# Here's a good one: how do we get out of the recession?

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May I first introduce this subject with a comment?

When prices go down, people put off purchases because prices will go down and they can get the items cheaper. That reduces manufacturing and workers are laid off. So, there is even less demand. Also, government tax receipts decline as income declines. That makes the national debt more difficult to control. So, the debt grows.

When prices are going up, people borrow to buy before prices go higher. The borrowing puts more money in circulation and prices continue to rise. Manufacturing increases to supply the growing demand, workers are hired and the government gets in more tax revenue.

Right now, prices are relatively stable. So, we are not recovering.

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May I first introduce this subject with a comment?

When prices go down, people put off purchases because prices will go down and they can get the items cheaper. That reduces manufacturing and workers are laid off. So, there is even less demand. Also, government tax receipts decline as income declines. That makes the national debt more difficult to control. So, the debt grows.

When prices are going up, people borrow to buy before prices go higher. The borrowing puts more money in circulation and prices continue to rise. Manufacturing increases to supply the growing demand, workers are hired and the government gets in more tax revenue.

Right now, prices are relatively stable. So, we are not recovering.

My take on the Tea Party is that they started out being pissed off about paying taxes without being fairly represented by either of the major parties. Suddenly, they started getting a lot of attention and new members who really pushed the whole tax angle, and the representation part took a back seat. Before the 2008 election, they had middle income people frothing at the mouth about tax increases when Obama was actually going to lower their taxes. That told me something was wrong with their ideology.

I think the Tea Party is being used by the mega-corporate special interests to shove the tax agenda and now the budget cutting down everyone's throats. All the reduction in government programs helps dilute regulations that cost businesses money in compliance. The last 10 years have been all about strangling programs like EPA, FDA and even public education and then complaining about why they don't work, why some should just be abolished and others privatized.

In the USA, I think we should place a moratorium on all government handouts to companies that don't qualify as small businesses. I think any company whose personnel is not at least 50% US citizens should not receive any kind of benefit from the US government. And I agree with Warren Buffet; why should I be paying 28% taxes on my middle income when he only pays 17% on over $40M? Tax the wealthy; they argued that the Bush tax cuts would create more jobs and trickle that extra wealth down AND THEY LIED. They moved operations overseas and screwed us into the worst time in the memories of most people living. ##### Link to comment ##### Share on other sites Relative demand increases when prices drop, and it decreases when prices increase. Your premise is broken. ##### Link to comment ##### Share on other sites My take on the Tea Party is that they started out being pissed off about paying taxes without being fairly represented by either of the major parties. Suddenly, they started getting a lot of attention and new members who really pushed the whole tax angle, and the representation part took a back seat. Before the 2008 election, they had middle income people frothing at the mouth about tax increases when Obama was actually going to lower their taxes. That told me something was wrong with their ideology. I think the Tea Party is being used by the mega-corporate special interests to shove the tax agenda and now the budget cutting down everyone's throats. All the reduction in government programs helps dilute regulations that cost businesses money in compliance. The last 10 years have been all about strangling programs like EPA, FDA and even public education and then complaining about why they don't work, why some should just be abolished and others privatized. In the USA, I think we should place a moratorium on all government handouts to companies that don't qualify as small businesses. I think any company whose personnel is not at least 50% US citizens should not receive any kind of benefit from the US government. And I agree with Warren Buffet; why should I be paying 28% taxes on my middle income when he only pays 17% on over$40M? Tax the wealthy; they argued that the Bush tax cuts would create more jobs and trickle that extra wealth down AND THEY LIED. They moved operations overseas and screwed us into the worst time in the memories of most people living.

Yes, that's my take on the subject also. . .

Relative demand increases when prices drop, and it decreases when prices increase. Your premise is broken.

Demand that is relative to what?

Also, I suggest you read the first post again because no mention was made of demand. When prices decline as they did in the Great Depression, people buy less, less is produce, the Treasury tax take declines and the economy spirals down.

If the government does not increase spending and get prices going up again, Europe will soon lead us into a credit collapse that would bring us a gobal depression.

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Relative demand increases when prices drop, and it decreases when prices increase. Your premise is broken.

Demand that is relative to what?

Demand after the price change relative to demand prior to the price change.

Also, I suggest you read the first post again because no mention was made of demand. When prices decline as they did in the Great Depression, people buy less, less is produce, the Treasury tax take declines and the economy spirals down.

You may not realize it, but when you talk about people buying more or less you're talking about demand. There's really no way around that. I agree with the second part of what you said here (that there is a self-reinforcing spiral), but not the first (that lower price leads to lower demand). When prices drop, the purchase of those goods tends to increase relative to when prices for those goods were higher. This is made rather obvious by the behavior which occurs when stores have sales. People buy more of the item on sale. You can repeat yourself all you want, but it won't change this simple fact.

If the government does not increase spending and get prices going up again, Europe will soon lead us into a credit collapse that would bring us a gobal depression.

I agree that investment and spending is needed right now, and I also agree that government has essentially become a lender of last resort. However, I still fail to see why you think investment raises prices, and why higher prices somehow lead to higher demand. That doesn't even begin to make sense.

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When your neighbor lost his job, it is recession and when you lost it, it is depression.

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There seems to be a fair bit of evidence that the "tea party" is, among other things, anti science.

I may be wrong, but I think that science drives the progress that will get us out of the recession and ensuring that children at school get a good education in science will help to maintain our standard of living.

I conclude that the Tea Party's ideas are the last things that would get us, and keep us, out of recession.

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There seems to be a fair bit of evidence that the "tea party" is, among other things, anti science.

I may be wrong, but I think that science drives the progress that will get us out of the recession and ensuring that children at school get a good education in science will help to maintain our standard of living.

I conclude that the Tea Party's ideas are the last things that would get us, and keep us, out of recession.

The Tea Party was a bandwagon that few wanted to just jump on; what they wanted to do was steer it. As I said, the name was supposed to recall the "No taxation without representation" battlecry of the original Tea Party. Then those who wanted to keep taxes lower for themselves grabbed the reins and changed the slogan. When "oppressive government regulation" became the thrust, the religious conservatives who want to steer abortion and same-sex marriage legislation their way also jumped on. It's those people who are anti-science, although the anti-corporate-tax/anti-wealthy-tax people will happily thump a bible or two to get their way. They have a history of killing many birds with one stone, some spilled oil and a haze of burned coal.

Everyone on that bandwagon is so happy to think themselves in control that they don't realize the straw they're sitting on is covering barrels of toxic waste just waiting for relaxed government regulations. And since science is suggesting that we be more concerned about the impact of such actions, science is going to be treated like the devil. It's no wonder why the mega-corporate tax dodgers openly welcome the religious right.

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Demand after the price change relative to demand prior to the price change.

You may not realize it, but when you talk about people buying more or less you're talking about demand. There's really no way around that. I agree with the second part of what you said here (that there is a self-reinforcing spiral), but not the first (that lower price leads to lower demand). When prices drop, the purchase of those goods tends to increase relative to when prices for those goods were higher. This is made rather obvious by the behavior which occurs when stores have sales. People buy more of the item on sale. You can repeat yourself all you want, but it won't change this simple fact.

I agree that investment and spending is needed right now, and I also agree that government has essentially become a lender of last resort. However, I still fail to see why you think investment raises prices, and why higher prices somehow lead to higher demand. That doesn't even begin to make sense.

I think I may have what is at the bottom of our differences. The public and media regards money as different from credit. They are not. When the goverrnment hires contractors and borrows from the banking system to pay for it, there is an expansion in the total money supply even thought there may be the same number of paper currency bills in circulation. The total number of bills has little to do with demand. When the borrowing increases, the total money supply expands and, in response, prices rise. Prices rise in rough proportion to the increased amount of credit.

Now, with banks flush with cash but lending it out parsimoniously because they expect prices and demand to shrink (the "double dip"), there is no increase in the money supply. So, as residential real estate prices continue to drop, businesses will borrow less, people will buy less, and the tax take will decline, all because the Stimulus is over.

The Tea Party was a bandwagon that few wanted to just jump on; what they wanted to do was steer it. As I said, the name was supposed to recall the "No taxation without representation" battlecry of the original Tea Party. Then those who wanted to keep taxes lower for themselves grabbed the reins and changed the slogan. When "oppressive government regulation" became the thrust, the religious conservatives who want to steer abortion and same-sex marriage legislation their way also jumped on. It's those people who are anti-science, although the anti-corporate-tax/anti-wealthy-tax people will happily thump a bible or two to get their way. They have a history of killing many birds with one stone, some spilled oil and a haze of burned coal.

Everyone on that bandwagon is so happy to think themselves in control that they don't realize the straw they're sitting on is covering barrels of toxic waste just waiting for relaxed government regulations. And since science is suggesting that we be more concerned about the impact of such actions, science is going to be treated like the devil. It's no wonder why the mega-corporate tax dodgers openly welcome the religious right.

Congratulations! That is the best summation of the Rightists I have ever encountered. I sum it up much like that in "The Next Civilization." With much more space to deal with in its many pages, I also added the Von Mises and Ann Rand Libertarian influence and also the growing sense of class. To free themselves from guilt over wanting to end care for the mentally and physically handicapped, the insane, the aged and unemplyed, they need to see themselves as "better" in order to justify it. This pushes classism and seems to be the same process that occurred late in all the previous civilizations. With blacks growing in number and the whites (as is the Tea Party) controlling the wealth, it could even end, ultimately, in a caste system.

There seems to be a fair bit of evidence that the "tea party" is, among other things, anti science.

I may be wrong, but I think that science drives the progress that will get us out of the recession and ensuring that children at school get a good education in science will help to maintain our standard of living.

I conclude that the Tea Party's ideas are the last things that would get us, and keep us, out of recession.

Agreed! In order to have the voting support of the militant faithful, the corporate class has to become more anti-evolution. That anti-science position helps them deny global warming. Thus, they would also starve the educational system until it EVENTUALLY volves into a few church run technical universities used to teach the skills to a small middle class that it would use to service the upper classes. Left would also be a few of the old-line universities for the children of the rich to luxuriate in as professional students and/or have connections needed to land important positions. The rest of the population would become "the rabble."

In every past civilization past its peak, the middle class vanished, religious reaction grew, the class structure hardened, and the secular system disappeared. Take a look at the collapse of the Hellenic age and the regression of Buddhist philosopjy in both India and China as the older faiths returned. Secular Humanism is on the same road.

Civilizations follow a discernable life cycle, one that has tended to shorten with each millenium.

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• 5 weeks later...

I take issue with the idea that the Tea-Party has any concrete belief system. It is an amorphous reaction by sections of the public in response various circumstances. A lot of those people come from NASA territory and I believe if you were to call them, "anti-science," they would fire back with something like, "you're anti-freedom," or "Obama is anti-space exploration." Many so-called liberals are just as bigoted and irrational as any self-identified conservative. Conservatives tend to consider them rationalists, whereas liberals consider themselves humanitarians. Of course in contemporary discourse these lines are blurred to the point of indiscernibility where arguments like, "it is rational to save every single baby regardless to the cost to the mother," or "it is humanitarian to kill large swaths of the population of the world to preserve resources," persist. I suggest that everyone refrain from using characterizations from corporate media outlets to frame arguments regarding mass political movements or the economic state of countries around the world.

Now that Unilever, Sean Penn, President Obama, George Soros and the like have come out in support of the OWS protests, as the Koch Brothers, Sean Hannity and similar entities seemed to co-opt the Tea-Party before it, one must ask oneself, what is the true story here?

As for my personal opinion. I believe in:

- a 1% wallstreet tobin tax

- the abolishment of the federal income tax.

- an across the board sales tax of 7%

- a tariff on imports above the sales tax

- a moratorium on on student loan and mortgage dept from the largest institutions pending bankruptcy proceedings and possible reorganization

- the enforcement of of bankruptcy convention on all financially suspect entities including all of the TBTF banks

- an immediate end to all foreign occupations and illegal unprovoked wars

- the immediate nationalization of the Federal Reserve and an increase in interest rates

- wide spread funding for science and engineering projects and agencies including NASA

- wide spread funding for public infrastructure projects including transportation, energy, healthcare, ocean and space

- the reinstating of the Glass-Steagal reforms

- An international treaty of science, engineering and infrastructure cooperation with China and Russia.

- the end to costly government policies such as the drug war

- the end through gradual attrition of many seemingly pointless, redundant and antagonizing government agencies such as the ATF, DEA, IRS, FEMA, DHS, FDA and so on.

You may not agree with all of it, but I would be hard-pressed to believe that every person on this forum does not agree with at least one item on this list.

Edited by FutureBeast
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- a 1% wallstreet tobin tax

You might want to read up on the feasibility for such a tax.

Although Tobin had said his own tax idea was unfeasible in practice, Joseph Stiglitz, former Senior Vice President and Chief Economist of the World Bank, said, on October 5, 2009, that modern technology meant that was no longer the case. Stiglitz said, the tax is "much more feasible today" than a few decades ago, when Tobin recanted.[36]

However, on November 7, 2009, at the G20 finance ministers summit in Scotland, Dominique Strauss-Khan, head of the International Monetary Fund, said "transactions are very difficult to measure and so it's very easy to avoid a transaction tax."

http://en.wikipedia.org/wiki/Tobin_tax#Technical_feasibility

a tariff on imports above the sales tax

You might want to read up on the smoot hawley tariff act.

http://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Act

And how exactly do you expect to pay for this. . .

- wide spread funding for science and engineering projects and agencies including NASA

- wide spread funding for public infrastructure projects including transportation, energy, healthcare, ocean and space

- the reinstating of the Glass-Steagal reforms

- An international treaty of science, engineering and infrastructure cooperation with China and Russia.

If you are going to do this. . .

- the abolishment of the federal income tax.

Finally,

- the immediate nationalization of the Federal Reserve and an increase in interest rates

How high an increase?

And to answer the OP. I think we need to increase spending to about 30% of GDP, in specific areas and increase taxes especially the top bracket maybe to 45% and the other tax brackets should possibly go up as well.

I believe this recession was worsened by many underlying problems with our country. Education, Health Care, and the lack of jobs beyond that of the service industry. We need to re-invest in science as FutureBeast said but we also need to invest more into education, infrastructure, manufacturing, and energy independence.

Now as much as that sounds like a political talking point it is true, yet many people don't like to hear the part above about taxes.

Our education system has declined, our government institutions are terribly underfunded, financial regulations are not enforced to the extent needed and our healthcare is certainly not as good as it could be. And yet people wonder why? Well that is what happens when you attempt to care for an aging population while continually cutting taxes and cutting domestic spending.

If you want cheap, conservative, small, corporate minded government then you get what you pay for. Great nations did not come about by having small governments that lived within their means. The internet came out of universities and education, the telephone lines, railroads, and highways were not primarily built by independent investors and "small government projects". Hoover Dam, Man on the moon, space exploration, the entire united states military. None of these would be allowed to about under small government or state by state education.

Some may argue that such above programs thrive when the economy is let free and not regulated. However, I believe that when the community invests in such programs they are enriched in a way that cannot be quantified into a number, and this enrichment often allows for new technology, new jobs, and new wealth to be had.

Edited by toastywombel
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how do we get out of the recession?

Herman Cain's 9-9-9 proposal got me thinking. Through taxes, the government gets a cut of (for example) personal income, corporate income, sales transactions, etc. When the economy is up, the government is rich, but when the economy is down, the government is poor. Along the lines of how the government can help today's down economy, shouldn't the government be putting money away for a rainy day (aka: recession, depression, etc)?

The unemployed don't want a unemployment benefits check; they want a job. So, instead of sending the unemployed benefits checks, the government should be giving money (or tax incentives) to businesses to hire new employees.

The government should also deport illegal aliens faster.

The government should also cut back on immigration quotas.

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