Trickle down theory, did it work?

[romanov]

Nor the pertinent reasons why I am wrong... without them, you are most certainly not 'right'.

She stated that she has neither the time nor the inclination to bother with that debris.

This has nothing to do with how I feel, but what I think.

Exactly, what you think. Probably some garbage that some professor puked out. That's why like to deal with what I know to be true.

Never mind how this would effect those for whom social security was designed for originally: those who have nothing to invest, and thus need a safety net.

You have absolutely no idea how social security works do you? I have this little saying; something I picked up years ago. You have the right to do as you please provided that you do not deprive me or others of our life, liberty or property through force or fraud. Social security is a fraud; an absolute 100% unadulterated fraud. A ponzi scheme forced on us by the federal government.

You say that it's to protect those who have no money to invest. You invest in social security every time you get a paycheck. But it's a pay as you go system. The people recieving social security checks right now get your money. And whenever the social security system and congress allow you to retire, you'll get the money that your children and your neighbor's children are paying into the system. Now the government can keep the fraud under wraps as long as there are more people working than receiving benefits.

Right now, there's more money coming into the social security system through your FICA tax than is being paid out by the social security administration. Guess what happens to the balance of the money? It goes into the general fund and has gone into the general fund since, I think, 1939 when congress changed the rules. They have spent the money, it is gone. There is no "lock box." There is no social security trust fund. Your "safety net." is a stack of IOUs in the bottom of some file cabinet in the social security office and they are all signed by the American taxpayer. They've spent it on every thing from highways, to Vietnam, to indoor rain forests in Iowa.

FICA tax is based on your income. Let's say you gross $100 a week. Your FICA tax is $7.25 or 7 1/4% of your income up to $85,000 a year. Your employer "contributes" dollar for dollar what you pay in. So $7.25 + $7.25 = $14.50. Not an exact computation but about 14.5% of what you earn goes into the social security sieve. As an experiment, go to any reputable financial advisor in your area and tell him you plan to work until you are 65 and never plan to make more than about $35,000 a year adjusted for inflation. And then tell him you want to invest 15% of that 35,000 a year into a retirement fund. And you want to know approximately how much you will have to retire on and how much can you reasonably expect to earn off that money for your retirement years.

That's kind of a trick question that you need not answer because I already know the answer. The Galveston TX school system opted out of the social security system when it was still legal to do so. A janitor who never made more than $25,000 a year, put money into the Galveston, TX school system's retirement plan done through a financial planner. The first year of his retirement, he made $34,000. In other words, he retired and got a raise.

If you were allowed to do the same, not only would you retire with more money, but when you died, guess who gets the money? Your wife or your kids or your cat, who ever you want to get the money, it's your money. You know who gets your social security money when you die? The government. You wife get's $250 and your kid's about $75 each a month if they are under the age of 18. So if your kids are lucky, you'll die when they are 2 years old. Great safety net.

 

[YoungJoonKim]

So..I guess we need depression to bring down the rich...
and all the while we suffer like in hell.
....wooow.

 

[romanov]

So..I guess we need depression to bring down the rich...
and all the while we suffer like in hell.
....wooow.

I really have no idea what you are getting at.

 

[PastorJim]

You can say this with a straight face? LOL, Seriously? I mean, seriously!

If your bsns fails...you get a nice fat golden parachute, leave the company bankrupt, people on the street and jobless and possibly homeless ...the top execs go on to their protected group of comrades to another cushy top position w/just as high and probably higher pay. It happens every day!!! They are the "elite" group-they "lose" their company and go on to another position w/the fat bulky parachutes intact. Please, don't insult my intelligence Pastor. THey are REWARDED whether the company thrives or fails...the laborers are the ones that get the shaft.

Really? Who provides me with this "golden parachute"? What "cushy top position" do I go to? It's possible that I could rebuild in a couple of years, but what do I do in the mean time?

What "elite group" am I a part of?

Honestly, you make it sound like I'm the CEO of GM or something.

If your attitude and ignorance toward small business owners is any indication of the Democrat's attitude and ignorance, then God help us if Obama should be elected.

 

[JustOneWay]

Guess what happens to the balance of the money? It goes into the general fund and has gone into the general fund since, I think, 1939 when congress changed the rules.

Myth 4 -

President Roosevelt promised that the money the participants paid would be put into the independent "Trust Fund," rather than into the General operating fund, and therefore, would only be used to fund the Social Security Retirement program, and no other Government program

The idea here is basically correct. However, this statement is usually joined to a second statement to the effect that this principle was violated by subsequent Administrations. However, there has never been any change in the way the Social Security program is financed or the way that Social Security payroll taxes are used by the federal government.
The Social Security Trust Fund was created in 1939 as part of the Amendments enacted in that year. From its inception, the Trust Fund has always worked the same way. The Social Security Trust Fund has never been "put into the general fund of the government."

http://www.ssa.gov/history/InternetMyths.html

 

[KarateCowboy]

Well the "wealth spreading" does go mainly to those same states if you want to talk about hypocrisy.



http://www.giveupblog.com/2005/11/taxes.html

So, given that hypocrisy is teaching one thing but doing the opposite, how does this constitute hypocrisy?

 

[snoopyloopysk8a]

She stated that she has neither the time nor the inclination to bother with that debris.


Exactly, what you think. Probably some garbage that some professor puked out. That's why like to deal with what I know to be true.


You have absolutely no idea how social security works do you? I have this little saying; something I picked up years ago. You have the right to do as you please provided that you do not deprive me or others of our life, liberty or property through force or fraud. Social security is a fraud; an absolute 100% unadulterated fraud. A ponzi scheme forced on us by the federal government.

You say that it's to protect those who have no money to invest. You invest in social security every time you get a paycheck. But it's a pay as you go system. The people recieving social security checks right now get your money. And whenever the social security system and congress allow you to retire, you'll get the money that your children and your neighbor's children are paying into the system. Now the government can keep the fraud under wraps as long as there are more people working than receiving benefits.

Right now, there's more money coming into the social security system through your FICA tax than is being paid out by the social security administration. Guess what happens to the balance of the money? It goes into the general fund and has gone into the general fund since, I think, 1939 when congress changed the rules. They have spent the money, it is gone. There is no "lock box." There is no social security trust fund. Your "safety net." is a stack of IOUs in the bottom of some file cabinet in the social security office and they are all signed by the American taxpayer. They've spent it on every thing from highways, to Vietnam, to indoor rain forests in Iowa.

FICA tax is based on your income. Let's say you gross $100 a week. Your FICA tax is $7.25 or 7 1/4% of your income up to $85,000 a year. Your employer "contributes" dollar for dollar what you pay in. So $7.25 + $7.25 = $14.50. Not an exact computation but about 14.5% of what you earn goes into the social security sieve. As an experiment, go to any reputable financial advisor in your area and tell him you plan to work until you are 65 and never plan to make more than about $35,000 a year adjusted for inflation. And then tell him you want to invest 15% of that 35,000 a year into a retirement fund. And you want to know approximately how much you will have to retire on and how much can you reasonably expect to earn off that money for your retirement years.

That's kind of a trick question that you need not answer because I already know the answer. The Galveston TX school system opted out of the social security system when it was still legal to do so. A janitor who never made more than $25,000 a year, put money into the Galveston, TX school system's retirement plan done through a financial planner. The first year of his retirement, he made $34,000. In other words, he retired and got a raise.

If you were allowed to do the same, not only would you retire with more money, but when you died, guess who gets the money? Your wife or your kids or your cat, who ever you want to get the money, it's your money. You know who gets your social security money when you die? The government. You wife get's $250 and your kid's about $75 each a month if they are under the age of 18. So if your kids are lucky, you'll die when they are 2 years old. Great safety net.

but, i saw an article a couple months ago in kiplinger's that said it's 100% legal for your minor children to collect social security as well while you're still alive and working if you reach age of retirement before they turn 18. quite a nice loophole if you fall into that category. also why the system, in addition to being continually raided, is broken and will cause yet another financial meltdown if not prepared for soon.

 

[Straydog4293]

I am the one that started a thread titled “I am undecided”. This is still true I am undecided. I just want to get that out of the way right up front. I am not posting here to support either candidate. I have problems with both candidates. In this case I disagree with Obamas plan.

Also note that I did not read every post in this thread. What is said below may have already been posted, if so I apologize for the repeat.

First a few questions:
Has it ever been said by republicans that their plan is “Trickle Down _____”
I only hear democrats saying this.

Is there an actual tax break for wealthy people, not talking about tax breaks for businesses, I mean for individual people?
Maybe there is but I am only aware of tax breaks being given to businesses. Maybe the implication is that only wealthy people benefit from these tax breaks.

The tax breaks for businesses help them to be or remain profitable. This idea is not to further increase the wealth of the business or individual running the business, with the hope that they will be generous and hand out some of their profits. Though it is more likely for workers to get a pay increase if a business is profitable, not saying that a business man will automatically give workers a pay increase if his business is profitable, it is a sure thing however, that his workers will not get a pay increase if the company is in the red.. The idea is to provide tax cuts/breaks to the business, helping it to remain profitable and therefore ensure jobs.

This idea to increase taxes on business making over a certain amount is not going to help. Does anyone honestly think that the business is going to eat this added cost? No they will not. This extra expense will be compensated for in higher prices for good and services, and/or lowering of benefits provided to employees. If the cost of goods and services is increased it will result in lower sales revenue. The loss of sales revenue could possibly lead to 1) go out of business, or 2) if the business has the means to do so they will move to another location.

In the case of higher taxes for businesses the little man loses in every possible scenario. He will either have to pay more for needed goods and services, will not get that much needed pay increase, will lose much needed benefits provided by the employer, or he will lose his job.


I am all for providing help to the little guy. I think increasing taxes on businesses will hurt more than it will help.

 

[Bootstrap]

First a few questions:
Has it ever been said by republicans that their plan is “Trickle Down _____”
I only hear democrats saying this.

McCain's plan is to (1) maintain the Bush tax cuts, and (2) reduce capital gains tax. These both attempt to fix the economy by targeting tax cuts to the wealthy. He does not use the term "Trickle Down Economics", I don't think the term would help his case, but that's about the only thing *in* his tax plan.

Is there an actual tax break for wealthy people, not talking about tax breaks for businesses, I mean for individual people?

Yes. The Bush tax cuts were temporary, McCain's plan is to make them permanent. That's about a 3% tax cut for the highest tax bracket.

Obama does not raise the corporate tax rate, he keeps it right where it is. McCain wants to cut it.

The tax breaks for businesses help them to be or remain profitable. This idea is not to further increase the wealth of the business or individual running the business, with the hope that they will be generous and hand out some of their profits.
!!! SNIP !!!
The idea is to provide tax cuts/breaks to the business, helping it to remain profitable and therefore ensure jobs.

But his tax breaks are targeted toward businesses with corporate profits over $250,000. Most new jobs are created by small businesses that earn less, and these businesses do better under the Obama plan. And it's precisely the new startup businesses, which rarely make that much money, that we should care about the most if we want job growth.

This idea to increase taxes on business making over a certain amount is not going to help. Does anyone honestly think that the business is going to eat this added cost? No they will not. This extra expense will be compensated for in higher prices for good and services, and/or lowering of benefits provided to employees.

I think the right question here is "by how much?"

If you give a business $1.00 back in taxes ....

- How much of that do they spend by lowering prices? And if they do, is that a government subsidy of their product?
- How much of that do they spend in employment?
- How much of that do they reinvest?
- How much of that do they return to their shareholders?
- How much of that is spent in other ways?

I'd have to look a lot of things up to answer your question with anything like a useful answer.

In the case of higher taxes for businesses the little man loses in every possible scenario. He will either have to pay more for needed goods and services, will not get that much needed pay increase, will lose much needed benefits provided by the employer, or he will lose his job.

Every tax costs.

Given the fact that the government spends more than it takes in, we have a growing deficit. We have to pay for what we spend somehow. Neither McCain nor Obama have plans that will cut spending.

It's a question of who bears what share of the tax burden. Would you rather have $1.00 as a tax cut, or would you rather we give that $1.00 to a business in the hopes that you will benefit by $1.00 through trickle down mechanisms?

I am all for providing help to the little guy. I think increasing taxes on businesses will hurt more than it will help.

I'm not convinced that McCain's tax policy helps more than it hurts. And that's largely because I don't think the data show that trickle down works.

Jonathan

 

[variant]

So, given that hypocrisy is teaching one thing but doing the opposite, how does this constitute hypocrisy?

Well since we are generalizeing by state.

The states that are most against redistribution, are also the states that partake most actively in it.

 

[JoyJuice]

So we are now on page 13, and not one defense that the same failed economic policy of Bush that McCain wants to double down on, actually works.

 

[YoungJoonKim]

WWI and depression have led to redistribution of income. I wonder why.

 

[bexcellent]

WWI and depression have led to redistribution of income. I wonder why.

Because the socialists and socialist dictators who want to take power know that tough economic times is their opportunity to take power by offering things in exchange. This is the concern with getting out of Iran too quickly and I bet any country you want to look at that went socialist. In America they do it progressively by degree until today we apparently have about half of the country that has bought into it if this election is any indicator.

 

[bexcellent]

So we are now on page 13, and not one defense that the same failed economic policy of Bush that McCain wants to double down on, actually works.

Tell us about these failed economic policies of Bush that McCain wants to double down on. While you are at it why don't you also tell us why our liberally dominated public schools have failed so miserably to teach more people to understand how to be successful in America and to make such basic wise personal finance decisions as choosing a mortgage or buying a home?.

 

[Bootstrap]

Because the socialists and socialist dictators who want to take power know that tough economic times is their opportunity to take power by offering things in exchange. This is the concern with getting out of Iran too quickly and I bet any country you want to look at that went socialist. In America they do it progressively by degree until today we apparently have about half of the country that has bought into it if this election is any indicator.

In other words, this post won't address the trickle down question. But it at least tells us that we're in Iran, which I didn't know up to now.

Jonathan

 

[Bootstrap]

Tell us about these failed economic policies of Bush that McCain wants to double down on.

I think he's talking about the Bush tax cuts and trickle down economics, which are the subject of this thread.

While you are at it why don't you also tell us why our liberally dominated public schools have failed so miserably to teach more people to understand how to be successful in America and to make such basic wise personal finance decisions as choosing a mortgage or buying a home?.

Perhaps you could open your own threads for this.

Jonathan

 

[Braunwyn]

Tell us about these failed economic policies of Bush that McCain wants to double down on. While you are at it why don't you also tell us why our liberally dominated public schools have failed so miserably to teach more people to understand how to be successful in America and to make such basic wise personal finance decisions as choosing a mortgage or buying a home?.

As we've already discussed, nothing has been brought to light as to why people that own homes, who choose to refinace based on the guidance of their lenders, should be put on the chopping block for blame. You certainly don't know why home values inflated and I don't know why either. So, until you pass on this pearl of wisdom that you may or may not have to offer, lets give a little slack to those that don't know any better than you or I.

 

[variant]

As we've already discussed, nothing has been brought to light as to why people that own homes, who choose to refinace based on the guidance of their lenders, should be put on the chopping block for blame. You certainly don't know why home values inflated and I don't know why either. So, until you pass on this pearl of wisdom that you may or may not have to offer, lets give a little slack to those that don't know any better than you or I.

You don't know why home values were inflated?

Try this> Easy credit leads to speculation, and more buyers in the market drives up prices.

 

[Braunwyn]

You don't know why home values were inflated?

Try this> Easy credit leads to speculation, and more buyers in the market drives up prices.

IRT the subprime loan crisis I don't see how this fits. We were both involved in the thread when this was broached by...notradame? So, I started to do some reading and learned that 90% of subprime loans from 1998 to 2006 were via refinancing. This doesn't lend to new home buyers contributing to more buyers though I can see how this could lead to an increase in buying more expensive homes. Outside that I'm at a loss.

 

[variant]

IRT the subprime loan crisis I don't see how this fits. We were both involved in the thread when this was broached by...notradame? So, I started to do some reading and learned that 90% of subprime loans from 1998 to 2006 were via refinancing. This doesn't lend to new home buyers contributing to more buyers though I can see how this could lead to an increase in buying more expensive homes. Outside that I'm at a loss.

The mechanics are the same. A large money supply and lax regulation allowed banks to take riskier positions in loans. The loans weather sub-prime or not were lax, and they lead to a rapid increase in what people were willing to pay in principle for a house, in a time when jobs in general were not paying any more money. People were speculating, and most thought that the housing market would only go up, so they were willing to pay a somewhat ridiculous amount now, thinking they would be able to sell it later in life for an even more ridiculous price.

Sub-prime refinancing was done afterward for people to pay other expenses, and this becomes much more popular as the cost of living goes up but wages do not, the refinancing was done based upon the value of the home, so the market run up still causes the sub-prime mess.

If lax loans are given, underestimating the risk involved, markets inflate.

It’s a general rule for any market, if the US government eased lending standards to let people leverage more so that they could buy stocks, people would inflate the stock market (this also happened in our history).