I suppose the 1% could take their assets and flee the country but since Americans overseas are stilled required to pay taxes to the US government you're not really getting away from anything. You could renounce your citizenship but I believe the government collects and "exit" tax on the assets of anyone who renounces their citizenship. Considering most of the assets of the 1% are tied up in US stocks or privately held US companies they can threaten all they want but they will never leave. Besides where do you go? Russia? Yea, they love Americans there. China? Not exactly a free country either. They put people in jail just for going to church over there. Of course if your god is money I guess religious freedom doesn't really matter, money is worshipped the world over.
<< <i>The 1% pays 40% of our taxes now and most of them pay less than 20% tax rate. Double their rate and we could pay of the deficit in a decade or two. Our problem isn't spending on programs, it's taxing. >>
No offense, but you sound like someone who benefits from government spending. As a member of the group paying the taxes (and I am very far from being in the 1%) I have to disagree and categorically state that spending is the problem. History has shown that the more you give Washington to spend the more they want - how long before we double taxes on everyone that pays taxes? We have already witnessed what happens when politicians make promises that cannot be keep to public sector employees. Given the choice of further tax increases to meet the growing pension burdon many localities are facing bankruptcy.
The top 20% earners pay 70% of federal income taxes. 46% of Americans pay no federal income tax. While a millionaire may end up with a lower net tax rate than the average middle income earner, the millionaire still pays a lot more taxes than the middle income earner. You want fair? Require all Americans to pay the same percentage regardless of income level.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
<< <i>I suppose the 1% could take their assets and flee the country but since Americans overseas are stilled required to pay taxes to the US government you're not really getting away from anything. You could renounce your citizenship but I believe the government collects and "exit" tax on the assets of anyone who renounces their citizenship. Considering most of the assets of the 1% are tied up in US stocks or privately held US companies they can threaten all they want but they will never leave. Besides where do you go? Russia? Yea, they love Americans there. China? Not exactly a free country either. They put people in jail just for going to church over there. Of course if your god is money I guess religious freedom doesn't really matter, money is worshipped the world over. >>
What if the 1% simply just put their wealth to sleep as a response? Meaning - if you're going to double my tax rate, I simply won't put it to use generating any more wealth/income.
<< <i>I suppose the 1% could take their assets and flee the country but since Americans overseas are stilled required to pay taxes to the US government you're not really getting away from anything. You could renounce your citizenship but I believe the government collects and "exit" tax on the assets of anyone who renounces their citizenship. Considering most of the assets of the 1% are tied up in US stocks or privately held US companies they can threaten all they want but they will never leave. Besides where do you go? Russia? Yea, they love Americans there. China? Not exactly a free country either. They put people in jail just for going to church over there. Of course if your god is money I guess religious freedom doesn't really matter, money is worshipped the world over. >>
What if the 1% simply just put their wealth to sleep as a response? Meaning - if you're going to double my tax rate, I simply won't put it to use generating any more wealth/income.
What happens then? >>
Where will they put all that money to sleep? Under the mattress? They control 40% of the wealth. You can't just put that to sleep. Cash out all their stocks and crash the market. Not to mention having to pay capital gains taxes on all of it.
<< <i>I suppose the 1% could take their assets and flee the country but since Americans overseas are stilled required to pay taxes to the US government you're not really getting away from anything. You could renounce your citizenship but I believe the government collects and "exit" tax on the assets of anyone who renounces their citizenship. Considering most of the assets of the 1% are tied up in US stocks or privately held US companies they can threaten all they want but they will never leave. Besides where do you go? Russia? Yea, they love Americans there. China? Not exactly a free country either. They put people in jail just for going to church over there. Of course if your god is money I guess religious freedom doesn't really matter, money is worshipped the world over. >>
What if the 1% simply just put their wealth to sleep as a response? Meaning - if you're going to double my tax rate, I simply won't put it to use generating any more wealth/income.
What happens then? >>
Where will they put all that money to sleep? Under the mattress? They control 40% of the wealth. You can't just put that to sleep. Cash out all their stocks and crash the market. Not to mention having to pay capital gains taxes on all of it. >>
Gee...I was thinking about buying a factory, but since my tax liabilty is set to double, I think I'll hold-off on that. Gee...I was thinking about expanding my business and hiring more people, but since my tax liability is set to double, I best not. Gee...I was thinking about investing my money in a new start-up, but since my tax liability is set to double, I'll just keep it in the bank, or under my matress, or wherever people who have a lot of money keep their money.
Geez people, it's not that hard to imagine the consequence of stupidity, is it?
Penalizing top earners for their success with lopsided tax rates will have the same result as burdening small business with excess government interference and regulation - You reach a point where it just ain't worth it.
The reward for risk and hard work is profit. In most cases those that want to penalize such reward are the same people not willing to take the risk or exert the effort, but yet expect to benefit from those that do. As the number of these people outgrows the number of people paying taxes you eventually reach a point where they corner the market at the voting booth. This is how a democracy becomes a socialist state. If anyone should be penalized it should be those that line up at the teet.
As Margret Thatcher once said "the problem with socialism is that you do eventually run out of other people's money."
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
About 50% of the country thinks like you and the other 50% thinks cutting taxes and cutting spending is the answer. So as I said before the printing will continue until public opinion tips in one direction or the other. How will you know when that happens? When one party controls the White House and veto and filibuster proof majorities in both houses of Congress. Until then expect more of the same. >>
The only thing is that if the guys who want higher taxes are the "one party" in charge, we will still need to print money because taking more from the so called 1% will not do the trick. Now with spending less we have a chance assuming the right regulations and smart tax levels. As I mentioned earlier the economy is dynamic and just because you double the tax rate on something does not mean you get double the revenues.
Gold and silver are valuable but wisdom is priceless.
Considering that the "risk free" return of treasuries is actually negative when taking inflation into account, you have no where to hide your money. You have to invest it in new businesses or stocks, or expanding your existing businesses. That's the point of the Fed's zero interest rate policy. To make it cheaper for businesses to borrow money and to force savers to invest in riskier assets like stocks and new business. There is no place to hide your money in something nice and safe anymore. I'm not saying that is morally right but it is reality.
<< <i>Considering that the "risk free" return of treasuries is actually negative when taking inflation into account, you have no where to hide your money. You have to invest it new businesses or stocks, or expanding your existing businesses. That's the point of the Fed's zero interest rate policy. To make it cheaper for businesses to borrow money and to force savers to invest in riskier assets like stocks and new business. There is no place to hide your money in something nice and safe anymore. >>
Can you conceed the argument that a wealthy person will figure-out and decide what to do with their money that will have the best out-come for themselves? They will find a way to put their money to sleep, or take their capital out of the market and put it into something else that will have the best out-come for themselves (fine art, jewerly, realestate,)
<< <i>Considering that the "risk free" return of treasuries is actually negative when taking inflation into account, you have no where to hide your money. You have to invest it in new businesses or stocks, or expanding your existing businesses. That's the point of the Fed's zero interest rate policy. To make it cheaper for businesses to borrow money and to force savers to invest in riskier assets like stocks and new business. There is no place to hide your money in something nice and safe anymore. I'm not saying that is morally right but it is reality. >>
You don't have to worry about hiding money that has already been taxed. You have to worry about paying taxes on the new money (gains) you generate with it. Why worry at all - just spend it on a luxurous life and let those who depend on you to generate jobs and production eat each other. Capitalism has made a better life for all income levels, even those that live strictly off the entitlements that it funds.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
<< <i>Considering that the "risk free" return of treasuries is actually negative when taking inflation into account, you have no where to hide your money. You have to invest it new businesses or stocks, or expanding your existing businesses. That's the point of the Fed's zero interest rate policy. To make it cheaper for businesses to borrow money and to force savers to invest in riskier assets like stocks and new business. There is no place to hide your money in something nice and safe anymore. >>
Can you conceed the argument that a wealthy person will figure-out and decide what to do with their money that will have the best out-come for themselves? They will find a way to put their money to sleep, or take their capital out of the market and put it into something else that will have the best out-come for themselves (fine art, jewerly, realestate,) >>
They have earned that right, just as you and I.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
Given the size of the government, taxing the "evil 1%" will not solve the government's spending problem. If you were to place a 100% marginal tax rate on all incomes above $500,000 a year, you would be able to run the government for about three months. What do you do about the rest of the year?
And if you did that once, the next time around you would collect less because the "evil 1%" would change their investment and income earning patterns. They would move more of their capital out of the country, and more people would be unemployed. In not too many years the U.S. economy would be in tank like it is in Venezuela with shortages of everything, and a much lower standard of living. If you would like to see where we are headed under the present policies, check out Mexico and Venezuela which have been under the control of "enlightened leadership " for many years.
An no, I'm not even close to being a member of the "evil 1%."
Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
<< <i>Considering that the "risk free" return of treasuries is actually negative when taking inflation into account, you have no where to hide your money. You have to invest it new businesses or stocks, or expanding your existing businesses. That's the point of the Fed's zero interest rate policy. To make it cheaper for businesses to borrow money and to force savers to invest in riskier assets like stocks and new business. There is no place to hide your money in something nice and safe anymore. >>
Can you conceed the argument that a wealthy person will figure-out and decide what to do with their money that will have the best out-come for themselves? They will find a way to put their money to sleep, or take their capital out of the market and put it into something else that will have the best out-come for themselves (fine art, jewerly, realestate,) >>
It is more likely that they will take their capital out of the country. The United States is no longer the only game in town.
Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
<< <i>Considering that the "risk free" return of treasuries is actually negative when taking inflation into account, you have no where to hide your money. You have to invest it in new businesses or stocks, or expanding your existing businesses. That's the point of the Fed's zero interest rate policy. To make it cheaper for businesses to borrow money and to force savers to invest in riskier assets like stocks and new business. There is no place to hide your money in something nice and safe anymore. I'm not saying that is morally right but it is reality. >>
You don't have to worry about hiding money that has already been taxed. You have to worry about paying taxes on the new money (gains) you generate with it. Why worry at all - just spend it on a luxurous life and let those who depend on you to generate jobs and production eat each other. Capitalism has made a better life for all income levels, even those that live strictly off the entitlements that it funds. >>
What do they call that when a parasite ends up killing its host?
All investments have some kind of risk. If you have to make over 40% profit just to break even with the government taxes considered then you might find the risk of having to achieve over 40% in an an investment too high and just sit on some holder of value. Why not keep the rates low enough to make it attractive to invest in businesses that grow and create more jobs? More jobs means more revenue. This is the thinking of the 50% who think taxing more is bad policy.
Gold and silver are valuable but wisdom is priceless.
<< <i>This is why I own gold. The temptation for governments to create too many dollars in order to paper over our economic problems is too great. There is nobody left in government to make the hard choices that include reigning in huge deficits at the risk of alienating certain groups of voters. If you cut programs you piss off one group of voters. If you raise taxes you piss off another group. So the only politically palatable option is to print, then it becomes the next guy's problem. >>
Bingo! Someone gets it!
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>Great discussion, but it has no business on the coin forum. Apologies to the coin crowd, I'm out. >>
I concede that we all have differences of opinions and we can talk until we are blue in the face and will solve nothing. It's been a great conversation though I like reading everybodies opinions. Thanks for making it an intellectually stimulating day. Derryb is right, this has gotten way off topic.
<< <i>Under the gold standard, a government is limited—both legally and practically—as to how much paper money it can print. As recently as the Lyndon Johnson administration, the U.S. could print paper dollars equal only to four times the value of the nation’s gold reserves. >>
Simple, treat it like a debt ceiling: Change the law as need. Need more dollars? Change the ratio to six times the value of the nation's gold. This in a nutshell is why a gold standard does not work - the restrictions can be changed. Rome made the same mistake by slowly reducing the silver content of its coinage.
A gold standard would not even be a topic of discussion if the creators of currency acted responsibly. With the power to create and control currency comes the responsibility to properly manage it. Taking that responsibility lightly has been the downfall of numerous nations - the US is not exempt. >>
Issuing paper and "computer account" money at a rate where the money supply is four times a nation's stock of gold is not "The Gold Standard." That's no different from the Federal Reserve is doing now. You just keep raising the money supply to the stock of gold ratio which makes "The Gold Standard" total fiction.
We have been off The Gold Standard since FDR called in the gold and arbitrarily raised the price of gold to $35 an ounce in 1933. American citizens could not exchange their dollars for gold, and it was illegal from them to hold gold in bullion form. They could only hold gold under prescribed circumstances, such as industrial applications, jewelry, medical uses and collectable coins issued legally in 1933 (the $10 Indians but not the $20 gold coins) and any gold coin issued before that date.
If you want an example of where this country got into big trouble with The Gold Standard, check out the history of the Panic of 1893. Because of some ill-advised legislation concerning the convertibility of some paper currency, the U.S. fell into the position where it did not have enough of a gold stock to back the currency in circulation. President Grover Cleveland had to go to the "the evil banker" J.P. Morgan to bail the government out. Otherwise the U.S. ran the risk of becoming just another banana republic that could not bake its currency when we were an emerging world power. This was during the "golden age of The Gold Standard" when every country that was with its salt, defined and backed the value of its currency in gold.
If you want another example check out the Panic of 1837 when President Andrew Jackson's "specie circular" caused problems for the banking system in the Northeast.
Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
The Gold standard was officially enacted in 1900 and disolved for US citizens in 1933. The international community had the gold standard with the US until 1971.
The greenback was exchageable for gold starting in 1879. This is not the true definition of a gold standard, as it was a Treasury policy to exchange them, not an act of Congress. The silver question of the 1880's to 1890's (Populisim and W. J. Bryan) shows that there was enourmous push-back on a gold standard at the time.
. . . . . . . . . . . . . . .we will answer their demand for a gold standard by saying to them: "You shall not press down upon the brow of labor this crown of thorns; you shall not crucify mankind upon a cross of gold." - - W. J. Bryan; July 9, 1896
U.S. was on a gold standard of various types until 1971. The late 1800s through the 1920s, and the post-war period till about 1971 were periods of tremendous prosperity. Much stronger economic growth than we have today.
"Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
The late 1800s through the 1920s, and the post-war period till about 1971 were periods of tremendous prosperity. Much stronger economic growth than we have today.
It should say: The prosperity is in spite of the constraints of a gold standard, not because of it. With a gold standard you had the whole country at the knees of J.P. Morgan during the 1907 banking crisis.
<< <i>U.S. was on a gold standard of various types until 1971. The late 1800s through the 1920s, and the post-war period till about 1971 were periods of tremendous prosperity. Much stronger economic growth than we have today. >>
Right! People were buying their very first frigidaires and horseless carriages.. like in China the past 15 or 20 years.
One could say that it was the gold standard (strong money) that brought a flood of immigrants to this nation from the 1870's to 1913. And that was a major help to the industrial boom that occurred during this period. Business booms tended to follow the gold. When England had a real gold standard in the 1700's to 1800's they boomed as well. It's unlikely we would have the huge expansion of the 1870-1910 period w/o a decent gold standard. The only really rigorous gold standard in the US was from 1878-1913. During the other periods the gold standard was often dropped, cheated upon, or neutered. The "gold standard" from 1920-1933 was a shell of it's of its former self as real bills were eliminated. During periods of war, strife, and stress the gold standard was often not fully in effect. It might be accurate to say that during the pre-1878 period the gold standard was not in effect more often than it was. And it usually takes years for the resulting economic abuse to rear its ugly head in a "panic." Each of these panics is more attributable to economic and financial abuses that resulted in an economic crisis. Any runs on gold were the end result, not the cause. Boom cycles always lead to bust cycles. Gold standard or not, those are going to occur due to human nature. Financing regulations were far less strict in the 1800's.
In the US, under the gold standard:
Panic of 1819, a U.S. recession with bank failures; culmination of U.S.'s first boom-to-bust economic cycle Panic of 1825, a pervasive British recession in which many banks failed, nearly including the Bank of England, affected the US Panic of 1837, a U.S. recession with bank failures, followed by a 5-year depression Panic of 1847 Panic of 1857, a U.S. recession with bank failures Panic of 1866 Panic of 1873, a US recession with bank failures, followed by a four-year depression Panic of 1884 Panic of 1890 Panic of 1893, a US recession with bank failures Panic of 1907
Most of these events can probably be attributed to bankers cheating on the gold standard. In the 1812-1816 post war period the southern banks went off the gold standard and printed money, leading to inflation in the south. The northern banks didn't have this problem. The US govt stepped in by 1820-1823 to right the ship. Bank failures tend to be linked with cheating on the gold/monetary standard of that time. The booms and busts back then are no different than today with the easing and then tightening of money supplies. To blame that on gold is ridiculous. The US still has the world's reserve currency. And most central banks today carry gold reserves. Even if one states no gold standard since 1971, the fact that 31,000 tonnes of gold is held by central banks would suggest otherwise. I submit that the US having the world's reserve currency needs its 8100 tonnes of gold reserves as a symbolic "partial" backing of all those FRN's and sovereign foreign debt floating around out there ($1.5 TRILL in FRN's, $5 TRILL in foreign debt, $350 BILL in gold). Even a 7% to 23% backing is significant.
It's always been an accounting problem. If the accounting system is changed, everything else changes to compensate. It helps to have people in charge of the accounting system who don't skim off too much.
Q: Are You Printing Money? Bernanke: Not Literally
Comments
<< <i>The 1% pays 40% of our taxes now and most of them pay less than 20% tax rate. Double their rate and we could pay of the deficit in a decade or two. Our problem isn't spending on programs, it's taxing. >>
No offense, but you sound like someone who benefits from government spending. As a member of the group paying the taxes (and I am very far from being in the 1%) I have to disagree and categorically state that spending is the problem. History has shown that the more you give Washington to spend the more they want - how long before we double taxes on everyone that pays taxes? We have already witnessed what happens when politicians make promises that cannot be keep to public sector employees. Given the choice of further tax increases to meet the growing pension burdon many localities are facing bankruptcy.
The top 20% earners pay 70% of federal income taxes. 46% of Americans pay no federal income tax. While a millionaire may end up with a lower net tax rate than the average middle income earner, the millionaire still pays a lot more taxes than the middle income earner. You want fair? Require all Americans to pay the same percentage regardless of income level.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
<< <i>I suppose the 1% could take their assets and flee the country but since Americans overseas are stilled required to pay taxes to the US government you're not really getting away from anything. You could renounce your citizenship but I believe the government collects and "exit" tax on the assets of anyone who renounces their citizenship. Considering most of the assets of the 1% are tied up in US stocks or privately held US companies they can threaten all they want but they will never leave. Besides where do you go? Russia? Yea, they love Americans there. China? Not exactly a free country either. They put people in jail just for going to church over there. Of course if your god is money I guess religious freedom doesn't really matter, money is worshipped the world over. >>
What if the 1% simply just put their wealth to sleep as a response? Meaning - if you're going to double my tax rate, I simply won't put it to use generating any more wealth/income.
What happens then?
<< <i>
<< <i>I suppose the 1% could take their assets and flee the country but since Americans overseas are stilled required to pay taxes to the US government you're not really getting away from anything. You could renounce your citizenship but I believe the government collects and "exit" tax on the assets of anyone who renounces their citizenship. Considering most of the assets of the 1% are tied up in US stocks or privately held US companies they can threaten all they want but they will never leave. Besides where do you go? Russia? Yea, they love Americans there. China? Not exactly a free country either. They put people in jail just for going to church over there. Of course if your god is money I guess religious freedom doesn't really matter, money is worshipped the world over. >>
What if the 1% simply just put their wealth to sleep as a response? Meaning - if you're going to double my tax rate, I simply won't put it to use generating any more wealth/income.
What happens then? >>
Where will they put all that money to sleep? Under the mattress? They control 40% of the wealth. You can't just put that to sleep. Cash out all their stocks and crash the market. Not to mention having to pay capital gains taxes on all of it.
<< <i>
<< <i>
<< <i>I suppose the 1% could take their assets and flee the country but since Americans overseas are stilled required to pay taxes to the US government you're not really getting away from anything. You could renounce your citizenship but I believe the government collects and "exit" tax on the assets of anyone who renounces their citizenship. Considering most of the assets of the 1% are tied up in US stocks or privately held US companies they can threaten all they want but they will never leave. Besides where do you go? Russia? Yea, they love Americans there. China? Not exactly a free country either. They put people in jail just for going to church over there. Of course if your god is money I guess religious freedom doesn't really matter, money is worshipped the world over. >>
What if the 1% simply just put their wealth to sleep as a response? Meaning - if you're going to double my tax rate, I simply won't put it to use generating any more wealth/income.
What happens then? >>
Where will they put all that money to sleep? Under the mattress? They control 40% of the wealth. You can't just put that to sleep. Cash out all their stocks and crash the market. Not to mention having to pay capital gains taxes on all of it. >>
Gee...I was thinking about buying a factory, but since my tax liabilty is set to double, I think I'll hold-off on that.
Gee...I was thinking about expanding my business and hiring more people, but since my tax liability is set to double, I best not.
Gee...I was thinking about investing my money in a new start-up, but since my tax liability is set to double, I'll just keep it in the bank, or under my matress, or wherever people who have a lot of money keep their money.
Geez people, it's not that hard to imagine the consequence of stupidity, is it?
The reward for risk and hard work is profit. In most cases those that want to penalize such reward are the same people not willing to take the risk or exert the effort, but yet expect to benefit from those that do. As the number of these people outgrows the number of people paying taxes you eventually reach a point where they corner the market at the voting booth. This is how a democracy becomes a socialist state. If anyone should be penalized it should be those that line up at the teet.
As Margret Thatcher once said "the problem with socialism is that you do eventually run out of other people's money."
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
The only thing is that if the guys who want higher taxes are the "one party" in charge, we will still need to print money because taking more from the so called 1% will not do the trick. Now with spending less we have a chance assuming the right regulations and smart tax levels. As I mentioned earlier the economy is dynamic and just because you double the tax rate on something does not mean you get double the revenues.
<< <i>Considering that the "risk free" return of treasuries is actually negative when taking inflation into account, you have no where to hide your money. You have to invest it new businesses or stocks, or expanding your existing businesses. That's the point of the Fed's zero interest rate policy. To make it cheaper for businesses to borrow money and to force savers to invest in riskier assets like stocks and new business. There is no place to hide your money in something nice and safe anymore. >>
Can you conceed the argument that a wealthy person will figure-out and decide what to do with their money that will have the best out-come for themselves? They will find a way to put their money to sleep, or take their capital out of the market and put it into something else that will have the best out-come for themselves (fine art, jewerly, realestate,)
<< <i>Considering that the "risk free" return of treasuries is actually negative when taking inflation into account, you have no where to hide your money. You have to invest it in new businesses or stocks, or expanding your existing businesses. That's the point of the Fed's zero interest rate policy. To make it cheaper for businesses to borrow money and to force savers to invest in riskier assets like stocks and new business. There is no place to hide your money in something nice and safe anymore. I'm not saying that is morally right but it is reality. >>
You don't have to worry about hiding money that has already been taxed. You have to worry about paying taxes on the new money (gains) you generate with it. Why worry at all - just spend it on a luxurous life and let those who depend on you to generate jobs and production eat each other. Capitalism has made a better life for all income levels, even those that live strictly off the entitlements that it funds.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
<< <i>
<< <i>Considering that the "risk free" return of treasuries is actually negative when taking inflation into account, you have no where to hide your money. You have to invest it new businesses or stocks, or expanding your existing businesses. That's the point of the Fed's zero interest rate policy. To make it cheaper for businesses to borrow money and to force savers to invest in riskier assets like stocks and new business. There is no place to hide your money in something nice and safe anymore. >>
Can you conceed the argument that a wealthy person will figure-out and decide what to do with their money that will have the best out-come for themselves? They will find a way to put their money to sleep, or take their capital out of the market and put it into something else that will have the best out-come for themselves (fine art, jewerly, realestate,) >>
They have earned that right, just as you and I.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
And if you did that once, the next time around you would collect less because the "evil 1%" would change their investment and income earning patterns. They would move more of their capital out of the country, and more people would be unemployed. In not too many years the U.S. economy would be in tank like it is in Venezuela with shortages of everything, and a much lower standard of living. If you would like to see where we are headed under the present policies, check out Mexico and Venezuela which have been under the control of "enlightened leadership " for many years.
An no, I'm not even close to being a member of the "evil 1%."
<< <i>
<< <i>Considering that the "risk free" return of treasuries is actually negative when taking inflation into account, you have no where to hide your money. You have to invest it new businesses or stocks, or expanding your existing businesses. That's the point of the Fed's zero interest rate policy. To make it cheaper for businesses to borrow money and to force savers to invest in riskier assets like stocks and new business. There is no place to hide your money in something nice and safe anymore. >>
Can you conceed the argument that a wealthy person will figure-out and decide what to do with their money that will have the best out-come for themselves? They will find a way to put their money to sleep, or take their capital out of the market and put it into something else that will have the best out-come for themselves (fine art, jewerly, realestate,) >>
It is more likely that they will take their capital out of the country. The United States is no longer the only game in town.
<< <i>
<< <i>Considering that the "risk free" return of treasuries is actually negative when taking inflation into account, you have no where to hide your money. You have to invest it in new businesses or stocks, or expanding your existing businesses. That's the point of the Fed's zero interest rate policy. To make it cheaper for businesses to borrow money and to force savers to invest in riskier assets like stocks and new business. There is no place to hide your money in something nice and safe anymore. I'm not saying that is morally right but it is reality. >>
You don't have to worry about hiding money that has already been taxed. You have to worry about paying taxes on the new money (gains) you generate with it. Why worry at all - just spend it on a luxurous life and let those who depend on you to generate jobs and production eat each other. Capitalism has made a better life for all income levels, even those that live strictly off the entitlements that it funds. >>
What do they call that when a parasite ends up killing its host?
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
<< <i>This is why I own gold. The temptation for governments to create too many dollars in order to paper over our economic problems is too great. There is nobody left in government to make the hard choices that include reigning in huge deficits at the risk of alienating certain groups of voters. If you cut programs you piss off one group of voters. If you raise taxes you piss off another group. So the only politically palatable option is to print, then it becomes the next guy's problem. >>
Bingo! Someone gets it!
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>Great discussion, but it has no business on the coin forum. Apologies to the coin crowd, I'm out. >>
I concede that we all have differences of opinions and we can talk until we are blue in the face and will solve nothing. It's been a great conversation though I like reading everybodies opinions. Thanks for making it an intellectually stimulating day. Derryb is right, this has gotten way off topic.
<< <i>Great discussion, but it has no business on the coin forum. Apologies to the coin crowd, I'm out. >>
We have digressed and even to original topic was kind of OT. Worthy conversation though.
<< <i>
<< <i>Under the gold standard, a government is limited—both legally and practically—as to how much paper money it can print. As recently as the Lyndon Johnson administration, the U.S. could print paper dollars equal only to four times the value of the nation’s gold reserves. >>
Simple, treat it like a debt ceiling: Change the law as need. Need more dollars? Change the ratio to six times the value of the nation's gold. This in a nutshell is why a gold standard does not work - the restrictions can be changed. Rome made the same mistake by slowly reducing the silver content of its coinage.
A gold standard would not even be a topic of discussion if the creators of currency acted responsibly. With the power to create and control currency comes the responsibility to properly manage it. Taking that responsibility lightly has been the downfall of numerous nations - the US is not exempt. >>
Issuing paper and "computer account" money at a rate where the money supply is four times a nation's stock of gold is not "The Gold Standard." That's no different from the Federal Reserve is doing now. You just keep raising the money supply to the stock of gold ratio which makes "The Gold Standard" total fiction.
We have been off The Gold Standard since FDR called in the gold and arbitrarily raised the price of gold to $35 an ounce in 1933. American citizens could not exchange their dollars for gold, and it was illegal from them to hold gold in bullion form. They could only hold gold under prescribed circumstances, such as industrial applications, jewelry, medical uses and collectable coins issued legally in 1933 (the $10 Indians but not the $20 gold coins) and any gold coin issued before that date.
If you want an example of where this country got into big trouble with The Gold Standard, check out the history of the Panic of 1893. Because of some ill-advised legislation concerning the convertibility of some paper currency, the U.S. fell into the position where it did not have enough of a gold stock to back the currency in circulation. President Grover Cleveland had to go to the "the evil banker" J.P. Morgan to bail the government out. Otherwise the U.S. ran the risk of becoming just another banana republic that could not bake its currency when we were an emerging world power. This was during the "golden age of The Gold Standard" when every country that was with its salt, defined and backed the value of its currency in gold.
If you want another example check out the Panic of 1837 when President Andrew Jackson's "specie circular" caused problems for the banking system in the Northeast.
The greenback was exchageable for gold starting in 1879. This is not the true definition of a gold standard, as it was a Treasury policy to exchange them, not an act of Congress. The silver question of the 1880's to 1890's (Populisim and W. J. Bryan) shows that there was enourmous push-back on a gold standard at the time.
Good narrative of the money politics of the 19th Century
Harrison Bergeron
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It should say: The prosperity is in spite of the constraints of a gold standard, not because of it. With a gold standard you had the whole country at the knees of J.P. Morgan during the 1907 banking crisis.
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<< <i>U.S. was on a gold standard of various types until 1971. The late 1800s through the 1920s, and the post-war period till about 1971 were periods of tremendous prosperity. Much stronger economic growth than we have today. >>
Right! People were buying their very first frigidaires and horseless carriages.. like in China the past 15 or 20 years.
Liberty: Parent of Science & Industry
effect more often than it was. And it usually takes years for the resulting economic abuse to rear its ugly head in a "panic." Each of these panics is more attributable to economic and financial abuses that resulted in an economic crisis. Any runs on gold were the end result, not the cause. Boom cycles always lead to bust cycles. Gold standard or not, those are going to occur due to human nature. Financing regulations were far less strict in the 1800's.
In the US, under the gold standard:
Panic of 1819, a U.S. recession with bank failures; culmination of U.S.'s first boom-to-bust economic cycle
Panic of 1825, a pervasive British recession in which many banks failed, nearly including the Bank of England, affected the US
Panic of 1837, a U.S. recession with bank failures, followed by a 5-year depression
Panic of 1847
Panic of 1857, a U.S. recession with bank failures
Panic of 1866
Panic of 1873, a US recession with bank failures, followed by a four-year depression
Panic of 1884
Panic of 1890
Panic of 1893, a US recession with bank failures
Panic of 1907
Most of these events can probably be attributed to bankers cheating on the gold standard. In the 1812-1816 post war period the southern banks went off the gold standard and printed money, leading to inflation in the south.
The northern banks didn't have this problem. The US govt stepped in by 1820-1823 to right the ship. Bank failures tend to be linked with cheating on the gold/monetary standard of that time. The booms and busts back then
are no different than today with the easing and then tightening of money supplies. To blame that on gold is ridiculous. The US still has the world's reserve currency. And most central banks today carry gold reserves. Even if one
states no gold standard since 1971, the fact that 31,000 tonnes of gold is held by central banks would suggest otherwise. I submit that the US having the world's reserve currency needs its 8100 tonnes of gold reserves as a
symbolic "partial" backing of all those FRN's and sovereign foreign debt floating around out there ($1.5 TRILL in FRN's, $5 TRILL in foreign debt, $350 BILL in gold). Even a 7% to 23% backing is significant.
I knew it would happen.