If it is true we will have grid lock with the republicans having power in congress and Obama as President, does that mean the Bush tax cuts will expire?

Obama is taking a firm stance on this issue.

The Republicans do not control Congress, they control the House.

I sure hope so. But I’m about the only person I know who feels like none of us are paying enough taxes to support our empire.

@marinelife Yes, I know. So how would that work? Congress will have to propose an extension of the tax cuts, Obama veto’s it, and then the senate does not have enough to overturn the veto? So then back to the Bush tax cuts expiring?

@JLeslie Why do you assume it would pass the Senate?

Hardly a firm stance there @Blondesjon ,,,“President Obama said that he is willing to negotiate to ensure the Bush tax cuts are extended ”
Obama has no choice but to extend all Bush Tax cuts….it’s the only cards he has left to play to bring this economy around.

This is how he sugar coated it.
”[M]y goal is to sit down with Speaker-elect Boehner and Mitch McConnell and Harry and Nancy sometime in the next few weeks and see where we can move forward in a way that, first of all, does no harm; that extends those tax cuts that are very important for middle-class families; also extends those provisions that are important to encourage businesses to invest, and provide businesses some certainty over the next year or two,” Obama said.”

@marinelife I said it would not pass the senate. Doesn’t there need to be a ⅔ vote to overturn a veto? Or, am I misunderstanding your question?

Everybody can say whatever they want to. The economy is in trouble because there are more goods and services than there are customers with money to buy goods and services.
Except for the most die-hard Marxists (who already wrecked one civilization) people know that taking money out of the pockets of potential consumers is a sure way to further damage a damaged economy.
The tax cuts will be extended, or there will be a problem for opponents in 2012.

@josie So what do you think will happen? All the tax cuts will be extended?

@JLeslie
Well, let’s face it.
Most people at one time or another (me included) have geen guilty of underestimating the stupidy of congress.
But economics is economics, and except for the most incredibly stupid among them, most legislators know that the more money people have to spend, the more they will buy. Especially people with a lot of money.
So, yes.

@josie I completely disagree that people with lots of money will buy more if they have more money. There comes a point where there are only so many cars, houses, and articles of clothing you can buy. I don’t change my spending when my husband and I earn more, we just save more, and I am not rich, but have money leftover at the end of the month, travel, nice cars. The middle class guy who worries about making ends meet, when he gets more money he might finally buy a new car or take his family on a vacation. The rich always have enough money to take a vacation or buy a new trinket.

@JLeslie Well then, write your congressmen and insist that he screw the rich so you can buy more stuff made in China. FYI, I am not rich either. It is an economic issue, not a political one. The more people with money, the more I sell. Simple as that.

@josie I am not trying to screw the rich. Have you ever seen that article I have posted that the top 400 earners in America, make over $200 million a year and pay an average of 17% in taxes? It is from IRS data. I would bet ey pay a lower percent than you. And, we agree, the more people with money the more you sell. Not, a few people with lots of money the more you sell.

@JLeslie Since when do you or anybody else get to have the priviledge to judge who is too rich for the “common good”.
If you had a plan for your life, and it made you rich, you would resent the people who thought you were inappropriate for being materially successful.
But if you felt weird about it, and if you chose to give away your money, certainly nobody would stop you and you would be confused it they tried.
But if others hired a gang of thugs to come and take it from you, and you simply rolled over and let them do it, then you would be an unprincipled weakling.
And I bet you are not an unprincipled weakling.
So what is your point?

@JLeslie To clarify @marinelife‘s point, in your example it would have to pass the House AND Senate for it to reach Obama for a veto. Therefore, if it didn’t pass the Senate to begin with, no veto would be required.

I read a book (sorry, I forgot the name) about the fact that rich people tend to spend less. This is not because they are rich. Rather, it is why they are rich.
This book stated that most people spend too much.
Most rich people spend within their means.
However when most people get extra cash they tend to spend it.

the right will have to come out with some ideas now, any ideas instead of no. It is in their best interest to play. They own as much of this situation as the Dems now.

@perq Got it. Thanks. I was thinking two steps ahead.

@josie, I would guess you think everyone should pay the same dollars in tax, I am talking about paying the same percentage. The very wealthy pay a lower percent. And, I am not talking about the guy who makes $250k I am talking about the superrich just to clarify. To me $250k is upper middle class. But, there are plenty of wealthy people who are in favor of taxing the rich more than they are taxed now to help the country get out of debt. I have no idea how much money you make, and I am not assuming anything about you when I make the following statment: almost everyone I know who is worried about the rich, have no understanding of how many tax breaks they get. They are the same people crying Obama raised taxes on them, when if they checked the tax tables from 2008 to 2009, they would see their taxes are actually lower. I am not for robbing from the rich to give to the poor, but I am for not letting the rich get away with robbery either. See the more money you have, the more you can influence policy, and set it up all nice and neat.

I wish we could just implement a flat tax, rather than a regressive tax rate.

I just saw Obama on 60 minutes, I have a feeling he will go for putting of letting the Bush tax cuts expire for at least a year. We’ll see.

I don’t see Congress doing what is right for the nation period, They are too caught up in hyper-partisanship to give half a piss-squirt about the people who voted them into office in the first place.

The best we can hope for is a temporary extension for all, but compromise is seen as weakness so I doubt that will fly on either side of Congress. A permanent extension for all won’t happen, and I am fairly certain that the Republicans would rather burn our country to the ground than compromise. I mean, if our nation crashes with a Democrat at the helm then the GOP will sweep 2012, so it’s in their best interest to stand their ground; either permanent for all or fuck everybody.

@josie I find it oddly funny that your “Since when do you or anybody else get to have the priviledge to judge who is too rich for the “common good”. ” comment is in teh same thread as,’ “The economy is in trouble because there are more goods and services than there are customers with money to buy goods and services… people know that taking money out of the pockets of potential consumers is a sure way to further damage a damaged economy.”

Put another way, when there is enough money at the top that there isn’t enough money in the middle to support a vibrant economy, I personally think it safe to say that some people are too rich for “the common good”. Granted, I think putting an exact number on what is “too rich” will cause a lot of partisan debate, but I think that any sane person would agree with that principle, even if not the details.

@Whitsoxdude I find that generalization a bit offensive. While it’s true that the rich don’t get rich by blowing their money and that some poor people are por by their own hand, I don’t think you can really paint all non-millionaires with the same brush.
When I get “extra” cash, I spend it alright. I have dental work that I’ve been putting off so that I can pay the lights, I have car repairs that I’ve been putting off so that I can eat… damn right I’m going to spend rather than save!

I’m saying there are people (and I know them in real life), who live paycheck to paycheck because they decided to buy that fancy car.
I was thinking more of people with fairly well paying jobs who rack up considerable debt while living like millionaires.
By extra cash I don’t mean unexpected gains, to pay bills. I mean that when they have extra cash and nothing to do with it, they tend to spend it rather than save.
In no way did I mean to generalize, but I can see how it looked that way.

@Whitsoxdude So ka. I’ve seen those types too, but definitely not enough of them to use the word “most”, hence the bristling.

@josie Everybody can say whatever they want to. The economy is in trouble because there are more goods and services than there are customers with money to buy goods and services.

Except for the most die-hard Marxists (who already wrecked one civilization)

Karl Marx outlined the inherent tendency of capitalism towards overproduction in his seminal work, Das Kapital.

According to Marx, in capitalism, improvements in technology and rising levels of productivity increase the amount of material wealth (or use values) in society while simultaneously diminishing the economic value of this wealth, thereby lowering the rate of profit—a tendency that leads to the paradox, characteristic of crises in capitalism, of “poverty in the midst of plenty,” or more precisely, crises of overproduction in the midst of underconsumption.

Marx sounded like he got it spot on to me.

@mammal Which in this case was caused by Federal monetary policy that allowed people to get cheap credit without means to pay it back. Any time you have cheap money chasing a few or one consumer item, you get a bubble. But it was not laissiz faire capitalism that did this. In true laissez faire, many of those folks would not have qualified for credit.

Which in this case was caused by Federal monetary policy that allowed people to get cheap credit without means to pay it back.

Do you mean the Federal Reserve’s monetary policy? Can you explain that, I don’t get what you mean.

@josie Marx visualised the business cycle as intimately intertwined with a credit cycle, which can acquire a relative autonomy in relation to what occurs in production properly speaking. An (over) expansion of credit can enable the capitalist system to sell temporarily more goods that the sum of real incomes created in current production plus past savings could buy. Likewise, credit (over) expansion can enable them to invest temporarily more capital than really accumulated surplus-value (plus depreciation allowances and recovered value of raw materials) would have enabled them to invest (the first part of the formula refers to net investments; the second to gross investment).

But all this is only true temporarily. In the longer run, debts must be paid; and they are not automatically paid through the results of expanded output and income made possible by credit expansion. Hence the risk of a Krach, of a credit or banking crisis, adding fuel to the mass of explosives which cause the crisis of overproduction.

Does Marx’s theory of crisis imply a theory of an inevitable final collapse of capitalism through purely economic mechanisms? A controversy has raged around this issue, called the ‘collapse’ or ‘breakdown’ controversy. Marx’s own remarks on the matter are supposed to be enigmatic. They are essentially contained in the famous chapter 32 of volume I of Capital entitled ‘The historical tendency of capitalist accumulation’, a section culminating in the battle cry: ‘The expropriators are expropriated’. But the relevant paragraphs of that chapter describe in a clearly non-enigmatic way, an interplay of ‘objective’ and ‘subjective’ transformations to bring about a downfall of capitalism, and not a purely economic process. They list among the causes of the overthrow of capitalism not only economic crisis and growing centralisation of capital, but Also the growth of exploitation of the workers and their indignation and revolt n the face of that exploitation, as well as the growing level of skill, organisation and unity of the working class. Beyond these general remarks, Marx, however, does not go.

Ernst Mandel

@mammal That’s pretty dense and I’d like to understand it better if you can help clarify a couple things for me. Mainly I want to understand how this is applicable to the events that precipitated the US recession.

This “crisis of overproduction”, as it applies to the US would “crisis of overconsumption” be more appropriate? I’m asking since the US imports more than it exports. If “overconsumption” is not correct, than is China the “overproducer” in this example, since they produced what the US demanded?

Also, is the problem of “centralization of capital” referring to the money residing in the hands of the wealthy, or is it referring to problems with central banking?

I’m hoping to learn something here.

@cockswain It seems crystal clear to me, but let me give it a shot.

You raise a valid point about overconsumption versus overproduction, but the point remains that there are more goods than there is money to buy said good, so the net effect is pretty much the same in a lot of ways.

In fact, it’s worse since the money spent to buy good is not in the same economy that it was consumed in, so the US has less wealth while those who export to us have more. But yes, I do believe that you are correct that overconsumption is more accurate in this context.

As for “centralization of capital”, it really doesn’t matter where it is centralized. The issue is that the capital is concentrated in one segment of the population, be it banks or a select few private individuals, and that leaves the majority with little/no capital at all. Now, if most of the people can’t buy much and a strong economy is based on money flowing then that means that centralization of capital leads to the economy going tits-up. The rich can only buy so many mansions and Maseratis. Put another way, which has more cash flow; one entity spending one billion dollars, or one hundred million people spending $100 each?

Bear in mind that Marx wrote well before the advent of credit cards. Economics has changed considerably since he died in 1883, so you have to cut Karl a little slack. I mean, I doubt our founding fathers envisioned the AK-47 and Barrett M95 when they drafted the Second Amendment.

@cockswain surplus value is the objective of the Capitalist, it is an imperative. It equates to the concept of Profit. if that helps any. Interesting point about China though. But doesn’t America outsource to China anyway. Think Apple for example.

@jerv contemporary Marxist economists probably take a few liberties with the initial theorems and add some embellishment in order to maintain Marx’s sense of inevitability. Having said all that, considering Marx wasn’t by nature an economist, he did a pretty good analytical job.

@jerv What’s clear to you wasn’t clear to me, and I thank you for a pretty solid answer. And I get the “centralization of capital” thing now. A central banking system and the “centralization of capital” are not similar concepts in this new light, and I understand now. This is referring to the problem with (I think I saw ETPro post the recent stat) 1% of the people having 80% of the capital.

@mammal Thanks for your answer. And you’re right, a lot of the production that occurs in China (or India) is just American companies outsourcing, not products necessarily invented in those nations that we embrace. Good clarification.

I’m not overly familiar with Marx beyond what I learned in high school and bits and pieces over the years. Apparently he was more brilliant than I realized.

I don’t really want to start a new thread on this, because I fear I could get a lot of dumb responses, but in your opinion what would you loosely summarize as the the pros and cons of Marxism?

@cockswain Sometimes a little re-wording is all it takes.