Incomes drop most in 20 years

[T3goalie]

Tax cuts are a false starter to the discussion. The questions are revenue and spending.

[gatorman_07732]

Originally Posted by mdgator05

And outside of a bubble in the mid-2000s, we have only really seen growth in corporate profits due to the structural issues. This growth is still continuing.

So if you think cutting taxes would be some sort of a magic elixir for the entire economy, without dealing with the structural problems, you would be wrong, as we have tried that.

Neither party wants to deal with the structural issues. Republicans don't want to deal with it because it involves them opening up immigration, admitting that they don't really want free markets, or designing programs with the recognition that allowing corporations to skim cheaper labor has negative consequences in order to mitigate the damage done to lower and mid income workers.

Democrats don't want to engage in policies that will naturally lead to lower unionization, don't want to restrict immigration in a draconian way, and are afraid of being seen as being too pro-government spending.

So on we go arguing on the margins and blaming the other party for a structural problem, while avoiding the problem and pretending that if only we cut taxes more, it wouldn't exist.

I think you're lost or disingenuous. For some reaon I doubt this conversation is worth my time

[mdgator05]

Originally Posted by gatorman_07732

I think you're lost or disingenuous. For some reaon I doubt this conversation is worth my time

As I said, Republicans don't want to talk about it...

[madgator]

Both sides are proving that they have no interest in cutting spending on any level

[gatorman_07732]

Originally Posted by mdgator05

As I said, Republicans don't want to talk about it...

I got news for you, Obama is making things worse with his policies and by 2016 we may be in a hole we can't get out. Heavier tax burdens and regulatory policies are not going to spur growth.

[mdgator05]

Originally Posted by gatorman_07732

I got news for you, Obama is making things worse with his policies and by 2016 we may be in a hole we can't get out. Heavier tax burdens and regulatory policies are not going to spur growth.

Nor are lighter tax policies. If I can pay somebody $0.25 to make my t-shirt and $0.50 to ship it, why would I make it in America just because you lowered my taxes? You can't undercut the labor costs unless you're willing to pay me subsidies to keep me in the US.

Unless you are willing to have a free labor market, which no Republican I have seen is willing to do (free meaning the ability for anybody to apply for a job anyplace, regardless of country in which that job is located), then you are going to end up with a group of low-skilled people stuck in a place without low-skilled jobs due to the high costs of living (the entire US is high cost of living by world standards).

You can't have free capital movement across national borders combined with no free labor movement across national borders and expect there not to be huge structural issues in the labor market.

And simply lowering taxes will do nothing to solve that problem. We have three options for solving that problem:

1. The Free Market solution: opening up international labor markets in the same way that international capital markets have been opened. Free immigration and emigration.

2. The government control solution: restricting capital markets in the same manner as we restrict labor markets, meaning it requires a lot of work to import goods in the same way that it requires a lot of work to immigrate here. Tariffs and continued immigration controls.

3. Maintain the current system but deal with the consequences of a trapped low-skilled labor population with too little work to do by attempting to increase skill where possible (education and training programs) and engaging in redistribution where it is not, either publicly through government or privately through charitable work. If this system is worth enough money to the skilled population (due to the lower cost goods combined with maintaining a high standard of living), this shouldn't be a huge issue.

Because no matter how much you cut taxes and decrease worker safety, increase air and water pollution, etc, you just can't compete with places that already have that lack of safety/environmental regulations and a cost of labor that would not be possible in the US due to the price of living in this country.

[mastoidbone]

The problem is BOTH dems and pubs have won while americans have lost.
Pubs have won in driving overall REVENUE to below historic norms as a % of GDP

DEMS have won with their drunken sailor spending---which has us at moder high spending as a % of GDP.


The result???
RECORD deficits and debt.

The solution???
RAISE TAXES---especially in a logical way that ensures stable revenue to pay down debt---a VAT makes the most sense.

SLASH spending---end pensions for govt workers, cut their pay 10%, slash defense 5% a year for 5 years, ration medicare, end easy disability.

Result???
A recession for a while for sure----but a better future for america---since we have been the ones to benefit from low taxes and ridiculous spending habits---we should pay the price not our kids.

[mdgator05]

Originally Posted by mastoidbone

The problem is BOTH dems and pubs have won while americans have lost.
Pubs have won in driving overall REVENUE to below historic norms as a % of GDP

DEMS have won with their drunken sailor spending---which has us at moder high spending as a % of GDP.


The result???
RECORD deficits and debt.

The solution???
RAISE TAXES---especially in a logical way that ensures stable revenue to pay down debt---a VAT makes the most sense.

SLASH spending---end pensions for govt workers, cut their pay 10%, slash defense 5% a year for 5 years, ration medicare, end easy disability.

Result???
A recession for a while for sure----but a better future for america---since we have been the ones to benefit from low taxes and ridiculous spending habits---we should pay the price not our kids.

And at the end, we will still have major structural unemployment. Because all of that slashing of spending and consumption (which will have a multiplier effect on the decrease in the economy) will not solve the structural labor problems. So we will have much higher unemployment for a few years, so that we can return to basically the same level of income/unemployment a few years later. This is going to continue to be the case until we deal with the structural issues. In fact, as technologies improve, it is likely to get worse over time, not better.

As long as we have low skilled labor trapped in this country along with the free movement of capital, we will have high levels of unemployment on the low-skilled portion of the economy.

[gatorman_07732]

Originally Posted by mdgator05

Nor are lighter tax policies. If I can pay somebody $0.25 to make my t-shirt and $0.50 to ship it, why would I make it in America just because you lowered my taxes? You can't undercut the labor costs unless you're willing to pay me subsidies to keep me in the US.

Unless you are willing to have a free labor market, which no Republican I have seen is willing to do (free meaning the ability for anybody to apply for a job anyplace, regardless of country in which that job is located), then you are going to end up with a group of low-skilled people stuck in a place without low-skilled jobs due to the high costs of living (the entire US is high cost of living by world standards).

You can't have free capital movement across national borders combined with no free labor movement across national borders and expect there not to be huge structural issues in the labor market.

And simply lowering taxes will do nothing to solve that problem. We have three options for solving that problem:

1. The Free Market solution: opening up international labor markets in the same way that international capital markets have been opened. Free immigration and emigration.

2. The government control solution: restricting capital markets in the same manner as we restrict labor markets, meaning it requires a lot of work to import goods in the same way that it requires a lot of work to immigrate here. Tariffs and continued immigration controls.

3. Maintain the current system but deal with the consequences of a trapped low-skilled labor population with too little work to do by attempting to increase skill where possible (education and training programs) and engaging in redistribution where it is not, either publicly through government or privately through charitable work. If this system is worth enough money to the skilled population (due to the lower cost goods combined with maintaining a high standard of living), this shouldn't be a huge issue.

Because no matter how much you cut taxes and decrease worker safety, increase air and water pollution, etc, you just can't compete with places that already have that lack of safety/environmental regulations and a cost of labor that would not be possible in the US due to the price of living in this country.

What lighter tax policies? Paul Ryans solution was eliminating tax loopholes and making the code less complex. Obama raised taxes but also gave selective tax breaks for some very wealthy people. They guy is a complete walking oxymoron. The first priority next to be increasing growth and jobs and the government will get more money coming in. One thing the left has never understood is when you tax something you get less of it.

[mdgator05]

Originally Posted by gatorman_07732

What lighter tax policies? Paul Ryans solution was eliminating tax loopholes and making the code less complex. Obama raised taxes but also gave selective tax breaks for some very wealthy people. They guy is a complete walking oxymoron. The first priority next to be increasing growth and jobs and the government will get more money coming in. One thing the left has never understood is when you tax something you get less of it.

Paul Ryan on tax cuts:

WALLACE: OK, but let’s assume it doesn’t. The question is, what’s more important to Romney? Would he scale back on the 20 percent tax cut for the wealthy? Would he scale back and say, OK, you know, we’re going to have to raise taxes for the middle class?

I guess the question is what’s most important to him in his tax reform plan?

RYAN: Keeping tax rates down. By lowering tax rates, people keep more of the next dollar that they earn. That matters. That is incentives. That’s pro-growth policy. That creates 7 million jobs. And what should go first...

No it won't do that. Because our problem with job growth isn't taxes. It is the structural unemployment caused by the free movement of capital combined with the government controlled movement of labor.

As for your last quote, that is simply not true. The first derivative, the effect of the change in tax code on revenues, is often positive although it can be negative. The second derivative, the acceleration of the effect of taxes on revenues is typically negative. But it is pure fantasy to claim that the empirical evidence has backed the first derivative is always negative. If that were true, the revenue maximizing tax rate would by to pick an asymptotically close to 0 percentage for taxes. That is simply absurd.

[gatorman_07732]

Originally Posted by mdgator05

Paul Ryan on tax cuts:



No it won't do that. Because our problem with job growth isn't taxes. It is the structural unemployment caused by the free movement of capital combined with the government controlled movement of labor.

As for your last quote, that is simply not true. The first derivative, the effect of the change in tax code on revenues, is often positive although it can be negative. The second derivative, the acceleration of the effect of taxes on revenues is typically negative. But it is pure fantasy to claim that the empirical evidence has backed the first derivative is always negative. If that were true, the revenue maximizing tax rate would by to pick an asymptotically close to 0 percentage for taxes. That is simply absurd.

What is so hard to understand to understand about getting more people to work and of the gov udder will increase revenue? This is so simple it's stupid. I do think liberals get this and it is their overwhelming desire to Ereopeanize this country and destroy it.

[mdgator05]

Originally Posted by gatorman_07732

What is so hard to understand to understand about getting more people to work and of the gov udder will increase revenue? This is so simple it's stupid. I do think liberals get this and it is their overwhelming desire to Ereopeanize this country and destroy it.

What is so hard to understand that you don't have a plan that will actually do that? You can cut taxes, but that will not have firms bringing low skill labor back into the US.

We do not have a problem of high skilled labor finding a job. The unemployment rate for those with a college degree is very low. High skilled labor can easily find work. So why can high skilled labor so easily find work while low skilled labor is having so much trouble? If the issue was taxes and regulations, why would that affect the low skilled labor pool more than the high skilled labor pool.

As I said, there are only three solutions to the issues dealing with the labor market: the free market solution (which allows people free immigration and emigration), the government control solution (an end to the free trade agreements with economies with significantly different costs of labor), or the status quo solution (deal with the issues of the structural labor problems through the use of redistributive programs in order to ensure maintenance of the benefits of free capital markets without dealing with the issues of free labor markets).

The status quo solution relies on the proposition that the labor market will not be able to develop into some form of purely wage-based equilibrium due to cultural issues and language in the free market solution and that those at the top of the income distribution benefit from their own jobs being relatively secure while they also pay lower prices for a variety of goods due to lower labor costs.

However, if you would like to advocate for the government control solution, as that will likely lead us to the closest to full employment, I would be willing to listen to a good argument for that solution. Just seems odd coming from a conservative.

If you think that this can all be solved by boiler-plate Republican talking point solutions, you are very sadly mistaken.

[busigator96]

It should continue as long as the true unemloyment rate remains low.

Human labor for repetitive and mundane tasks will diminish even faster as technology replaces it.

[gatorman_07732]

Originally Posted by mdgator05

What is so hard to understand that you don't have a plan that will actually do that? You can cut taxes, but that will not have firms bringing low skill labor back into the US.

We do not have a problem of high skilled labor finding a job. The unemployment rate for those with a college degree is very low. High skilled labor can easily find work. So why can high skilled labor so easily find work while low skilled labor is having so much trouble? If the issue was taxes and regulations, why would that affect the low skilled labor pool more than the high skilled labor pool.

As I said, there are only three solutions to the issues dealing with the labor market: the free market solution (which allows people free immigration and emigration), the government control solution (an end to the free trade agreements with economies with significantly different costs of labor), or the status quo solution (deal with the issues of the structural labor problems through the use of redistributive programs in order to ensure maintenance of the benefits of free capital markets without dealing with the issues of free labor markets).

The status quo solution relies on the proposition that the labor market will not be able to develop into some form of purely wage-based equilibrium due to cultural issues and language in the free market solution and that those at the top of the income distribution benefit from their own jobs being relatively secure while they also pay lower prices for a variety of goods due to lower labor costs.

However, if you would like to advocate for the government control solution, as that will likely lead us to the closest to full employment, I would be willing to listen to a good argument for that solution. Just seems odd coming from a conservative.

If you think that this can all be solved by boiler-plate Republican talking point solutions, you are very sadly mistaken.

It's been done over and over again and it's called supply side economics.

[Dreamliner]

Bush's fault until further notice.

[mdgator05]

Originally Posted by gatorman_07732

It's been done over and over again and it's called supply side economics.

So if I am a firm and can get my supply at 50% the cost for a low skilled production process in a foreign country compared to the US, due to free trade, why would I care if you reduced my taxes to 0%? I would still need to act in an economically irrational way to produce that product in the US.

[gatorman_07732]

Originally Posted by mdgator05

So if I am a firm and can get my supply at 50% the cost for a low skilled production process in a foreign country compared to the US, due to free trade, why would I care if you reduced my taxes to 0%? I would still need to act in an economically irrational way to produce that product in the US.

But not everybody does that do they? It happens yes but we also adjust, but somehow you think this is somehow exclusive to Obama. After the dot com recession and 9/11 we still managed to get down to the natural rate of unemployment. With Obama's policies it will be impossible.

[mdgator05]

Originally Posted by gatorman_07732

But not everybody does that do they? It happens yes but we also adjust, but somehow you think this is somehow exclusive to Obama. After the dot com recession and 9/11 we still managed to get down to the natural rate of unemployment. With Obama's policies it will be impossible.

To answer your first question: outside of a few niche producers and industries in which shipping is harder due to the size of products (which have limited export capabilities), yes just about everybody does that. Even high end producers, some of whom have remained in the US, are importing the components needed for their products that only require unskilled labor.

If you are producing mass market manufactured goods that rely on low skilled labor, and you are not producing in other countries, you are going to be out of business very quickly. And with free capital markets, there really isn't much that can be done about that short of offering subsidies.

As to your second point, yes, after the recession in 2000-2001, we formed a bubble of unskilled and semi-skilled labor in housing, an industry that was impossible to outsource. It was unsustainable and had major economic implications going forward. I guess we could try that again, but it doesn't seem like it would be a smart idea, given what happened when it ended in 2008-2009.

[gatorman_07732]

Originally Posted by mdgator05

To answer your first question: outside of a few niche producers and industries in which shipping is harder due to the size of products (which have limited export capabilities), yes just about everybody does that. Even high end producers, some of whom have remained in the US, are importing the components needed for their products that only require unskilled labor.

If you are producing mass market manufactured goods that rely on low skilled labor, and you are not producing in other countries, you are going to be out of business very quickly. And with free capital markets, there really isn't much that can be done about that short of offering subsidies.

As to your second point, yes, after the recession in 2000-2001, we formed a bubble of unskilled and semi-skilled labor in housing, an industry that was impossible to outsource. It was unsustainable and had major economic implications going forward. I guess we could try that again, but it doesn't seem like it would be a smart idea, given what happened when it ended in 2008-2009.

More and more companies are setting up operations globally which allows them to function at optimum levels. It's a matter of thinking outside the box to stay competitive. People in the U.S. adjust and move on, but there are the vocal few that whine and complain because of the loss of their manufacturing job.
You think the dot com bust was semi-skilled labor? I don't know where you were back then but you're flat wrong, I was there and almost lost a business. That comment tells me you're not completely in tune with what actually happened as the IT sector among other high tech sectors were decimated.

[mdgator05]

Originally Posted by gatorman_07732

More and more companies are setting up operations globally which allows them to function at optimum levels. It's a matter of thinking outside the box to stay competitive. People in the U.S. adjust and move on, but there are the vocal few that whine and complain because of the loss of their manufacturing job.
You think the dot com bust was semi-skilled labor? I don't know where you were back then but you're flat wrong, I was there and almost lost a business. That comment tells me you're not completely in tune with what actually happened as the IT sector among other high tech sectors were decimated.

You are right about corporations setting up globally to remain competitive, since we have designed the economy with free capital markets. However, workers do not have the same option, as there has been nowhere near the push for making free labor markets, through the end of immigration and emigration controls.

As it stands right now, on the low end of the scale, there just aren't enough jobs for all the people who are low skilled that are stuck in the US due to immigration/emigration law and cultural/language barriers. That is why you have a massive structural unemployment.

The Dot-Com bubble was not all semi-skilled labor (there were some definite semi-skilled manufacturing positions that accompanied the boom, but those were not the majority of jobs). I never claimed it was. The recovery from the crash involved forming a semi-skilled and unskilled labor-based bubble in housing. The Dot-Com crash just resulted in reallocation within the same industry, as the successful companies of the Dot-Com boom period consolidated the market (Google, Amazon, eBay, etc.).

However, a former textile worker with a high school education and the skill set of an unskilled laborer, has no such option. While on an individual level we can train some of them, we don't have enough skilled jobs to allow everybody to do this. In addition, some of the people in these positions are not particularly well suited for this form of labor.