Obama to Small Business Owners

Off Topic Politics & World Issues
201

[quote]D Public wrote:
The republicans have a very simplistic idea of how job creation works.

They think that if you tax individuals less then they will use that money to hire more people. The problem is that businesses have a lot of money right now. In fact, there is so much excess money out there right now that it is simply ridiculous. Corporations have an estimated $1.7 trillion of cash on their balance sheets.

Apple has $100 billion in cash on their balance sheet. They could probably hire 1,000,000 people right now if they wanted too. Just to put things in perspective, there are 14,000,000 people actively seeking employment. And, If Apple really wanted to, they could probably borrow 300 bil at some of the lowest interest rates in the past couple decades and hire 2-3 mil.

It is also simply a myth that tons of small businesses will just pop up out of nowhere if you reduce their taxes. New business ideas are very hard to come up with, and lenders will continue to avoid lending to small businesses because they are risky. It doesn’t matter if you help them with their tax savings as it does nothing to reduce their inherent risk.

The point is that reducing taxes is not going to change things. As taxes do nothing to change the inherent risks and deep structural issues that stagnate the economy.

We have probably 20 mil people who are unemployed or are underemployed who have immense value that has to be unlocked…and there are tons of cash and credit that are sitting idle…we need to get things reignited and taxes is not going to do that…It will only help steer things in the right direction afterwards…

It is clear that the only immediate way out of this stagnation is a very large government stimulus aimed at fixing many of the structural issues in our society. We need to borrow a very large amount of money. In the last stimulus, we used a bow and arrow when we needed to use a bazooka.

[/quote]

Reducing taxes may or may not increase jobs, but will increasing taxes create jobs? If the answer is no than what is the point of increasing taxes on the rich or on business entities?

202

@ D Public

Also the last stimulus wasn’t exactly chump change, how much are you proposing and where is that money going to come from, especially considering money has to be found for the Health Care Bill per the SCOTUS?

203

[quote]D Public wrote:
They think that if you tax individuals less then they will use that money to hire more people. The problem is that businesses have a lot of money right now. In fact, there is so much excess money out there right now that it is simply ridiculous. Corporations have an estimated $1.7 trillion of cash on their balance sheets.

Apple has $100 billion in cash on their balance sheet. They could probably hire 1,000,000 people right now if they wanted too. Just to put things in perspective, there are 14,000,000 people actively seeking employment. And, If Apple really wanted to, they could probably borrow 300 bil at some of the lowest interest rates in the past couple decades and hire 2-3 mil.[/quote]

You know why business are sitting on that cash?

Fear and the sweet sent of blood, I mean opportunity, in the water.

The economy has done jack and shit in the last 4 years and business knows it. They are called reserves for a reason. When we have another melt down, they will spend their reserves to keep the employees they already have, and buy up struggling competitors at depressed rates.

Want them to spend the cash?

Route for a real recovery, or another melt down. Vote for people that will accomplish whichever one you prefer.

We will have to agree to disagree that they do nothing.

This is the absolute worst fucking idea I have ever heard.

Horrid man.

Based off your other posts I would have sworn, up and down, you were smarter than this.

204

[quote]usmccds423 wrote:
and where is that money going to come from, especially considering money has to be found for the Health Care Bill per the SCOTUS?[/quote]

Ask the liberals in office. They apparently know the Magic Money Fairy.

I’ve been looking for that bitch for a long time, but just settled for spending less than I earn and working hard.

205

[quote]countingbeans wrote:

[quote]usmccds423 wrote:
and where is that money going to come from, especially considering money has to be found for the Health Care Bill per the SCOTUS?[/quote]

Ask the liberals in office. They apparently know the Magic Money Fairy.

I’ve been looking for that bitch for a long time, but just settled for spending less than I earn and working hard.[/quote]

What I don’t understand is why we can’t just reduce spending. Like 1% of every government program from the Military to the Presidents pay check until debt is reduced to a healthy level. Why is that so hard?

206

[quote]usmccds423 wrote:

[quote]countingbeans wrote:

[quote]usmccds423 wrote:
and where is that money going to come from, especially considering money has to be found for the Health Care Bill per the SCOTUS?[/quote]

Ask the liberals in office. They apparently know the Magic Money Fairy.

I’ve been looking for that bitch for a long time, but just settled for spending less than I earn and working hard.[/quote]

What I don’t understand is why we can’t just reduce spending. Like 1% of every government program from the Military to the Presidents pay check until debt is reduced to a healthy level. Why is that so hard? [/quote]

Because 1% does not even come close.

30% sounds about right, at current interest levels.

207

[quote]orion wrote:

[quote]usmccds423 wrote:

[quote]countingbeans wrote:

[quote]usmccds423 wrote:
and where is that money going to come from, especially considering money has to be found for the Health Care Bill per the SCOTUS?[/quote]

Ask the liberals in office. They apparently know the Magic Money Fairy.

I’ve been looking for that bitch for a long time, but just settled for spending less than I earn and working hard.[/quote]

What I don’t understand is why we can’t just reduce spending. Like 1% of every government program from the Military to the Presidents pay check until debt is reduced to a healthy level. Why is that so hard? [/quote]

Because 1% does not even come close.

30% sounds about right, at current interest levels. [/quote]

Except there is no chance the federal government will cut spending by 30%. Maybe cut 1% every year until we reach 30%, which is also unlikely.

208

[quote]usmccds423 wrote:

[quote]orion wrote:

[quote]usmccds423 wrote:

[quote]countingbeans wrote:

[quote]usmccds423 wrote:
and where is that money going to come from, especially considering money has to be found for the Health Care Bill per the SCOTUS?[/quote]

Ask the liberals in office. They apparently know the Magic Money Fairy.

I’ve been looking for that bitch for a long time, but just settled for spending less than I earn and working hard.[/quote]

What I don’t understand is why we can’t just reduce spending. Like 1% of every government program from the Military to the Presidents pay check until debt is reduced to a healthy level. Why is that so hard? [/quote]

Because 1% does not even come close.

30% sounds about right, at current interest levels. [/quote]

Except there is no chance the federal government will cut spending by 30%. Maybe cut 1% every year until we reach 30%, which is also unlikely. [/quote]

Oh, there is every chance.

In fact it is around 100%.

The chance that they will do it voluntary is rather low though.

But, if they wont, it will happen anyway.

209

[quote]usmccds423 wrote:
What I don’t understand is why we can’t just reduce spending. [/quote]

Because we would have to give people less free shit like billions for train tracks to nowhere in a bankrupt state.

Politicans don’t win votes doing what needs to be done. They win votes giving people free shit.

210

I can see why you think the idea is reckless. It is very difficult to explain this concept, but I will try to.

We largely owe the debt to ourselves. This is kind of hard to imagine, but we largely control our own borrowing costs. When the treasury decides it needs to borrow money, it auctions treasuries to the public and then the public prices the treasury yields(interest rates). However, when the government declares that it is going to borrow the money, there is an implicit understanding that the federal reserve can push yields down if it wants to by buying those very same bonds. Even if the fed doesn’t do this, investors will buy treasury bonds anyway because they know that we can do that. We will never get locked out of the market like spain or greece because we can buy our own bonds, and we can essentially just print more money to do it. Our borrowing cost can basically be manipulated at will.

The issue of doing this is then debasement of the currency. Since we would be increasing the supply of money, there is potential for devaluation of the dollar which would rise the price of goods. However, this is not a concern because inflation is constrained by expectations of demand not the supply of money. This is something that a lot of very smart people do not understand very well. prices are simply reflective of the expected level of demand for the most part not necessarily the supply of money. Essentially, even if banks have excess cash(supply) to lend, the inflation due to that excess cash will only occur if people actually think that other people will demand the cash and use it to buy things. This is what causes prices to rise(inflation) not just increasing the money supply/printing money.

put it another way. During the roman era, people would shave coins and melt the shavings down to make new coins. those coins could only cause a rise in price levels if the townspeople thought that the counterfeiters could actually use those coins to buy stuff. If the counterfeiters simply told no one and kept the coins in their homes, nobody would even know that they had increased the supply of money and therefore the prices would stay the same(no inflation).

The only inflation concern I have is if there is a supply shock such as a strong reduction in oil output or a food shortage(which would spike prices due to increased scarcity), but I don’t believe that increasing the debt will lead to a runaway generalized inflation where menu prices change every day. It would have already happened if that were the case, but it hasn’t. it’s largely a myth.

Now on to debt repayment…As I said earlier, we borrow from ourselves. However, this doesn’t mean that we can continuously borrow money. All it means is we have access to debt and can control the borrowing cost if we can bear the inflation. At some point, we will not able to maintain our debt burden due to inflationary issues, so we will need to pay the debt down to avoid a painful type of inflation. Now, before we even reach that point, we should already be attempting to balance the budget and allow the private sector to take on more of the burden while we pay down the debt. The private sector should be growing very fast at that point and should have reduced their own debt burden over the same time period, and it will only be a matter of yrs before the national debt is shrinking relative to our GDP.

What we spend the money on is a different story. I do think there are severe structural issues in our society. There are some economists who share my views on the stimulus but deny the structural issues(unskilled labor, high cost of living, obesity, aging population, energy/climate problems, etc). So, I disagree with them. If we don’t fix the structural issues, it will just result in another crisis that we could have avoided.

Now sadly, I don’t see any of this happening. People are trying to chase two goals right now. It is equivalent to the guys on this site who try to bulk and cut at the same time. It doesn’t work - you just stay stagnated.

211

[quote]D Public wrote:
I don’t see any of this happening.
[/quote]

Me either, and thank god, because it is retarded.

Here is my plan, and I’ll even be bipartisan.

  1. the government agrees to go back to Clinton era spending.
  2. For every year the budget is a surplus the people will agree to Clinton era tax rates for the next year
  3. for every two years the budget is a surplus the people agree to a 2% flat tax that every citizen pays, no freebee’s, in addition to the Clinton era rates, that goes directly to pay off the national debt. (Once the debt is paid off, we can fund a rainy day fund)

Can’t manage s surplus:

  1. For every two years the budget is balanced, the people agree to Clinton era tax rates for the next one year.

Can’t balance the budget?

  1. For every year the budget is a deficit, Congress forfeits 50% of their salary and 80% of their vacation days
  2. for every two years the budget is a deficit, each party must pay in tax, equal to 50% of the campaign contributions they collected in the previous election cycle, including PAC’s.
  3. If congress goes 3 years running a deficit, no current member of congress may occupy the same seat after the next election cycle.

I’m really just pulling this out my ass right now, but it is 1000x better than borrowing/printing more money. but both are never going to happen. Yours because it is insane, mine because it holds people accountable, and that shit doesn’t fly in America anymore. (Unless we are talking about the tax rate of the top 10%)

212

[quote]usmccds423 wrote:

What I don’t understand is why we can’t just reduce spending. Like 1% of every government program from the Military to the Presidents pay check until debt is reduced to a healthy level. Why is that so hard? [/quote]

Here’s why. We are in the midst of a world war. Also, the defense budget including war costs now accounts for just 16% of the federal budget. Under JFK it is was nearly 50% of the federal budget.

Defense now accounts for only one sixth of the federal budget yet will suffer 76% of all budget cuts.

A recent report estimates the loss of 1.09 million jobs from the defense cuts next year alone and with almost 70 percent from manufacturing and professional and business service jobs.

213

I have been self employed for the last 30 years. I am curious what other people’s credentials Are ?

214

[quote]orion wrote:

[quote]usmccds423 wrote:

[quote]orion wrote:

[quote]usmccds423 wrote:

[quote]countingbeans wrote:

[quote]usmccds423 wrote:
and where is that money going to come from, especially considering money has to be found for the Health Care Bill per the SCOTUS?[/quote]

Ask the liberals in office. They apparently know the Magic Money Fairy.

I’ve been looking for that bitch for a long time, but just settled for spending less than I earn and working hard.[/quote]

What I don’t understand is why we can’t just reduce spending. Like 1% of every government program from the Military to the Presidents pay check until debt is reduced to a healthy level. Why is that so hard? [/quote]

Because 1% does not even come close.

30% sounds about right, at current interest levels. [/quote]

Except there is no chance the federal government will cut spending by 30%. Maybe cut 1% every year until we reach 30%, which is also unlikely. [/quote]

Oh, there is every chance.

In fact it is around 100%.

The chance that they will do it voluntary is rather low though.

But, if they wont, it will happen anyway. [/quote]

I’m enjoying the free-style haiku-themed posts you’re making in this thread.

215

[quote]D Public wrote:
I can see why you think the idea is reckless. It is very difficult to explain this concept, but I will try to.

We largely owe the debt to ourselves. This is kind of hard to imagine, but we largely control our own borrowing costs.
[/quote]

… Are you talking-down to CB on economics?

Lordy, lordy, lordy.

216

[quote]pittbulll wrote:
I have been self employed for the last 30 years. I am curious what other people’s credentials Are ?[/quote]

I’m a CPA, MBA, who has over 12,000 hours of real life experience in a small firm working with and for small and medium sized businesses, working directly with partners, some of whom were so poor as a child they couldn’t afford shoes, and now have two commas in their bank account.

217

[quote]MaximusB wrote:
8 more cities in California have inquired about bankruptcy protection, bring it to a total of 11 so far, with even more cities to come.

Hey Obama, the only thing I have seen government create is DEBT. We have the largest state government in the Union, looking at a quarter TRILLION in debt for unfunded pension liabilities, add another quarter TRILLION for that High Speed Rail, the state is so fucked we will need to be buried twice. [/quote]

I seriously wonder what is going to happen with California. Will there eventually be a federal bail out?

218

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No, it truly is very hard to explain.

I’m basically saying that you can eat pizza and still get shredded if you know what you are doing. Last year, I had very similar thoughts as most of you that we were being irresponsible and that we needed to buckle down and suffer to avoid a debt apocalypse. Chancellor Merkel strongly holds this view, and many responsible people seem to hold this view because normally it holds true, but it doesn’t in this case.

Things can be easily fixed it seems.

219

…“Things can be easily fixed it seems”…

D:

“Easy” may be a strong word…but certainly fixable IF there was the Political Will.

Our Politicians seem more focused on proving “their way” is right and making those with opposing views look bad than they are with fixing anything.

Mufasa

220

[quote]countingbeans wrote:

[quote]D Public wrote:
I don’t see any of this happening.
[/quote]

  1. If congress goes 3 years running a deficit, no current member of congress may occupy the same seat after the next election cycle.

[/quote]

This alone would get the job done.