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...because rich people can already spend as much as they want and are unlikely to spend more even if their taxes are abolished.

The author lost all credibility with this statement.

Breotan wrote:

...because rich people can already spend as much as they want and are unlikely to spend more even if their taxes are abolished.

The author lost all credibility with this statement.

No taxes means spending more, no matter what group you look at. I was for the plan when it got rid of reductions, but I'll look it over and hopefully he reworks it into a better plan. I'm for a flat tax and a federal sales tax after all.

halonachos wrote:
No taxes means spending more, no matter what group you look at.

No it doesn't, "spending" does not cover all financial decisions.

dogma wrote:

halonachos wrote:
No taxes means spending more, no matter what group you look at.

No it doesn't, "spending" does not cover all financial decisions.

I mean that when a person has no taxes they get more income and with that income they tend to spend more, no matter the group of people you look at. Hell, even if they spend a penny more than usual then its spending more.

halonachos wrote:

dogma wrote:

halonachos wrote:
No taxes means spending more, no matter what group you look at.

No it doesn't, "spending" does not cover all financial decisions.

I mean that when a person has no taxes they get more income and with that income they tend to spend more, no matter the group of people you look at.

Unless they're rich, in which case they're more likely to save it than spend it, so that they can use money to make money.

halonachos wrote:
I mean that when a person has no taxes they get more income and with that income they tend to spend more, no matter the group of people you look at. Hell, even if they spend a penny more than usual then its spending more.

Diminishing returns would still apply.

To hyperbolize, if I make 1 million USD per anum, and don't spend 30% of it (or even 1% of it) I will not be likely to spend more given 2 million USD per anum.

Now, there are variations, if I were given 1 billion USD per anum I probably would spend more, because the pool of things I could spend money on would increase in size dramatically.

Melissia wrote:

halonachos wrote:

dogma wrote:

halonachos wrote:
No taxes means spending more, no matter what group you look at.

No it doesn't, "spending" does not cover all financial decisions.

I mean that when a person has no taxes they get more income and with that income they tend to spend more, no matter the group of people you look at.

Unless they're rich, in which case they're more likely to save it than spend it, so that they can use money to make money.

Oh of course because they aren't already saving money.

halonachos wrote:
Oh of course because they aren't already saving money.

You're equating saving with spending, which is a mistake and part of what I think Melissia was getting at.

dogma wrote:

halonachos wrote:
I mean that when a person has no taxes they get more income and with that income they tend to spend more, no matter the group of people you look at. Hell, even if they spend a penny more than usual then its spending more.

Diminishing returns would still apply.

To hyperbolize, if I make 1 million USD per anum, and don't spend 30% of it (or even 1% of it) I will not be likely to spend more given 2 million USD per anum.

Now, there are variations, if I were given 1 billion USD per anum I probably would spend more, because the pool of things I could spend money on would increase in size dramatically.

So that means that they won't spend 30% of what they're given additionally. If I make 1 million and don't spend 30% and am given in increase in 2 million then I would still spend more than normal seeing as though I would be saving only 30% of the 3 million I then make.


Automatically Appended Next Post:

dogma wrote:

halonachos wrote:
Oh of course because they aren't already saving money.

You're equating saving with spending, which is a mistake and part of what I think Melissia was getting at.

You're reading too much into it, I'm not equating saving and spending. I'm not some sort of punk who doesn't understand the difference between the two.

People who are given more money will spend more money even if they already save a portion of it. Now how they spend it may be different, they may spend it towards paying off credit or spend it on more food, or perhaps even spend it on luxury items or insurance policies.

halonachos wrote:
So that means that they won't spend 30% of what they're given additionally. If I make 1 million and don't spend 30% and am given in increase in 2 million then I would still spend more than normal seeing as though I would be saving only 30% of the 3 million I then make.

When I said "given 2 million USD per anum" I meant it in the sense of having the amount per adjusted to 2 million per anum.

But, your argument is poor, people do not spend in consistence with percentages of income. No one, or at least very few people, says "I will save 30% of my income." independently of the amount they make. In general, people will purchase what they desire given the capacity to do so, and not spending 300k per anum suggests that the person in question has relatively few additional desires.

halonachos wrote:
You're reading too much into it, I'm not equating saving and spending. I'm not some sort of punk who doesn't understand the difference between the two.

Yes, you are.

Yeah... actually. I kinda think you are that "punk", to use your own term.

Those whom have lots of money tend to save more as a percentage of their income than those that do not; those that have less money tend to spend a larger percentage of their income than those that have more.

It's one of the most consistent facts in economic history, and why the "fair tax" is regressive.

dogma wrote:

halonachos wrote:
So that means that they won't spend 30% of what they're given additionally. If I make 1 million and don't spend 30% and am given in increase in 2 million then I would still spend more than normal seeing as though I would be saving only 30% of the 3 million I then make.

When I said "given 2 million USD per anum" I meant it in the sense of having the amount per adjusted to 2 million per anum.

But, your argument is poor, people do not spend in consistence with percentages of income. No one, or at least very few people, says "I will save 30% of my income." independently of the amount they make. In general, people will purchase what they desire given the capacity to do so, and not spending 300k per anum suggests that the person in question has relatively few additional desires.

You were the one who brought up the 30% dogma, not me, I was just using your numbers so your argument is poor as well. Besides, you cannot tell me that if a person made more income they would not end up spending more money than normal, even if it is by a penny.

halonachos wrote:
You're reading too much into it, I'm not equating saving and spending. I'm not some sort of punk who doesn't understand the difference between the two.

Yes, you are.

halonachos wrote:
You were the one who brought up the 30% dogma, not me, I was just using your numbers so your argument is poor as well.

The number was chosen at random, and was not the focus of my point, which I further clarified and you have either misunderstood, or purposefully misrepresented.

halonachos wrote:
Besides, you cannot tell me that if a person made more income they would not end up spending more money than normal, even if it is by a penny.

Sure I can, just watch:

"A person who makes more money is not necessarily going to spend more, even if its a penny."

More seriously, you would have display a causal link (which is really difficult) between earning more money and spending more (in a marginal sense), to prove your point.

halonachos wrote:
Actually no I'm not Dogma, there is a clear difference between saving and spending the first being you end up keeping money in one hand and use it in the other hand.

That's not the difference. Spending is, economically, a euphemism for consumption, and does not include investment.

Also, "on", not "in".

halonachos wrote:Bah, you are not seeing the point

... I'm not really entirely sure you have one?

As for me, I paid taxes every time I worked, but that doesn't mean I support the current tax system...

Breotan wrote:

...because rich people can already spend as much as they want and are unlikely to spend more even if their taxes are abolished.

The author lost all credibility with this statement.

The author overstated his case in claiming they are unlikely to spend more at all. They are likely to spend some of their previously taxed income - not as much as lower income groups - but certainly greater than zero.

It wasn't a huge mistake, though, and I'm surprised it's enough for the author to lose all credibility with you.

Meanwhile, Cain's plan is actually dependant on that additional spending to kickstart the economy and drive new growth. This theory operates in almost complete ignorance of the simple fact that the consumption spending of the wealthy is marginally affected by the tax rate. Is that enough for Cain's tax plan to lose credibility with you?

dogma wrote:

halonachos wrote:
You were the one who brought up the 30% dogma, not me, I was just using your numbers so your argument is poor as well.

The number was chosen at random, and was not the focus of my point, which I further clarified and you have either misunderstood, or purposefully misrepresented.

halonachos wrote:
Besides, you cannot tell me that if a person made more income they would not end up spending more money than normal, even if it is by a penny.

Sure I can, just watch:

"A person who makes more money is not necessarily going to spend more, even if its a penny."

More seriously, you would have display a causal link (which is really difficult) between earning more money and spending more (in a marginal sense), to prove your point.

halonachos wrote:
Actually no I'm not Dogma, there is a clear difference between saving and spending the first being you end up keeping money in one hand and use it in the other hand.

That's not the difference. Spending is, economically, a euphemism for consumption, and does not include investment.

Also, "on", not "in".

Did I not say that spending money was different from them putting money into savings? Savings is just not spending money, and that is all it is.

The key factors that determine consumer spending in the economy can be summarized as follows:

The level of real disposable household income
Interest rates and the availability of credit
Consumer confidence
Changes in household financial wealth
Changes in employment and unemployment


Keynesian economics dogma, Keynesian economics.

Which is a nice evasion of the point, Halo, but it's still just an evasion.

The point was made that people whom make a lot of money already frequently spend less as a percentage of that money, and thus are far more likely to save. Upon getting more money, you say they'd spent it all-- which contradicts this well-proven economic principle.

An evasion of the point Melissia? I have given you a graph showing that when people make more they tend to spend more, I fail to see how that is evading the point.

Evading the point by pointing out an entire economic theory based on the belief that people spend more if they make more and that people should be given money to spend if the economy is tanking?

No Melissia, I am not evading any point. I have an entire economic theory that agrees with my statement that people spend money when they have it and spend more when they have more. In fact I think I hit the point square on the head with so much precision that an analytical scientist would weep.

I never said that they would spend it all, all I said is that they would spend more than they normally would should they get more money. Also, Keynesian economics was all about spending and said that underspending/oversaving was bad. You think that I am trying to evade the point only because you have consistently failed to see the point I was originally making because you were making assumptions that reached farther into my original statement than you should have reached. Its a farely basic statement "When people get more money they tend to spend more money, even if its by a penny.".

Now if you do want to reach into statements then I will say that you believe that if the rich get more money they will save it all and not spend a single penny of it. To which I reply, this is BS. Rich people are already saving more money percentage wise than the poor because they can, but they are also spending more than the poor in terms of items they purchase. Afterall, how many poor people do you know that own a private jet that costs more than a house?

halonachos wrote:An evasion of the point Melissia? I have given you a graph showing that when people make more they tend to spend more, I fail to see how that is evading the point.

The article writer was talking specifically about rich people though. While he overstated his case in claiming the wealthy don't spend more money, they certainly spend a whole lot less out of each extra dollar than the poor.

Evading the point by pointing out an entire economic theory based on the belief that people spend more if they make more and that people should be given money to spend if the economy is tanking?

Except that same economic theory notes the relative impacts of giving different groups of people more money, and the subsequent effect on aggregate demand. It notes that a dollar given to a rich man is only going to see a few cents spent, while a dollar given to a poor man will be nearly entirely spent.

And the same theory notes that neither handout has a fraction of the effect on raising aggregate demand that public infrastructure spending has.

Rich people are already saving more money percentage wise than the poor because they can, but they are also spending more than the poor in terms of items they purchase. Afterall, how many poor people do you know that own a private jet that costs more than a house?

The key issue is not the total amount spent, but marginal spending. That is, as a result of receiving an extra dollar in tax cuts how much extra does the rich man spend, and how much extra does the poor man spend. Because he has more pressing consumer needs, the poor man spends almost all of that extra dollar, while the rich man spends a lot less.

All of which basically amounts to say that Hermain Cain's plan to drive economic growth through tax cuts focussed on the wealthy is pretty much anti-economics.

halonachos wrote:
Did I not say that spending money was different from them putting money into savings? Savings is just not spending money, and that is all it is.

You said it, and then said several things that indicated you didn't understand what you said.

halonachos wrote:
The key factors that determine consumer spending in the economy can be summarized as follows:

The level of real disposable household income
Interest rates and the availability of credit
Consumer confidence
Changes in household financial wealth
Changes in employment and unemployment

Keynesian economics dogma, Keynesian economics.

I'm trying to respond to this without being insulting, and it is incredibly difficult.

First, you are plainly confusing aggregated spending with the consumer spending of a particular group.

Second, you're confusing any rebuttal of my claim that you do not understand the distinction between spending and saving with a claim that you do not know what consumer spending is, as illustrated by your quotation of this website (pro-tip, we can all right click on pictures that you post).

Third, said website actually agrees with the distinction I have made.

An evasion of the point Melissia?

Yes.

You have a graph, good for you. But the graph discussed an entirely different point, which did not support your argument.

If you spread a million dollars (through tax cuts, rebates, food stamps, assistances, whatever is appropriate) over a thousand people that each make 15k a year, they are extremely likely to spend the entire million dollars. If you spread a million dollars over a thousand people making 500,000 or more, they are likely to put some, most, or even all of it in the bank, as it's just an extra bonus to them. Some of the money will be spent on consumption-- but not as much as when it is given to the poor people.

The more efficient route then, if you wish to increase demand, is to give to those whom don't have as much through various programs, and let those who already have lots of money spend their own.

Wow, you guys are completely over reading everything I have been saying. What I am saying is that no matter who you give money to(rich, poor, middle-class) they will spend more than they would if they had not been given extra money.

@dogma, congratulations I found a random image on the internet and decided to use it as a source. You then looked at the image properties to see where I got it from, whippity doo, I could care less what you think of the sources of images I find. Just because I used an image from a site that teaches basic economic principles doesn't mean I don't know what I'm talking about, it means that it was the only graph that I could find to back up my claim with the limited amount of time I put into searching for something for an internet argument.

Now Melissia, are the rich more likely to put some of the money into the bank, yes. But here's the big fething point there, they are still likely to spend some of it as well as money they would normally spend and that's all that I was saying.

I wasn't saying that they would not put any of it into a bank, I wasn't saying they would spend it all, I was saying that should a person be given money they would spend some of it. You can compare and contrast the different economic levels and say that the poor will spend more on food compared to the rich, but that's not what I'm getting at. i am not comparing the relative spending habits of the rich and poor, I am saying that both groups would spend more than they normally would should they get more money.

Oh my god, it really as simple as that. By trying to compare and contrast the different categories that the different income levels spend their money on shows that you have not only missed my point, but have tried to turn around and say that I am missing the point I was trying to make.

@Dogma, I have said that spending and savings were different. I have repeatedly said it and you have repeatedly said that I was wrong, but guess what Dogma, the website that the graph comes from also agrees with me on the definition of saving compared to spending. I would appreciate it if you didn't try to act so high and mighty by saying that my base definition of saving vs spending is incorrect. I have never said that spending=putting money into a bank and I have not said that saving=using money to purchase items. I have always said that spending=use of money for goods and saving=storing money.

halonachos wrote:Now Melissia, are the rich more likely to put some of the money into the bank, yes. But here's the big fething point there, they are still likely to spend some of it as well as money they would normally spend and that's all that I was saying.

So basically you WERE missing the point.

Melissia wrote:The more efficient route then, if you wish to increase demand, is to give to those whom don't have as much through various programs, and let those who already have lots of money spend their own.

Melissia wrote:

halonachos wrote:Now Melissia, are the rich more likely to put some of the money into the bank, yes. But here's the big fething point there, they are still likely to spend some of it as well as money they would normally spend and that's all that I was saying.

So basically you WERE missing the point.

Melissia wrote:The more efficient route then, if you wish to increase demand, is to give to those whom don't have as much through various programs, and let those who already have lots of money spend their own.

I can see why so many people put you on their iggy list...

No Melissia, I was not arguing for any "efficient route" or looking for some sort of stimulus idea. I was saying that people will spend more if they are given more no matter who they are, if you want to argue about who should be given more that's fine and all but not what I was talking about at all. Don't tell me that I don't know what target I was shooting at after you fail to hit it.

So then, why did you disagree with what I said if you don't disagree with what I said? Unless of course you changed your mind, which is fine.

Melissia wrote:So then, why did you disagree with what I said if you don't disagree with what I said? Unless of course you changed your mind, which is fine.

Because you disagreed with me in the first place by bringing up something I wasn't comparing, or in the words of someone on here, you brought up something irrelevant to my statement.

Again, if you agreed with what I was saying, why did you disagree with what I was saying?

Relevant to the topic: It looks like (from what I read of transcripts of the debate) the R debate last night had even the other candidates tear apart some aspects of the 999 plan.

Melissia wrote:Again, if you agreed with what I was saying, why did you disagree with what I was saying?

Relevant to the topic: It looks like (from what I read of transcripts of the debate) the R debate last night had even the other candidates tear apart some aspects of the 999 plan.

I agreed to what I was saying, you just went off on how the rich save more than the poor and therefor we shouldn't give them more money and should instead give some to the poor, which is something I don't agree with seeing as though I would like it if no one was given tax deductions.

Then that should have been your objection yes?

Melissia wrote:Then that should have been your objection yes?

Oh, at first I wasn't objecting I was just adding my two cents to the thread. However people began arguing against my statement and insulting my intelligence by saying that I didn't know the difference between spending money and not spending money.