Rolling Back the Bush Tax Cuts: Helping the Poor?

[El_Machinae]

Once there's a system to stop the devaluing of the American Dollar, you'll have a system which is protecting people who save and invest.

 

[Godwynn]

Once there's a system to stop the devaluing of the American Dollar, you'll have a system which is protecting people who save and invest.

Could you elaborate on that? I'm not knowledgeable in the economics field of currency.

 

[JZ_UK]

If the value of the money which you save falls then the value of your savings falls

The flip side is that your exports look more inviting because they cost less to foreign importers, course... your own importers have to pay over the odds for what they're bringing into the country... trade deficit... that sorta thing...

 

[Integral]

Once there's a system to stop the devaluing of the American Dollar, you'll have a system which is protecting people who save and invest.

The recent drop in the value of the dollar is the expected result of the Fed lowering interest rates.

Now, the long-term value of the dollar...

 

[El_Machinae]

Well, if you save a buck and then it devalues by 10%, you've lost 10%. And that's pretty crummy to those of us who sock away money like no tomorrow.

Anyway, people talk about policies which help the 'rich' and the 'poor'. The policies of the last few years have been really hard on the 'investors' (who, granted, tend to be the wealthier people)

 

[Fugitive Sisyphus]

With taxes, like with all political issues, emotion seems to trump reason. Even if Bush's tax cuts were only for the rich, it would not hurt the poor in the slightest. The budget problems come from overspending.

 

[Godwynn]

Well, if you save a buck and then it devalues by 10%, you've lost 10%. And that's pretty crummy to those of us who sock away money like no tomorrow.

Anyway, people talk about policies which help the 'rich' and the 'poor'. The policies of the last few years have been really hard on the 'investors' (who, granted, tend to be the wealthier people)

So it is inflationary? Are we talking about exchange-rates or the constant printing of money? A mix of both?

 

[luiz]

...which had to be cut, because of the tax cut resulting in a loss of government revenue.

No, they were cut because Bush increased spending elsewhere. Bush cut taxes and increased spending (which is very irresponsible), so blaming the tax cuts for cuts in those programs is a limited way to look at it.

 

[Merkinball]

Can someone explain to me the concept of a trade deficit? I mean, Wal*Mart has really gotta running one hell of a trade deficit.

 

[luiz]

Can someone explain to me the concept of a trade deficit? I mean, Wal*Mart has really gotta running one hell of a trade deficit.

Trade deficit is a notion applied to countries, not corporations. Wal Mart buys cheap stuff in China and sells them for slightly more in the US, hence making money. But this adds up to the trade deficit of the US. Trade deficit = Total Imported - Total exported (if imports are superior, otherwise you have a trade surplus).

Mind you, I don't consider the trade deficit to be worrying. It is natural that some nations will buy more than sell, and it should also be taken into account that the US receives all sorts of royalties from abroad. And it is also worth mentioning that the cheap imports have kept inflation down in the US even with really low interest rates, keeping the economy warm and unemployement down. Greenspan himself said that this huge period of excellent growth rates and low inflation in the US would never be possible without China. So trade deficit does not equate to unemployement or other economic problems.

What you should worry about is the budget deficit. Now there's a real problem for ya.

 

[History_Buff]

Yeah, Trade Deficits are only a real problem if the country you have a deficit with is about to cut your supply. That could become a problem 20-30 years down the road though, should tensions run too high with China. Or the Middle East. Or Canada.

 

[Merkinball]

That's not what I meant.

I mean, the notion of a trade deficit is counter intuitive. Nothing is really traded for. It's not like Civ where we trade banana's for iron. We buy stuff from China, and China buys stuff from us. Either way, everything comes out even in the end.

I made my assertion based on the idea that if we are going to judge deficits based on the value of net goods that exit the country, and the value of net goods that enter the country, then theoretically, Wal*Mart has one hell of a trade deficit. It's not like when I got to Wal*Mart and want shows, that I bring a bath roab to exchange for it. I exchange cash for it. Everyone breaks comes out even. The same principal holds true with China. They have stuff we want, we exchange cash for it. They get the money, we get the stuff. Where's the deficit?

 

[luiz]

That's not what I meant.

I mean, the notion of a trade deficit is counter intuitive. Nothing is really traded for. It's not like Civ where we trade banana's for iron. We buy stuff from China, and China buys stuff from us. Either way, everything comes out even in the end.

I made my assertion based on the idea that if we are going to judge deficits based on the value of net goods that exit the country, and the value of net goods that enter the country, then theoretically, Wal*Mart has one hell of a trade deficit. It's not like when I got to Wal*Mart and want shows, that I bring a bath roab to exchange for it. I exchange cash for it. Everyone breaks comes out even. The same principal holds true with China. They have stuff we want, we exchange cash for it. They get the money, we get the stuff. Where's the deficit?

Trade deficit doesn't meant that you're getting robbed.

There is a money deficit. Money is one thing, goods are another. If the goods you bought from China could be converted into cash immediatly, than it would be the same thing, but they can't (we say they have less liquidity). Plus they will depreciate and lose value, while the money made selling them will be invested and will multiply. But as I said, there is nothing inherently bad about having a trade deficit, however the phenomena does exist.

 

[Cannae]

No the poor don't need any help, and besides won't they just spend their new found money on drugs and acohol. They will need to pull their own boot straps before getting any help.

 

[Godwynn]

No the poor don't need any help, and besides won't they just spend their new found money on drugs and acohol. They will need to pull their own boot straps before getting any help.

You won't have to worry about them getting any help if the Democrats are elected.

 

[Cannae]

You won't have to worry about them getting any help if the Democrats are elected.

Nah, I perfer the Republican party. The Republican party knows and understands what it's like to go through the hardships of being unfairly taxed of money that could be spent on buying a cruse ship.

 

[Godwynn]

Nah, I perfer the Republican party. The Republican party knows and understands what it's like to go through the hardships of being unfairly taxed of money that could be spent on buying a cruse ship.

Ah, because obviously all Republicans are rich, and all Democrats are poor.

 

[Merkinball]

Question hot shots: Who's the richest US Senator?

 

[Godwynn]

Question hot shots: Who's the richest US Senator?

John Kerry of Massachusetts, with a net worth of at least $164 million.
Herb Kohl of Wisconsin, with a net worth of at least $111 million.
John "Jay" Rockefeller of West Virginia, with an estimated net worth of at least $82 million.

Top 3, all Democrats.

 

[Cannae]

Ah, because obviously all Republicans are rich, and all Democrats are poor.

Ah, that's not the case. No the Republican party has beinfets for all people! The poor stand to gain somthing becuase they know that the American dream is a right and at the same time don't have to be reliant on government handouts. The rich also stand to gain from the Republican party because we can use our money that would have gone to social security to buy ourselves mega mansions.