I agree with Rand Paul on this. Taxes should be the domain of Congress.
Economics Thread
- Thread starter sturg33
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I agree with Rand Paul on this. Taxes should be the domain of Congress.
Runnin
Well-known member
Thanks to the MAGA folk. But the Dems have also moved to the right.
acesfull86
Well-known member
On what issues?
acesfull86
Well-known member
https://www.wsj.com/opinion/donald-trump-credit-card-interest-cap-10-percent-new-york-rally-4f0dd47b?mod=opinion_lead_pos3
Donald Trump keeps trying to microtarget working-class voters, but he’s bidding himself into policy and political dead ends. “While working Americans catch up, we’re going to put a temporary cap on credit-card interest rates,” he told a rally last week in New York. “We’re going to cap it at around 10%. We can’t let them make 25 and 30%.”
That’s a price control on credit. It would be comforting to write off this remark as another of Mr. Trump’s rally improvisations, like references to Hannibal Lecter. But watch the video, and it looks as if Mr. Trump is reading the credit-card policy off the teleprompter.
Mr. Trump’s promised “temporary” 10% cap is lower than the rate that America’s two leading socialists proposed in 2019. A bill from Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez aimed to limit rates on consumer debt to 15%. “Modern-day loan sharks are no longer lurking on street corners breaking kneecaps,” Mr. Sanders said. “They wear three-piece suits and work on Wall Street.”
Yet economics teaches there’s no free lunch. Millions of Americans use credit cards as convenient and ubiquitous payment networks, and they don’t owe interest because they pay off their balances at the end of each month. Debit cards are an alternative. People in a pinch also use credit cards to cover emergencies or financial shortfalls.
The interest rates on credit cards reflect operating costs, including nonpayment. A 10% cap would effectively cut off people with less-than-pristine credit scores. After Illinois capped many consumer interest rates at 36% “all-in APR,” a study in the journal Public Choice said “financial well-being declined” for residents who lost access to short-term, small-dollar loans.
Why do Messrs. Trump and Sanders think it’s helpful to limit credit access and send folks to the pawn broker or leg breaker instead? Card companies might respond by raising fees, which is what happened to free checking after Democrats regulated debit swipe charges in 2010.
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To reiterate
Donald Trump keeps trying to microtarget working-class voters, but he’s bidding himself into policy and political dead ends. “While working Americans catch up, we’re going to put a temporary cap on credit-card interest rates,” he told a rally last week in New York. “We’re going to cap it at around 10%. We can’t let them make 25 and 30%.”
That’s a price control on credit. It would be comforting to write off this remark as another of Mr. Trump’s rally improvisations, like references to Hannibal Lecter. But watch the video, and it looks as if Mr. Trump is reading the credit-card policy off the teleprompter.
Mr. Trump’s promised “temporary” 10% cap is lower than the rate that America’s two leading socialists proposed in 2019. A bill from Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez aimed to limit rates on consumer debt to 15%. “Modern-day loan sharks are no longer lurking on street corners breaking kneecaps,” Mr. Sanders said. “They wear three-piece suits and work on Wall Street.”
Yet economics teaches there’s no free lunch. Millions of Americans use credit cards as convenient and ubiquitous payment networks, and they don’t owe interest because they pay off their balances at the end of each month. Debit cards are an alternative. People in a pinch also use credit cards to cover emergencies or financial shortfalls.
The interest rates on credit cards reflect operating costs, including nonpayment. A 10% cap would effectively cut off people with less-than-pristine credit scores. After Illinois capped many consumer interest rates at 36% “all-in APR,” a study in the journal Public Choice said “financial well-being declined” for residents who lost access to short-term, small-dollar loans.
Why do Messrs. Trump and Sanders think it’s helpful to limit credit access and send folks to the pawn broker or leg breaker instead? Card companies might respond by raising fees, which is what happened to free checking after Democrats regulated debit swipe charges in 2010.
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To reiterate
"Price controls are an industrial policy tool whereby the government sets rules on
what private firms are allowed to charge their customers. These controls can be set
either for one or multiple industries, but this kind of tool is different than overall
macroeconomic inflation management through monetary policy, where overall price
levels are indirectly controlled through interest rate adjustments. In turn, through
increased or decreased bank lending, this affects the pace of economic activity.
Price controls, on the other hand, take a more direct form: as instructions to specific
producers (including, notably, many if not mostly non-banks) on how much they may or
may not legally demand for their products. In so doing, government limits or expands
the distribution of money between different industries—our definition of industrial
policy."
There really isn't a right or wrong on this. It's more of a viewpoint than anything else.
what private firms are allowed to charge their customers. These controls can be set
either for one or multiple industries, but this kind of tool is different than overall
macroeconomic inflation management through monetary policy, where overall price
levels are indirectly controlled through interest rate adjustments. In turn, through
increased or decreased bank lending, this affects the pace of economic activity.
Price controls, on the other hand, take a more direct form: as instructions to specific
producers (including, notably, many if not mostly non-banks) on how much they may or
may not legally demand for their products. In so doing, government limits or expands
the distribution of money between different industries—our definition of industrial
policy."
There really isn't a right or wrong on this. It's more of a viewpoint than anything else.
Last edited by a moderator:
sturg33
I
there is a difference between the central bank setting interest rates that influence the borrowing/loaning of banks country wide, vs a federal intervention of what a bank can charge for its product, regardless of the fed's interest rates
you are wrong. don't applaud commie trash bc the orange man said it
acesfull86
Well-known member
Right…the unbolded portions of that passage best describe the bank/consumer credit transaction. The bolded refers to central bank macroeconomic policy. No one would refer to that as a “price control.” So that passage, wherever it came from, agrees with my point.
Also, getting beyond the semantics of it all is the 2nd half of that WSJ piece - this is bad policy!
Runnin
Well-known member
Her tax proposals are less liberal than Biden's. More accurately, her team has made a concerted effort to run to the center from the beginning. Of course, that doesn't mean she will govern that way.
Okay, I will concede the point on it not being a price control.
acesfull86
Well-known member
https://taxfoundation.org/research/all/federal/kamala-harris-tax-plan-2024/
I don’t much evidence here of a move to the center on taxes. Especially floating the idea of taxing unrealized gains, which is pretty damn far left.
lol
Runnin
Well-known member
Taxation is a non-issue this election. Any policy still has to make it through Congress where it always gets watered down. But just vote for Donald Trump if you believe he's the better leader.
acesfull86
Well-known member
I’m just going by what you said …you’d offered tax policy as a place where she moved to the right. I don’t see it that way. I’m also not voting for either of these candidates.
acesfull86
Well-known member
https://www.wsj.com/world/americas/argentina-milei-rent-control-free-market-5345c3d5?st=R8ogdk&reflink=article_email_share
BUENOS AIRES—For years, Argentina imposed one of the world’s strictest rent-control laws. It was meant to keep homes such as the stately belle epoque apartments of Buenos Aires affordable, but instead, officials here say, rents soared.
Now, the country’s new president, Javier Milei, has scrapped the rental law, along with most government price controls, in a fiscal experiment that he is conducting to revive South America’s second-biggest economy.
The result: The Argentine capital is undergoing a rental-market boom. Landlords are rushing to put their properties back on the market, with Buenos Aires rental supplies increasing by over 170%. While rents are still up in nominal terms, many renters are getting better deals than ever, with a 40% decline in the real price of rental properties when adjusted for inflation since last October, said Federico González Rouco, an economist at Buenos Aires-based Empiria Consultores.
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I hope someone tells Harris
BUENOS AIRES—For years, Argentina imposed one of the world’s strictest rent-control laws. It was meant to keep homes such as the stately belle epoque apartments of Buenos Aires affordable, but instead, officials here say, rents soared.
Now, the country’s new president, Javier Milei, has scrapped the rental law, along with most government price controls, in a fiscal experiment that he is conducting to revive South America’s second-biggest economy.
The result: The Argentine capital is undergoing a rental-market boom. Landlords are rushing to put their properties back on the market, with Buenos Aires rental supplies increasing by over 170%. While rents are still up in nominal terms, many renters are getting better deals than ever, with a 40% decline in the real price of rental properties when adjusted for inflation since last October, said Federico González Rouco, an economist at Buenos Aires-based Empiria Consultores.
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I hope someone tells Harris