Originally posted by IshDaGegg I am not sure the US census data themselves support the oft-made claim of income stagnation for most US citizens from about the 1970s onwards.
Consult this document on consumer income.
http://www.census.gov/prod/2010pubs/p60-238.pdf
Here, see the data on real median household income for all races (Figure 1, Page 6)
Consult this document on househ icher faster than the poor get richer, but the poor *do* get richer as the rich get richer.
No one claims that income stagnation has existed since 1967 so that is a red herring. They have claimed that worker wages have stagnated since the late 70s. Here's a chart of male worker wages: http://www.stateofworkingamerica.org/tabfig/2008/03/SWA08_Chapter3_Wages_r2_Table-3.6.jpg
In 1979, those at the 50th percentile made an hourly wage of $17.63 in constant 2007 dollars. In 2007, BEFORE the Great Recession, the same figure was $16.85 or a 4.4% drop. Of course, those fortunate enough to be in the top 5% of wage earnings have seen an increase of over 30%.
Originally posted by spruce112358 So the lesson is clear. Low taxes means a prosperous economy with low unemployment. High taxes means a stagnant economy with high unemployment which no amount of government spending can fix (in fact only makes worse). So increasing taxes on “the rich” with something disasterous like 50% on income over $250,000 would take us right back in the direction of another lost decade like the 1970's.
Dumb idea.
Low taxes might improve things economically in the short term, but when government looks at its obligations and its tax streams you have with a nation like the US only one option....WAR.....
Originally posted by Teinosuke Until the 1970s the United States was part of a fixed exchange rate system which was surely designed in part to prevent countries from "manipulating their currency". It was an American President who made a unilateral decision to withdraw from this system, presumably on the assumption that it was in US interests.
If China is now manipulating its currency ...[text shortened]... ive tariffs, respond by manipulating their own currency to neutralise China's advantage?
That was different. The US dollar was officially the world currency -- "as good as gold". But Nixon had to abrogate Bretton Woods because the "rest of the world" refused to maintain gold at $35/oz. Instead, the rest of the world was making a nice profit off of arbitrage - converting dollars to gold in the US and then selling the gold on the open market for more than they converted in dollars. Nice little scheme and so nice of the US to enable it, but ultimately untenable because US gold reserves were disappearing and would eventually have been gone.
I agree that even in the absence of official "pegs", any country might still want to manipulate their currency -- and the disincentive should be tariffs that defeat that purpose. The tariffs should happen so automatically that the temptation goes away completely.
Originally posted by spruce112358 That was different. The US dollar was officially the world currency -- "as good as gold". But Nixon had to abrogate Bretton Woods because the "rest of the world" refused to maintain gold at $35/oz. Instead, the rest of the world was making a nice profit off of arbitrage - converting dollars to gold in the US and then selling the gold on the open market ...[text shortened]... pose. The tariffs should happen so automatically that the temptation goes away completely.
No, the disincentive should be:
1) reducing the number of currencies - no currency wars between eurozone members, I assure you.
2) mutual agreements between countries not to manipulate currencies.
That way you don't have to extinguish fires using gasoline.
Cutting taxes increases prosperity
13 Nov '10 17:391 edit
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