Observations on life

If Sen Sanders would only give the full story

Nothing is free, nothing costs zero, everything has a price. The Danes are happy with their welfare state, they don’t mind paying high taxes in return for the state providing for them. Denmark has a population about the same as Colorado and ethnically about 86% Dane.

Who knows, perhaps Americans want to be taxed to live in a welfare state, but gee Senator just give the full story.

Here are some of the taxes the Danes pay.

Denmark’s progressive income tax tops out at 55.8%, and the average individual pays 45%. The Danes pay an 8% Danish labor market contribution tax, a 5% healthcare tax, 22.5% to 27.8% in municipal taxes, social security taxes of DKK 1,080 (USD 164) per year, and capital gains taxes of 27% or 42%. There is a withholding tax of 27% on dividends and 25% on royalties.

Plus Denmark has the second highest Value Added Taxes (VAT) in the EU at 25% on virtually all goods and services.

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8 replies »

  1. Plus, since just about everyone does have a college degree, you graduate and work in a restaurant unless you want to pursue a post graduate degree.

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  2. Since Bernie won’t give the full story, perhaps I can.

    There is an academic economist* named Stephanie Kelton, who is the chief proponent and architect of what she and her followers call “Modern Monetary Theory” (MMT). The first I heard of Ms. Kelton was in early 2014, when an economics blog commenter provided a link to a video of a speech she had given to some forum. Interestingly, the context of the forum was how to deal with the pending Social Security and Medicare “crisis”. And, being interested in that as well, I clicked to watch the video of her speech.

    She began her presentation with, in essence, “Fear not, there is no pending crisis!”. After which she stated specifically, “It’s the Government’s money, not ours. We’re just ‘users’ of it. And the government can print however much it needs at any time to meet its obligations.” At that point, I clicked to another “channel”, as it were, and stopped watching or listening. I actually thought at that time that the whole thing was just another YouTube “gag” video.

    UNTIL …

    A few months later, when I read that she had been appointed “Chief Economist to the U.S. Senate Budget Committee”, effective Jan 1, 2015. Now, I’m 65 years old, and I’ve voted in every election since 1972. And in all that time, there have only been two occasions when I’ve been concerned enough about something going on at high levels of my government that I felt compelled to write my congress-critters. This was one of those times. This was no longer just a “gag”.

    The relevant thing here is, “Modern Monetary Theory” is the pseudo-economic “theory” that underpins Bernie’s (and others’) promises of “free” everything. MMT is also the pseudo-economic “theory” underpinning the “Universal Basic Income” (UBI), or its other monikers such as “Basic Income Guarantee” (BIG) that you may have heard about. So, with MMT, anything is possible – not only “free” everything, but “free” money to boot! After all, “It’s the Government’s money, not ours. We’re just ‘users’ of it. And the government can print however much it needs at any time to meet its obligations.” What could possibly go wrong?

    Incidentally, Stephanie withdrew from her appointment as “Chief Economist to the U.S. Senate Budget Committee” sometime in 2015, in order to take up her new appointment as “Economic Adviser” to the 2016 Bernie Sanders presidential campaign. I suspect she and MMT advise him still.

    *According to her Wikipedia page, Stephanie Kelton earned her economics PhD from “The New School” in New York. I would recommend looking deeper into Stephanie Kelton’s CV and accomplishments, as well as “Modern Monetary Theory”, and “The New School” in order to get the “full story” underlying Bernie Sanders’ campaign promises.

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      • You are welcome, sir. And thank you back for providing both interesting topics, and an open forum for discussing them!

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    • The school’s full name is “The New School for Social and Economic Justice.” It’s a hot bed of guilt-ridden social activists and professional victims.

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    • Printing money has not help the hyperinflation for Venezuela. Why would any economist think that is a good idea? Even I know that is a bad idea.

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      • Hi Dwayne:

        When I first heard about MMT, my initial reaction was exactly the same as yours. And I do mean exactly – including your question: “Why would any economist think that is a good idea?”.

        Actually, fully understanding this gets to a very, very old argument, in political as well as economic circles. And it goes far, far beyond just the potential for inflation/hyperinflation or even higher taxes.

        The argument is just this: Should the Government, or the Private sector, control money and the money supply? And why?

        It’s an ancient argument, dating as far back as the Roman Empire. Even in the early U.S. this was a very unsettled and hyper-politically charged argument. In the U.S. (and most everywhere else), the “Private control” proponents won out – nominally. The statutory “independence” of the U.S. Federal Reserve System (Fed) is the practical evidence and an artifact of that “Private control” of U.S. money and money supply.

        But even the Fed “independence”, is constantly being questioned, criticized and threatened. Politicians (Governments) really, really dislike being constrained/fettered by a “Privately controlled”, thereby privately “limited”, money supply. For most politicians, it’s demeaning enough to have to pander to the “mob”, the “deplorables”, the other disagreeing/disagreeable elements of the electorate/voters in a democracy.

        So, in context with Mr. Quinn’s post here, Bernie Sanders can honestly promise “free everything”, including “free money” with a completely straight face, and not be lying – IF the current monetary control regime is changed from “Private” to “Government” as the MMT crowd advocate.

        In fact, under an MMT regime, there won’t be any taxes. All “taxes” are an irrelevancy – non-sequitur – a logical fallacy – under an MMT regime. Remember, in their minds, and under the MMT construct, “It ain’t YOUR money!”.

        Understanding the full implications of MMT takes a further bit of “thinking out of the (status quo) box”, metaphorically speaking. But it’s explained in what Stephanie Kelton actually said: “… it’s Government’s money … and Government can print as much as it needs/wants TO MEET ITS OBLIGATIONS.” Pardon the capitals here – I’m not “shouting”, as it were, just emphasizing to illustrate my point. And my point is just this: Under this “pseudo-economic” MMT regime, the “Government” need not tax its citizens at all. It just “prints” the money! And better yet, “Government” (in this example, Bernie Sanders) can make all the “obligations” it/he/she wants – “Free” stuff, “Free” money, No taxes at all. And no “inflation”, according to them.

        So again I had to ask myself, “what could possibly go wrong?”, “where’s the ‘trick’?”.

        In my mind, the ultimate argument against the “Government control” of money proponents is a purely economic one: Absolute “Government” control of money/money creation in this way completely divorces the production/creation of Money from the Economic production/creation of Value. It’s just as simple as that.

        That could be characterized simply as “inflation”, within the classical definition. But what “inflation” really is, is COUNTERFEITING! And it doesn’t matter whether the counterfeiter is Government, the Fed (as currently constituted), a private Bank, or your next door neighbor with a copier/printer attached to his/her PC. It’s still counterfeiting – the creation of Money, completely divorced from, and unrelated to, the required attendant creation of Economic Value.

        And if I, or anyone else, can get all the “free” money (and stuff) I want simply by counterfeiting, where exactly is my replacement incentive to actually produce/create ANY economic Value? The ultimate answer to that question is: In the absence of monetary incentive to create economic value, I and any other value creators would have to be COMMANDED to create it. That’s the real (dirty) “trick” to all of this.

        As the saying went in the old Soviet Union, “The Government pretends to pay us, and we pretend to work.”

        At least that is MY “conceptual framework” for more accurately and fully understanding the potential implications/ramifications of the Bernie Sanders/Stephanie Kelton “too good to be true” promises. It’s not just a “trick”, it’s a really dirty “trick”.

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