CNBC reporter Rick Santelli just went on another one of his monumental rants, which I am sure will go viral on Youtube. He said that if the government took $1 million from all 225,000 million-dollar earners in the U.S. (in other words, took all their income), then the deficit would only be reduced by $225 billion.
Santelli says the problem is spending, but in reality, the problem is his understanding...period.
That's because you can play the same numbers game on the spending side. If the government cut spending by $225 billion (as opposed to taxing those millionaires), then you removed $225 billion in incomme from some group of Americans in the private sector. Same thing as that tax he hates so much, only it probably hits different people, like the very blue collar workers that Santelli purports to stand up for.
Santelli believes the debt is catastrophic to his kids. Well, he's the bond expert, right? I wonder if he would feel poor if he had $1 million in Treasuries? If his accountant prepared his financial statements wouldn't he list those $1 million of bonds as an asset? Of course he would.
I'd love to see his response to that question. His debt rant was an embarrassment.
27 comments:
So you're saying that increasing taxes and cutting government spending have the same impact on the economy? That's the dumbest thing ever. Or maybe you're saying that it has the same impact on government "net income"? That's also dumb. The government doesn't produce anything. It steals from group A and uses that money to buy votes from group B. If government spending improved the economy, then Russia would have done great. Look at North Korea vs. South Korea, West Germany vs. East Germany. The government needs to be shrunk to the size of a pea. Otherwise, group A will simply pack up and leave, and group B will be left with nothing.
Anon... when is hyperinflation coming?
Anon,
No roads in South Korea? No bridges? No public schools? No military?
C'mon...
@Matt,
I think Anon's misguided point is that N Korea has a larger government than S Korea... thus their economic inferiority to S Koreas. S Korea has all the things you say they do because government restraint has allowed the "market" to provide. I'm not saying anything in his troll rant makes any sense, just clarifying his ignorant perspective.
"The government doesn't produce anything."
Like the highway system, space program, Internet, basic research, educational system, etc.? And how would business do without the legal system?
Another false meme.
Broll,
Thanks see that point wrt Anon, but if you think about it, the size of the 'govt' in South Korea, as far as public assets, and effectiveness of the govt authority, is probably larger than in North Korea...
So Anon here has it all backwards...
Resp,
Guys like Anon have been hard to find around here for a long time. (Guess we scared them off.) Let him chime off, guys, I could use the humor.
@Matt,
Yes, you're right... but I think he's lumping government spending and government control into one amorphous monolithic "big government" state. He doesn't differentiate between the good of public assets and the control of a dictatorship.
He´d be a goof even if he understood the economics of deficits.
Didn't some study of the "Happiest Countries" come out recently with Norway, Denmark, and Finland right on top?
World Happiness Report 2012: Scandinavian Countries Are Happiest On Earth
That's because you can play the same numbers game on the spending side. If the government cut spending by $225 billion (as opposed to taxing those millionaires), then you removed $225 billion in incomme from some group of Americans in the private sector.
Not if that spending cut is matched dollar for dollar with borrowing/taxing cuts.
Then the entire $225 billion remains in the private sector.
Santelli believes the debt is catastrophic to his kids. Well, he's the bond expert, right? I wonder if he would feel poor if he had $1 million in Treasuries? If his accountant prepared his financial statements wouldn't he list those $1 million of bonds as an asset? Of course he would.
$1 million invested in Treasuries is $1 million NOT invested in private enterprise that produces civilian goods in the market.
I don't look at all the Treasury debt in terms of money flows only, I look at it in terms of what otherwise could have taken place in real terms if investors invested in civilian enterprises instead.
I mean, there's only so many roads and bridges and space missions that are needed. At some point, maybe the fact that over 40 million people are on food stamps should clue people in that we need far more productivity in the civilian sector.
"$1 million invested in Treasuries is $1 million NOT invested in private enterprise that produces civilian goods in the market."
Nothing is "invested" in tsys. It is saved. The question is whether there is public purpose in the US government subsidizing savers with interest on tsys when they are not necessary operationally under the current monetary system. That's a huge subsidy.
"maybe the fact that over 40 million people are on food stamps should clue people in that we need far more productivity in the civilian sector."
Whaaaaaaaaaaaatttt??????!
Tom Hickey:
Nothing is "invested" in tsys. It is saved. The question is whether there is public purpose in the US government subsidizing savers with interest on tsys when they are not necessary operationally under the current monetary system. That's a huge subsidy.
I define investment as any expenditure of money for the purposes of making subsequent sales/income.
By this definition, purchasing Treasuries, because it is for the purpose of making subsequent sales/income, namely, principle and interest, is an investment.
At any rate, the question is not whether tsys should be paid interest when the tsy doesn't really have to do so to spend money, the question I am bringing up is what the effects are of people giving money to the tsy, rather than to private producers, in order to earn interest on their investments.
Matt Franko:
Whaaaaaaaaaaaatttt??????!
OK, I'll say it in another way. When over 40 million are incapable of producing enough in order to earn enough in order to buy sufficient food to feed themselves, it means that the productivity of their labor is far too low.
Well, the solution then would be for their productivity of labor to rise, so that they can earn enough, so that they can acquire enough food for themselves.
Major,
Have some of them come over to my house and cut my grass tomorrow. And when they are done with that they can trim the hedges.
I have no USD balances at my disposal to pay them though, but they are welcome to come over and "produce some labor" anyway.
Tell them that they can collect some of the clippings and make a salad out of them if they have to eat something.
Matt Franko:
Have some of them come over to my house and cut my grass tomorrow. And when they are done with that they can trim the hedges.
That is just you consuming. It's not productive.
I have no USD balances at my disposal to pay them though, but they are welcome to come over and "produce some labor" anyway.
Hahaha, I didn't say "produce labor", I said productivity OF labor. Good lord, are you telling me you don't know that real wages are determined by the productivity of labor?
Your words here: "40 million are incapable of producing enough"
You are talking about a quantity not a rate.
If you were talking about "productivity" you would have to re-phrase your sentence here to include some sort of denominator...
"just consuming": So we are allowed to build our sewer systems but never flush the toilet? Are we supposed to still dig a hole in the back yard even though we have constructed sanitary systems throughout the country? Peeing in the backyard is "MAJOR FREEDOM"?
You're lost.
Matt Franko:
Your words here: "40 million are incapable of producing enough"
You are talking about a quantity not a rate.
This is irrelevant. Rate subsumes a quantity and quantity subsumes a rate. Talking about a quantity implies a rate, since time always goes forward. If over the next year a specific quantity is produced, then we can infer a rate. If we talk about a rate, then we can infer a quantity.
If you were talking about "productivity" you would have to re-phrase your sentence here to include some sort of denominator...
It's not necessary, but if you want a denominator, then it is time.
"just consuming": So we are allowed to build our sewer systems but never flush the toilet?
Rhetorical question that does not address anything I said.
Are we supposed to still dig a hole in the back yard even though we have constructed sanitary systems throughout the country?
Another off topic rhetorical question.
Peeing in the backyard is "MAJOR FREEDOM"?
Another off topic rhetorical question.
You're lost.
You haven't shown how I am "lost."
You're not addressing what I am saying. You quibbled over whether I am talking about quantity or rate, then you asked a series of silly rhetorical questions obviously designed to paint me as morally repugnant. You're lost, not me. You're worried about morality in a discussion about economics. Stay on topic.
Major,
If we agree that having sanitary sewer systems is good public purpose (which Greece and Rome had 2,000+ years ago):
Then govt builds the system by paying non-govt sector entities USD balances to do the construction that said non-govt entities willfully accept.
Okay so far?
Now the same govt, thinks it is a "good idea" to put a toll on the use of the system. So they put a meter on your home and send the homeowner a bill in USDs that is proportional with the amount of gallons used, but they do not provide the USD balances to the users to be able to pay it... does this make sense to you? It does NOT to me.
Major,
Trying to understand your point... Are you saying that we can build the sewer system by issuing USD NFAs but that we should have to go get a bank loan to be able to have a bowel movement?
Resp,
Matt Franko:
If we agree that having sanitary sewer systems is good public purpose (which Greece and Rome had 2,000+ years ago)
They also had slavery back then. Maybe we should copy ancient societies in total.
Then govt builds the system by paying non-govt sector entities USD balances to do the construction that said non-govt entities willfully accept.
If there is wilful acceptance, it wouldn't have been a government agency that financed it.
Now the same govt, thinks it is a "good idea" to put a toll on the use of the system. So they put a meter on your home and send the homeowner a bill in USDs that is proportional with the amount of gallons used, but they do not provide the USD balances to the users to be able to pay it.
Suppose I, or myself and those in my neighborhood, want to finance build our own sewer system.
Do you understand how it would much more sense to let people decide for themselves, rather than lazily imposing a crude one size fits all solution?
Maybe you have lost all sense of your individuality, and you're such a parasite that you want others to foot the bill for the infrastructure costs, while you just pay a small nominal fee as if you are paying everyone back what was taken from them, but some of us aren't so milquetoast.
Trying to understand your point... Are you saying that we can build the sewer system by issuing USD NFAs but that we should have to go get a bank loan to be able to have a bowel movement?
Better a bank than the state. At least with the bank, you can pick and choose, or go your own way. With the state, it's the same pile of junk, and you have to pay what the state tells you to pay or else you will get thrown into a cage.
Last time I checked, a bank doesn't throw you into a cage if you don't want to do business with them and then have the audacity not to pay them for services you did not want rendered.
Yes, thinking is hard isn't it? Just let mommy and daddy state take care of you, and everyone else has to be made into sheep like you too.
Just trying to understand your point:
If I want to impose a sewer system in your area, and forced you to pay what I want you to pay, then you'd probably consider me to be acting against your interests. Well, should I be wearing different clothes, and a badge, wouldn't turn me into acting in favor of your interests. But for some reason you want to make me believe my interests are promoted just because the goons are wearing certain clothes and wearing badges.
"They also had slavery back then. Maybe we should copy ancient societies in total."
Wow that was irrelevant.
"If there is wilful acceptance, it wouldn't have been a government agency that financed it."
So they were being forced to accept the money in payment? What planet does your brain live on?
"Suppose I, or myself and those in my neighborhood, want to finance build our own sewer system."
You see, I grew up in a society where the sewer system had already been built, so I didn't have to bother with that. Perhaps you live in a particularly backward neighbourhood. Can I ask - are you all fundamentalist right wing libertarian cranks?
In London, before the government intervened to build the sewer system, the Thames was an open sewer. For some reason the private market had never got round to building a sewer system before. I wonder why, given that only the market can efficiently allocate resources (according to your religion).
Anonymous:
"They also had slavery back then. Maybe we should copy ancient societies in total."
Wow that was irrelevant.
But the ancient Romans had slavery. If they knew slavery 2000 years ago already, it must be good. It should be something we should copy.
"If there is wilful acceptance, it wouldn't have been a government agency that financed it."
So they were being forced to accept the money in payment? What planet does your brain live on?
Haha, no, the people who finance it are the ones being forced to finance it. Taxation is mandatory by force. It's not a polite asking.
"Suppose I, or myself and those in my neighborhood, want to finance build our own sewer system."
You see, I grew up in a society where the sewer system had already been built, so I didn't have to bother with that.
You see, I grew up in a caged society where there were guards preventing us from leaving the camp. So I didn't have to bother with thinking what it might be like to live free outside the camp.
Perhaps you live in a particularly backward neighbourhood. Can I ask - are you all fundamentalist right wing libertarian cranks?
I am not right wing, nor am I a libertarian.
Can I ask you: Do you accuse everyone who doesn't adhere to your statist claptrap "right wing libertarian cranks"?
If you had adequate knowledge, you'd have known that the right wing is just as statist as the left wing. I am against statism. It is inimical to my freedom.
In London, before the government intervened to build the sewer system, the Thames was an open sewer. For some reason the private market had never got round to building a sewer system before. I wonder why, given that only the market can efficiently allocate resources (according to your religion).
Correct. They didn't build a sewer because there were other, more pressing needs and desires that individuals wanted.
Yes, in your worldview humans don't even exist. Everything is just a mechanical set of data and the state is to impose it on everyone by force.
It wasn't until there were adequate resources produced in the private sector that the state could fleece the people of their resources to make the sewer possible. The people would have almost certainly done it on their own anyway, once they were satisfied with their other needs, but in your worldview, humans are too stupid for their own good and need a state master to tell them how to improve their own lives.
"It wasn't until there were adequate resources produced in the private sector that the state could fleece the people of their resources to make the sewer possible. The people would have almost certainly done it on their own anyway, once they were satisfied with their other needs, but in your worldview, humans are too stupid for their own good and need a state master to tell them how to improve their own lives."
Finally a flicker of truth. When human being lived at the subsistence level, mostly by hunting and gathering, there were no economic problems since there was no economy. The major challenge was surviving in a relatively hostile environment and defending territory against intruders.
Civilization and economics began when surpluses began to be produced with the onset of agriculture. Then a warrior class had to be maintained, as well as a specialist class, generally priests, that were in possession of the rudimentary knowledge. That was the beginning of extraction by rulers, which was pretty general and brutal for the most part until recently. There was no escape other than the frontier, and as soon as a sufficiently developed civilization was developed, it too got hijacked by an elite that took over political power.
It was really the revolutions of the 18th and 19th century that brought a measure of democracy and the ability of an increasing portion of the public to participate — fist male property holders only, then a broader section of the male population and then women. However the elite still remain in charge virtually everywhere, and there is little possibility of a libertarian scaling up, now that the frontier is history, all territory is claimed by nation states, and nation states exert their power pretty much universally. However, history has a liberal bias and it is possible that humanity is evolving toward higher form of life with greater freedom.
"You see, I grew up in a caged society where there were guards preventing us from leaving the camp"
In your sick dystopian ideal world people would lose their political freedom and democratic rights. That's the nasty reality at the heart of your tyrannical religious ideology. No one wants to live in your nightmare paradise which is why no one is interested in your demented ravings.
As stated in response to some other nonsense you wrote in comments section of the following article, your opinions are based on a total ignorance of how things actually function in this economy. This makes it very difficult for anyone to take anything you have to say seriously.
I understand however that you hate the country in which you live and consider it to be a prison camp. You also have no interest in working with other people to "improve things". You will only ever be content when only YOUR ideas are IMPOSED on everyone else and people's right to oppose YOUR ideas through the democratic process is REMOVED FOR EVER.
So why don't you go and live somewhere else? On your own, with your little pile of gold.
You won't be missed.
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