Not if they live in Manhattan, though.
$150K is about 3x’s the “living wage” of Chattanooga, but only 1.7x that of DC. So, is the family in Chattanooga making $150K richer (more rich?) than the family in DC.
This brings up another issue. The chart is for a family of 4 (2 working adults & 2 kids). Well, if personal choices shouldn’t be considered (i.e. trying to keep up with the Jones’) than the number of kids a person has shouldn’t either. That’s a choice too.
Ya, this is why I think this conversation is so dicey especially if you look at it from a global perspective. $125K is over 12x greater than the average household income worldwide. Is that not rich?
My position is that personal choices do matter, they matter most of all. If a household earns 150k/year perhaps they should choose not to live in Manhatten.
I was hoping we would confine the matter to the United States.
[quote=“pat, post:80, topic:222900, full:true”]
That’s a bullshit talking point Democrats use as sloganeering tactic and in no way representative of a true ideal republican budget. Anymore than simply saying democrats just want to tax and spend us out of existence.
Both want to generate more tax revenue, the conservative belief is that generally lower taxes increases taxing opportunities which will increase tax revenue.[/quote]
I’m not quite sure where the difference between the two statements lies.
As far as I can tell, “generally lower taxes increases taxing opportunities” roughly equals “cutting taxes on the wealthy will simply lead to economic growth as the wealthy spend the money”.
Sure, but if people choose not to live in Manhattan (who say work on Wallstreet) and instead live in Northern New Jersey then real estate prices will increase in Northern New Jersey.
We’ve seen something similar in MD actually. The D.C. Metro area is too expensive for your average government worker so people have pushed out into the surrounding counties. We’ve seen real estate prices climb as far west as Frederick County especially now that the intercounty connector has been completed.
Point being, and I’m sure I sound like a broken record at this point, there are so many evolving factors that I’m back to where I originally started. It’s subjective.
I suppose where I was going was something like this…If you earn in the bottom 20% and are having a hard time, I get it. If you’re earning in the top 20% and having a hard time you’re the biggest part of the problem.
Disclaimer: I’m never excusing people for not trying their hardest.
Aggregate Supply Stuff:
Short run aggregate supply is the relationship between GDP and Price Level.
Tax cuts on the wealthy DO NOT move shift term aggregate supply to the “right” or “outward.” They just keep more money in wealthy hands.
Tax cuts that lower wage costs(lowering the cost of labor) WILL shift short term aggregate supply along the curve. Lower costs of production mean more production.
In the short term, capital is considered “fixed.” Rich people stuff like new factories and better production processes don’t have time to work, in the short run.
In the long run, tax cuts on the wealthy DO shift Long Term Aggregate Supply “outward” or “to the right.” “The rich” invest money, get educated, and improve capital stock( factories/equipment). It takes time for the “investments” to pay off, but the long term improvements expand GDP.
Putting money in people’s (consumer’s) hands through tax cuts increases demand. “Poor” people spend all their extra money, definetly increasing demand. “Rich” people are more likely to save or invest extra, theoretically causing “less” increase in demand.
The Monetarist stance is to forget demand side or supply side economics, and keep the money supply expanding steadily to keep inflation in check and keep the economy rolling. People love Friedman. But quantitative easing makes people nervous.
HIghjack but related
I never understood where the reckoning was for the the derivatives moved from 2007ish.
It seems that banks have done what they could by keeping over valued properties on the books rather than starting the chain reaction from accurately marking asset at current value. Borrowing money from Fed at 0% has helped, but what about downstream bundles that went to sovereign funds, foreign investment portfolios, etc?
The value would dictate either world war or reset of global financial system as it is estimated at $250TT(?).
I thought that they did reset? There was a sort of domino effect through the world as entire countries crashed, or as Bernanke would call it- adjusted.
I’ve been out of school for awhile. When I was an Econ major, Clinton and Greenspan were proving Monetarist right.
I haven’t been manipulating my econ graphs much in a long time. But here is my best attempt at an essay answer.
Growth was slow since 08, below “Natural Levels” because low interest rates lead to a lack of investment.
Instead of of growth, we had stagnation. In the Fed had done nothing, price level and interest rates would have gone up. Money would have been super hard to get. This would have further slowed the economy. Remember how every scum bag was stealing copper pipe and catalytic converters? The whole economy would have been like that. So much shit would have been torn down, our ability to produce would have gone backwards. GDP would decrease as we descended into Mad Max style cannabilism of the old world.
Instead, we expanded the money supply to keep the economy afloat. Rather than investment, there was spending. As the economy grows, and GDP increases, the Fed will (presumably) raise interest rates, slowing the growth of the money supply. This will lead to more investment, and more GDP growth. Inflation/Raising price levels will follow. This will make assets and savings more valuable again, restoring the lost $250TT.
To Monetarist, money isn’t like a pile of gold that can be dropped into the sea and “lost.” Its like an expression of the value of the economy. It goes up and down.
I was daytrading for several years during that period, and predicted stagflation to my trading chat roomies. My thought was that inflation would be needed to blow up the bubble needed to let the derivatives unwind.
Never guessed the Fed (and I suppose other central banks) would tamp down inflation by lowering interest to nil, and for years. But it still seems to be kicking the can down the road, because someone bought those CDOs at a high price and eventually need redeeming to get cash for their obligations.
When I see new attempts at expanding home ownership through unsound government and bankster impetus, well - overheated real estate seems to be the birthplace of recessions and depressions.
The value of everyone’s house, who still had a house, went down. But everyone’s mortgage stayed the same. Everyone was “underwater.”.
The bankers still got their money. They just took it from whoever had it.
Responsible middle class people lost a bunch of wealth.
The cost of kicking the can down the road was years of stagnation.
Young people have been forced to live with their parents. It’s like we lost 8 Years.
No. In order for it to be a repudiation of the basic concept one would have to control for all of the confounding variables that usmc wrote about. Have to. No way around that if you want to claim disproof of the basic concept, which IS the theory. The most you can say is that it refutes the notion that improvement is an automatic and blanket result whenever taxes are reduced. And in order to do that you have to really dig in because unemployment was already low, so it won’t show a big sudden impact, and tax revenue obviously not a suitable indicator either.
This isn’t me being stubborn about an ideology, this is simply the bare fact of the way one goes about disproving a theory. The gloriously smug headlines that came out in partisan rags across the internet shortly after Kansas did this about it ‘disproving trickle down economics’ are a bunch of bullshit for that reason. If you want to criticize the Republicans for talking about trickle down as an automatic benefit, have at it. Nothing is life is automatic though, so essentially you can criticize them for marketing hype. This could be leveled at both parties easily in different areas.
There is a reason statisticians control for confounding variables, and there’s a reason stats is so hard as a discipline where data is messy and incomplete (i.e economics)
Really great evolution to this thread, like the discussion. Totally agree with the above, with some disclaimer for outliers with always exist. Try your hardest. Not every body is perfect–Lord knows I’m not–but try.
True.
[quote=“SkyzykS, post:110, topic:222900”]
I thought that they did reset?
[/quote
I don’t think in reality because although the original bundles totaled far less, they kept getting used as a collateral over and over. Making a huge multiplier effect.
At the end of the day, many people end up as holding the bag - which in this case is full of overvalued assets.
Sorry I can’t verify 250TT number at the moment, it is important to the conversation. From the standpoint of a trillion here and a trillion there, and soon you are talking real money.
Oh. I thought that was accounted for as the institutions holding those assets had to re-evaluate their holdings.
That could be my misunderstanding though.
This shit is complicated. It’s way easier just to blame everything on rich Jew bankers. Or Bush and the secret handshake illuminati. Or Obama and his hordes of welfare minority illegals.
Are we only allowed to pick one?
