Fundamental Concepts - Laffer, the best medicine. [Weirddave]

This week's thread may be shorter than usual. I've been flat on my back with the flu for the past three days, and last night I just didn't have the mental acuity to write. Instead I dreamed about what I was going to say all night long, tossing and turning as my subconscious tried to write this thing in my sleep (the things I go through for you Morons).

Anyhow, this one is short and to the point, but I particularly like it because it lays bare two of the big lies of the Left. Most of you are probably familiar with the Laffer Curve (named after the man who proposed it, Brian Williams of NBC News), which states that there is a(n often inverse) relationship between tax rates and revenue for the government. Somewhat counter intuitively, lowering tax rates usually increases the amount of money the government raises through taxation. It's not infinite, a tax rate of 0 will yield $0, but it does seem to hold pretty far down the curve. 4 times in the last century the federal tax rates were dramatically lowered (in the 1920s,1960s,1980s and 2000s), and each time federal tax revenue went up.

Why? Well, it has to do with something else that is as mystifying to the Left as stigmata: People are rational actors. When tax rates go up, people don't just sit around and gnash their teeth and moan while paying the higher rates. They act rationally and seek to protect their money from the confiscatory rates by utilizing tax shelters. When rates go down, they see an opportunity to grow their money through investment.

"Ah-ha!", you might say, "Trickle-down economics!". You'd be completely wrong.

There is no such thing as "trickle-down" economics. "Trickle-down" is a pejorative, one that dates back to FDR's administration. FDR's speechwriter, Samuel Rosenman, penned these words: "the philosophy that had prevailed in Washington since 1921, that the object of government was to provide prosperity for those who lived and worked at the top of the economic pyramid, in the belief that prosperity would trickle down to the bottom of the heap and benefit all."

The brilliant Thomas Sowell has made it something of a life's work to track all of this, and he reported in a paper for the Hoover Institute in 2012 that he couldn't find a single incident of people who support lower taxes using the term trickle-down. No, the term was used exclusively by their opponents to attack lower tax policies, the worst kind of populist polemic. I say the worse kind because they are arguing against policies that demonstrability benefit what they claim to support. Every single time taxes have been lowered, the amount of taxes paid by "the rich", in both absolute and proportional terms, has gone up.

And there lies exposed the lie that is at the heart of leftest economic theory. A leftist will tell you that the government is the only entity that can act to ensure prosperity and comfort for all, and that to do that it must raise lots of money. If they actually believed this, the Democrats would be the biggest tax cutters around (because cutting taxes increases revenue. This isn't theory, it's historically proven fact. Every time tax rates have been cut, in the US, in the UK, in Australia, New Zealand and anywhere else it's been done, revenue has gone up. Every. Single. Time.). The fact that they aren't big tax cutters proves that they don't believe what they say.

Well, if it's not trickle-down economics, what is it?

It's trickle-up economics. When someone decided that the tax climate is favorable for them to attempt to increase their wealth, they have to put their money into circulation. They may do this by starting a business, or investing, or loaning it out. The goods, services and jobs generated in this effort are what's known as wealth. This wealth is generated out of nothing (really), and it enriches all of society.

Say I decide to start a factory making an improved mousetrap that I've designed. I hire 10 people to work there. These ten formerly unemployed folks now have jobs. My mousetrap is such a success that the lives of the people who buy it are enriched by having fewer mice around (a mouse-free life being one of the universal standards for wealth-Disneyland excepted). Increased demand for my mousetraps drives me to hire more people and expand my factory, and eventually some fraction of the wealth generated flows back UP to me as profits. I then pay taxes on these profits, and the government gets more revenue. The government gets a smaller slice of the larger pie that I created. It's win fricking win all around, but nothing trickled down, at every step of the way I could have failed utterly. It's only after I succeeded in creating wealth for society as a whole that some of it trickled back UP to me.

Before I wrap this up, I wanted to point out one final thing. I said that understanding how all this works exposes two big lies of the left. What's the second lie? I also said that there was no such thing as trickle-down economics. There isn't, because it isn't called that, but consider this:

The reflexive response to any economic downturn from the left is always, always, always "We need a stimulus!". As we've seen, the correct way to do this would be to loosen the chains of government and allow the economy to grow naturally. That's not what they do. They "stimulate" the economy by writing a bunch of checks in the blind belief that the money will get out into the economy somehow and magically create jobs and prosperity. Why, it's almost as if they believe that that money will somehow....how best to put this.....I dunno.......maybe...trickle.....down....or something?

And there's the second lie. Leftists use the term Trickle-down as a pejorative to mischaracterize an economic policy that they don't like; and yet a clear eyed look at the economic policies that they do favor, policies that have been shown time and again NOT to work, reveals that their failed policy is nothing more than...

Trickle-down economics. And they're right. It doesn't work.

Posted by: Open Blogger at 10:34 AM

Comments

(Jump to bottom of comments)

1 I've been on my back too.

Posted by: Allison Williams at February 07, 2015 10:30 AM (gwG9s)

2 Trickle down sucks.

Posted by: Al Roker's leg at February 07, 2015 10:31 AM (fWLrt)

3 Yes! This is my General Theory of Liberalism: that every liberal policy is based on the failure of liberals to understand the incentive effect.

http://tinyurl.com/lg2depv

Posted by: WC Varones at February 07, 2015 10:33 AM (8N411)

4 FDR loved tax and spend and his unemployment rate was catastrophic. So is Obama's but his labor department lies about it. Others are just now beginning to note that his numbers are all lies.

Posted by: Vic at February 07, 2015 10:33 AM (wlDny)

5 The Left can't learn this lesson because it is an assault on their worldview and their religion.

Their model must completely collapse before it can be replaced by a better one.

Even after that the Left will bitterly cling to its religion.

The rubber band has to break.

Posted by: eman at February 07, 2015 10:36 AM (MQEz6)

6 Yes! This is my General Theory of Liberalism: that every liberal policy is based on the failure of liberals to understand the incentive effect.

http://tinyurl.com/lg2depv
Posted by: WC Varones at February 07, 2015 10:33 AM (8N411)

Because incentive is rayscissss.

Good article, WD. The lefties have been pounding it a lot recently, just like they've found a new egg of Silly Putty. They almost ALL attribute it to, get this,

REAGAN! rOnNieRayGun!!!11111eLebinty!!111

The ones that don't, don't attribute it to anyone. They just repeat it like a Georgian chant.

Posted by: 98ZJUSMC Suntanning in Bizzaro World at February 07, 2015 10:39 AM (mru3R)

7 Read The Forgotten Man by Amity Shlaes.

Posted by: Barry: FDR Redux at February 07, 2015 10:39 AM (gwG9s)

8 The excuse most often used for the Fed's weird policy of printing more currency over the last few year has been the decline in the velocity of money. It just doesn't circulate because citizens are hoarding money, keeping it away from the economy (and the taxman).

To increase velocity all the Feds had to do was lower tax rates, but Progressives cannot manage to even say those words, much less actually do so. Even now TFG has proposed to tax money held by Americans overseas and not being repatriated, hoping to penalize owners of cash. This is the way these scum think they can force an increase in the circulation of wealth and currency. All they need to do is lower rates, and the money will flow.

Posted by: MTF at February 07, 2015 10:40 AM (FCsIb)

9 But, but, but....Fairness.

Posted by: Mr. Natural at February 07, 2015 10:43 AM (/pOl7)

10 The Laffer Curve does not say that there is an inverse relation between tax rates and tax levy (revenues). It is shaped like a normal curve on its side (although the precise shape is still studied).

In some areas of the curve the correlation is positive; in others it is negative. The main point is that there is an *optimal* tax rate where revenues are maximized. Higher than that rate and revenues do, indeed, fall. Lower than that rate and revenues also fall.

One interesting theory is that if you can split the public (ultra rich, rich, wealthy, middle class, lower middle class, etc.) then you will find that each as its own optimal rate. It certainly adds weight to the argument for tax brackets, if your goal is to soak everyone.

Posted by: RobM1981 at February 07, 2015 10:43 AM (zurJC)

11 It certainly adds weight to the argument for tax brackets, if your goal is to soak everyone.
-----------------------------------

Brackets. I know those. Let's talk about my brackets.

Posted by: Preezy Choomer at February 07, 2015 10:45 AM (fWLrt)

12 Taxing and spending are two pillars in the Left's power structure.

Taxes fund spending, spending generates votes.

Politicians tax the makers to buy votes from the takers.

Add propaganda and indoctrination to help hold it together.

The government gets so big that corruption spreads everywhere and few people are left who want to tear it all down.

The final kicker is the size of government. It becomes so big that people fear the consequences of shrinking it.

So, on it goes, growing and growing and no one can stop it.

Posted by: eman at February 07, 2015 10:46 AM (MQEz6)

13 I've stared down the meatwhistle of many an aggressive IRS agent. I've been near the shit, man.

Posted by: Brian Williams at February 07, 2015 10:49 AM (lG2E3)

14
The Laffer Curve does not say that there is an inverse relation between tax rates and tax levy (revenues).

I did not say that it did, at some points vs others it is inverse, at some points not.

Posted by: Weirddave at February 07, 2015 10:49 AM (WvS3w)

15 Good post. Also I want one of those improved mouse traps. Just caught my 3rd one in 12 hours.

Posted by: Molly k. at February 07, 2015 10:49 AM (L0LTE)

16 PURPOSE OF TAXES

NOT TO COLLECT OUR MONEY

BUT TO CONTROL US

Posted by: haiku guy at February 07, 2015 10:50 AM (ffo1e)

17 My Brian Williams action figure tells the other action figures his limp comes from a laser burn he got while fighting an Alien trophy hunter in a Central American jungle back in '87.

When he yells, "Get to duh choppa!!" all the other figures jump and gasp.

Posted by: eman at February 07, 2015 10:54 AM (MQEz6)

18 >>PURPOSE OF TAXES

NOT TO COLLECT OUR MONEY

BUT TO CONTROL US

Probably the most succinct way of putting it. The problem with arguing economics with lefties is they don't have the same goal we do.

We want to see the individual empowered, they want to see the state empowered. There's a reason that Obamacare is monitored by the IRS.

Posted by: JackStraw at February 07, 2015 10:55 AM (g1DWB)

19 Taxes should not exist.

Government should be funded like a charity.

Voluntary donations only.

No taxes, no fees, no force.

Posted by: eman at February 07, 2015 10:55 AM (MQEz6)

20 The final kicker is the size of government. It becomes so big that people fear the consequences of shrinking it.

Posted by: eman at February 07, 2015 10:46 AM (MQEz6)]/i]

Stolen.

Posted by: 98ZJUSMC Suntanning in Bizzaro World at February 07, 2015 10:56 AM (mru3R)

21 Another day closer to my goal... making you sick of hearing about me.

Posted by: Ms. Bruce Jenner at February 07, 2015 10:56 AM (gwG9s)

Posted by: 98ZJUSMC Suntanning in Bizzaro World at February 07, 2015 10:57 AM (mru3R)

23 The complexities of human memory caused me to misremember when I said I wasn't banging your sister.

Posted by: The Great White Snark at February 07, 2015 11:01 AM (LImiJ)

24 You're right. But let's look at this more broadly.

Why hasn't the phrase "Trickle Down Economics" been used by every conservative commentator and commentator on a blog or social media site to describe Obama's giving billions to his cronies since 2008? We let their definition stand uncontested.

Because conservatives do not know how to use language, but instead have dopey leaders like the Bushes who use it against them with phrases like "Voo Doo Economics" or "Compassionate Conservatism".

So the Middle Class sat back and had their wealth happily laundered to Democrat cronies under the phrases "Financial Aid to Students", Housing for the Poor" and "Stimulus". There was no counter. If you write checks to your pals with cash taken from future generations, or the current one with 1% interest rates, and call it Stimulus, no one complains. Because no one counters.

Libs use language to confuse. Once "Global Warming" seemed ridiculous it became "Climate Change". How can you question that? The climate always changes. My town of 56K has an office dedicated to climate change. One bright spot, I see most conservatives don't bite and continue to call it Global Warming. Never refer to it as Climate Change. Never.

A very smart blogger should write more on this and suggest some phrases of our own to use, -- an Angel's Dictionary -- and use again everywhere so they seep into the brains of the LIQs (Low IQ Voters).
They don't hesitate to call you stupid. Why do we give them the benefit of the doubt?

MSM? No, call it "Brown (nose) Journalism". We could play verbal jiu jitsu by flipping their phrases and countering their programming. For that's what they do: program. We need our own Stuxnet.

We've been fighting defense too long. We have to start punching back twice as hard. We need psy-ops.

Posted by: (not JJ) Sefton at February 07, 2015 11:01 AM (wi0rD)

25 That's pretty good for a flu-addled short post.

I'll say again, if Ace or Pixy is listening, these Fundamental Concepts posts should have their own permanent link in the sidebar.

Posted by: rickl at February 07, 2015 11:05 AM (sdi6R)

26 So media, academia, and politics is full of liars, lying to us continuously in order to protect their seats close to the Great Teat of Unearned Wealth ?

Huh.

Posted by: sock_rat_eez at February 07, 2015 11:05 AM (OCcU9)

27 Great post, WD. Don't know if you have covered it, but another Fundamental Concept worthy of study is "the tragedy of the commons". Explains, in a nutshell, why socialism cannot work.

Posted by: Alberta Oil Peon at February 07, 2015 11:06 AM (upitO)

28 *consults open sources*

There are errors in that A-10 quiz from the ONT.
Max internal fuel for an A-10 is 10,700lbs and not 11,000lbs.
Max ferry range they list is approximately 50 miles greater.
Rate of fire with the GAU-8 is selectable - either 2,100 or 4,200 rds.

Posted by: Anna Puma (+SmuD) at February 07, 2015 11:06 AM (1JDCL)

29 "This wealth is generated out of nothing (really).

This! Or, rather, it appears to be "out of nothing" because it is potential and ideas locked up in peoples' heads. In a favorable market those ideas are tried out and although many (most?) will fail, the cost won't be too high and the really good ones will take off. In an adverse market those ideas are smothered in the cradle or starve after birth because the cost of trying anything new is simply too high.

I *can't* be the only one with way too many ideas and designs for *me* to execute due to time and ability consraints, but unable to hire any help because there isn't anything *certain* to work out to off-set the cost of the regulations invoked by hiring help. If any of the ideas *were* really good I would need more supplies and eventually more help (and then even more supplies) which would create wealth from an idea that at this point will probably never leave the confines of my skull.

Posted by: Polliwog the 'Ette at February 07, 2015 11:08 AM (GDulk)

30 OT: "There's no question that the Grammy Awards, which will air Sunday night, are politically biased: Bill Clinton, Hillary Clinton, Al Gore, Jimmy Carter and Barack Obama have at least one each."

-
I'm sure they are all based on merit.

Posted by: The Great White Snark at February 07, 2015 11:09 AM (LImiJ)

31 Let me get this right????

The Laffer curve is to maximize the tax revenue FOR THE GOVERNMENT.

When the maximum fed rate was in the high 90% there were all kinds of deductions, and the amount of taxes was collected was say "X". Later with fewer deductions the taxes collected is still close to 'X'. (% of GDP)

The reason the tax codes can't be printed on a small truck load of paper is the exemptions for the cronies, and the desire modify the economy. It is called progressive for a reason. It forces companies to play nice to the govt. Some because they want some of the trillions being tossed around others just so they can survive the stupid regulations.

The people in charge use taxes for social justice as much as the necessaries of running a country.

In short the laffer curve would be a good tool for the govt to maximize its take from the people.

Posted by: Bob from table9 at February 07, 2015 11:11 AM (WNERA)

32 Great post, WD. Don't know if you have covered it, but another
Fundamental Concept worthy of study is "the tragedy of the commons".
Explains, in a nutshell, why socialism cannot work.

I took a shot at it back in October. http://ace.mu.nu/archives/352550.php

Posted by: Weirddave at February 07, 2015 11:13 AM (WvS3w)

33 You write pretty well in your sleep.

When I have a night like that, I wake up, only to discover that my night time tossing and turning thoughts were pretty much fantasy, life isn't nearly as bad as it seems in the middle of a sleep struggle night.

While the Laffer curve is real and trickle down a pejorative, we don't control the narrative and the public will likely never get the truth.

The only thing that could fix this country is a century of media dedicated to undoing the propaganda against humanity of the last century.

Posted by: petunia at February 07, 2015 11:13 AM (M1eBo)

34 Hahaaa, a great buy, businessman Ray Shamie, nearly defeated John Effing Kerry in his first Senate run in 1984. One of Ray's favorite lines on the campaign trail was:"People call it 'trickle-down economics...' I call it 'trickle-up!'" Then he'd go on to describe how he started grew his own tech biz, all the jobs it created families it sustained...

YES, TRICKLE-UP!

Posted by: JewishOdysseus at February 07, 2015 11:13 AM (FWwQD)

35 This wealth is generated out of nothing (really).

-
So you're a creationist. Probably an intelligent designer as well.

Posted by: The Great White Snark at February 07, 2015 11:14 AM (LImiJ)

36 Bill Clinton, Hillary Clinton, Al Gore, Jimmy Carter and Barack Obama have at least one each.

Speaking of leftists giving each other awards, poor Hillary doesn't have a Nobel Prize yet, does she? She'll need one before the elections.

Posted by: t-bird at February 07, 2015 11:15 AM (FcR7P)

37 7 Read The Forgotten Man by Amity Shlaes.
Posted by: Barry: FDR Redux at February 07, 2015 10:39 AM (gwG9s)

That's an excellent book. It exposes many lies and misconceptions about the New Deal.

Two of the most pernicious ones, still "common wisdom" today, were that Hoover was a champion of the free market whose policies caused the Depression and hurt the working man, while Roosevelt's New Deal got us out of the Depression. Wrong on both counts.

The stock market crash occurred on Hoover's watch, and he responded with stimulus-type policies which turned a recession into a depression. FDR actually ran against those policies in 1932, but when elected he did a 180 and turned them up to eleventy, thus deepening and prolonging the depression.

Posted by: rickl at February 07, 2015 11:16 AM (sdi6R)

38 I'm a Grammy! More breakfast wine, serf!

Posted by: Hillary! 2016! at February 07, 2015 11:17 AM (gwG9s)

39 In short the laffer curve would be a good tool for the govt to maximize its take from the people.

Posted by: Bob from table9 at February 07, 2015 11:11 AM (WNERA)

Indeed, Bob. But I wouldn't necessarily mind being taxed at the peak of the curve as long as I was also certain that the Al Gores, the Brian Williams, and the Tom Bradys of the country were also being taxed at the same rate.

Posted by: Alberta Oil Peon at February 07, 2015 11:17 AM (upitO)

40 Static numbers always lead to bad results. Liberals do not understand the concept of a moving economy.

They are just dumb shits. That is all.

Posted by: Nip Sip at February 07, 2015 11:19 AM (0FSuD)

41 I'm sure I'm not the first one to have noticed that when the government announces a new program, and the number of jobs it will create, the jobs number is pretty much the cost of the program divided by about $120,000.

Posted by: Apprentice Doppelganger at February 07, 2015 11:19 AM (TqyFL)

42 WeirdDave

Pretty good summary with examples. Trying to get an economic class in 500 words or less is difficult but you clearly put up the sail and have the right direction. IMHO.

Posted by: Bob from table9 at February 07, 2015 11:19 AM (WNERA)

43 I'll bet that Laffer never saved a puppy from a burning building.

Posted by: Muldoon, a solid man at February 07, 2015 11:20 AM (XjfwU)

44 I am a long time reader and occasional commentor so when I say this I'm not some DNC paid flack causing FUD...

The author of this article has no idea what the Laffer Curve is and the empirical evidence in support or against. You make conservatives look stupid with your blanket statements and ignorant rants.

Thank You

Posted by: none at February 07, 2015 11:21 AM (r5Off)

45 Not seeing 'The Laffer Curve' at Redbox or on demand.

Good review though.

Posted by: RWC Team Warthog at February 07, 2015 11:23 AM (HKu0W)

46 I took a shot at it back in October. http://ace.mu.nu/archives/352550.php

Posted by: Weirddave at February 07, 2015 11:13 AM (WvS3w)

Looks good. About the only thing you didn't mention was the origin of the term, which arose from observations about the sad state of "community pastures" in England.

Posted by: Alberta Oil Peon at February 07, 2015 11:25 AM (upitO)

47 None: you'd be more convincing if you tried to convince. Like, offering contrary evidence.

Posted by: boulder terlet hobo at February 07, 2015 11:26 AM (VOgxg)

48 Posted by: none at February 07, 2015 11:21 AM (r5Off)

Thank you for your contribution?

Posted by: Cloyd Freud, Unemployed at February 07, 2015 11:28 AM (lG2E3)

49 I'll bet that Laffer never saved a puppy from a burning building.
Posted by: Muldoon
--------------------

Or safely auto-rotated a Chinook down after an RPG hit.

Posted by: Mike Hammer, etc., etc. at February 07, 2015 11:28 AM (/GgDU)

50 Economics? Hillary made $100k in cattle futures overnight! She understands economics.

Posted by: Bill in Chappaqua at February 07, 2015 11:29 AM (gwG9s)

51 You make conservatives look stupid with your blanket statements and ignorant rants.

Thanks for the blanket statement, 'not some DNC-paid flack' (wink, wink).

Posted by: t-bird at February 07, 2015 11:30 AM (FcR7P)

52 Haven't read the book AOP but I got a hint from your comments.

Real life example: Local Indian reservation had 'open range' where every Indian could run a few head of cattle..some more than others.

They ran so many head they over grazed the range. You could see they were in sad shape, even from a distance you could see the ribs.

Getting closer you could see them eating the 'jumping' cactus with the spines sticking out of their drooling mouths.

I was pissed at the abuse but apparently none of the Indians gave a shit.

No one made a gain.

Posted by: Bob from table9 at February 07, 2015 11:31 AM (WNERA)

53 None forgot that he was a long time conservative who voted for Reagan but just had to vote for TFG because of BOOOOOOOSH!!!

Posted by: RWC Team Warthog at February 07, 2015 11:31 AM (HKu0W)

54 I never groped Brian Williams, either

http://is.gd/Z6frpq

Posted by: TSA Guy at February 07, 2015 11:32 AM (Cq0oW)

55 Allison W, call me! I'll shovel your walk.

Posted by: Bill in Chappaqua at February 07, 2015 11:34 AM (gwG9s)

56 Obama and the Fed proved trickle down economics does work. An $80 billion/month fire hose of money directed at the top 0.1% for 5 years has led to 5.7% unemployment for those at the bottom who are actually searching for some kind of work.

Posted by: deadman at February 07, 2015 11:35 AM (Zf0v/)

57 No one made a gain.

Posted by: Bob from table9 at February 07, 2015 11:31 AM (WNERA)

That's right. In the case of the Indian range, I'm sure there is some Federal government program to compensate Indian ranchers whose herds, inexplicably, fail to thrive.

Posted by: Alberta Oil Peon at February 07, 2015 11:36 AM (upitO)

58 Allison's browneye has that "come hither" look.

Posted by: Bill Clinton at February 07, 2015 11:40 AM (lG2E3)

59 56 Obama and the Fed proved trickle down economics does work. An $80 billion/month fire hose of money directed at the top 0.1% for 5 years has led to 5.7% unemployment for those at the bottom who are actually searching for some kind of work.
Posted by: deadman at February 07, 2015 11:35 AM (Zf0v/)

If Drudge is correct most of the jobs are going to immigrants -- I assume doing jobs americans won't do for the pay.

It is convenient the unemployment numbers don't reflect those actually out of work.

Posted by: Bob from table9 at February 07, 2015 11:42 AM (WNERA)

60 Hillary made $100k in cattle futures overnight! She understands economics.
Posted by: Bill
--------------------------------

And..., has founded a multi-million dollar foundation, which provides employment for several people at fabulous salaries.

Posted by: Mike Hammer, etc., etc. at February 07, 2015 11:42 AM (/GgDU)

61 44 I am a long time reader and occasional commentor so when I say this I'm not some DNC paid flack causing FUD...

I'm a lifelong Communist, but now that I read the OP I realize that Communism not only has not worked, but cannot work, now or ever, and that I've been pushing arrant bullshit all these years. My bad.

Posted by: Jay Guevara at February 07, 2015 11:43 AM (oKE6c)

62 Allison, I just snorted my Viagra! C'mon over baby- I know your dad!

Posted by: Bill in Chappaqua at February 07, 2015 11:44 AM (gwG9s)

63 They ran so many head they over grazed the range.

The Tragedy of the Commons is the excuse for the left to step in and administrate that grazing, for the Indians' own good, of course.

Basically, they need to establish "Commons" (such as reservations and "public" lands) in order to create the need for administration and make their offices permanent.

Posted by: t-bird at February 07, 2015 11:44 AM (FcR7P)

64 Great post, WD. Don't know if you have covered it,
but another Fundamental Concept worthy of study is "the tragedy of the
commons". Explains, in a nutshell, why socialism cannot work.
Posted by: Alberta Oil Peon at February 07, 2015 11:06 AM (upitO)

AOP, I like that idea for a blog post. It is important to remember, though, that a lot of commons are self regulated because the users act as an informal oligarchy to control exploitation. When the oligarchy is disrupted (by economic reasons or governmental meddling) the extraction gets out of hand and tends to overstrip resources.

Posted by: Cesar Chavez on crossing the Sacramento River at February 07, 2015 11:44 AM (t//F+)

65 I ask who among you wouldn't change careers and be a futures trader if you made 100,000 dollars in a few weeks?

Nice round number for a pay off.

Posted by: Bob from table9 at February 07, 2015 11:45 AM (WNERA)

66 And off with the stupid UFW sock

AOP I love your hash

Posted by: Kindltot at February 07, 2015 11:46 AM (t//F+)

67 Hillary made $100k in cattle futures overnight! She understands economics.

Posted by: Bill

In fact, she's writing a book on how to make a fortune in the commodities market.

Step 1. Find a wealthy campaign contributor who'd like to help you out, and if you should see your way clear to helping him out once you're in office, it's kismet.

Step 2. Have said contributor to buy both ends of a commodity futures contract.

Step 3. Have said contributor to give you the end of the contract that ends up in the money, and eat the one out of the money.

Anyone can do it - it works like magic! The hard part is step 1.

Posted by: Jay Guevara at February 07, 2015 11:47 AM (oKE6c)

68 I always understood the Laffer Curve as the intersection of mathematics and psychology. Without rational response to tax-rates, in theory, people would keep producing regardless of the rate. In practice, people respond to the rates as a signal to produce less in the face of higher rates.

There is plenty of room to debate the shape of the Laffer Curve (the rate of peak revenue), but IMHO, it is a fact that the rate versus revenue line is a curve going from zero to peak and back to zero.

Posted by: SomePaulInOhio at February 07, 2015 11:47 AM (1sis3)

69 65 I ask who among you wouldn't change careers and be a futures trader if you made 100,000 dollars in a few weeks?

Nice round number for a pay off.

Posted by: Bob from table9 at February 07, 2015 11:45 AM (WNERA) /i]

No one. So you run $6 K into $100 K in a few weeks. What would any normal member of Homo sapiens do at that point?

I submit that any normal person would take some of the winnings and try it again, playing with house money. Not a person in a billion would stand down at that point, unless he knew the original deal was a straight-up fraud, and wouldn't happen again.

Posted by: Jay Guevara at February 07, 2015 11:50 AM (oKE6c)

70
I ask who among you wouldn't change careers and be a futures trader

We'd have to change our careers to politics to make that kind of money trading futures.

Posted by: t-bird at February 07, 2015 11:51 AM (FcR7P)

71 Thank You
Posted by: none at February 07, 2015 11:21 AM (r5Off)

There is noting I adore more than a deeply knowledgeable person explaining something of which they have studied and understand.

Please expand on your understanding of the Laffer curve and it's implications. You indicate that the understanding is limitied.

Posted by: Kindltot at February 07, 2015 11:52 AM (t//F+)

72 I was a convinced Lafferite back in the 1980s, but I now believe that taxes are actually too far too low.

An enormous swathe of the American public have become convinced that they can continue to vote for more and more lavish federal government spending, while themselves personally enduring little or no federal tax bite.

This habit of mind is pernicious. Policy must discourage it.

Posted by: torquewrench at February 07, 2015 11:53 AM (noWW6)

73 29
Or, rather, it appears to be "out of nothing" because it is potential and ideas locked up in peoples' heads. In a favorable market those ideas are tried out and although many (most?) will fail, the cost won't be too high and the really good ones will take off. In an adverse market those ideas are smothered in the cradle or starve after birth because the cost of trying anything new is simply too high.

Posted by: Polliwog the 'Ette at February 07, 2015 11:08 AM (GDulk)

This is known as "bad luck".

Posted by: Robert A. Heinlein at February 07, 2015 11:54 AM (sdi6R)

74 So the Middle Class sat back and had their wealth
happily laundered to Democrat cronies under the phrases "Financial Aid
to Students", Housing for the Poor" and "Stimulus".

Posted by: (not JJ) Sefton at February 07, 2015 11:01 AM (wi0rD)

My favorite: The "earned income tax credit." It's not a tax credit - a tax credit is essentially forgiveness for future taxes that you would have had to pay - it's a fucking welfare check straight-up, to give some parasite a reward for finally getting off his ass a little bit.

Posted by: Jay Guevara at February 07, 2015 11:55 AM (oKE6c)

75 That cattle futures thing deserves a little expansion. Do you recall that one of the guys involved was Robert L. "Red" Bone? Catchy name.

Anyhow, just to remind you of how unbiased Wiki is, here is it's comment on Hillary's dealing with public response to the scandal:
------------
" Afterwards she won media praise for the manner in which she conducted herself during this, her first adversarial press conference; Time called her "open, candid, but above all unflappable ... the real message was her attitude and her poise. The confiding tone and relaxed body language ... immediately drew approving reviews."
------------

I can not tell whether they were genuflecting when they wrote that or not.....

Posted by: Mike Hammer, etc., etc. at February 07, 2015 11:56 AM (/GgDU)

76 it's a fucking welfare check straight-up, to give some parasite a reward for finally getting off his ass a little bit.
Posted by: Jay Guevara
-----------------

Coming soon, to an illegal immigrant near you!

Posted by: Mike Hammer, etc., etc. at February 07, 2015 11:57 AM (/GgDU)

77 Well morons, back from gun shop. This AR was a steal. It's a 223 Wylde chamber which will shot 556 NATO or 223 Rem, 1 to 9 twist. $440!

http://tinyurl.com/l9v6dyy

I am thinking I will just buy some more 223, which I can also shot in my Mini 14.

Posted by: Nip Sip at February 07, 2015 11:57 AM (0FSuD)

78 72 I was a convinced Lafferite back in the 1980s, but I now believe that taxes are actually too far too low.

An enormous swathe of the American public have become convinced that they can continue to vote for more and more lavish federal government spending, while themselves personally enduring little or no federal tax bite.

This habit of mind is pernicious. Policy must discourage it.

Posted by: torquewrench at February 07, 2015 11:53 AM (noWW6)

They're not too low, they are just too many people not paying them. Everybody should pay something in tax. Even welfare recipients. Gross up their payments, and then tax them back down to where they were, but make the layabouts peel off $100 bills so they feel the pain of having had the money in their hot little hands, but having to give it up.

Call it "redistributing the tax bite."

Posted by: Jay Guevara at February 07, 2015 11:57 AM (oKE6c)

79 And Art Laffer himself these days isn't so much arguing that tax rates are too high per se, but rather that the tax code is far too complex.

http://preview.tinyurl.com/o9wlbf6

Posted by: torquewrench at February 07, 2015 11:58 AM (noWW6)

80 72 I was a convinced Lafferite back in the 1980s, but I now believe that taxes are actually too far too low.

An enormous swathe of the American public have become convinced that they can continue to vote for more and more lavish federal government spending, while themselves personally enduring little or no federal tax bite.

This habit of mind is pernicious. Policy must discourage it.
Posted by: torquewrench at February 07, 2015 11:53 AM (noWW6)

Yes, The progressive tax allows them to tax the man behind the tree (current bad guy is rich).
Need a system where everyone has skin in the game.

I'm not for the flat tax however, mainly because it still requires the IRS in our lives.

No system is perfect in collections. People smuggle, lie and cheat because it pays.

Having said that a national sales tax puts everyone in the game and removes the IRS from our personal lives.

Posted by: Bob from table9 at February 07, 2015 11:58 AM (WNERA)

81 I like to trickle sideways. Jus' sayin'.

Posted by: Sandra Flook at February 07, 2015 11:58 AM (Dwehj)

82 81
I like to trickle sideways. Jus' sayin'.

Posted by: Sandra Flook at February 07, 2015 11:58 AM (Dwehj)

Me too, wish your Black

Posted by: Steve Kroft at February 07, 2015 11:59 AM (0FSuD)

83
PURPOSE OF TAXES
NOT TO COLLECT OUR MONEY
BUT TO CONTROL US

---------------------------------------------------------------------
The people in charge use taxes for social justice as much as the necessaries of running a country. Posted by: Bob from table9

The progressive left, I feel, almost doesnt care if revenues go down, they just want to make sure those 'independent' business owners know who the boss is. And if revenues go down because of their punitive use, then they'll just raise rates...on the right people.

Posted by: Daisy Cutter at February 07, 2015 12:00 PM (myGBe)

84 62 Allison, I just snorted my Viagra! C'mon over baby- I know your dad!

Posted by: Bill in Chappaqua at February 07, 2015 11:44 AM (gwG9s)

I'll be right there, Bill. I just applied some Preparation H.

Posted by: Allison Williams at February 07, 2015 12:00 PM (oKE6c)

85 I'll be right there, Bill. I just applied some Preparation H.

Posted by: Allison Williams at February 07, 2015 12:00 PM (oKE6c)

If I bring the Champagne can I join you all?

Posted by: Steve Kroft at February 07, 2015 12:02 PM (0FSuD)

86 >>I was a convinced Lafferite back in the 1980s, but I now believe that taxes are actually too far too low.

Mine aren't.

I think the problem is that far too few are paying much if anything at all. When approximately half of the country is paying all the federal taxes you have a severe disconnect.

This is why I say that discussions of various economic theories are great but they do not address the fundamental problem that right and left have a fundamentally different vision of the relationship between the individual and the state. The left wants government to control virtually every aspect of our lives, go far enough along that curve and you end up with Cuba or Venezuela.

The left thinks they can control and manage the economy from the top down with a few geniuses like Obama who has never run anything. The right wants as little government involvement in the free market as possible and let the individuals decide. It's not just that they are dumb, it's that they have a completely different goal in mind.

Posted by: JackStraw at February 07, 2015 12:02 PM (g1DWB)

87 For Weirddave: Feeling like this? http://tinyurl.com/n3q9w5k

Posted by: Mike Hammer, etc., etc. at February 07, 2015 12:04 PM (/GgDU)

88 When the American Republic was young, the nation's capital was a sleepy backwater. As the country grew, wealth was created in many places, such as farms and factories around the country, ranches in the West, steel mills in Pittsburgh, the banking industry in New York, shipbuilding and port facilities in coastal cities, and so on.

Today 6 of the 10 wealthiest counties in the nation are in the Washington, DC suburbs. Funny, that.

https://tinyurl.com/naal79s

Posted by: rickl at February 07, 2015 12:06 PM (sdi6R)

89 Jackstraw - As I have pointed out recently, the last time I looked, in a nation of some 330 million people, only around 40 million are net payers of income tax, and only the two upper quintiles are paying very much.

Posted by: Mike Hammer, etc., etc. at February 07, 2015 12:07 PM (/GgDU)

90 89 Jackstraw - As I have pointed out recently, the last time I looked, in a nation of some 330 million people, only around 40 million are net payers of income tax, and only the two upper quintiles are paying very much.

Posted by: Mike Hammer, etc., etc. at February 07, 2015 12:07 PM (/GgDU)

The operative word being "net." No government employee pays taxes on his salary. The government pays him, and he returns some fraction of his pay to the government. He's a net recipient of tax money, not a source of it.

This, btw, is EXACTLY what I'm proposing for welfare recipients.

Posted by: Jay Guevara at February 07, 2015 12:09 PM (oKE6c)

91 it's a fucking welfare check straight-up, to give some parasite a reward for finally getting off his ass a little bit.

Posted by: Jay Guevara

-----------------

Look at again please. Maybe I am misunderstanding it but it appears that you do not even have to have any income at all to qualify for EITC.

Posted by: GMB World Class Tyrant at February 07, 2015 12:11 PM (wQ7l/)

92
Look at again please. Maybe I am
misunderstanding it but it appears that you do not even have to have any
income at all to qualify for EITC.

Posted by: GMB World Class Tyrant at February 07, 2015 12:11 PM (wQ7l/)
You may be right. I'd assumed that there was a scintilla of reality in the name, and that therefore someone must have had to earn something. How naive of me.

Posted by: Jay Guevara at February 07, 2015 12:12 PM (oKE6c)

93 90 89
No government employee pays taxes on his salary. The government pays him, and he returns some fraction of his pay to the government. He's a net recipient of tax money, not a source of it.

Posted by: Jay Guevara at February 07, 2015 12:09 PM (oKE6c)

This is why the expansion of armed agents in every Federal agency and massive ammunition purchases is so worrisome. Those government employees will fight like hell to keep their jobs, pay, perks, and pensions. As the economy continues to unravel, they will eventually resort to outright confiscation of private wealth at gunpoint.

Posted by: rickl at February 07, 2015 12:15 PM (sdi6R)

94 >>Jackstraw - As I have pointed out recently, the last time I looked, in a nation of some 330 million people, only around 40 million are net payers of income tax, and only the two upper quintiles are paying very much.

Yep. So then the question becomes what does a lefty administration really care if the unemployment rate is 5% or 10% since most of those people wouldn't be paying much if any in the way of federal taxes if they were working.

They don't except for purposes of show which is why they are constantly cooking the books instead of trying to fix the problem. It's also why you hear people like Obama and Clinton say things like "You didn't build that" or "Businesses don't create jobs" and why they are so intent on destroying the Constitution which clearly outlines the relationship between government and the individual.

Posted by: JackStraw at February 07, 2015 12:16 PM (g1DWB)

95 Oh, on EITC:

Not only is it being _massively_ gamed, with the IRS estimating that they have handed out $110B in bogus EITC refunds over the past decade, but now, that genius Obama is making EITC retroactive for illegals who claim they were resident in the USA during the prior three years, every single year of which they can claim for.

It's Pigford again. On steroids. And crystal meth.

Posted by: torquewrench at February 07, 2015 12:16 PM (noWW6)

96 92

Look at again please. Maybe I am

misunderstanding it but it appears that you do not even have to have any

income at all to qualify for EITC.

Posted by: GMB World Class Tyrant at February 07, 2015 12:11 PM (wQ7l/)
You
may be right. I'd assumed that there was a scintilla of reality in the
name, and that therefore someone must have had to earn something. How naive of me.

Posted by: Jay Guevara at February 07, 2015 12:12 PM (oKE6c)

You must have "earned income" to qualify for the EITC.

http://is.gd/mWytaz

Posted by: Vic at February 07, 2015 12:17 PM (wlDny)

97 Continuous free stuff for survival is corrosive to the soul of man. If you doubt this look at any large inner city.

This might be a new curve where the misery of man is tracked. There might not be a solution to this in a modern industrial world at least not one obvious to me.

Posted by: Bob from table9 at February 07, 2015 12:17 PM (WNERA)

98 Looking at the IRS charts there are maximum limits for EITC but no minimum limits. Thi, imho, means that even if you had zero income, you qualify for the EITC.

YAY WELFARE!!!

Posted by: GMB World Class Tyrant at February 07, 2015 12:17 PM (wQ7l/)

99 Lunchtime! Salad, Allison?

Posted by: Sandra Flook at February 07, 2015 12:18 PM (Dwehj)

100 So the "Earned Income Tax Credit" is an Orwellian term. How shocking.

Posted by: rickl at February 07, 2015 12:19 PM (sdi6R)

101 My daughter got audited once because her ex claimed the EITC on his 1040 while she claimed it on hers too. They do look at it.

The biggest fraud occurs on the SSDI claims. I have seen some economists say that as much as 50% of that is fraud and abuse.

Posted by: Vic at February 07, 2015 12:20 PM (wlDny)

102 That was the idea for EITC. It includes zero income. Especially zero income. While we are on a roll, why do we pay child CREDIT for children south of the border we have no idea exists or not? Harry asshole Reid stopped a bill to correct this.

Posted by: Bob from table9 at February 07, 2015 12:21 PM (WNERA)

103 Believe me (my sister is a tax preparer) the scammers know to the penny how to game the system. Here is how it goes: You take your payments in cash (lawn work), then, at the end of the year you file a return claiming an income that will maximize EITC credit.

Example - In NC, you report an income of $17,000, Head of Household, two dependent children. You will pay -ZERO- state or Federal tax..., BUT...., Yipeeee!, you will receive $5,372 in EITC from the Federal taxpayers, and $242 from NC taxpayers.

So...., $5,614 in sweet, sweet, free money...., which, is itself non-taxable. Win-win baby!

Believe me....., this goes on ALL of the time

Posted by: Mike Hammer, etc., etc. at February 07, 2015 12:25 PM (/GgDU)

104 nood

Posted by: Vic at February 07, 2015 12:25 PM (wlDny)

105 "The biggest fraud occurs on the SSDI claims. I have seen some economists say that as much as 50% of that is fraud and abuse."

The SSDI rolls started to explode in size at precisely the same time that Bill Clinton was "ending welfare as we have known it".

Getting people out of the permanent dependency class turns out to be a lot harder than just waving a wand. All they did was shift from one program to another.

Posted by: torquewrench at February 07, 2015 12:26 PM (noWW6)

106 I can not tell whether they were genuflecting when they wrote that or not.....

Full prostration.

Posted by: Fox2! at February 07, 2015 12:28 PM (brIR5)

107 We need psy-ops.
Posted by: (not JJ) Sefton at February 07, 2015 11:01 AM (wi0rD)
----
May I suggest some merit badges?

http://tinyurl.com/6x46zgf

Posted by: All Hail Eris at February 07, 2015 12:29 PM (KH1sk)

108 @88

When you control almost 1/3 of the entire economy, you are going to make some money.

Posted by: Good ole Al Gore. at February 07, 2015 12:37 PM (0FSuD)

109 I appreciate Dave taking the time even though he's not feeling too well to post and the thoughtful responses on the topic. I'm feeling rather unwell as well as curmudgeonly this afternoon so the folks who need to post their sophomoric sexual humor about various media figures really are a bit of a bore. Couldn't you save that for an open thread?

Posted by: FenelonSpoke at February 07, 2015 12:38 PM (DXzRD)

110 >>If I bring the Champagne can I join you all?

Posted by: Steve Kroft

http://tinyurl.com/7eclkwm

Posted by: Starfish Williams at February 07, 2015 12:39 PM (3rrMW)

111 "65 I ask who among you wouldn't change careers and be a futures trader if you made 100,000 dollars in a few weeks?

Nice round number for a pay off."

IIRC, one of the participants was a high-level executive from Tyson Farms, and Tyson Farms had a plant that operated on the White River while it was judged to be the sixth most polluted river in the US and remained so while Billy Jeff was the governor.

Again, that's from memory...

Posted by: Blor Utar at February 07, 2015 12:39 PM (pbkeE)

112 10 The government can set tax policy to maximize its own income in a static sense or to maximize economic growth, which produces more income for the government in a dynamic sense. This is the insight of Laffer. Dynamic scoring is like voodoo economics to the Left, which views the world in terms of how big everyone's slice is relative to each other, not how big the pie is. Fortunately, the election of the GOP now means that dynamic scoring by CBO and the Joint Economic Committee is now the rule by which legislation will be measured. Bash the GOP if you will, but this will result in a tangible shift toward more pro-growth policies.

Posted by: Caesar North of the Rubicon at February 07, 2015 12:48 PM (C3KwS)

113 The Laffer curve has an analog in electrical engineering called 'impedance matching'.
http://en.wikipedia.org/wiki/Impedance_matching

Posted by: profligatewaste at February 07, 2015 03:00 PM (R3JkO)

114 Thanks for the post. Pretty good work for someone suffering the flu. Hope you get better soon. Me ke aloha pumehana

Posted by: kimoloka at February 07, 2015 03:39 PM (ufO49)

115 Yes but this type of argument is of the same species as proving the pedigree of "liberalism" from the classical liberal, libertarian-leaning philosophers of the 18th century, so that by proudly proclaiming yourself a "liberal" you are really serving the purpose of liberty.

Except the language has become so debased that doing so just reinforces the "liberal=good" "anti-liberal=bad" reaction of The 47% (my general moniker for Stupid Fucks).

So the denigration of "trickle down" by showing how its not really part of the conservative philosophy, but actually the unrealistic approach of government attempting to spur growth by spending just reinforces the generally held idea among the Stupid Fucks that "trickle down=bad" which is of course identified as "Republicans/conservatives Bad"

Not disputing a really good analysis, just that it won't sell in (the Stupid Parts of) Peoria.

Posted by: NYC Parent Now With Added Bile at February 07, 2015 03:46 PM (TcePY)

116
"IIRC, one of the participants was a high-level executive from Tyson Farms..."

James Blair literally told a GMA interviewer that HE had made the golden telephone calls on Hillary's behalf to her broker "so she could save the money on a long distance phone call."

Posted by: JewishOdysseus at February 07, 2015 03:57 PM (FWwQD)

117 There is one person on the right who does support trickle-down economics by name: Rush Limbaugh. He does it often. And I wish stop it. But he doesn't know much about economics.

Posted by: D1st at February 07, 2015 06:23 PM (BvcFD)

118 When Reagan was President, he managed to cut the tax rates, which grew the economy and tax revenues went up.

But dishonest leftist commentators point the above and say it is proof that "trickle-down economics doesn't work". How do they accomplish this sleight-of-hand?

By moving the goalposts, as they love to do. If the facts don't work the way you wish, zoom in with laser-like precision on something that sounds kind of bad. For the above, their claim is that "the income disparity between the rich and the poor grew at an accelerated rate" after the cuts.

The actual reality is that the rich got richer, and the poor got richer. Everyone got richer during the economic good times caused in part by the tax cuts. However, the rich got richer faster than the poor did. This is inescapable: if all you have to invest is $100, your investment will pay you a few bucks and you can buy a snack at Dairy Queen; if you invest several million dollars, the same investment will pay you much more and you can buy a new Cadillac or something.

It's basically impossible for normal economics to ever have the rich get richer at the same speed as the poor. Yet this is the standard demanded by the dishonest leftist commentators. It's not enough that the poor were getting richer.

For many leftists, while they say they are all about the happiness and prosperity of the poor, they actually want to see the rich lose. They argue bitterly against lowering taxes, even though the evidence clearly shows that the poor would be better off under such a policy. It's more important to take money away from the rich than to see the poor get less poor.

And President Obama came right out and said it: even if lowering taxes on the rich would produce more tax revenue, he would still oppose it because he wants to take money away from the rich.

Weirddave, if you haven't done so yet, please write a "Fundamental concepts" primer about zero-sum thinking. Leftists like President Obama really believe that someone being rich somehow hurts the poor people, which is dangerous nonsense. If people understand that the world isn't a zero-sum game, they might not be as swayed by bogus arguments like the ones discussed above.

(My favorite example of why the world isn't a zero-sum game: in 1970, even a billionaire couldn't buy an iPhone. Now ordinary people have as many iPhones as they want. The whole world is richer now than it was in 1970.)

Posted by: mr_jack at February 07, 2015 07:30 PM (M59SC)

119 People will produce more if government takes less.

Production IS money ... product is sold for money, and banks loan money against product. It is confusing, because it's paper money (federal reserve notes) that is not really money. When the Swiss recently broke their peg to the Euro their currency jumped 40% overnight, as people hoped the Swiss would go back to some gold standard, or at least not do QE.

the rest of this comment is late night fluff we all know, in a dead thread anyway lol

Banks create "money" by lending nine out, to one on deposit (fractional reserve), but that is fiat currency. The only real money is backed by real things, or IS real things (like gold, which is produced). I tend to keep my grain in the bin as long as I can, since it is real ... in chaos I could sell, trade or eat it. Paper money may become worthless, credit cards more worthless.

So the pie is larger when people keep more (obviously) of what they produce, and hence they produce that big pie. The invisible hand keeps them producing the right product (things that can be sold). If I don't grow soybeans, that money never comes into existence, and my suppliers don't get to profit from seed, chemicals, etc.

The pie would be even larger if government took very little, because we don't need much government to make an economy (some roads, military, a few things). The Laffer curve is only about maximizing government's take, not about maximizing the free economy.

Government can kill the private sector, but it is bad at forcing it to grow, though it can allow special friends to grow by skirting rules others must obey. Laffer's curve doesn't really figure in Gucci Gulch and the tax carve outs, or all the other corruptions/coercions in the system.

Government broke the Laffer curve laws by borrowing and inflating the currency, especially with QE. They take payroll money for magic bean retirement promises, but spend the money, so people don't see it as a Ponzi scheme. They spent "money" from future year Laffer curves, and push will come to shove at collection/confiscation time as retirees tell youth that all future profits belong to the retired.

Many things government does is coercive to help their lobbyists, and that bends the Laffer curve numbers to where any tax at all becomes crippling to small business. Only those with lobbyists can have their tax reduced to the profitable region, or have sweetheart deals directed to them (e.g. overpriced union contracts, Obamacare Insurers, Medicare device providers).

But yes, every time they screw the free markets, the criminals tell us it's for our own good. They tell us our profits should go to the poor to buy our goods and help our business (trickle up/down whatever), and there is always a 1.7x multiplier effect (bs) ... as long as the working class keeps increasing productivity and producing more real things, and the entitled keep taking them for free.

If productivity isn't increased, you HAVE to work more to pay all the bills, so working class works 30 hours time two jobs, to fund people to get for free, what they produce ... or join the free stuff class and/or go off the books.
This is how Obama kills the working/middle class. Probably intentionally ... Cloward Piven style.

Posted by: Illiniwek at February 07, 2015 10:52 PM (/FK3e)

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