Cafe Hayek - Latest Comments in On Savings

Re: On Savings

Martin Brock — Sat, 14 Jun 2008 09:56:09 -0000

I've only just read Landsburg's review of the book. Like most economic pundits, he comes across more like an investment adviser pitching conventional wisdom than like an economist. Maybe an S&P 500 index fund inevitably yields 8% adjusted for inflation over 40 years, but I'm skeptical of this assertion.

Re: On Savings

Martin Brock — Sat, 14 Jun 2008 09:08:29 -0000

Ron,

I haven't read your book, but I like the idea of a progressive consumption tax, specifically a simpler progressive income tax with an unlimited allowance for tax deferred investment. Do you advocate this model?

I also like what I understand to be your theory of our credit crisis, that we use credit too much to bring consumption forward rather than to purchase the means of future production and that we often do the former while pretending to do the latter.

Since a home is a means of production fundamentally but also consumption on the margin, rising mortgage defaults, particularly on costlier homes, seems like evidence of "excessive" consumption to me. If there's another explanation, I'd like to know it. I suppose people could save to purchase the Jones' costlier house, rather than mortgaging it, but this saving doesn't create a credit crisis, so Landsburg's theory is less persuasive.

I won't promise to read the book, because I already have three on my nightstand that I'm not reading, including one of Roberts'. I'd like to know your thoughts though. Maybe I'll buy the book and drop it on the stack at least.

Re: On Savings

Ron Wilcox — Thu, 12 Jun 2008 15:00:53 -0000

It is interesting to come across blog comments that are entirely detached from the data on what should otherwise be a reasonable site -- dedicated to the venerable work of Hayek. I wrote the book in question here. I support consumption taxes and the book is unambiguous about that. Some of the posts here demonstrate the danger of only reading second hand information instead of primary source material.

Ron Wilcox

Re: On Savings

Martin Brock — Tue, 10 Jun 2008 18:20:40 -0000

Your entitlement to tax revenue is not a matter of my bias. It's a matter of your entitlement to tax revenue. If no court says that you owe income taxes, then you don't, but that's a separate issue.

Re: On Savings

vidyohs — Sun, 08 Jun 2008 13:16:44 -0000

Martinduck,

"Isn't your "personal wealth reserve" a monthly check from the Federal government? Aren't income taxes withheld from your check?

Posted by: Martin Brock | Jun 7, 2008 12:58:27 PM"

One question is nothing but a reflection of your own personal bias as you have shown through previous statements, a bias founded in ignorance I might add.

The second question is a reasonable question.

The answer to both is no.

Re: On Savings

Martin Brock — Sun, 08 Jun 2008 04:06:57 -0000

Yes I draw a military pension, and the answer to both questions is still no.

So your check from the Federal government isn't monthly? Is that it? Or maybe you have direct deposit? Income taxes aren't withheld because the amount is below the threshold for income taxation? Feel free to elaborate.

Re: On Savings

vidyohs — Sat, 07 Jun 2008 17:01:52 -0000

Think on this, in relation to my past posts.

28 USC 3002

(15) "United States" means -

(A) a Federal corporation;

(B) an agency, department, commission, board, or other entity of the United States; or

(C) an instrumentality of the United States.

Ahhh gee! What United States are you giving allegiance too?

Gosh, would that mean that the Uniform Commercial Code has more to do with your daily life than the U.S.Code?

Wow, would that mean that what you were taught was a nation is just really a commercial corporation?

Did that corporation have anything to do with the creation of the land upon which you were born? Did that corporation contribute anything to your conception and birth?

Where has the real United States of the Articles of Confederation gone?

Just so much to discover!

Re: On Savings

vidyohs — Sat, 07 Jun 2008 16:48:24 -0000

People who refuse to think and want everything poured into their brain are ridiculous. But that is what we have wound up with thanks to the socialist seizure of the education system.

In the meantime, ad hoc, ad homs, ad libs, ad vertise, ad verb, ad jective, and ad ios!

Re: On Savings

Eric — Sat, 07 Jun 2008 14:55:50 -0000

Quit it with the ad homs. This is ridiculous.

Re: On Savings

vidyohs — Sat, 07 Jun 2008 13:39:13 -0000

martinduckie,

You're a dense little duckie.

"Isn't your "personal wealth reserve" a monthly check from the Federal government? Aren't income taxes withheld from your check?

Posted by: Martin Brock | Jun 7, 2008 12:58:27 PM"

Yes I draw a military pension, and the answer to both questions is still no.

W o u l d y o u l i k e m e t o r e p e a t t h a t r e a l s l o w?

T h e a n s w e r t o b o t h q u e s t i o n s is s t i l l n o.

LOL, you'll kill yourself before you open your mind and see what is right before you.

Re: On Savings

Martin Brock — Sat, 07 Jun 2008 10:45:57 -0000

The answer is no to both questions and reveals that you know even less about the subject of income tax than I suspected.

So I'm mistaken that you're a military pensioner?

Re: On Savings

vidyohs — Sat, 07 Jun 2008 10:31:29 -0000

Martin duckie,

"Denying reality often feels good, but it's still denying reality."

Posted by: Martin Brock | Jun 7, 2008 12:58:27 PM

Pull a FRN out of your wallet and look, it has in writing "Federal Reserve Note" and I gave you this:

"Black's Law Dictionary 7th Ed.

NOTE, n 1. A written promise by one party (the maker) to pay money to another party (the payee) or to bearer. - A note is a two-party negotiable instrument unlike a draft (which is a three-party instrument)."

and you want to talk to me about denying reality? There is the official legal defintion of the term "note" and as usual you think your defintion is what is going to prevail in court. It is to laugh!

"Isn't your "personal wealth reserve" a monthly check from the Federal government? Aren't income taxes withheld from your check?

Posted by: Martin Brock | Jun 7, 2008 12:58:27 PM"

The answer is no to both questions and reveals that you know even less about the subject of income tax than I suspected.

"And you say you file no income tax return."

Posted by: Martin Brock | Jun 7, 2008 12:58:27 PM

Duckie, that's no secret; but trust me I am provided the opportunity to communicate with the loving caring folks at the IRS on a regular basis. They lie, attempt fraud, threaten, attempt coercion, and offer me regular opportunities to "make an appointment with a tax court (LOL); while I return to them their own correspondence with the reasons I am rejecting it and my reasons as I have stated here before are based upon jurisdiction not whether what I receive in exchange for my labor can be called income or not.

I have a ruling from a federal district judge that says the IRS can not ever claim that I need to keep books and records for them to examine or to justify any of my financial dealing, I stumbled into that little victory back the spring of 2001. That pretty much soldifies for me that there has never been an actual law requiring that, or else I wouldn't have that order from the court in my records.

You see duckie, my friends and I had discovered that there actually is no law requiring the keeping of books or records but making that stick in a IRS tamed federal court is difficult, and I just lucked out and had a federal asst dist atty that screwed up and admitted on the record in my court appearance that they recognized that I do not keep them and had no real answer to that.

Trust me, the IRS knows who I am and where I live, and some day they may come with guns and men to take me away; but, it won't be because of application of the law, it will be because of misapplication of the law much like the Soviets did with their dissenters. But, that won't happen now until they at least charge me in a federal court with some sort of criminal or civil offense, and that hasn't happened in the 20 plus years I have been out here. You see they can't get a legal levy unless they take me to federal court and obtain a judge's authorization (signature), which means I have the opportunity to appear and make my case. For a judge to rule against me, he will have to go against the 13th amendment, and that fact is borne out by the informative facts that I have been passing for the last four days.

Law can not compel performance.

Long ago I recognized that there really is such a thing as a "stupid" question.

The question is usually expressed this way:

"Mr. So-and-so doesn't pay any income taxes, how can we make him pay like we do?"

That is just such a stupid stupid question.

An intelligent question would be: "Mr. So-and-so doesn't pay an income tax like I do, I wonder if he will teach me what he knows and does?" (The answer is, I won't. I will only point you to the sources of information and you can go learn on your own and gain belief on your own. That is the only thing that will overcome your fear of getting off your knees and becoming a free man.)

So far the patrons of this cafe haven't thought to ask the intelligent question, duckie, especially you.

The really crazy thing to me is the fear.

It seems no one recognizes yet that people in this country who believe themselves to be prefectly innocent law-abiding folk can, without warning, go through what the Weaver family did at Ruby Ridge, the Branch Davidians did at Mt. Caramel, Tex, the family of Elian Gonzales did in Miami, and countless others who have been rousted out of bed in the middle of the night by uniformed thugs to be shot dead, their homes ransacked, loved ones thrown out into the street in their sleepwear, or naked, all because someone didn't check the address correctly (happens way more often than you'd want to believe).

That has been done, is being done, and will continue to be done with your money as long as you're afraid to stand on your hind legs and say "no more".

Re: On Savings

Martin Brock — Sat, 07 Jun 2008 08:58:27 -0000

What we call cash, Federal Reserve Notes (FRN) are instruments of debt. That is why they are labelled "notes". We only exchange debt when we use them.

They're notes accounting for credit. When you accept money (or currency) for your produce, you accept a note accounting for the value of your produce, crediting you with this value and entitling you to something of similar value currently. If you want to hold something of similar value currently instead of the money, you need to exchange the money for something else currently, because values change over time.

After obtaining your "clear title" all you have done is secure exclusive use of the land or home, the state still owns it and can take it at any time they choose.

Like I said, it's "personal wealth" only as long as someone else can't take it from you. Your selective attention is showing again.

Isn't your "personal wealth reserve" a monthly check from the Federal government? And you say you file no income tax return. Aren't income taxes withheld from your check?

Denying reality often feels good, but it's still denying reality.

Re: On Savings

Martin Brock — Sat, 07 Jun 2008 08:44:11 -0000

Cash, or a monetary reserve, is a component of wealth. The other component is the assets held by the individual.

These assets are further divided into personal and business assets.

Obviously, you may use words however you like. If Ben Bernanke writes higher figures in his ledger, you may call that "greater wealth", and if I write some figures on paper, you may call that wealth too, but I consider both uses of this word confusing, so I'll stick with a different standard.

Re: On Savings

vidyohs — Sat, 07 Jun 2008 07:23:24 -0000

Just have patience folks, the internet is slowly killing the IRS. Instead of working individually through massive amounts of paper, it is all available on line, searchable, and subject to coordinated group attack. And, that is happening.

For you martinduck since you brought up the subject of tax again here on this thread.

------------------------------------------

Well in a closing note, this went exactly where I said it would back at the beginning.

STRB (chuckle) can not produce or document the exact law requiring an income tax to paid upon your even exchange of service for fruits of labor no more than, as I said, can any other tax professional, IRS agent, or Treasury dept. official.

Bruce,

for you. You might try looking at:

http://caselaw.lp.findlaw.c...

and

http://caselaw.lp.findlaw.c...

and

http://caselaw.lp.findlaw.c...

Bruce, you have to realize one thing, the IRS is not going to tell you or give you a hint of anything that contradicts your anecdotal, presumptive, and conventional wisdom belief that you owe an income tax. Not on their website or in their phamptlets; and you won't find anything on sites sycophantic to the IRS, H.R.Block et. al.

Again you might also go to truthattack.org and look at Tom Cryer's winning arguments.

I am not telling anyone not to pay a lawful tax, I am only saying we should all know and understand what is lawful and what is fraudulent.

Posted by: vidyohs | Jun 7, 2008 11:19:09 AM

Re: On Savings

vidyohs — Sat, 07 Jun 2008 07:05:54 -0000

Poor martinduck,

Another invitation to "roun' the mulberrybush". Naw, no thanks. If you only knew half of what you think you know you'd be ahead of Einstein as a figure of reverence. However, it is still ducksville for you.

"Cash is not wealth. It's an accounting device."

What we call cash, Federal Reserve Notes (FRN) are instruments of debt. That is why they are labelled "notes". We only exchange debt when we use them.

Black Law Dictionary 7th Ed.

"A personal wealth reserve is something like a house to which you hold clear title,"

I have further news for you duckie, you also will find it extremely rare that anyone in the USA ever holds "clear title" to their home or land even after "paying" off their note, or securing the land via total cash buy. That is why you will continue to pay taxes on it even after obtaining "clear title". If you actually owned it, you wouldn't pay taxes on it.

After obtaining your "clear title" all you have done is secure exclusive use of the land or home, the state still owns it and can take it at any time they choose.

Re: On Savings

Babinich — Sat, 07 Jun 2008 02:28:01 -0000

Martin Brock says:

"Cash or a cash equivalent (an entitlement to cash like a Treasury note) is never a personal wealth reserve. Cash is not wealth."

Cash, or a monetary reserve, is a component of wealth. The other component is the assets held by the individual.

These assets are further divided into personal and business assets.

Re: On Savings

Martin Brock — Sat, 07 Jun 2008 01:44:52 -0000

The socialist plan doesn't require a personal wealth reserve to exist, our fellow man will provide living expenses including medical.

Why save cash or its equivilant?

Cash or a cash equivalent (an entitlement to cash like a Treasury note) is never a personal wealth reserve. Cash is not wealth. It's an accounting device. A personal wealth reserve is something like a house to which you hold clear title, although this wealth is really "personal" only insofar as no one can take it from you, and the title is only another account of the state's willingness to defend your possession.

Isn't your "personal wealth reserve" a monthly check from the Federal government? And you say you file no income tax return. Aren't income taxes withheld from your check?

Re: On Savings

Martin Brock — Sat, 07 Jun 2008 01:30:15 -0000

When foreigners save, U.S. interest rates drop. This makes it smart for Americans to consume more.

Creditors may soon foreclose on Ed McMahon's castle in Beverly Hills. When foreign "investors" bought the mortgage backed security financing Ed's mortgage, they expected repayment, but Ed can't repay them, and I'm not sure he's supporting Obama. Needless to say, the Bushtapo can't repay the trillions they've borrowed recently either, and they don't much care, because it's now spent and somehow increases the account balances of their cronies, but that's another story.

Credit by definition pays for services expected to be rendered in the future. It is not a charitable contribution to the consumption of the borrower, not deliberately anyway. Was Ed "smart" to borrow millions he ultimately couldn't repay to buy a castle in Beverly Hills? Sure, he was. He's lived in a castle for years without paying for it, and that's apparently what he wanted to do. Thomas Jefferson did the same thing centuries ago, and I suppose he outsmarted his creditors too. Was Dick Cheney smart to channel billions to his buddies in the military-industrial complex after receiving tens of millions from them for his personal account? Yeah. He's smart too.

So the question now is: have we accepted the credit of smart foreigners reinvesting earnings from the U.S. back into the U.S. in recent decades, or have we outsmarted them with blissful ignorance of their expectation of a return? Is the credit crisis limited to home mortgage finance, or is it more widespread? Will the Federal Treasury/Federal Reserve bail out investors by substituting its credit for McMahon's, i.e. did Bear Sterns finance McMahon's mortgage somehow?

Will taxpayers really bear this burden as taxpayers, or will foreigners handed more dollars simply bid up the dollar-denominated price of oil and thus the price of gasoline and other goods in the U.S.? Or will we allow McMahon's creditors to take a loss rather than dividing the loss among all U.S. citizens somehow?

Isn't that the question?

And if foreigners take the loss and decide not to extend us as much credit in the future, can we reorganize ourselves to produce for ourselves what we previously consumed from them, albeit at higher cost? We have one of the richest and most developed economies on Earth, so we can produce practically anything at some cost as a practical matter, but that's not the question. The question is: have we now passed a law against it? Have we sold foreigners monopoly rights to produce what we expect to consume?

Re: On Savings

jpm — Fri, 06 Jun 2008 18:54:28 -0000

Not true, freedomlover, not true.

The half of America that are voting for Obama can't save. The half of America that are so inept that they are voting for McCain can't possibly have enougn foresight to save.

Re: On Savings

FreedomLover — Fri, 06 Jun 2008 11:26:20 -0000

Everyone can save, they just have to live within their means and have a little left over after each paycheck. It accumulates. It takes discipline and patience.

Re: On Savings

Babinich — Fri, 06 Jun 2008 11:01:27 -0000

kook says: "The reason why we don't save more, is because of the artificially low interest rates perpetrated on us, mainly by the Fed and also by other non-market forces like global central banks."

I'll take it one step farther. The reason people do not save is due to a lack of discipline and vision.

Re: On Savings

kook — Fri, 06 Jun 2008 10:54:29 -0000

The reason why we don't save more, is because of the artificially low interest rates perpetrated on us, mainly by the Fed and also by other non-market forces like global central banks.

Re: On Savings

vidyohs — Fri, 06 Jun 2008 09:11:06 -0000

Put simply, could we say that America has adopted the socialist plan that our fellow man is our "savings" upon which we will rely as we can no longer produce for ourselves?

The socialist plan doesn't require a personal wealth reserve to exist, our fellow man will provide living expenses including medical.

Why save cash or its equivilant?

Re: On Savings

Keith — Fri, 06 Jun 2008 08:35:13 -0000

Why don't people save more? You get taxed on the interest. You get taxed on the capital gains. The value of cash continually depreciates. When you die (maybe tomorrow, so a fat lot of good all that saving does), more taxes.

What don't you understand.