Robert Reich to the “rich”: We don’t need your stinking saving and investment
Spoken like a true lefty. Tax cuts for the rich are useless. Tax cuts for the poor stimulate the economy. Yada, yada, etc, etc. I actually want to cut the Harvard professor a break. He’s the economist, I’m not. But to simply dismiss cutting taxes for one group has more economic benefit is absurd on its face. The stark reality is that tax cuts for both are critical to reviving the economy.
For some reason the left is convinced that money exists in a vacuum or that all money is finite and that life would be fine if the rich didn’t hoard or that it should be redistributed. Whatever their belief system, it’s wrong, and I know someone like Robert Reich knows it is wrong. The problem is he is a political animal. It’s not about jobs, it’s about clinging desperately to a often discredited but somehow, never destroyed, belief that wealth is meant to be consumed and the rich just don’t do enough of it. The rich are selfish.
Robert Reich tells us the rich don’t deserve to keep their cash because they won’t spend it the way we want to.
He’s right of course, on savings vs spending, not on a limited payroll tax holiday. As you plot discretionary income over income groups, spending declines and saving and investing increases exponentially as income rises. It, in fact, and Professor Reich knows this, is actually critical to the creation of more capital and more jobs. You see the wealthy (what is that, $150,000 and above?) don’t stuff their discretionary income in mattresses. They consume, they hire, they build and they invest.
That last part is what is most important. It is those Bank CDs that the “rich” park cash in, that give your local banks the capital they then in turn use to make loans for homes, or college or whatever. And the wealthy invest their ill-gotten gains in the stock market, capital companies use to build factories, add new equipment, create jobs. Why, the evil rich even invest in T Bills, Bonds and Notes, which enable helps the Government to pay it’s bills.
Conversely, when you rob them of their hard earned cash you remove that capital from the market, from housing, and business and job creation in the private sector. You know the same private sector that in turn pays the taxes that further help the government pay their bills.
When the government robs capital it is not as if more money will just flow like water and take its place allowing business to continue to grow and expand. It doesn’t. It’s gone. And when the government takes that money and uses it to prop up failing government pension plans, or fund honey bees or SUVs or bail out irresponsible states and pay police and firefighter and yes teacher salaries, the money flow stops on a dime. The state must come back again and again for more. Yes these folks do indeed spend but it is spending that merely maintains activity. There is no capital growth, no need to even hire or produce more goods and services, because such spending is limited to the amount of capital taken, not created from the private sector. It is finite.
Reich knows this and now so do you. The problem with socialism, as Maggie Thatcher so famously and articulately stated, is that sooner or later you run out of other people’s money.
As for the payroll tax holiday … make a full holiday for all at every income level. Stop trying to pick winners and losers. You lefties crack me up.
In the 1990s, the median level of total investment spending as a percent of GDP in the US was 15.97%. During the 2000s, the total is 15.91% — a statistically insignificant difference. Lowering taxes for the wealthy did not spur investment.Reagan lowered taxes for the wealthy tripled the deficit from 900 billion to 2.7 trillion and then with TEFRA raised taxes significantly.The wealthy won't create more jobs if you cut their taxes nor will they increase wages.They will only help themselves.
Maybe like the "stimulus", it "saved" jobs! 😉
If "the wealthy won’t create more jobs if you cut their taxes nor will they increase wages", then what will they do when you increase their taxes?
I guess all that money the rich folks were pouring into the banks didn't help too much when the financial system collapsed taking the stock market with it. Of course their money was long gone from the risky stocks, the folks at Enron and Lehman brothers know that all too well. Some of those wonderful people took their "Ill-Gotten" gains and placed bets on the system crashing. Hey who cares about your 401k, they got theirs.
Isn't that what George Soros did? Bet big against the British pound and make a quick billion? And isn't he Øbama's mentor?
But that brings us back to the point: will taxing the rich make them create more jobs here?
I was always under the impression that the "rich" (or anyone for that matter) could only do five things with money: spend it, save it, invest it, donate it or stuff it under a mattress. All but the latter are usable to society in some form or another. Liberals like Reich seem to think (or want you to believe) that the rich are like Unca Scrooge, and sequester their money in some giant money bin that nobody but them can access. Rubbish. I would imagine that the best part of being rich would be being able to buy or do what you want and as you please. I guess I will never know… ;-(
I would also ask Reich why so many Dems are considering keeping some of Bush's tax cuts to aid the middle class. Now how could that be if it is only a "tax cut for the rich"? You can't have it both ways. If they are only for the rich as they have long claimed, then cut them and cut them quick!
Reich – or as I call him, "the tiny little windbag" – is all about class warfare. Economist or not, he works for the left and will continue to spew doctrine from that side.
Everything about this administration and what Obama has done to this country in eighteen short months has me incensed. I'm so sick of these little lefty mouthpieces lying for the administration and trying to tell us that unicorns DO exist…it's not as bad as it seems, it's getting better, let's just tax the wealthy (yeah, $150K and over?), it's all their fault anyway. And by the way, has anyone blamed Bush for anything yet today?
Now I know why there are TOU for this site…I am biting my tongue so hard today it's practically bleeding.
"Pompous pipsqueak" comes to mind…
It was actualy 250k and over, Vicevich pretended not to remember, I doubt many of the people posting make that kind of money. Vicevich conveniently forgot to make it seem like more people will be impacted. But lets face it, the factories the very wealthy build will be in another country at the expense of jobs here, its been happening for years.
I seem to recall that certain members of the Øbama administration were all over the place with the magic "no tax under" number. Biden screwed it up, and I will try to find the names of the others.
If the wealthy build factories here, it won't be because their taxes went up.
@scottm….as far as Jim forgetting the magic number, we’ve ALL been following the bouncing ball to see where it will land because it hasn’t done so yet.
If the wealthy won’t build factories here, we can always sue them and force them to build here.? It’s the American way!
It's the Rambo Blumenthal way, anyway….
heh heh heh, Dims…by the time they're done, their plan will be to not raise taxes on anyone who currently isn't paying taxes. Then they'll give a tax cut to the poor which means those NOT paying taxes will end up getting a refund on taxes never paid. You'll see…it will all work out for the best and it will be "fair" (yes, kateinmaine…I tossed in "fair" just for you! 😀 ).
I think that the word "fair" in leftyspeak should be spelled "phair" to differentiate it from the true meaning of fair.
Dims, that would be PHAT!
go ahead tax the rich and you will be surprised how rich you are.
Another Harvard nitwit spouting off. At least Clinton was from Yale. Oh lets compare Harvard nitwits in the current administration bankrupting the country and Clintons administration not looking so bad compared to what we got.
Bush took office with a budget that was balanced for the first time since Kennedy, a budget surplus and the lowest unemployment in decades. Why did he feel the need to cut taxes for the rich?
@scott – stop re-writing history. Bush cut taxes for EVERYONE who paid taxes. To be certain, I have NOT defended the Bush – or Congress' – record on spending which is totally out of control. But this post, written in Feb. 2009, has yet to be refuted and certainly makes those who claim the "Bush" tax cuts were a total disaster clam up.
Since the time frame referenced, we had the huge financial crisis which put us into a downward trend for the economy, plus all of the totally explosive government spending that has made things worse when it comes to tax revenue.
Yes I know Steve, Bush cut taxes for everyone, and the wealthy could buy a new yacht and the middle on down could get fries with their burger. Even some republicans most notably John McCain voted against it saying it disproportionately favored the rich. The explosive spending has been going on since we invaded 2 countries, thats something we will be paying against for several years. Where sre all the republican deficit hawks when it comes to pouring billions into foreign countries we invaded to rebuild as they blow it up again. Government spending is used as a tool to help us out of a recession, note Reagans tripling of the deficit. He also presided over the largest tax increase in American history, the TEFRA act of 1982. He also supported an increase of gasoline taxes and social security taxes. As for reducing government, there was an increase in civilian government workers. Despite all of the spending and tax increases I don't recall anyone calling for Reagan's head.
When Mitch McConnel was asked how we would pay for continuing the Bush tax cuts he was completely stumped. He tried to avoid the answer but the person wouldn't let him off the hook, saying that the republicans have been constantly saying they are concerned about the deficit and how would we pay for continuing the tax cuts that are set to expire. He sat there with a stupid grin and had absolutely no answer for it. Alan Greenspan has been quoted as saying that tax cuts don't pay for themselves by generating revenue and productivity. But I suppose he knows nothing.