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RSS Zarepheth

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10 most recent arguments.
1 point

I believe there are other, better, economic theories. Theories that better describe modern economics. For instance MMT (Modern Monetary Theory) seems to provide a very rational viewpoint that demand for money is driven by taxation. And for a government to actually receive money from taxation, it must first provide money to the economy. Whether it does this through direct printing, or indirectly with a third party debt system may impact how the economy works. But more importantly the theory helps us understand how government could intervene to directly counter periods of inflation or deflation.

1 point

No. Both Social Security and 401K/IRA plans are methods by which people acquire purchasing power without producing goods to be purchased. At least, that is most people's goals when investing in such programs.

With Social Security, a persons earnings are placed into a government trust. The government then has a fiduciary responsibility to administer the trust for the benefit of the contributors. Although such may be the case with a private 401K/IRA plan, such plans are not backed by the government. Such plans expose average citizens to risks they are not prepared to take. And has been noted in another post, if such a mandatory plan for 401K/IRAs been in place a few years ago, most people would have lost most of their principal when the economy took a downturn.

401K/IRA plans generally trade on the stock exchange. Although the stock exchange is supposed to help companies raise capital for expansion, it has turned into a casino. Very little money on the exchange actually makes its way to a corporation which needs financial assistance to expand. Instead most of it passes hands from one investor to another, then on to yet another investor.

This means that a sudden influx of money from a mandatory 401K/IRA law might raise stock prices, but since nothing will have changed for the underlying companies, the price to earnings ratios will go up. The return on equity and return on investment will go down. And this will happen across the whole market place. Existing investors (like the larget financial institutions lobbying congress for this change and sponsoring books and news articles to promote it) will enjoy a nice increase in the monetary value of their stock holdings. But the average citizen will not benefit. Instead, they'll pay higher prices for lesser returns.

And none of this will do anything to spur greater production or better service. Because the underlying situation for each company whose stock is traded will remain the same. The stock price goes up, but their earnings remain constant. Since demand for their products and services did not increase, they do not expand their operations. They do not hire more workers. They do not give out any extra raises. Instead, senior executives get bonuses for rising stock prices. But most of those executives already have so much money that they don't spend the extra in the "main street" economy, instead they re-invest it in the stock market.

1 point

Due to unbalanced economic power between the major players in the stock market and the average citizen, such a mandatory program would be no different than requiring every citizen to enter a den of hungry lions.

Because the average citizen must compete not only with other citizens, but with larger and more powerful financial companies, the average citizen will not be able to keep up with those institutions. The larger the institution, the more time and resources they have to research the market and individual companies. The larger and wealthier the institution, the greater computing power they can apply towards analyzing and responding to market conditions. The larger and wealthier the institution, the higher, faster network connections they get with the exchanges. They can also exert more influence on politicians and governing bodies.

The average citizen will be able to spend one or two hours a week studying the market in an attempt to find and purchase the most undervalued stocks. The large institutions apply dozens or hundreds of specialists, full time to analyze the market. The average citizen might have the assistance of one out-dated software tool. The large institutions use proprietary, software, developed in under trade-secret laws to analyze the market. Those organizations may even have a staff of economists performing full-time research to improve their proprietary software. Against such odds, the average citizen will buy stocks at higher prices and sell at lower prices than the large institutions.

1 point

In our current monetary and economic system, we should retain Social Security - with a stipulation that the Federal Government return to it, all the money it has "borrowed" from it.

The stock exchanges on which most 401K and IRA plans trade, are effectively rigged to benefit the owners of the largest banking conglomerates. They use the money under their control to buy stocks in one sector of the market, and then the smaller organizations start doing the same, then it the stock price increases in that sector reach the news media and yet smaller organizations start buying into it. After it's been in the news for a while, the average "investor" who is just trying to shift money from one fund in their 401K/IRA to another buys into the sector with the rising prices. Unfortunately for the average investor, they are the last to get in and do so just before the big organizations sell-off their shares to move money to another sector - popping the bubble and starting a new one.

Any mandatory 401K/IRA where people have to compete with each other and the large banking institutions, hedge funds, and so on in order to make money will do nothing but transfer wealth from the average citizen and put it into the hands of the already wealthy elite.

The average citizen does not have the resources to hire hundreds of day traders, along with multiple data centers and expensive software to scour the marketplace for arbitrage opportunities. Nor do the average citizens have the resources to cause entire sectors pricing to swing up or down due to the huge quantity of money they are shifting around. The large financial institutions, however, often control so much money that they cannot help but materially influence prices when the shuffle their assets.

So Social Security, into which people have already paid, is the only retirement program from which most people will actually receive a positive return on investment.

1 point

A few points:

1) Most "morality" derives from religion. The fact that the label attempts to use "morality" to oppose the Bible or its content seems hypocritical.

2) The label implies that the Bible supports many of the activities listed on the label. Approximately half of the listed activities are prohibited by the Bible and the only descriptions are those necessary to place the prohibition in writing.

Of the rest, except for war related violence, the remaining activities are prohibited or discouraged and the descriptive stories about those activities include the negative consequences directly attributable to those activities.

3) The exposure warning is useless. All the listed consequences of exposure to the Bible are more likely to occur as a result of exposure to TV, Movies, and Video Games.

However, if someone is already mentally unstable, the Bible contains lots of verses that can be pulled out of context and used to justify all sorts of evil. Examining the whole context around those versus would correct such misuse. Unfortunately, when people have decided to focus on and misuse a few words here and there, it's pretty hard to argue with them.

1 point

That's the crux of most poverty discussions and most debates about capitalism/socialism and anything else dealing with economics. Those with the most money say they made it all by themselves and that anyone could do likewise. Which is total BS. The only people who make wealth all by themselves are those who live entirely off the land and don't need anything from anyone else to do so. For some reason, those "live off the land" people barely produce enough wealth to live on...

The rest of us, wealthy or poor, have to make our wealth by working with other people. But then we see people who barely participate in the work receiving a greater share of the produce than those who did the most work. This is what drives people to envy. And if those receiving the smaller portion do not have enough to live on, it can drive them to theft and violence.

1 point

Wealth is created by labor acting on land and natural resources. From that foundation comes all the wealth in this world. You can add to wealth by applying labor to the results of another's labor, but without the initial application of labor to land or other natural resources no wealth would exist.

To eliminate poverty, we must provide everyone, especially the poor, the opportunity to apply their labor in a manner that generates enough wealth for them to support themselves and their families. Anything less removes the motivation to work. Since people require land, natural resources, or the products of someone else's labor in order to produce or increase wealth, people who lack access are automatically impoverished.

Deterrents will neither solve nor reduce poverty. However, they may motivate people to steal and kill in order to avoid the poverty extermination squads. I'd rather not live in that world. If there are fewer jobs than people, anyone who loses their job is a candidate for extermination. I would be highly motivated to lie, cheat, steal, even murder to protect my life. I suspect everyone else would be similarily motivated.

By the way, if there are fewer jobs than people, killing the people will not keep the jobs and people balanced until we've eliminated most of the world's population. As you kill people, you kill those who purchase the goods produced by business. As a consequence, the businesses have to cut back production and cut back more jobs. Until our population was cut back to the stone age, we would fail to balance jobs with population.

1 point

AIG Failing would be good for the world. Most of their wealth was invested in phantom investments - things like credit default swaps and similar financial instruments. Letting them fail would cause most, if not all, evaluators of those instruments to value them at zero. This would quickly wipe tens of trillions of dollars of phantom value off the books of a great many companies, individuals, and perhaps governments. When all was said and done, we'd know how much they are all worth and could fix the underlying problems.

Bailing them out just prolongs the inevitable consequences on society while allowing the guilty a chance to escape with their ill gotten wealth and thus avoid the consequences for themselves. Basically it is a case of privatize profits while socializing risk and loss.

3 points

Extremes of either Capitalism or Socialism can run into problems. Since the current economic depression was caused by out-of-control Capitalism and "fixing" the problem within a capitalistic framework is going to cause "pain" - such as job losses, along with loss of basic support for food, housing and health insurance - I must side with Socialism which would provide basic support for everyone, even when jobs are scarce.

I personally believe that capitalism got out-of-control because we allowed private interests to concentrate wealth and power into the hands of a few people. This provided them with the means to unduely influence our elected officials. After using their wealth to run advertisements (or even buy the media) they could also unduely influence us and sway the public as a whole.

When wealth is concentrated to the point where those who have it cannot find productive investments, they start gambling. Rather than gamble in casinos, they gamble with the stock market. They invest heavily in one sector of the market - causing prices to rise, and kicking off a bubble in that sector. When the bubble approaches the top, they sell of their assets, causing prices to drop and bursting the bubble. Since the last people into the market are usually middle-class investors with limited time and experience, they don't realize how the bubble was created (or that there even is a bubble). They also lack the time and expertise to properly evaluate the market so as to leave with a minimum of loss. Instead, they are the ones who lose their hard-earned wealth to those from whom they bought their investments. This is nothing more than fraud.

2 points

Quote: "What is my incentive to excel if the fruits of my efforts are taken from me?"

When many people participate in production all should receive a share of the production. But how should the fruits of their combined efforts be distributed?

In our current system, the owners of the company - who did NOT participate - get the largest share. After them, senior management, who did not participate, get a share. Then middle management - who may (or may not) have participated receive a share. Eventually the job foreman gets a piece. Finally, whatever is left is distributed to the laborers who did most of the work. As far as distributing the wealth is concerned, I fail to see the difference between this system and slavery.

A better solution would be to break large corporations into many smaller corporations. Remove from banks the power to create money and give it back to the government. Take land from the land owners and require them to rent the land from the community. Now all the profits from rent will go straight back to the community. Smaller companies more evenly divide the fruits of combined labor between workers and managers. And government can create/recall money as needed to benefit society.

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Country: United States
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Education: College Grad

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