61 replies to this topic

[Apollo]

Thank you gm_general and AChartist for saying this. The real problem is our debt based currency. Going back to the gold standard AND making the charging of interest on loans illegal would go a long way towards fixing our economy and maximizing happiness.

Why is it there are usually two sides to an argument taken by most people, but neither looks at the real problem. That usually gets the attention of that small percentage left who gets it. Why worry about sharks when the water is poisoned? We have nearly $58T in debt and maybe $15T to pay it off with. This guarantees debt will continue to grow until there is some massive amount of debt evaporation (bankruptcy, default). Private debt sources started to pay down some debt, but they cannot make a decent dent as it is mathematically impossible. We have a system where new money is created with attached debt, and since new money is needed to grow the economy, growth must come with ever increasing debt. Since paying down debt by the private sector causes contraction, to make this look good, the government has been picking up the debt increasing slack, but that is no solution as it will be taken from us to cover that. Fix the problem and not the symptoms - a need for more taxes is just a symptom. Fix the monetary system so more is never owed than is created.

[arbman]

Interest is nothing but a measure of depreciation of money against time and depleting resources. If there is an economic boom with many opportunities, giving your money away to someone should have more opportunity cost. If there isn't a boom, giving your money away to somebody should cover at least its depreciation because the resources are depleting regardless of an economic boom or not, but it will have obviously less cost (in interest). The debt system is not wrong. However, when the govt bails out trillions of bad debt with the economic output, it is wrong. Nobody's private risk taking should be covered by the govt, or people's money. But the banks are simply treated as the privileged entities, and yet they don't belong to people, even though they are wholly subsidized by the govt, or people. This is what's wrong.

Edited by arbman, 07 October 2013 - 10:09 AM.

[dasein]

thanks arb - people have been saying debt is the problem for some time - not at all, credit has been with us thousands of years and given/used wisely, it has allowed development and prosperity where none would have existed - but a farmer borrowing money to buy seed and equipment in the spring against the harvest in the fall is quite different from a shopclerk buying a Beamer on credit or from bailing out risktakers who extended the credit to the shop-clerk! giving credit to a productive enterprise also entails risk, but less risk than equity - it has preference and is not supposed to have a say in running the company as quity does - however, bondholders tend to have even more say in running the company than shareholder - thanks to the SEC and doubletalk:) running all of life on a cash basis would be OK for very small business and individuals, sort of, but it is a disaster for companies with erratic cash flow - like the miners who would have to mine the gold that the gold standard is going to be set on!

[dougie]

Maybe, but if a govt only spends to make its top 1% richer, literally bleeds into them, no amount of debt can save them. When they made their bad bets in the real estate, the govt did not have to bail out in trillions any of them, especially the backdoor bail out of GS via AIG and so on. About 30-40% of the debt was created to bail out the banks which should belong to people right now, and the banks made record profits since 2009. All of their profits, yes 100% (not even 90%), should've been returned to Treasury, they should've been taxed or transferred all of their profits back to govt. There is your symptom. This is only one of them, there are a ton of govt sponsored projects where the private equity has priority to exit, or bailed out, in case the projects fail. When they get such a special treatment, you must tax them. It is ridiculous what they get away with while the people are holding the bag. This is common sense, either the system has never worked, or some people are getting a completely different treatment by capitalizing the gains and socializing the losses...

AMEN to that

[pdx5]

"The problem is taxes are too high on profitable corporations."

Wow, is that the issue? Are corporate profits low here? Are the large corporations really paying an overabundance of tax? Which do you mean, like AAPL or say GE?

Please read my entire post and try to understand everything first before posting a reply.

Corporate taxes are the most regressive form of taxation. It gets passed on to all the lowly consumers. And it is shared by all all the lowest paid employees with the highest paid CEO equally by percentage.

For sake of fairness higher taxes should be paid by INDIVIDUALS with high incomes.

I already explained why it is unfair for GE to pay ZERO tax. But obviously you did not bother reading my entire post and jumped on one sentence out of context.

Again, reason GE paid zero tax was too many tax loopholes in tax law. To solve that problem, tax the sales and not the profits. That levels the field for all businesses. The efficient and productive businesses will grow and the lousy ones will disappear. If such law was in place GE would have paid Billions in taxes.

[gm_general]

Interest is nothing but a measure of depreciation of money against time and depleting resources.

If there is an economic boom with many opportunities, giving your money away to someone should have more opportunity cost. If there isn't a boom, giving your money away to somebody should cover at least its depreciation because the resources are depleting regardless of an economic boom or not, but it will have obviously less cost (in interest).

The debt system is not wrong. However, when the govt bails out trillions of bad debt with the economic output, it is wrong. Nobody's private risk taking should be covered by the govt, or people's money. But the banks are simply treated as the privileged entities, and yet they don't belong to people, even though they are wholly subsidized by the govt, or people. This is what's wrong.

Its wrong if the interest charged exceeds the economic growth, this is especially exacerbated under a fractional reserve system, most importantly, when there are no limits on debt based currency creation. When there was a limit (gold), there was a cycle of inflation and deflation that not only negated inflation, it bled off debt. This in itself led to periodic hardship, and if currency is managed well, it is unnecessary.

[AChartist]

The bank has zero reserves by definition of fractional reserve.
The money is printed
The money plus interest is returned to the bank, the interest was never printed.

It was stolen from someone because the interest was never printed,
the interest comes out of existing wealth somewhere else or other forms
of inneficiencies, wastes, and losses,
now how that works aggregately is hard to define in many cumulative
losses. It could be lost in the form of bankruptcies, it could come from
depleting prior wealth like inherited wealth, liquidating prior wealth of
various forms, I cant say, I havent thought that far of
every possible technology that extracts value and wealth, which I called theft,
in order to return interest to the bank, when the bank never printed the
interest value and it never entered the aggregate value of the economy in
the first place it was a loss or theft from something of value already existing.



[quote name='arbman' date='Oct 7 2013, 09:47 AM' post='673395']
AChartist, So you are saying your wage is stolen from somebody when you work? Your thinking is completely wrong. If you work to create goods and services, you actually turn your time (or life however you want to put it) into money. Hopefully your time is more valuable than your expenses (including your debts and interest). So, when you borrow, you either pay it back with a portion of your life (almost a prison sentence but with more liberties) or take smart risks and win. If your risk taking doesn't pay off, you still have to pay back (unless you pass away first) or become bankrupt (which will be the pain of your life for another decade)... LOL


[quote name='AChartist' post='673364' date='Oct 7 2013, 05:44 AM']Gentlemen you are all way off the beam.

[AChartist]

Now I understand the consideration of the value of my labor, you are saying that it is what creating the interest money that got returned the bank. It was just existing money that was moved to me by my labor, the bank still never printed the interest money, nor gave it to my employer who gave it to me. So sure they have some other technologies to put this quantity of interest money into the systems but I expect it is mostly fraud and wealth extraction tecnologies that take the entire society down resulting in what you have now with the .000026% owning everything. In fact the most abusive, wasteful, inneficient, fraudlent wealth extraction technolgiy, for the purpose of getting this sum of interest extracting into the systems in order to be extracted, may be taxation.

Edited by AChartist, 07 October 2013 - 04:21 PM.

[Dex]

Again, reason GE paid zero tax was too many tax loopholes in tax law. To solve that problem, tax the sales and not the profits. That levels the field for all businesses. The efficient and productive businesses will grow and the lousy ones will disappear. If such law was in place GE would have paid Billions in taxes.

It was due to a loss carry forward incurred in GE capital.

[Dex]

For sake of fairness higher taxes should be paid by INDIVIDUALS with high incomes.

Take a look at Hong Kong's tax code.

All levels of people there find it fair.