't the same. Economic investment refers to how firms allocate their resources, do they consume it now or later? They base their investment decisions on this functions. Investment=f(Y=income,r=interest rate). If a firm invests in capital (new equipment, human capital, etc.), then they are forgoing the rate they would earn if they lent the money at r. The interest rate is their opportunity cost, the cost of the highest forgone option, therefore, they expect that an investment in capital will yield a higher return than if it's lent at the current interest rate. Investment, which is a component of GDP, is an economic indicator. The DJIA, S&P500, etc. are not measures of the economic health of the macroeconomy. When Obama's economic record is questioned, it's a red herring to use the equity markets as a proxy. Obama's made this argument himself which is very troubling that the President doesn't know a simple definition. There's validity in the contention that investment has been poor under Obama as corporations continue to hold record amounts of cash.

 

[Caturday]

That's bullshit. The corporations are holding record amounts of cash and refusing to hire workers in an attempt to extort more money for themselves with even more tax cuts. They found that it worked before, so why not try it again? "Give us some more tax cuts, or you will never see your precious jobs again!" (And...as we showed you suckers last time, even if you do give us more tax cuts, you'll have to go to Mexico or China to see your jobs.)

I'm not going to dignify this with a response. If someone wants to see this argument get obliterated I'll do it, if not, I'm not wasting my time.

 

[TBR]

The European economies that have tried austerity aren't exactly humming along. In fact, they are in worse shape than ours.

As with most economic articles, if the writer supports your preconceived positions, they are a genius. If the writer doesn't, they are an idiot.

Economies like Spain and Greece got to where they were because their governments became too large relative to the rest of the economy. The message the crises in Europe should send is that government can be too big. The austerity measures aren't supposed to result in immediate improvement; they are supposed to bring the government back down to an appropriate size to stop the massive government borrowing that caused the crisis. It is counter to all common sense that a significant decrease in government spending, all else equal, would improve the economy in the short run. Only exceptions I know of are the US post-WW1 and post-WW2.

I am not reading the article because the sort of analyses that appear in the popular press are almost certainly biased on way or another. The cold hard truth is that both parties do what is politically expedient, not what is good or right. Unfortunately, political expediency only rarely intersects with sound economic policy because of the special interests and economic ignorance of voters.

 

[RJKarl]

The POTUS tried to get roads built and other jobs bills which would have created demand in many ways. It would have lowered the unemployment.

It's not his fault the GOP cares more about beating him than about the well being of the country.

Had they passed those bills companies would have had more reason to invest and there would have been more demand.

 

[Caturday]

Economies like Spain and Greece got to where they were because their governments became too large relative to the rest of the economy. The message the crises in Europe should send is that government can be too big. The austerity measures aren't supposed to result in immediate improvement; they are supposed to bring the government back down to an appropriate size to stop the massive government borrowing that caused the crisis. It is counter to all common sense that a significant decrease in government spending, all else equal, would improve the economy in the short run. Only exceptions I know of are the US post-WW1 and post-WW2.

I am not reading the article because the sort of analyses that appear in the popular press are almost certainly biased on way or another. The cold hard truth is that both parties do what is politically expedient, not what is good or right. Unfortunately, political expediency only rarely intersects with sound economic policy because of the special interests and economic ignorance of voters.

Bingo.

 

[SkyDivingDeacon]

Then the concept that Obama's the worst POTUS for investment must be worthless jibber jabber.

I kind of agree. That or at least we won't know one way or the other until some of his policies have been in place for the next X amount of years...

 

[DreamOnDemOn]

Economies like Spain and Greece got to where they were because their governments became too large relative to the rest of the economy. The message the crises in Europe should send is that government can be too big. The austerity measures aren't supposed to result in immediate improvement; they are supposed to bring the government back down to an appropriate size to stop the massive government borrowing that caused the crisis. It is counter to all common sense that a significant decrease in government spending, all else equal, would improve the economy in the short run. Only exceptions I know of are the US post-WW1 and post-WW2.I am not reading the article because the sort of analyses that appear in the popular press are almost certainly biased on way or another. The cold hard truth is that both parties do what is politically expedient, not what is good or right. Unfortunately, political expediency only rarely intersects with sound economic policy because of the special interests and economic ignorance of voters.

Would you rather have the government take your paycheck and spend the money or leave it with you and let you spend it? Who would spend that money more wisely? Perhaps less government spending will improve the economy in the long run. Lots of economists beieve this, although I know many don't.

 

[RJKarl]

Would you rather have the government take your paycheck and spend the money or leave it with you and let you spend it? Who would spend that money more wisely? Perhaps less government spending will improve the economy in the long run. Lots of economists beieve this, although I know many don't.

This is a selfish, moronic, luddite idea. No economist with a brain thinks you don't have to have taxes ort that they can be optional.