Voice of Reason Loc: Earth

So, you *were* saying it's good for the economy. Make up your mind. :)



Stop right there! This is where the fallacy in your argument lies. It absolutely matters whether the dollar was earned or stolen. If it was earned, that means wealth was created. If it was stolen, that means wealth was simply t***sferred instead of created. The creation of wealth is what grows the economy.

Voice of Reason Loc: Earth

Now you're beginning to understand. You see, your original definition of wealth was 'an accumulation of money'. In reality it is an accumulation of money and goods.

If Tom owns a million dollar home and has 10K in savings, he's still more wealthy than Joe who doesn't own a home and has 500K in savings.



Okay, first a pet-peeve of mine: Loose is the opposite of tight. Lose is the opposite of win. :)

I said money represents wealth. That is why civilizations have used money for millenia, because it's much easier than bartering for goods. The reason selling products is a good business model for gaining wealth is because wealth is created when those products are made. Selling the products gives the maker the ability to collect a representation of that created wealth.

Voice of Reason Loc: Earth

Poverty doesn't cause crime, that's a worn-out liberal fallacy. If it were true, then when the last recession hit crime rates would have skyrocketed, instead they decreased. What causes crime is an entitlement mentality. Welfare promotes that mentality.

Further, even if your assertion was correct, what you're saying is still wrong. If Ken tells you he's going to hurt your kids unless you pay him $1000/week, would you pay or have him arrested for extortion? Apparently you think it's okay if you can pay him $10 and force 99 other people to also pay him $10.



LOL. Actually I said pretty much the same thing when the Patriot Act was first passed. I am significantly more worried about what the govt can do to me by removing Constitutional protections than I am about a terrorist attack.

Actually I have a really good solution for crime, but you and all the other libs would absolutely H**E it.

Mom8052 Loc: Lost in the mountains of New Mexico

Go ahead and tell us. I'm curious to see if it is the same solution that me and my hubby have comeup with.

Voice of Reason Loc: Earth

It's really quite simple, pass a federal law that allows the states to sell the organs of executed criminals at a profit to the highest bidder. Stop and think about it, what would a Kennedy pay for a new liver? What would Cheney pay for a new heart?

95% of crimes are committed by 5% of the population. If we could eliminate that 5% the crime rate would drop to almost zero. But we can't eliminate them without providing an incentive for the politicians and criminal justice system. Right now, the criminal justice system profits from maintaining a large number of criminals in society. We need to change that to allow them to profit by reducting the number of criminals. This law would provide that incentive.

The one thing we can always count on politicians for is greed. Once this law is passed, politicians will view career criminals as a resource for body parts and, in relatively short order, most states will begin passing laws which make executions of career criminals easier and quicker. Excuting a career criminal will be viewed as beneficial because their organs will be used to save several non-criminal lives.

Is that similar to the solution you and your hubby devised?

straightUp Loc: California

Yeah, that's it. It has nothing to do with keeping things simple for the sake of explanation, I actually thought payments on debt was just invented right about the time Obama took office!



Just because you think the debt factor doesn't change your point doesn't mean it fixes your analogy. The big problem with your analogy is that it implies all spending is optional as if everything is a pair of shoes that we decide to buy because we feel like it. I was trying to get you to understand that a lot of government spending is an obligation created by previous policy makers. I thought interest payments on debt would be the easiest to explain because it's such a public concern. I didn't take into account that for the same exact reason, there is an abundance of distorted pictures and that you would find one.

So, let me make this even simpler.

Debt is just one example of financial obligation. Policy is another one. Obligatory spending can't always be blamed on the current government because most obligations were created in previous governments. So rather than trying to assess all the obligations, maybe it would be easier to get back to your analogy and just focus on new spending, the spending that no previous administrations have anything to do with.

Cost of New Policies : Bush Administration = $5.07 Trillion ( about level with what he added to the national debt, meaning we still owe everything he spent.)
Cost of New Policies : Obama Administration = $1.44 Trillion.

Here's the breakdown...

http://c491792.r92.cf0.rackcdn.com/PolicyChangesUnderTwoPresidents_072511.gif

source: Congressional Budget Office; Center on Budget and Policy Priorities

So... you might wonder, if Bush added $5 trillion to the bill and Obama only added $1.4 trillion, then why has the national debt increased so much more under Obama? Well, the simple answer is that obligations accumulate. So, back to the analogy.

Bob:

$200 = new shoes - puts it on the card. (new debt)
$500 = commitment to buy shoes every year for the interns (new policy) - puts it on the card.
$ 20 = obligated payment on predecessors shoes.

$ 20 total outlay
$ 80 added to debt.
$ 700 new spending

Oscar:

$100 = new shoes - puts it on card.
$100 = obligated payment on Bush's shoes
$500 = obligated (by Bob) to buy shoes for the interns, but there isn't enough money so...
$100 = money spent to buy shoes for the interns
$400 = added to the card.

$ 200 total outlay
$ 500 added to the debt.
$ 100 new spending

As you can see, the comparisons can be wildly different...

Outlay : Bob = $20, Oscar = $200
Debt: Bob = $80, Oscar = $500

This is all the Bob fans ever look at. Look at how much more Oscar is spending! ...but then there's this...

New Spending: Bob = $700, Oscar = $100.

Again, this is just an analogy to help explain how the spending of one government can be influenced by the obligations of a previous government. In the case with the last two presidents the numbers are quite clear. Bush basically dined and ditched, leaving Obama with the bill. The fact is you can destroy the entire country in such a way that the successor will get all the blame for it. This has been standard conservative practice since Nixon.

straightUp Loc: California

Where did I ever say spending isn't good for the economy? I think you're confused.




So, if you are at a cash register and one guy gives you $5 for a coffee and donut and the next guy gives you $5 for the same thing. Are you going to interview them and ask where they got the money from or are you just going to sell the damned donuts? My guess (because I don't think you're an i***t) is that you're just going to ring up $10 and it's not going to matter that the second guy stole the $5 from someone else, it's still going to be $10 in t***sactions added to the GDP.

Now, I already know what you're thinking... "Yeah, but if that second guy stole the $5 from a third person, then that third person is prevented from spending it." But again, strictly from a dollar bill perspective, what does it matter if that $5 was spent on coffee and donuts or on a box of nails? $5 is $5 - as long as it's spent.

(BTW, a fallacy is an intentional design to deceive someone, not just an opinion that you disagree with.)

straightUp Loc: California

LOL... I'm *beginning* to understand?

When I said wealth is the accumulation of money I was drawing a distinction between wealth and income. Income being the money coming into your possession and wealth being an accumulation of that money in your possession. If I try to describe every molecular detail every time I try to make a simple point or you wouldn't want to read the resulting 500-page post. LOL.

And as for Tom... if he's like the typical American homeowner, he owes the bank some money for that house. If he's like a LOT of American homeowners today, he owes more to the bank for that house than the house is worth. Let's say he owes the bank 1.5 million. That would put his balance sheet $510,000 in the hole, which would actually make Joe wealthier man, even if Joe stole that $500,000 from a bank.



Yes, and for all those millenia, it didn't matter if the money in someone's purse was traded or stolen, which is why we always had robbers.


That's an interesting idea but it's not very realistic. Creating a product doesn't always create wealth. You might think you created a $500 painting, but when the highest bid is $50, well guess what? You didn't create $500. You might think you just created $200 worth of oranges to sell to the local market, but when that market tells you they just bought all the oranges they need from someone else and you have no one else to sell it to, well guess what? All you created was a compost pile and an unpaid debt for the water bill.

...which leads me to the part we haven't even touched yet. The way most wealth in America is being created today without producing anything. It's called debt - America's #1 export. What happens is any time someone uses their credit card to buy something, they are creating a debt, which is now owed to someone else... plus interest. So actually that orange farmer *did* create wealth for someone else because that's what the other side of the debt is... wealth in someone else's hands. In fact, the creditor created new wealth that didn't exist before just by charging interest.

Voice of Reason Loc: Earth

Any chart which calls tax cuts government spending has no relation to reality. Allowing workers to keep their own earnings can only be called government spending by hyperpartisan statists who believe all earnings belong to the government and, in its grand benevolence, allows a small portion of those earnings to be retained by the workers who earned them.

Another question I have, which is not specified in the chart, is whether spending increases are defined as new programs or include increases to existing ones, as in Obama's 41+% increase in existing welfare programs.

Anyway, the main reason that it can be claimed that Obama is increasing spending, expressed as a percentage, is because in his first year he increased spending by over 25%. Since then the increases have been lower as a percentage while still higher in actual dollars than any other president.

This article, by the liberal WaPo, has a good explanation.

http://www.washingtonpost.com/blogs/fact-checker/post/the-facts-about-the-growth-of-spending-under-obama/2012/05/24/gJQAIJh6nU_blog.html

Voice of Reason Loc: Earth

You're talking about the wrong t***saction. The coffee and donut is created wealth, which is paid for with money and does benefit the economy. The t***saction that occurred when the second guy stole the $5 was the one that simply t***sferred money without creating wealth.



You're correct, that's exactly what I'm thinking. Look, I know it's important for you to win this argument because it represents your worldview, but it's just not winnable. Sorry. Simple math repudiates it.

Let's use an analogy similar to yours, except the coffee shop will represent the economy. Now, lets say Joe has $5 and he's on his way to the coffee shop to spend it on coffee and a donut. Now Jim comes along and robs Joe, takes his $5, and goes to the coffee shop and spends it on coffee and a donut.

If Joe hadn't been robbed, the coffee shop would have collected $5.
Because Jim robbed Joe, Joe can't buy coffee and donut, but Jim did, so the coffee shop collected $5.

If robbing Joe had helped the economy (coffee shop), then they would need to collect more than the $5 they would have received without the robbery. They didn't, so the robbery did not benefit the coffee shop (economy).


Oddly, in the dystopian world of Keynesian economics, if Jim had shot and wounded Joe during the robbery in the above scenario, that would be beneficial to the economy because of the medical bills Joe would rack up. That's why Keynesian economics is called 'the broken window theory of economics', it's all about destruction and the cost to put things back to how they were instead of wealth creation and economic growth.



I apologize if I offended you by using the term fallacy, I did not mean to imply that you're being deceitful. The following is from Dictionary.com:

fal·la·cy
[fal-uh-see]
noun, plural fal·la·cies.
1.a deceptive, misleading, or false notion, belief, etc.: That the world is flat was at one time a popular fallacy.
2.a misleading or unsound argument.
3.deceptive, misleading, or false nature; erroneousness.
4.Logic. any of various types of erroneous reasoning that render arguments logically unsound.
5.Obsolete, deception.

When I use the term, I am referring to definition #4.

Voice of Reason Loc: Earth

Yeah...but it's a slow process. :)



There's a difference between 'every molecular detail' and a glaring omission. It didn't take 500 pages for me to fix your statement, all it took was two small words, "and goods".



This is why debating libs is so difficult, you're all so bad at math. :) In the above, Tom would be 490K in the hole, not 510K.

However, like you, I choose my words carefully. When I said Tom owns his home, I meant it. If he owed money on the mortgage, he would be sharing ownership with the bank.

The situation of being underwater (owing more than the home is worth) actually happened recently to my son. He bought his house a few years ago when prices were dropping. After the purchase, prices continued to drop until a couple years ago (roughly) at which point the house was worth about 60% of his mortgage. I told him not to worry about it, he didn't want to sell or move, he could afford the payments (with my advise he got a fixed mortgage instead of an ARM), and prices would eventually rebound. Since then, prices did rebound and the house is now worth about 20% more than he paid for it. So, how was he affected by being underwater? Not at all. Actually, if the house had been re-appraised at its lower value he may have saved some money on property taxes, but I doubt that happened.



Money is not a prerequisite for robbery. Thieves steal goods as well as money.



You're hilarious! It's the basis of capitalism!!!



No, you created $50. (For an artist you'd have to wait until you're dead for it to be worth $500.) :)



...unless you're a smart orange grower and had a selling contract in place before you invested in growing them.



Let's say you want to move but don't want to hire movers. So you go to the local U-Haul or Ryders and rent a truck. You pay them a fee for the temporary use of their truck. Interest on loans is the same thing, you're paying the lender for the temporary use of their money. Since most people borrow money to buy something (as opposed to hiding it in their mattress), according to you that helps the economy. If there was no system for borrowing/lending money, how many people would be able to afford to buy a house?

I had a co-worker once who was one of those people who has to have wh**ever shiny object grabs his attention. His wife was the same way. They worked out a system to prevent fights over purchases. The system was that whenever one of them wanted to make a major purchase, the other was allowed to make a purchase of equal value for themself. Of course what this meant was they lived paycheck-to-paycheck, and were in debt up to their ears with all their credit cards maxed out while making minimum monthly payments. They finally changed their ways, stopped impulse buying, destroyed their credit cards lived within their means while paying off the debt.

When you stop and think about it, their system is exactly how the government works. Representative A wants money for his district so he agrees to sponsor Representative B's proposal for money for his own district in return for Representative B sponsoring Representative A's proposal. This is repeated over and over and over among all the Representatives. It's nothing short of insanity.

You said that using a credit card causes debt plus interest. While that can be true it doesn't have to be. I've had credit cards for decades and have never paid a penny of interest on any of them. In fact, I get between 1 and 5% cash back for using them, and I use them for virtually all purchases. Why? Because I don't buy what I can't afford and I pay the full balance each month.

Credit card debt is a symptom of greed, not on the part of the financial instutions, but on the users of the cards. Those people feel they're entitled to wh**ever want even if they can't afford it, so they buy it anyway using their credit card, then complain about having to pay for it. That's another reason I'm so opposed to the welfare system, it has created an entitlement mentality that is pervasive throughout society, even among those who've never used it.

straightUp Loc: California

That wasn't a glaring omission... I'm not explaining things to a child (I don't think) so I don't feel its necessary to explain things I think you already understand. And my reference to a 500 page post is a reference to ALL the details that should be explained if talking to a complete i***t (there are many) such as.. including "goods" as a part of wealth, when all I am trying to do is contrast wealth and income. You were just being nit-picky. Of course this is something every liberal needs to be aware of when talking to a conservative who would rather dispute the tangents than grasp the point being made.


I'm glad things turned around for your son. Yeah, 30-year fixed is the only way to go. I will say that when it comes to finance I am VERY conservative.

Anyway, all I was really saying is that wealth is diminished by debt. When his property was worth only 60% of his mortgage, his wealth was less than when it rose to 20% more than he paid for it. Not even sure what we're arguing about here.


I never said money is a prerequisite for robbery. I'm not going to repeat everything I say... if you don't get it he first time, just assume I'm a stupid liberal - it's easier.


No it's not. The basis for capitalism is investment - it doesn't matter if a product is involved or not. Your example is not the basis for capitalism it's just one approach to capitalism. What I am calling unrealistic is the part where you say wealth is created when the product is made. I know on a fundamental level, this is what the grade-school text books say, but I'm trying to have this conversation in the context of the real world. In the real world a product is worthless until a demand for that product is applied. For commodity products this can happen as soon as the product is created, but other products not so much. To take the argument even further, you can actually gain wealth by speculating on products that haven't even been created yet.

This tangent started off with our discussion on purchasing power, remember? My point was that wealth is a better measure of someone's purchasing power than income is, which explains why a person with wealth can buy things even when his income is so low that he qualifies for welfare. Your immediate response was that money isn't wealth, products are. Well, when Alan Greenspan explained how wealth is a better measure of purchasing power, I'm sure he was thinking about money not crates of cabbages.


:) - that's usually true. But what if no one wants the picture at all? What kind of wealth did that artist create? I mean, the product is right there - according to you that's wealth.


1. Yes, borrowing helps the economy, that's why the Federal Reserve lowers interest rates, to encourage borrowing as a way to accelerate the economy.
2. If there was no system for borrowing/lending money, houses would probably be more affordable because the demand for expensive houses would drop. I'm sure there would be less buyers because everyone and their mother isn't being drawn into the debt trap we call the American Dream, but the houses on the market would be smaller and more affordable and people would be more inclined to save money.


I agree. So now we know the government works the same way many households do. The only thing you're missing is your faultless shiny corporation :) Have you ever been to a corporate budget meeting? I have. It's pretty much the same thing. In fact I can remember years ago my boss at the HMO I used to work at ordering two telco circuits for every connection between buildings. He was actually putting them end to end so their wasn't even any extra bandwidth. He was just wasting money. Knowing there wasn't any good reason for that I asked why. (I asked several times because he didn't really want to tell me) but basically he said the more we spend on these circuits the more money we get on the next budget cycle. So yeah - money isn't always handled in the most efficient way and it's often a grab bag kind of process, but to imply the government is somehow more guilty than the private sector is a laugh. In fact, as I've stated before the government has a much, much lower debt level than the private sector does. The reason why we always think the government is so bad is because the government is public and therefore exposed to our scrutiny.


Actually, I was including interest as part of the debt (I may not have made that very clear)


Keep in mind that money is dynamic. Let's say you buy a coffee maker, put it on your card. At the time of purchase you are not actually trading money that you have for the coffee maker, you are instead creating new money by using your card. That new money belongs to your creditor. A lot of people think the creditor is actually loaning you their money, but that isn't actually the case, you are actually creating new money that didn't exist before. That money now belongs to them and it's value is based on what you owe them. This is why debts are traded because debt *IS* money.


Eh... I wouldn't put that ALL on the spenders, credit card companies DO push you to spend because they make money when you do. Every week it seems half my trash can is filled up with credit card offers. They also come up with very creative ways to lure people in. So, while I agree with you that frivolous spenders are ultimately to blame for their debt, they are not the only ones trying to get something out of it.


You *do* have a horrible impression of the American people don't you. I *do* see your parallel but I think it really depends on the type of person using their card or the welfare system. Not everyone using these systems is abusive - they just don't make good fodder for conservative arguments.

When it comes to the welfare system, I think the main difference between you and me is that I recognize the people who actually need the the system and you seem more inclined to think that EVERYONE on welfare is a worthless drug-addicted slime-ball.

Trust me, if I thought everyone on welfare was a slime-ball I'd be pushing to take it down too.

Voice of Reason Loc: Earth

So, you're contending that the wealth created by making a product is determined at the point-of-sale? Okay, I'll accept that. Remember, though, that when you go to the store everything there has already been sold by the manufacturer. Most stores don't work on a consignment basis. In fact, the way it usually works in the real world is the retailer orders products from the manufacturer at a negotiated price, then the manufacturer makes them.



I do remember but I'm not sure that's true. Would you rather have 100K or a guaranteed income of 2K/mo for life? I think it depends on the amounts. Also, isn't personal wealth accumulated through income? I do agree, however, that having accumulated wealth should disqualify welfare recipients with low incomes.



Now who's asking for 'every molecular detail'? Of course you need to create something that somebody wants in order to create wealth. I assumed that was understood.



Agreed.



I'm not sure houses could be made small enough to still house a family and cheap enough for most people to be able to afford to pay cash. Remember, when you buy a house you're also buying the land it sits on. In most areas where most people live, the average home buyer couldn't even afford the cost of the land without the house.

It's interesting to me that you're labeling the American Dream a 'debt trap'. I've always looked at it as the easiest, most commonly available way for the average American to profit using money they don't have. It allows the buyer to capitalize on the increase in the entire value of their home while only investing a small fraction of that amount. Of course that only works when home prices rise.

I do agree that without borrowing/lending more people would tend to save more.



The way many of the most fiscally inept and irresponsible households do.



While not every fiscal decision made at a private (non-governmental) business is good, the majority are. Corporations don't have to answer to the public, but they do to their boards and stockholders. If they want to stay in business they must make a profit.

Government does not worry about profit. You think Christmas comes in December? For those who sell products to the government it comes in September. Every government agency goes on a buying binge in September so they can spend all of their budget prior to the close of the fiscal year. Just like your boss at the HMO, if a government agency doesn't spend all their budget this year, it will be reduced next year. What that means is there is no incentive to save money and great incentive to waste as much as possible.

My favorite example for this is a school. If a private school doesn't educate their students, the parents will remove the students and it will go out of business. If a public school doesn't educate their students, they get a bigger budget next year. Failure is rewarded. In many areas, budget money is taken from the few public schools that are providing an education and given to failing ones. So, not only is failure rewarded, but success is punished.



That's not exactly how it works, but yes, new money is created from debt. That's how the money supply keeps up with the constant creation of wealth.

This is the reason why, IMO, the constant liberal complaint about the income gap or the wealth gap is meaningless. When people talk about that they're assuming a zero-sum game. If Bill Gates has more, then somebody else must have less. But the economy isn't a zero-sum game. It's constantly expanding and new wealth is constantly being created. So the fact that Bill Gates has lots of money doesn't prevent others from having anything.



I agree about the fact that credit card companies push their product and constantly send offers. That doesn't excuse people for misusing their cards and certainly doesn't excuse liberal politicians and the mass media for defending them.



When it comes to the credit cards, I think those that misuse them are a relative minority, mainly because the companies that run them have the means to determine who doesn't pay their bills and won't issue cards to them. It's not conservatives who use credit card deadbeats as fodder, it's liberals. When was the last time you saw a story on TV about a person who's up to their eyeballs in debt that wasn't sympathetic towards the debtor?



I don't think EVERYONE on welfare is 'a worthless drug-addicted slime-ball', but many are. Further there are many others who could and should be working but don't. Basically, I know welfare is the only option for some, but IMHO, they are a small minority of the total population of welfare recipients.



Then I suggest you familiarize yourself with some typical welfarers. Every now and then some Republican pol suggests drug testing as a requirement for welfare, just like for virtually every job in America. Whenever that happens, the liberal pols go crazy opposing it. Why do you suppose they do that?

Dave Loc: Upstate New York

It is very simple. The House passed a continuing resolution the did everything but insisted on delaying the individual mandate one year. Reid refused to put it to a v**e in the Senate and Obama said if it passed he'd veto it. Now it is apparent that delaying a year is clearly not only probably but likely - and even if it isn't delayed, there is virtually no chance the penalty (tax per Supreme Court) will be enforced.

If that isn't enough, another CR that also passed the House but never got further becuase of Reid and Obama was one that said the Congress should be treated exactly as was laid on in the ACA as it was passed, but again Ried and Obama didn't want any part of that.

scottyb

.I love this thread!!! It is the epitome of all other disagreement between the classic positions. When an agreement is reached on this thread the sight may as well shut down because what would be left is superfluous babbling.

I had once suspected voice of reason and straightup were the same guy just yanking the rest of us around because it was fun. Now I know they are actually twins separated at birth!!!

Thanks guys bless you both cause u r a blessing to me!