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sense of entitlement
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No_hite_pls

Joined: 05 Mar 2007
Location: Don't hate me because I'm right

Posted: Tue Sep 18, 2012 11:47 pm Post subject: sense of entitlement

http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/09/17/romneys-theory-of-the-taker-class-and-why-it-matters/

Quote:

Part of the reason so many Americans don�t pay federal income taxes is that Republicans have passed a series of very large tax cuts that wiped out the income-tax liability for many Americans. That�s why, when you look at graphs of the percent of Americans who don�t pay income taxes, you see huge jumps after Ronald Reagan�s 1986 tax reform and George W. Bush�s 2001 and 2003 tax cuts. So whenever you hear that half of Americans don�t pay federal income taxes, remember: Ronald Reagan and George W. Bush helped build that. (You also see a jump after the financial crisis begins in 2008, but we can expect that to be mostly temporary.)

Some of those tax cuts for the poor were there to make the tax cuts for the rich more politically palatable. �Do you think we wanted to include a welfare payment to people who don�t pay taxes and call it a tax cut?� A top Bush administration official once asked me. �No. But that�s what we needed to do to get it done.�

But now that those tax cuts have passed and many fewer Americans are paying federal income taxes and the rich are paying a much higher percentage of federal income taxes, Republicans are arguing that these Americans they have helped free from income taxes have become a dependent and destabilizing �taker� class who want to hike taxes on the rich in order to purchase more social services for themselves. The antidote, as you can see in both Paul Ryan and Mitt Romney�s policy platforms, is to further cut taxes on �job creators� while cutting the social services that these takers depend on. That way, you roll the takers out of what Ryan calls �the hammock� of government and you unleash the makers to create jobs and opportunities.
So notice what happened here: Republicans have become outraged over the predictable effect of tax cuts they passed and are using that outrage as the justification for an agenda that further cuts taxes on the rich and pays for it by cutting social services for the non-rich.

That�s why Romney�s theory here is more than merely impolitic. It�s actually core to his economic agenda.

Of the 47%,

Quote:

"61 percent of them paid payroll taxes � which means THEY HAVE JOBS and, when you account for both sides of the payroll tax,
they paid 15.3 percent of their income in taxes, which is higher than the 13.9 percent that Romney paid."

On average the 47% paid a higher tax percentage than Mitt Romney. I guess when Mitt was talking about all the freeloaders,
he must have been really talking about himself.

Yes Mitt Romney, there are some with a sense of entitlement but not just in the lower class, many of them are also in the investment class.
And I believe that Mitt Romney you are one of them.

No_hite_pls

Joined: 05 Mar 2007
Location: Don't hate me because I'm right

Posted: Tue Sep 18, 2012 11:58 pm Post subject:

"There are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it." This, from a man who got $70,000 Government tax break last year for his pet horse.

visitorq

Joined: 11 Jan 2008

Posted: Wed Sep 19, 2012 12:14 am Post subject:

No_hite_pls wrote:

This, from a man who got $70,000 Government tax break last year for his pet horse.

There are plenty of things to pick on Romney for. Getting a tax break isn't one of them... We should all get tax-breaks, the more the better. Less money in government hands = more money put to productive use in the economy.

Unposter

Joined: 04 Jun 2006

Posted: Wed Sep 19, 2012 2:06 am Post subject:

VisitorQ, What is the difference between personal spending (lets say on a pet horse) and government spending (lets say on a pet horse) in terms of "productive" use in an economy? And, are you really defending Romney's use/abuse of the government? Seriously?

radcon

Joined: 23 May 2011

Posted: Wed Sep 19, 2012 3:44 am Post subject:

visitorq wrote:

Less money in government hands = more money put to productive use in the economy.

Or to hoard in Cayman Island bank accounts. Or to invest overseas in stock markets.

visitorq

Joined: 11 Jan 2008

Posted: Wed Sep 19, 2012 4:01 am Post subject:

Unposter wrote:

VisitorQ,

What is the difference between personal spending (lets say on a pet horse) and government spending (lets say on a pet horse) in terms of "productive" use in an economy?

They're as different as night and day. The government does not spend in productive ways. I merely redistributes money, usually to a negative effect. Personal spending, by contrast, is on the things that we actually want.

Quote:

And, are you really defending Romney's use/abuse of the government? Seriously?

Where are you getting that notion from? I'm defending anyone who willfully avoids paying taxes. Tax avoidance is 100% admirable no matter the circumstances.

visitorq

Joined: 11 Jan 2008

Posted: Wed Sep 19, 2012 4:02 am Post subject:

radcon wrote:

visitorq wrote:

Less money in government hands = more money put to productive use in the economy.

Or to hoard in Cayman Island bank accounts. Or to invest overseas in stock markets.

Money is only "hoarded" to avoid confiscation by the government. Investment is a productive and desirable activity that leads to wealth creation.

Titus

Joined: 19 May 2012

Posted: Wed Sep 19, 2012 6:31 am Post subject:

The top and the bottom against the middle.

Unposter

Joined: 04 Jun 2006

Posted: Thu Sep 20, 2012 2:50 am Post subject:

VisitorQ, In what way can't government spending be an investment? Education? Research? Infrastructure? And, there are so many ways that personal spending is not investment... I'm sorry but I just don't understand. Either you are not taking the question seriously or you are you just don't have anything intelligent to say. Which is it?

visitorq

Joined: 11 Jan 2008

Posted: Thu Sep 20, 2012 3:03 am Post subject:

Unposter wrote:

VisitorQ,

In what way can't government spending be an investment? Education? Research? Infrastructure?

Not a single penny of your tax goes to pay for any of these...

A big chunk of your income tax is eaten up to pay for the army of gov't bureaucrats who get paid more than you do to shuffle the necessary papers around, the rest goes straight to paying for the ever increasing interest on the national debt that gov't incurs with wasteful spending (namely the countless trillions spent on war and bank bailouts).

Quote:

And, there are so many ways that personal spending is not investment...

I'm sorry but I just don't understand. Either you are not taking the question seriously or you are you just don't have anything intelligent to say. Which is it?

Nowhere did I say that all personal spending is "investment"... so not sure what you're on about there. Anyway, personal spending is what stimulates the economy. Government spending does no such thing, since government doesn't create wealth.

bucheon bum

Joined: 16 Jan 2003

Posted: Thu Sep 20, 2012 10:01 am Post subject:

visitorq wrote:

Government spending does no such thing, since government doesn't create wealth.

So when a bridge is built, that doesn't stimulate the economy one iota? How is it that when I buy a coke from the corner store I'm stimulating the economy one iota, but when the road passing that corner store is repaved, there is no positive impact on the economy? Even though repaving that road:

1. Requires engineers, roadworkers, machines (likely domestic here in the USA), and other supplies
2. Makes it easier (or at least smoother) for potential customers to get to that corner store

How does that NOT stimulate the economy?

visitorq

Joined: 11 Jan 2008

Posted: Thu Sep 20, 2012 12:46 pm Post subject:

bucheon bum wrote:

visitorq wrote:

Government spending does no such thing, since government doesn't create wealth.

Alright, if you're talking about infrastructure projects, then I concede the point... but only to a degree. The government is still far less effective at building the things that the market actually wants, that add value to the economy. Building a road or bridge to nowhere (i.e. pork barrel spending) is just a waste. This is why FDR failed utterly to bring the US out of the Depression in the '30s despite putting so many people to work digging ditches...

The massive expense of government bureaucracy also erodes most of the value the economy would have gained anyway, even if resources are properly allocated (which they usually aren't)... Bottom line is that if the government created net wealth through its spending, then we wouldn't have bigger and bigger deficits each year, while infrastructure continues to deteriorate.

Kuros

Joined: 27 Apr 2004

Posted: Thu Sep 20, 2012 4:29 pm Post subject:

Stimulus can work, but is much better in theory than in practice.

Garett Jones wrote:

Valerie Ramey of UC San Diego (FD: one of my dissertation advisers) has looked at the major studies and written some of her own, and in a new article she concludes that in the U.S., "on balance government spending does not appear to stimulate private activity." Yes, it boosts government hiring--and lowers the unemployment rate--so on average you're getting a free lunch there. But Faberge shampoo-style stories you read about in freshman economics texts where "he spends money at her store, and she spends money at another store, and so on, and so on" just doesn't seem to show up in the real world.

You might think, "Textbooks don't really claim that government spending sets off waves of private-sector spending---that's just a caricature." But I've got a textbook right in front of me--Schiller/Hill/Wall, in its 13th edition so it must have moved some product--and they talk about a multiplier of 4: One dollar of government spending sets off three dollars of private spending. If that's how the real world works, let's double the Department of Defense.

Case/Fair/Oster, a popular text coauthored by deservedly famous economists, is more careful--but even once they throw in all of their caveats, they conclude "in reality the size of the multiplier is about 2." Every dollar of government spending sets off an extra dollar of private-sector spending.

The Congressional Budget Office is a bit more conservative than both of those textbooks: They offer high-low ranges for the multiplier, so I'll cavalierly report a midpoint: 1.5. They also note that after post-ARRA "discussions on this topic with its panel of economic advisers" (to be a fly on the wall at that meeting) they dropped their lower-bound multiplier estimate down to only 0.5: So they think there's a reasonable chance that a dollar of government spending shrinks the private sector by fifty cents.

How could that possibly be? How could extra government spending shrink the private sector? Well, in the simplest Keynesian model, it can't. You have to add some bells and whistles--let's call that "reality"--to get a multiplier less than one.

Here's one path to a tiny multiplier: Let's suppose the government is trying to find the right person for the job. Now, what if that person already has one...

What can I say? At least Obama isn't allowing himself to get spinned.

And Garett Jones offers suggestions for a better stimulus:

Quote:

I hope that pro-fiscal-stimulus economists draw some lessons from our work: If you want a big Keynesian multiplier:

1) Focus on projects that hire less-skilled workers (remembering that "skilled" includes pipefitters, electricians and other specialties that mercifully don't yet require a college degree).

2) Focus on projects that use workers from sectors with temporarily high unemployment rates.

3) Make some kind of effort to target parts of the country with high unemployment rates; this time around they didn't quite succeed. Public choice (or was it the tendency to spend ARRA dollars in college towns?) for the win.

One way to get all 3 would be to follow Martin Shubik's plan: An independent agency that plans for ways to spend money next time there's a recession. I'm not crazy about the idea --- I prefer
automatic stabilizers plus Taylor-rule monetary policy myself, since I see strong benefits to predictable rules -- but it'd be better than the hodgepodge Congress offered up in January 2009.

If the Shubik plan suspended Davis-Bacon prevailing wage laws for the duration of an economic emergency, and if it were mostly a way of saying "let's do more of our government construction projects during recessions, not during boom-times," it might even get bipartisan support. I said "might."

Stimulus could work if gov't sets a reserve aside during boom times specifically for recessions. You know, exactly how individuals are counselled to have a 6-month reserve in case they are fired. But the chances of that happening are limited.

mnjetter

Joined: 21 Feb 2012
Location: Seoul, S. Korea

Posted: Thu Sep 27, 2012 5:44 am Post subject:

Quote:

...except that FDR did bring us out of the depression?

Also, the market is not fair to people living in "nowhere" (I know, different meaning of nowhere than what you meant, but I'm confiscating the term for my own ends here). There are countless places in the United States where the post office goes that private companies like FedEx won't touch, because there is no customer base. My grandparents, living in a farm outside a town of 400 people, would not have a postal service if it weren't for government "inefficiency". Do you think the roads near their farm would ever get fixed? They live on a county road that was specifically built to provide automotive access to three individual farms. Three households is not enough to support a transportation industry.

"The market" may be efficient for growing an economy as a whole, if you view GDP as an organism whose well-being is more important than that of citizens. But it does a crap job of meeting the needs of people who have no buying power, or who have very unique needs (like roads to the middle of nowhere).

Captain Corea

Joined: 28 Feb 2005
Location: Seoul

Posted: Thu Sep 27, 2012 8:06 am Post subject:

visitorq wrote:

Unposter wrote:

VisitorQ,

What is the difference between personal spending (lets say on a pet horse) and government spending (lets say on a pet horse) in terms of "productive" use in an economy?

I always figured that roads, bridges, schools.. that sort of stuff - seemed pretty productive to me. There are limits, of course, we don't need "bridges to nowhere", but to say that they DO NOT spend it in productive ways rings false to me.

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