Faber: Prepare Your Anus (For Massive Market Meltdown) | Page 3 | TigerDroppings.com

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Archie Bengal Bunker
Florida State Fan
Member since Jun 2008
15387 posts

re: Faber: Prepare Your Anus (For Massive Market Meltdown)


quote:

As long as the effective rate remains the same, I don't think many would argue. The argument comes from raising rates,


This is what I may be missing from the deduction argument. To me it is semantics, money is money. Raise your rate or remove deductions and your tax burden increases. Maybe, you can explain it a different way, or show me what I am missing [no sarcasm].

quote:

especially in such a bad economy. Do we go the route of short-term gains (raising taxes on the wealthy) only to have it make the economy worse?


Here is where I disagree. I don't think the economy will come to a halt with small increases. The economy was working before these cuts [nod to the dot-com boom]. Millionaires will still want to increase their wealth. People won't quit participating in the market because of a reasonable tax increase because 1] There aren't many better alternatives, 2] the rich have the means and want to grow their wealth. Romney himself said that the rich are doing just fine in this economy, not that I am advocating increases only to the rich. Incremental increases across the board are fine with me.

About the effectiveness of the Bush cuts, there is plenty of debate about them. Who benefited the most, did it actually spur growth, etc.

quote:

The federal government has taken in record and near-record revenues every year since the Bush tax cuts went into effect in 2005.


If we look at inflation adjusted numbers, the only boom years under the cuts coincide with the Housing Bubble. '06 and '07 saw huge jumps and to a lesser extent '08. The years '09, '10, and '11 look just like '03 and '04.

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200



This is a global recession. The extra money in the economy from the cuts isn't necessarily going to lead to growth, even though some companies are doing great and even hoarding cash. Why is that? Like you said uncertainty. That is why I think we need to go after receipts up front instead of playing the market game.

http://www.theatlantic.com/business/archive/2012/07/the-5-trillion-stash-us-corporations-money-hoard-is-bigger-than-the-gdp-of-germany/260006/



quote:

I've said for a while the best thing the President and Congress could do would be to freeze rates for 7 years. This would give businesses a level of confidence they haven't had for the past couple of years.


This is the best argument I have heard for keeping the cuts. But I still disagree. This is a global issue, and with Euro countries still likely to fail, I just don't see American cuts or increased gov spending fixing the issue [not that anyone is advising another stimulus or more spending]. Not to mention Obamacare.




So, in sum, the economy is a global problem, but our deficit is within our control. And we need to attack it from two fronts. Slight increases in taxes via deductions, loopholes, or rate increase. AND flat cuts or reform to spending programs.

I think a marginal increase in rates will for certain collect more revenue. Whereas, tax cuts and pray for the economy is not a guarantee of increased revenue. In fact, with the current global economic forecast, I think it is more likely the cuts will NOT spurn recovery. The only hope is a boom, such as the dot-com or housing bubble. No such boom is being predicted, and I think it would be awfully difficult to predict such a boom [how can you predict something like the internet]. Further, I don't think we can afford to waste time hoping for such a boom. How long can we let the debt and interest stack up in hopes of a rebound? It's going to be tough, but we are up against a wall.






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tigeraddict
LSU Fan
Baton Rouge
Member since Mar 2007
4790 posts

re: Faber: Prepare Your Anus (For Massive Market Meltdown)


quote:

Paying a bit more now would do nothing to prevent you taking in the arse in 5-10 years.



exactly. Just raising taxes will not solve out problems. If we raised taxes across the board to balance the budget this year, we would again have to raise taxes again next year to cover the increased entitlements that are growing faster than GDP is growing.

Throw in the fact that raising taxes will also hurt growth in itself

No longer is just cutting an option tho. Unfortunately, we are so far in the will will have to tax and cut....






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Bard
LA-Monroe Fan
BR
Member since Oct 2008
16424 posts
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re: Faber: Prepare Your Anus (For Massive Market Meltdown)


quote:

This is what I may be missing from the deduction argument. To me it is semantics, money is money. Raise your rate or remove deductions and your tax burden increases. Maybe, you can explain it a different way, or show me what I am missing [no sarcasm].


It's mainly a way to begin streamlining the tax code. It's a small step, but it was one that would have probably gotten support because the tax rate would have ended up being the same (closing deductions & loopholes but dropping the tax rate a commensurate amount so that the tax payer is paying about the same, just without the deductions and such so everyone can feel it's more fair).


quote:

Here is where I disagree. I don't think the economy will come to a halt with small increases. The economy was working before these cuts [nod to the dot-com boom]. Millionaires will still want to increase their wealth.


I think a very small increase might get by, but it would be so small that any benefit from it would be negligible except for making pro-raisers warm and fuzzy because the "fiscal cliff" is only half of the one-two punch (the other being the Healthcare bill that will increase their costs) that have shaken the business community's confidence in DC.

quote:

If we look at inflation adjusted numbers, the only boom years under the cuts coincide with the Housing Bubble. '06 and '07 saw huge jumps and to a lesser extent '08. The years '09, '10, and '11 look just like '03 and '04.


Are you looking at it for inlfation adjusted to today? Why? We aren't comparing apples to oranges, we're looking at a series of fixed-time events.






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Bard
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re: Faber: Prepare Your Anus (For Massive Market Meltdown)


quote:

Unfortunately, we are so far in the will will have to tax and cut....


I completely reject that. Raising taxes is only a short-term solution as markets will adjust by cutting employment. Along with that we have seen the federal government increase spending far beyond what it has taken in (and it's taking in near-record revenues). Cuts are the ONLY real answer here, but no one in DC will want to sacrifice their jobs to cut "the big 3".







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Archie Bengal Bunker
Florida State Fan
Member since Jun 2008
15387 posts

re: Faber: Prepare Your Anus (For Massive Market Meltdown)


quote:

Are you looking at it for inlfation adjusted to today? Why? We aren't comparing apples to oranges, we're looking at a series of fixed-time events.


The LINK has a column for receipts in 2005 dollars. I used that rate because you said tax revenues have been at record levels since 2005. I did not know if you meant actual number of dollars; so, to keep it fair across years, I used the baseline provided. But 2005 wasn't that long ago; so, just comparing 2000-2011, the only years you see significant jumps are '06, '07, and '08. Which again, coincides with the Housing Bubble.






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wickowick
LSU Fan
Head of Island
Member since Dec 2006
23765 posts
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re: Faber: Prepare Your Anus (For Massive Market Meltdown)


quote:

If we raised taxes across the board to balance the budget this year


Where would you get 1.3 trillion dollars more from the economy? Let's look at this video "Funding Government by the Minute"

ETA: Here is another one Will Taxing the Rich Fix the Deficit?



This post was edited on 11/13 at 4:38 pm


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Grizzly
Southern Cal Fan
Member since Oct 2012
1776 posts

re: Faber: Prepare Your Anus (For Massive Market Meltdown)


quote:

Tiger n Miami AU83


It's the spending stupid.






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Bard
LA-Monroe Fan
BR
Member since Oct 2008
16424 posts
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re: Faber: Prepare Your Anus (For Massive Market Meltdown)


quote:

The LINK has a column for receipts in 2005 dollars. I used that rate because you said tax revenues have been at record levels since 2005. I did not know if you meant actual number of dollars; so, to keep it fair across years, I used the baseline provided.


I'm looking at current year for each year because what I am talking about is per-year revenues and per-year spending. I'm not comparing it to other years to show value, I'm comparing to show a trend of spending that increases commensurately as revenues increase. To add to that, another reason I am not looking at a fixed year Dollar value is because the deficit (what this all boils down to) is paid off as a total sum, not paid off based on the value of the Dollar in some other year.

I understand what you are saying, I just think it's the wrong view for this particular topic.

quote:

This is the best argument I have heard for keeping the cuts. But I still disagree. This is a global issue, and with Euro countries still likely to fail, I just don't see American cuts or increased gov spending fixing the issue [not that anyone is advising another stimulus or more spending]. Not to mention Obamacare.


There's two counter-points to this...

1. Screw the global markets. I realize that sounds a bit harsh, but what it means is that there's nothing we get from the global markets that we can't get from within our own shores given the proper motivation. While I am certainly not recommending a policy of North Korea'ing ourselves, we can indeed ride out a global market meltdown better than most other countries. This leads me to point 2...

2. The world markets depend on the consumerism of the US more than they do any other country or the EU. We're like a country of Tasmanian devils in that we consume, consume, consume. If our economy falters enough that it brings us back to 10+% U3 Unemployment, then the rest of the world gets hit even harder. To put it more succinctly, the world markets depend more on a strong US market than the US markets depend on a strong world market.






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