Here is the latest conversation I had with money manager Andrew Horowitz…. new insights for anyone who invests in anything. The stock picks are beginning to perform well.
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If you like stories about people trapped down wells you’ll love Germinal by Emile Zola.
If the tax cuts for the wealthy continue, more investment in the speculative markets will result.
If not, and the burden shifts from the nonwealthy to the wealthy, more immediate spending on goods and services will result, and a better average debt profile.
Stocks are up because the dollar is down. This has been the dominant pattern of the stock market for the past decade.
#2 – If the tax burden shifts from the non-wealthy (middle class) to the wealthy (who already pay most of the tax) then the wealthy will respond by: 1. Leaving and taking their money with them, and 2. Increasing prices to cover higher taxes, passing the taxes back to the middle class.
To #2 #4 left of reducing spending on things like new employees and everything else.
I’m not sure how much spending by the lower income groups on imported goods actually helps the local economy either. China yes. America? hard to say.
Grain and beef exports are up and that should help some if the government doesn’t bleep the producers to badly some of whom #2 considers to be the enemy because in a good year they make to much money for his pleasure. The fact that in a bad year they run in the red is purely their problem.
I wish #2 would move to the EU. Sure they’re going broke but enough twits like #2 and so will we. CA and NY should have already declared bankruptcy only the law doesn’t cover it.
After the last pork barrel budget buster/stimulus package combined with the health care insurance that is going to leave most people worse off that we can’t pay too for I’d say the Fed is going to run out of money only they’ll just keep printing it until nobody will take it unless you threaten them with a gun.
My happy golden years are going to be a nightmare from the pits of bleep. Thank you #2. It just goes to show how bad life can be when incompetents, leaches, and swindlers run the government.
#2 – Can you elaborate? There are no tax cuts on the way for anybody, so the way I’m reading your post is that the nonwealthy will spend more money because the wealthy have less. This doesn’t sound right to me. Am I misunderstanding?
That said, given a tax increase on the wealthy, I’d expect tax revenue to rise (at least in the short term – until capital is repatriated etc) (given current tax rates and elasticities, I’d suggest the U.S. economy is probably on the left half of the Laffer curve). However, government spending is basically independent of revenue now, so it seems to me that it would make a modest impact on the deficit while perhaps slightly reducing private consumption and investment.
Kinda depends on how worthless the dollar becomes doesn’t it.
I suspect there is NO LIMIT to how high the DOW can go… in dollars.
Of course, it might take a thousand of those newly printed dollars to buy a Big Mac.
Chuck, if the wealthy want to leave, I’ll happily help to pack their bags! When they get tucked up the butt somewhere else, we should charge them a fee to come back.
Dewoll, as I’m sometimes in the wealthy set, depending on my income that year, I say pfthhh to you!
Yes the wealthy spend some of their money on goods and services, but the bulk is invested offshore in making more money. The wealthy didn’t become wealthy by spending, and hiring lazy bones people, they hoarded their money, invest it in growing markets, and only hired when expansion side risk/reward was a better investment than any other means available.
The poor spend every cent they make, and then some (40% of US households).
But shepple only bleat what the other shepple bleat.
I subscribe to “Trickle Up” economics.
That is, put money in nonwealthy people’s pockets, and they will spend it in the businesses of the wealthy, making the wealthly wealthier.
That pinko commie Reagan, and his Trickle Down policy, wanted to give all the money to the wealthy in the Hope that it would be used to employ the poor.
The Bush era tax breaks for the nonwealthy/wealthy are about to expire. If the wealthy aren’t taxed at the old, nonreduced, rate, it is a furtherance of Reaganomics by a Democrat.
#4 You need to go back to economics 101.
The rich simply cant leave and take their money with them. They can temporarily move it to some tax shelter country, but if the banking system in the tax shelter country collapses, they could see all their money evaporate.
They also cant simply raise prices. Prices are always governed by the market clearing price, which is set by supply, demand, and money supply. The vast majority of the “rich” do not even produce anything to raise prices on.
Since the top 10% have 90% of the money, they should be paying 90% of the taxes.
#9
Hey Tea Party,
It sounds like you’re into trickle up poverty. Way to go pal. You’re probably for the estate tax too since you own nothing of worth to pass on to others.