The Stimulus Package

[TheGame]

Bond, I disagree with everything you just said. If the economy is going so great here, why do we owe money.. and more importantly why are we even borrowing money from other countries? (<< You could ignore the rest of this post if you want, the only thing I want is a clear answer to this question )

And no, this isn't an issue that just started 4-6 months ago. Its been like this.

And no again, I made no reference to banks to why I think the bailouts are bad. I'm more focused on the buisnesses that are taking them which are by a LONG shot not all banks. These companies are in it to make as much money as possible, as my Ford example showed, they're willing to lie and say things are going bad to get more free handouts from the government, but when they'd personally have to take a pay cut their whole story changed.

Companies are also trying to find loop holes and make up incentives for their leaders without calling it bonuses.

Like I said once again, I refuse to take middle ground. Either the strategy we have isn't working and something major needs to change, or the american capitalism project is failing.

[Professor S]

Game, the reason why we are in debt is the same reason a family can be in debt: They spend more than they take in and live above their means.

I'm having a hard time understanding why people seem to be confused regarding how our country makes money, especially after seeing those charts Bond posted.

Government revenue is related to the nations GDP, not how it taxes it's people. As the charts show, increasing taxes on the rich does NOTHING to increase tax revenues. Instead, a government that does more to increase GDP increases its tax revenues. Progressive taxes have nothing to do with it.

Increase GDP = Increased revenue. Decreased GDP = Decreased revenues.

So a government should do more to increase GDP as a means to increase its revenue. I fail to see how punishing businesses that make over $250,000 a year, reducing tax exempt charitable donations and raising capital gains taxes accomplishes this goal.

And to say that capitalism has failed, or even to call it a project, is myopic thinking. Capitalism is what is the NORM, not the experitment, and it has been the norm since man first began bartering beads for animal pelts. Socialism is the experiment and it's the experiment that has FAILED every time it's been attempted from the USSR to FDR to LBJ to Castro's Cuba. European nations that have socialist constructs live with normal unemployment rates raging from 9-13%.

I can see where you're coming from, but I also believe you're letting the myth of "perfect" get in the way of the achieveable "good". Is capitalism perfect? No, but to this point in history it's the only system that has been proven to actually work on a large scale. There have always been crashes and recessions, but they've also always been followed by priods of growth that far exceeded the previous crisis.

http://futurist.typepad.com/my_weblo...ock_marke.html

IMO, recessions are overall necessary for continued growth. Like any environment, homeostasis is achieved by the ability of an environement to weed itself. Organisms that are sick or weak will be consumed during this process, but in the end the best run and most healthy organisms live and prosper. When this is allowed to happen, we go through terrible pain, but in the end always end up back on track and pushing to new heights.

The problem comes when natural selection is interfered with, and the entire process is extended through interference. Sick companies are not being allowed to die or be consumed by healthy ones, nor are they being forced to fundamentally heal themseves by changing the nature of their business. They are simply on life support hoping their cancer will just go away.

IMO, if we want to see the quickest recovery possible, the government needs to clearly state when they will NOT provide assistance or bailouts, so that these companies can feel comfortable in making moves confident that the government will not step in change their business environment. Billion of private dollars will need to be risked tfor companies to recover, but I can't see these companies taking that risk not knowing the totality of what the government will and will not do.