As Floyd Norris points out, Obama has in fact significantly raised taxes on very high incomes, largely through special surcharges included in the Affordable Care Act; and what the Act does with the extra revenue is expand Medicaid and provide subsidies on the exchanges, both means-tested programs whose beneficiaries tend to be mainly lower-income adults. The net effect will be significant losses for the super-elite — not crippling losses, to be sure, and hardly anything that will affect their elite status — and major gains to tens of millions of less fortunate Americans.What Krugman fails to point out here is that this wealth transfer means less capital for the economy. The rich are the savers. not the poor. In the long run, the rich and the poor would be better off if the money was left with the rich, since it is climbing capital that increases a countries standard of living. Less capital means a lower standard of living for all, rich and poor.
Monday, April 21, 2014
Krugman's One Note Short Discussion of Obama's Wealth Transfers
Paul Krugman writes:
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Oh, and there's that whole stealing thing too, of course.
ReplyDeleteName one super rich person who didn't become super rich through racketeering. When you think of someone, be sure to explain how that person is representative of the super rich rather than an exception to the rule that the super rich become that way through racketeering arranged under the color of law.
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Still waiting...
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Still waiting...
Ok, so there is no such person. Further, the critical issue here is that the number of people who benefit from capitalist racketeering has been expanded by Obamacare. This means that corruption has become even more entrenched and difficult to eliminate.
Perhaps conservatives should acknowledge Mr. Obama's service to them.
No, you mean the rich were saved....the system should have collapsed...the wealth extraction via zirp, qe levitated faux equity on an overcollateralized debt backbone that was layed off on the public and channeled (extracted) into private hands.....lets cut the bs....
ReplyDeleteThe rich weren't who were being saved, the government saved itself and in the process saved the rich and everyone else for a little while anyhow. Why people don't get this is simply amazing. Had the government let the financial sector collapse, it would have become a junky without a dope dealer. The government can't regulate the financial markets because it needs them like a crack addict needs crack. And the beauty is, the more wars and safety nets you create, the more dependent the government becomes on the financial sector. Saving the rich was simply a bi-product of the government having to save the system to save itself. And understand something else, the rich pay most of the taxes the government collects. The worst possible thing it could do is to destroy that group of people who it is totally dependent on to pay more and more taxes each year. Its a sick system with lots of people at all levels, top to bottom, benefiting from it.
Deleteyour explanation is a lame excuse for self preservation....
Deletethe poor are already poor...
.the rich are scared of becoming poor...
.the safety net is an excuse to maintain the money printing for the rich, not the poor...
just look at the wealth concentrations
"The traditional gold standard was so effective because it provided an 'automatic stabilizer.' If Credit was created to excess, an economy would suffer a loss of gold. The reduced gold reserve would dictate higher rates and a (stabilizing) contraction in lending. Bankers and politicians understood the mechanics of the system (and were committed to sustaining the monetary regime), so they would tighten their belts when excess first emerged. In this way, the gold standard provided a stabilizing and self-correcting system. These days, everyone knows the Fed will not respond to excess. Our central bank, however, will be predictably quick to print additional 'money' at the first sign of a faltering Bubble, liquidity that will reward financial speculation. Excess begets excess. Today’s system is the very opposite of 'automatic stabilizer.'"
ReplyDelete- Doug Noland
http://www.prudentbear.com/2014/04/automatic-stabilizer.html
Hahahaahahaah........the poor are better off when taxes are cut on the wealthy. That is hilarious. Can't believe in 2014 people still sell that horse shit.
ReplyDeleteJW: Troll.
DeleteWolfie is economically ILLITERATE, absolutely clueless about Broken Window Fallacy!
DeleteWhich is why he keeps getting PWND!
"this wealth transfer means less capital for the economy"
ReplyDeleteSo, the capital evaporates when held by a poor person but not by a rich person? Wow, that's magical. Is that, like, something that God does? He yells down from on high "You are not deserving!" and, poof, the capital disappears?
In the current environment, we have a lot of capital sitting around idle. Not just excess saved capital from the rich that can't find a reasonable return on investment, but also idle labor capital. If you take some of that excess saved capital and drop it out of a helicopter into the lap of a poor person, the poor person will spend the money. The money will eventually flow back into the pocket of the rich person, but, in the meantime, since demand has increased, production can increase. Hiring can increase. The production and hiring are self-sustaining.
So by taking a little bit of idle monetary capital here and a little bit of idle labor capital there, you can put the labor capital to work long term increasing the amount of monetary capital, and return the borrowed monetary capital to its original owners.
Or you could let the idle monetary capital just sit there and not increase the standard of living.