I genuinely don’t understand it. We had years and years of brutal public services cuts and them being ground to the bone, where’s the money gone? People around me just say “tax cuts/payoffs for billionaires” but idk if that’s verified

  • CompactFlaxEnglish
    11·
    6 个月前

    Income tax rates go up like this (purely example) 0-20000 - 10% 20-40000 - 15 40-80000 - 20 80-100000 - 30 100-150000 - 40 150000+ 45%

    If you make 75000 in this example, you’re taxed 10% on the first 20k, then 15% on the next 20k, then 20% on the remaining 15k, so 2000 + 3000 + 4500.

    Lowering the top rate of income tax means that the people who earn more than whatever the limit is (150k in this example) pay less tax. Generally, the consensus is that the rates should shift to the higher income rather than the other way around.

    Quantitative easing is the government buying up bonds to support their value. If everyone stops paying their mortgage, the economy tanks because the bonds that represent those mortgages go to zero. If the government promises to buy some them in spite of the zero value, the value is propped up. The people who benefit, by and large, are capitalists (those who make their money from already having lots of money ie wealthy). But it makes the cost of loaning money lower, so it becomes easier to get a loan, which combined with limited housing leads to an increase in sale prices of houses.

      • CompactFlaxEnglish
        5·
        6 个月前

        “It went to the billionaires” is the short version.

        • bryndos@fedia.io
          2·
          6 个月前

          Also to prop up house/property prices in general and pension funds which is a bit wider of a group but generally still the people on the upper end of the wealth rank.

          Stupid thing really is when you have an asset bubble it does crowd out other investment. It needs to burst for the good of the economy. The QE and such stopped the opportunity for investors to learn that they should inves government to force investors to invest in productive capacity rather than asset bubbles.

          • CompactFlaxEnglish
            1·
            6 个月前

            Yes. Unfortunately the pension funds were set to have a bad time, and mutual funds and other retail investment vehicles were as well; in order to “save” the average person, QE was implemented and had a convenient side effect. But really, nobody truly knew what the reaction would be. It was all novel.

            • bryndos@fedia.io
              11·
              6 个月前

              well it was novel enough to ignore any lessons from the 1920s and 1930s. The animal spirits aren’t novel, they’ve been there for centuries.

              If anything the only novelty was a brief period when the animals were slightly controlled.

              Unfortunately for some parts of ‘the west’’ they started to persistently elect animal spirits into to government. fml.

              ed: spe;lng