Taxes and the Pyrite State

From

Jerry Brown: California Will Have Surpluses

That’s what he says:

After years of red ink, Gov. Jerry Brown said on Thursday that California’s $96.7-billion general fund is now poised to end next year with a surplus, thanks to years of deep budget cuts and billions in new taxes approved by voters last year.

“We achieved the position we’re in because of tough cuts … and then the people voted for taxes,” he said. “We broke the logjam by going to the people.”

Schools will be the big winner in the governor’s new spending plan, receiving $56.2 billion in state funds, an increase by $2.7 billion over the last year. That funding is set to jump to more than $66 billion by 2016.

The budget also dedicated an additional $350 million to the state’s public insurance program, Medi-Cal, to help implement President Obama’s healthcare law.

Brown’s budget predicts only the second budget surplus in the last decade, with an $851-million surplus projected at the end of the 2013-14 fiscal year — if all his proposals are approved by lawmakers.

Jerry Brown says we will have surpluses. I say we will not.

We’ll see who is right.

The boldfaced parts were by Patterico commenter Taney O’Haley, who said that it sounded like wishful thinking to her.

Donald Douglas referenced an article from Investor’s Business Daily which pointed out that the overwhelming majority the voters gave to the Democrats puts the restrictions under Proposition 13 at risk, and that there are already at least two proposals in the legislature to weaken it:

Already, state Sen. Mark Leno wants to put a measure on the ballot to lower the two-thirds vote threshold for school district parcel taxes to 55%. State Sen. Lois Wolk introduced a bill that would ask voters to drop the vote threshold to 55% for library parcel taxes and bond measures.

In the Assembly, Tom Ammiano plans to reintroduce a bill seeking to revise the definition of an ownership change that triggers a new business property assessment. Voters’ OK isn’t needed. Even if the bill stalls, as it has in the past, business owners fear that its goal — squeezing more tax money from commercial property — will surface in other proposals, some with better odds.

The tax increases approved by the voters in November were temporary increases, adding a 0.25% increase to the state sales tax, and creating three new brackets for the most productive Californians, lasting for seven years. For a single Californian earning $500,000 or more, the new 12.3% marginal rate, combined with the new federal top rate of 39.6%, means that 51.9% of his earnings over the thresholds will be seized just in income taxes alone. If his earning power is portable — and for many of California’s top producers, it won’t be — moving to a state like Texas or Florida, which have no state income taxes, is a completely rational economic decision.

How many will? We can’t know yet, but we’ll see in two more years, when Governor Brown’s projection of a balanced state budget is either realized, or it is not.
__________________________
Cross posted on TRUTH BEFORE DISHONOR.

104 Comments

  1. Uh-huh.

    I see you seem to have conveniently overlooked capital tax as a major source of income for the rich – yet again.

    Weasel.

  2. Uh-huh.

    I see you seem to have conveniently overlooked capital gains tax at a 15% rate as applying to a major source of income for the rich – yet again.

    Weasel.

  3. I see you seem to have conveniently overlooked overlooked the increase in the capital gains tax from 15% to 20%. Once again you have engaged your keyboard before your brain.

    Ignoramus.

  4. I see you seem to have conveniently overlooked overlooked the increase in the capital gains tax from 15% to 20%.

    Remind me again – is that the same as the 39.6% top marginal income tax rate you tried to pass off as what the rich would be paying?

    Because it seems to me that the new rates mean people who earn money from their sweat and labour are paying about TWICE AS MUCH (at the top marginal rate) as people who pick it up from having investments. And it looks like you’re desperately trying to avoid addressing that.

    Weasel.

  5. My 401(k) is invested in the stock market, the same as practically everyone who sweats for a living, ignoramus. And the bottom 47 percent pay zero federal income taxes, ignoramus. In fact, many are they who get more dollars back than they paid in total federal taxes, ignoramus. And the higher the taxes on investments, the fewer dollars there are for investments; therefore, the fewer jobs are created for the sweaters to sweat, economic ignoramus. Are you still leeching off the sweat of the workers who sweat for a living, librarian?

  6. True, the bottom 47% pay no federal income taxes, but they pay plenty of local taxes which impact their lives more than an increase from 35 to 39% on the top bracket and from 15 to 20% on capital gains impacts those making more than say $400K, John. You have to look at the entire tax picture, and not select out only the federal portion, in which case you do not make a valid argument.

  7. WW wrote:

    True, the bottom 47% pay no federal income taxes, but they pay plenty of local taxes which impact their lives more than an increase from 35 to 39% on the top bracket and from 15 to 20% on capital gains impacts those making more than say $400K, John. You have to look at the entire tax picture, and not select out only the federal portion, in which case you do not make a valid argument.

    And the top 53% who do pay federal income taxes also pay those state and local taxes. The Ignoramus in a time of Education seems to think that he has made some sort of point concerning the different, lower tax rates on capital gains, but this article was about the increase in the state income tax rates in the Pyrite State, and my skepticism that they will balance their budget, despite Governor Brown’s claims, and the fact that many of the top producers will do what they can to flee those higher taxes.

    The lower earners pay the Social Security payroll tax . . . and so do I.

    I did, however, increase my 401(k) contribution from 14% to 15% at the beginning of the year, which has slightly reduced my federal income taxes. :)

  8. I have, however, made an error on the capital gains tax increase. While the so-called “fiscal cliff” tax increase raised the capital gains tax rate from 15% to 20% for the most productive Americans, there is a 3.8% increase in the tax rate on capital gains and dividends contained in the ObaminableCare law, as well as a 0.9% increase in the Medicare tax for Americans earning over $200,000/$250,000 (single/married).

  9. “Because it seems to me that the new rates mean people who earn money from their sweat and labour are paying about TWICE AS MUCH (at the top marginal rate) as people who pick it up from having investments.”

    Interesting choice of words. People “earn money from their sweat and labor” because other people (or even themselves) take a calculated risk to invest money to create those jobs. So they don’t just “pick it up from having investments” like it’s lying around on the ground and only some people can see it. You always see the Labor part of the factors of production but always fail to see the Enterprise part.

    Labor itself creates very little, but when combined with Risk Taking it creates a company (ask Bill Gates). And jobs. And prosperity. Thus Labor is encouraged by rising wages just as Enterprise is encouraged by lower taxes on Risk. If we take away the incentive for increasing ones wages by higher productivity we diminish Labor (we call that “The Dole”) and if we remove the incentive to earn profit by taxing it away we reduce investment (we call that communism).

    There can be a balance in the Factors of Production but that balance cannot be achieved if we address Economics as a political club to bludgeon the players. Or if we use the Force of government to penalize people we deem “undeserving” of their wealth from whichever Factor derived.

    The Factors work together:
    Land generates Rent
    Labor generates Wages
    Capital generates Interest
    Enterprise generates Profit

    They are NOT mutually exclusive but rather work together (with different goals based on their own self interest) to achieve Economic Dynamics.

  10. One other thing. If ” the new rates mean people who earn money from their sweat and labour are paying about TWICE AS MUCH (at the top marginal rate) as people who pick it up from having investments” then I would think we need to LOWER those new rates, not raise other rates. Obviously, people are paying too fuckin’ much taxes on their “sweat and labor”.

  11. Tell me, o great and brilliant Socialist from Lose, Delaware, what taxes do I pay?

    I pay no Federal income tax.

    I pay no Social Security tax because my Federal Income Tax Return is great enough that I get all my Federal income tax paid and all my Social Security tax paid returned to me.

    I pay no Medicare tax because my Federal Income Tax Return is great enough that I get all my Federal income tax paid and all my Social Security tax paid and all my Medicare tax paid returned to me. I also get money “returned” to me that I never even paid in, money that would cover other, non-federal taxes I paid.

    State income tax? I live in Texas.

    Local income tax? I live in Texas.

    Gasoline costs for work and shopping? I live in Texas, where the average price of gasoline is 20 cents below the national average. Not only that, but I live in a part of Texas where the price of gasoline is below the State average.

    So, great and brilliant Socialist from Lose, Delaware, you have once again proven you know Jack and Shyte.

    Beyond that, it is none of the Federal government’s business what the taxes are for any other level of government. Taxes are not for the purposes of Socialist Engineering but for the purposes of running that government that is necessary for a Free People, and nothing more.

    And to incorporate any taxes other than Federal taxes when discussing Federal taxes is to introduce a Red Herring. Had you been better than your own acknowledged dismal results in college philosophy and logic, you would have known better than to introduce that logic fallacy into your emotionalist, logic-free blather.

    But since you know nothing about logic or about economics, macro or micro, and you are adamant in your refusal to learn about any of it, you will continue to spew forth with your logic-free, fact-free emotionalist Socialism. And you will continue to do so with your arrogant demand that you be allowed to remain totally ignorant of all facts in question.

    But please, do tell me what taxes I pay, you stupid cow.

  12. And I have already proven through goal-set intersection that you “progressives” are indeed Socialists. The proof is easily found through a permalink on my site, which garnered 67,000 views in 2012. How many views did your Socialist site get?

  13. John, I’ll overlook your smart ass reply and ad hominems, and reply to your response.

    You at least pay gasoline tax, property tax (directly or indirectly), and sales tax (as high as 8.25%), the sum of which can have a significant impact on poor, low-income workers like yourself.

    Moreover, your experience in Texas is not typical of many other states in which the tax burden is greater.

  14. Moreover, your experience in Texas is not typical of many other states in which the tax burden is greater.

    My experience in Republican, low-tax Texas is not typical of Democrat, high-tax, and failing states. I know that.

    You at least pay gasoline tax, property tax (directly or indirectly)

    That is something you accidentally slipped into. A Truth you so diligently try to deny elsewhere. I pay no property tax directly because I do not own any land or a house. The landlord is billed that property tax, which he then passes on to his tenants, thus not actually paying it himself. And there is the nugget of Truth you so diligently deny practically everywhere — except when you think it might win you an argument. Corporations do not pay any taxes, despite being billed taxes, because they pass those taxes along to their customers in the form of higher costs for goods delivered or services rendered. But you are ever willing to have higher corporate taxes, which the impoverished must pay. You are ever willing to have higher investment taxes, which the unemployed must pay for through their inability to get a job that wasn’t created due to the high investment taxes.

    And I already covered gasoline costs as a whole, showing that I pay below Texas average for gasoline, and showing that the Texas average for gasoline is below the national average, and by a significant margin.

    Again, I’ll note that you, in your fevered rush to win an argument, proved Conservatives’ point: Conservative governance provides a much lower cost of living for the low-income earners than Leftist governance.

    And, oh by the way, what is the sales tax on Chicago residents? What is the City income tax on Chicago residents? What is the State income tax on Chicago residents? Answer the same questions again, substituting Los Angeles and New York City for Chicago.

    Get back to me when you want to have an honest discussion (which would be the first time you have ever done so on this site).

  15. Wagonwheel, everybody pays gasolene tax either directly or indirectly. If a poor person buys food, shipped by truck, he pays indirect gas tax as that tax is passed on to the consumer as a business expense of the trucking company.

  16. Also, Perry, does Texas have a sales tax on food? If all I buy at the store is food, do I pay sales tax? If the clothes I wear are more than 10 years old, the car I drive was bought 12 years ago, the computer I use is 8 years old, the furniture I have is 10 years old, the appliances, cookware, tableware are all 10 years old, when have I paid sales tax? What impact on my living expenses does sales tax have?

  17. Hoagie wrote about the Labor Theory of Value:

    Labor itself creates very little, but when combined with Risk Taking it creates a company (ask Bill Gates). And jobs. And prosperity. Thus Labor is encouraged by rising wages just as Enterprise is encouraged by lower taxes on Risk. If we take away the incentive for increasing ones wages by higher productivity we diminish Labor (we call that “The Dole”) and if we remove the incentive to earn profit by taxing it away we reduce investment (we call that communism).

    Karl Marx held that the value of a thing was entirely determined by the amount of labor required to produce it. Well, four men with shovels and picks can dig a footing for a house in a good, long day, if the ground isn’t too rocky and the day isn’t too miserable. But, with a backhoe, I can dig the same footing in an hour or two, without breaking a sweat. And the footing I dug would be of the same value as the one dug by hand; both do the same thing, holding up a house.

    It was capital which was used to buy the backhoe, and capital which would have made my labor more productive.

  18. Hoagie wrote:

    Wagonwheel, everybody pays gasolene tax either directly or indirectly. If a poor person buys food, shipped by truck, he pays indirect gas tax as that tax is passed on to the consumer as a business expense of the trucking company.

    Unfortunately, Hoagie doesn’t mention the half of it. First of all, virtually every commercial delivery truck runs on diesel, not gasoline, and the federal excise tax on diesel fuel is 24.3¢ per gallon, not the 18.3¢ per gallon assessed on gasoline. Second, throughout the production chain to get food from the fields to the grocery store, most food is handled a lot more than once, which means more trips by truck, not only to move the food from the field to the packaging plant to the grocery store, but moving the raw materials to the producers who makes the cans, boxes or bottles in which to package the food, then from that producer to the food processor and packager.

    Everywhere you look, on every item you buy, you will find taxes on top of taxes on top of taxes. Politicians just hope that the public don’t really see all of them.

  19. You always see the Labor part of the factors of production but always fail to see the Enterprise part.

    Typical Hoagie defensive exaggeration here, but there’s more:

    Labor itself creates very little, but when combined with Risk Taking it creates a company (ask Bill Gates). [Labor creates products]And jobs. And prosperity. Thus Labor is encouraged by rising wages just as Enterprise is encouraged by lower taxes on Risk. [But labor has not been getting rising income] If we take away the incentive for increasing ones wages by higher productivity we diminish Labor [What incentive?] (we call that “The Dole”) and if we remove the incentive to earn profit by taxing it away we reduce investment (we call that communism) [Exaggeration here!].

    There can be a balance in the Factors of Production but that balance cannot be achieved if we address Economics as a political club to bludgeon the players [Which is exactly what corporations have been doing to labor.]. Or if we use the Force of government to penalize people we deem “undeserving” of their wealth from whichever Factor derived [In what country is this happening? Certainly not ours!].

    Hoagie, your use of unjustified exaggerations is not impressive, only typical right wing politics. The fact is that our nations wealth has been moving upwards, away from labor and the middle class. Thus, you people are distorting economics to suit your greedy outlook and line your pockets.

  20. Perry, I said to come back when you were ready to be honest. Obviously, you did not heed my advice as your above wholly dishonest screed proves. You would be a disappointment if any sane person had any expectations of your having any integrity.

  21. Perry, I said to come back when you were ready to be honest.

    Ahem.

    [Off topic portion of comment deleted. This subject was answered one, here, and won't be allowed to continue through every thread on which Miss Nova the Phoenician comments. -- Editor]

  22. Hey, you sick New Zealand Socialist government teet-sucker, what did you hope to achieve by republishing a truthful statement of mine from 10 months ago? Whatever it was, you are a dismal failure.

  23. So, what’s your flucking point, Pho? Hitchcock was having a little sport at Miss Fluck’s expense, what’s the big, flucking deal?

  24. Here are a couple of facts I just ran across which should substantiate my point about how American workers have been getting the “short end of the stick”, and for years.

    * From 1973 to 2011, while worker productivity has increased 80%, median compensation has increased only 10%;

    * Since 2000, worker productivity has increased 23%, while real hourly pay has been stagnant

    Reference: Steven Greenhouse, NYT, 01/12/2012

    Now I would request our Editor, Hoagie, and the like, to digest these simple figures and remember them for more than five minutes!

  25. Of course “real hourly pay” has remained stagnant: that’s what you get in the Obama economy! Your ‘raise’ is that you get to keep your job. With unemployment at 7.8% — and it’s that low only because so many people have become discouraged under this wastrel of a President — there’s no economic pressure for raises to keep good people.

  26. As is hardly an infrequent event here, the discussion has gotten off-topic. Governor Jerry Brown (D-CA) has said that the state budget will be balanced by the end of 2014; Patterico didn’t think it would work out that way.

    But, the proof will be what happens: will enough of the top producers stay in the Pyrite State for the higher tax rates to generate the revenue the Governor projects, and will the state’s economy not get dragged down by the new taxes? Tune in at the end of 2014 for the answer!

  27. the top producers stay in the Pyrite State

    Where do you get this “Pyrite State” stuff? I’m in California right now, and I don’t see any pyrite. Or pirates, either.

    What gives?

  28. “True, the bottom 47% pay no federal income taxes, but they pay plenty of local taxes …”

    For what in return? Oh yeah, we’ve been there done that and you couldn’t keep up.

  29. “Typical Hoagie defensive exaggeration here, but there’s more:”

    Wagonwheel, my intent was neither defensive in nature nor was it to exaggerate. It was to keep it pithy but still point out that each Factor of Production has a part in economic development and prosperity. That said, you immediately begin to disparrage any other part of the Production equasion that is not Labor, and what’s worse attempt to demonize those other Factors.

    Just wages are good-without just wages we will not have good Labor.
    Fair rent is good-without fair rent we cannot develope real property.
    Competitive interest is good-without it we cannot finance or equate risk.
    Attractive profits are good-if profits are not attractive there will be no investment.

    It is not all Labor. If you want to have a Labor market to build cars, first you have to get someome to invest in a factory where they’ll be built. No Factory, No Jobs. No Jobs, No Cars. We can all work together, without anamosity, or you can try to build your own fuckin’ factory without the entrepreneures experience, without the capitalists money and without the landlords land. Atlas will Shrug.

    Your socialist tendencies make it torture to discuss economics or business with you. With you it’s all about Labor and the guys who develope the land, lend the Capital and take the Risk are but servants to Labor. And they all should be servants to government.

    Again, I’ve had thousands of employees and taken scores of high capital risks in my life and you have not, so please don’t insist you know better than I. You don’t.

  30. Hoagie says:
    Tuesday, 15 January 2013 at 15:38

    “Typical Hoagie defensive exaggeration here, but there’s more:”

    Wagonwheel, my intent was neither defensive in nature nor was it to exaggerate. It was to keep it pithy but still point out that each Factor of Production has a part in economic development and prosperity. That said, you immediately begin to disparrage any other part of the Production equasion that is not Labor, and what’s worse attempt to demonize those other Factors.

    Just wages are good-without just wages we will not have good Labor. …”

    Perry seems to wish to start with a ‘social justice’ predicate. If so he might answer a question he has heretofore avoided.

    Do some men have a right to be provided an opportunity for laboring at the direction of other men? If so, on what basis?

    Let’s all grant that any man has the fundamental right to obtain property and tools, to work them while pursuing a trade or vocation, to keep the profits from what he produces or gains in exchange.

    But the question at hand doesn’t concern the right of the entrepreneur, or the freeholder, or the professional, or the freelancer. The question is whether some men have a right to expect or demand that other men provide them with time occupying and remunerative opportunities; in other words, not the right to pursue a trade, but the “right” to be an employee of someone else.

    If they have the right, to be provided, who has the duty to provide, and on what grounds?

    As I asked Perry a little while back, do the stupid have an interpersonal claim on competent persons unrelated to them? And if so, on what basis, and for what in particular? Hunting grounds and sharpened sticks? Processed food? Shelters with central heating? Televisions? Cell phones? Lessons on how to use them? Sex with a better looking class of women than would voluntarily associate with them? Offspring? Maintenence for their offspring? More shelter and televisions for them?

    But you are right Hoagie. Perry’s abysmal ignorance, lack of critical thinking skills, and impertinent interpersonal assumptions, make communicating with him almost, if not fully, impossible.

  31. DNW, I’m not trying to jump all over WW, I’m not even trying to get into a tuff. But he focuses like a laser on Labor which is one of four Factors of Production and in doing so seems to cast aside the other three as somehow anecdotal or even unnecessary. He also seems to believe the “job” of economics is to ensure equality of income or wealth. It is not. The job of economics is to provide the flow of goods and services to the consumer, and to seek the best utilization of resources. Outcome be damned. The belief by some that they will manipulate the Laws of Economics to obtain a desired outcome for special groups is a pipedream. Just like water, economics seeks it’s level…whether WW likes that level or not.

  32. Hoagie says:
    Tuesday, 15 January 2013 at 19:06

    DNW, I’m not trying to jump all over WW, …

    No of course not. I am though, because I think that he is fundamentally incoherent. Or cynically and obnoxiously dishonest in a way that makes him seem so.

    “I’m not even trying to get into a tuff. But he focuses like a laser on Labor which is one of four Factors of Production and in doing so seems to cast aside the other three as somehow anecdotal or even unnecessary.”

    Well, it’s easy to focus on so called labor if you presume a developed system ideally existing for the benefit of “labor”, conceived of, not as a verb, but as a noun referring to an interest group or social class.

    “Who are the workers?” I once asked a Marxist. “All who work?”

    “What do you mean by work?” he demanded. “Look it up, it’s in the dictionary”, I said. “To perform work is to move matter through space to shape or form it … presumably in economics, for some productive or useful purpose. Therefore, and again, who are the workers?”

    “Oh, then … if you mean that then no, carpenters, and ranchers, and machine shop sole proprietors and the one-man earth moving outfit are not workers or laborers no matter how much value they produce with their own effort, because they own their own tools

    Whereas, I was informed immediately following, unemployed members of the lumpen proletariat and their would-be dependents were glorious “workers”.

    Joe the Plumber however is not, per modern liberal, aka crypt-marxist economics, a worker entitled to respect or consideration. Joe owns his own tools. He self-directs. The concept of justice doesn’t apply to him.

    ” He also seems to believe the “job” of economics is to ensure equality of income or wealth. It is not. The job of economics is to provide the flow of goods and services to the consumer, and to seek the best utilization of resources. Outcome be damned. The belief by some that they will manipulate the Laws of Economics to obtain a desired outcome for special groups is a pipedream. Just like water, economics seeks it’s level…whether WW likes that level or not.”

    Your first sentence above describes it perfectly because
    Perry doesn’t have the slightest idea of what economics is. Is it the study of value exchange transactions … or maybe (literally) the laws of house-ordering and all that that implies?

    Or, is it just a word that stands in his mind for the development of a scheme of efficiently directing material wealth generation and distribution?

    Like most notions based on the product of previous liberal reification moves (“society” for example), it’s probably the latter with him. A dozen people pause within 50 feet of each other for more than 20 minutes and they become a “society” through the magic of evolution. At which point, a new principle arises as social justice in order to demand that the one who can figure out a way to support himself and the best looking girl, also figure out a way to support the others too, whether they are interested in cooperating or not.

    And of course then, society magically becomes a thing in itself as a kind of almost independently living noun thing, rather than a verb representing a mere state of affairs among real things i.e., persons.

    Sort of like that whole “Detroit” thing. So why did Detroit come to exist in the first place? And how does it now justify its continued existence? The liberal answer: Well, who cares? It’s our job to ensure that it remains a comfortable nesting place because … well just because those who are comfortable there are comfortable there!

  33. Do some men have a right to be provided an opportunity for laboring at the direction of other men? If so, on what basis?

    Marxism. Perry’s various and sundry rants all boil down to classic Marx, really. All that matters are that things are “fair”. Bill Gates has more money than Perry. Perry thinks this is “Unfair”. Thus Perry thinks the government should take Gates’s money away and give it to, well, Perry. Never mind that Perry hasn’t earned a penny of it.

    Of course, to re-quote PJ O’Rourke: If everyone ends up poor, broke, and dead, well fair’s fair!

  34. Eric wrote:

    Of course, to re-quote PJ O’Rourke: If everyone ends up poor, broke, and dead, well fair’s fair!

    Then I guess that life really is fair, because we all will end up dead!

  35. Detroit is Detroit because we built cars there. It’s where the iron ore was off loaded, steel was forged, the workers came, the bankers financed, the entrepreneurs built factories to bring it all together for profit. Then came the unions, the the government regulators, then the taxes, then more regulations and strikes and the inventors and innovators left. Then the entrepreneurs left and the bankers would no longer loan. Now it’s a seething swamp of underclass, gangs and misfits. The cockroaches left over after the family left the house. The town looks like Berlin in ’45.

    If you really want to observe the cockroaches and their attitude, watch Hardcore Pawn. The entitled class, full of bitchers and screamers without one producer among them. They are the ones they’ve been waiting for.

  36. Of course “real hourly pay” has remained stagnant: that’s what you get in the Obama economy! Your ‘raise’ is that you get to keep your job. With unemployment at 7.8% — and it’s that low only because so many people have become discouraged under this wastrel of a President — there’s no economic pressure for raises to keep good people.

    Mr Editor, have you ceased to regard factual information? In the post prior, I pointed out:

    * From 1973 to 2011, while worker productivity has increased 80%, median compensation has increased only 10%;

    * Since 2000, worker productivity has increased 23%, while real hourly pay has been stagnant

    Reference: Steven Greenhouse, NYT, 01/12/2012

    In your abject hatred of President Obama, your integrity is flagging, Mr Editor!

  37. The obvious question is: has per worker productivity increased because workers are working harder, or has productivity increased because capital investment has given workers better tools with which to be productive? If productivity has increased 80% since 1973, I’d guess it was the improvements in capital items . . . unless you are trying to say that workers today are working 80% harder than forty years ago, something you’d find difficult to prove.

    And I told the truth: in the Obama economy, your “raise” is that you get to keep your job.

  38. DNW continues his ad hominems, thus exhibiting his ignorance:

    Do some men have a right to be provided an opportunity for laboring at the direction of other men? If so, on what basis?

    ….

    But you are right Hoagie. Perry’s abysmal ignorance, lack of critical thinking skills, and impertinent interpersonal assumptions, make communicating with him almost, if not fully, impossible.

    But there is a question asked there, to which the answer is no. However, it should be hoped that all the participants in our economy , all American citizens, exert their moral authority to assure a fair wage for a good day’s work. This has not been the case in our country since ’70′s, as the wealthy and powerful have managed to suck the nations wealth to the elite few, thus creating an unstable environment which may continue said downward trend, thus leading to increasing unrest and chaos. Better hold onto your guns, DNW!

    It is remarkable and telling that to disagree with DNW then automatically subjects one to ad hominem attacks, out of thin air. This has become a staple of today’s far right mentality. You demean yourself, DNW, except in the eyes of your fawning tribe!

  39. First off abject hatred of Obama notwithstanding, he has NOTHING directly to do with either pay or productivity. He pays no factory, retail or service workers. He sets no hours nor procures any tools of productivity. He hasn’t the knowledge or the ability if he could. And if hourly pay is stagnant don’t you think it just might have to do with the recession? Do you think adding Obamacare and 78,000 new regulations and raising taxes is gonna fix that? Cause I don’t.

    But I’d be interested in what YOU would do about it. Would you pass a new law requiring $20 per hour pay raises? Or would you tax businesses an extra 25% if they didn’t raise workers pay 23% every year? I know you’d never consider lowering taxes on both workers and employers or cutting back on the red tape or regulations would you? See, you guys create uncertainty in markets, regulatory nightmares, red tape and a million damn “agencies” that regulate everything from light bulbs to greenhouse gasses, then when the market responds negatively to your crap you scream bloody murder. Sorry Charlie, you can’t manipulate the markets then cry when they don’t like your manipulations or don’t respond they way YOU want them to.

  40. Our editor guesses:

    The obvious question is: has per worker productivity increased because workers are working harder, or has productivity increased because capital investment has given workers better tools with which to be productive? If productivity has increased 80% since 1973, I’d guess it was the improvements in capital items . . . unless you are trying to say that workers today are working 80% harder than forty years ago, something you’d find difficult to prove.

    And I told the truth: in the Obama economy, your “raise” is that you get to keep your job.

    Your guess won’t even buy a loaf of bread. However, the skill set required for today’s jobs is higher, which is why about 3 million job openings remain unfulfilled.

    Don’t you think that the worker should share some of the productivity gains I referenced? They appear to get none of it, as their expected gains go not to them, but to their bosses. That’s not the way it should be!

  41. “…..all American citizens, exert their moral authority to assure a fair wage for a good day’s work.”

    There is no “moral authority” that can judge a fair wage for a good day’s work. Should we pay a gardner the same wage as a surgeon if they both put in “a good day’s work”? What’s fair wage is determined between the employee and the employer. Not YOU and not “all American citizens”. Just the participants. Mind your own business and stop worrying about what everybody else earns. Worry about what you earn, that’s your business. If I hire a gardner at $18 an hour who the hell are you to say I should pay him $20? He agreed, I agreed and you keep your nose the hell out of it.

  42. First off abject hatred of Obama notwithstanding, he has NOTHING directly to do with either pay or productivity. He pays no factory, retail or service workers. He sets no hours nor procures any tools of productivity. He hasn’t the knowledge or the ability if he could. And if hourly pay is stagnant don’t you think it just might have to do with the recession? Do you think adding Obamacare and 78,000 new regulations and raising taxes is gonna fix that? Cause I don’t.

    But I’d be interested in what YOU would do about it. Would you pass a new law requiring $20 per hour pay raises? Or would you tax businesses an extra 25% if they didn’t raise workers pay 23% every year? I know you’d never consider lowering taxes on both workers and employers or cutting back on the red tape or regulations would you? See, you guys create uncertainty in markets, regulatory nightmares, red tape and a million damn “agencies” that regulate everything from light bulbs to greenhouse gasses, then when the market responds negatively to your crap you scream bloody murder. Sorry Charlie, you can’t manipulate the markets then cry when they don’t like your manipulations or don’t respond they way YOU want them to.

    There is little that President Obama can do about this disparity of wealth which gets worse every year. This trend is unsustainable, Hoagie. More unrest and chaos will be the eventual outcome. The ethic of fairness is evaporating in our business owner class. When the salaries of the CEOs get to 300-400 times more than the mean salary of the employees, our business practices are out of kilter and ultimately unsustainable.

    Moreover, our leaders cannot govern without the consensus of the citizens to allow themselves to be governed, otherwise chaos. We have been heading in the direction of said chaos for decades. Our business leaders are the ones who should address this problem, a very complex problem indeed. There is a need for a business – government joint effort, focused on education and investment. With today’s politics being as polarized and divided as we now have, it is going to be difficult, or impossible, to get us back on track. President Obama cannot do this alone.

  43. “Don’t you think that the worker should share some of the productivity gains I referenced? They appear to get none of it, as their expected gains go not to them, but to their bosses. That’s not the way it should be!”

    So nobody today is better off than in 1973? In ’73 did you have two cars, cell phones, computers, 65″ HDTV’s, iPads etc.? I didn’t. A middle class guy today lives better than King Louie XIII, eats better gets better medical care has better housing, heating and cooling, better transportation and still has to listen to your crap. If things were so fuckin’ bad don’t you think Americans would be leaving in droves for a promised land just like our ancesters did? Or are our feet nailed here? And don’t you think the rich in Europe, Asia or anywhere else are just as rich as they are here in America? Or are only rich Americans bad (unless they’re Algore) but the rest are wonderful?

    You really hate and envy the wealthy, don’t you?

  44. There is no “moral authority” that can judge a fair wage for a good day’s work. Should we pay a gardner the same wage as a surgeon if they both put in “a good day’s work”? What’s fair wage is determined between the employee and the employer. Not YOU and not “all American citizens”. Just the participants. Mind your own business and stop worrying about what everybody else earns. Worry about what you earn, that’s your business. If I hire a gardner at $18 an hour who the hell are you to say I should pay him $20? He agreed, I agreed and you keep your nose the hell out of it.

    The morality rests with the business owners. Obviously they are taking a larger and larger piece of the profits, leading to the demise of the American middle class.

    And about worrying, it is my duty as an American citizen to worry when I see blatant greed taking over in our economy, which is exactly what is happening. Why do you think I continue to participate in this blog?

  45. “When the salaries of the CEOs get to 300-400 times more than the mean salary of the employees,”

    See, right there you show your hand. You never complain about the salaries of movie stars, TV clowns who get 1.5 Million an episode, singers who get a 20 million dollar album, producers or directors, football players or other sports figures or even politicians who retire millionaires but only earned 140k a year in office. No, it’s always the big bad CEO’s with you. Just so you know those CEO’s are paid by the shareholders, not you. If they didn’t think them worth the price they’d fire’em. Again, stop counting other people’s money and mind your own business.

  46. So nobody today is better off than in 1973? In ’73 did you have two cars, cell phones, computers, 65″ HDTV’s, iPads etc.? I didn’t. A middle class guy today lives better than King Louie XIII, eats better gets better medical care has better housing, heating and cooling, better transportation and still has to listen to your crap. If things were so fuckin’ bad don’t you think Americans would be leaving in droves for a promised land just like our ancesters did? Or are our feet nailed here? And don’t you think the rich in Europe, Asia or anywhere else are just as rich as they are here in America? Or are only rich Americans bad (unless they’re Algore) but the rest are wonderful?

    You really hate and envy the wealthy, don’t you?

    Hoagie, now don’t project your hatreds on to me. My calling for a fairer sharing of our wealth based on productivity gains is not asking too much. But the fact is, our nations wealth is moving upwards into the hands of fewer and fewer people, which I do not think represents properly those responsible for the productivity gains we have achieved. It takes entrepreneurs to invest in new ideas and businesses, and it takes workers to efficiently produce goods and services. In the ’50′s through the ’70′s, everyone prospered. This is no longer the case, for a multitude of complex reasons, including foreign competition, and including a distorted reward system for all the producers responsible for profits.

    When you cannot come up with anything more, Hoagie, then you must retreat to accusing me of hating the wealthy. You know what? You are wrong!

  47. “The morality rests with the business owners. Obviously they are taking a larger and larger piece of the profits, leading to the demise of the American middle class.”

    Again, my economically and business challenged friend, you are confusing “business owners” with CEO’s of large corporations. I know “business owners” and they’ve been struggleing for the last three or four years trying to make ends meet and keep their employees. They are getting a smaller and smaller “piece of the profits” because of the regulations, uncertainty and mandates of government.

    And just so you know, “business owners” are entitled to ALL THE FUCKIN’” PROFIT, not a piece. Just as employees are entitled to ALL THEIR WAGES, bankers are entitled to ALL THEIR INTEREST and landlords are entitled to ALL THEIR RENT! That’s the deal!

  48. ” In the ’50′s through the ’70′s, everyone prospered.”

    Nonsense! You’re saying there were no poor or lower class in the 50-70′s? That’s a complete myth perpetuated by the left.

  49. It is remarkable and telling that to disagree with DNW then automatically subjects one to ad hominem attacks, out of thin air.

    You big, fat, stinking, lying HYPOCRITE! Who the hell calls people here traitors, terrorists, racists, and more? Who the hell here threatens people’s jobs just because they don’t like stuff they say on an Internet site?

    You’re a worthless piece of lying dog shit, Perry. Why don’t you do us all a favor and flush yourself down the toilet.

  50. Mind your own business and stop worrying about what everybody else earns. Worry about what you earn, that’s your business. If I hire a gardner at $18 an hour who the hell are you to say I should pay him $20? He agreed, I agreed and you keep your nose the hell out of it.

    Ha ha, very well said! But Perry just LOVES to stick his snout in other people’s business. He’s the classic snitch, rat fink, tattletale, weasel. And besotten with envy and rife with resentment. These moral parasites wouldn’t know the first thing about the concept of minding their own business, and letting other people mind theirs.

  51. See, right there you show your hand. You never complain about the salaries of movie stars, TV clowns who get 1.5 Million an episode, singers who get a 20 million dollar album, producers or directors, football players or other sports figures or even politicians who retire millionaires but only earned 140k a year in office. No, it’s always the big bad CEO’s with you.

    Again, very well said. Perry is your classic hater and your classic hypocrite. He hates the successful in business and is always scheming to tear them down to size. It’s no wonder his guru is Obama, he of “You didn’t build that” fame.

    If Perry and his ilk had their way, this country would be East Germany. Everything was nice and “Fair” there, no rich businessmen, no rich CEOs.

  52. First off abject hatred of Obama notwithstanding, he has NOTHING directly to do with either pay or productivity. He pays no factory, retail or service workers. He sets no hours nor procures any tools of productivity. He hasn’t the knowledge or the ability if he could. And if hourly pay is stagnant don’t you think it just might have to do with the recession?

    Not unless you’ve been in a recession since 1973. But don’t let facts get in your way – nobody expects wingnuts to deal with reality.

  53. Speaking about wingnuts not being able to deal with reality:

    —-
    This isn’t because Republicans are reckless, as such. Many conservatives are sincerely convinced that excessive government spending poses a dire risk to the U.S. economy, and that even if missed payments have severe negative short-term economic consequences, they will be worth it if the long-term outcome is a smaller government.

    The conviction that everything is about to come apart in the U.S. if the government maintains its current economic-policy course — through tremendous inflation, a debt crisis, and/or all of the productive members of society Going Galt — animates the huge Republican resistance to anything Obama proposes, even if that’s just the government paying the bills it has already run up. They’re trying their very hardest to save the country from a madman.

    This sincere outlook is also insane, as you can see from how the stock and bond markets have behaved in recent years in response to various policy actions. The markets like fiscal expansion, monetary expansion and deals that keep the government operating as usual without drastic policy change. They do not cry out for massive disruption in pursuit of smaller government.

    But the conservative worldview is robust because of its imperviousness to evidence. Economic data, like polling data or climate data, cannot get in the way of the narrative. Conservatives are sure that the Obama presidency will lead to an economic calamity, and they will prove it, if necessary.
    —-

  54. And their lack of “dealing with reality” is dooming the future of this country which they falsely claim to love. Wherever there is a buck to be made, they’re fast after it, to hell with the American worker whose salaries have practically stagnated for four decades, while the elites have made out like bandits. And then they blame the Liberals, the height of self deception and evasion of reality.

  55. to hell with the American worker

    Yeah, we know what Obama thinks of the American worker. Unemployment between 8 and 10 percent four years running. Obama to the Keystone Pipeline workers – Drop Dead. Obama to the Boeing workers in South Carolina – Go fuck yourselves.

  56. This sincere outlook is also insane

    Sure. Because fiscal responsibility is so, like, insane. But running up trillion dollar deficits as far as the eye can see is the height of rational thinking.

  57. even if that’s just the government paying the bills it has already run up

    But that’s just it. The government isn’t paying the bills it’s running up, that’s why we have these trillion dollar deficits.

  58. More ignorance of reality here:

    Yeah, we know what Obama thinks of the American worker. Unemployment between 8 and 10 percent four years running. Obama to the Keystone Pipeline workers – Drop Dead. Obama to the Boeing workers in South Carolina – Go fuck yourselves.

    The reality being that it was the Republican sins of war and mismanagement of the budget which was President Obama’s inheritance. The counter then is that the Obama administration policies have reduced unemployment by 20% already, while decreasing the deficit by about $2T already, for which he gets no acknowledgement from the Right. And on the pipeline, Nebraskans themselves did not want the pipeline running over their aquifer, for which they appreciated the Obama policy on this issue.

    It’s time for you to start getting comfortable with the facts, Eric, or continue to project yourself as the liar that you are!

  59. Mr Editor, have you ceased to regard factual information? In the post prior, I pointed out:

    * From 1973 to 2011, while worker productivity has increased 80%, median compensation has increased only 10%;

    * Since 2000, worker productivity has increased 23%, while real hourly pay has been stagnant

    Reference: Steven Greenhouse, NYT, 01/12/2012

    In your abject hatred of President Obama, your integrity is flagging, Mr Editor!”

    Is that total productivity divided per worker, or an assessment of the physical input of the individual laborers as compared to output of units or value?

    If it’s the former I can only imagine how “productive” a floor inspector in a factory filled with CNC chuckers tended by Fanuc robotic arms would be.

    Let’s see what might help explain “worker productivity” gains since 1973.

    Containerized shipping systems.
    Palletized material handling and sorting
    The expansion of machine assisted mining and extraction.
    The spread of relatively rare late 1950′s and 60′s Numerical Control and it’s rapid replacement and continual upgrading by CNC in the early eighties through to today.
    Increased accuracy and capability of standard-type CNC machines, eliminating multiple set-ups and finish operations: Jig boring is almost obsolete and jig grinding is on its way.
    Work Cell production and robotic loading.
    The replacement of HS Steel cutting tools with Carbide and eventually ceramics.
    Desktop Cad stations and the enormous drop in price of the same leading to their proliferation.
    Rapid prototyping technology of either the “printing” or laser and medium kind.
    Digital metrology which allows a much lower level of operator skill to “see” and evaluate part feature and geometric comformance with ease and repeatability and therefore with concomitant scrap elimination.
    In-process quality control and real time monitoring of part feature trends over the production cycle – again eliminating scrap and re-work.

    Do you think that that stupid piece of shit Joe Biden even knows what half of these things are? Or that his master knows anything about any of them?

  60. Reality? You are delusional! Wars and mismanagement were voted for by BOTH parties, or don’t you recall that? Both parties fucked spending because Both parties went all Keynes on us. Obama reduced unemployment by 50% if you’re just counting people who left the work force. Show me the jobs, Mr. Reality. And he RAISED the deficit by 5T, that’s reality. Then you say “nabraskans themselves did not want the pipeline running over their aquifer”. Really? ALL Nebraskans or just the ones YOU heard?

    All you clowns on the left have are excuses. You guys can’t fix the problem but once again you have no problem fixing the blame. What a bunch of dogs.

  61. Hoagie says:
    Tuesday, 15 January 2013 at 23:11

    ” In the ’50′s through the ’70′s, everyone prospered.”

    Nonsense! You’re saying there were no poor or lower class in the 50-70′s? That’s a complete myth perpetuated by the left.

    Yeah what was it that that worthless president with the big nose and ears was supposedly waging a war on?

  62. Hoagie says:
    Wednesday, 16 January 2013 at 10:40

    Reality? You are delusional! Wars and mismanagement were voted for by BOTH parties, or don’t you recall that? Both parties fucked spending because Both parties went all Keynes on us. Obama reduced unemployment by 50% if you’re just counting people who left the work force. Show me the jobs, Mr. Reality. And he RAISED the deficit by 5T, that’s reality. Then you say “nabraskans themselves did not want the pipeline running over their aquifer”. Really? ALL Nebraskans or just the ones YOU heard?

    All you clowns on the left have are excuses. You guys can’t fix the problem but once again you have no problem fixing the blame. What a bunch of dogs.

    But they can fix the problem if only you will accept the blame. It may take generations of your subservience and acceptance of their direction, it may seem as though you are being directed into a hole and doomed to termite status, but trust them, if you will just relinquish you egocentric notions of self-interest and individuality, and accept that your personal destruction may be a social good, then you will realize that they do have your best interest in mind.

  63. Hoagie says:
    Wednesday, 16 January 2013 at 10:45

    If I guess “Poverty” DNW, do I win a prize?”

    “Poverty” is such a negative word. Think of it as “solidarity” and “sharing”, and an opportunity to fulfill your destiny as an enlightened species being free of superstitious notions of meaning, and purpose and self.

  64. The reality being that it was blah blah blah more excuses, lies, and bullshit

    When are you Obama toadies ever gonna man up and take some responsibility? Generally speaking, a new president gets about six months where he gets to blame his predescessor, after that he’s expected to quit whining snd start solving problems. But Obama’s been whining and making excuses for four years now!

    In what other field of endeavour could a person in a leadership role get away with that? Imagine a football coach with four losing seasons under his belt, and he’s still blaming the previous coach. He’d be laughed right out of the NFL! He’d be lucky to end up coaching Pee Wee league! Or a movie director whose last 4 films were flops and he’s still blaming the studio. In the real world, failure has consequences, but in Obama world, it gets him re-elected.

    Fortunately, reality does eventually bite you in the ass. Four more years of a stagnant economy, high unemployment, and trillion dollar deficits and the Obama presidency will make the Carter years look like times of milk and honey.

  65. Hoagie says:
    Wednesday, 16 January 2013 at 10:45

    If I guess “Poverty” DNW, do I win a prize?”

    Yes, the war on poverty. You win the prize.

    What’s strange is that like slavery, the left aims to abolish it by universalizing the condition.

  66. Containerized shipping systems.
    Palletized material handling and sorting
    The expansion of machine assisted mining and extraction.
    The spread of relatively rare late 1950′s and 60′s Numerical Control and it’s rapid replacement and continual upgrading by CNC in the early eighties through to today.
    Increased accuracy and capability of standard-type CNC machines, eliminating multiple set-ups and finish operations: Jig boring is almost obsolete and jig grinding is on its way.
    Work Cell production and robotic loading.
    The replacement of HS Steel cutting tools with Carbide and eventually ceramics.
    Desktop Cad stations and the enormous drop in price of the same leading to their proliferation.
    Rapid prototyping technology of either the “printing” or laser and medium kind.
    Digital metrology which allows a much lower level of operator skill to “see” and evaluate part feature and geometric comformance with ease and repeatability and therefore with concomitant scrap elimination.
    In-process quality control and real time monitoring of part feature trends over the production cycle – again eliminating scrap and re-work.

    Do you think that that stupid piece of shit Joe Biden even knows what half of these things are? Or that his master knows anything about any of them?

    Good work, DNW! Nice to see someone who knows real facts about industry and the economy. As I’ve said before, Obama wouldn’t know how to successfully run a hot dog stand.

    But hey, who needs economic competence when you can tell your adoring army of mental clones that it’s all Bush’s fault?

  67. And on the pipeline, Nebraskans themselves did not want the pipeline running over their aquifer, for which they appreciated the Obama policy on this issue.

    To quote your own damn self – Citation, please!

    Oh, wait. You don’t have one. You just made that up out of thin air.

    Funny, the Canadians didn’t have a problem with the pipeline. None of the other states had a problem with the pipeline. And there’s been no record that anyone can point to of an oil pipeline causing a major spill, anywhere, never mind there are tens of thousands of miles of oil and gas pipes already in existence.

    So spare us the bullshit, Perry. Obama wasn’t worried about any pipeline problems. He cancelled that project because he’s an elitist. He thinks oil = Global Warming and screw the workers who would have gotten thousands of good paying jobs. It was the tree huggers vs the hard hats, left wing ideology vs prosperity and economic growth.

    And why should Obama care about the workers? It’s not like he can relate to them. He’s never had an honest job in his life, the kind of job where you get your hands dirty and come home smelling of diesel fumes. No, the only “Work” he knows is politics and academia. Economics to him is a mixture of Keynes and Marx, all theory and no practical reality.

  68. Eric said:
    “Economics to him is a mixture of Keynes and Marx, all theory and no practical reality.”

    Tell us about it. You know what I’d like to see? One of the leftists here go out and start and run a business. Just one. Then come back and report how wonderful all your theories are. It’s a lot different running a business than pontificating about what they should do never having owned one. It’s easy as pie for a couple guys who get their checks from the government to tell me what I should do in my business. And that’s exactly what a business know-nothing like Obama does every day to every business.

  69. Tell us about it. You know what I’d like to see? One of the leftists here go out and start and run a business. Just one. Then come back and report how wonderful all your theories are.

    You know, this actually happened once. Failed left wing presidential candidate George McGovern, after he got out of politics, tried to open a business of some sort in, I think, New England. Anyway, he was stunned at how hard it was with all the taxes and regulations that he and his ilk had spent decades imposing on business. He was that rare lefty who actually got to be on the receiving end of his own policies, and then found he didn’t like it very much.

  70. I recall that Eric. I believe he went into the hotel/motel business and was stunned at how difficult it was to “comply” to the regulations and amazed at the taxes. He also went OUT OF BUSINESS. Couldn’t hack it.

  71. Hoagie says:
    Wednesday, 16 January 2013 at 11:42

    Eric said:

    “Economics to him is a mixture of Keynes and Marx, all theory and no practical reality.”

    Tell us about it. You know what I’d like to see? One of the leftists here go out and start and run a business. Just one. Then come back and report how wonderful all your theories are. It’s a lot different running a business than pontificating about what they should do never having owned one. It’s easy as pie for a couple guys who get their checks from the government to tell me what I should do in my business. And that’s exactly what a business know-nothing like Obama does every day to every business.”

    George McGovern tried and failed, and admitted he had no idea of the impact of regulatory burdens on his ability to run a business.

    On the other hand, numerous lefties have made fortunes in quasi monopolistic schemes or scams … licensed communications, parking lots, carbon credits, telecommunication scams, entertainment and vice. Oh, insider trading and bootlegging! (How could the fortune of America’s premier Demonicrat dynasty have been overlooked?) The record pretty much speaks for itself.

  72. Good lord. This server loading problem is ridiculous. Posts that have been up for a half an hour don’t show, and you wind up repeating a point someone else has already made.

    Dana …

  73. But that’s just it. The government isn’t paying the bills it’s running up, that’s why we have these trillion dollar deficits.

    Uh-huh. You wingnuts still too stupid to figure out that a government is not like a household or business, huh?

    —-
    Why You Should Love Government Deficits

    The calls for cutting the federal government’s budget and perhaps even balancing it have continued and are likely to grow louder during this election year. Don’t listen to them unless you want to see a fall in your net assets! Government deficits, by definition, create private sector wealth, while surpluses drain it. It’s simple accounting.
    [...]
    What the above means is this: government deficits create private sector wealth, while government surpluses drain it. There is no trickery here. When the federal government spends in deficit, it does so by putting financial assets, usually in the form of Treasury bills, in the hands of the public; when it spends in surplus, the net quantity of Treasury bills held by the public declines. Thus, federal government deficits not only create the extra demand necessary when the economy is at less than full employment (which is what I have argued many times in this blog; please see for example Why You Should Learn to Love the Deficit: Federal Budget Fallacies and The Horror Movie That Is Fiscal Responsibility) but it puts money in the bank, too. And the US could never be forced to default on the debt because it is denominated in dollars (see Who Should Really Be Downgraded, the USA or S&P?, Downgrade Part II: More Evidence of the Ignorance of S&P, or Alan Greenspan). Furthermore, this is exceedingly unlikely to be inflationary under current conditions–indeed, it has not been (for more on what does and does not cause inflation, see here: Money Growth Does Not Cause Inflation and What Actually Causes Inflation).

    So, next time you hear Obama or Romney talking about reducing the deficit, be sure you put that into the proper context. They are talking about draining your savings account! That’s hardly a sound policy when we have over 12 million unemployed.

    NOTE: I’m sure many of you are thinking that the above ignores our debt to China. However, 100% of our debt to China (which amounts to less than 10% of the total, incidentally) is a function of our trade deficit with them, not the budget deficit. Even if the federal budget were balanced or in surplus, we’d owe just as much to China. The only difference would be that they would probably be holding fewer Treasury bills since they would not be available in such quantity. Instead, they would hold more US private sector assets. —-

  74. And why should Obama care about the workers? It’s not like he can relate to them. He’s never had an honest job in his life, the kind of job where you get your hands dirty and come home smelling of diesel fumes. No, the only “Work” he knows is politics and academia. Economics to him is a mixture of Keynes and Marx, all theory and no practical reality.

    Remind us again – you did just do a post where you looked out your window one winter’s day, noticed it was cold in winter, and proceeded to claim that that invalidated the work of thousands of scientists, right?

    Bwahahahahahah.

  75. So, what’s your flucking point, Pho?

    [The Editor very clearly said no. No means no. So no, it will not stand.]

    And Dana attempts to hide that away [The Editor very clearly said no. No means no. So no, it will not stand.]

  76. Uh-huh. You wingnuts still too stupid to figure out that a government is not like a household or business, huh?

    Uh, actually, it is. Unless you think government money is different that every other kind of money. A budget is a budget, whether it’s a household, a business, or a government. Ultimately, the books have to balance sooner or later. To believe otherwise is to believe in magic, to believe government money really does grow on trees, and you can pick as much as you want and more will keep growing back.

    Oh, well, there IS one difference. The government can do something the private sector can’t, it can print money out of thin air. Of course, this didn’t work so well in 1920′s Germany, 1980′s Mexico, or present day Rhodesia. Hyperinflation, anyone?

  77. —-
    Why You Should Love Government Deficits

    All this jabberwocky fails to explain why we had a roaring economy and a booming stock market in the late 90′s, which was also when we were running budget surpluses. Or why the economy is stuck in neutral now that we are running trillion dollar deficits.

    If you’re going to quote someone on budgets and economic matters, it would help not to cite a retard.

  78. And Dana attempts to hide that away [The Editor very clearly said no. No means no. So no, it will not stand.]

    [It still will not stand. No still means no.]

  79. “Uh-huh. You wingnuts still too stupid to figure out that a government is not like a household or business, huh?”

    Uh, actually, it is.

    No, Eric, it isn’t. A sovereign government can print money at will. A household or business cannot. Once again you demonstrate your complete ignorance.

    Unless you think government money is different that every other kind of money.

    Yes, Eric, I believe that to a government money is different than it is to a household or business.

    To a household or business, money is a resource which has to be earned and is used in exchange for goods or services. They are players, and the goal is to make money by which they can increase their share of the goods and services produced in an economy.

    To a government, money is a tool for facilitating the production and distribution of goods and services in the economy for which they are responsibly. They are referees, and their objective (among others) is to increase the goods and services produced in the economy as a whole.

    Governments get to print money, Eric. Households do not print money, Eric. Governments have to make a distinction between money and wealth, Eric. Households generally can get away with seeing the two as the same thing, Eric.

    All this jabberwocky fails to explain why we had a roaring economy and a booming stock market in the late 90′s, which was also when we were running budget surpluses.

    Hey, Eric – looks like you’re the retard.

  80. So, why do we have to pay taxes at all, or borrow money? Nobody likes taxes, and we certainly don’t want to tax money away from productive American citizens to send overseas to pay for stuff we’ve already bought, so why doesn’t the government just print the money — really, these days, just declare that the money is in the bank — to pay for everything?

    Hell, we can have free health care, free food, and have teh government take care of all of our needs by “creating” money, and those few of us who will still work can use that on luxury goods.

  81. “A sovereign government can print money at will. “

    I suppose if “government”‘s were sovereign they could; though why anyone would be stupid enough to use that terminology or accept that premise is a bit of a mystery.

    Must be a parliamentary toady’s thing.

  82. I was back on with my site hosting service yesterday, and, once again, they said it was their problem, and not the site’s. I had contemplated switching to the site hosting service used by William Teach, but they have no telephone number at all where you can talk to a living human being, so I said, “Fornicate them!”

  83. Editor says:
    Thursday, 17 January 2013 at 10:04

    So, why do we have to pay taxes at all, or borrow money? Nobody likes taxes, and we certainly don’t want to tax money away from productive American citizens to send overseas to pay for stuff we’ve already bought, so why doesn’t the government just print the money — really, these days, just declare that the money is in the bank — to pay for everything?

    Hell, we can have free health care, free food, and have teh government take care of all of our needs by “creating” money, and those few of us who will still work can use that on luxury goods.”

    Your question, and the neurotic’s terminological stupidity regarding “sovereign” government answer the question. In fact the link to the “impossibility” of social security ever going broke does the same thing when it lays out explicitly what the implicit premises are … a no-exit room, non-cooperation disallowed, and eternal growth.

    Of course it may have escaped the notice of many, including many economists, that our government is not sovereign. Nor is “the state” except in relation to foreign states. The correct constitutional answer is that it is the people of the states who are when acting through their states, and that our system is not a unitary but a federal system.

    The relation of this principle to the interpretation of economic ordering and norms is the comparative relation of individual person to social element.

  84. Editor says:
    Thursday, 17 January 2013 at 10:12

    I was back on with my site hosting service yesterday, and, once again, they said it was their problem, and not the site’s. I had contemplated switching to the site hosting service used by William Teach, but they have no telephone number at all where you can talk to a living human being, so I said, “Fornicate them!”

    Must be almost as frustrating for you as for those who try to use your site.

  85. No, Eric, it isn’t. A sovereign government can print money at will.

    No shit, dumbfuck! Indeed, I made that VERY EXACT POINT in my post above.

    I also pointed out that printing money out of thin air has a historical record of leading to fiscal disaster in the form of hyperinflation.

    But I guess you must have missed that part.

  86. I was back on with my site hosting service yesterday, and, once again, they said it was their problem, and not the site’s. I had contemplated switching to the site hosting service used by William Teach, but they have no telephone number at all where you can talk to a living human being, so I said, “Fornicate them!”

    Well, the Site is working fine now, so hopefully that fixed the problem. Permanently.

  87. I also pointed out that printing money out of thin air has a historical record of leading to fiscal disaster in the form of hyperinflation.

    But I guess you must have missed that part.

    You must have missed the point that all the money in your pocket RIGHT NOW was printed out of thin air.

  88. So, why do we have to pay taxes at all, or borrow money? Nobody likes taxes, and we certainly don’t want to tax money away from productive American citizens to send overseas to pay for stuff we’ve already bought, so why doesn’t the government just print the money — really, these days, just declare that the money is in the bank — to pay for everything?

    Dana, I KEEP POINTING YOU AT THE ANSWER TO YOUR QUESTIONS. The fact that you keep coming up with the same old stupid shit again and again and again demonstrates you’re simply a weasel.


    So the purpose of State Money is to facilitate the movement of real goods and services from the non-government (largely private) sector to the government (public) domain. Government achieves this transfer by first levying a tax, which creates a notional demand for its currency of issue. To obtain funds needed to pay taxes and net save, non-government agents offer real goods and services for sale in exchange for the needed units of the currency. This includes, of-course, the offer of labour by the unemployed. The obvious conclusion is that unemployment occurs when net government spending is too low to accommodate the need to pay taxes and the desire to net save.

    This analysis also sets the limits on government spending. It is clear that government spending has to be sufficient to allow taxes to be paid. In addition, net government spending is required to meet the private desire to save (accumulate net financial assets). From the previous paragraph it is also clear that if the Government doesn’t spend enough to cover taxes and the non-government sector’s desire to save the manifestation of this deficiency will be unemployment. The basis of this deficiency is at all times inadequate net government spending, given the private spending (saving) decisions in force at any particular time.

    For a time, what may appear to be inadequate levels of net government spending can continue without rising unemployment. In these situations, as is evidenced in countries like the US and Australia over the last several years, GDP growth can be driven by an expansion in private debt. The problem with this strategy is that when the debt service levels reach some threshold percentage of income, the private sector will “run out of borrowing capacity” as incomes limit debt service. This tends to restructure their balance sheets to make them less precarious and as a consequence the aggregate demand from debt expansion slows and the economy falters. In this case, any fiscal drag (inadequate levels of net spending) begins to manifest as unemployment.
    —-

    In short – if the government doesn’t tax enough to cover spending, inflation (assuming full employment). If the government doesn’t spend enough to cover taxation, unemployment (after running down savings). And the government needs to spend more than it taxes to inject enough money into the economy to cover the trade deficit and desired growth in net private financial assets.

    Not that this is going to stop you trotting out the same old tired line again and again and again because you can’t be bothered thinking or learning.

    And I see DNW is nearly as retarded as Eric in his confusion on “sovereign”.

  89. Yet another example of the squid’s ignorance, which is why he uses words to cover his embarrassment : “Of course it may have escaped the notice of many, including many economists, that our government is not sovereign”.

    Take out a $1 bill.

    On it, you will see the words “This note is legal tender for all debts, public and private”.

    To any economist, a government is sovereign over precisely that geographical area in which it can make those words stick. That’s the definition of monetary sovereignty.

    Moron.

  90. You must have missed the point that all the money in your pocket RIGHT NOW was printed out of thin air.

    If the government could print money out of thin air, there’d be no need for taxes.


  91. So the purpose of State Money is to facilitate the movement of real goods and services from the non-government (largely private) sector to the government (public) domain. Government achieves this transfer by first levying a tax, which creates a notional demand for its currency of issue. To obtain funds needed to pay taxes and net save, non-government agents offer real goods and services for sale in exchange for the needed units of the currency. This includes, of-course, the offer of labour by the unemployed. The obvious conclusion is that unemployment occurs when net government spending is too low to accommodate the need to pay taxes and the desire to net save.

    More jabberwocky.

    This entire paragraph makes no sense because left wing economics makes no sense. Markets make sense. They have to. But left wingers don’t like markets. Markets are “Unfair”. So left wingers, much like a dog endlessly chasing its tail, keep trying to manipulate markets to achieve their own (self-serving) ends, never mind the end result is East Germany or North Korea. Kill markets, kill prosperity. But left wingers don’t want prosperity, they want power. And if all the serfs are miserable, that’s just fine, especially if the misery is all spread around equally. Fair’s fair, and all that.

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