US defaulting ...

As in the 1930s when the US ranked as a military power between Sweden and Portugal and their soldiers practised with wooden rifles. Didn't work out too well, as I recall.

Allan D wrote:Yep, a consumption tax and an investment tax - just the thing for an economy with a 9% unemployment rate.

Markets are looking for signs of true and fundamental reform by policymakers & politicians. I did say a carefully targeted CGT. I did say a 1% GST.

Mick Sawyer wrote:

Allan D wrote:Yep, a consumption tax and an investment tax - just the thing for an economy with a 9% unemployment rate.

Markets are looking for signs of true and fundamental reform by policymakers & politicians. I did say a carefully targeted CGT. I did say a 1% GST.

Good luck finding it. It seems to be more common nowadays for the wreckers to prevail at the cost of the economy.

Weird day on the markets in Oz. Down over 5% at one stage, now "only" down 1% with BHP basically flat on the day.

Some good bargains were to be had today.

Wow - ASX now square on the day!

FFS, now down again....

garquen woofer

I thought you were long in gold, JGK. Why would you GAF?

Courtesy of telling my financial advisor how to do her job recently, I'm laughing at all the stoopid retirees who are bleating about their life's savings disappearing before their eyes. Greedy or stoopid ol' qunts.

Bradman wrote:

Mick Sawyer wrote:

Allan D wrote:Yep, a consumption tax and an investment tax - just the thing for an economy with a 9% unemployment rate.

Markets are looking for signs of true and fundamental reform by policymakers & politicians. I did say a carefully targeted CGT. I did say a 1% GST.

Good luck finding it. It seems to be more common nowadays for the wreckers to prevail at the cost of the economy.

ah, yes, where are the builders?

And talking of wreckers ....... one of our very responsible media organisations was running an interview with Alan Greenspan the other night. It should have been shot from inside a cell.

Another bloodbath overnight in the Dow Jones.

skully wrote:Another bloodbath overnight in the Dow Jones.

Reform required in Europe, reform required in the US. Markets will continue to behave like prick teasing virgins whilst the status quo holds.

Mick Sawyer wrote:

skully wrote:Another bloodbath overnight in the Dow Jones.

Reform required in Europe, reform required in the US. Markets will continue to behave like prick teasing virgins whilst the status quo holds.

down down

down down.

**chuckle**

The Oracle speaks...

Buffett Urges Congress to Raise Taxes on ‘Coddled’ Billionaires
By Michael Heath - Aug 15, 2011 3:11 PM GMT+1000

Billionaire Warren Buffett urged Congress to raise taxes on the nation’s wealthiest individuals to help cut the U.S. budget deficit, saying it won’t inhibit investment or job growth.

“My friends and I have been coddled long enough by a billionaire-friendly Congress,” the chairman and chief executive officer of Berkshire Hathaway Inc. (BRK/A) wrote in an opinion article published in the New York Times. “It’s time for our government to get serious about shared sacrifice.”

Buffett’s advocacy of higher taxes for the “mega-rich” may reinforce President Barack Obama’s call for an end to tax breaks for corporate-jet owners. In the op-ed, the 80-year-old investor said his federal tax bill last year, or the income tax he paid and payroll taxes paid by him and on his behalf, was $6,938,744.

“That sounds like a lot of money,” Buffett wrote. “But what I paid was only 17.4 percent of my taxable income -- and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.”

A 12-member panel, formed in the Aug. 2 law that raised the nation’s debt ceiling and averted a possible default, is charged with finding $1.5 trillion in budget savings.

Democratic Representatives James Clyburn, Chris Van Hollen and Xavier Becerra will join Republican counterparts Dave Camp, Fred Upton and Jeb Hensarling. The Senate team includes Republicans Jon Kyl, Pat Toomey and Rob Portman and Democrats Patty Murray, John Kerry and Max Baucus. Murray, of Washington state, and Hensarling, of Texas, will be co-leaders.

Millionaires

Buffett said that for those making more than $1 million -- there were 236,883 such households in 2009 -- he would raise rates immediately on taxable income in excess of $1 million, including dividends and capital gains. For the 8,274 taxpayers who made $10 million or more, he said they should get an additional increase in the rate.

“While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks,” Buffett wrote.

He cited Internal Revenue Service data showing that the tax burden on the nation’s wealthy had fallen for the past two decades.

In 1992 the top 400 American earners had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that amount, he wrote. In 2008, while the aggregate income of the highest 400 had soared to $90.9 billion, the rate paid had fallen to 21.5 percent.

Hiring, Investment
Buffett said the notion that high taxes discourage hiring and investment is false.

“I have worked with investors for 60 years and I have yet to see anyone -- not even when capital gains rates were 39.9 percent in 1976-77 -- shy away from a sensible investment because of the tax rate on the potential gain,” he said.

“People invest to make money, and potential taxes have never scared them off,” he said. “And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.”

The U.S. unemployment rate has averaged 9.5 percent in the past two years, dropping to 9.1 percent in July from 9.2 percent a month earlier, a government report showed Aug. 5

If you taxed every US millionaire at 100% the total revenue would not cover the cost of social security payments for 6 weeks and for every millionaire that would voluntarily pay any increase there would be many more who would hire an accountant to hide his wealth in family trusts and offshore tax havens plus some who would decide that the Bahamas or the Cayman Islands offered them a better lifestyle.

Buffet is del;iberately disingenuous when he uses the figures for job creation for 1980-2000. This was the era of the Reagan tax reforms, which radically reshaped the federal tax system but also brought about the largest rate cuts on upper incomes in US history, followed by the explosion in the home computer market, the biggest technological innovation in our era which some have argued had the same effect on US economic growth as the building of the railways in the 1850s-90s or the building of the freeway system in the 1950s.

The Bush tax cuts were deliberately designed to prevent the US (and world) economy falling into a deep depression following the 9/11 attacks which was the general fear at the time because of the knock-on effects of a potential collapse in the airline and tourist industries. Generally they can be said to have worked although their effect has been diminished by not being made permanent and by the increase in federal government spending which has reduced the amount going to the private sector.

FDR taxed the rich and middle-class through increased direct taxation - as well as the poor through increased indirect taxation to pay for his workfare proposals in the 1930s. As a consequence by 1939 when he had been in office for 6 years the US unemployment rate still stood at 19%. John Maynard Keynes likened the New Deal to men being paid to dig holes and bury money and another lot of men being paid to dig it up again. The stimulus effect of higher government spending was nullified by the effect of higher taxation reducing consumption.

The real solution lies in simplifying the tax system not making it more complex and reducing the numerous reliefs and allowances (even more prevalent in the US system which does not use PAYE) in favour of a lower, generalised tax rate. This would have the effect of both stimulating the economy and increasing the amount of government revenue.

The "Sage of Omaha", as Buffett is known, has his own reasons to sympathise with Obama and look askance at the credit rating agency, Standard & Poor's, who delivered a similar downgrade to that of the US in the credit rating of Buffett's investment company, Berkshire Hathaway, at the beginning of last year after Buffett invested $26bn taking over the largest rail freight company in the US which S&P obviously considered a poor investment:

Buffett's Berkshire loses top S&P credit rating

However Buffett defended his investment as an investment in 'green' technology, so beloved by The Great Leader. Buffett said that one gallon of diesel fuel can haul a ton of goods for 470 miles on the railways.

They do it in a very cost efficient way and they do it in an extraordinarily environmentally friendly way

So what does this environmentally friendly company carry?

It transports coal...between US cities and to or from international ports

Err...quite.

Warren Buffett signals his confidence by buying into US railways