Dal – so most consumers are idiots. I am not sure I get your point, outside of the “fuzzy math.” People work, they buy cars, car gets old, they sell it and buy another car. If they buy new, they are basically putzes who are throwing their money away and everyone knows that. Look, daddy, some putz bought a brand new Lexus. Yep, son, there’s a million of 'em. But they have to throw their money away somewhere, right? If the yuppies want to live la vita loca while the rest of us laugh behind their backs, what is the harm?
>> I fail to see why the national debt matters at all
Myrr21, maybe an example will help. My property tax bill in DC states that 70% of the tax paid goes to “service the debt”. That means that of the amount we pay, less than one third goes to pay for actual services we get and more than two thirds go to pay for past expenses. There is no money for schools, potholes and other services because the debt has to be paid first (or default).
What happened to DC was that it thought it could borrow indefinitely. When it was at the verge of declaring bankruptcy the federal government had to come in and bail them out and put some order.
That’s what happens when you borrow more than you should.
Of course, if you are an individual, the feds won’t bail you out. You just go bankrupt. If you are a country… then you go to the IMF and see what you can get. But they have you by the gonads.
Debt is “good” because it helps stabilize and make more prosperous the wealthy whose money essentially runs the economy. People who buy bonds for D.C. get “free” money with no risk since the government is always willing to bail out “cities” or “countries” or “banks” when the money goes bye-bye. This is ultimately worth a regressive tax on the poor because then they “get to have” jobs. But it is all just accounting.
If you think carrying large debt has no consequences, I suggest you have a look at what happened in New Zealand. The country literally ran out of money. No one would lend them any more. They couldn’t pay federal employees, and I’ve heard stories that employees were actually told to run their credit cards up to pay bills while the government tried to raise financing.
In the end, New Zealand recovered by massively reforming a lot of its social infrastructure, to the point where it was selling billboard space on the side of hospitals, and allowing private vehicles to be used as police cars. Farm subsidies were almost totally eliminated. Other social programs were scaled back as well.
In the end, New Zealand was much better off for having cut those programs. It makes an interesting case study, because a lot of industries that were being ‘helped’ through subsidy found that they were doing even better without them.
A question for Spiney norman: I have been to denmark many times, and it is a very nice, clean country. Everybody appears to be well dressed, and you don’t see too many homeless people in Copenhagen. My questionis this; in spite of the high income and consumption taxes, there are STILL rich people in Denmark. How is this so? How does a Danish millionaire hold on to his money?
While at Bellevue beach one day (admiring the Danish girls), I struck up a conversation with a guy who was a city bus driver (he was also a university graduate). He told me how high taxes were, etc. While we were talking, a large private yact appeared off the cost-it was probably in the range of $400-500,000 value. Theoretically, nobody in Denmark can afford such a boat-but I saw it.
/hijack
BTW, in Denmark, is the Royal family still able to walk around anywhere unmolested?
/hijack
The reason for this was very patiently explained to you, and you were asked to prove the algebra thing, and yet you never responded to any of the points made. If you don’t want to discuss it, drop it.
I once heard the difference between capitalism and socialism expressed thusly:
Nothing I have read here contradicts or improves upon this definition.
Yet somehow one of the two has actually worked to some extent, while the other has been attempted with disastrous and deadly results.
So what you’re saying, waterj2, is that capitalism is more efficient at oppression than socialism? Now that’s something to aspire to!
I don’t see how you could possibly get that interpretation from my post. The oppression that exists in capitalism is far less destructive than the oppression that exists in socialism, at least to the extent we can generalize from the approximations of each that have actually existed.
Well, it’s not as if it’s totally egalitarian. If you manage to build a successful business, you can make a bundle. The system doesn’t really favour those with an entrepeneurial (sp?) spirit (employing people, for instance, is a bureaucratic nightmare), but some people have what it takes or just strike it lucky. The people behind Vestas windmills, for instance, had the right product at the right time. And if you own the company, you can just adjust your salary to allow for taxation, right ?
There’s some old money as well - Maersk shipping is Danish, and mr. McKinney-Moeller is very rich indeed.
Those are the exceptions, though.
Even families from what one would think of as “upper middle class” - dentists, lawyers, surgeons and suchlike - are normally completely dependent on having two incomes. One parent staying at home to look after the kids is quite rare, for instance.
guinastasia:
/hijack
Well, they hardly ever go around unescorted anymore - there’s almost always a plainclothes police officer around. Yet, most people do give them breathing space and I’ve yet to hear of anyone attempting anything. When the Crown Prince went to the university in Aarhus, the bars & cafes made it a public policy that while the Prince was more than welcome, journalists and photographers emphatically were not. Nevertheless, the paparazzi (assholes) have had a field day taking photos of his girlfriends.
/hijack
S. Norman
Thanks, Spiney Norman. I guess I still don’t understand-say you are Mr. Moeller’s grandson-you buy a $500,000 luxury cabin cruiser-and the Danish tax office wants their 25% VAT. You buy fuel-another 25% tacked on-it seems to me that your fortune would dissipate fairly quickly. Do the rich people escape income taxes by buying tax-free govt. bonds? (Thats what the “old money” in the USA does-you simply put your fortune into special municipal bonds). They pay only around 3.5%-5%, but are totally free of all income taxes. Is this available to the rich in Denmark?
Again, despite the high taxes, people seem well-off in Denmark.
Spiny Norman wrote:
ARTHUR: I am king.
DENNIS: Oh, king eh? Very nice! And how’d you get that, eh? By exploiting the workers! By hanging on to outdated imperialist dogma which perpetuates the economic and social differences in our society!
(Well, you did say “holy grail”.)