Economics

[BobK]

Perhaps there are, but I am not aware of any.

But I I ask you a hypothetical when people are asked to voluntary donate 40% of their salary to fund a social program, how many would actuallly do it?

So since you're unaware of any that tried, it's completely predictable you couldn't think of any that not only tried but succeeded.

As for your hypothetical, I'd say not many at all. Where did that 40% figure come from?

 

[PocketZeven]

So since you're unaware of any that tried, it's completely predictable you couldn't think of any that not only tried but succeeded.

As for your hypothetical, I'd say not many at all. Where did that 40% figure come from?

I have studied history and there are no examples of a succesfull economic society with succesfull social programs entirely funded by voluntary donations. I really, really wish that everybody would be happy to donate a portion of income to help the people in need.

See above reaction to 40% question.

 

[Danoff]

I have studied history and there are no examples of a succesfull economic society with succesfull social programs entirely funded by voluntary donations. I really, really wish that everybody would be happy to donate a portion of income to help the people in need.

See above reaction to 40% question.

People donate a ton.

 

[Rallywagon]

I have studied history and there are no examples of a succesfull economic society with succesfull social programs entirely funded by voluntary donations. I really, really wish that everybody would be happy to donate a portion of income to help the people in need.

See above reaction to 40% question.

That's really silly. Of the 40% income tax, how much if that is going to welfare? If it's not 40, or even 25%, then perhaps you need to revise your number to match more realistic values.

 

[Exorcet]

It was just an example. In my country income tax starts at around 40%. I dont know anyone who would even donate 25% every month. That is just not realistic.

That 40% is for the entire government then, not just a social program. Hypothetically if the government were to switch from tax to donation, the money would already be budgeted for (people would be accustomed to giving up 40% already), so it's not like they would have to consider a major change.

 

[PocketZeven]

People donate a ton.

that seems like a lot, but it isnt. Try disecting the 30% religious donations end up. I also believe a great percentage of those donations end up in the pockets of the wrong people. They are much less transparant then the government is required to be.

That's really silly. Of the 40% income tax, how much if that is going to welfare? If it's not 40, or even 25%, then perhaps you need to revise your number to match more realistic values.

See above. In my country the lowest salary tax is around 37%.

edit: I was not only talking about wellfare.

 

[Rallywagon]

that seems like a lot, but it isnt. Try disecting the 30% religious donations end up. I also believe a great percentage of those donations end up in the pockets of the wrong people. They are much less transparant then the government is required to be.

Uhhhh, riigghhhtttt. Maybe in your country, mean while in America, the Pentagon has literally lost trillions and wasnt audited until 2018. And stillnisnt being held responsible or facing much more oversight for it all.

 

[Danoff]

that seems like a lot, but it isnt. Try disecting the 30% religious donations end up. I also believe a great percentage of those donations end up in the pockets of the wrong people. They are much less transparant then the government is required to be.

$400B is not a lot?

Keep in mind social security is supposedly something you pay for you. $400B handles a lot. And that's how much people contribute now, in the presence of those social programs.

 

[PocketZeven]

$400B is not a lot?

Keep in mind social security is supposedly something you pay for you. $400B handles a lot. And that's how much people contribute now, in the presence of those social programs.

Its over 4 Trillion in 2018.

Government funded programs work. Allthough it helps individual cases, donations barely make a dent overall. Were for example do the 30% religious donations go?

Uhhhh, riigghhhtttt. Maybe in your country, mean while in America, the Pentagon has literally lost trillions and wasnt audited until 2018. And stillnisnt being held responsible or facing much more oversight for it all.

Its just as bad in my country. But charity overhead can be just as bad or even worse.

 

[Danoff]

Its over 4 Trillion in 2018.

I suppose you think we can't fit ourselves into 2015 figures anymore.

$1.1T is for Social Security. Presumably you pay that to yourself, so that's a non-issue. $600B is for military spending. See where I'm headed here?

Government funded programs work. Allthough it helps individual cases, donations barely make a dent overall. Were for example do the 30% religious donations go?

Presumably to the recipient. I love how you just "this works", "this does nothing" without any citation at all.

Its just as bad in my country. But charity overhead can be just as bad or even worse.

You're wildly biased on this issue.

 

[PocketZeven]

I suppose you think we can't fit ourselves into 2015 figures anymore.

$1.1T is for Social Security. Presumably you pay that to yourself, so that's a non-issue. $600B is for military spending. See where I'm headed here?



Presumably to the recipient. I love how you just "this works", "this does nothing" without any citation at all.



You're wildly biased on this issue.

Just pointing out you should compare the amount of donations of 2018 with 2018 government spending.

"this works": Europe and especially scandinavian model.

"this does nothing": I did not say that. Donations help many individual and specific groups or people, but I prefer a system that does not discriminate. of the 400 billion, where for example do the 120 billion in religious donations go? 10% to "foundations" what does that mean? How much of that 400 billion does actually go to social programs? Only 8% ? What is "human services"?

biased how?

 

[Danoff]

Just pointing out you should compare the amount of donations of 2018 with 2018 government spending.

I quoted 3 years of donations. And I can compare any of them to any reasonable level of government spending.

"this works": Europe and especially scandinavian model.

Europe is working perfectly? News to me. We should definitely switch everything then.

"this does nothing": I did not say that. Donations help many individual and specific groups or people, but I prefer a system that does not discriminate.

All "systems" discriminate in some way or another.

of the 400 billion, where for example do the 120 billion in religious donations go?

The recipients?

biased how?

You're unwilling to consider the fact that charity actually does operate with less overhead for one.

 

[PocketZeven]

I quoted 3 years of donations. And I can compare any of them to any reasonable level of government spending.



Europe is working perfectly? News to me. We should definitely switch everything then.



All "systems" discriminate in some way or another.



The recipients?



You're unwilling to consider the fact that charity actually does operate with less overhead for one.

Never claimed it worked perfectly. Just stating social programs can be succesfull in a system with high taxes. The people in scandinavia are among the happiest on earth though.

With religious donations who actually are the recipients?

I would not consider me being biased, rather sceptical. It isnt me believing that there is less overhead (could not find reliable source). But more that I have absolutely little faith in people doing the right thing. What history and experience have told me, is that you should always assume people are selfish and greedy. People are not inherently selfish and greedy though, but you can not count on people to voluntary be charitable. Capitalism is fueled by greed and for the US it has been extremely succesfull.

 

[mustafur]

Chicken and Egg scenario, Libertarians will argue it's not a crazy idea because it hasn't been tried, but no one is crazy enough to attempt it.

Millions of people need some sort of assistance to survive, the amount of people that would die just to flip over to this system would make it publicly unacceptable even with a plurality (which will never happen).

 

[Exorcet]

Millions of people need some sort of assistance to survive, the amount of people that would die just to flip over to this system would make it publicly unacceptable even with a plurality (which will never happen).

While transitioning over would present challenges, there isn't really much to substantiate this claim. A voluntary UBI sounds pretty reasonable as a first step. I even pointed out a couple that already exist.

 

[Danoff]

In some of these countries where cash transactions are being banned (or talked about being banned) and interest rates are turning negative, do we know whether you're still allowed to make a large deposit in a bank?

So, for example. Let's say I live in a country where anything over $15,000 cannot be done in cash legally. And let's say that interest rates are -2%. So putting money in the bank is costing me 2% in interest.

Can I then just store my money in a safe at my house? In order to buy something, I'd have to deposit it in a bank. Are bank deposits over $15,000 also not allowed to be cash?

Another example of this would be to have a HELOC open and ready to tap. So you want to buy a car with cash (say, $20,000). You buy it with the HELOC, and before you start... uh... earning? interest on the HELOC debt, you pay it off with cash from your safe.

 

[Eunos_Cosmo]

In some of these countries where cash transactions are being banned (or talked about being banned) and interest rates are turning negative, do we know whether you're still allowed to make a large deposit in a bank?

So, for example. Let's say I live in a country where anything over $15,000 cannot be done in cash legally. And let's say that interest rates are -2%. So putting money in the bank is costing me 2% in interest.

Can I then just store my money in a safe at my house? In order to buy something, I'd have to deposit it in a bank. Are bank deposits over $15,000 also not allowed to be cash?

Another example of this would be to have a HELOC open and ready to tap. So you want to buy a car with cash (say, $20,000). You buy it with the HELOC, and before you start... uh... earning? interest on the HELOC debt, you pay it off with cash from your safe.

God I hope this nightmare scenario doesn't come to the US. This zero and negative rate policy juicing needs to stop.

 

[mustafur]

In some of these countries where cash transactions are being banned (or talked about being banned) and interest rates are turning negative, do we know whether you're still allowed to make a large deposit in a bank?

So, for example. Let's say I live in a country where anything over $15,000 cannot be done in cash legally. And let's say that interest rates are -2%. So putting money in the bank is costing me 2% in interest.

Can I then just store my money in a safe at my house? In order to buy something, I'd have to deposit it in a bank. Are bank deposits over $15,000 also not allowed to be cash?

Another example of this would be to have a HELOC open and ready to tap. So you want to buy a car with cash (say, $20,000). You buy it with the HELOC, and before you start... uh... earning? interest on the HELOC debt, you pay it off with cash from your safe.

From what I know its per transaction when talking about Cash limitations, but a cash ban on the other hand would likely have a time limit before all circulated Physical currency is invalid.

 

[Danoff]

From what I know its per transaction when talking about Cash limitations

Does that include a deposit at the bank? Or just a purchase transaction?

 

[mustafur]

Does that include a deposit at the bank? Or just a purchase transaction?

I would assume it means everything, negative interest rates wouldn't apply till after the cash is invalid, therefore Bank transactions would be limited in both ways untill they are not possible.

As much as I know about Human Nature, people don't enjoy being trapped, such a situation could easily create other forms of currency using physical items or such as a replacement to physical cash rather then holding worthless currency that consistently devalues(At a far more accelerated state then current inflation).

 

[Danoff]

As much as I know about Human Nature, people don't enjoy being trapped, such a situation could easily create other forms of currency using physical items or such as a replacement to physical cash rather then holding worthless currency that consistently devalues(At a far more accelerated state then current inflation).

As with so many things, this kind of nonsense hits poor people hardest. It's not that hard for wealthy people to work around. You just put your money into something valuable which you can borrow against or sell if need be. So, for example, instead of holding $100,000 in your bank account, you buy a rental property for $500,000, owe $400,000 (which you're earning interest on for borrowing), and get a rental return on it as well.

Alternatively, buy a car that's not depreciating, or any other asset, like artwork. Those are harder to borrow against though. I almost said buy an annuity, but I assume annuities are garbage in a negative interest environment. That's the side of the equation nobody wants to be on.

When the government has borrowed too much, and creates a landscape that favors debtors, you almost have to play along and borrow as well.

 

[Eunos_Cosmo]

As with so many things, this kind of nonsense hits poor people hardest. It's not that hard for wealthy people to work around. You just put your money into something valuable which you can borrow against or sell if need be. So, for example, instead of holding $100,000 in your bank account, you buy a rental property for $500,000, owe $400,000 (which you're earning interest on for borrowing), and get a rental return on it as well.

Alternatively, buy a car that's not depreciating, or any other asset, like artwork. Those are harder to borrow against though. I almost said buy an annuity, but I assume annuities are garbage in a negative interest environment. That's the side of the equation nobody wants to be on.

When the government has borrowed too much, and creates a landscape that favors debtors, you almost have to play along and borrow as well.

When a company offers public bonds...who would buy them if rates are negative? Will that form of fundraising just cease to exist?

 

[Danoff]

So realistically, when would US interest rates ever go back to where they were in the early 2000s. Let's say, 6%.

For that to happen, the US government would have to be able to afford 6% on its deficit and whatever debt is rolling over that particular year - which means balancing the budget... not going to happen. Alternatively, some massive portion of the debt could be wiped out. I've seen it suggested that war with China would be answer for this. China apparently holds 26.7% of the US debt. That's not enough.

Any other ideas? Because it looks to me like the US is irreversibly on course to keep interest rates extremely low.

 

[mustafur]

When a company offers public bonds...who would buy them if rates are negative? Will that form of fundraising just cease to exist?

If its a Massive "Too big to fail" type corporation that thats an easy answer, It will be the Fed.

 

[mustafur]

If its a Massive "Too big to fail" type corporation that thats an easy answer, It will be the Fed.

So realistically, when would US interest rates ever go back to where they were in the early 2000s. Let's say, 6%.

For that to happen, the US government would have to be able to afford 6% on its deficit and whatever debt is rolling over that particular year - which means balancing the budget... not going to happen. Alternatively, some massive portion of the debt could be wiped out. I've seen it suggested that war with China would be answer for this. China apparently holds 26.7% of the US debt. That's not enough.

Any other ideas? Because it looks to me like the US is irreversibly on course to keep interest rates extremely low.

It could Happen Soon or past our life time.

It depends on what direction the US economy goes compared to the rest of the world, It also depends on what measures other countries might take regarding their currency.

Raising interest rates generally is a Currency protecting move, so I would say the risk is quite high for either direction if i was a betting man, I would say the answer to that question is probably going to be China.

 

[Danoff]

It could Happen Soon or past our life time.

It depends on what direction the US economy goes compared to the rest of the world, It also depends on what measures other countries might take regarding their currency.

Raising interest rates generally is a Currency protecting move, so I would say the risk is quite high for either direction if i was a betting man, I would say the answer to that question is probably going to be China.

I don't see how the US can do it. If debt demand drops, I don't see how we can afford to jack rates to increase demand. We'd just move to other more dramatic options like banning cash in order to force money into the banks and into public debt. When nobody wants to buy your 0% 30-year treasury, make it not an option.

 

[mustafur]

I don't see how the US can do it. If debt demand drops, I don't see how we can afford to jack rates to increase demand. We'd just move to other more dramatic options like banning cash in order to force money into the banks and into public debt. When nobody wants to buy your 0% 30-year treasury, make it not an option.

Make no mistake, if a country decides to raise interest rates in these times its basically saying to hell with the economy im protecting the currency, it's hard to imagine now but it's very possible if we get a huge Reccession/Depression.

This is a Good Read about how a Currency Crisis happens and past history on Countries that went through it.
https://www.investopedia.com/articles/economics/08/currency-crises.asp

 

[Eunos_Cosmo]

I don't see how the US can do it. If debt demand drops, I don't see how we can afford to jack rates to increase demand. We'd just move to other more dramatic options like banning cash in order to force money into the banks and into public debt. When nobody wants to buy your 0% 30-year treasury, make it not an option.

I'll be very curious to see what happens if/when inflation starts to rise. Imagine borrowing $500k at 0% or negative interest (to presumably acquire an asset with real value) combined with 5-10% annual inflation. By the time you pay it off, the real appreciation (or divergence in value between the original value and the deflated value) would be staggering, and that's not even including the potential money you have been earning to borrow money! Upside down world! Don't stash your money in the bank, stash it in debt! Bizzaro-bonds.

 

[Dotini]

Seen and heard on CNBC this morning.

"We are going to the Moon", "Coronavirus fears recede", "We are in the early stages of knocking on the door of euphoria", " Conditions are not yet present for a big decline".

 

[PocketZeven]

remove please