Warren Buffet speaks common sense; alarms most Republicans

[giblets]

Funny, how 25 states have better unemployment numbers but only 20 have better workforce participation. Odd that. Apparently you can be unemployed and yet not count as 'unemployed'.

North Dak - 72.3
Nebraska - 71.1
Minnesota - 71.9
South Dak - 70.9
Iowa - 70.9
Vermont - 70.6
New Hamp - 69.5
Kansas - 69.3
Alaska - 69.2
Wyoming - 69.1
Wisconsin - 68.7
Virginia - 68.5
Colorado - 67.9
Connect - 67.8
Rhode I - 66.8
Maryland - 66.7
Utah - 66.5
Illinois - 66.0
D of C - 65.9
Texas - 65.6

Historically, the Northeast has always had the highest workforce participation. Certain midwestern states are holding on too.

Yes, more stay-at-home parents is never a good thing. Mothers should enter the workforce and bring up the participation rates. Wait, why make that assumption?

[Jaguar]

What makes you think tech people in banks understand finance?

Oh, and for the record, Asher, I do have a job.

[Ben Kenobi]

So Vermont and New Hampshire are states with a particularly high number of stay at home parents?

Bzzt, try again.

[Kuciwalker]

How's that working out with the US's Chinese creditors?

I have no idea what this even means. Are you just producing noises that sound appropriate, or do you have a point?

[Ogie Oglethorpe]

This. He is making a public policy argument and using his own experiences to show how he and similarly situated people can get away with paying less % of tax (and all rational actors would do so). He is arguing the government should reduce the incentives to get away with paying less, and that he'd be willing to take on those increased burdens.

No he assumes in his own arrogance a superior moral position.

By that you mean he feels his philanthopy is better suited to reflect his personal preferences and/or believes that he is more efficient with his philanthropy than allowing the government access to his wealth.

He obviously feels others of the uber rich persuasion do not share his passion and/or wisdom in administrating philanthropy and thus is more than willing to sign his collegues up for government revenue generation. I might add he likely feels so strongly that others are degenerate in their social obligations/duties as to allow that the loss in efficiency of directed philanthropy and/or adminstrative costs are offset.

[Jon Miller]

I do think that quantitative easing would help (why doesn't the fed do this?), but it is not at all clear to me that there are not structural problems caused by the concentration of wealth. I can't think of any society where higher wealth concentration benefits it.

JM

[Ben Kenobi]

I do think that quantitative easing would help (why doesn't the fed do this?)

Where is the money going to come from Jon? The debts already at 98 percent of GDP. IF QE 3 is another trillion, that's going to put the US at 108 percent debt to GDP assuming that the economy does not grow, or decline further.

Canada's peak, at 4 percent deficits (the US is running 10+) was 104.

I can't think of any society where higher wealth concentration benefits it.

Every wealthy society has income stratification. Every single one, Jon. The greater the stratification, the larger the economy.

[Jaguar]

Ben, QE does the exact opposite of what you think it does. It puts more dollars into the government's hands, not fewer.

[Ben Kenobi]

Ben, QE does the exact opposite of what you think it does. It puts more dollars into the government's hands, not fewer.

How so? Explain.

[Jaguar]

The Fed literally creates new dollars in its accounts electronically to purchase financial assets from banks. The government isn't issuing new debt, but rather, it is creating dollars to buy debt back up.

[Imran Siddiqui]

No he assumes in his own arrogance a superior moral position.

Would it help that he does have a superior moral position?

[Ben Kenobi]

The Fed literally creates new dollars in its accounts electronically to purchase financial assets from banks.

Ok, now from supply and demand, what does that do to dollar holders like myself? Would you expect my portfolio to rise or drop?

The government isn't issuing new debt, but rather, it is creating dollars to buy debt back up.

Couple things here Jag.

One, privatization is an increase in efficiency. Everything that the government buys has to be managed by someone who's funded from taxpayer dollars.

Two, taking those assets off the market decreases the percentage of the economy that is privatized. This is a problem. As the size of the government increases, then so does the taxpayer burden on the private economy. What has been happening is that QE is getting sucked up in the massive deflationary crush that is weighing on the Fed right now. There's something like more loans out there then there are assets to cover the loans. As the QE gets printed, the banks take the money and use it to try to unwind some of their bad bets.

The money will not go down to people, simply because that's not the purpose of QE. QE is lighting a torch. But the torch burns down, as commodities increase in the face of the dollar. This is good for dollar denominated debt, and good to stave off deflation, but not so great for the rank and file.

The problem is that QE can't be done to actually push off the deflationary pressure, not without destroying the dollar. BofA just about fell apart last week. What's going to happen when people take their money out and buy gold or silver? What do the banks do then, when they are trying to cover their loans, but their asset ratios drop.

[Asher]

TX, with about 25 million people has routinely half the job creation in the nation with a state only consumption tax. Imagine what would happen if the feds and all the states switched over?

I'm sure the Texas job growth has nothing to do with high oil prices and a resurgent US energy sector.

[Ben Kenobi]

I'm sure the Texas job growth has nothing to do with high oil prices and a resurgent US energy sector.

Resurgent energy sector? Have you seen what Obama's done to drilling, and the EPA crap they are dumping on TX? It's the taxes.

[Asher]

Warren Buffet is making a number of points. One of his points is that some income that is treated as investment income or capital gains under the current tax code is, properly speaking, wage income (and therefore should be taxed as wages). This is a reasonable point that would be totally obviated if we moved from an income tax to a consumption tax.

His other point, regarding the intertemporal elasticity of consumption, is completely unfounded and almost certainly wrong.

The deficit is irrelevant to this discussion. If raising taxes on them closes the deficit, fine, but since it doesn't alter the total quantity of goods and services and since it doesn't redistribute any of those goods or services it cannot actually increase the real wealth of any people.

It's not at all irrelevant. The impetus for the article is the deficit/debt crisis.