Debate, and discuss, just dont Bore me.
For those getting their Education from Comics
Published on February 8, 2008 By Dr Guy In Current Events

Today we had an article by one blogger wondering how a certain comic gets paid.  In the comments, another blogger defended the comic with the following rationale.

I say if the point of tax cuts is to stimulate the economy, give them to the poor people.  They know how to spend.  Rich people will just put it in a mutual fund.  That might help the rich people but it doesn't help the economy like a new TV or game system purchase will.  Okay I should be nice and say a car repair and new clothes but you get the idea. 

To be fair and honest, they got the first part right.  The tax cuts (actually just rebates as they are not permanent) are to stimulate the economy.  And that is where it ends for the batting average.

They know how to spend. 

No they do not.  That is why they are poor.  Saying that poor people, driving a nice Lincoln, with a cell phone, TVs, DVDs, and Cable systems know how to spend is like saying that an alcoholic knows how to drink.  They can spend (drink), but they do not know how, or they would not be poor, they would be lower middle class.  This goes directly back to Brad's numerous articles on delayed gratification as a corner stone to getting ahead.  They can spend, but they do not know how to spend.

Rich people will just put it in a mutual fund.

That is unfortunately a bad and incorrect stereotype, but one that is common among failed comics that cannot make an honest living any longer.  While some of it may go to mutual funds (not a bad thing regardless of the intonation), most will be invested in what?  Shocker that this is (and yes, going back to Brad's articles), they are going to invest it in ventures that do better than a mutual fund.  They are going to invest it in hiring people to INCREASE their business and thus increase their wealth.  They did not get wealthy (with the exceptions like Paris Hilton) by being stupid.

While not stated, this statement also perpetuates another myth.  That somehow "rich" money does not go into the economy.  That of course is only true if they stuff the money in a mattress.  The truth is, even if put into a "mutual" fund, the money is going to go into the economy as either spending OR investment.  It is all nice and good that someone is out there buying all the junk, but someone has to make it, and that takes money, and that comes from investments.

That might help the rich people but it doesn't help the economy like a new TV or game system purchase will. 

This actually has a smidgen of truth to it, but in a backhanded way.  Yes, the money will help the rich people, but why not?  It is their money!  But the latter half of the statement is of course a popular liberal myth, and totally false for 2 reasons.  One, as mentioned above is investments.  You cannot have an "economy" without them.  The other is that the Rich tend to spend more wisely than do the poor, and spending helps the economy as well.

Okay I should be nice and say a car repair and new clothes but you get the idea. 

Finally, the last statement.  The problem with someone deciding what is the right purchase for everyone is that they are always wrong.  This is not a theory or opinion, but a demonstrable fact (Eastern Block Economies circa pre 1989 anyone?).  So whether one buys a car, or a TV is not the issue.  Indeed, if the government was smart (an impossibility), they would try to address the issues of the falling economy by targeting the parts that are failing.  Every sector is not in danger.  Anyone seen mass layoffs at McDonald's?  But parts are suffering badly - notably this time around, Housing.  Which leads to another truism.

The rich get rich by buying low and selling high.  IN other words, while the poor are buying whoppers with their money, the rich are going to be gobbling up depressed stocks, pumping money into where it is really needed the most!  The housing market is suffering, but only a fool would think it is going under.

As a last thought, some would say "well, the government can see that, so they can do what the rich do!".  And of course they would be wrong.  In an ideal world, they could be right.  But we live in a human world, not an ideal one.  So while some IN the government may see how to best invest the money, they do not make the rules. And lobbyists and graft make sure that politicians (the ones making the rules) cant make the right decisions.

The decision is not ours.  But the decision is obvious if illusive.  Put more money into the hands of the poor (late disclaimer - this is not about all poor, just the chronically poor) to waste away, or to the rich to really give the economy a boost!  And note the word "put".  It was chosen with care.  Not give - it is their money to begin with, but Put.  Government "giving" money to the rich is like a thief "giving" you your car back after taking it for an abusing joy ride.  Great guy that thief, right?


Comments
on Feb 08, 2008

Here's how I see it-

Giving tax cuts (or more money) to lower income folks has an immediate effect on the economy, like downing a can of red bull-all that sugar and caffeine gets into the bloodstream pretty quick. Putting additional money in the hands of the wealthier has a more delayed impact, like eating a slow-burning carbohydrate. I will not use the words "trickle down" as I don't believe in the concept, but that's another topic

This happens because when lower income folks get more money, they tend to spend it right away on consumables- food, gas, electronics, new spare tire for the truck. Heck, might even celebrate by going out to a nice restaurant, or hell honey, now we can buy that new couch you wanted and I can pick up sins of a solar empire, too!

Now I hate to say this and don't want to come off as condescending so please take this into consideration.... but the truth is, poor people can't handle money. This is due to a host of factors ranging from education and upbringing to personal resolve, but also is largely due to their perception of the world.

Since poor people have never really had a lot money they do not understand the basic concepts of finances. I've said it before and will say it again that real economic education is necessary in the school system and would go a long way to helping a lot of people out of the holes they dig for themselves. Once they do get money, they have to spend it on something to get the status symbol. This is why you see delapitated run down trailers with black mould growing inside but with a shiny new 45,000.0 truck sitting out front. This is why you hear about people who win multi-million dollar lotteries and have blown the whole kitty in a couple years of booze, drugs and misery with nothing to show for it but a lot of confused, ridiculous decisions along the way.

The key is that the amount of money one actually has is not that important (unless you have absolutely NO money, you do need ham and eggs to make an omelette) It's what you decide to do with it. Blowing it all right away on consumables is good for the economy short term, like pouring gasoline on a fire. If you give em' enough and they spend enough on consumables, it might just succeed in getting the fire hot enough to sustain itself. Although the only place in nature where that's happened is the fusion reaction in stars, and it needs to get MIGHTY hot for that to happen.

on Feb 08, 2008

"Not give - it is their money to begin with, but Put.  Government "giving" money to the rich is like a thief "giving" you your car back after taking it for an abusing joy ride.  Great guy that thief, right?"

Yeah, I don't think so.  So all the governments money is the rich peoples money.  If they get a rebate, they're just giving them back what was theirs anyway.  ~rolling eyes~  Rich people have it to rough.  My heart bleeds for them and all of their hard times and worries.  The rich people pay taxes on their income.  They pay taxes to pay for government services that they all use and for the good of the country.  Once they have paid their taxes it is not "their" money that they are getting back. 

on Feb 08, 2008

I will not use the words "trickle down" as I don't believe in the concept, but that's another topic

You are an honest man! 

It seems we do not disagree entirely, just on the timelines.  I dont think buying burgers are an immediate fix either (what I said the poor would do), but has to trickle into the rest of the economy as well.

on Feb 08, 2008

The rich people pay taxes on their income. They pay taxes to pay for government services that they all use and for the good of the country. Once they have paid their taxes it is not "their" money that they are getting back.

The rich pay a higher % in taxes.  Do they use roads, school and other government paid services that % more than the "poor" that pay nothing?  How does that work?  And yes, a rebate is just giving somebody back their money.  If the person paid more than another person who gets the same benefit, why should they not get it back?

on Feb 08, 2008

 

So all the governments money is the rich peoples money.

No, and you missed the point.  Show me (get the stats from anywhere) where the rich are "getting" more from the government than they are paying?  Do poor people pay taxes?  And you made a critical, albeit liberal, mistake.

It is NOT the government's money.  It is the people's money, and yes, the people actually get it.  But different people.  By saying "the government's money" you have just stated that it is the thief's car after he steals it.  Possession is 9/10ths of the law, right?

The rich people pay taxes on their income. They pay taxes to pay for government services that they all use and for the good of the country. Once they have paid their taxes it is not "their" money that they are getting back.

Nice rolling eyes.  If you dont want to read, why did you ask me to write it? 

But I have another question for you.  You go to a car dealership.  He says the car is going to cost you $10,000.  But for your neighbor, he is only going to charge $5,000.  Same car.  That is fair, right?

You are saying it is.  You are saying that I have to pay $20,000 for that car, for one reason only.  I have more money than you.  It is the exact same car.  But I have to pay more.

The rich PAY TAXES.  A lot more than you or I.  That has never been in question (unless you are questioning it now?).  They pay a lot more taxes than you or I.  For the same services.  Now the government is taking less taxes (the rebate).  Should you get the rebate on the car I bought even though you did not buy the car just because I make more? ~rolls eyes~

on Feb 08, 2008

If the person paid more than another person who gets the same benefit, why should they not get it back?

According to Loca, because they did not buy the car.  Only those who do not buy the car can get the rebate.

on Feb 08, 2008

You know the funny part about some of this discussion is the crap about rich people using services at the same or higher amount than do poor people.  Oh really?

Lets think on that a bit.

Hmmmm, take a bad neighborhood in say L.A. or the burbs around NYC.  Neighborhoods with poor people, where people mugging residents, burglarizing homes to get money to pay for drug habits, alcohol habits and the like.  Neighborhoods with bad schools that are filled with children of, or at least relatives of the poor and rather indigent.  How much is spent on police services for those areas?  How much is spent to clean the streets there?  How much is spent to gather waste there?  How much is spent to move sewage from those areas?  Provide clean water at drinking fountains and the like?

Now consider how much is spent to provide a nice park where the wealthy may use.  How much is spent to pay for the police presence in such areas?  How much more does it cost to provide sewage services?  To pick up trash that probably isn't near the same amount per square foot of area as would be in a poorer area?

The point being there is a big myth among those that want to play Robin Hood that the wealthy get all of these great benefits from government and they should therefore pay that much more for it.  That's a load of crap if ever there was one.  We all benefit pretty much equally from the investments that the government make in society with the money *we the people* give to the government, or at least we all *could* benefit pretty much equally if we desired to and applied ourselves to doing the same.

The fact that many people don't take advantage of the opportunities that are already available to them (free K-12 education one of the biggest among those opportunities) says far more about the lack of drive and initiative of those that have those free opportunities available and fail use them.  How many people that are born in well off families do you see wasting opportunities to go to school?  How many people in poor households blow it off and become dropouts because school sucks and doesn't get them instant wealth and gratification?

on Feb 08, 2008
Nice rolling eyes. If you dont want to read, why did you ask me to write it?


I guess because I find your philosophy as baffling as you find my philosophy. The government does not "steal" your money for taxes. We pay taxes to support our government and because it's our legal responsibility. We go to jail if we don't pay taxes. The government isn't stealing money from us.

Yes, higher income people do pay more INCOME tax but lower income people pay tax too. They actually pay a higher percentage of their income on taxes than the rich do. They pay in regressive taxes, sales tax, excise tax, property tax (which increases rents) etc.

on Feb 08, 2008

Hmmmm, take a bad neighborhood in say L.A. or the burbs around NYC.

But one can argue that since the rich have more to steal, they to have more attentive law enforcement.  Taht is an argument for another day.

No one has been or is arguing that the Rich should not pay taxes.  Only with the people that claim the rich should pay a lot more, and not get any back - that these rebates should go to people that do not pay taxes (which is an oxymoron since that would just be another welfare payout, not a rebate).

on Feb 08, 2008

 

I guess because I find your philosophy as baffling as you find my philosophy. The government does not "steal" your money for taxes.

When the government promises a "rebate", but then turns around and says "no, you cant have it because you made too much.  BUT you can have it because you did not pay anything" that is stealing.  Legally it is not, but in any other language it is.  Or perhaps fraud is a better term.  It no longer becomes a rebate - since nothing is being rebated - but a welfare program, under the lie that it is a rebate.

Yes, higher income people do pay more INCOME tax but lower income people pay tax too. They actually pay a higher percentage of their income on taxes than the rich do. They pay in regressive taxes, sales tax, excise tax, property tax (which increases rents) etc.

Very good!  Yes they do!  But not to the feds.  (and excise taxes are on luxury goods anyway by definition, so they should not be paying those taxes period if they are poor).  And this goes straight back to the car rebate. If the states were "rebating" you would have a partial case.  They would get a higher percentage, but not a higher amount. (Taxes on a $500k house are more than on a $100k house).

You are not going to get an argument from me on regressive taxes.  I have argued on those for many years, saying that they were the real insidious taxes.  The one you do not mention, but is a darling of the DC set (and I will not fool myself into saying it is just democrats) is Social Security. It is the worst one, and the only reason it is maintained is to maintain the "illusion" that it is a retirement savings account.

All that being said, this is still a rebate on the federal taxes, and as such has to be looked at what people pay in federal taxes, not all taxes.

on Feb 08, 2008

Giving tax cuts (or more money) to lower income folks has an immediate effect on the economy, like downing a can of red bull-all that sugar and caffeine gets into the bloodstream pretty quick.

So people get money and they consume it. That's what you said. Why not just write a check directly to China then since most of the piddly things we spend money on ends up going there anyway.

If you want to help the economy, make people feel confident that their jobs are secure. That means finding ways to ensure that the people who produce jobs have capital to create more jobs.

The person who said that "the rich" will just put money into a mutual fund demonstrates why they aren't rich.  To put money into a mutual fund, one must first have capital to put into that mutual fund.  Rich people are rich because they first found ways to generate their own capital. 

The best thing you can do for the economy is to ensure that the people who actually DO things have more capital to do things with.

on Feb 08, 2008

I guess because I find your philosophy as baffling as you find my philosophy. The government does not "steal" your money for taxes. We pay taxes to support our government and because it's our legal responsibility. We go to jail if we don't pay taxes. The government isn't stealing money from us.

Let's take a close look at what you're saying:

We pay taxes because if we don't, men with guns will come and imprison us. But you insist it's not "stealing".

Let's see...men with guns come and force me to pay money.  What does that sound like?

Traditionally, money is exchanged for goods and services. But the way our government is evolving, thanks to the growing parasite class being able to vote politicans in who will direct the men with guns to do their bidding, money is now transferred from the people who earn it to people who didn't earn it with no goods or services rendered in return.

The problem with you Loca, is that you have a fundamental misunderstanding of capitalism. You see people objecting to HIGHER taxes as being against taxation in principle.  That is not the case.  What people object to is when money is not being exchanged for goods and services. 

When someone forces me to give them money at the point of a gun with nothing given in return, that is stealing.

on Feb 10, 2008

If you want to help the economy, make people feel confident that their jobs are secure.

YeS! And that is why I think this "package", while being well received, wont make much of a difference.

on Mar 06, 2008

One other thing about the rebate is the fact that it explicitly excludes wealthy people which is just such a petty slap in the face. The people paying most of the taxes are the only ones not getting a rebate.

on Mar 07, 2008
One other thing about the rebate is the fact that it explicitly excludes wealthy people which is just such a petty slap in the face. The people paying most of the taxes are the only ones not getting a rebate.


That goes back to the politics. There are just not enough Rich people - as a voting block - to have the politicians cater to them. It is pure politics, not a real aid to the economy.