I’m not seeing why this is a “non-free market situation”. There are a given number of jobs and a given number of eligible employees with varying degrees of qualifications. You want to retain the good ones, and get rid of the bad ones (or get them on a track to becoming one of the goods ones). There is a relatively stable (or at least relatively predictable) number of positions needed-- in fact, many companies have much more unpredictable employment needs.
Keep in mind that they can “up and leave” and still get jobs as teachers, either in the private sector or in another school district. They needn’t become real estate salespeople.
Again, this is not really different from what every large corporation has to worry about all the time. But what we’re really talking about in this thread is what is good for the economy. And if teachers are paid more than the market tells us they are worth, then that’s bad for the economy.
The current deficit is higher, sure – but as your own numbers indicate, getting that $100 billion from the rich would have only reduced the pre-slump deficit by something like a third. And the current budget proposal never gets lower than $600 billion at any time during the next decade – even with highly optimistic revenue assumptions.
Snark about innumeracy all you want, but $100 billion in revenue will not fix a $600 billion deficit. Even ignoring the current slump, we have a structural deficit that taxing a few million rich people can’t come close to covering.
It is a “non-free market situation” because a very significant percentage of teachers are under the employ of the government at various levels, rather than by the “free market.” There simply aren’t a given number of jobs, nor a given number of eligible employees, at least not as determined by the market.
True. They may well not be able to move to another school district - I was assuming, I admit, that this wage cut was state wide. Moving to another state requires recertification, unless teachers are blue skied (genuinely don’t know if this is the case). And yes, they can move to the private sector, but this will be to a limited job pool (further supressing the wage rate). But again, it isn’t something that can necessarily be done overnight. It’s an economic truism that as time lengthens, an individuals labor mobility increases (up to certain values of time).
Presuming the market valuation is accurate. You make a typical free market error here - that free market valuations are correct. Even if I give you that, you’re missing my argument. It is that IN THE SHORT RUN, the effects of a reduction in wages tell you NOTHING about the free market “correct” level of wages.
You’re smart enough to get this, John, unlike some. The short run is the time where people cannot make decisions regarding the supply of their labor based on free market clearing wages.
I don’t want to debate who’s being snarkier. The fact is you totally mischaracterized my post, which dealt with Stone’s incorrect pretence that $1.6 trillion is a “normal” high deficit. Now you’ve tossed the extra trillion away to pretend your post made sense.
In any event, no one claimed a 7% tax on the super-rich was a silver bullet to solve all problems. You seem to be agreeing with Stone now: If taxing the rich isn’t a complete solution, then why tax them at all?
When people wake up, and quit listening to politics as usual they will understand why we are really in this shape.
Taxes are not fair till we ALL pay the same percent ( flat rate no deductions).
This would be for everyone.
We could even do away with the IRS that would also save money.
Our jobs have been sent offshore in favor of Corporations who don’t pay taxes.
Look at say Korea.
What do you have there?
Only thing there are corporations. We have bases there that shouldn’t even be there.
So. Korea has a very strong air force. They can defend themselves very well.
We have troops there to defend the corporations.
They use an address in the Virgin Islands, and are tax free.
That building isn’t large enough to hold offices for all these companies.
So we have like 3% of people controlling the majority of all our money.
We had the rich, and the poor (peons( when Henry Ford was alive.
The unions are what made the middle class.
Most were Democrats, and the rich were Rep. like now.
If they can break all unions like they are doing now the only ones getting elected will be the ones supported by big business.
We need to demand our jobs back here in the U.S.A… where they belong.
No more NAFTA, or CAFTA we have to many now.
Just look at what you are wearing right now for an example at what is happening to us.
Where were your shoes made?
How about your under clothes?
Your shirt, pants, your car, television. etc.
Nothing is made here any longer.
If you can find something, hang onto it because it someday is going to be worth a lot because it will say Made In U.S.A. on it.
This new world Order thing is not for me.
Corporations might love it, but I don’t want America turning into just another third world country like Mexico is.
I say tax the hell out of imports, till the companies bring our jobs back.
They are treating those in other countries like slaves, and are turning us into the same thing.
Unions are our only hope.
They gave us paid holidays, unemployment insurance, sick days so you wouldn’t lose your job for being sick.
They have blood drives at work. the list goes on and is long.
You just couldn’t refuse to do your job and keep it.
Congress did this when our president was getting elected.
They still have there jobs, and even got a 10K raise, while many Americans were losing their jobs.
They explain that it is just automatic and not there fault.
Well its time they did something about it.
Any raise they get should be voted on by the people ( popular vote )
no electoral vote.
This is getting long, I’m out of here.
Well, see, you lost me right there. Flat taxes are NOT fair. Ten percent of a poor person’s income is cutting into food and rent. Ten percent of a wealthy person’s income is cutting into investment capital. It’s not the same thing at all.
I think you’re oversimplifying the comparison in some ways here.
Commercial companies, and to a lesser extent private schools, have the freedom to focus on the market demographics that will be most profitable for them. If there’s a service they’re providing or a region they’re serving that isn’t giving them a good return on investment, they can abandon it and focus on products and customer bases that are more profitable.
Public schools, on the other hand, have to provide certain services and resources across the board to all students everywhere. They can’t just decide to stop serving a certain segment of the student population because it’s not cost-effective.
And companies that figure it out wrong go belly-up all the time, too. Market forces killing off less successful companies isn’t a problem when the company in question is just one of many competing providers of some nonessential consumer product, of course.
But in the case of a school system that’s supposed to offer long-term stability and consistent service levels to its clients, you don’t really have the luxury of letting the creative chaos of market forces drive all the decisions.
I don’t see him saying anything about “normal” anywhere; if he did, please show me. He used the 2011 figure, presumably because it is 2011 and it makes way more sense to deal with real numbers and not on projections of what might be if everything goes the way we hope.
The deficit might be smaller in 2015 than it is now; it might be bigger if we have another contraction. It makes no difference to the point that Sam and I are both making: there simply aren’t enough really rich people out there to balance the deficit or make any kinds of major changes solely by taxing them.
Again: in the best-case scenario, if we have sustained robust growth for three years, the current budget projections still wind up with deficits of about $700 billion every year for the next decade. Unless you’re of the opinion that we can run deficits forever, that needs to be closed. To get that amount solely from the rich, you’d have to somehow get double the tax revenue from every person in the top 10% of income. That’s not likely to happen.
Ergo, we will also need to tax the middle-class and/or spend a lot less.
I’m really not sure what you’re getting at.
The OP suggested that middle-class tax rates should be cut. Sam pointed out that someone has to pay the bills, and that you can’t just keep soaking the rich without negative consequences (e.g., they leave the state).
I was responding to a specific statement you made, that the deficit is an “anomaly.” It is only an anomaly in that it is even worse than it has been, and worse than it might be if things get better.
Nobody is saying rich people shouldn’t be taxed at all. FWIW, I think we probably need to raise taxes on everyone, and cut spending even more.
Please, please tell me you aren’t under the impression that education spending has gone down. Which government was it that had cut education spending?
Yeah, I was in a hurry and threw a quick number out there. The real number is 6.25%. It’s no difference, but thanks for the nitpick.
I’m using the numbers we have today. If you want to look at projected deficits, fine. The FY2012 budget has deficits for the next 10 years looking like this:
Now, here’s the reason why those numbers are useless: First, they are guesses, and second, they are based on extremely rosy scenarios - that spending will be contained, and that the economy will be roaring on all cylinders. There’s zero evidence that that will be the case.
If you want to see how optimistic (and wrong) Obama’s budgets have been, let’s have a look at what its projected deficits were in 2010:
The 2010 budget missed its own deficit estimate for that year by 100 billion dollars - the amount of your 7% tax increase. That just covers the error in the deficit for the year of the budget. But it gets much worse. The 2010 budget predicted that the 2011 deficit would be 912 billion - missing the mark by 700 billion dollars. It predicted that by 2012 it would be 581 billion, and it will be almost double that size.
Now notice that this year’s budget does the same kind of thing - get two years out, and suddenly the budget deficit will magically plummet to half of what it is now. Any bets that next year’s budget will move that magic date out by another year?
And finally, notice that even in this rosy budget scenario, the deficit starts to creep back up towards the end. What you’re seeing there is the start of the entitlement crisis, when all the baby boomers stop being net contributors to the economy and start becoming a net drag. In other words, the mid-2010’s are as good as it’s going to get, and then it’s going to get much worse.
Look at this graph: The entitlement crisis chart. Entitlements are about 10% of GDP right now. By 2030 they will be 15% of GDP. 5% of GDP happens to be about 750 billion dollars today.
So not only does the U.S. have to close a budget deficit that at best will average 610 billion dollars per year for the rest of the decade (and in my opinion will average over a trillion), but it will have to come up with an additional 750 billion dollars per year by 2030 just to cover the added cost of entitlements. And it only gets worse after that - by 2060 entitlement spending alone will equal the historical level of tax revenue in the United States - leaving nothing for any other part of the budget.
My point was that to get that much money out of the ‘rich’, you will need severe tax increases. To erase the deficit and also keep pace with entitlement spending, you would have to raise an additional 1.36 trillion dollars per year. If we take at face value your claim that 7% of the income of the ‘rich’ amounts to 100 billion dollars, I hope you can see that you’d have to take ALL of their money. But then of course they wouldn’t do any work, so you wouldn’t get any revenue anyway.
That’s why the rich aren’t the solution to your problems. There aren’t enough of them, and they don’t have enough money. You’re going to have to cut entitlements, retirement benefits, and probably raise taxes on the middle class if you are serious about getting the budget under control. Even if you raise taxes on the rich as high as you can possibly get away with.
We’re only talking federal deficits so far. If anything, most states are in even worse shape relative to their own revenues. A number of states are approaching bankruptcy now.
So stop thinking about it being an either/or situation. You want to raise taxes on the rich? Fine. But you’re still going to have to deal with government spending, and especially entitlement spending. You can either choose a rational way to do it now, or you can put your head in the sand and wait until the choice is made for you by reality.
That’s the context under which it becomes egregious to allow public unions to have gold-plated pensions and big salaries. You think the people are mad at the unions now? Wait until there’s a debt crisis, or the government announces a 17% VAT on everyone to help pay for those benefits, or states start cranking up state sales taxes and state income and business taxes at the same time the federal government also starts increasing taxes.
It’s politically infeasible to cut entitlements for the general public while protecting the much better benefits of public employees. You best get ahead of the curve on this, or it’s going to happen anyway except without any of your moderating influence.
One focuses on the long-term, not a year where the deficit is inflated (by about $1,000,000,000,000.00 no less) due to Keynesian stimulus etc. for a (hopefully!) once-in-a-lifetime crisis. Since you’re not innumerate ( ) we’ll agree you know that 1600 billion is more than 600 billion. Consult an on-line dictionary if you have an issue with my terming the former figure an “anomaly.”
And, since you bring up “soaking the rich”, I’ll ask you the same question Mr. Stone didn’t answer. In my first post, I quoted from an academic website. It claimed that the rich pay only slightly more taxes, in percentage terms, than the middle class. Did you read it? Is it wrong? Is taxing the rich 31% when the middle pays only 25% “soaking the rich”?
Hello Mr. Stone. I’m sure much of what you say is largely correct. I do however get annoyed when my comments are dismissed disrespectfully, first using a wrong number, then (as if that didn’t give you enough advantage) exaggerating the simple arithmetic. And, in a society where some feed caviar to their pets, while others lack the funds to buy nutritious food for their children, to pooh-pooh a tax on the rich because " $100 billion is chump change " sounds very like “Let them eat cake.”
I don’t know where you got the idea I treated this as an “either/or situation.”
And as for
I’ve no idea why you think I have any influence, moderating or otherwise. I can’t even seem to communicate effectively at SDMB. :smack:
When I answered “Both”, you said that was idiotic, and now you seem to be arguing that we need to look at both long- and short-term effects, so apparently you think your own posts are idiotic.
:rolleyes: Dude, the condescension is lame, especially given the credulity you demonstrate towards politicians. As Sam has outlined, unless we make major changes, the actual real-world 2015 budget is likely to be closer to 1600 than 600. If you want to be pedantic about it: we won’t actually know if the 2008, 2009 or 2010 figures are anomalous until we see the actual figures, not hopeful projections
I repeat: I have no problem with raising taxes on the rich. I don’t think Sam does either. What we’re pointing out is that while it may be fine as far as it goes, where it doesn’t go is anywhere close to solving the nation’s current or long-term fiscal problems. Part of the reason why is what your own article suggests – rich people will take advantage of loopholes and tax breaks to avoid taxes. I happen to agree with Obama’s debt commission on the need to focus on eliminating loopholes; unfortunately, he’s not accepting any of their findings or recommendations.
Regardless, the point is simple: even if that 31% was a 62%, we’d still be massively in the red for every year as far as the eye can see. The answer to the OP is that for both state and federal budgets, the numbers only add up if you start taking away from the middle class in either higher taxes lower services. Anyone saying otherwise is, well, innumerate.
No, really it wasn’t. The question wasn’t “should you consider long and short term effects” it was “when determining if someone is overpaid by looking at the impact of a reduction in salary on the quality of that profession, should once consider the short or the long term effects.”
Given that the short term is the period over which you cannot change inputs such as quantity of labor, it would be absolutely fucking asinine to look at the effect of reducing salaries in the short term. The only relevant time period is the long term for that. I’m sorry you cannot understand this.
So in terms of budgeting: cutting teachers salaries by a tenth has only positive effects and taxing the rich an extra few percent has only negative effects. That should be pretty easy to prove with numbers and past policy right? so let’s see it.
Since we’re jumping to conclusions about the rich fleeing over an extra 3% tax - why don’t we play the same game with teachers. Less money for teachers = less teachers = bigger classes = more kids dropping out = more criminals = more crime = more money needed to house more criminals and put them through the court system. OMG cutting teachers’ salaries results in an increased budget too. holy poop.
I think that, if anything, public school systems have it easier than private companies. What company wouldn’t love to have a captive customer base and a predictable market? Because let’s face it… for the majority of people, public schools are the only option. The school system isn’t going to go belly up. At worst, it gets taken over by some other branch of government.
Just a few observational responses. Disregard at your leisure:
Good luck holding up CA as an example. I have no sympathy for anyone in California. They have been a liberal mecca for decades. Funny how that works. Would the old cliche i"they are now lying in the bed they made" seem appropriate? :rolleyes:
Daaaang. I got no raise at all those years. Paid same tax, somebody made more, now there’s a budget crises? Whoda thunk it?
That would be pure fallacy. Parents are footing the bill. We get a shopping list at the beginning of every year.
In my case, I’d just have to say he’s misinforming.
captive, but extraordinarily diverse. Companies who make money do so with niche products and services that target a segment of the population. It’d be like trying to tailor a food product to people who aren’t vegetarians, that would satisfy the entire non-vegetarian population.
) we’ll agree you know that 1600 billion is more than 600 billion. Consult an on-line dictionary if you have an issue with my terming the former figure an “anomaly.”