Politics As Usual
Published by Bloody P on Thursday, September 25, 2008 at 9:41 PM.
Instead of coming to Washing to actually focus on a real way to help resolve the financial crisis, John McCain shows up for a photo op while also showing how out of touch he is with what's going on by offering an "alternative solution" to this problem that is actually exactly what we've been getting for the past four years.
Political stunt, indeed.
Political stunt, indeed.
The King of Deregulation
Published by Bloody P on at 8:03 PM.
Don't let the YouTube clip in the previous post fool you. That's FOX News talking.
McCain has never asked for more federal regulation. In fact, hisvice presidential nominee couldn't even tell you one instance when he has fought for regulation in the last 26 years. But when she does find some instances, she'll be sure to "bring 'em to ya"...
Here's the REAL McCain, fist pound on the podium and all.
You decide who helped get us in this mess.
McCain has never asked for more federal regulation. In fact, his
Here's the REAL McCain, fist pound on the podium and all.
You decide who helped get us in this mess.
Who allowed this to happen?
Published by StB on at 1:35 PM.
A lot of people are ignoring the issue of how things got out of hand the government sponsored entities. Others saw it coming and try to rebuff the plan to restrict Fannie and Freddie's activities. They should have tried harder.
Suspend Cap Gains Tax To Fix The Economy?
Published by BG on Wednesday, September 24, 2008 at 7:27 AM.
Okay, I can't pretend I'm smart enough to fully understand the situation that got us to this spot in the market, but I find the right-wing "Republican Study Group" plan to make fix things up right curious.
UPDATE: I'm an idiot. Of course, you only pay cap gains on profits, not on losses. So a sell off of assets after they've been on your books losing money doesn't come with a 35% premium. That's probably not the only thing wrong with my assertions below, but it's a start. Ignore me.
They want to suspend the cap gains tax for both individuals (15%) and corporations (35%) for (at least) two years.
Now, please correct me where I'm wrong, but wouldn't this come with a fairly significant set of consequences? Yes, I know how much rich people abhor taxes, and I know the arguments in the trickle-down vein regarding the free flow of capital, but what about the problems this would create? Here's what I mean:
1) Corporations are holding enormous amounts of investments that are growing more and more worthless by the day.
2) Eliminate cap gains tax.
3) Corporations immediately see a 35% premium to release those assets to the market.
4) The flood of selling devalues the assets further and further, regressing to near zero as supply vastly outweighs demand
I guess on the one hand this has the consequence of pricing those instruments "correctly" in the market. But imagine the rush on the seller's window when the 35% premium kicks in. You are aware that built in to the buy price of any asset is the price consequence of releasing it at a future date (i.e., the cap gains tax), right?
Forget about the individual investor for a minute (the scale will clearly be different than what we're discussing here, and the "average American" is always better off with a tax burden that exists for someone other than himself). Forget too about the free market magic that fewer taxes are supposed to generate. Think about this vast pool ("Big Shitpile") of assets that have been rapidly devaluing and the consequence of releasing these assets and others back into the marketplace at a price premium. Am I getting my economics wrong on this? Will we not see massive and enormous sell-offs? Is flooding the marketplace with worthless, yet overpriced assets a good thing?
UPDATE: I'm an idiot. Of course, you only pay cap gains on profits, not on losses. So a sell off of assets after they've been on your books losing money doesn't come with a 35% premium. That's probably not the only thing wrong with my assertions below, but it's a start. Ignore me.
They want to suspend the cap gains tax for both individuals (15%) and corporations (35%) for (at least) two years.
Now, please correct me where I'm wrong, but wouldn't this come with a fairly significant set of consequences? Yes, I know how much rich people abhor taxes, and I know the arguments in the trickle-down vein regarding the free flow of capital, but what about the problems this would create? Here's what I mean:
1) Corporations are holding enormous amounts of investments that are growing more and more worthless by the day.
2) Eliminate cap gains tax.
3) Corporations immediately see a 35% premium to release those assets to the market.
4) The flood of selling devalues the assets further and further, regressing to near zero as supply vastly outweighs demand
I guess on the one hand this has the consequence of pricing those instruments "correctly" in the market. But imagine the rush on the seller's window when the 35% premium kicks in. You are aware that built in to the buy price of any asset is the price consequence of releasing it at a future date (i.e., the cap gains tax), right?
Forget about the individual investor for a minute (the scale will clearly be different than what we're discussing here, and the "average American" is always better off with a tax burden that exists for someone other than himself). Forget too about the free market magic that fewer taxes are supposed to generate. Think about this vast pool ("Big Shitpile") of assets that have been rapidly devaluing and the consequence of releasing these assets and others back into the marketplace at a price premium. Am I getting my economics wrong on this? Will we not see massive and enormous sell-offs? Is flooding the marketplace with worthless, yet overpriced assets a good thing?
