American Budget Cuts

Remember, the productivity of the richest 1% of Americans is going to be a lot larger than might otherwise be expected. All of their invested money counts as effort as well.If you have a project where a wealthy person invested 1 million dollars and an employee invested $250,000 worth of effort... then the rich person is responsible for 4 times the total gain of the project than the employee. The money is directly convertible to effort yet I expect you didn't consider it equivalent. And you completely missed the significance of investment, and what it represents.You simply don't understand what is going on.

Well, no, it's not. It's only going to be slightly larger than expected - rich or poor, there's only so many hours in the day and only so much one man can do. The productivity of the rich is going to reflect their lower downtime due to poor health, their greater labor effectiveness due to fitness, their greater education, and so on. But that's about it. Rich or poor there's only 24 hours in a day to do things. Of course, the greater portion of a rich person's life devoted to leisure indicates that their productivity is actually quite a bit lower than we would expect. No, it doesn't. If I invest in your factory, I'm not working there. The workers are still responsible for their own productivity, and I'm responsible for mine. They own their productivity and they're selling some of it to you. As an investor I may own some of the results of that labor, but by your own standard, you'd have to admit that taking all of it would be stealing - a man is entitled to the sweat of his brow, to borrow from a video game, and taking more of it than you deserve is theft. Taking any of it may be theft, depending on how libertarian you tend to be. No, because investment isn't productivity. It's a form of loan. The workers at the company own their productivity. We can easily prove this by the example of a factory with no workers and a hundred million-dollar investors. What does that factory actually produce?Absolutely nothing - there's nobody actually being productive. The only people involved with the factory are the investors sitting around and waiting to cash checks. That's not productivity, as proven by the fact that the factory is not producing anything. Investment is capital. It's a loan of money on terms that, theoretically, outweigh the level of risk. But investment isn't productivity. Having millions in investment capital doesn't actually produce anything all on its own. Haven't you seen The Producers? (The title doesn't refer to the investors!) The whole scam is to have investment capital and no productivity. Of course, the joke is on them when the actors, writers, and designers they hire turn out to be way more productive than Max and Leo anticipated. People keep telling me that, usually right as they're saying idiotic and easily-disprovable things.

You are leaving out a lot, probably deliberately.Your claim is true when men have to rely on their brute muscle power to accomplish things.In a large corporation those at the top are not relying on muscle power to accomplish things. Knowledge and skill count, as do contacts outside the corporation.The productivity of the "rich" is more likely going to relate to their ability to do things for the corporation that the janitor and floor-worker just can't do. And they are paid in relation to that ability.Your attempts to equate the two levels are simply not reflecting reality.

Still completely wrong. Lets have a thought experiment:Imagine two people, each of which perform $100,000 dollars worth of work. It doesn't matter at what, they get their effort converted to dollars which they can then easily reallocate to whatever they choose.The first (person A) spends his money on things he consumes. That could be food, or things he owns, or practically anything. The point is that it is gone, not providing any more economic benefit.The second (person B) takes all his money and buys a machine that will last one year. This $100,000 machine he lets the first person run the next year, with the understanding that they will split the profits. Remember its effectively B's first year of effort plus A's second year of effort, thus the split is perfectly reasonable. B hasn't gotten the reward from his effort, he is investing it instead.So if someone has a bunch of money, that have a bunch of placeholders for effort. They can purchase effort from other people, or they can purchase equipment or supplies which effort was required to produce. And thats completely irrelevant. Investment capital can be spent on labor too. You are turning labor placeholders back into labor. Of course if you only buy equipment then nothing gets done, but thats completely irrelevant.

So, how much can an individual really EARN, in a year or a lifetime?Certainly, delayed gratification is valid - Sacrifice early on and get paid more later on.Just for round numbers, I propose that one can EARN an average of $1 million/year over a 50 year working lifetime. That is, $50 million for that working lifetime. Anything above that $50M is windfall profit.And we have individuals getting paid $100,000,000+ a year. Is it possible to EARN such a thing? I say, NO WAY IN HELL! And to do such is an undesirable distortion of (ideal) capitalist theory.Moose

The corporate identity is legally treated as a separate individual for the purposes of conducting business. That means that only the corporation can obligate itself under contract, not any of its members. Any such contract is legally enforceable in the same manner as are contracts made by individuals. And any income it is due is payable only to the corporate identity, not to any member or group of members.It does not separate the corporation from its ownership. To gain acceptance as a legal corporation one of the requirements in every state in the union is that the articles of incorporation clearly incorporate the ownership of the entity within the corporate body.Your basic understanding of the corporate identity is akin to the creationist's understanding of the 2nd Law, seeing it as giving proof that disorder must alway increase thus no order can ever be achieved. Since the corporation is treated in contract law as a separate individual then it must be fully independent of anything and anyone. There is much more to it then you appear to acknowledge. Oh. Well, then never mind.Edited by AZPaul3, : correction

I'll agree with that!

People have to rely on their labor to accomplish things. If they're relying on paying for someone else's labor to accomplish something, it's the other person who accomplishes it, and they're just purchasing it.Just because you can afford to hire a plumber to come over and fix the pipes doesn't mean that you actually did any plumbing. You, in fact, did nothing at all but purchase some of the productivity of a trained and certified plumber.Productivity is how much you can accomplish with your labor, not how much you can accomplish with your wealth. By definition. the rich simply can't be much more productive than an average person, because they're not capable of significantly more labor. There's still only 24 hours in a day, and there's still only so much one man can do. The reality is that there is only 24 hours in the day. Productivity cannot be infinite. Rich people simply cannot be so productive as to produce 10 million dollars in aggregate value in a single year, per person. No person can work that much in 365 days.

Then they have equal productivity, by definition. Sure. But that's not their productivity; that's someone else's productivity that they then purchased the results of.Like I told Coyote, you're simply mistaken about what the word "productivity" means. It's not the amount you're able to accomplish with your wealth, it's the amount you're able to accomplish with your labor.Labor takes time - man-hours, to be specific - and there's only 24 hours in a day. Rich people simply can't be three orders of magnitude more productive in a year than anyone else, because no matter how rich you are you can't buy more time in the day. Sure. You can spend it on anything. But buying the services of a laborer doesn't constitute your labor. Buying the services of a plumber doesn't mean you plumbed, it means he did and you paid him for it. Productivity isn't what you can accomplish with your wealth, it's what you can accomplish with your labor.

By this argument, the owner of a business can't commit the crime of embezzlement - since by your position they already own all business assets, indeed they are the business - but since people who own businesses are convicted of embezzlement, you must be wrong.The corporation is always separate from the ownership, by definition of "corporation." Your basic understanding of the corporate identity is akin to the creationist's understanding of the law of biogenesis, seeing it as giving proof that evolution is a physical impossibility because life could never have come from non-life.

Right, so who are you to say that the $100,000 worth of effort worker A puts in the second year should give him any more right to the fruits of that labor than the deferred $100,000 of labor of person B? (provided in the form of machinery) They exchanged productivity for productivity. Or more accurately the results of their productivity for the results of someone else's productivity. Why would an equivalent exchange change anything? The purpose of a medium of exchange is to allow such transformations. No thats "labor productivity", a distinct subset of "productivity". Productivity is a measure of output from a production process, per unit of input. Our unit of input is dollars, which is used to quantify the amount of labor input as well as the amount of invested equipment.Regardless, you are just trying to cloud the issue with semantics. Whatever you want to call it people deserve to reap the rewards of their investments.Edited by Phage0070, : spelling

They both have equal claim to the fruits of their labor, and they're both receiving the fruits of their labor, because they're doing $100,000 of work and getting paid $100,000. What they spend their compensation on is irrelevant because that's not their productivity, that's their spending. No, they exchanged wealth for productivity, unless they literally agreed to terms like "if you fix my pipes, I'll paint your house." You're confusing the medium of exchange with the things its being exchanged for. Paying $3.49 for a box of corn flakes doesn't make me a farmer, not even a little bit. I'm buying the results of a farmer's productivity. If the profits from the sale of corn allow him to buy another 60 acres and make more corn in a year, he's increased his productivity; mine has stayed the same. And you're talking about someone using their wealth to increase the amount of input, so there's no gain in productivity. Buying a rose doesn't make you a florist, not even a little bit. Agreed. What is your evidence that the wealthiest 1% of Americans spent any money investing in the American worker?

So basically you haven't the faintest concept of the allocation of resources beyond getting your paycheck and spending it.You haven't really progressed past "hunter-gatherer" stage have you? How is that relevant?

I don't see how you arrived at that conclusion, except by simply taking me utterly out of context.Spending and productivity are not the same thing. Are you saying you can't tell the difference between a bill and a paycheck? Between Accounts Payable and Accounts Receivable? Your finances must be a mess. Well, we're talking about people either making a profit on an investment, or stealing. If it's your contention that the rich were entitled to the vast increase in GDP by the American worker because they're singularly responsible for it by virtue of having made huge investments in the American worker, then you should provide evidence for your non-obvious contention. Just making investments doesn't entitle them; I'm not entitled to take from Peter just because I invested in Paul.We've established that the rich have transferred an enormous amount of wealth from the middle class to themselves. That's been agreed to by everybody including you. Your position is that they were entitled to do so on the basis of enormous investments that they made.Well, that's only true if what they invested in was the American worker. Making an investment with one party doesn't entitle you to take from another; my investment in IBM doesn't entitle me to any money from Apple.So what's your evidence in this massive investment in the American worker since 1970 you've just proposed?

So you're saying that capital gains (realizing a net gain in share value over a period of time) is not a direct and necessary result of a company's retained earnings and increased book value of shares outstanding?The value the market assigns the share is determined only by some secret voodoo performed by speculators and has nothing to do with any underlaying value of the share, in real dollars built up by retained earnings, that the owner would receive if the company dissolved? And the sky in your world is what color?Frog, did you get your MBA off one of those matchbook covers?