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Post 09 Aug 2018, 9:14 am

bbauska
#1. Wealth inequality is a thing that has always existed to some extent, and I am glad that it does. If everyone makes 1600 a month, there is no incentive to better yourself


Who's arguing that everyone makes $1600 a month?

Do you subscribe to the concept of The "American Dream" Bbauska?

In 1931, historian James Truslow Adams first publicly defined the American Dream. He used the phrase in his book Epic of America. Adams' often-repeated quote is, "The American Dream is that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement."

Adams went on to say that it is not, "... a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”

What this can be succinctly said to be is "Social Mobility". In countries with great wealth inequality there is less social mobility. In countries where inequality is less, there is greater social mobility.
In other words, for a person born into a household of lower income and wealth; the "American Dream" is now easier to achieve in Denmark, or Sweden or Canada.
https://qz.com/1057324/without-equality ... portunity/

I don't subscribe to the notion that people should earn equally. Nor does any modern social democracy. What they all subscribe to is affordable medical care for all, affordable education for all, and an emphasis on the social programs that allow children in poorer households the same or at least similar opportunities and security as those born into wealthy families.
That can be achieved by taxation, and by paying for those programs.
The US middle class was built by such programs after WWII. They've been degraded since 1980.
So has social mobility, and the promise of the American Dream.

I'll note our agreement on the overspending in the military. Its this that largely brought the Soviet Union to its knees. And even Putin understands that he can't keep Russia's current military spending levels... But not apparently US politicians who think more money for guns is always a good thing.

Can we agree that Social Mobility - is also desirable?
The benefits of high social mobility include lower crime, a healthier and happier populace and greater social cohesion . Again, all good things?
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Post 09 Aug 2018, 9:41 am

RickyP,
I chose $1600 a month out of the air. I could have easily chosen $1000, $2500 or $9864 per month. It is the equality you are asking about, not the amount.

We are disagreeing about the "American Dream" means.

https://www.investopedia.com/terms/a/american-dream.asp

My position is that it is not the class that they were born into, but the level of effort they are willing put forth to better themselves. Rich kids can self-destruct, and poor kids can better themselves. It does not work in every case, but people who engage is destructive behavior or poor choices limit their own capability of bettering themselves.

Bad Choices
Having a child out of wedlock
Drug use
exposed tattoos
Excessive debt (including student debt!)

Here is a great article about stupid decisions and how they can affect your growth from whatever level you are starting from.

https://agileleanlife.com/stupid-decisions/
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Post 09 Aug 2018, 11:23 am

bbauska
My position is that it is not the class that they were born into, but the level of effort they are willing put forth to better themselves. Rich kids can self-destruct, and poor kids can better themselves. It does not work in every case, but people who engage is destructive behavior or poor choices limit their own capability of bettering themselves


Social Mobility is greater in Denmark, Sweden, Germany, Canada and every other western nation.
Is that because Americans born into poverty or working class are uniquely lazy? That Danes born into the working class are simply imbued with drive and energy that most American working poor don't have?


bbauska
We are disagreeing about the "American Dream" means


How exactly? The definition you linked is virtually the same as the quote I presented from Adams.
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Post 09 Aug 2018, 11:34 am

Then why the influx of immigrants into the US, if the mobility is so bad?

Perhaps definition is the wrong word, and apologies for that. I would think implementation to achieve the goals are our difference.

Your (and "virtually my") article shows that the European nations have had this as an issue for quite some time.

He went on to explain, "It is a difficult dream for the European upper classes to interpret adequately, and too many of us ourselves have grown weary and mistrustful of it.
(from our link above)

Do you think that everyone is "Stuck" in the economic strata they are born in and cannot move up or down? I personally do not think such a thing. I have MANY stories of people moving up and down in their economic conditions.

I guess I believe more in a person's ability to better themselves than you do.
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Post 09 Aug 2018, 2:36 pm

bbauska
Then why the influx of immigrants into the US, if the mobility is so bad?


Is there a lot of immigration coming from Denmark or Germany? (In 2016 there were 521 from Denmark and 5,306 from Germany) More Americans went to both countries...
Or is most of it coming from undeveloped countries? (There were 66,000 from Cuba and 175,000 from Mexico (legally).
https://www.migrationpolicy.org/program ... ion-trends



bbauska
Do you think that everyone is "Stuck" in the economic strata they are born in and cannot move up or down? I personally do not think such a thing. I have MANY stories of people moving up and down in their economic conditions.

Well, I "think" this because the evidence I've produced for you proves that the US has less mobility than other countries.
You may have MANY stories. The US has a population over 300 million. It would not be difficult to find MANY who have moved up from their meager beginnings...
However, the point I've made is that statistically this just doesn't happen that much in the US. That the percentage of Americans that ARE stuck in meager circumstance over their lives is very much higher than all other first world countries. And the primary reason is that they don't have access to health security or inexpensive education. The nations with great mobility, however, tax enough, and prioritize to ensure these conditions exist for everyone. The US does not. The US allows the extremely wealthy to keep most of the wealth. And they don't create anything with it compared to social programs delivering health care and education.


bbauska
I guess I believe more in a person's ability to better themselves than you do

No you don't. I absolutely believe that children provided health care and educational opportunities on a reasonably equal basis will achieve their potential despite their beginnings. I just believe that without the health care and education, only a small group will be able to overcome the inherent deficit that is poverty . And I believe that makes society poorer.

You seem to believe that most people can magically improve their lives without the benefit of health security or education.
That somehow, cutting
education, EPA, State Dept, HHS, Welfare, infrastructure and EVERYTHING across the board
isn't going to effect the rate of success of those seeking to work themselves out of poverty.

The richest 1 percent in the United States now own more wealth than the bottom 90 percent. In 2013 UNICEF data on the well-being of children in 35 developed nations ranked the United States at 34 out of 35 (Romania is the worst). This may reflect growing income inequality.[50]
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Post 09 Aug 2018, 3:00 pm

And this is the reason that the different political sides in the US cannot get anything done. Thank you for displaying it so precisely, RickyP.

I survived poverty, and "poor" health care in the 60s and 70s (What political party ran congress then?) and am upper middle class. How was I able to do that in such terrible economic turmoil for the impoverished? Am I that much more amazing than anyone else? I worked hard, and anyone else can too.

RickyP, I am not in the mood to turn this into a left/right boogeyman/strawman creation and hunt. The question is what will reduce the deficit and balance the budget. I don't think that is possible.

Do you, and how?
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Post 10 Aug 2018, 8:02 am

bbauska
The question is, what will reduce the deficit and balance the budget
.

Increased taxation of the very wealthy, and closing tax loop holes on corporations. This increases revenue.

Increased investment, with the increased revenue into infrastructure projects. Increasing employment, and the local economies and strengthening the economy.

Medicare for all. Currently 17% of the GDP is taken up with delivering health care in the US. And it isn't done with efficiency or efficacy. Taxation levels would need to change, taking up most of the current insurance premiums as taxation - but not all. Efficiencies would be found by implementing the methods of national systems that provide insurance for all.... eliminating the bureaucratic waste and profiteering inherent to the current US system. The efficiencies that would fall to US businesses no longer required to maintain insurance would be significant. The contribution to ending poverty would be significant. And there would be a contribution to lowering the deficit.

Taxing churches and educational institutions. (more revenue) Universities like Havard have billions and billions in wealth that they should be investing more greatly into provision of education.

Ending MOST agricultural subsidies and instituting programs that manage the ups and downs of the agricultural market more effectively. And without big agra gaining most of the benefits rather than family farms.
Simplifying the tax codes to eliminate most deductions, but lowering rates where competitively necessary.
Investing in education, in order to make it easier for young people to afford education. And allowing them to graduate without debt. (This will also benefit lower crime rates)
Ending private operation of prisons.
Decriminalizing drug use. (Lowering prison populations and increasing access to health care.)
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Post 10 Aug 2018, 8:47 am

Do YOU consider your position one of compromise?

Your only position that appears one of compromise is simplifying the tax code. Whatever that means...
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Post 10 Aug 2018, 9:57 am

Increased taxation of the very wealthy, and closing tax loop holes on corporations. LEFT
Increased investment, with the increased revenue into infrastructure projects. LEFT
Increasing employment, and the local economies and strengthening the economy. HOW?
Medicare for all. LEFT
Taxing churches LEFT
and educational institutions. RIGHT
Ending MOST agricultural subsidies LEFT (but I agree with all subsidies gone, regardless of sector
Simplifying the tax codes to eliminate most deductions, HOW?
Investing in education, LEFT
Ending private operation of prisons. LEFT
Decriminalizing drug use. LEFT

Compromise? 8 benefit the left, 1 benefits the right, 2 unknown.

At least we know your position, thank you.
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Post 10 Aug 2018, 11:08 am

bbauska
Do YOU consider your position one of compromise?

Here's what you asked.

The question is what will reduce the deficit and balance the budget.


bbauska
Compromise? 8 benefit the left, 1 benefits the right, 2 unknown

Your weird.
The objective was to balance the budget and reduce the deficit - not to find some imagined mid ground that equally benefits how you perceive the ideologies of the American left and right.
By the way, there is no place else on earth where the current American ideological left would be "left" . Example? No other nation considers provision of national health insurance as anything but a given, let alone portrays it as "leftist".

bbauska
Simplifying the tax codes to eliminate most deductions, HOW?

By ignoring the vast corporate lobbying that currently writes the tax code.
That would take enormous political will. And since that would require independence from political donations, a first step might be
- ending tax deductions for political contributions.
- perhaps eliminating corporate tax entirely and replacing that with a value added tax.....on all business transactions. No tax on profits.(This would include a transaction tax on every stock trade...)
- providing political parties with campaign financing from the public purse - based upon votes received in past elections. (So many cents per vote for instance...)
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Post 10 Aug 2018, 12:17 pm

Thank you for the response. Even the name calling. Perhaps you forgot that I am not Dr. Fate, and you slipped into old habits.

We were talking compromise. I see your perspective of compromise.

Your plan would never get through congress.
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Post 11 Aug 2018, 7:22 am

The Gini coefficient can be very misleading. Typically they exclude both government taxes and government transfer payments. In the US this is a big deal because of the large outlays for social security, Medicaid, and Medicare, and other outlays as well (food stamps, etc.). When you factor that in, the US Gini coefficient is better than many other western countries.

Gini coefficients also exclude tax payments to the government. Europe raises funds through VAT which is very regressive, whereas the US income tax system is very progressive. (The bottom 50% don't pay income taxes at all.) So I would be very careful about using cross-country Gini coefficients without fully analyzing the data.

Deficits are a huge concern. The CBO released number this week for the first 10 months of the current fiscal year. (Oct 1, 2017 - July 31 2018. The ytd deficit is $682 B which is $116 B higher than the prior year. What's interesting is that receipts are up over the 10 month period by $26 B. In other words is looks like the tax cuts are not causing deficits, and perhaps are working.. (or others will argue that it is momentum from the Obama years -- we'll never settle this :) ). The reason the deficit for the 10 months is higher is that federal spending increased by $143 B, which is attributable to Medicare, Medicaid, and Social Security.

BTW, I think you should view the 4% GDP growth as remarkable in spite of the trade skirmishes. Even with those head winds, the tax cut and regulatory relief are working. We are seeing issues with the supply chain as a result of the trade skirmishes. That is of major concern and may undo the economy in the long run. Also, there are now labor shortages so our economy could benefit from more immigration. I strongly prefer the legal type.
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Post 11 Aug 2018, 9:03 am

bbauska
We were talking compromise
.

No we weren't. I'll quote you again:
The question is what will reduce the deficit and balance the budget


Whats the point of "Compromise" if the compromise isn't in any way effective?


rayjay
The Gini coefficient can be very misleading

Indeed. It underestimates inequality according to most economists.
http://triplecrisis.com/our-misleading- ... efficient/
It is by now generally accepted that the sharp rise in income and wealth inequality in the US and much of Western Europe over the 1990s and 2000s was one of the bulldozer forces behind the rise in financial fragility. And it has long been accepted that the Gini coefficient is the workhorse measure of inequality. But it is not generally recognized that the coefficient is normally defined in a way which biases the measure in a downward direction, making inequality seem less large than another version of the coefficient would suggest. By this alternative measure inequality is much higher than is generally thought. The standard measure is misleading us into thinking that economic growth is more “inclusive’ than it is.


My argument is anchored on the notion that social mobility is desirable. When hard work, and talent are rewarded - society as a whole benefits.
What I've offered is that rising inequality has eroded social mobility in the US, more than in Europe or other western democracies.
And I've offered that MORE taxation in the US would help solve both income inequality (by funding programs like Medicare for all) and contribute to reducing the deficit and debt.
I agree with you that VAT is regressive (on individuals. But it can be very effective if applied to Business transactions and corporation in lieu of complicated corporate tax structures and regulations.)
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Post 11 Aug 2018, 10:40 am

Ricky:
Indeed. It underestimates inequality according to most economists.
http://triplecrisis.com/our-misleading- ... efficient/


one economist is not the same thing as "most economists". Why lie?

Ricky:
What I've offered is that rising inequality has eroded social mobility in the US,


Offered is different than proved. I'm not buying the Gini #s, and there's no proof on social mobility in what you have provided. It's a nice graph, but what is the source of measurement?

What I've provided is that Gini does not include transfer payments and that government spending (primarily transfer payments) increased by $143,000,000,000 in the 1st 10 months of this fiscal year. What impact has that had on inequality.

And since we are talking about Trump's tax plan, why are you citing data from 2016 and earlier?
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Post 12 Aug 2018, 7:08 am

rayjay
Offered is different than proved. I'm not buying the Gini #s, and there's no proof on social mobility in what you have provided.

If you really want to get down into the weeds...

http://cpi.stanford.edu/_media/working_ ... easure.pdf

Mobility is measured by
the association between parents’ and adult children’s socioeconomic standing, where higher
association means less mobility. Socioeconomic standing is captured by different measures – the most
common are social class, occupational status, individual earnings and family income. The
methodological approaches used to measure mobility depend on the measure of socioeconomic
attainment used.

Many studies have undertaken international comparisons of mobility and have provided some
empirical evidence about these relationships. Several reviews exist that compare estimates of
elasticity across advanced industrial countries using (relatively) similar methods and assumptions
(Solon 2002, Jantti et al 2006, Corak 2006, Bjorklund and Jantti 2009, Blanden 2013). These studies
consistently indicate that Scandinavian countries feature the highest levels of mobility, while the US,
the UK and Italy have the stronger intergenerational association
.

rayjay
And since we are talking about Trump's tax plan, why are you citing data from 2016 and earlier?

Because there haven't been any "intergenerational studies done since the Trump tax plan was released.
However since 90% of the benefits of the Trump tax plan accrued to the top 10%, what would be different.
Rich get richer. Poor get poorer.



rayjay
What I've provided is that Gini does not include transfer payments

Your source is Greg Mankiw?
Your argument seems to be that, "yeah but the US household incomes are under reported." so the whole comparison is invalid....
Well, since inter-generational mobility is the key, and the US demonstrates the lowest inter-generational mobiity .. that would mean that despite slightly higher incomes than Gini calculates there still isn't mobility in the US.
Could that be because medical inflation and the cost of education have increased far more than incomes ? And its those two key factors that allow for poor kids to work out of their born circumstance.

https://www.oecd.org/centrodemexico/medios/44582910.pdf