"flow matters"

[hardnox]

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/11198288/US-and-China-tighten-in-u...

[Palouser]

EVERYONE is Kensyian when it comes to actually dong something to affect the dynamics of an economy cooling or heating. Flow DOES matter. And we won't have any economic mojo until that flow increases - at the right LEVEL of the economic ladder. Right now the last nails are being hammered into the coffin of 'trickle down' economics as the wealthy are wealthier and the gap between them and the middle class continues to grow - and the economy stinks. It was a boondoggle.

The Fed was vbasically feeding the top. Now they're done, the liquidity sits out there in pools that don't trickle down. The middle class has circled the wagons to survive. The Fed had the tools under their mandate to buy rich corporation's paper but couldn't reach the middle class. Congress can reach the middle class but refuses to do so - with the exception of farmers that are unsurprisingly doing very well with their particular welfare and mandates.

The story of the middle class is they are going to do only what they have to to survive. They are cutting debt but not spending. When they do spend, like for high value items like cars, they have proven they will cut back on retail at the same time.

So, who blinks first? Middle class (no way). Ultra-wealthy building factories to sell cheap goods to the middle class for terms much lower than credit cards? No way. Congress? Probably not.

So, no kick starting. Unless there is another cave in.

[vrbuck]

Sometimes when I wake up in the morning my "flow isn't that great".

[clayton58]

Pal, if you could cause congress to do one thing to reach the middle class, what would it be?

[Palouser]

#1 would be to reform the tax structure. That is, eliminate the tax loopholes for individuals and corporations. The tax schedule is progressive but it means nothing if there are tax loopholes and tax shelters that some lawyer creates and then gets approval from regulators to use that aren't available or usable by the common individual tax payer or small business. That would include sham overseas postal addresses, etc. The tax schedule can still be progressive but the classes are not set into stone. They don't even actually exist in the real world now as they are riddled with exceptions. For the long term this would be the best thing that could happen.

#2 would be works projects on public lands or systems that need upgrading. There could be a benefit for those companies that train workers on the job in technical skills that are in demand in the economy in the process.

I could go on but I think my jist is clear.

[weedman · Accepted solution]

You progressives are unbelievable. If you study you solution it includes nothing except trickle down except it is trickle down from your god the government. Take the money from the haves and give it to the have nots through the tax system. As if that would be more effective than letting people keep and spend and invest their own money. What is so magical about some central planner making the decision on who qualifies for economic rewards?

[hardnox]

I accidentally hit the solutions button, which I didn't intend.

The haves won't have anything if there is nobody to sell their goods and services to.

Or more importantly, nobody to unload stocks and bonds onto in order to keep wealth flowing upward.

Lotsaluck with your religion.

[hardnox]

I'd spend an additional several hundred $B a year on infrastructure- in a manner that is consistent with the 21st century realities. Electrical grid, water and sanitation and urban repurposing- not 8 lane highways to suburbs 30 miles away.

Simultaneously I'd begin to tigthen the screw further on traditional social safety net programs and ultimately replace them with better, more efficient programs. UEI, SNAP, AFDC are all flawed, unfortunartely they are necessary and there is presently only sentiment to get rid of them, not reform.

The spending would largely fund itself anyway- there is a strong multiplier on working class employment (as opposed to high end tax cuts, where there isn't except for yatch builders) and the tax system is relatively regressive at that end (FICA).  And of course you'd be cutrting social spending costs by providing jobs/forcing people off programs.

I'd raise the minimum wage substantially- with a coupe million new jobs being created by the public spending that floor should help assure that those jobs are priced at a level that permits people to escape poverty.

If the cost of a Big Mac goes up .20, I don't care, I don't eat tehre anyway. And the people who work there can actually afford to eat there from time to time.

[r3020]

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@hardnox wrote:

I accidentally hit the solutions button, which I didn't intend.

The haves won't have anything if there is nobody to sell their goods and services to.

Or more importantly, nobody to unload stocks and bonds onto in order to keep wealth flowing upward.

Lotsaluck with your religion.

---

If Almighty Big Government gives enough to the have nots to buy from the haves then why work. It is better being a have not. In fact lets open the borders and let even more have nots in so Almighty Big Government can give them enough to buy from the haves. Then Almighty Big Government can dictate to the haves the selling price to the have nots so more have nots can be haves. When the Almighty Big Government gets the selling price low enough even the haves will get into line with the have nots. That will make it much easier to implement Karl Marx's communist manifesto theory of from each according to his ability, to each according to his need. The progressives will then declare mission accomplished.

[Palouser]

You guys really took off on a jag!  The idea being against the wealthy  paying a lower marginal tax rate  than the middle class  due to tax advantages is anti capitalist is a real hoot! Meaning tax fairness is anticapitalist. And tax advantage is more important then markets. Think about it.

You LIKE that Google can create a sham company in Ireland, arbitrarily assign it the power to charge the  US company operations royalties for it's own patents and protections, and allow it to take that money to Ireland in a transaction that creates a sham charge in the US to avoid US taxes, and THEN drop the money at a post office box in Bermuda? All to avoid taxes.

And then say it's socialist to be against this kind of shenanigan? Hahahaha! Must be the welfare farmer mentality, huh?

We are killing the Golden Goose that the middle class is. When it's gone, it's gone, as a consuming economic force.