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Our Missing $10 Trillion


#1

Our Missing $10 Trillion

Josh Hoxie

A trillion dollars, a figure with twelve zeros after a one, is by any measure a ton of money. It’s near impossible to comprehend how much a trillion is.


#2

One fundamental flaw - the title “Our Missing $10 Trillion” - makes the assumption that the money belongs to the government, not the people who earned it.

People earn their money, and the government takes some of it to pay for whatever the government decides to spend money on. The notion that reduced taxes is a gift from the government is backwards - it merely means the government is taking a little less of our money, not giving us anything.


#3

What is (fiat) money but control? Does the average or median citizen know the difference between m, b, t, _illion? (Watch any TV news anchor [dead weight] for the answer.) We subjugate ourselves to money control. Money governs what jobs most people try to “secure” (job security is now quite the anachronism). Money governs how people live, whether impoverished by real circumstances or in illusory debt existence. I certainly do not have the remedy to this reality, but I shall call out the devil that is our money-dependent existence, especially when I see the ravages of money’s externalities of poverty, environmental degradation, and incivility at play.


#4

“One fundamental flaw - the title “Our Missing $10 Trillion” - makes the assumption that the money belongs to the government, not the people who earned it.”

And your assumption is that people that have money “earned” it. Let’s take a really obvious example, Jeff Bezos. Did he earn 150 billion dollars with his own hands? Did he sit in a factory or something and crank out 150 billion dollars-worth of products and services, did Jeff Bezos deliver all those things (no, the USPS largely did)? No, of course not. When a worker works at Amazon, he or she creates value with their labor. If the value that they produce isn’t greater than their wages, then Amazon won’t keep them employed, and we know the horrific working conditions there. The greater the gap, the more value that a worker creates relative to their wages, the larger the surplus. So, who in Amazon gets that surplus? Does it go back to the workers, or does it overwhelmingly go to people like Bezos? So, why did it become his in the first place, or than the big evil state putting in place particular policies which allowed for that? Wasn’t always this way, to this extent, because of different state policies and different power dynamics. If workers were collectively more powerful, their wages would be higher and that surplus would be smaller, meaning less would go to Bezos. Then there is inheritance (which is massive), people just making money because of how big they are (economists always talk about the negative impacts of monopoly power in regards to raising prices above the costs of production, extracting far more from consumers than would happen in an actual free market). There is also the fact that many capitalists make profits simply because they can create costs which they then pass off onto others, the environment, consumers, future generations, society at large. Pollution is an obvious example. Many companies create pollutants that have negative impacts on human health and the environment. Those are costs, but costs the market largely ignores. So, to the extent that companies can be shielded from paying for those costs, externalizing them, to that extent they will see their profits increase. That makes others sick, raises THEIR healthcare costs, some die, some live shorter lives. Or how about financial capital? Finance’s product is debt, and wages have stagnated relative to the costs of things like housing, education and healthcare. So, people are going into debt just to go to school, to pay for healthcare expenses, or to buy basic goods. We could design a system that wouldn’t force people to do that, and so lots of money wouldn’t go to the parasitic financial sector (and the state in regards to student loans), but those in power have set up this system. If you invest in the stock market, and that thing increases in value, did YOU do anything to increase the value? No, you invested in something and it went up in value. How exactly did YOU earn that? If you invest in property, and surrounding the property is economic development, and that property goes up in value for that reason, did YOU earn anything, or is that property increasing in value because of what the community on the whole is doing? The question of it being “their” money in the first fucking place is open to debate.

Taxes ultimately don’t pay for what the government spends anyway. If taxes are cut on the rich, the government can spend the money still, but the difference will essentially be new money creation, and that spending increasingly goes to the damn rich too. But the government recently decided that if they spend more here, they cut something elsewhere, which is stupid but intentionally so. The balanced budget fetish (at least when the money is not going to the rich). The tax cuts by themselves increase inequality further in a society where we already have an oligarchy, there is no macroeconomic argument that justifies those cuts, and the oligarchy bought a government to put in place endless austerity for everyone but the rich. And guess what? There is a high correlation between what those in government do and their own wealth increasing. High correlation between what the rich want and what the state does, and little to no correlation between what the public at large want on policy versus what the state does. It’s really weird, it’s almost like we have been doing what people like you want, increasingly, since Reagan and everything is falling apart.


#5

The “surplus” is called “return on investment”, i.e., return on either capital or borrowed funds. All value is not due to labor.

Regardless, it is not money that belongs to the government, but rather to the people who put up the money to finance the business.


#6

The “surplus” is called looting. Those billionaires “earned” shit, the system is gamed, by them, for them. You are a sycophantic mouthpiece.

How exactly did anyone “earn” the skyrocketing income gap? CEOs in the USA took 20 times the average worker 50 years ago, now they take more than 250 times. That is shameless theft, enabled by the fact that they and their cohorts determine the rules of the system.

“Free market” my ass.


#7

A good portion of the money earned by the 10% are got thru government subsidies to these rich corporation i.e. oil companies, big agr farms corporations, private prison industries, military contractors, pharma and … after getting these subsidies they gouge us taxpayers by overcharging for their services. These 19T paid a lot of their ill begotten gains to pay off politicians to pass more laws in favor them, hire lobbyist to write the laws that these paid off politicians to pass the bill. Think of Trump and his current cabinet miss use and outright in your face gouging and working in their own best interest not the country.

This country would not be what it is without taxation and the rich paying more especially over the last 150 years. Think the internet and government research, military research that many of these people have made billions off of. Our tax dollars paid for it all.

Don’t forget that we would of never had a middle class if we adhere to what you suggest everyone for themselves , you probably would not have what you have.


#8

“The “surplus” is called “return on investment”, i.e., return on either capital or borrowed funds.”

That is the view of the capitalist. The capitalist invests in something, and they get more back than they invested. As I said, there are a huge number of reasons why the return on investment will have nothing at all, nothing, to do with what the capitalist did. Saying it is “their” money and saying that they “earned” it is at the very least open to debate.

“All value is not due to labor.”

Well, duh, that is what I said. I gave one way in which capitalists make profits, which is hiring workers that create more value than they are paid. The larger the surplus, according to Marx, the larger the degree of exploitation is. This happens with every single profitable enterprise that hires workers. If workers did not create more value than they are paid, there would be no economic reason to hire them, if the goal was making profits. There are ways in which capitalists can make money without hiring workers or by making stuff. Financial profits, which were about 10% of domestic profits when Reagan took over, but almost 40% by the onset of the crash. Financial profits allow parasitic capitalists to accumulate money without making anything, and financial capitalists make money when they loan (i.e., when others go into debt to them) and earn interest on the debt. That is because of how we have designed our financial and monetary system. Investing in the stock market, buying bonds, doesn’t involve hiring workers. Pushing costs off onto others results in profits that don’t have anything to do with exploiting workers.


#9

Nowhere have I said there should be no taxation.

And I heartily agree that we shouldn’t be subsidizing the rich - to the extent that we can shut off government subsidies, I’m all for it - that’s a matter of changing government policy.

The problem is always that when the government can pass out favors, it generates corruption, since people are willing to “pay to play”.


#10

You are right that value is not always due to labor. It is due to pushing paper around from here to there and back. Making money off of pushing paper. You do remember the crash of 2008? It was paper pushing and other shenanigans and then paper pushing here and there.

Who got bailed out? These paper pushers i.e. hedge fund managers, wall street, venture capitalist. How do hedge fund managers create jobs? They buy out a company, gut it assets i.e. pensions et al which loads the company with debts then the company goes bankrupt and it is picked up for a dime. Same way these sycophants were able to pick up the American Dream (homes) for a dime.

Again, where would you be without the rich paying their fair share. No where unless you are part of the 20% lackeys to the outrageous obscene decadent rich .


#11

Doesn’t matter. Since the gold standard was destroyed by Nixon, the only thing backing the dollar is a promise. Don’t YOU trust that promise?!
(Non. Nod. Wink. Wink.)


#12

Realize that congress is controlled by uber-rapacious, uber-rich sociopahts, and its actions all make sense.


#13

We never should have bailed out the banks - As I noted in the previous post - when government can pass out favors (i.e., “bail outs”), it generates corruption. Like in Iceland, the banks should have been allowed to fail.

As to “paying their fair share” - I’ll ask the question I’ve asked regularly (and never gotten an answer to) - what constitutes a “fair share”? The top 20% earn 50% of the income and pay 80% of the income taxes. The top 5% earn 36% of the income and pay 60% of the taxes. The top 1% earn 20% of the income and pay 39% of the taxes. What is a “fair share”?


#14

Time to get back to the 90% rate for the wealthy during Ike’s time!
(Yeah, that’ll happen with those same wealthy owning/running the government)


#15

No Joan, it is the view of anyone who understand production.

Value comes from the application of labor to raw materials and capital. Value does not only accrue to labor, and the notion that others share in the value creation is not “exploitation”. If you’re committed to a Marxist interpretation, we obviously don’t share a common language.


#16

This is not just happening now. Funding for HUD and public housing has been reduced by billions upon billions of dollars for over 30 years since the revolution brought about by Reagan. today - we see the results - massive homelessness across the land and exhorbitant rents in most of the cities. These people don’t care what they do to the middle and lower classes in the US. Unfortunately I’m afraid that the people are unable or don’t know how to stand up. They just loose and many turn to drugs, alcohol or other diversions and some are working more than one job just to survive. How do they have time to participate in a democracy? We have been deceived and subverted as a nation by the right wing (people like the Koch brothers - and their faithful servants - the presidents and congress.).


#17

Yes, there definitely isn’t a “free” market.


#18

“No Joan, it is the view of anyone who understand production”

Yeah, I understand this stuff, which is why I can discuss this with you. I am not a Marxist, but that doesn’t mean he didn’t say things worth considering. I am influenced by Piero Sraffa more than I am Marx. Economists across the ideological spectrum teach Marx’s economics and writings on things like early labor market legislation, financializtaion, and his work on surplus value. His Theories of Surplus Value was the first real history of economics. You read up on Marx’s four different types of transactions (C-C’, C-M-C’, M-CM’, and M-M’), which he discussed a lot in the second volume of Capital, the circuits of capital and all that. Read his writings on “fictitious capital” that he wrote a lot about in the third volume. Not all value comes from labor, but labor does create value above the cost of their wages, which is my point. And since production is not fully automated, even the machines that create value wouldn’t do so unless someone was using them, and someone using them couldn’t produce stuff without the aid of machines (or at least, often not as easily). Separating the value that the machines create from the workers operating the machines is not obvious or easy to do in reality, sorry. There is a direct correlation between Bezos being rich, Amazon doing so well, and their workers getting paid what they are paid in horrible working conditions. If there was a larger surplus created, say if they created the same exact value with their labor but their wages were reduced, that surplus gets funneled up to people like Bezos. Amazon also makes money simply because of its size. As a defender of the “free market”, you’d think you’d see this obvious reality. I thought you free market types hated monopoly power and realized that it would allow a company to make money simply because of its size (meaning it wouldn’t be “earned”). You don’t have to share my world view, but it might help to read from people that you don’t agree with. They might articulate things you didn’t think of, they might challenge you in ways you should be challenged and you might have a better understanding of this stuff, as well as the arguments of people like me. I have read a heck of a lot of neoclassical and Austrian stuff. It helps me to understand those arguments.


#19

To answer your question.

Incomes at the top have risen dramatically over the last several decades due to rising productivity for which few of them are responsible (even in part). I would say a “fair share” over those decades would have been whatever would have been required to see that the benefits of rising productivity were shared, not equally, but in proportion to the more equitable income differentials that existed 4 decades ago.

Going forward, to take an extreme example, if robots and AI make work almost redundant, but all its potential gains go to the owners and nothing to the displaced workers, there would be little point in the robots producing anything for the mass of people as they’d not have the money to buy what the robots could produce.

We need an equitable sharing of the wealth of the country. That 40% of Americans live in poverty is proof that the economy is not working for all. Getting taxes right, the uber-rich especially, paying their fair share could provide the funds for a better country, ad it did following WWll - let’s go back to that, that would be “paying their fair share”.


#20

The Obama administration released a study on AI and automation in December of 2016. It showed that many jobs will likely be eliminated because of automation, the report linked below says that as many as 47% of all jobs could be lost via automation, other studies show even higher numbers. Who owns and benefits from this will be a big debate in the coming years, and this has not happened in a very long time. Socialists, whether people like it or not, will be central in this debate. Here is the one mention of ownership in the report:

AI-driven technological change could lead to even larger disparities in income between capital owners and labor. For example, Brynjolfsson and McAfee argue that current trends in the labor market, such as declining wages in the face of rising productivity, are indicative of a more drastic change in the distribution of economic benefits to come. Rather than everyone receiving at least some of the benefit, the vast majority of that value will go to a very small portion of the population: “superstar-biased technological change.” Superstar-biased technological change is somewhat similar to skill-biased technological change, but the benefits of technology accrue to an even smaller portion of society than just the highly-skilled workers. The winner-take-most and winner-take-all nature of the information technology market means that the fortunate few are likely to emerge as victors of the market. This would exacerbate the current trend in the rising fraction of total income going to the top 0.01 percent.