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What's with the US dollar?!

  • #241
  • Edited 1:20am Apr 12, 2011 1:04am | Edited 1:20am
Quoting Noloqy
Why would you say that? I think increasing taxes is great. A lot of harm has already been done, but reducing the government deficit should help the US credibility issue in the future, right?
Also - and correct me if I'm wrong - US income tax rates are historically low. Of course everybody is entitled his own opinion about the role of government and their prefered level of taxes, but hypothetically there would be "room" for raising taxes.

Fundamentally the difference between PIIGS and other modern economies isn't really that big, and it is quite...
the more the rich are taxed, the less they can save / consume / invest in projects. Since many rich are rich for a reason (they are more inclined to invest in profitable projects) => if their projects are successful, more jobs are created, more taxes can be collected.
Concerning consumption, you might assume that taxing them doesn't affect their consumption behavior, cause they have so much money, but it really does. Thousands of jobs are just based on their consumption. And guess what, less consumption leads to a downturn in luxury companies leads to destruction of jobs in that industry and less taxes from the companies and workers.

Taxing more is a bad idea in a fragile economy.
  • #242
  • Apr 12, 2011 1:09am Apr 12, 2011 1:09am
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20." Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.
"I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"
"That's true!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
  • #243
  • Apr 12, 2011 1:12am Apr 12, 2011 1:12am
Quoting SunTrader
The sun comes up each day (even if sometimes if it is behind a cloud).

That someone can be sure of.

Opinions not so.
hm, in history quite a lot of states already failed. I think people at that time also thought that this could never happen.

But humans have a tendency of saying: nah, this can never happen nowadays (and definitely not in the USA).
  • #244
  • Apr 12, 2011 1:15am Apr 12, 2011 1:15am
Quoting Euroscum
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
[font=arial]The ten men drank in the bar every day and seemed quite...
interesting analogy!
  • #245
  • Apr 12, 2011 8:45am Apr 12, 2011 8:45am
Quoting Custos
hm, in history quite a lot of states already failed.......
Name one.
  • #246
  • Apr 12, 2011 9:19am Apr 12, 2011 9:19am
Quoting SunTrader
Name one.
soviet union

roman empire

and many states in africa

and here you got a couple of failed currencies: http://www.mint.com/blog/finance-cor...ed-currencies/
  • #247
  • Apr 12, 2011 9:34am Apr 12, 2011 9:34am
Quoting Custos
soviet union

........
Ok, thought you were talking about current US states.
  • #248
  • Apr 12, 2011 9:50am Apr 12, 2011 9:50am
Quoting SunTrader
Name one.
This is the big difference between the USA and the EEC. There were several "failed states" during the great depression of the 1930's but they received federal aid. Presumably, the federal government can insist on spending cuts so that states that receive federal aid meet financial requirements.

Unfortunately the EEC forgot to put such a mechanism in place and so individual countries can spend what they want and still demand bail outs.

All a bit simplistic, but it's what is happening at the moment.
Gone to a better place
  • #249
  • Apr 12, 2011 9:53am Apr 12, 2011 9:53am
Quoting SunTrader
Ok, thought you were talking about current US states.
sorry, my bad, I should have said nations.
  • #250
  • Apr 12, 2011 9:55am Apr 12, 2011 9:55am
It's affectionately known as toilet paper.
  • #251
  • Edited 10:10am Apr 12, 2011 9:56am | Edited 10:10am
Quoting smikester
This is the big difference between the USA and the EEC. There were several "failed states" during the great depression of the 1930's but they received federal aid. Presumably, the federal government can insist on spending cuts so that states that receive federal aid meet financial requirements.

Unfortunately the EEC forgot to put such a mechanism in place and so individual countries can spend what they want and still demand bail outs.

All a bit simplistic, but it's what is happening at the moment.
the problem is that the EU is only an economic union and not like the US a political union (which is one step further from an economic union).

Thus it is my belief that it was easier for the US to implement such a mechanism. Problem in the EU is still that the productive nations never wanted to bail out unproductive nations unless it was in their own interest, which is happening now. So, from this point forward I think they will put in such a mechanism.
  • #252
  • Apr 12, 2011 10:19am Apr 12, 2011 10:19am
[quote=Euroscum;4537647]Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20." Drinks for the ten now cost just $80.

:
Well done... Do you think CNN would put that analogy up on there website so most of their viewers could finally figure out the way things work instead of pissing and moaning about the rich not paying any taxes... Just read the link on this site about the top ten highest paid CEO's OMG you should hear the people cry and the ridiculous comments they make in the blog below!!! Its AMERICA baby get out and become a CEO if you want to make that kind of money...they did!!! why cant you??? Oh yeah I forgot it might be "Difficult" take years of hard work and discipline/deducation....yeah just forget it... too hard i'll just stick with my job at the dry cleaners putting plastic on the clothes, go home and watch CNN and bitch about my high taxes.
Venture out and Thrive where there is no Supervision... R.L
  • #253
  • Apr 12, 2011 10:23am Apr 12, 2011 10:23am
Quoting Custos
the more the rich are taxed, the less they can save / consume / invest in projects. Since many rich are rich for a reason (they are more inclined to invest in profitable projects) => if their projects are successful, more jobs are created, more taxes can be collected.
Concerning consumption, you might assume that taxing them doesn't affect their consumption behavior, cause they have so much money, but it really does.
It is still the middle class who is creating the most jobs.

The rich tend to hoard their money in hedge funds and purely financial instruments.
The middle class tends to more directly re-invest in real economy.

The rich people often are "outside investors" and have shares in other companies.
The middle class - if it has shares - is investing 100% in its own business, since it also will go down if something happens.

The rich have only shares/money to loose, and will dump them quickly or force the management to fire a lot of people ONLY to have those shares yield a profit!!!

Quoting Custos
Thousands of jobs are just based on their consumption. And guess what, less consumption leads to a downturn in luxury companies leads to destruction of jobs in that industry and less taxes from the companies and workers.

Taxing more is a bad idea in a fragile economy.
This may be true to an extent and for some economic areas.
But lets look e.g. on Apple an its Ipad. They would absolutely HATE IT if they only would be a luxury product provider. Instead they are offering the ipads with a price that even a "near"-poor person can afford. Its a difference if you can sell a 100k pieces to the rich people, or a 100 Million pieces to the world.
this pig cannot be slaughtered for ever... or can it?
  • #254
  • Apr 12, 2011 10:37am Apr 12, 2011 10:37am
Quoting georgem
It is still the middle class who is creating the most jobs.

The rich tend to hoard their money in hedge funds and purely financial instruments.
The middle class tends to more directly re-invest in real economy.

The rich people often are "outside investors" and have shares in other companies.
The middle class - if it has shares - is investing 100% in its own business, since it also will go down if something happens.

The rich have only shares/money to loose, and will dump them quickly or force the management to fire a lot of people ONLY to...
Okay, then my arguments are wrong and it is good to tax the rich right now when the USA is at the bring of economic collapse.
  • #255
  • Apr 12, 2011 10:41am Apr 12, 2011 10:41am
Quoting Custos
Okay, then my arguments are wrong and it is good to tax the rich right now when the USA is at the bring of economic collapse.
US will collapse regardless of who is taxed what, no country can survive a fiat currency.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #256
  • Apr 12, 2011 10:43am Apr 12, 2011 10:43am
Quoting LasVahGoose
US will collapse regardless of who is taxed what, no country can survive a fiat currency.
agreed, but it is especially bad timing right now.
  • #257
  • Apr 12, 2011 10:45am Apr 12, 2011 10:45am
Quoting LasVahGoose
US will collapse regardless of who is taxed what, no country can survive a fiat currency.
Although you might be right nothing is for certain.

But in the past when a dominant currency collapsed it didn't effect the whole world economic system.

This time it will, if we go down.
  • #258
  • Apr 12, 2011 10:47am Apr 12, 2011 10:47am
Quoting SunTrader
Although you might be right nothing is for certain.

But in the past when a dominant currency collapsed it didn't effect the whole world economic system.

This time it will, if we go down.
Bretton Woods II is in the works, they are removing the dollar as reserve currency and will most likely bring in a one world currency backed by gold or some other commodity during the transition phase.
Don't wish it were easier, wish you were better. ~ Jim Rohn
  • #259
  • Apr 12, 2011 10:50am Apr 12, 2011 10:50am
Quoting SunTrader
Although you might be right nothing is for certain.

But in the past when a dominant currency collapsed it didn't effect the whole world economic system.

This time it will, if we go down.
My personal theory of what will happen once the US would default is this:

The main creditors will not allow them to default, cause it would make their holdings of US debt worthless. So what does a good creditor do, if the debtor wants to default?
The creditor takes the assets of the debtor.
In case of countries this might be favorable trade agreements, shares in all kinds of US companies (by expropriating the current share-holders), government owned real-estate, gold from ford knox...

The debtor has not much choice but to comply or to default and risk civil war, revolution,...

Just my own little theory, but this might never happen...
  • #260
  • Apr 12, 2011 10:53am Apr 12, 2011 10:53am
Quoting LasVahGoose
Bretton Woods II is in the works, they are removing the dollar as reserve currency and will most likely bring in a one world currency backed by gold or some other commodity during the transition phase.
yep, actually I think the chinese were making up this world currency reserve concept which is independent from nations.

A couple of years ago they were laughed at for such a ridiculous idea...
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