Socialism in the US

And how do you do that without creating a horribly non-competitive (to the world) business environment?

The budget in the US could not possibly accomplish this and actually make a balanced budget. Even if you eliminated 100% of all military spending and jacked taxes through the roof.

Why would that happen? Exact same reason I'm talking about. You are infusing excess cash into an economy that is not creating it. Over time the currency will devalue and inflation will strike thus rising the price and cost of everything forcing more and more money from the government to make up for each increase. (Which then sparks an inflationary spiral.)

At any given moment, there is a finite amount of cash in circulation and storage. Increase that amount (which you will have to since the US government has very low quantities of cash in storage) and the cash supply increases at the cost of currency value.

The only time infusing cash like that results in a non-inflationary scenario (and even then only for the short term) is when you have a significant deflationary scenario going on. The US economy hasn't suffered true deflation in nearly 80 years.

Worse, if you jack the taxes up to pay for this, you are inherently disturbing the supply side of the economic equation and when supply is disturbed in such ways it leads to only one outcome over time: stagflation just like was happening under Jimmy Carter.

You could totally pay for it without killing the job market. Unless we're talking about different things here (which I suspect we are).

edited 10th Jul '11 1:24:27 PM by DrunkGirlfriend

Somebody needs to check out the size of the US economy, and compare it to government spending.

And really, you could reduce other wasteful spending with more government spending. A public health system would cost less than the US currently spends on healthcare and deliver better overall results.

^^ How is the question? The rich don't have the tangible assets that can be taxed year over year and provide sufficient revenues. Most of them have already made their money so what they have has already been taxed. What they earn year over year is insufficient. Also double jeopardy taxation is illegal and unethical.

That leaves taxing the businesses and you know the result that will ensure.

edited 10th Jul '11 1:29:15 PM by MajorTom

This is brought up time and again: There is plenty of money in the US economy to pay off the debt. The rich have most of it. They don't want to pay it.

Enku makes a good point. For example, we have big companies here who owe billions in unpaid taxes. They could wipe out the deficit.

What needs to change is the notion that companies can buy off politicians. Then the ideas of politicians. And thus, the policies.

^ The deficit is measured in trillions now. Unless mathematics drastically changed over the last week, billions in unpaid does not wash out over a trillion in deficits.

He was using it as an example of how the debt is in the UK.

The rich have, in total, about 40~50 trillion.

Which asks the question, has it already been taxed? Unless they all earned that 40-50 trillion THIS YEAR, it's likely already been paid for.

After the fact taxation going after the already paid for stuff sets a disturbing precedent. (Not to mention unethical.)

@Tom: and if we cut government progerams and government jobs, we destroy the demand sector utterly. So if supply destruction is a given outcome no matter what under liberal policies, then conservative policies are just as doomed because cutting spending utterly to the point where we cant even maintain vital services and the jobs those servies support is JUST AS SUICIDAL.

Most of it has not been taxed, actually, that's the reason FOR estate taxes, BECAUSE such gains are not taxed.

edited 10th Jul '11 1:48:41 PM by blueharp

Also, people, eg hedge fund managers, koch brothers, are still making billions. Tax those people more, shore up the deficit. Deficit reduced=debt reduced. Add in a tax for financial transfers to the tune of .0001% of the transfer, make money hand over foot.

^^^ The demand curve is far more biased against government spending.

You want to know how? The economy of anywhere by way of GDP is figured by one simple equation:

C + I + G + (X-M) = GDP where C is consumer spending, I is investments, G is government spending, X is exports and M is imports.

In the US, the C component accounts for 68% of US GDP, the I component about 16%, less than 15% (prior to 2009) was government spending by proportion and the rest exports (though that one usually ends up negative owing to greater imports).

The C and I components (and thus by extension X and M) are difficult to budge one way or another to change up the proportion. G is much easier. However C and I react directly to the actions of G positively or negatively. They react negatively when G component intrudes on C and I such as through higher taxation. They historically have a tendency to increase in proportion when G component gets out of the way as in makes a balanced budget through spending cuts. The X component also reacts to the G component usually higher in times where government spending and actions do not infringe upon C and I. M is pretty well static and fairly incapable of being influenced significantly.

^^ I guarantee you it's been taxed at least once. You cannot legally buy property anywhere in the US or UK and evade property taxation either for the sale or the occupancy of the property. (And you can't offshore land like you can cash.)

edited 10th Jul '11 1:56:54 PM by MajorTom

@ Tom. The courts here aren't exactly... fair. C'mon, you can't be naive enough to think that companies are upfront here about taxes. The fact remains that company execs have high friends in high places in government, and some of them just happen to work for Her Majesty's Revenue & Customs.

Precisely. Even someone barely centre-right can see that cutting social programs isn't good for anyone. If the state lends a little helping hand to people, e.g. healthcare, public transport, then we get better workers. The role of the modern state is to provide for people. Business can't do that, even if we impose economical, social and environmental regulations.

There. That's the fact. Raising the tax on the rich a little bit, turn up that dial, and then the money coming in goes up.

You may say that "well, they're just going to vacate the country", let me tell you, their savings have - they might as well join them.

edited 10th Jul '11 1:57:59 PM by Inhopelessguy

Are you alleging most of their wealth is in real estate? Hardly. But actually, there are plenty of ways to avoid property taxes, that's actually a common incentive for economic investment. And of course, in the US, the Federal gov't doesn't collect any significant revenue through that taxation method.

^ It's not in wages and cash if that's what you're wanting.

That'd be about as sensible as taxing gold or diamonds.

Neither socialism nor big-c capitalism works in the long run.

Well, not if you go full-bore with it. You sorta need elements of both in order to work.

edited 10th Jul '11 7:03:42 PM by DrunkGirlfriend

Exactly, centrism ftw.

Any slavish devotion to an ideology is inherently flawed

Thing is, I'm not entirely sure that socialism would even work with any type of currency involved. Production for use is more practical under socialism.