TAXES

>From: "victoriatangoman"
>Reply-To: spacesettlers@yahoogroups.com
>To: spacesettlers@yahoogroups.com
>Subject: [spacesettlers] Re: TAXES
>Date: Wed, 23 Nov 2005 00:16:49 -0000
>
>--- In spacesettlers@yahoogroups.com, "Valens Agnitio"
> wrote:
>
> > Note that GDP is growing significantly faster than the debt.
>
>True, but also note a few nuances to this trend. Asset price levels
>move up and down while debt pricing remains fixed. We're currently in
>a major housing boom (dieing off in some locales) and the increasing
>price of housing is adding significantly to the rising GDP. If we have
>a housing slowdown or a burst bubble, the price of the commodities
>used in housing will decline due to lessened demand, so too will the
>prices of goods and labor, but the the debt levels will be immune to
>revaluation (neglecting for the moment the secondary debt markets.)
>

All true, and all factors in the depth and length of the Great Depression.
However, I don't see the extremes that are necessary for an event of that
magnitude, and real estate is far more resistant to deflationary pressure
than other types of equity investments. Since there as been such a large
pull back from said equity investments, and a huge inflow into fixed income
instruments, and the fact that the Fed is far more educated in application
of its controls, any recession should be relatively mild and short lived.
Also, it appears that for a variety of reasons, the economy is far more
resilient than in the past, and the speed f recovery is correspondingly
shorter. So, in spite of all the pitfalls and demons, I am very optomistic.

>Also, GDP is increasing but the distribution of the wealth is becoming
>more skewed as the US gini coefficients are rising. However, on the
>flip side, most of the cases of poverty are people who are here
>illegally. If we restrict illegal immigration the gini coefficient
>would become more favorable.
>

Interesting... Where did you pull the data on the illegal contribution to
the gini? Although this makes sense, I was not aware that effect would be as
large as you imply.

It follows that if an economy rewards performance, there will be a
distribution of wealth that generates a gini > 0. I am not sure where the
optimal range moght be, especially when our current examples of the spread
have varying degrees of transparency in how wealth is measured, and in some
societies, simple distribution of wealth defined as personal ownership of
wealth is not as meaningful as in others. So, though I haven't payed any
attention to the gini coefficient, I am not sure how to read it. Perhaps it
is really only useful as an indicator of change in a single economy, and not
used as a benchmark to compare to others.

>Another also, take a look at what's been happening to the GNP/GDP
>ratio over the years. As our GDP increases, the increased wealth is
>being captured, to a ever larger extent, by foreign capital owners.
>

True, but there is always eb and flow, and the current percent owned by
foreigners is not alarming. It does not necessarily follow that the trend
will extrapolate unfavorably. At any rate, it isn't clear that increased
foreign investment is a bad thing, though it is certainly a sign that our
economy, at least for the moment, is the best game in town.

>Yet another also, take a look at the SIC categories in which the US
>maintains a trade surplus. Here they are:
>
>Over A Billion Dollars:
>
>098 Edible Products And Preparations, N.e.s.
>122 Tobacco, Manufactured (whether Or Not Containing Tobacco Substitutes)
>211 Hides And Skins (except Furskins), Raw
>251 Pulp And Waste Paper
>282 Ferrous Waste And Scrap; Remelting Ingots Of Iron Or Steel
>533 Pigments, Paints, Varnishes And Related Materials
>574 Polyacetals, Other Polyethers And Epoxide Resins, In Primary
>Forms; Polycarbonates, Alkyd Resins And Other Polyesters, In Primary Forms
>582 Plates, Sheets, Film, Foil And Strip Of Plastics
>597 Prepared Additives For Mineral Oils Etc.; Liquids For Hydraulic
>Transmissions; Antifreezes And Deicing Fluids; Lubricating Preparations
>728 Machinery And Equipment Specialized For Particular Industries, And
>Parts Thereof, N.e.s.
>
>Over Two Billion Dollars:
>
>012 Meat, Other Than Of Bovine Animals, And Edible Offal, Fresh,
>Chilled Or Frozen (except Meat And Meat Offal Not Suitable For Human
>Consumption)
>041 Wheat (including Spelt) And Meslin, Unmilled
>044 Maize (not Including Sweet Corn) Unmilled
>081 Feeding Stuff For Animals (not Including Unmilled Cereals)
>263 Cotton Textile Fibers
>511 Hydrocarbons, N.e.s. And Their Halogenated, Sulfonated, Nitrated
>Or Nitrosated Derivatives
>575 Plastics, N.e.s., In Primary Forms
>598 Miscellaneous Chemical Products, N.e.s.
>723 Civil Engineering And Contractors' Plant And Equipment
>
>Over Five Billion Dollars:
>
>222 Oil Seeds And Oleaginous Fruits Used For The Extraction Of Soft
>Fixed Vegetable Oils (excluding Flours And Meals)
>714 Engines And Motors, Nonelectric (other Than Steam Turbines,
>Internal Combustion Piston Engines And Power Generating Machinery);
>Parts Thereof, N.e.s.
>874 Measuring, Checking, Analysing And Controlling Instruments And
>Apparatus, N.e.s.
>
>Over Twenty Billion Dollars:
>
>776 Thermionic, Cold Cathode Or Photocathode Valves And Tubes; Diodes,
>Transistors And Similar Semiconductor Devices; Integrated Circuits,
>Etc.; Parts
>792 Aircraft And Associated Equipment; Spacecraft (including
>Satellites) And Spacecraft Launch Vehicles; And Parts Thereof
>
>Here are all the SIC codes:
>http://www.census.gov/foreign-trade/reference/codes/sitc/sitc.txt
>
>With the major exception of Boeing most of our trade surplus is
>derived from sales of agricultural products.
>
>Some more info:
>
>In 2002, the US exported $682 Billion in products and $292 Billion in
>services. In the same year it imported $1,165 Billion in products and
>$227 Billion in services.
>
>Breaking down the EXPORT in services we find that Travel accounted for
>$66.5 Billion, Passenger Fares for $17 Billion, Other Transportation
>for $29.2 Billion, Royalties & License Fees for $44.1 Billion, Other
>Private Services for $122.6 Billion, Transfer Under US Military Sales
>Contracts for $11.9 Billion, and US GOv't Misc. Services for $0.8 Billion.
>
>Breaking down the IMPORT in services we find that Travel accounted for
>$58 Billion, Passenger Fares for $20 Billion, Other Transportation for
>$38.5 Billion, Royalties & License Fees for $19.3 Billion, Other
>Private Services for $69.4 Billion, Direct Defense Expenditures for
>$19.2 Billion, and US GOv't Misc. Services for $2.9 Billion.
>
>Our $65 Billion trade surplus in services is accounted for by two
>categories: license fees and other private services.

A very important reason for enforcement of intellectual property rights. I
am suprised that in all of that you didn't mention the enormous impact on
the deficit created by increased energy prices. Which, by the way, I think
is a good thing. It will spur develpment of alternative energy sources, and
really get the creative wheels turning in things that were not ecnomically
viable before.

>
>In Advanced Technology the US is running a deficit of $24 Billion for
>the first 11 months of 2003.

Disappointing... But the invisible hand is at work. Hopefully whatever
administration is in charge will encourage policies that encourage economic
growth. I keep hoping that a small fraction of that ten's of trillions of
wealth focuses on our favorite topics...