Trickle down or trickle up economics?

[jIM_Ohio]

A school teacher would not attract clientele willing to drop 100k at the nightclub.

Paying hilton to attend nightclub is an investment by the nightclub to make money, it does mean she is worth 6 figures or more than a teacher.

[Inkstain82]

Originally Posted by jIM_Ohio

A school teacher would not attract clientele willing to drop 100k at the nightclub.

Paying hilton to attend nightclub is an investment by the nightclub to make money, it does mean she is worth 6 figures or more than a teacher.

It's a principle of the commons problem (one of those free-market glitches they teach you about in econ classes ).

Theoretically*, a schoolteacher's value is in creating a common good: an educated populace. Individually, everybody makes more money by avoiding paying for it. As a group, we all lose when we do that.


*- Whether or not teachers actually create much of this good is a whole other debate

[jIM_Ohio]

what was posted was

In our market we will glorify Paris Hilton and people pay her 6 figures to just come visit their night club. I personally don't think Paris Hilton is worth more than a teacher.

What someone is paid is not what they are worth.

Theoretically*, a schoolteacher's value is in creating a common good: an educated populace. Individually, everybody makes more money by avoiding paying for it. As a group, we all lose when we do that.

This assumes everyone in the population needs an education. Everyone in the population needs access to high quality education. They do not need the education itself (if the person chooses to throw the opportunity for education away, it is not the government's or society's role to force them to educate themselves).

[Inkstain82]

Originally Posted by jIM_Ohio

what was posted was



What someone is paid is not what they are worth.



This assumes everyone in the population needs an education. Everyone in the population needs access to high quality education. They do not need the education itself (if the person chooses to throw the opportunity for education away, it is not the government's or society's role to force them to educate themselves).

That's why I said "theoretically."

The point is that it is potentially an example of a common good, which is a known concept that thwarts the free-market valuation process.

[rooskers]

jIM_Ohio I understand why they pay her a huge amount and from a business perspective it is a wise decision if it can increase profits.

What someone is paid is not what they are worth.

My arguement is that I feel some people have been using the word "Worth" not only in the business or monetary sense but also to define peoples character. I used Paris Hilton to compare too teachers, police, soldiers to try to make a point that the term worth has more than one meaning.

I wonder if any of you who strongly hate the government can give examples of how the government has helped us out tremendously.

For those that prefer or like the idea of government intervention in the free market what could the free market do better than the government.

[jIM_Ohio]

First 30k for a teacher working 9 months a year is OK- they probably get a pension working 30 years, meaning retirement at age 52 is quite realistic. They are making 6% more than any other occupation making 30k (teachers here do not pay into SS).

In 3 months I could earn around $15,000 doing something else. And retire earlier.

The apparently 10 years of life are not "worth" what they used to be

I do agree that there is value to society that "free market" models don't cover, but it was 1991 when I took my last economics classes (HS and college). And I remember the prof making a comment about me missing class way too much in college when giving the 10% attendance grade. Econ theory is not my strong suit.

The teacher was compensated for their time (30k) in this case. They have another 3 months to make around 50% more if they choose to, plus they get an extra 10 years of retirement which I find difficult to put a price on.

I do have ideas I think education and teacher salaries could be improved, but that is another discussion for another day.

[maat55]

Originally Posted by jIM_Ohio

Tax credits are NOT free money.
They lower a person's tax liability dollar for dollar (If I have a $9000 tax bill and $2000 worth of child tax credits, my new tax liability is $7000).

Most tax credits cannot reduce a tax liability to less than zero (meaning if I had a $1500 tax liability and had $2000 in tax credits, I now have a ZERO tax liability- depending on the type of tax credit, the $500 is probably non refundable and lost).

Tax credits are good if they are NON REFUNDABLE because it then requires a tax liability exist before they can be applied.

I know people who have recieved(Refunds) more money than they have paid in due to the earned income tax credit.

Obama say's he will lower taxes for 95% of americans, 40% are not paying anything, that means they will get money refunded they did not pay in.

National healthcare will cover people who will not pay a penny for it. I'll bet a hundred bucks that national healthcare will cost the government more than is paid into it. With 10 trillion and climbing debt, and a 40+ trillion unfunded obligation for future SS and medicare.

I would like to know where the money is going to come from.

[rooskers]

Every district is different and every state has different retirement plans. I would not be able to retire at the age of 52 working as a teacher even making the extra amount during summer. My retirement plan works more like a 401k where I put in most of the money and they match a certain percentage it isn't great but nothing to complain about. Granted I know some teachers who make more and live far more frugally than I do who could retire at 52. I don't put into social security but I also can't collect on it either. This isn't a debate on whether I make enough or if teachers make enough in general.

My point is once again not about the money. When I read many of the previous posts people seemed to equate the word "WORTH" to someones character, personal qualities, morals in addition to their finances. Not all poor people are stupid, dumb, lazy, and so on. People who make higher wages are not always smarter, morally superior, better educated, more motivated, and so on.

[jIM_Ohio]

Originally Posted by maat55

I know people who have recieved(Refunds) more money than they have paid in due to the earned income tax credit.

Obama say's he will lower taxes for 95% of americans, 40% are not paying anything, that means they will get money refunded they did not pay in.

National healthcare will cover people who will not pay a penny for it. I'll bet a hundred bucks that national healthcare will cost the government more than is paid into it. With 10 trillion and climbing debt, and a 40+ trillion unfunded obligation for future SS and medicare.

I would like to know where the money is going to come from.

Distinguish between "paid in" and tax liability.

Of course a tax credit of $2000 for two kids might be more than someone earning $30,000 would owe in taxes (30k minus std deduction of 8k=22k, minus 3 exemptions is $3500*3=10500, so 11500 is the taxable income (in 10% bracket). 11500 has a tax liability of $1150. The tax credits would then be subtracted from the liability.

Measuring this to what was withheld does not make sense. Because you and I could make same exact income, with same filing status, with same dependants, at same company (same state and local taxes). Because I claim 7 allowances as married and you claim 0 as single does not matter.

I take home more and you get a HUGE tax refund. It is all rectified at tax time. EITC is designed to recoup the SS taxes paid in (tax credit) and is REFUNDABLE. That means if a 2k credit for EITC existed for the 1150 case, the $850 left after 2k is subtracted from 1150 is refundable. In the case of the 2k child tax credit the $850 is "lost" because that credit is non refundable (non refundable means the credit cannot reduce tax liability below zero).

In the base of the EITC though, the person would need to earn more than 2k to get the 2k tax credit. They cannot get 2k of EITC off a $1500 amount of earnings. To get an EITC of 2k they would need to have a good amount of earned income.

That being said, I share similar views of Obama, especially considering he stated recently he is NOT raising taxes on anyone in 2009- he is going to probably let the Bush cuts expire in 2010 and then the taxes will just revert back to 2000 percentages with a new 2011 ceiling on the wages it applies to.

[KGeary]

Originally Posted by jIM_Ohio

Tax credits are NOT free money.
They lower a person's tax liability dollar for dollar (If I have a $9000 tax bill and $2000 worth of child tax credits, my new tax liability is $7000).

Most tax credits cannot reduce a tax liability to less than zero (meaning if I had a $1500 tax liability and had $2000 in tax credits, I now have a ZERO tax liability- depending on the type of tax credit, the $500 is probably non refundable and lost).

Tax credits are good if they are NON REFUNDABLE because it then requires a tax liability exist before they can be applied.

Ever heard of a refundable tax credit?

[jIM_Ohio]

Originally Posted by KGeary

Ever heard of a refundable tax credit?

I edited my above post- yes I know that EITC is refundable where as most other tax credits are NON refundable.

[KGeary]

Originally Posted by rooskers

I am very satisfied with what I make as a teacher and said that in a previous post. My point was that KGeary said that in a free market everyone gets paid what they are worth. Others were saying that if the underpaid people want to make more money that they should just get an education. Well I have an education and feel I am worth a lot more than $30,000. I am not complaining though since my wife makes a very decent living and we are happy where we are at financially. I also think family practive doctors, policeman, soldiers, volunteer firefighters, etc... are worth a lot more than they are paid.

Some people here have been borderline saying that people should be judged and valued on how much they earn.

Example:









Certainly there are instances where all the above quotes are true but not in every case. I guess it comes down to how you define "worth". In our market we will glorify Paris Hilton and people pay her 6 figures to just come visit their night club. I personally don't think Paris Hilton is worth more than a teacher. Drugs dealers in the US make more than teachers and I certainly don't think they are worth more than teachers.

I understand that we don't want to distribute wealth as a general rule but to blame government for everything and credit them with nothing???? On one hand KGeary argues that it was the regulation of government that caused this melt down and then he turns around and says



Well it sounds like your arguement is that it was partly the governments fault and partly the consumers fault. With this logic I can also claim that even though the banks could give loans to people without income doesn't mean they had too. Uh oh that would mean that it was partly the governments, consumers, and financial industries fault.

I will keep saying that what makes this country work is not extremism (complete free market, socialism, only trickle down, only trickle up) but the constant battle to find a middle ground that works best, not perfect, but just best.

Hello?? Are you there???

I said in a free market people get paid what they're worth. You're a government employee; that's not the free market!

[KGeary]

Sigh.

Originally Posted by GrimJack

I was wondering when you would bring up the CRA - that has been one of the right-wing<nut> arguments with no basis in reality.

Right. Ok Barney Frank.

There is not one bank that adheres to the CRA that is in any financial difficulties because of the CRA.

Where do you get your information? This is like listening to the Democrat congress saying they had nothing to do with the bank failure. Turn the broken record off and think for yourself.

This should be easy for you if you are correct - you should be able to find one bank that went under due to CRA.

You think banks loan money to people that can't afford it because they want to go bankrupt? No, they do it because the goverment told them to and then told them they'd back them up. Freddie and Fannie bought all those bad mortgages. I'm wasting my time talking to you.

Well, I just went there and wonder what you see that is a problem. I linked to a summary location because I am pretty sure that is as much that is needed here. You think that injecting honesty, honest reporting, auditing, and punishment for cheating are a bad thing, I would have to guess.

Lol. Everything has unintended consequences. If you aren't clear on what negative consequences have come about because of SOX, I don't have the time or energy to educate you on it. Get informed before you start making naive comments.

support your perception of the naivety of that statementThis statement leads me to believe that you have no idea who or what company produces the FICO score and how they come up with it.

Yeah, you're right, I have no idea what FICO stands for (the company that produces it) or how they come up with the score. I'm completely clueless.

Jesus.

Purely a rant full of ad hominem attacks that is not worth any consideration.Summary of a personal philosophy, making a statement with no references with self-contradictory content.Another ad hominem attack with no references.

You do not argue your position very well. Here are a couple of site to help you keep from making errors in logic - Logical Fallacies and Common Fallacies

You can always tell when someone has no logical argument because they always scream, "ad hominem, ad hominem". It's the grown up version of "sticks and stones". It's also known as pathetic.

[sweeps]

This is getting out of hand. Thread locked.