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Old 12-16-2011, 10:13 AM
sugarkang sugarkang is offline
Join Date: Oct 2008
Location: Cali, Small-Govt Liberal
Posts: 2,186
Default Re: Modern capitalist China?

Originally Posted by Baz View Post
AemJeff was right sugar I shouldn't have called you a liar it was too strong...I apologize.

The paper you linked to advocates free trade policies and claims there's a consensus on this within the economic community.
Accepted and thank you.

But as Florian has said there's a huge difference between free trade in theory and free trade in practise and very often what is called free trade isn't the free trade that economists have a consensus on.
I agree. That's also why I said economists agree, but with some caveats. But even with our currently imperfect free trade agreements, all those economists would still reject the general protectionist sentiment as it exists now in both parties.

I wasn't talking about the theoretical models the economists use in their research or textbooks but the so called free trade agreements that are put into practise like NAFTA. In my opinion these are heavily if not totally influenced by the financial and corporate lobbies (as we should expect) who benefit from them. And I don't think this is controversial if we look at the effects on the working/middle class in the US.
Economists would largely disagree with you. NAFTA took place during the Clinton years. Economic boom, balanced budget.

From all the wealth created in the US from 1983-2004, 42% of it went to the top 1%, 94% went to the top 20%, the bottom 80% received only 6% of all the new financial wealth generated in the United States in this period.
I agree this is a problem and something I've thought about for quite some time, but don't know what the fix would be. Taxes?
1. Estate tax. The rich use trusts, not wills. The trusts appoint trustees to manage the money so the silver spoons don't need to do anything.
2. Higher marginal tax rate. The rich don't make money from salaries. When Bush tax cuts expire in 2013, it won't even dent the deficit.
3. Higher capital gains tax. This is where Warren Buffett makes his money. I'd support this to an extent, but even so, at a certain point, the money starts to move overseas. Those investment dollars fund industries in other countries.
4. Close tax loopholes. The biggest loophole is the mortgage interest deduction. Every single homeowner in America uses this. It's the biggest loophole there is and I support ending it, but I doubt anyone on this board who owns a home would agree with me. I'd close as many loopholes as possible.
5. Progressive consumption tax. I'd back this, but there's no political support for a VAT.

If you're unhappy that the wealthy have too much, then there's no way to make things more equal unless you take that wealth by force and redistribute it, Hugo Chavez style. If you're unhappy that people don't have jobs, then the consensus is to do NGDP targeting. Bernanke said no.
The mixing of populations lowers the cost of being unusual.
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