Joseph Stiglitz: Australia should not follow the American path to inequality

[Texas_tea]

Increasing Tax on the rich does not necessary lower the money available. The very rich tend to wast their money by saving without increasing production .

Not waste their money .... protect their money .... welcome to reality Aus

Governments can use the money better by investing in productive enterprises.

Please site one example where government has ever "better used" other peoples moneys!

The failure of a sick liberal mind .....

 

[GBFan]

It is difficult to give complex answers here >one book that looks at the practice of Keysnian economics is "The Political province Economic ideas , Keysianism across nations. "Keysnian economics has been used at various time among many nations. Even conservatives like Nixon used it.
The example I gave was Australia between 2007 and 2010.
Increasing Tax on the rich does not necessary lower the money available. The very rich tend to wast their money by saving without increasing production .Governments can use the money better by investing in productive enterprises.

Hmmm -- '... waste their money by saving..."

Gotta tell ya - saving money for my retirement never impressed me as 'wasting' it.

Frankly, you are operating on the same tired misconception that most liberals do ... that, somehow, rich people stick their money in a drawer and never use it ... in reality, they 'invest' it by putting it in a bank account, or treasury bonds, or stocks, or whatever. But, is that money 'wasted'?

No - it's what the less rich use to finance their new car or house or tv or whatever .... where do you think the money in the bank comes from?? So - the money is double invested ... I put it in the bank and get interest, and you borrow it to buy a new tv. That is hardly called a waste ...

But, let's suppose, that instead of putting the money in the bank, I buy stocks and bonds with it ... that money is, in turn reinvested in the company, to create new jobs or new products or whatever.

Since your big complaint is that the middle class doesn't have enough money, tell me where they get their money - they borrow it, they work for it, they earn it ... and guess who pays their wages, or makes money available for them to borrow.

You're only looking at one side of the cube - step out of the box and look at it realistically.

Now, as for Keynesian economics ... you need to look for FISCAL stimulus, not MONETARY stimulus. What you call the Keynesian approach is actually monetary stimulus - lower interest rates, etc. This works, short term, producing a minimal spike in the economy (as has been happening over the past 5 years). However, in the long term, the economy is wracked by unemployment, insufficient tax income, slow economic growth, and inflation (as has been happening over the past 18 months).

The concept that the government can borrow its way out of a recession is, simply, pure folly. Given the finite amount of money available, every dollar that the government borrows (or, takes out of the economic flow through taxes) is a dollar that can't be spent in the economy. But, some say - if the government borrows it and puts it back into the economic flow, that's the same thing. Oh, would it be that were true ... the cost of government (in the US) is $.38 of every dollar the touch. In other words, when I give them a dollar in taxes, only $.62 is placed back into the economic stream. THAT is the law of diminishing returns, my friend.

You have a simplistic misconception of macroeconomics. I can't un-teach you here; you need to study it without prejudice.

 

[Aus22]

I don't think I can teach you economics in this forum .It takes three years of study. Keynes made it clear that Savings is not investment. Putting the money under you bed for your retirement helps nobody except yourself. Even put it in a bank, usually in a foreign country , at low interest is not investment, The very rich have lower propensity to consume. It is better to transfer this money to those who will either spend or invest and therefore increase productivity.

 

[GBFan]

I don't think I can teach you economics in this forum .It takes three years of study. Keynes made it clear that Savings is not investment. Putting the money under you bed for your retire
ment helps nobody except yourself. Even put it in a bank, usually in a foreign country , at low interest is not investment, The very rich have lower propensity to consume. It is better to transfer this money to those who will either spend or invest and therefore increase productivity.

NOW your prejudices show up ... clearly, you're not interested in a sincere discussion.

Have a nice day.

 

[dogtowner]

I don't think I can teach you economics in this forum .It takes three years of study. Keynes made it clear that Savings is not investment. Putting the money under you bed for your retirement helps nobody except yourself. Even put it in a bank, usually in a foreign country , at low interest is not investment, The very rich have lower propensity to consume. It is better to transfer this money to those who will either spend or invest and therefore increase productivity.

A bank USUALLY in a foreign country ? Seriously ?
Savings IS investment just with low yield. But in this country safe within limits.
Rich people comsune plenty. You probably mean as a prtcentage of income.
Nobody puts money under the.bed except criminals who have trouble getting large amounts if cash into the system by law.
Transfer of money is robbery. Taxes to payfor legitimate functions of govetnment are one thing. Taxes that go to other residents is simple robbery.
And where you come up with increasing productivity is simply nonsense.

 

[GBFan]

For those interested in a short tutorial on free market economics, I recommend:

http://online.hillsdale.edu/page.aspx?pid=2674

 

[Aus22]

I think we are coming to the end of useful comments on economics. I suggest you look up an economic course on the internet by one of the many Universities online.
Economics can be influence by politics but that is a different matter. For example many rich invest their money in foreign banks to get better interest is a fact.

 

[Texas_tea]

I think we are coming to the end of useful comments on economics.

You mean you are running out of a legitimate argument for your failed socialist "economics" ......

I suggest you look up an economic course on the internet by one of the many Universities online.

You mean academics that continue to support your sick ideology that there is literally decades of data reflecting their failures!

Economics can be influence by politics but that is a different matter. For example many rich invest their money in foreign banks to get better interest is a fact.

Economics are absolutely influenced by politics .... look at what is going on here in Amerika .... another clear example of "your" failed sick ideology!

Face it Aus ...

Marxism is a disease that you and many other ignorant idiots suffer from and no amount of degrees .... four or five WETF is irrelevant ..... you are mentally sick

Freedom ... Liberty and Capitalism is always the solution with decades of data to back up my statement.

Please bow out as your a** is handed to you .... once again!

 

[GBFan]

I think we are coming to the end of useful comments on economics. I suggest you look up an economic course on the internet by one of the many Universities online.
Economics can be influence by politics but that is a different matter. For example many rich invest their money in foreign banks to get better interest is a fact.

That is, simply, not true ...

As a foreign investor, bank interest rates play no role in my investment decisions. First of all, putting money in a foreign bank is done for business reasons - not for investment purposes. Frankly, putting ANY money in the bank to get income is nonsensical ... who would want a return of 0.90% (highest bank rate in the US today - 7/29/14) when the money can be invested in a million other things. Hell, I can buy a whole life insurance policy with a guaranteed return of 4.0% - why would I put it in the bank? The bank is a business tool - not an investment vehicle.

For example, I have money in a bank in the Caribbean (Virgin Islands) ... why? Because, in order to have a company registered in VI, I must have a certain value invested/owned in the VI. Now, why do I use the VI? Easy - taxes.

I also have some money in a European bank. Why? To establish my bona fides so that I can use the bank to process my European business dealings. Why do I use a European bank rather an a US bank? Easy - taxes.

I presume you are familiar with the impact of bringing foreign-generated income into the States. First of all, not only do I pay taxes in the country of origin, I also have to pay taxes in the US. Guess what money never comes back into the States?

Now, what you probably heard is that people who buy bank stock in some foreign countries do so because of the difference in taking profits from the bank. I can make more money owning stock in a foreign bank than I can every hope to make in the US.

Your view of world economics is very simplistic ... you need to study up.

 

[Aus22]

GBFan You only confirm that rich bank and invest in other countries for a variety of reasons. As a Labor supporter I want to get some of this money in my own country that why I want to tax you.

 

[GBFan]

GBFan You only confirm that rich bank and invest in other countries for a variety of reasons. As a Labor supporter I want to get some of this money in my own country that why I want to tax you.

Actually, what I did was disprove your comment that people invest overseas because of higher interest rates ... you were totally wrong. ("For example many rich invest their money in foreign banks to get better interest is a fact.")

I invest wherever for the best overall return - when considering both profitability and tax impact. The bottom line is the bottom line ....

If you want some of my money in your country, don't tax at all ... I'll be investing like crazy. It is ludicrous to even suggest that increasing my taxes will make me want to invest more in your country.

 

[dogtowner]

As gb points out you make your governmental policies more attractive than others to attract foreign investment then you enjoy revenue from the production that investment creates. Even the US gets this as theu have made it more attractivr for foreign investment than domestic. Ergo the companies inverting to improve their tax burden.
But really you must understand that companies do not pay taxes as its their comsumers that provide revenue.

 

[GBFan]

As gb points out you make your governmental policies more attractive than others to attract foreign investment then you enjoy revenue from the production that investment creates. Even the US gets this as theu have made it more attractivr for foreign investment than domestic. Ergo the companies inverting to improve their tax burden.
But really you must understand that companies do not pay taxes as its their comsumers that provide revenue.

Finally!!

You're right .. it's just passed on to the consumer. So, tell me ... when the government raises taxes on the rich, who do you suppose suffers?

Thank you ... you now have the perfect argument to convince your government to lower their tax rates.

 

[dogtowner]

Finally!!

You're right .. it's just passed on to the consumer. So, tell me ... when the government raises taxes on the rich, who do you suppose suffers?

Thank you ... you now have the perfect argument to convince your government to lower their tax rates.

It is no mystery why the tax code is tens if thousands of pages and the wealthy pay about the same % no matter what while the middle pays more. For the insane amout if spending you have to hit the biggest volume of wallets. As has been demonstrared here many times there are not enough 1%ers who if you taxed them 100% you could even cover the deficit much less the total.
Sooner or later people will catch on that its a fool's bargain to pay so much for so poor a benefit. Of course that is likely only going to come when the govt defaults and all the crumbs of welfare etc disappear.
Hope Im wrong.

 

[Aus22]

Even in Australia with the welfare State and Progressive taxation the rich pay less than the poor A person on $150,00 has a a 33% tax rate. They get benefits for their company , allow to have an expensive house and still get tax benefits . That if they pay tax in their own country.
In the recent budget it was found by treasury experts that it effected the lower incomes more than the Middle class or even the upper class despite a tax increase