Overtaxation, Overregulation and Overspending, America is doomed.

In your case, Cindy, under-education is the problem. That or a congenital lack of wits.

I have a question. Do the Koch Brothers pay you by the word or by the post?

Pres. Theo. Roosevelt said, "ALL wealth begins with labor."

Shooter,

I have no idea what you mean by this "Economic wealth is goods and services, not income."

Income is dollars that get added to a person's accounts that they can use. Those dollars can then be used for a wide variety of purposes. Every person uses some for basic necessities like food and shelter. For some people, just having enough for the basics is a challenge. As income increases, a person has more options - fancier food and fancier shelter - and anything above that can be used to invest in businesses or to squirrel away in tax shelters, etc.

Rich people do not fund business. Customers fund business.

Rich people may invest in starting up new businesses, but a business succeeds or fails depending on customers. If there were just a small number of super-wealthy people and the rest just barely surviving is not sustainable. Businesses can not survive.

That is why this chart is important.

If we go by Shooter's definition, Wall Street is worthless, because NEARLY NONE OF IT is tangible goods or services. So, since we can all tell he's full of it and doesn't know finance from a hole in the ground, how about we stick him in "finance" and fill in the hole...

maphi, "economic wealth" is usually held separate from monetary wealth because money doesn't do anything but be traded for goods and services. You can't eat it, it won't babysit your kids, or drive you to work. It just sits there as a number.

Additionally money can be created out of thin air, it's an abstract both physically and conceptually. Real wealth is what you can hold or a service performed, it's tangible. But your confusion is understandable which why I always make it clear what I'm referring to.

Rich people may invest in starting up new businesses, but a business succeeds or fails depending on customers.

That's the point, without rich people there would be no business to begin with. This is not a small point. Nobody gets hired until the Owner/s decide to do that. Yes, once the business starts, customers are central to it's existence. But once again, without a rich person to fund the business, customers have nowhere to go.

Lastly the chart isn't important, because rich people have no effect on your life. Hmmm, I take that back. Without rich people your tax burden would likely be higher. Anyway, they don't take anything from you. If the 400 richest people in America retired tomorrow your life wouldn't change one little bit.

Actually, without LENDING, there would be no business. So, what's actually needed is banks that act responsibly; rich PEOPLE can be done away with entirely from the equation.

Shift money to the rich? Nobody shifts money to the rich, they make it themselves. Do you think there is some God-like money shifter somewhere deciding who gets what? I don't think so.

Meanwhile demand, as in people want stuff, never goes away. But, the money to pay for demand is in short supply. Where does that money come from? Jobs. Where do jobs come from? Business.

Repeat after me, business comes first, then jobs, then demand. See North Dakota for an example in action.

I have a hard time believing that demand is driven by businesses and jobs. Isn't that a bit backwards? Without demand there is no need for business. Without business there are no jobs. North Dakota is a fine example of global demand for oil preceding businesses investing in extracting.

In Shooter's world, if you lay a bikini top and bottom on a hammock, a supermodel will appear to fill them. It's never worked yet, but that doesn't stop him from believing.

Shooter,

business comes first, then jobs, then demand.

Which comes first, chicken or egg?

The economy is a complex interaction of all of those things. There needs to be a balance!

A business can't succeed unless there is demand for the goods or services. The employees of the business get paid and then become customers for other businesses. There is no beginning and end - it is a CIRCLE!

Actually, Shooter can't follow a line of reason past his nose. The way this works - and it is NOT a chicken or egg thing - is first there is demand, then there is labor, and then there is business. For example, first there is hunger. Then there is someone willing to labor to grow enough food for himself AND you. Then someone starts a business to either 1) organize the growing of food and distribution; or 2) become a middleman between the grower and the eater.

This is a simple explanation but it works for any example, at any level of demand for a product. It could be beets, clothing, a car, a computer. Someone, somewhere wanted that product, even if it didn't exist. That demand spurred someone to create it and then a business to sell it. Steve Jobs didn't start out trying to create the largest computer company in the world. He wanted a personal computer and wanted to see if he could actually create one. After he did, more people wanted one and so he made more until he couldn't make enough by himself. THEN he organized the company. Apple doesn't sit around dreaming up things and then try to get you to buy them. People like you and me say ,"I want a phone that does this; or I want to have my music on my computer; or ..." and then the product is created.

Pauly Heins

I think there is a distinction between need and demand.

If someone is hungry (need), this doesn't result in demand that is felt by a business (the person willing to grow the food) if the hungry person doesn't have money to pay for the food (or something else of value to trade).

Steve Jobs had ideas that resulted in products that people wanted (need) that they could afford to buy (demand). If people did not have resources left over after the basics, Apple would not have failed.

maphi,

need and demand - my need to eat creates the economy's demand for food. My larger point was that the business comes last, not first.

You are correct - it is a circle, hopefully a spiral. What we strive for is an expanding spiral, not a contracting one.

Again with the North Dakota reference... nevermind that ND is an aberrant bubble that will fade, is incapable of being related to other parts of the country, and has been demonstrated as such multiple times here and elsewhere. When you keep with the blind BS, Shooter, you underline your irrelevance.

Without demand there is no need for business.

That's like saying, without air there's no need to breathe. Like I say, "demand" is everpresent, people always want something. The issue is how to pay for that demand.

Without business there are no jobs.

Exactly, and without jobs there is no way to pay for demand. North Dakota has a commodity that people want, but without a business to extract it, it's worthless. However once that business appears, jobs appear with it, and following that demand can be satisfied.

Which comes first, chicken or egg?

Consider how it all began, prehistoric barter. One guy makes flint knives and trades them for deer meat. He's always hungry, but he made something to trade to feed that hunger. The business of making flint knives came first, then came the trade for something else (demand).

The way this works - and it is NOT a chicken or egg thing - is first there is demand, then there is labor, and then there is business. For example, first there is hunger. Then there is someone willing to labor to grow enough food for himself AND you.

Which in turn makes him a business. He will after all, charge for the food he provides. Demand is everpresent, being able to pay for it is another matter altogether. No money, no food.

Guy A makes a flint knife that he uses to hunt his own deer meat.

Guy B makes a flint knife that he uses to hunt his own deer meat.

Guy B realizes that Guy A makes a better knife than he can.

Guy B is a better hunter than Guy A.

Guy B asks Guy A to make him a knife in exchange for Guy B doing the hunting.

Guy A will not make more knives than he and Guy B can use.

Guy B will not hunt more deer than he and Guy A can use.

Guy C can't make knives and doesn't hunt well and is hungry, but has learned how to cook.

Guys B and C work a deal - Guy B will do the hunting and will hunt more deer and Guy C will do the cooking for both. Guy B needs more knives (hunting is hard on knives) but Guy A doesn't need more meat but likes cooked meat. Guys A, B and C agree on a fair distribution: Guy A makes the knives, Guy B hunts, Guy C cooks. Everyone is fairly compensated for their work. No one makes, hunts or cooks more than is necessary.

Guy D moves nearby and has learned how to make pottery...

Next thing you know - you have interstate commerce.

Guy A will not make more knives than he and Guy B can use.
Guy B will not hunt more deer than he and Guy A can use...
...No one makes, hunts or cooks more than is necessary.

This is great. Maphi, you just wiped out the profit motive. You've killed off the essential human desire for "more". Of course the knife maker is going to make more than he and the other guy can use. As will the hunter, cook, and potter. Are you kidding me? Business is good!

Hopefully each one will expand to the point they need help... a/k/a offer a job. And then off it goes.

Do you think there is some God-like money shifter somewhere deciding who gets what? Shooter

Yes I do, it is called the Republican congress that passed the Bush tax code. After the Bush tax cuts rich people get to keep more of their money than either the middle class or the poor, because they pay lower tax rates. Romney, for example pays at a lower overall rate than his maid. The congress critters who created the Bush tax code created a money shifting machine. They knew what they were doing would help the rich and hurt everybody else, but they did it. Do some research. Find out what happened after Bush was elected.

Shooter,

You've killed off the essential human desire for "more".

I have not killed off anything!

In prehistoric times, the essential human desire is not "more" but "survive". The goal was not "more" but "enough".

A knife making guy can make a few more to have on-hand as samples for new customers, like that guy that makes pottery. But to just use his time, energy and raw material to make knives that no one else needs or wants is not the road to success!!

I do not run a business, but here is how it works. Guy A makes knives that other people want to buy. As word gets out, he can't keep up with the orders. He finally trains Guy E to make them. Guy E works part time and gets paid. The back orders get filled, but orders keep increasing. Guy E works more hours. Guy A and Guy E finally can't keep up with the orders. Guy A does market research and decides that demand will continue so hires Guy F part time. Etc.

Demand increases first. More workers are added ONLY when current workforce can't keep up.

No you haven't killed off anything, but just like Krugman you're ignoring human nature. What you're describing is a tribe, what I'm describing is trade. At some point tribes would interact leading to trade.

I'm going to take a wild guess and bet myself you know this is all going to lead into capitalism as the default economic mechanism for humans. Am I right?

I am not ignoring human nature. It is human nature to want more, even to be greedy and try to get and keep more than one's fair share. Having more means more personal security and with it greater chance of personal survival.

However, greedy people only help themselves - don't contribute to the survival of the tribe.

Tribe vs trade..... I suppose to understand what you means requires understanding where the boundaries of tribe end.

The example I used is small scale trade - between individuals in a group. I would argue that trade between tribes is essentially the same but on a larger scale.

I don't know if capitalism is the "default economic mechanism" for humans. But it is the best economic mechanism that I know of.

Having said that, as with all things human, if can be corrupted and taken over by a greedy minority that are only interested in "more" for themselves - extracting out the benefits of the society. This is not sustainable - the society will eventually fail. On the flip side, trying to make all outcomes equal is also not sustainable. There needs to be a balance.

However, greedy people only help themselves - don't contribute to the survival of the tribe.

Sure they do, indirectly. That's the beauty of the system, everyone works for themselves and in doing so provides something someone else needs. Self interest isn't greed. After all, every life is lived according to self interest.

The example I used is small scale trade - between individuals in a group. I would argue that trade between tribes is essentially the same but on a larger scale.

I understand, and moving, forward the tribes are now entire nations in a global marketplace. However the principles remain the same.

There needs to be a balance.

Agreed, but to us it seems the balance has tipped in favor of stagnation. Let me leave this thread with this thought for you. As I understand it, a unit of natural gas costs $2.50-$3.00 here. In China it's closer to $17.00.

http://www.forbes.com/sites/energysource/2012/06/13/the-u-s-has-a-natural-gas-glut-why-exporting-it-as-lng-is-a-good-idea/

I'm sure I don't have to point out the business opportunity. Yet, all the friction around fracking is going to block that. Getting our money back from China won't happen, Instead the Canadians will prosper. The desire (demand) for oil and gas is everpresent, we possess it, yet if business is blocked from extracting and selling it, there are no jobs, no tax revenue, and no fulfilled demand.

Until business is in place, demand is irrelevant.

Does that average include the 1%? Are those values adjusted for inflation?

Using the site--http://www.usinflationcalculator.com/

20 dollars in 1979 bought what it takes $464.27 to buy now or an inflation rate of 2221.4%

You can't be talking groceries, Paul. Dang. That's why I'm broke.

Remember campbell soup at a quarter or sometimes a dime on sale? Remember when a hundred bucks filled your trunk with groceries? I remember when a six pack of empty 12 oz. coke bottles would buy a six pack of six oz. cokes-minus the tax.

ooops that was 1913

1979 20 bucks bought what 63.71 buys today or only 216,5% inflation.

Of course we are taliking averages without adjusting for the extremes. Since the wealthy have prospered disproportionately these averages are bull to a degree.

Adjusting for inflation, then - 1979's salary adjusted for inflation in $35,722 today. An average salary of $50,000 represents a 40% increase in spendable income achieved over 33 years - which is a roughly a rate of 1.2% per year. Anyone think that's stellar?

...

Unemployment rate-

1979-11-01 5.9
1979-12-01 6.0
1980-01-01 6.3
Of course if unemployed people were part of this "average" then we must be doing great. Or at least some of us. Once again we must consider the fact that the real benefactors have been the rich as they have had a real gain in wealth while the majority of the people have lost ground big time.

Averages never tell the whole story. First one must either toss out the extremes or give details on how either extreme has affected the mean.

End the Bush era tax cuts and see how that average looks. Besides those tax cuts are directly resposible for a lot of the so called non-tax paying workers.

Britain had rationing as long as it did due to the damage caused by WWII, dingus.

It is true that the damage to infrastructure was a major problem. It was also the begining of the collapse of the British Empire that kept raw materials and food from the UK. The Canadians, Australians, Indians, and etc were busy with their own problems. The UK was tapped out.