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Liberty News ForumLNF Forums HerePolitical Opinion Page - The Hot Seat › Debt Tops $20 Trillion for First Time; Jumps $317,645,000,000 in 1 Day
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Very Hot Topic (More than 25 Replies) Debt Tops $20 Trillion for First Time; Jumps $317,645,000,000 in 1 Day (Read 824 times)
wyattstorch2004
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Re: Debt Tops $20 Trillion for First Time; Jumps $317,645,000,000 in 1 Day
Reply #10 - Sep 12th, 2017 at 7:01pm
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forgotten centrist wrote on Sep 12th, 2017 at 3:01pm:
Yeah, sure, investors can take their winnings and go seek other opportunities.  Not the point. 


But it kind of is.  Because you are arguing that when profit is less taxed and comes back from overseas, it is going into buybacks and dividends, which won't help the economy grow.  But that money very well can and almost certainly would help the economy grow as those who get the cash for their shares or the dividends can use it for all sorts of things.

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The point here is that US companies are finding it less profitable to re-invest earnings back into their own business, their own production lines, their own R&D.


OR, their business and production lines are so profitable that their owners would prefer to expand to different areas that are outside the purview of their current line of business.  This is not necessarily good or bad when this happens.  But it is good for the economy when this decision is made correctly, whichever choice is made (reinvest within or without).

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Moreover, when companies withhold dividends and refrain from buybacks in order to re-invest in their own production lines, they are NOT stiffing investors.  They are building stock value by making the company more valuable.


At some point they have to make a profit.  That is THE purpose of business.  So sure, investing within can make the shares more valuable.  But there is a limit to the value that can be created.  And if it comes at the expense of other opportunities, it is that much worse.  The great thing is, our market economy allows shareholders an avenue to express their dissatisfaction with such a strategy.  A very powerful one.  One that management probably watches like a hawk.  The share price. 

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So the takeaway here is not "hurray, investors benefit from buybacks and dividends!", it's "bummer, overall demand for this company's product is so flaccid that it doesn't make sense to upgrade production..."


Apple does massive buybacks.  They hold huge cash and cash equivalent reserves.  And they have a dividend yield of 1.5%.

Is demand for their products "flaccid"?

Or is it possible for a business to be mature enough and efficient enough at what they do to carry out all the necessary R&D and production while STILL making (and paying out) a profit and STILL buying back shares and STILL hoarding cash equivalents.
  
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Re: Debt Tops $20 Trillion for First Time; Jumps $317,645,000,000 in 1 Day
Reply #11 - Sep 12th, 2017 at 7:39pm
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This is perhaps the single largest indicator of why govt must be reigned in. Republic and dems. Completely out of control.
  
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forgotten centrist
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Re: Debt Tops $20 Trillion for First Time; Jumps $317,645,000,000 in 1 Day
Reply #12 - Sep 13th, 2017 at 12:49am
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wyattstorch2004 wrote on Sep 12th, 2017 at 7:01pm:
OR, their business and production lines are so profitable that their owners would prefer to expand to different areas that are outside the purview of their current line of business.  This is not necessarily good or bad when this happens.  But it is good for the economy when this decision is made correctly, whichever choice is made (reinvest within or without).


No.  If a line of business is highly profitable, the owners generally do NOT want to divest from it.  They value it MORE.  As reflected in the stock price.  You will not see stockholder rebellions to force profitable and well-managed companies to do buybacks.  Those stockholders who push for that will be in a distinct minority, and will find it much easier to just sell their shares if they really want to "branch out".

Companies (in the US) can create stockholder value by paying out dividends, by financializing through buybacks and other stock price manipulations, or by reinvesting profits back into the company and growing stockholder value in share price.

Large US companies have generally turned away from reinvestment.  That is evidence that reinvestment does not bring the same returns to stockholders that dividends or financialization do.  It *used* to be that way.  There are a variety of reasons why reinvestment makes less sense these days -- I tend to think demand is anemic due to extended wage suppression.  But regardless of *why*, it suggests that "helping companies by cutting their taxes" will not do much for job creation.

If their capital (or taxpayer capital) were able to goose profits/value through reinvestment, they'd be doing it now.  They are finding it makes more sense to pay dividends and buybacks.  If you cut their taxes to free up more capital for them, they will tend to put that into those same dividends and buybacks, NOT into reinvestment.

And since reinvestment is the whole point of cutting corporate taxes, it's not gonna work.  So don't bother cutting taxes.
  

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Re: Debt Tops $20 Trillion for First Time; Jumps $317,645,000,000 in 1 Day
Reply #13 - Sep 13th, 2017 at 6:36am
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forgotten centrist wrote on Sep 12th, 2017 at 11:21am:
Clearly the only way out of this will be to cut taxes for the investor class...



Nah....

A great place to start is with the 45%(last count) who pay NO, Zero, and Zelda Fed income tax? Huh


And.... even some of those not only don't pay any Fed income tax but also receive thousands in Tax refunds which is wealth redistribution of others money(Including those investors/Rich) Angry
  

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Re: Debt Tops $20 Trillion for First Time; Jumps $317,645,000,000 in 1 Day
Reply #14 - Sep 13th, 2017 at 7:07am
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Just think , Repubs control all branches of Government and the numbers are only going north

Yeppers
  

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The Original Wally
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Re: Debt Tops $20 Trillion for First Time; Jumps $317,645,000,000 in 1 Day
Reply #15 - Sep 13th, 2017 at 10:17am
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Luther wrote on Sep 13th, 2017 at 7:07am:
Just think , Repubs control all branches of Government and the numbers are only going north

Yeppers

You Libs are living in a pretty fragile glass house to be throwing stones at anyone.  Obama doubled our National Debt!  By comparison Trump has not yet begun to spend!  (Give him time though; his recent 'triangulation" with Schumer and Pelosi is leading him right down the Liberal Path of tax and spend, where his Democrat roots are!
  

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Re: Debt Tops $20 Trillion for First Time; Jumps $317,645,000,000 in 1 Day
Reply #16 - Sep 13th, 2017 at 10:24am
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The Original Wally wrote on Sep 13th, 2017 at 10:17am:
You Libs are living in a pretty fragile glass house to be throwing stones at anyone.  Obama doubled our National Debt!  By comparison Trump has not yet begun to spend!  (Give him time though; his recent 'triangulation" with Schumer and Pelosi is leading him right down the Liberal Path of tax and spend, where his Democrat roots are!


Obama brought the federal deficit down faster than anyone in history.  He brought it down almost every year of his presidency, after Bush took a nominal budget surplus and turned it into the largest deficit in history.
  

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Re: Debt Tops $20 Trillion for First Time; Jumps $317,645,000,000 in 1 Day
Reply #17 - Sep 13th, 2017 at 2:47pm
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forgotten centrist wrote on Sep 13th, 2017 at 12:49am:
No.  If a line of business is highly profitable, the owners generally do NOT want to divest from it.  They value it MORE.  As reflected in the stock price.  You will not see stockholder rebellions to force profitable and well-managed companies to do buybacks.  Those stockholders who push for that will be in a distinct minority, and will find it much easier to just sell their shares if they really want to "branch out".


I don't see how this is a rebuttal to my argument.  The fact that they find sellers for their buybacks shows that there are plenty of owners in these companies that do indeed wish to put their resources elsewhere.

Companies (in the US) can create stockholder value by paying out dividends, by financializing through buybacks and other stock price manipulations, or by reinvesting profits back into the company and growing stockholder value in share price.

Large US companies have generally turned away from reinvestment.  That is evidence that reinvestment does not bring the same returns to stockholders that dividends or financialization do.  It *used* to be that way.  There are a variety of reasons why reinvestment makes less sense these days -- I tend to think demand is anemic due to extended wage suppression. [/quote]

But haven't you also pointed out that profitability is way up?  So how do you square that? 

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But regardless of *why*, it suggests that "helping companies by cutting their taxes" will not do much for job creation.


But you have ignored (even skipped out on quoting) my point regarding where the money goes when it ISN'T reinvested internally.  Those resources don't just disappear.  So it you can keep restating that suggestion.  But at some point the counter argument I have made needs to be addressed.

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If their capital (or taxpayer capital) were able to goose profits/value through reinvestment, they'd be doing it now.


Can you cite a stat that shows "they" (whomever they are) are not?

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They are finding it makes more sense to pay dividends and buybacks.  If you cut their taxes to free up more capital for them, they will tend to put that into those same dividends and buybacks, NOT into reinvestment.


And, again, I will ask, where do those resources go after they are paid to shareholders?

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And since reinvestment is the whole point of cutting corporate taxes,


According to whom?

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it's not gonna work.  So don't bother cutting taxes.


And, again, what do you think those shareholders are doing with their dividends and the proceeds of stock sales?

Finally, why are we basing corporate tax policy decisions on the tiny minority of publicly traded companies?
  
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Re: Debt Tops $20 Trillion for First Time; Jumps $317,645,000,000 in 1 Day
Reply #18 - Sep 14th, 2017 at 3:12am
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The Original Wally wrote on Sep 13th, 2017 at 10:17am:
You Libs are living in a pretty fragile glass house to be throwing stones at anyone.  Obama doubled our National Debt!  By comparison Trump has not yet begun to spend!  (Give him time though; his recent 'triangulation" with Schumer and Pelosi is leading him right down the Liberal Path of tax and spend, where his Democrat roots are!



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You Libs


You Libs?

Wally, I'm a hell of a lot more conservative than you will ever be  Wink  Roll Eyes
  

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Re: Debt Tops $20 Trillion for First Time; Jumps $317,645,000,000 in 1 Day
Reply #19 - Sep 14th, 2017 at 3:16am
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forgotten centrist wrote on Sep 13th, 2017 at 10:24am:
Obama brought the federal deficit down faster than anyone in history.  He brought it down almost every year of his presidency, after Bush took a nominal budget surplus and turned it into the largest deficit in history.



Boy, I would like to know all the details in all of that Wink
  

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