The Benefits of the Fair Tax
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12-02-2014, 11:14 PM
RE: The Benefits of the Fair Tax
(12-02-2014 10:17 PM)cjlr Wrote:  
(12-02-2014 09:48 PM)frankksj Wrote:  However, not one fiat currency from 100 years ago has any value at all today.

Which of your putative 3000 fiat currencies existed 100 years ago? All major currencies I can think of at the moment were held to a metal standard.

You obviously haven't researched this. Have you ever heard of, say, the holocaust? Ever looked into what caused it? Oh, yeah, it's because 100 years ago Germany (the Weimar republic) had a fiat currency, the mark. The central bank printed so much of it, it took a wheelbarrow of the stuff to buy a loaf of bread, and the currency was used as wallpaper, because it was cheaper than any other form of paper they could buy. As always happens with a fiat currency, the bankers got very, very, very rich. And everybody else got very, very, very poor. Back then "the 1%" who held all the wealth were the bankers, like the Rothschilds. If you read Mein Kampf, you'll see the issue Hitler had with Jews had to do with their role as bankers--not their religion per se. Of course, just because almost all the bankers were Jewish, doesn't mean all Jews were bankers, and I'm certainly not defending the extermination of an entire race because there were a handful of bad actors that used a fiat currency to confiscate all the wealth. Rather, I'm learning from history in the hopes such tragedies can be avoided. When you insist there were no fiat currencies 100 years ago, you seem to be forgetting very important parts of our history, dooming us to repeat it. Throughout human history fiat currencies have been tried, and it's always been a disaster.

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(12-02-2014 10:17 PM)cjlr Wrote:  
(12-02-2014 09:48 PM)frankksj Wrote:  No strawmen, please. _I_ said repeatedly there was no perfect medium. I only said gold was the best medium I knew of. You disputed that, so I asked you to name some other medium that was better than gold.

That is not what happened.

I said value was a human construct. You said gold was inherently valuable.

You said: "Gold has no inherent value either". The either was referring to fiat currencies. Your argument was that gold has no inherent value, as paper currency has no value, and any value is just imaginary.

But that's clearly false. The value of wood isn't imaginary. It has inherent value because you can use it to build houses. The value of water isn't imaginary. All these things have attributes that give them some inherent value. Gold is no different. In gold's case the attributes which give it inherent value is that, just like wood makes a good floor, gold makes a good medium of exchange. They both have attributes that make them suit a given purpose.

This is NOT the same as fiat paper currency. Here, the paper itself is worth next to nothing. It's useful for writing on, and maybe as an artifact. But, paper is easy to produce, so it has no natural attributes that make it useful as money. It's only worth what people think it's worth. You're clearly struggling to grasp the difference between representative currency and fiat currency because you wrote the patently false statement that "all currency is fiat". If that were true, it wouldn't be called "fiat currency". It would just be "currency". If you look up 'fiat currency' on wikipedia you'll see that it refers to a particular type of currency, because you can have non-fiat currency (ie representative currency).

(12-02-2014 10:17 PM)cjlr Wrote:  You do realize the world has changed a great deal over its recorded history, yes? What served best as currency in 300BCE was not ideal in 1500CE; what was in use in 1500 would not be ideal now.

This is silly. Throughout recorded human history, dating back to the ancient Egyptians 5,000 years ago, gold has been used as a medium of exchange and to store value. Sure, there have been some isolated areas in history where gold may not have been valued. But your assertion that gold was only used in Europe as money, and that "Chinese coins were based on silver" is patently false. The Ying Yuan was a gold coin from China in the 6th century BCE!

(12-02-2014 10:17 PM)cjlr Wrote:  Except for the part where gold possesses neither a unique colour, nor sheen, nor texture.

Really? Please don't pull a Cathy. Be SPECIFIC. What SPECIFIC substance has the same color, sheen and texture as gold.

(12-02-2014 10:17 PM)cjlr Wrote:  I can't even begin to comprehend where you got such an idea.

Well, for starters, because you're a physicist and I've asked the above question repeatedly, and you STILL can't come up with the name of a substance that mimics gold's physical attributes.

(12-02-2014 10:17 PM)cjlr Wrote:  
(12-02-2014 09:48 PM)frankksj Wrote:  If you dug up some random gold coin from 3,000 years ago, you could still, today, in 2014, take it anywhere in the world and use to buy your necessities.

Except for the part where you couldn't.

Please name one place on planet earth where a 3,000 year old gold coin could not be used to buy necessities. I'm waiting.


(12-02-2014 10:17 PM)cjlr Wrote:  If I have something which was, in the past, recognised as valuable, then I could "go back in time" and have its value recognised. That isn't the same as currency or money.

Yes, that IS the entire thing I'm debating with you. Jeez, has the whole thing gone over your head. The debate is:

a) should we use as money something that is tangible and which the issuer can't just make as much of he wants (be it gold, or aluminum foil, or whatever)

_OR_

b) should we use pieces of paper that have no intrinsic value, which the issuer can just print as much of it as he wants, thus diluting the value of the currency that everybody else has, and transferring wealth to himself

Telling me gold has some natural recognized value is simply arguing my point.

(12-02-2014 10:17 PM)cjlr Wrote:  That is a phenomenally disingenuous way of stating things. Do you understand why?

Not at all. We're talking about what makes a good medium of exchange (money). What allows you to enter into very long term contracts because you know the money will still have value? What kind of money can you stuff in your mattress for a rainy day and know that in 50 years it will still hold it's value?

As I pointed out, once I moved to Switzerland, I realized how Americans behavior is driven by a fear of fiat currency collapsing. Why is it that in Switzerland, the one place with the gold standard, they have the lowest rates of home ownership? Ask the Swiss. They'll say 'why should I invest in a depreciating asset, I'll put my money into a business, or to productive use. Any house I can buy today i'll be able to buy 20 years from now for the same price, so there's no reason to hurry.' By contrast, American families dump almost all their money into buying a home, so that they don't have to worry that the currency will plummet (ie home prices will rise) so that their current savings will no longer pay for the house. Americans feel the need to buy a piece of land so they have some tangible asset to survive all the economic storms. But this means American's aren't using their money wisely. A house _IS_ a depreciating asset. Assuming there were no inflation and the price of a given house were constant, a house you buy today will be worth less in the future. The reason the average Swiss family has $700k in savings is because without a fiat currency, they don't worry about the future. They don't fear inflation. And they can see clearly the folly of putting all your money in a depreciating asset. Instead, they all rent and put their money to productive use, starting business, investing, etc.

(12-02-2014 10:17 PM)cjlr Wrote:  I said they were no longer legal tender anywhere, which is in fact true. Do you know what that means?

Strawman. No, you refuted my claim that old gold coins could be used today to buy your necessities. You were wrong.

(12-02-2014 10:17 PM)cjlr Wrote:  
(12-02-2014 09:48 PM)frankksj Wrote:  You could still use that coin to pay your rent.

Except for the part where it's not legal tender.

Read my claim. I never said anything about legal tender. I said you could use an old gold coin to pay your rent. The fact is you CAN, because you can always convert it into whatever is the current legal tender wherever you happen to be.
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12-02-2014, 11:52 PM
RE: The Benefits of the Fair Tax
Cjlr,

I can't find it right now. But a couple years ago, during the Occupy Wall Street movement, in another political forum, also debating monetary policy, I lifted some passages straight out of Mein Kampf, but changed the word "banker" to "1%", and posted it, claiming it was an OWS manifesto. Days passed, and nobody questioned that the manifesto in question was current and from OWS. Why? Because the grievances of OWS were EXACTLY the same as the grievances of the Nazi's. In both cases, the protests were against the big banks which owned the central banks and used a fiat currency to confiscate all the wealth. The only difference is that back then Germans considered 'banker' and 'jew' as synonymous, so Jews made an easy scapegoat, lumping all Jews in with the bankers. But it's the same thing right now. OWS lumped all the 1% together, even though a subset of the 1% got their wealth through fiat currency, many others in the 1% earned their money fairly by providing goods and services that make our lives better. But they were all lumped together.

And, today, because we forgot the history, we're doing the exact same thing. This study shows how there are only 147 corporations that control almost half of the world's wealth. Scroll down the list and you'll see the vast majority of them are the same corporations that own the world's central banks. So nothing has changed. 100 years later, we're repeating the same cycle that led to the desolation of Europe and the greatest tragedy in modern history. Yet AGAIN, for the 3000th time, we're letting the central banks confiscate all the wealth through a fiat currency.
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13-02-2014, 07:29 AM
RE: The Benefits of the Fair Tax
How can someone be so wrong about a theory he hates?

Keynesian economics has NOTHING to do with trickle down economics, my mentally challenged little friend.

Since you are so fond of Wikipedia, I'll stick to that as your education platform.
"Trickle-down economics" and the "trickle-down theory" are terms in United States politics to refer to the idea that tax breaks or other economic benefits provided to businesses and upper income levels will benefit poorer members of society by improving the economy as a whole.[1] The term has been attributed to humorist Will Rogers, who said during the Great Depression that "money was all appropriated for the top in hopes that it would trickle down to the needy."[2] The term is mostly used ironically or as pejorative.[3]
http://en.m.wikipedia.org/wiki/Trickle-down_economics


Kenyesian economics is simply:

Keynesian economics (/ˈkeɪnziən/ kayn-zee-ən; or Keynesianism) is the view that in the short run, especially during recessions, economic output is strongly influenced by aggregate demand (total spending in the economy). In the Keynesian view, aggregate demand does not necessarily equal the productive capacity of the economy; instead, it is influenced by a host of factors and sometimes behaves erratically, affecting production, employment, and inflation.[1]

What do taxes have to do with Keynesian?

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13-02-2014, 07:51 AM
RE: The Benefits of the Fair Tax
This discussion seems to have gone far off track, so to get back to the FairTax;

The “Fair Tax” is a Fraud – we need a 10% “Tithe” Tax!

I am a retired lifetime tax consulting professional (JD, LLM in Taxation, CPA, co-author of a 3 volume tax treatise, lecturer), with no financial stake in ANY tax system. This only a brief summary - for supporting details of all comments, call Stephen C. Eldridge tel. 423-532-7337.

The so-called “Fair Tax” (“FT”) is a fraud – it is MORE WEALTH REDISTRIBUTION, AND a financial SCAM.

In their own words, FT proudly advertises that it is MORE PROGRESSIVE (yes, it INCREASES WELFARE).

Of prime importance, the Prebate is NOT a real refund of FT paid as it appears to be. It is a new $600B ENTITLEMENT, which would have ALL Americans receiving a substantial monthly check from the federal govt – a very bad idea for those of us who are not Socialists. We simply cannot afford yet another huge entitlement that will only be increased in the future.

The FT and the Prebate would leave the working poor making no contribution at all to funding the federal budget and paying nothing even for their personal SS/Medi benefits. The FT and the Prebate FT then extend tax welfare to the non-working poor –and also take the next Progressive Cloward-Piven step towards giving SS/Medi to all regardless of work, by removing the tax “penalty” for reporting SS Wages, thereby “inviting” the fraudulent reporting of SS Wages.

The Prebate is apparently calculated to merely repay the poor for any FT they pay, but actually would pay them far MORE than any FT they might pay (by “assuming” the poor spend MORE than the underlying HHS Poverty Guidelines and also by “assuming” they will pay FT on ALL of their purchases, but they WON’T) - and FT also provides free SS/Medi to the working (and some non-working) poor.

The FT produces a 40-70% in-your-face retail sales tax that would spark a taxpayer rebellion that would destroy our retail-sales-sensitive economy. 40% = 30% (not 23%) FT + e.g., 10% S/L sales tax and 70% is the rate needed at a sample 30% FT evasion rate (the FT incredibly assumes ZERO evasion and ZERO intentional reduction in spending and ZERO migration from new to used goods).

IN ADDITION to that 40-70% tax, the FT contains several HIDDEN TAXES. 1) FT’s 30% rate is really 42+%; the 12+% is hidden by having fed + S/L govts paying FT – ultimately, they must get that money from you. 2) The initial 30% rate is 1-5% short and that plus any other revenue shortfall will have to be made up by raising more FT (or a NEW Income Tax), 3) The fed budget will rise for a) higher SS benefits and higher COLA’s payable to all federal retirees, both induced by FT’s price increase of nearly 30%, and for b) fraudulent new SS benefits invited by FT’s removal of the “tax penalty” for reporting SS Wages, – more FT (or a NEW Income Tax) we be required to fund these.

The NEW IRS (i.e., the STAA) may well be far worse, far more invasive than today’s IRS (the buyer is liable to pay FT and get/show a receipt – The STAA may audit consumers) – also we may well have to file an “Annual FT Summary”.

We may well wind up with BOTH a NEW Income Tax AND the FT, when Congress repeals the FT’s Sunset Clause and enact a NEW Income Tax .

Seniors will start to pay for SS/Medi again and some will pay a 2nd-3rd tax on their earnings. Many middle class seniors will pay more FT than they would have paid in Income Tax and many will lose purchasing power because of 1) the nearly 30% price increases and 2) the higher S/L & federal taxes required because they must pay FT and can only get the funds from us, and 3) higher federal taxes due to higher SS & pension COLA’s and fraudulent SS benefits.

The FT promises grand economic benefits which are all UNPREDICTABLE - mere Hype & Change.

What we need is a Flat Income Tax with No Deductions, No Exemptions, No Credits and a 10% rate, with business income taxed to shareholders on a very simple basis (i.e., no corporate income tax) - See H.R. 1040, but with changes as noted here (IRS is neutered, 1 page tax filing, everyone pays - more evolutionary). Call your representatives in Congress and let them know that this is what you want.
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13-02-2014, 08:42 AM
RE: The Benefits of the Fair Tax
To get back to fair tax.

Please keep in mind that 40% of US citizens pay a negative tax rate. Which means they pay no taxes and receive money from the government.

My effective tax rate is 40%!!!!!!!!

You say that poor people create jobs. The reality is that they don't, the middle class and wealthy do. And they are the ones that pay the taxes.

You want to create a better spread of wealth? Cut out the middle man, who takes a 70% cut due to their inefficiency and bureocratic waste.

While it won't solve every problem, I think any employer that pays a X% above the minimum wage, offers x% above the bare minimum of benefits, then they should receive significant tax cuts.

I have no problem sharing the wealth of the business with people who EARN it, who take on risk in proportion to their earnings. What I have a problem with is busting my ass to make a fortune, taking on the risk and having people take from me when they earned nothing.

The majority of Baby boomers didn't save money. It's the sense of entitlement. That paying in for SS would be enough. They now receive more money than they paid in because they are living longer. While I have no inherent problem with this: why didn't they save more of their income for retirement?

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13-02-2014, 08:56 AM
RE: The Benefits of the Fair Tax
(13-02-2014 07:29 AM)Cathym112 Wrote:  Keynesian economics has NOTHING to do with trickle down economics, my mentally challenged little friend.

Cathy dear,

Step 1: What is the problem?

Step 2: How are you going to fix it?

When you glossed over Keynesian economics, you only mentioned step 1, the uncontroversial bit of Keynesian economics. For step 2, you have to be clear what Keynes advocates we do in a recession when aggregate demand drops. Four simple yes/no questions:

1. Did Keynes advocate the government increase spending to fill the spending gap and prime the pump?

2. Did Keynes advocate this new spending be a fiat currency, which allows the central bank to make more of it?

3. When the central bank makes more of a fiat currency, is it credited into the reserve accounts of the very same big banks which, as mentioned in my last, already own half the world's multi-national companies?

Every Keynesian knows the answer to all 3 is 'yes'. Now read that definition of trickle-down economics:

"the idea that ... economic benefits provided to businesses and upper income levels will benefit poorer members of society by improving the economy as a whole."

Is getting a boatload of money deposited into your reserve account an "economic benefit"?

Are the recipients of this new money in the top 1% already?

Does Keynes claim that by doing this, giving the top 1% more money, it will benefit the economy as a whole?

Sure, Keynesians will insist that trickle-down economics is an evil policy of their opponents. But, if you actually study what Keynesians advocate, it actually IS trickle-down economics. In fact, it's even MORE trickle-down than Reaganomics. At least with Reaganomics the "economic benefit" given to the top 1% was letting them keep their own money. In Keynesianism, the "economic benefit" given to the top 1% is actually transferring the wealth of the poor and middle class to the 1% by confiscating the buying power of the poor and middle classes salaries and savings.

(13-02-2014 07:29 AM)Cathym112 Wrote:  What do taxes have to do with Keynesian?

Keynes advocates government spending. This is uncontroversial. Since government doesn't create wealth--only the people do--the only way for government to spend is to take wealth from the people. And there are only 2 ways to do that: 1) transparently and honestly through taxation, 2) in a secret, hidden manner by making more money, diluting the buying power of the people.

Keynes advocated the government use BOTH methods. Austrians advocate the government only use #1--taxation, because taxation is above-board, everybody knows what they're paying, what everybody else is paying, and you can see if the burden is distributed fairly across society. Naturally this makes big government spending harder, though, since politicians need to justify it so taxpayers will agree to open their wallets more. Government spending through printing money (like having the Fed buy up the US debt) is the easy way out. It's a lot easier to hit the 'print' button and the people don't know what's going on than to tell the people to open their checkbooks. But it's sleazy and unethical because the people still pay, they just don't know it, and it's actually the poor and middle class who pay disproportionately.
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13-02-2014, 09:21 AM
RE: The Benefits of the Fair Tax
(07-02-2014 02:59 PM)Carlo_The_Bugsmasher_Driver Wrote:  I have to say, I'm becoming a proponent for this form of taxation.

For those who don't know, the Fair Tax is the abolishment of the existing Federal Income Tax and replacing it with a Federal sales tax on all purchased goods and services.

It seems to have a number of very good advantages. First off, it creates an incentive for people to save money. After all, the less you spend, the less you lose in tax. It also provides you with more money in your pocket come payday and you can control how much of that is lost in tax by what you purchase.

Second, as you save more, the banks benefit as they have more money to lend. This makes it easier for them to grant you a loan if you need money and raises the interest rates on savings accounts, allowing them to be more practical for retirement savings
The amount of sales tax levied can be set according to the value of the good or commonidy. Expensive items such as exotic cars or private jets can have an additional 'sin tax' imposed upon them as could other vice such as alcoholic beverages, tobacco or marijuana.

Thoughts?

REPLY:

Please read my outline of the fatal flaws of this FairTax - "FT"" -proposal (which I posted at about page 13, but still do not see).

Viewed differently, the FT is punishment for enjoying the fruits of your hard earned labors.

I see you view that anything a rich persojn spends is a "sin", Comrade, awaken from your sleppwalking and find reality.
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13-02-2014, 09:39 AM
RE: The Benefits of the Fair Tax
(12-02-2014 11:14 PM)frankksj Wrote:  
(12-02-2014 10:17 PM)cjlr Wrote:  Which of your putative 3000 fiat currencies existed 100 years ago? All major currencies I can think of at the moment were held to a metal standard.

You obviously haven't researched this. Have you ever heard of, say, the holocaust? Ever looked into what caused it? Oh, yeah, it's because 100 years ago Germany (the Weimar republic) had a fiat currency, the mark. The central bank printed so much of it, it took a wheelbarrow of the stuff to buy a loaf of bread, and the currency was used as wallpaper, because it was cheaper than any other form of paper they could buy.

And that wasn't 100 years ago.

Nor did the Weimar government just decide one day "let's print money for shits and giggles". The alternative (given that the large majority of goldmarks were to be paid as war reparations) was bankruptcy and general collapse.

Faced with a choice between economic collapse and economic collapse, the Weimar government chose economic collapse. It is extremely disingenuous at best (and profoundly ignorant at worst) to imply they somehow didn't know what they were doing.

Nor was the initial impetus merely someone's whim. The most severe inflation occurred after the military occupation of the Ruhr and Rhineland in 1923.

But forget that noise, right? We certainly can't be bothered thinking of history as a complicated or interrelated series of causes and events. No, no! A single all-consuming reductionist fixation on monetary policy is all we need to explain all of human history. Yep.

(12-02-2014 11:14 PM)frankksj Wrote:  As always happens with a fiat currency, the bankers got very, very, very rich. And everybody else got very, very, very poor. Back then "the 1%" who held all the wealth were the bankers, like the Rothschilds. If you read Mein Kampf, you'll see the issue Hitler had with Jews had to do with their role as bankers--not their religion per se.

Yes, because Hitler is always a good source.

(12-02-2014 11:14 PM)frankksj Wrote:  Of course, just because almost all the bankers were Jewish, doesn't mean all Jews were bankers, and I'm certainly not defending the extermination of an entire race because there were a handful of bad actors that used a fiat currency to confiscate all the wealth. Rather, I'm learning from history in the hopes such tragedies can be avoided. When you insist there were no fiat currencies 100 years ago, you seem to be forgetting very important parts of our history, dooming us to repeat it. Throughout human history fiat currencies have been tried, and it's always been a disaster.

The stability of a currency is dependent on so, so many other things.

You have apparently ignored my earlier statement. All currency is temporal. All things human are temporal.

"All species are failures because they eventually go extinct!"
Much of the same "logic", there.

(12-02-2014 11:14 PM)frankksj Wrote:  You said: "Gold has no inherent value either". The either was referring to fiat currencies. Your argument was that gold has no inherent value, as paper currency has no value, and any value is just imaginary.

Yes. That is true.

(12-02-2014 11:14 PM)frankksj Wrote:  But that's clearly false. The value of wood isn't imaginary. It has inherent value because you can use it to build houses. The value of water isn't imaginary. All these things have attributes that give them some inherent value. Gold is no different. In gold's case the attributes which give it inherent value is that, just like wood makes a good floor, gold makes a good medium of exchange. They both have attributes that make them suit a given purpose.

But for the part where that's incredibly fallacious, of course.

The reasons humans attribute value to gold are its scarcity, its ease of working, and its beauty. Similarly some kinds of wood are useful construction materials.

Of course, neither wood nor gold is much use to a man lost in the desert. Let us imagine you were offering him a very large amount of gold for his last bottle of water. Which would be more valuable to him?

"It's good as a medium of exchange because it's a good medium of exchange, therefore it's a good medium of exchange" is frighteningly circular.

It bothers me that you don't realize this.

(12-02-2014 11:14 PM)frankksj Wrote:  This is NOT the same as fiat paper currency. Here, the paper itself is worth next to nothing. It's useful for writing on, and maybe as an artifact. But, paper is easy to produce, so it has no natural attributes that make it useful as money. It's only worth what people think it's worth. You're clearly struggling to grasp the difference between representative currency and fiat currency because you wrote the patently false statement that "all currency is fiat". If that were true, it wouldn't be called "fiat currency". It would just be "currency". If you look up 'fiat currency' on wikipedia you'll see that it refers to a particular type of currency, because you can have non-fiat currency (ie representative currency).

As I previously stated, I'm well aware of how the term is used. You appear incapable of understanding the point I was making.

The distinction is one of scarcity and supply.

(12-02-2014 11:14 PM)frankksj Wrote:  This is silly. Throughout recorded human history, dating back to the ancient Egyptians 5,000 years ago, gold has been used as a medium of exchange and to store value.

Along with all kinds of other things.

Do you not understand the difference? Throughout history, different cultures have found any number of materials suitable for use as media of exchange.

(12-02-2014 11:14 PM)frankksj Wrote:  Sure, there have been some isolated areas in history where gold may not have been valued. But your assertion that gold was only used in Europe as money, and that "Chinese coins were based on silver" is patently false. The Ying Yuan was a gold coin from China in the 6th century BCE!

And very nearly all their circulating coinage was backed by silver. At many times the dominant economic issue in Ming and Qing China was the silver supply.

(12-02-2014 11:14 PM)frankksj Wrote:  
(12-02-2014 10:17 PM)cjlr Wrote:  Except for the part where gold possesses neither a unique colour, nor sheen, nor texture.

Really? Please don't pull a Cathy. Be SPECIFIC. What SPECIFIC substance has the same color, sheen and texture as gold.

Pyrite. Electrum. Plated lead.

The context you, yourself originally provided was that of being able to fool a layman. There are any number of ways to do so. This is true of just about any material imaginable.

(12-02-2014 11:14 PM)frankksj Wrote:  
(12-02-2014 10:17 PM)cjlr Wrote:  I can't even begin to comprehend where you got such an idea.

Well, for starters, because you're a physicist and I've asked the above question repeatedly, and you STILL can't come up with the name of a substance that mimics gold's physical attributes.

You are frighteningly circular. Do you realize this?

You cannot have gotten the idea from my response to your stating such an idea. That makes literally no sense.

It bothers me that you don't realize this.

(12-02-2014 11:14 PM)frankksj Wrote:  Please name one place on planet earth where a 3,000 year old gold coin could not be used to buy necessities. I'm waiting.

And once again: you do not understand.

Gold has had at most points in time substantial value as a commodity. This is because of the way human beings thought of it and used it.

This is entirely distinct from its value as currency.

Reluctantly I am forced to conclude that not only do you not understand but that you cannot understand the difference.

(12-02-2014 11:14 PM)frankksj Wrote:  
(12-02-2014 10:17 PM)cjlr Wrote:  If I have something which was, in the past, recognised as valuable, then I could "go back in time" and have its value recognised. That isn't the same as currency or money.

Yes, that IS the entire thing I'm debating with you. Jeez, has the whole thing gone over your head. The debate is:

a) should we use as money something that is tangible and which the issuer can't just make as much of he wants (be it gold, or aluminum foil, or whatever)

_OR_

b) should we use pieces of paper that have no intrinsic value, which the issuer can just print as much of it as he wants, thus diluting the value of the currency that everybody else has, and transferring wealth to himself

Telling me gold has some natural recognized value is simply arguing my point.

And (par for the course) your question is strikingly short-sighted and you refuse utterly to consider why the parameters are overly-narrow.

"[T]he issuer can't just make as much of [it as] he wants" is not related to physical quantities.

Bitcoins are intangible and have no intrinsic value. Their supply is finite.

But because you don't understand what value means, this has taken us on another exciting trollercoaster ride.

(12-02-2014 11:14 PM)frankksj Wrote:  
(12-02-2014 10:17 PM)cjlr Wrote:  That is a phenomenally disingenuous way of stating things. Do you understand why?

Not at all.

See, if I were dishonest, I would just leave that there.

(12-02-2014 11:14 PM)frankksj Wrote:  We're talking about what makes a good medium of exchange (money). What allows you to enter into very long term contracts because you know the money will still have value? What kind of money can you stuff in your mattress for a rainy day and know that in 50 years it will still hold it's value?

And once again, for the slow section at the back of the class:
The value of currency is distinct from the value of the constituent components of its physical form.

Why is this so hard for you to understand?

(12-02-2014 11:14 PM)frankksj Wrote:  As I pointed out, once I moved to Switzerland, I realized how Americans behavior is driven by a fear of fiat currency collapsing. Why is it that in Switzerland, the one place with the gold standard, they have the lowest rates of home ownership?

The Swiss franc has not been gold-backed since 2000. But why let facts trouble you?

(12-02-2014 11:14 PM)frankksj Wrote:  Ask the Swiss. They'll say 'why should I invest in a depreciating asset, I'll put my money into a business, or to productive use. Any house I can buy today i'll be able to buy 20 years from now for the same price, so there's no reason to hurry.' By contrast, American families dump almost all their money into buying a home, so that they don't have to worry that the currency will plummet (ie home prices will rise) so that their current savings will no longer pay for the house. Americans feel the need to buy a piece of land so they have some tangible asset to survive all the economic storms. But this means American's aren't using their money wisely. A house _IS_ a depreciating asset. Assuming there were no inflation and the price of a given house were constant, a house you buy today will be worth less in the future. The reason the average Swiss family has $700k in savings is because without a fiat currency, they don't worry about the future. They don't fear inflation. And they can see clearly the folly of putting all your money in a depreciating asset. Instead, they all rent and put their money to productive use, starting business, investing, etc.

... this appears to be irrelevant.

(12-02-2014 11:14 PM)frankksj Wrote:  
(12-02-2014 10:17 PM)cjlr Wrote:  I said they were no longer legal tender anywhere, which is in fact true. Do you know what that means?

Strawman. No, you refuted my claim that old gold coins could be used today to buy your necessities. You were wrong.

And you have utterly ignored my response. Why does that not surprise me?

Do you know what else I can use to buy necessities? Literally anything at all I can convince someone else to buy or barter for.

(12-02-2014 11:14 PM)frankksj Wrote:  Read my claim. I never said anything about legal tender. I said you could use an old gold coin to pay your rent. The fact is you CAN, because you can always convert it into whatever is the current legal tender wherever you happen to be.

Then it does not have its face value as currency. It has material value. This is true of any jewelry I might dig up. This is true of any literature I might dig up. This is true of anything I own insofar as anything I own can be sold or traded.

I cannot imagine anyone being so asinine as to say those things are the same as money. And yet because old coins are still coin shaped your brain apparently lumps them together and concludes "GOLD MONEY IS ETERNAL TROLOLOLOL".

Because you like to accuse others of ignoring stupid questions, I shall accuse you of ignoring a pertinent question:
(12-02-2014 10:17 PM)cjlr Wrote:  What is the nominal value of an Augustan aureus? As currency that is unanswerable. It is not denominated in any modern currency. As metal it possesses some value; this price will then be dependent on the market value of the metal content, which is determined in modern currencies. What is its actual value? It is incidentally worth far more than the commodity value of its component parts, given its status as a historical artifact (or, as has sailed over your head several times already, value is a human construct).

... this is my signature!
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13-02-2014, 10:24 AM
RE: The Benefits of the Fair Tax
(13-02-2014 07:51 AM)Stephen Eldridge Wrote:  What we need is a Flat Income Tax with No Deductions, No Exemptions, No Credits and a 10% rate, with business income taxed to shareholders on a very simple basis (i.e., no corporate income tax) - See H.R. 1040, but with changes as noted here (IRS is neutered, 1 page tax filing, everyone pays - more evolutionary). Call your representatives in Congress and let them know that this is what you want.

The prebate aspect of the Fair Tax is certainly idiotic. But, the idea of replacing income taxes completely with consumption based taxes is not. A national sales tax could exempt basic necessities, and tax luxury items at a higher rate. Since there would not be the gimmicky prebate to fund, the overall rate could be less than the Fair Tax.

The poor would end up paying tax only to the extent they chose to purchase non-necessities, just everyone else, and the not poor could choose to lower their own tax bite by sticking to the basics, if for example, they were trying to save up to start their own business, or to retire early. If they were simply saving for a new car, they'd pay the tax when they bought it.

Softly, softly, catchee monkey.
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13-02-2014, 10:36 AM
RE: The Benefits of the Fair Tax
This is tiresome, and totally off the topic of this thread. And you're STILL throwing out silly, false statements, like claiming that Pyrite mimics the attributes of gold. Pyrite: "a superficial resemblance to gold, hence the well-known nickname of fool's gold." Speak for yourself. YOU may not able to tell the difference between a coin make of gold vs. pyrite, but lots of people, myself included, can tell the difference without even needing any tools.

The bottom line is that the one who understands the system best is the one who can accurately predict the result. Austrian economists and Libertarians are predicting that there is no way out of this indefinite QE so that within the next 10 years we will again have a collapse of fiat currencies so they are either abandoned or of little value and the dollar will lose it's place as the world's reserve currency. On the other side, Keynesian economists and Democrats, Republicans believe the QE is temporary, it will stimulate the economy, and that this time, for the first time ever, today's fiat currencies will prevail.

Just go on the record, state which side you're on. Time will tell who understands the system better, and if I'm wrong, I'll have no problem admitting it.
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