Economy 101

[Valkyrie]

If he trades with that person for what they have produced then what is wrong with that? But if he steals what they have produced then the problem is not greed but theft.

Not all theft is illegal. But I'm not talking about theft, I'm simply pointing out that anyone who collects more than they can use at the expense of others is immoral.

 

[Dr.Who]

Not all theft is illegal. But I'm not talking about theft, I'm simply pointing out that anyone who collects more than they can use at the expense of others is immoral.

Let s use the classic example of the apple tree in an unowned field.

The one who picks more apples than he can eat while others are waiting to get into the tree does do so at the expense of others. Unless of course he sells his apples at a fair price to those who cannot climb the tree. Then he is actually offering a valuable service.

But alas this does not actually address what you said because this applies to those who take something and therefor deprive others of it.

What you said was: "No . . . I'm saying that "A greedy man is one who collects more than he can consume by consuming what others have produced."

So what would an example be in which a person takes more than he can consume at the expense of others and that what he consumes is what others have produced?

Back to the apple tree:

If a person takes what others have picked simply by stealing their baskets then that is theft. If he hires others to pick apples and what he collects is more than he can consume then he has still performed a service of benefit to them by paying them for their work. If he hires them for less than their time is worth then they still thought it was a good deal since they accepted the deal and it is not less than there time is worth. They still had the choice to not accept the offer and pick the apples for themselves.

I do not see a scenario in which he can collect more than he can consume, that they produced, at the expense of others and which is not theft and which is also immoral.

 

[Texas_tea]

Not all theft is illegal. But I'm not talking about theft, I'm simply pointing out that anyone who collects more than they can use at the expense of others is immoral.

More "for the greater good" BS ....
Please point out, at anytime in history, where a socialist or even a socialist style government has ever even come close to the success and exceptionalism America has provided for it's citizens and other countries abroad, including the support and protection of all Freedoms and Liberties!

 

[Valkyrie]

Actually, he did oppose such things..



Rand made no exceptions, hence the word "Every"... You offered a strawman by suggesting that Rand would have supported a position that would utilize the power of government to provide a benefit to some at the expense of others when she did no such thing, you also used an appeal to ridicule to poke fun at her for having written fiction novels with an appeal to authority which suggests that fiction authors have no credibility on the subject matter, and finally you used an ad hominem by attacking her as being intellectually dishonest.

Should we lower our expectations and stop expecting you to reply in a manner that's consistent with intellectual honesty?

It isn't a strawman argument simply because Rand did not openly publish that idea- this is how conservatives consistently err.

Faux News has become very adept at this. Like Rand, they point out the flaws on one side of the fence while ignoring the flaws on their own side. The fact is that if Rand expresses her concern over poor and disabled people getting government assistance, but neglects to mention that corporations receive assistance, then she is not examining her own claims fully. Either that, or she is aware of the flaws in her argument, but is confident that the people reading her garbage aren't really capable of critical thinking. The sad part is, she's right.

This tactic never fools the more intelligent portion of the populace, because we tend to examine such claims before we accept them.

 

[Cruella]

Faux News has become very adept at this. Like Rand, they point out the flaws on one side of the fence while ignoring the flaws on their own side.

You don't watch Faux News do you?

 

[Valkyrie]

Let s use the classic example of the apple tree in an unowned field.

The one who picks more apples than he can eat while others are waiting to get into the tree does do so at the expense of others. Unless of course he sells his apples at a fair price to those who cannot climb the tree. Then he is actually offering a valuable service.

Wonderful post and example, Dr. Who!! I agree completely. If a more capable person climbs the tree and sells apples to those who CANNOT climb the tree at a FAIR PRICE- he is providing a valuable service.

But if he blocks the progress of others who are capable, or sells the apples at an outragious price, the value of his service is diminished- and could even be eliminated.

Thank you- I was beginning to wonder if this forum had anything to offer.

 

[Dr.Who]

Like Rand, they point out the flaws on one side of the fence while ignoring the flaws on their own side. The fact is that if Rand expresses her concern over poor and disabled people getting government assistance, but neglects to mention that corporations receive assistance, then she is not examining her own claims fully. Either that, or she is aware of the flaws in her argument, but is confident that the people reading her garbage aren't really capable of critical thinking. The sad part is, she's right.
.

Rand clearly objected to corporations receiving assistance. In her book Atlas Shrugged the evil railroad attempted to lobby for special treatment and she opposed that.

 

[Cruella]

You would prefer that the government take possession of the tree and pay people to pick the apples and pay for their healthcare and retirement and then expect the people who pick the apples to pay for their share of apples while giving those who can't climb the tree their share for free and giving them healthcare and retirement too. You also have to tax the people who have earned money for climbing the tree to pay for their wages and benefits, and they also have to pay for those who have gotten everything free at the expense of the tree climber's labor.

 

[Dr.Who]

Wonderful post and example, Dr. Who!! I agree completely. If a more capable person climbs the tree and sells apples to those who CANNOT climb the tree at a FAIR PRICE- he is providing a valuable service.

But if he blocks the progress of others who are capable, or sells the apples at an outragious price, the value of his service is diminished- and could even be eliminated.

Thank you- I was beginning to wonder if this forum had anything to offer.

If he blocks the progress of others then he is interfering with that persons right to climb the tree. This is exactly the purpose of government - to protect rights. In this case while a right was violated it is not an example of the person benefiting by taking what others have produced.

If in a free market he sells the apples at an outrageous price...well if the apples are bought then the price was not outrageous but if the price is outrageous then the apples will not be bought. The ONLY time the apples can be sold at an outrageous price is in the absence of a free market.

 

[Valkyrie]

I will not waste my time responding to your ad hominem and strawman fallacies, instead I will point out that I did address what you actually posted:

You proposed an economy based on 100% spending and 0% savings - true or false

If the answer is False, then I have misinterpreted your proposal, I apologize for the misunderstanding, and I request that you be more specific.

However, if the answer is True, then I have addressed what you actually posted and my statements are valid - demonstrably so.

Now let's examine the proposed economic "system" of 100% spending...

The average mean income for the US is roughly $47,000 a year. At current income tax rates an individual will pay $7,780 in income tax and an additional $2,656 in FICA taxes, leaving them with an adjusted after-tax annual income of $36,564. Now to be generous, let's say they get paid every 2 weeks, that's $1406.30 per paycheck and, according to your "system", they have to spend all that money and save nothing.

Under your "system" no individual could ever purchase any single item with a cost greater than $1,406.30 - Congratulations, your "system" just killed the entire economy of the United States: The realty industry is dead, can't buy a new home for $1400... The auto industry is dead, can't buy a new car for $1400... The construction industry is dead, can't build a new building for $1400... Every industry that sells products or services in excess of $1400 has gone broke AND the entire stock market has collapsed as every penny of capital has been drained out of it and there is no more capital in the form of savings and investments available to purchase stocks and bonds, thus bankrupting every major company and industry overnight....

And what's this person supposed to do for income in retirement? He wasn't allowed to save anything, so once he retires, he's flat broke... Perhaps your plan is to cart him off to the Glue Factory in true Animal Farm fashion, or maybe soylent green is more your style...

Since you're so keen on accusing me of not understanding reality, and not comprehending economics, and you refuse to discuss economic growth as it pertains to the proposed "system" by pretending that it's unrelated to the topic, perhaps you can explain how your "system" realistically leads to something other than total economic collapse.

You do not understand, GenSeneca. The concept of spending everything and saving nothing is not an ideal economy, and I did not claim that it was. It certainly is not my proposal to implement such a system, and your attempt to portray it as my "recommendation" is it's own form of strawman argument.

For the second time, I will try to simplify the question for you:

Is an economy more sluggish when people spend, or when they do not? Most people understand that spending is a critical element of the economy, and that the more consumers spend, the higher the GDP:

Consumer spending is a critical determinant of the direction the economy takes. The consumer makes up more than 70% of the Gross Domestic Product (GDP) of the United States. So, the how goes the consumer, goes the economy. http://www.tradingonlinemarkets.com/Articles/Economics/The_State_of_Consumer_Spending.htm

Wages are stagnating as the job market cools, restraining the consumer spending that is needed to sustain the U.S. economic recovery. http://www.bloomberg.com/news/2012-...l-restraint-in-spending-by-u-s-consumers.html

Retail sales are an important economic indicator because consumer spending drives much of our economy . . . When consumers open their pocket books, the economy tends to hum along . . . However, if consumers feel uncertain about their financial future and decide to hold off buying new refrigerators or blue jeans, the economy slows down. http://stocks.about.com/od/marketnews/a/stocksretailsal.htm

While I appreciate that you're trying, I think you keep jumping ahead of me- and reading things into my posts that are not there.

 

[Cruella]

Where is the popcorn smilie?

 

[Dr.Who]

Is an economy more sluggish when people spend, or when they do not? Most people understand that spending is a critical element of the economy, and that the more consumers spend, the higher the GDP:

I had to go back quite a way to see where this started.

yes an economy with lots of spending is better than one with little.

Yes currency permits crafty people to invent new ways to cheat others. Currency also solves a lot of problems that the barter only system has. The existence of currency does far more good than harm. There is no way in the world that we will ever return to a pre-currency economy so there is no sense in worrying about it. People will always find ways to cheat others instead of trying to remake the whole economy we need to be getting gov to focus on what it is supposed to be doing - enforcing laws that protect rights.

 

[GenSeneca]

It isn't a strawman argument simply because Rand did not openly publish that idea

Straw man – an argument based on misrepresentation of an opponent's position.​

As Dr.Who pointed out, Rand was consistent in opposing government handouts - to anyone.

"Whoever claims the “right” to “redistribute” the wealth produced by others is claiming the “right” to treat human beings as chattel." - Ayn Rand, The Virtue of Selfishness

You claim she only opposed government handouts to the poor and disabled but had no problem with corporate welfare... Where is your evidence of this? Why have you not posted a single quote from Rand where she explicitly states what it is you're claiming she believed?

 

[GenSeneca]

The concept of spending everything and saving nothing is not an ideal economy, and I did not claim that it was.

Here's what you DID claim...

PART II

Imagine a country where everyone spent every penny they make. This is the most robust economy imaginable- when people spend, companies hire to cover the extra business they're getting. In this type of economy, it is difficult to imagine that significant unemployment would exist at all. Since income taxes are a percentage of income, the government benefits from this type of economy, too.

For those who do not know, the economy only grows when people are spending money.

Any arguments?

You had complained that I did not address what you actually posted but that's exactly what I have done. I have thoroughly demonstrated that an economy "where everyone spent every penny they make" would not be "the most robust economy imaginable" as you imagined but, instead, would be a total disaster. You asked for arguments, if you were hoping for one that wasn't devastating to yours, perhaps you should have asked only for arguments weaker than your own.

Most people understand that spending is a critical element of the economy, and that the more consumers spend, the higher the GDP

Our economy is (fallaciously) measured in terms of GDP = Gross Domestic Product, i.e. the sum total of domestic production. Hence the reason I originally pointed out that production must precede consumption in order for GDP to see growth. You rejected my mentioning of the concept of "growth" as being a red herring despite the fact that you claimed, "the economy only grows when people are spending money".

The economy is not measured as GDS = Gross Domestic Spending. So while spending does play an important role in the economy, it is not how a nation's economy is measured and, therefore, is not the cause of GDP growth. If you believe otherwise, then you must have no problem with trade deficits... After all, if spending is spending, you would have to agree that spending our money to purchase foreign goods helps grow our economy.

Lastly, overspending poses a significant threat to the stability of any economy. We saw proof of this with the credit bubble that was used to build a housing bubble, which ultimately exploded and brought about the banking crisis. Such economic bubbles are always built on overspending. So a truly "robust" economy would be one that is stable and sustainable, which means, one that is built on a solid foundation of savings and investments.

 

[GenSeneca]

yes an economy with lots of spending is better than one with little.

I think that depends on how you define "better" and whether or not that "spending" comes from credit or savings.