A summary of trickle down economic theory:

[HershOstropoler]

Originally posted by Kidicious


Do you mean if the savings rate fell? I don't think a falling savings rate is that bad for this economy. The reason is that interest rates are so low right now. The savings rate wouldn't fall as much as you're thinking because interest rates would go up.

You know that in a closed economy, savings equal investments?

Originally posted by Kidicious

That maybe so. The trade balance results in borrowing. The imbalance is the result of the wealth in the US. Consuption always spurs investment though so there is always enough investment. It's the invisible hand

The imbalance has nothing to do with "wealth" in the US. What wealth?

Consumption spurs investment if it is required to expand capacity. So you get increased nominal demand. care to explain why you equal that with increased real output, especially with a falling savings rate?

Originally posted by Kidicious


The difference is that the US has no problem getting the necessary investment.

Neither had Britain during their late Thatcher bubble. You're back from Marxist to Wallstreet econ clown.

[Arrian]

Debt driven investment is insane. (Oh, and try to raise significant amounts of capital that way without equity

It's called the financial system. It's how you and I get a return for our savings. Because someone borrows it to invest.

The "financial system" eh? And what, pray tell, does the financial system us to lend out money? PEOPLE'S SAVINGS!!! But your system emphatically discourages savings, particularly large amounts of money.

And you accuse others of not knowing how things work?



-Arrian

[HershOstropoler]

Originally posted by MichaeltheGreat


Hey, how do you like Auerstadt? I might be looking for someplace to move my business.

You want to move to Auerstaedt?

[MichaeltheGreat]

Hey, if Kid ever takes over, Zambia wouldn't look so bad.

Then again, maybe I can buy a reserve commission in the mountain navy?

[Arrian]

If Kid took over, I'd join those crazy Canadian capitalist pigs!

-Arrian

[Kidlicious]

Originally posted by MichaeltheGreat
Losers will always find a way to lose. People who don't see success as attainable now aren't going to see it because they have some extra spending money every two weeks.

You choose whether you see success as attainable or not, just as you choose what role models you'll follow, if any, etc.

At one point you are acknowledging the different problems that poor and rich people face, and at the next point you go back to saying that rich people are superior to poor people.

[Imran Siddiqui]

Same here... Ontario is fairly nice .

[Kidlicious]

Originally posted by HershOstropoler
You know that in a closed economy, savings equal investments? 3

In the long run yes. In the long run there are productivity improvements. A wealth tax would encourage productivity improvements because of the scarcity of resources and the higher prices.

Originally posted by HershOstropoler
Consumption spurs investment if it is required to expand capacity. So you get increased nominal demand. care to explain why you equal that with increased real output, especially with a falling savings rate?

Savings increases because of higher interest rates. Then savings will equal investment. Increases in productivity will result in higher consumption in the long run.

[Kidlicious]

Originally posted by Arrian


The "financial system" eh? And what, pray tell, does the financial system us to lend out money? PEOPLE'S SAVINGS!!! But your system emphatically discourages savings, particularly large amounts of money.

And you accuse others of not knowing how things work?



-Arrian

No offense Arian, but you don't know how the economy works. Interest rates determine the level of savings. Interest rates would be higher.

[Japher]

Why are you so caught up on a wealth tax? To incourage investing to incourage growth? Yet, investments are savings! If you just mean savings as in a bank account, than not to fear those ppl are already getting screwed by a low interest that doesn't even amount to infaltion. Also, the bank lends this money out. Pretty much, by not investing you are already losing money, so I don't see why you need to tax it too! The government already takes money everytime it changes hands, why more?

[Arrian]

Savings increases because of higher interest rates. Then savings will equal investment. Increases in productivity will result in higher consumption in the long run.

More production = more consumption? Isn't that bassackwards? Isn't it more Demand = more production? If you make a bunch of stuff that people don't want, they aren't going to buy it.

-Arrian

[MichaeltheGreat]

Originally posted by Kidicious


At one point you are acknowledging the different problems that poor and rich people face, and at the next point you go back to saying that rich people are superior to poor people.

I didn't say "poor people." I said losers. If you find an equivalence there....

Being poor reflects current economic state. Being a loser reflects attitude. Someone who is both poor and a loser isn't going to become rich, no matter what you throw at him in subsidies. He'll just **** it up, or spend it all like a pimp, because the attitude towards work, money, management, etc. will lead to that result.

Someone who is poor and has the right attitudes, has the opportunity, assuming there are no artificial barriers to opportunity (why I support civil rights, scholarships, improved education both inside and outside the traditional public school systems, etc.), has the chance to substantially improve his or her economic status.

[HershOstropoler]

Originally posted by MichaeltheGreat
Then again, maybe I can buy a reserve commission in the mountain navy?

Before you move to Auerstaedt... hey, we could use a native english speaker commissioned mountain navy guy, for the Sound of Music Tours....

[Arrian]

No offense Arian, but you don't know how the economy works. Interest rates determine the level of savings. Interest rates would be higher.

Says the communist. Listen, several people with far greater knowledge of economics than I (my understanding is relatively basic, yes, limited to several college courses, watching what my family has done, and my own experience) have flat-out told you that you are sprouting garbage. Yet you insist that I don't have a clue.



-Arrian

[Kidlicious]

Originally posted by Japher
Why are you so caught up on a wealth tax? To incourage investing to incourage growth? Yet, investments are savings! If you just mean savings as in a bank account, than not to fear those ppl are already getting screwed by a low interest that doesn't even amount to infaltion. Also, the bank lends this money out. Pretty much, by not investing you are already losing money, so I don't see why you need to tax it too! The government already takes money everytime it changes hands, why more?

Right now though money is invested in unproductive areas, because of the supply orientation of the economy. If you increase consumers incomes the scarcity in savings will promote productivity improvements.