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Stopping the increasing National Debt , and somebody will.


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    AmcmurryFreedom Wrote:

    I doubt that many rich have their money just sit, unless they have enormous amounts of precious metal worth. Having gold, silver, platinum and other pricey materials can be used from time to time to sell and buy just like stocks. The rich have assets sufficient to pay people to manage their riches, so the rich just goes off and play knowing their coffers continue to grow. As in cash, the rich will own a market fund of hundreds of different stocks and bonds and the same goes they pay for someone to manage these funds. Guess who helps the rich get richer. You, the investor, by purchasing shares of funds you are able to get a small slice of the funds success, but the owner/owners will get huge payouts as dividends. Example: Berkshire Hathaway owned by a very rich person in the everyday news. Yes, you can join into the success of Berkshire Hathaway, but it is somewhat pricey for most investors. Most all those large funds have a board with a chairman as they evaluate the success of their business and decide on keeping the Chief Manager and staff. All those board members are reasonably rich, some more than others as decided by their shares holding. However, the largest share holder is considered the owner.

    It doesn't make a whole lot of sense for rich to just allow their money to sit. The richer they are the more people they employ to manage their vast wealth. The key to their employment is "MAKE MONEY", thus these people make their rich employer happy and they get receive enormous bonuses based on the success of making money. While the rich are happily cruising on their large yachts and jetting around on their personal luxury jets, you can rest assure they have people making money for them. All the rich have to do is enjoy life, a rich life, and make decisions occasionally on investing the vast wealth which grows faster than they can spend. Many of the rich are entrepreneurs, who invest in people for their ideas for social, business and scientific developments. It's another way, they can reap an abundance of wealth by helping a bright person in successful development of products. Of course, the rich entrepreneur would do homework more probably by his employed, smarter than he, people. A rich person would not want to get a headache slaving around on the difficult path vetting on an investment decision. That what the rich pays people to do, just give him the decision to invest or not and back to golf course or getting a better tan. The rich do have fun and the more rich have more fun.

    the wealthy do not employee more people to manage their money. they employ wealth management firms/investment bank groups to manage their money. as a particular group becomes more wealthy they do not arbitrarily say that they need more people but rather that they need diversification and they order those who manage their money to mange it with that goal in mind. anything else is a poor attempt to restate the "wealthy people create jobs" meme which has no basis in truth.

    investment capitalists invest for returns, period. oh, there may be some here and there that do so for humanitarian reasons such as a particular product having a social benefit but the vast majority do not. and of course the concept of return is exactly what i mentioned previously. capitalism demands return. return is defined as profit. and since capitalism as adam smith noted requires continuously expanding markets to sustain continuous return it will and does run up against finite resource issues.

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    Chet Ruminski Wrote:
    lonely bird Wrote:

    chet brings up a good question.

    but we lack for a definition of a healthy economy.

    adam smith knew that capitalism requires continuous expansion as well as compound growth. neither of those things are possible on a finite planet with finite resources. when we add in the concept that corporations are people and that extraction of resources "belongs" to those who hold "rights" to them you end up with distortion. distortion leads to charlatanism in the form of religion cloaked violent politics or violent politics in general. in the case of the u.s. it also leads inexorably to xenophobia and all the attendant insanity that comes with it. witness trump and the backlash against muslims/immigrants.

    lonely bird, Capitalism does not need continuous expansion or continuous growth. A special type of capitalism needs growth and expansion. From the beginning of my first reasonable thought I questioned the existence of the stock market. And I realized the meaning of greed. The only type of capitalism that needs growth is one that has a segment that creates income, not products. Then income becomes the purpose and not the result. A regulated capitalism will produce products that have as one result growth. Unregulated and the natural result is false expansion to provide fees creating an income not generated by producing a product for trade. That would need continues expansion to supply fees. When normal expansion did not supply the required fees, then came the selling of the promise of future products. That is the contemporary stock market. It continues to sell the promise until it is intuitively obvious that production is not meeting the promise. The fees collecting stops and production is inline with value. But gifted individuals were able to convince investors that this was only a temporary setback and that production will increase to create surplus that can be taken as fees. And it goes on continuously because there are obvious individuals showcased as the result of capitalism. Saying that capitalism needs continues expansion is only needed for predatory capitalist that require fees in excess of the result of production. Capitalist ventures that prove expansion is not needed are all the spectator functions. They exist and create a product that becomes more desirous and creates expanding fees without expansion. Only the selling the futures stockmarket needs continuous expansion as a promise in order to collect fees and sustain an ongoing cyclical regeneration.

    To put it in perspective a Ponzi Scheme needs continuous expansion.

    chet, capitalism certainly does. adam smith wrote about it. it requires continuous expansion into new geographic markets as old markets become saturated either with supply from competitors or monopoly. sooner or later new customers have to be found for products and services. every business in the world seeks new customers from tobacco companies engaging in deceptive advertising and "science" to lure new smokers to companies opening new operations in a different geography. as an example i work in the paint,coatings adhesives sector. the paint industry grows at a rate of @2% a year. yet every company demands growth numbers higher than that. the only ways to get that are dropping prices which leads to those with the deepest pockets surviving, expanding into different market segments which is doable but not real responsive from a profit standpoint immediately as you would be the "new kid on the block" and competing with established companies or trying to differentiate yourself which is difficult as the paint industry is not loaded with technical secrets. so every competitor runs around trying to be the last guy in the door to get specified on projects followed by having to be aware of the role price plays. if growth was required shareholders would not give a damn whether or not a company grew. the same applies to management. but since inflation eats into the value of profit, even low inflation, they seek growth both for share price and for dividends.

    much of this is tied to financialization however smith knew that things do not exist in a vacuum. lenders of money for capital expense require interest/return. venture capitalists that buy stakes in companies require return. and return is to be done in any manner necessary or possible. this results in labor being treated as a cost as opposed to partner. if we sit to see a better model at least until a total system revamp occurs then we would be wise to look to northern europe and australia. we would be unwise to pay any attention to economists from the austrian school, the u. of chicago or any other classical/neoclassical school. we would also do well to ignore so-called business leaders such as the koch, the waltons, the ceo class in general as well as politicians such as the vast majority of the right, much of the left and trump, fiorina and any other nitwit who thinks business experience means anything when it comes to the political economy.

  • Are you sure you want to delete this post?
        
    lonely bird Wrote:
    Chet Ruminski Wrote:
    lonely bird Wrote:

    chet brings up a good question.

    but we lack for a definition of a healthy economy.

    adam smith knew that capitalism requires continuous expansion as well as compound growth. neither of those things are possible on a finite planet with finite resources. when we add in the concept that corporations are people and that extraction of resources "belongs" to those who hold "rights" to them you end up with distortion. distortion leads to charlatanism in the form of religion cloaked violent politics or violent politics in general. in the case of the u.s. it also leads inexorably to xenophobia and all the attendant insanity that comes with it. witness trump and the backlash against muslims/immigrants.

    lonely bird, Capitalism does not need continuous expansion or continuous growth. A special type of capitalism needs growth and expansion. From the beginning of my first reasonable thought I questioned the existence of the stock market. And I realized the meaning of greed. The only type of capitalism that needs growth is one that has a segment that creates income, not products. Then income becomes the purpose and not the result. A regulated capitalism will produce products that have as one result growth. Unregulated and the natural result is false expansion to provide fees creating an income not generated by producing a product for trade. That would need continues expansion to supply fees. When normal expansion did not supply the required fees, then came the selling of the promise of future products. That is the contemporary stock market. It continues to sell the promise until it is intuitively obvious that production is not meeting the promise. The fees collecting stops and production is inline with value. But gifted individuals were able to convince investors that this was only a temporary setback and that production will increase to create surplus that can be taken as fees. And it goes on continuously because there are obvious individuals showcased as the result of capitalism. Saying that capitalism needs continues expansion is only needed for predatory capitalist that require fees in excess of the result of production. Capitalist ventures that prove expansion is not needed are all the spectator functions. They exist and create a product that becomes more desirous and creates expanding fees without expansion. Only the selling the futures stockmarket needs continuous expansion as a promise in order to collect fees and sustain an ongoing cyclical regeneration.

    To put it in perspective a Ponzi Scheme needs continuous expansion.

    chet, capitalism certainly does. adam smith wrote about it. it requires continuous expansion into new geographic markets as old markets become saturated either with supply from competitors or monopoly. sooner or later new customers have to be found for products and services. every business in the world seeks new customers from tobacco companies engaging in deceptive advertising and "science" to lure new smokers to companies opening new operations in a different geography. as an example i work in the paint,coatings adhesives sector. the paint industry grows at a rate of @2% a year. yet every company demands growth numbers higher than that. the only ways to get that are dropping prices which leads to those with the deepest pockets surviving, expanding into different market segments which is doable but not real responsive from a profit standpoint immediately as you would be the "new kid on the block" and competing with established companies or trying to differentiate yourself which is difficult as the paint industry is not loaded with technical secrets. so every competitor runs around trying to be the last guy in the door to get specified on projects followed by having to be aware of the role price plays. if growth was required shareholders would not give a damn whether or not a company grew. the same applies to management. but since inflation eats into the value of profit, even low inflation, they seek growth both for share price and for dividends.

    much of this is tied to financialization however smith knew that things do not exist in a vacuum. lenders of money for capital expense require interest/return. venture capitalists that buy stakes in companies require return. and return is to be done in any manner necessary or possible. this results in labor being treated as a cost as opposed to partner. if we sit to see a better model at least until a total system revamp occurs then we would be wise to look to northern europe and australia. we would be unwise to pay any attention to economists from the austrian school, the u. of chicago or any other classical/neoclassical school. we would also do well to ignore so-called business leaders such as the koch, the waltons, the ceo class in general as well as politicians such as the vast majority of the right, much of the left and trump, fiorina and any other nitwit who thinks business experience means anything when it comes to the political economy.

    lonely bird, I differentiated between types of capitalism. The one you describe is unregulated profit seeking. If you buy a car and drive pedal to the metal it will give out. That is not getting the best use out of the car. The same happens with viable interest products in the type of capitalism prevalent in our country now. Companies have to utilize all resources and labor initiative to present a product that maximizes profit in the short term to compete for the money flowing into the unregulated financial market. Companies can't do it long term and long term there will be no more money in the unregulated market. This is not the natural evolution of labor and money. It is the result of profit motives that have no dependency on the outcome. The financiers in that position have all the money they and their families will need for thousands of years. It is of no concern to them about the outcomes of businesses other than accumulating more money and maximizing profits. That is the type of capitalism that needs constant expansion. That has no future and it doesn't matter because the main investors don't need an income. Regulated capitalism and tax programs can go on forever . Adam Smith dances around a lot of ideas and it just depends what the purpose is on how he is explained. I can't imagine the .001 getting a glowing feeling looking at clean streets, green parks and a happy citizenry. The .001 cannot have that much power and the accompanying power and not feel a special relationship with God or whatever they consider to be the prime mover. Their position on entitlements says it all.
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    When Trump was running for office, he said that he was going to pay off the national debt in 8 years.

    He lied.

    It rose almost $7.8 trillion during his time in the White House — approaching World War II levels, relative to the size of the economy. This time around, it will be much harder to dig ourselves out of.

    The growth in the annual deficit under Trump ranks as the third-biggest increase, relative to the size of the economy, of any U.S. presidential administration, according to a calculation by Eugene Steuerle, co-founder of the Urban-Brookings Tax Policy Center. And unlike George W. Bush and Abraham Lincoln, who oversaw the larger relative increases in deficits, Trump did not launch two foreign conflicts or have to pay for a civil war.

    Economists agree that we needed massive deficit spending during the covid-19 crisis to ward off an economic cataclysm, but federal finances under Trump had become dire before the pandemic.

    The combination of Trump’s 2017 tax cut and the lack of any serious spending restraint helped both the deficit and the debt soar. So when the once-in-a-lifetime viral disaster slammed our country and we threw more than $3 trillion into covid-related stimulus, there was no longer any margin for error.

    Bigger debt ultimately means bigger interest costs, even in an era when the Federal Reserve has forced down Treasury rates to ultralow levels. The government’s interest cost (including interest paid to government trust funds) was around $523 billion in the 2020 fiscal year. That outstrips all spending on education, employment training, research and social services, Treasury data shows.

    https://www.washingtonpost.com/business/2021/01/14/trump-legacy-national-debt-increasee/

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    Just add the Biden proposed "package" of just about 2 trillion, then the deficit will be even larger. Looking at who "donated" the most "money" towards the Trump "elections", then the "burden" should fall on them. Indeed certain people profited from the "virus" disaster and should be "taxed" accordingly. Looking at the total "deficit", then it may take an awful long time to fix it to reasonable levels, because the virus is not under control at all, as well the world economy has sustained lots of damage from it. So I don't think that the deficits will decline under Biden. So it may affect the next election as well, unless Biden fixes our awful laws, to get an second term, which I doubt that he will fix things in his first term because of "obstruction" by the GOP.