A fool-proof plan for economic recovery: [modified]

[Oakman]

Stan Shannon wrote:

Yes, and they will grow until we can no longer afford our own manufactured goods

Sure we will. Just as creating all those terribly expensive manufacturing plants during WWII fueled prosperity by creating new, high-paying, jobs.

Jon Smith & Wesson: The original point and click interface Algoraphobia: An exaggerated fear of the outside world rooted in the belief that one might spontaneously combust due to global warming.

[73Zeppelin]

Richard A. Abbott wrote:

Yet, if that occurs the loser will be the domestic marketplace. There are other downsides as well. Such as, the efficiency of an organization will be much reduced if they are compelled to work with sub-quality objects irrespective if that object is an item of machinery or a poorly educated worker, which will increase their costs in a non-specific way. And I don't necessarily mean their costs in terms of dollars. But Dollars, Pound Sterling, Euro's etc., the bottom line counts.

Exactly. Which is why protectionism is not a good economic policy.

[Lost User]

I am unaware of taxation policy in the USA. But ... for UK business taxation ... now, you might find this unbelievable - BUT IT IS TRUE If you lease an object - say a photocopier - it has a value. The object is not owned by you. You pay a quarterly bill to a finance company who are the owners. The owners and you agreed a 5 year deal. The value of this over time reduces in its asset value to the point at the end of 5 years its worth is £zero or close to £zero (anyhow a nominal value). It is tax efficient for the leasing company because they are receiving quarterly payments from you, the assessed value of the object is written off against tax. You, the company leasing it has been paying this quarterly bill. It is tax efficient for you as items that are leased are claimable against tax. Consequently, over a 5 year term, you have had the services of a photocopier and your costs are nil as this is claimed against taxes and for the company who leased it to you, their costs are written down and are a taxable claim so their costs will be minimized with the exception of the resale value which as stated above would be nominal. So, the tax payer is essentially subsidizing the business through tax efficient means. But it is not all a one-way traffic. The manufacturer of the photocopier employs people so tax revenue is collected, and other revenues are collected along the way such as VAT. The manufacturer of toner and the supplier of service engineering (it will breakdown and need servicing from time to time) and insurance on the leased object will all attract some government taxable revenue. So, for a business, it is tax efficient to lease. And thus to replace equipment regularly. I said photocopier - but it could be a computer system that you replace/upgrade every 3 years. It doesn't need to be 3 or 5 years but these are the norm. And the taxman is happy as he doesn't lose out. He just gets his cut from a variety of sources that keeps that photocopier working. When Dalek Dave gets on-line, he is an accountant, I'm sure he can give a better fuller explanation. But I'm not far wrong.

[Lost User]

Thank you John. You have confirmed what I said in a thread below.

[Oakman]

Stan Shannon wrote:

What makes you assume that quality would be better?

What makes you think it wouldn't be? The truth is, of course, that in some cases, foreign manufacturers have realised that quality sells - compare the reputation of of GM versus Honda, for instance. But the vast majority of product coming out of the sweatshops of China and India and Central America are produced by illiterates who are actually or practically chained to their workplace twelve hours @ day. It would be hard not to produce better goods. For instance, I recently bought two water pistols for young relatives. Both made in China, both depositing more water on the shooter than the target, I, on the other hand, still have a 1968 phaser water pistol made in America - it can knock a fly out of the air at 20 paces.

Jon Smith & Wesson: The original point and click interface Algoraphobia: An exaggerated fear of the outside world rooted in the belief that one might spontaneously combust due to global warming.

[Lost User]

Oakman wrote:

it can knock a fly out of the air at 20 paces.

So your eyesight has not depreciated :) [I ducks the water jet]

[Oakman]

Richard A. Abbott wrote:

I'm sure he can give a better fuller explanation. But I'm not far wrong.

I am very aware of the tax advantages of incorporating. You have described the rough equivalent of what I understand about the accounting practices in this country, especially those in the books the IRS gets to see.

Richard A. Abbott wrote:

So, for a business, it is tax efficient to lease.

That's why I used to drive a BMW. ;)

Jon Smith & Wesson: The original point and click interface Algoraphobia: An exaggerated fear of the outside world rooted in the belief that one might spontaneously combust due to global warming.

[Oakman]

Richard A. Abbott wrote:

So your eyesight has not depreciated

Actually, I have cataracts starting up and we are just waiting until they are bad enough to warrant peeling my eyeballs and gluing in permanent contacts. I didn't say I could hit the broad side of a barn with one. ;)

Jon Smith & Wesson: The original point and click interface Algoraphobia: An exaggerated fear of the outside world rooted in the belief that one might spontaneously combust due to global warming.

[Lost User]

Oakman wrote:

BMW

Wonder what you might be forced to drive if the USA (and the world) went protectionism. With GM in all sorts of difficulty, it probably won't be one of their models unless there's to be yet another bail-out or two. OT This SB has been amazing this last few days. Hardly any nasty business from anybody. It really has been a pleasure to come here. :-D

[73Zeppelin]

Richard A. Abbott wrote:

This SB has been amazing this last few days. Hardly any nasty business from anybody. It really has been a pleasure to come here.

Calm before the storm? Or is the new Masonic-Lodge nature of the Soapbox actually to our benefit?

[Stan Shannon]

Its Obama!!!!! :laugh:

Chaining ourselves to the moral high ground does not make us good guys. Aside from making us easy targets, it merely makes us idiotic prisoners of our own self loathing.

[Chris Austin]

Synaptrik wrote:

Which really brings us back to my main point. That an economy is driven by demand, which equates to labor, which needs a manufacturing base to really thrive.

What you are refusing to see is that in order for a retail manufacturing base to thrive once again in this country one of two things need to change. 1) We siginificantly lower our way of life/cost of living. or 2) Consumers, have to demand higher quality goods and be willing to pay for them. You or I may want to pay for quality goods. But, I submit that the success of stores like BigLots, Dollar Tree and, Walmart paints an entirely different picture of the American Consumer's demand for goods. Once we stop consuming throw away products US based manufacturers will need to step up and outperform the competition. It's not something that can happen quickly.

Sovereign ingredient for a happy marriage: Pay cash or do without. Interest charges not only eat up a household budget; awareness of debt eats up domestic felicity. --Lazarus Long Avoid the crowd. Do your own thinking independently. Be the chess player, not the chess piece. --?

[73Zeppelin]

Bingo. :thumbsup::thumbsup:

[Lost User]

Although you can use the thumbs-up and thumbs-down symbols, there certainly has been a more adult feel to the place now that voting and message reporting can no longer be done. To discuss an issue with people who actually want to discuss issues has been made all the more possible. But that won't mean that there won't be reasons to have full bodied - even full blooded - arguments. Thus far a benefit and AFAIK, no moderators in sight, so, it does shows that we can behave like adults. :)

[73Zeppelin]

We should wear Shriner hats and pledge allegiance to disembodied heads.

[Stan Shannon]

I think competition at every level of society improves quality and lowers prices. I don't believe for a moment that there is any society or ethnicity on the planet that doesn't understand that, or cannot achieve it with a little effort. But, I don't believe that there is anything inherent in tariffs that encourages that one way or another. The only way that would work is if every society on the planet isolated itself economically from all the others and each one lived as a little economic island. But even then you would have regions within those islands that would be more or less likely to cooperate with the other regions and the same basic problems would still exist, so you would need further isolation, just as illion suggested. I just don't see it happening. You have to go in one direction or the other - economic unification or economic disintegration. Economic stability will never happen anywhere.

Chaining ourselves to the moral high ground does not make us good guys. Aside from making us easy targets, it merely makes us idiotic prisoners of our own self loathing.

[Lost User]

Stan Shannon wrote:

Economic stability will never happen anywhere.

With the right instruments in place, there is a chance of that happening. But defining those instruments will be most problematic, it becomes internationally and domestically political very quickly and can get very messy indeed.

[Oakman]

Richard A. Abbott wrote:

Wonder what you might be forced to drive if the USA (and the world) went protectionism.

Any country that does not: manipulate its currency, have high tariff barriers with the US, enslave its workers, disregard the impact of its industry on the environment, or manufacture goods that are dangerous or deadly to use, should not be protected against. I'm not quite sure who-all that might be, but I suspect that most of western Europe could fit into that category - if they eliminated their own tariffs.

Richard A. Abbott wrote:

This SB has been amazing this last few days.

I suspect that a number of us - myself maybe most of all - realised that we'd become the kind of posters we wished would go away.

Jon Smith & Wesson: The original point and click interface Algoraphobia: An exaggerated fear of the outside world rooted in the belief that one might spontaneously combust due to global warming.

[Oakman]

Richard A. Abbott wrote:

AFAIK, no moderators in sight

Which doesn't mean there aren't any. In another website for which I am webmaster, there are two moderators - neigher of whom is known to the rest of the members. I'm still betting on Rob. ;)

Jon Smith & Wesson: The original point and click interface Algoraphobia: An exaggerated fear of the outside world rooted in the belief that one might spontaneously combust due to global warming.

[Stan Shannon]

Oakman wrote:

Sure we will. Just as creating all those terribly expensive manufacturing plants during WWII fueled prosperity by creating new, high-paying, jobs.

The only reason that worked is because all the other industrial societies were dropping bombs on one another's factories. That same situation is never going to work forever. You simply create a condition where the guy screwing a bolt on a wheel expects to be as well paid as the guy who designed the car.

Chaining ourselves to the moral high ground does not make us good guys. Aside from making us easy targets, it merely makes us idiotic prisoners of our own self loathing.