A Better Bailout Idea

kristie911 said:

*peers around*

Funny. I always thought it would be darker on the dark side.

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It's actually very sunny and friendly over here. The 'dark side' meme is one we like to laugh about, and it keeps out the moochers. The 'dark side' is really where you came from, where pollution is only a crime if you're not well-connected to the political machine.

Pull up a chair and have a beer. Since there's no taxation and the beer's consumer-certified instead of regulated, it's only a nickle a can or twenty-five cents a six-pack. Of course, that's in gold or silver only.

James81 said:

Key words being "TAX CUTS AS A FORM OF A GOVERNMENT BAILOUT."

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Who said this? Certainly not me.

Don said:

It's actually very sunny and friendly over here. The 'dark side' meme is one we like to laugh about, and it keeps out the moochers. The 'dark side' is really where you came from, where pollution is only a crime if you're not well-connected to the political machine.

Pull up a chair and have a beer. Since there's no taxation and the beer's consumer-certified instead of regulated, it's only a nickle a can or twenty-five cents a six-pack. Of course, that's in gold or silver only.

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Have you ever read The Multiplex Man by James P. Hogan? You'd like it.

Roger J Carlson said:

Have you ever read The Multiplex Man by James P. Hogan? You'd like it.

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No, I've read several Hogans and enjoyed them all. I'll have to check at the library today.

Maybe we need a libertarian cantina over in Office Party or Sci-Fi. I could use an occasional five-cent beer.

Roger J Carlson said:

Who said this? Certainly not me.

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That's the way I understood this statement:

Roger J Carlson said:

The government could easily transfer money back to the taxpayers by simply cutting tax rates NOW...this week. If my employer withheld less money from my check this week, I would have more money to spend, pay off debt, and invest. It wouldn't need any fancy bailout packages, nor would it require spending millions to mail out rebate checks. The payroll department of every company would do the work for them.

So why are massive tax cuts NEVER discussed?

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Sure, they aren't GIVING you money, but they are taking from the pool of benefits that we as tax payers enjoy in order to help bail out people who are struggling with their debts.

perhaps I should've said "anti-socialism" instead. In theory you are taking funds from one pool of money and "redistributing" (albeit they aren't actually GIVING you money, but the money you were ONCE paying is being cut) to another pool, for no other reason than because Joe Schmoe took on more credit than he could handle.

I'm not arguing against tax cuts (give me my money plz), but your solution to the current crisis is to rob peter to pay paul (in a sense).

James81 said:

perhaps I should've said "anti-socialism" instead.

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Indeed.

James81 said:

I'm not arguing against tax cuts (give me my money plz), but your solution to the current crisis is to rob peter to pay paul (in a sense).

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No, it's to QUIT robbing Peter to pay Paul.

Don said:

No, it's to QUIT robbing Peter to pay Paul.

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Or may it's more like you are "robbing Paul to pay Peter."

You are thinking of it in one sense, and I am thinking of it in another sense.

Here's the premise:

There is a massive credit crisis.

Your SOLUTION to said massive credit crisis (or Roger's):

Massive tax cuts.

Here's the ramifications of said tax cuts:

Reduced benefits from government funded programs.

And the trouble with THAT solution is that you are cutting taxes on ALL people (regardless of their credit situation), which they DO enjoy, but by doing so you are also forcing a reduction of federal benefits on ALL people, just to help a few people who are in a crunch.

What about the guy who has excellent credit, wasn't living beyond his means, and is financially stable? Because of the people who weren't as smart with their finances, he now has to live with reduced benefits from the government programs that he enjoyed. Granted, you are putting money in his pocket, but does that money EQUAL the reduction in benefits that he get from said government programs? Very likely the answer is NO.

Hence an "anti" socialistic broadstroke solution to a problem. Or, rather, (and this is why I intially saw it as socialism) you are making EVERYBODY "pay" for what a select group of Americans caused.

James81 said:

Granted, you are putting money in his pocket, but does that money EQUAL the reduction in benefits that he get from said government programs? Very likely the answer is NO.

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Almost assuredly, the answer is YES. Government consumes something over 30% as overhead, to pay for the bureaucratic machine, so for every dollar you pay in, on average you're getting less than 70 cents in return.

Don said:

Almost assuredly, the answer is YES. Government consumes something over 30% as overhead, to pay for the bureaucratic machine, so for every dollar you pay in, on average you're getting less than 70 cents in return.

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Let's use an example, then.

Let's just say "roads" (now I know that the money for roads actually comes from the gas tax at the pumps, but for the purpose of this example, let's assume it's a federally funded program straight from a tax-payer's check).

A reduction in the tax revenue from tax payers would result (in this example) a reduction in the quality of roads, and the ability to fix said roads. So if the government is unable to fix as many roads because of a reduction in taxes, then it's safe to say that you will find your car on MORE (in number) subpar roads than are already out there. Which also means more wear and tear on your car due to the roughness.

Now the money that ONE person saves in taxes is not enough to go recoup that benefit in it's entirely, and one person has no control over how the others are using their money. It's not like if people save money on their taxes, that they (on their own) are going to band together to fix their roads. Not going to happen.

So, yes, you may not be getting that 70% return in the benefit you enjoy. But even with the money you get (100%), it's causing a reduction in the quality of the roads you drive, bringing more wear and tear on your car, causing MORE need for it to be in the shop. So you are actually losing that money you save anyway, in essence, through the reduction of the benefit that you take for granted.

See what I'm saying?

Don said:

Almost assuredly, the answer is YES. Government consumes something over 30% as overhead, to pay for the bureaucratic machine, so for every dollar you pay in, on average you're getting less than 70 cents in return.

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That depends where you are on the income scale. I posted in the past -- the top 20% get something like 40 cents in government spending for every dollar they pay, the bottom 20% get 8$ for every dollar they pay. But this is off-topic. Carry on.

James81 said:

See what I'm saying?

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No, sorry, because as you said, roads aren't really a valid example.

I'm trying to think of one, but since I consider the vast majority of what FedGov does to be both wasteful and unconstitutional, I'd have trouble appreciating one until FedGov was reduced to much less than a quarter of its current size. When the cuts start impacting on the chores assigned to FedGov in Article 1, Section 8 of the Constitution, then you may have a valid argument.

dmytryp said:

That depends where you are on the income scale. I posted in the past -- the top 20% get something like 40 cents in government spending for every dollar they pay, the bottom 20% get 8$ for every dollar they pay. But this is off-topic. Carry on.

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Which is why I said 'on average.' Carrying on.

James81 said:

That's the way I understood this statement:

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James81 said:

Your SOLUTION to said massive credit crisis (or Roger's):

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You've misunderstood me. I'm not presenting this as a solution to the "credit crisis". I'm only saying that if the Federal Government really feels that it must put money back into the economy, why don't they ever consider NOT TAKING it away in the first place? The question is partially rhetorical. Government is an organism that will fight for its life just like any other.

But I'm confused about all these "benefits" that we "enjoy". There are certainly some things that the Federal government should do: national defense, interstate commerce (including roads), certain law-enforcement functions, and the like. But that does not consume the vast majority of the budget.

The majority of the budget goes towards bailing people out of bad decisions on a daily basis. What is welfare if it isn't a massive bailout? If you're concerned about not bailing people out, perhaps you should start looking at some of those benefits we enjoy.

Section 8. The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;

Am I reading this wrong? To me, uniform means the same. How then can a progressive tax system be legal?

P.S. Congratulations on your latest recruit, Don. It's after 12 somewhere, ya'll pull up a chair - nickle beers are on me.

Roger J Carlson said:

You've misunderstood me. I'm not presenting this as a solution to the "credit crisis". I'm only saying that if the Federal Government really feels that it must put money back into the economy, why don't they ever consider NOT TAKING it away in the first place? The question is partially rhetorical. Government is an organism that will fight for its life just like any other.

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You already know the answer to that, don't you? A "one time" bailout is much different that reducing taxes on all taxpayers. The gov doesn't want to lose their income. They just want to control how it is spent. If they have to give a little of it back once in a while to "bail out" the economy, then they'd rather do that than to lose their income.

Roger J Carlson said:

But I'm confused about all these "benefits" that we "enjoy". There are certainly some things that the Federal government should do: national defense, interstate commerce (including roads), certain law-enforcement functions, and the like. But that does not consume the vast majority of the budget.

The majority of the budget goes towards bailing people out of bad decisions on a daily basis. What is welfare if it isn't a massive bailout? If you're concerned about not bailing people out, perhaps you should start looking at some of those benefits we enjoy.

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I can agree with that. Granted, the feds waste a lot of money, but I suppose that goes back to what I was saying above. They like controlling where the money is spent.

But as a form of economic stablization? I don't think tax cuts would be any more beneficial than a stimulus package.

The best form of economic stabilization comes in the form of personal responsibility. Spend less than you make, no matter WHAT level we are talking about (whether it be personal finances or government spending). Yes, i believe a balanced budget would go a long way to improving our economic situation.

Damn, that makes me sound like a Democrat, doesn't it?

MoonWriter said:

Section 8. The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;

Am I reading this wrong? To me, uniform means the same. How then can a progressive tax system be legal?

P.S. Congratulations on your latest recruit, Don. It's after 12 somewhere, ya'll pull up a chair - nickle beers are on me.

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They took care of that one in 1913. This is the first one we need to get repealed.

Amendment XVI

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.

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Now that a nickle actually buys something, thanks for your generosity.

James81 said:

Damn, that makes me sound like a Democrat, doesn't it?

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Nope, you're starting to sound like a small-government proponent. Keep going the way you're going and you'll be drinking nickle beer soon.

Don said:

Nope, you're starting to sound like a small-government proponent. Keep going the way you're going and you'll be drinking nickle beer soon.

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lol, I've seen the libertarian platform. I'll pass thanks.

regdog said:

Orgy of spending? Pie in the sky targets? You mean like the very banks who are being bailed out with hundreds of billions of tax dollars.

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I don't see much defense of the bank bailouts in this thread, and certainly not from either Roger or me. (I wanted to say Roger and Me (cheap theatrical reference) but it was poor grammar. ) I don't think you'll find us defending the bailout of the automakers, either.

regdog said:

It was the very banks who brought about their own failings.

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The banks certainly share the blame, but you might want to read up on the Community Reinvestment Act before you hold government blameless. Note that both parties were up to their elbows in getting that bill and the amendments since then passed. Without the CRA and the artificially-low interest rates offered by the Fed, the housing crisis would have been a tiny fraction of what it is today. FedGov was a big part of the problem, and now people look to FedGov for a solution.

James81 said:

lol, I've seen the libertarian platform. I'll pass thanks.

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No, you've seen the Libertarian Party platform. Little-L libertarians don't have a platform. The American Heritage Dictionary has a pretty decent definition.

One who advocates maximizing individual rights and minimizing the role of the state.

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I think my current favorite is from Dr. Mary Ruwart.

Libertarianism promotes a society where no one is the first to harm (strike, defraud, steal from) another. If someone fails to obey this one-and-only law, then he or she must make things right again with the one who is harmed. The only legitimate use of force is self-defense.

Basically, libertarianism is a restatement of how we learned to get along with each other as youngsters. We honor our neighbors' choices, and they honor ours. We don't start fights and only fight back when attacked. We try to make right any wrongs that we do. Simple, isn't it?

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I think that government debt absolution is always a bad thing.

Assume, for a second, that you support socialism. (If you're libertarian or conservative, you have a whole host of different reasons not to support debt absolution, of course.)

There are two primary socialist tactics to take -- the creation of public goods, or the direct redistribution of wealth. I believe that public goods (specifically, socialized education, socialized healthcare, socialized childcare, rent control and improved policing which includes oversight and accountability to the lower-class communities) are universally superior to direct redistributionism.

The root of the difference is the psychology of spending. People are lower-middle class, or below the poverty line, often do not learn responsible financial skills. They live month to month, and the practical financial lesson they learn from life experience is that when they get money, they should spend it before it is "taken away" from them -- by people they owe debts to, by transient friends or good-for-nothing family members, by various scams, even by criminal extortion that operates in poorer neighborhoods. Some lower-class people, realizing a lump-sum handout might be the only chance they have to experience some of the finer things in life, will spend it on luxury goods in an attempt to reclaim their human dignity. The common thread of this is that in many cases the poor do not spend money in a way that helps to alleviate their poverty, and because in many ways the lower classes live outside the normal aegis of society, they have less protection to prevent exploiters of various sorts from taking their handouts away. Put simply, giving a streetwalker single mother socialized childcare can literally change her life; giving her handout is subsidizing her pimp.

This is undeniably an elitist attitude. You could read a racist subtext into it if you wanted (though that's far from my intent) and could be used to justify a lot of ugly authoritarian policies. But I'm not using it for that. I'm just saying, think about it when wondering how the government should spend its own money.

Government debt absolution is by far the worst form of handout, because it creates a terrible, corruptive social tradition. It teaches people that being in debt is good, is okay, the government will take care of it, and as a result people will get even more in debt, not wanting to "lose out" on the next set of payouts. It rewards the irresponsible poor at the expense of those in poverty who are doing the correct things (i.e., minimize debt, save money) to try and better themselves. It sends a horrible message, and I truly believe it would do more to increase poverty in the long run than it would to amelorate it.

Yes, college debt is terrible, and it can grow into a burden that can consume the life of the financially limited. But subsidizing education will reduce college debt (by making college cost less) without giving a substantial portion of that subsidy to corporations whose marketing targets the lower classes' self-esteem, slumlords and other such parasites -- and far more importantly, the message it sends to the financial psychology of the lower classes (of everyone, really) is a far better one.

The one other thing I wanted to add is that doing any kind of charity by social security number (as the OP suggested) tends to exclude the poorest of the poor, who fall off all kinds of bureaucratic maps. Ditto illegal immigrants. No, I don't have a better idea how to organize things, but it's important to be aware of that consequence of the SSN when thinking about charity.