Author Topic: The Iowa Caucus results should make everyone love Roth IRAs  (Read 22798 times)

tmoneyearlyretiree

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The Iowa Caucus results should make everyone love Roth IRAs
« on: February 02, 2016, 11:40:03 PM »
take a look at the entrance poll results in iowa. I think that Sanders getting 84% of the under 30 vote is the most dominating performance with that demographic in the history of contested iowa caucuses. In 2008, Obama only got 57% of this group. That seems to me to be a clear indication that the country will be moving far to the left on tax policy in the future no? Meaning Roth IRAs are better even for folks in the 25-28% tax brackets who expect modest incomes in retirement. Shocking at how poor Hillary did among millennial voters. In the words of a CNN analyst that night, "she completely failed to communicate to that demographic group"

sol

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #1 on: February 03, 2016, 12:13:49 AM »
So your interpretation of the Iowa caucus is that young people seem to favor Bernie Sanders, and he or someone like him will cause tax rates will go up in the future, and that makes Roth IRAs a better deal because you pay all of the taxes up front?

I'm not so sure.  For one, I expect to pay zero tax in the future anyway so I'd rather taxes went to zero today and what happens in the future doesn't really matter to me.  For another, I'm not sure that Bernie's budget plan ("blow a huge hole in the US budget by raising entitlement spending") is really very different from the Trump/Cruz/Rubio budget plan ("blow a huge hole in the US budget by slashing tax revenue") since both plans have the exact same 10 trillion dollar outcome; future taxes will have to go up in either case, or deficits will continue to balloon.

I don't think it's any surprise that young voters are more progressive than older voters.  Hasn't that always been the case? I'm fully expect that by the time my kids are old, they'll look back on DOMA in the same way we look back on miscegenation laws.  In disgust that our government actually fought to protect garbage like that.  Yet Obama campaigned on it, like politicians of years past fought against ending prohibition, women's suffrage, and the civil rights movement.  History always favors the progressive view.  Conservatives are always harkening back to outdated views, which is why they are always left behind eventually.  I make no judgment on whether this is a good or bad thing, I merely observe that it is the inevitable march of our national history.

pdxmonkey

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #2 on: February 03, 2016, 01:47:38 AM »
That and the fact that currently the US has one of, if not the most progressive tax schemes, by which I mean the top quintile pay virtually all the taxes. I think that at some point this will flatten a bit and the burden will be spread more evenly as it is in other countries. I expect taxes on the lower brackets to go up. And maybe the higher ones too.

Bucksandreds

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #3 on: February 03, 2016, 06:23:43 AM »
That and the fact that currently the US has one of, if not the most progressive tax schemes, by which I mean the top quintile pay virtually all the taxes. I think that at some point this will flatten a bit and the burden will be spread more evenly as it is in other countries. I expect taxes on the lower brackets to go up. And maybe the higher ones too.

When you factor in FICA and Medicare taxes plus city and state taxes then the US is definitely not toward the extreme end of progressiveness of taxation. Conservatives love to compare FIT in U.S. to taxes in other countries but that is an apples to oranges comparison.

Digital Dogma

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #4 on: February 03, 2016, 06:30:12 AM »
I believe Bernie repeatedly stated that income tax on the top bracket would be increased, so when Im FIRE my income will be WAY less than top bracket. You should be more concerned about capital gains tax rising and figuring out if your land will be valued over 3 million upon your death for estate taxes... if he gets what he talks about. The chances of that are slim to none since Presidents dont set tax rates.

Presidents come and go, dont change your financial plans because of momentary excitement or ideological dogma
« Last Edit: February 03, 2016, 06:31:51 AM by Digital Dogma »

nereo

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #5 on: February 03, 2016, 07:27:06 AM »
...That seems to me to be a clear indication that the country will be moving far to the left on tax policy in the future no? Meaning Roth IRAs are better even for folks in the 25-28% tax brackets who expect modest incomes in retirement.
I would say no. 
1) tax policy is set by congress, not the president, so what matters most here is the House.  Currently it looks doubtful that the democrats will control the House.
2) Millennial support of one candidate in one party hardly equates to a sea change.  Every election there's a lot of hype about how maybe this year young voters may just be the determining factor.  Every single election they get swamped out by the over 65 crowd.

Regarding tax brackets, as another poster mentioned the fate of capitol gains taxes is as important as the progressive income tax.  Also - Ted Cruz won the republican ticket, and he wants to do away entirely with capitol gains taxes.

Tetsuya Hondo

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #6 on: February 03, 2016, 07:52:05 AM »
Given that the Iowa caucus has not been predictive of anything for the past 40 years, I wouldn't pay any attention to it.

nereo

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #7 on: February 03, 2016, 07:59:10 AM »
Given that the Iowa caucus has not been predictive of anything for the past 40 years, I wouldn't pay any attention to it.
This isn't even close to being an accurate statement.
(sampling of past winners)
Obama 2008 (elected president)
Kerry 2004 (became nominee)
Gore 200 (became nominee)
Carter 1980 (became nominee)
Carter 1976 (became president)
2004 Bush (became president - though unopposed)
2000 Bush (became president)
1996 Dole (Became nominee)

How does this myth keep getting repeated??

seattlecyclone

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #8 on: February 03, 2016, 08:11:56 AM »
If you honestly expect that income in today's 15% bracket will be taxed higher than the 25-28% you might be paying now, go ahead and put your money in Roth IRAs. I'll keep stuffing the traditional retirement accounts as much as possible. Some increases are possible, maybe even likely, but raising tax rates by more than 67% for low/middle income earners just doesn't even seem like Sanders's style.

Cougar

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #9 on: February 03, 2016, 08:13:01 AM »
Just a little history lesson for those giving tax cuts a bad rap, in the 1920’s a77% top tax rate was cut down to 25% in the 1920’s, or as they are sometimes called; the roaring twenties. Following these cuts, that decade did indeed roar. Even with inflation factored in, the real GDP of the 1920 decade grew by 45% and the personal income level rose 29%.

And In 1961, tax revenues were $94 billion dollars; but just a short 7 years later in 1968 after JFK cutting the top tax rate from 90 to 70; federal revenues grew to $153 billion which is an increase of 62%. Yes, that’s right. A decrease of tax rates caused an increase of over 50 percent in federal revenues.

I don’t think I have to put anything up on the Reagan tax cuts and the George W. Bush tax cuts also increased revenues.

The problem is always the size and growth of government because it has no accountability and voting for a democratic socialist like Bernie is going to make your roth ira at greater risk to eventually be taxed because he’s going to put the growth of government on hyperdrive and it's going to need more money resources.

(Sorry for the rant, some things I have issues with).


bottlerocks

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #10 on: February 03, 2016, 08:23:17 AM »
... Yes, that’s right. A decrease of tax rates caused an increase of over 50 percent in federal revenues....

Obligatory correlation != causation.  For instance, the great depression started in '29, was that caused by tax cuts also?

tmoneyearlyretiree

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #11 on: February 03, 2016, 08:30:16 AM »
...That seems to me to be a clear indication that the country will be moving far to the left on tax policy in the future no? Meaning Roth IRAs are better even for folks in the 25-28% tax brackets who expect modest incomes in retirement.
I would say no. 
1) tax policy is set by congress, not the president, so what matters most here is the House.  Currently it looks doubtful that the democrats will control the House.
2) Millennial support of one candidate in one party hardly equates to a sea change.  Every election there's a lot of hype about how maybe this year young voters may just be the determining factor.  Every single election they get swamped out by the over 65 crowd.

Regarding tax brackets, as another poster mentioned the fate of capitol gains taxes is as important as the progressive income tax.  Also - Ted Cruz won the republican ticket, and he wants to do away entirely with capitol gains taxes.

The Millennial vote is extremely relevant because those are the folks who will be selecting the Congress in 30 years, and thus selecting the tax policy. 51% of millennials are Dems vs 35% Republican. 84% of the Millennial dems went to Sanders, so thats about 40% of voters. That seems like it predicts a long term, far off in the future shift to the left. Sanders wouldn't blow a hole in the budget, he'd blow a hole in the economy. He promises to pay for all his programs with massive tax increases, including treating capital gains and dividends like ordinary income. Go Curry Cracker's plan to pay 0% in taxes would be at severe risk as the rate for 90k of income as a couple goes from 0 to 15% under sanders, and I expect much more if you count the 2.2% healthcare tax and 6.2% employer tax. I imagine he adds those to cap gains rates too

nereo

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #12 on: February 03, 2016, 08:51:01 AM »

The Millennial vote is extremely relevant because those are the folks who will be selecting the Congress in 30 years, and thus selecting the tax policy. 51% of millennials are Dems vs 35% Republican. 84% of the Millennial dems went to Sanders, so thats about 40% of voters. That seems like it predicts a long term, far off in the future shift to the left. Sanders wouldn't blow a hole in the budget, he'd blow a hole in the economy. He promises to pay for all his programs with massive tax increases, including treating capital gains and dividends like ordinary income. Go Curry Cracker's plan to pay 0% in taxes would be at severe risk as the rate for 90k of income as a couple goes from 0 to 15% under sanders, and I expect much more if you count the 2.2% healthcare tax and 6.2% employer tax. I imagine he adds those to cap gains rates too
Sorry, I* don't agree.  First, what's relevant isn't the breakdown of millennials' policial ideology, but how many of them actually vote.  Historically, people 18-34 have had the lowest voter turnout.  My point earlier was that in every election there's a lot of hype about how 'this time it's different' and young voters will change things, but it hasn't happened yet.  I'd be thrilled to be proven wrong, but history is against it.

Also, your point that these people will be selecting the Congress in 30 years is a good one, but doesn't take into account shifts in ideology as people age.  Again, history shows us that as a cohort gets older more individuals shift towards becoming more conservative than in the other direction.

I'm also not sure what you mean when you say "Sanders... would blow a hole in the economy".  I work on a lot of boats, and holes are almost always a very bad thing.  Perhaps you meant differently?

As I understand it Go Curry cracker's plan deals less with earned income than investment (capitol) gains. Any changes would have to be made by Congress (originating in the House), not by the President... So again I'm not too sure what your statements above about earned income are referring to.when you say "90k of income goes from 0 to 15%". What happens if the House stays republican (currently a very likely scenario) and the White House stays blue?

*Fair disclosure, depending on where you make the rather arbitrary cutoff, I am either an old Millennial or a young Gen-Xer, and on most issues I'd put myself somewhat left of center.
See this graph for voter turnout by age.  It's pretty clear that historically those past age 55 vote in far greater numbers than those age 18-34.

bacchi

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #13 on: February 03, 2016, 09:47:33 AM »
Just a little history lesson for those giving tax cuts a bad rap, in the 1920’s a77% top tax rate was cut down to 25% in the 1920’s, or as they are sometimes called; the roaring twenties. Following these cuts, that decade did indeed roar. Even with inflation factored in, the real GDP of the 1920 decade grew by 45% and the personal income level rose 29%.

And In 1961, tax revenues were $94 billion dollars; but just a short 7 years later in 1968 after JFK cutting the top tax rate from 90 to 70; federal revenues grew to $153 billion which is an increase of 62%. Yes, that’s right. A decrease of tax rates caused an increase of over 50 percent in federal revenues.

What about the 90% tax rate in the late 1940's and the booming economy through the 1950's? That goes against your theory.

Quote
I don’t think I have to put anything up on the Reagan tax cuts and the George W. Bush tax cuts also increased revenues.

No, Reagan's tax cuts didn't increase revenue. Tax revenue fell the first four years after his tax cuts. Revenues did increase after his tax increases (yes, he increased taxes, in 1982, 83, 84, and 87) but only from the lowered 1981 base. They were down overall from his initial tax 1981 cut.

nereo

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #14 on: February 03, 2016, 09:49:31 AM »
"don't let facts and data ruin my ideology!!"

Eric

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #15 on: February 03, 2016, 10:14:20 AM »
Settle down Chicken Little.

Schaefer Light

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #16 on: February 03, 2016, 11:10:06 AM »
I don't think it's any surprise that young voters are more progressive than older voters.  Hasn't that always been the case? I'm fully expect that by the time my kids are old, they'll look back on DOMA in the same way we look back on miscegenation laws.  In disgust that our government actually fought to protect garbage like that.  Yet Obama campaigned on it, like politicians of years past fought against ending prohibition, women's suffrage, and the civil rights movement.  History always favors the progressive view.  Conservatives are always harkening back to outdated views, which is why they are always left behind eventually.  I make no judgment on whether this is a good or bad thing, I merely observe that it is the inevitable march of our national history.
Those are all social issues.  I only care about fiscal issues, and on those I tend to agree with conservatives a helluva lot more than "progressives".

nereo

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #17 on: February 03, 2016, 11:12:56 AM »
2) Millennial support of one candidate in one party hardly equates to a sea change.  Every election there's a lot of hype about how maybe this year young voters may just be the determining factor.  Every single election they get swamped out by the over 65 crowd.
In this case, I wouldn't be so sure. The Millennials actually overtook the Baby Boomers as the largest living generation which means they have the voting block now to push through their policies and the politicians are starting to take notice of this.
But only if they/we actually vote!  That is the crux of the problem here! 
Over the last several Presidential elections, voters in their 50s and 60s (baby boomers) were 50% more likely to vote than those in their 20s. 2012 actually had a worse voter turnout of people aged 19-24 then they did in 2008 or 2004, which isn't encouraging.

I want more people from all demographics to vote.  I think that's when our democracy functions best.  But until millennials can show that they/we can turn out to vote in numbers even close to baby boomers they/we will have less power as a voting block.
http://ck37.com/sites/ck37.com/files/voter-registration-and-turnout-1996-2008_0.png

Also, let's not ignore the other elephant in the room - campaign financing.  Which demographic is providing more funding?
« Last Edit: February 03, 2016, 11:55:03 AM by nereo »

Telecaster

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #18 on: February 03, 2016, 11:33:46 AM »
Just a little history lesson for those giving tax cuts a bad rap, in the 1920’s a77% top tax rate was cut down to 25% in the 1920’s, or as they are sometimes called; the roaring twenties. Following these cuts, that decade did indeed roar. Even with inflation factored in, the real GDP of the 1920 decade grew by 45% and the personal income level rose 29%.

And In 1961, tax revenues were $94 billion dollars; but just a short 7 years later in 1968 after JFK cutting the top tax rate from 90 to 70; federal revenues grew to $153 billion which is an increase of 62%. Yes, that’s right. A decrease of tax rates caused an increase of over 50 percent in federal revenues.

I don’t think I have to put anything up on the Reagan tax cuts and the George W. Bush tax cuts also increased revenues.


Be careful.   You're making two common mistakes in your analysis, maybe three.   The first is you didn't adjust for inflation.  Even fairly low rates of inflation can make big differences over say, eight years.   If you use inflation adjusted the numbers for the Kennedy years, you come up with a more modest 40%.  By comparison, during the Reagan years 1981-88 revenues grew by an inflation adjusted 10%.   More on that in a bit. 

The second mistake is you have to compare to periods when taxes weren't cut in order to have a baseline if cutting taxes is better or worse for revenue.   The economy gets larger almost every year, so government revenues get larger almost every year just from doing nothing.   If we assume, say a constant 3.3% economic growth then revenues should expand by 30% over eight years without doing anything. 

Finding a period like that is little hard to do because Congress fiddles with the tax rates all the time, but recall that Bill Clinton raised the top marginal rate when he became president, and the next eight years revenues grew an inflation adjusted 50%.   The blows the doors off Reagan's 10%.   And just to make this thing full circle, let's compare the GWB years of 2001-08.  We find revenue growth of 0.03%.   If we were arguing that cutting taxes increases revenues, I probably wouldn't use Reagan or GWB as examples. 

That said, cutting taxes can raise revenues.  But it doesn't work all the time.   JFK and his top economic adviser, Walter Heller argued that while cutting taxes would increase the deficit, the stimulus would be a net benefit over the long run.   And they were right. The economy took off, unemployment fell, and inflation stayed in check.   But  the conditions of high unemployment and low economic growth have to be present for the stimulus to work otherwise there isn't much economic effect. 

All this by itself is not an argument for or against raising taxes.  Simply pointing out it doesn't follow that cutting taxes always raises revenue.  Cutting taxes can raise revenue but only under specific economic conditions and with the penalty of creating deficits. 



 



sol

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #19 on: February 03, 2016, 11:43:21 AM »
I only care about fiscal issues, and on those I tend to agree with conservatives a helluva lot more

Wow.

Okay first off, conservatives certainly haven't been any better on fiscal issues than liberals, despite all the rhetoric you hear.  Reagan started to balloon our debt to fight communism, and every President since, including three terms of Bushes, has followed that pattern of low taxes and high spending that has created our current budget deficits.

Second, I'm astonished anyone would actually say "I only care about fiscal issues" out loud.  Like you'd seriously rather live in a world with a balanced budget but we still have slavery?  Fuck that noise, man.  Money is an artificial construct but civil rights is like the defining characteristic of civilized societies.  Government exists for the sole purpose of making our lives better, and how well balanced its budget looks seems a lot less important to me than how much better it can make our lives.  The budget is only a concern if it starts to impact government's ability to make our lives better, which so far hasn't happened.

Equality is more important than dollars, and hearing anyone say otherwise strikes me as literally evil.  Like dark side of the force kicking puppies Hitler on a bad day kind of evil.  Money is a thing, a tool, an idea we came up with in order to make our lives better.  We shouldn't sacrifice making a better life in the service of the tools used to make a better life.
« Last Edit: February 03, 2016, 11:46:38 AM by sol »

Paul der Krake

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #20 on: February 03, 2016, 11:53:38 AM »
I'm not worried at all about our beloved FIRE tricks going away. If congress starts taxing capital gains and dividends as earned income tomorrow, so be it.

The sweet spots and loopholes will come and go. Having the drive to look for opportunities and the flexibility to adapt accordingly, that's what really matters.

Kris

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #21 on: February 03, 2016, 11:55:19 AM »
I only care about fiscal issues, and on those I tend to agree with conservatives a helluva lot more

Wow.

Okay first off, conservatives certainly haven't been any better on fiscal issues than liberals, despite all the rhetoric you hear.  Reagan started to balloon our debt to fight communism, and every President since, including three terms of Bushes, has followed that pattern of low taxes and high spending that has created our current budget deficits.

Second, I'm astonished anyone would actually say "I only care about fiscal issues" out loud.  Like you'd seriously rather live in a world with a balanced budget but we still have slavery?  Fuck that noise, man.  Money is an artificial construct but civil rights is like the defining characteristic of civilized societies.  Government exists for the sole purpose of making our lives better, and how well balanced its budget looks seems a lot less important to me than how much better it can make our lives.  The budget is only a concern if it starts to impact government's ability to make our lives better, which so far hasn't happened.

Equality is more important than dollars, and hearing anyone say otherwise strikes me as literally evil.  Like dark side of the force kicking puppies Hitler on a bad day kind of evil.  Money is a thing, a tool, an idea we came up with in order to make our lives better.  We shouldn't sacrifice making a better life in the service of the tools used to make a better life.

Not to mention that social issues have an effect on fiscal issues.  Social policies determine whether, for example, women are allowed to work, allowed to have children while working, allowed to leave an abusive husband (and have some employability so that leaving is possible), etc. Social policies determine whether people have adequate access to education, so that they can grow up and get a good job and pay taxes while complaining that the government is taxing them to death. Etc.

It is easy to think you don't care about social issues if you have benefitted enough from social policies that they are largely invisible to you unless you are trying to see them.

nereo

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #22 on: February 03, 2016, 12:23:49 PM »
But only if they/we actually vote!  That is the crux of the problem here! 
Over the last several Presidential elections, voters in their 50s and 60s (baby boomers) were 50% more likely to vote than those in their 20s. 2012 actually had a worse voter turnout of people aged 19-24 then they did in 2008 or 2004, which isn't encouraging.

I want more people from all demographics to vote.  I think that's when our democracy functions best.  But until millennials can show that they/we can turn out to vote in numbers even close to baby boomers they/we will have less power as a voting block.
http://ck37.com/sites/ck37.com/files/voter-registration-and-turnout-1996-2008_0.png

Also, let's not ignore the other elephant in the room - campaign financing.  Which demographic is providing more funding?
There in lies the rub though - in a lot of cases people forget to shift the data to account for aging demographics. Saying that 20% of 18 to 24 demographic voted in 2008 is meaningless unless you now shift those ages to the 26 to 32 demographic where we now start to see the historical 50% voter turn out assumptions. In other-words, remember that a lot of the people that voted in 2008 are now in their late twenties or early thirties and a whole new cohort of votes that haven't participated in a presidential election without an incumbent are in that block now.
Right - and I'm not one forgetting the shift in demographics.  Those 18-24 year olds who had such poor voter turnout are indeed now 26-32.  What's making you think that they will suddenly vote in historically record numbers?  What makes you think the demographic that is newly available to vote in this election (18-22) will be different from every other election? 
Or looking at the other side of the coin - what makes you think that baby boomers will suddenly drop from their >75% voter participation rate?  If anything, history indicates that the challenging party gets a boost when there's no incumbent running.  That means a boost to the conservative voters, who tend to be much older.

Feel free to PM me in November and I will happily eat a slice of humble pie if I am wrong, but I'm deeply skeptical that millenials will vote in larger numbers (in absolute terms, not even in %) than their older counterparts.  I absolutely want to see 70%+ participation rates from younger individuals.

thd7t

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #23 on: February 03, 2016, 12:36:03 PM »
Given that the Iowa caucus has not been predictive of anything for the past 40 years, I wouldn't pay any attention to it.
This isn't even close to being an accurate statement.
(sampling of past winners)
Obama 2008 (elected president)
Kerry 2004 (became nominee)
Gore 200 (became nominee)
Carter 1980 (became nominee)
Carter 1976 (became president)
2004 Bush (became president - though unopposed)
2000 Bush (became president)
1996 Dole (Became nominee)

How does this myth keep getting repeated??
Eliminating your Bush unopposed number (because you don't have any other incumbents listed who ran unopposed), you're showing 7 nominees out of 14 caucuses (also not including sitting presidents who ran unopposed for reelection) since 1976.  Three became president.  That's essentially a coin toss on predicting the nominee and a 21% chance of predicting the president.  In addition, in all that time, the caucuses have only picked both nominees in an open primary year one time (2000).

I'd say that the data you've presented shows that the Iowa caucuses are a weak predictor at best.

(One interesting note is that they've only successfully predicted the president in this time period when it was a switch after an eight year term for the other party.)

nereo

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #24 on: February 03, 2016, 01:04:12 PM »

Eliminating your Bush unopposed number (because you don't have any other incumbents listed who ran unopposed), you're showing 7 nominees out of 14 caucuses (also not including sitting presidents who ran unopposed for reelection) since 1976.  Three became president.  That's essentially a coin toss on predicting the nominee and a 21% chance of predicting the president.  In addition, in all that time, the caucuses have only picked both nominees in an open primary year one time (2000).

I'd say that the data you've presented shows that the Iowa caucuses are a weak predictor at best.

(One interesting note is that they've only successfully predicted the president in this time period when it was a switch after an eight year term for the other party.)
A coin toss, really?  That analogy would only be true if there were just two individuals running for each nomination (hence, two sides to a coin) each year. I also clearly stated that what I listed below was an incomplete list - I felt going further not worth the effort, but I suppose not.  In reality the Iowa caucuses have been a decent predictor at who would win the party's nomination.  For example, the likelihood of picking the winner in the 1976 field ofr both the democrat and republican side by random chance would be 1/12.

Democrat side:
The guy with the most votes in Iowa won the nomination in 76, 80, 84, 96, '00, '04 and 08.  That's out of a field of 6 (76), 2 (80), 7 (84), 4 (88), 5 (92), 2 (96), 2 (00), 5 (04), 5 (08) and 1 (12).   The Iowa caucuses picked the winner of the primary in 7/10 years.  Removing the unopposed years from the analysis that's 7/9. 

Republican side:
The guy with the most votes in Iowa won the nomination in 76, 84, 92, 96, '00, and '04.  That out of a field of 2 (76), 7 (80), 1 (84), 5 (88), 1 (92), 8 (96), 6 (00), 1 (04), 7 (08), and  7 (12).  The Iowa caucuses picked the winner of the primary in 6/10 of the years.  Removing the unopposed years from the analysis that's 4/7, when the # of candidates ranged from 2-8. 
https://en.wikipedia.org/wiki/Iowa_caucuses

thd7t

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #25 on: February 03, 2016, 01:55:05 PM »

Eliminating your Bush unopposed number (because you don't have any other incumbents listed who ran unopposed), you're showing 7 nominees out of 14 caucuses (also not including sitting presidents who ran unopposed for reelection) since 1976.  Three became president.  That's essentially a coin toss on predicting the nominee and a 21% chance of predicting the president.  In addition, in all that time, the caucuses have only picked both nominees in an open primary year one time (2000).

I'd say that the data you've presented shows that the Iowa caucuses are a weak predictor at best.

(One interesting note is that they've only successfully predicted the president in this time period when it was a switch after an eight year term for the other party.)
A coin toss, really?  That analogy would only be true if there were just two individuals running for each nomination (hence, two sides to a coin) each year. I also clearly stated that what I listed below was an incomplete list - I felt going further not worth the effort, but I suppose not.  In reality the Iowa caucuses have been a decent predictor at who would win the party's nomination.  For example, the likelihood of picking the winner in the 1976 field ofr both the democrat and republican side by random chance would be 1/12.

Democrat side:
The guy with the most votes in Iowa won the nomination in 76, 80, 84, 96, '00, '04 and 08.  That's out of a field of 6 (76), 2 (80), 7 (84), 4 (88), 5 (92), 2 (96), 2 (00), 5 (04), 5 (08) and 1 (12).   The Iowa caucuses picked the winner of the primary in 7/10 years.  Removing the unopposed years from the analysis that's 7/9. 

Republican side:
The guy with the most votes in Iowa won the nomination in 76, 84, 92, 96, '00, and '04.  That out of a field of 2 (76), 7 (80), 1 (84), 5 (88), 1 (92), 8 (96), 6 (00), 1 (04), 7 (08), and  7 (12).  The Iowa caucuses picked the winner of the primary in 6/10 of the years.  Removing the unopposed years from the analysis that's 4/7, when the # of candidates ranged from 2-8. 
https://en.wikipedia.org/wiki/Iowa_caucuses

My coin toss analogy was between predicting the nominee vs. not doing so. I agree that the field has a lot of breadth before Iowa, but that doesn't signify valid candidates. 

I have one problem with your numbers.  Although Nader was shown on the wikipedia page as running in 1996, he didn't run as a Democrat, but in the Green Party, so I'd place '96 as unopposed.  This brings your correct picks on the Democratic side to 6/8 removing unopposed years (75% correlation isn't bad).

However, the Republican side giving 4/7 is not great.

In addition, picking three presidents in 15 races is still not an amazing average.  I am curious to glance at your data more to looking at the rate of correct pick based on how many candidates were running.

ETA: It's interesting that Carter was beaten in Iowa in '76 by "Uncommitted"!
« Last Edit: February 03, 2016, 01:59:06 PM by thd7t »

nereo

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #26 on: February 03, 2016, 02:32:37 PM »
My coin toss analogy was between predicting the nominee vs. not doing so. I agree that the field has a lot of breadth before Iowa, but that doesn't signify valid candidates. 

You're kidding, right?  If there is a field of 5 candidates and Iowa picks the eventual winner that's not the same as a coin toss.  A coin toss explicitly implies a 50/50 probability.
For an analogy, that's like someone who picks the winner of the AL East 60% of the time and concluding that his picks are no better than random chance.  It's absurd.  Absolutely there are candidates who are stronger going in each year than others, but that's immaterial.  The question is whether the results in Iowa are predictive of who might win the party's election.

Quote
I have one problem with your numbers.  Although Nader was shown on the wikipedia page as running in 1996, he didn't run as a Democrat, but in the Green Party, so I'd place '96 as unopposed.  This brings your correct picks on the Democratic side to 6/8 removing unopposed years (75% correlation isn't bad).
Fair enough, we can remove the Democratic election in '96 as having no predictive value (essentially unopposed, or a choice of 1/1).  But again I would say  75% is extremely good given that six out of the 8 years had at least 4 candidates running.

Quote
However, the Republican side giving 4/7 is not great.
It's 57%!!  Given the size of the fields those 7 years that's both statistically significant and extremely robust.
Also - I'll throw this out there; in 2012 Santorum beat Romney by just 34 votes, or < 0.01%.  That's a statistical tie.  In 1980 Reagan beat Bush by just 2%.  So in only 1 of the 7 years did someone who wasn't the winner or very close to the winner go on to become the party's nominee.

Quote
In addition, picking three presidents in 15 races is still not an amazing average.  I am curious to glance at your data more to looking at the rate of correct pick based on how many candidates were running.

No.  The question is whether Iowa can predict the future Presidential nominee for both parties.  There are two nominees for each presidential race, so by definition it would be impossible to predict the winner of the general election more than 50% of the time. At least one of the two Iowa winners must loose, it can be no other way. 

Furthermore, if you want to analyze the question "how often does the winner in Iowa go on to be President" you have completely inflated your estimate.  There have not be 15 Presidential races since 1976 - there have been 10.  And if you are going to remove years when a candidate ran unopposed you have to remove both sides. You can't decide to remove the Republicans in '84 or '04 (both of whom went one) or the Democrats in '96 or '12 (again, both of whom won) and conclude that Iowa was unable to predict the winner in those years (because they did, but admittedly they had no real otehr alternative).  That leaves you with 6 races.  In those 6 races Iowa selected the next President 50% of the time.


thd7t

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #27 on: February 03, 2016, 02:52:54 PM »
My coin toss analogy was between predicting the nominee vs. not doing so. I agree that the field has a lot of breadth before Iowa, but that doesn't signify valid candidates. 

You're kidding, right?  If there is a field of 5 candidates and Iowa picks the eventual winner that's not the same as a coin toss.  A coin toss explicitly implies a 50/50 probability.
For an analogy, that's like someone who picks the winner of the AL East 60% of the time and concluding that his picks are no better than random chance.  It's absurd.  Absolutely there are candidates who are stronger going in each year than others, but that's immaterial.  The question is whether the results in Iowa are predictive of who might win the party's election.

Quote
I have one problem with your numbers.  Although Nader was shown on the wikipedia page as running in 1996, he didn't run as a Democrat, but in the Green Party, so I'd place '96 as unopposed.  This brings your correct picks on the Democratic side to 6/8 removing unopposed years (75% correlation isn't bad).
Fair enough, we can remove the Democratic election in '96 as having no predictive value (essentially unopposed, or a choice of 1/1).  But again I would say  75% is extremely good given that six out of the 8 years had at least 4 candidates running.

Quote
However, the Republican side giving 4/7 is not great.
It's 57%!!  Given the size of the fields those 7 years that's both statistically significant and extremely robust.
Also - I'll throw this out there; in 2012 Santorum beat Romney by just 34 votes, or < 0.01%.  That's a statistical tie.  In 1980 Reagan beat Bush by just 2%.  So in only 1 of the 7 years did someone who wasn't the winner or very close to the winner go on to become the party's nominee.

Quote
In addition, picking three presidents in 15 races is still not an amazing average.  I am curious to glance at your data more to looking at the rate of correct pick based on how many candidates were running.

No.  The question is whether Iowa can predict the future Presidential nominee for both parties.  There are two nominees for each presidential race, so by definition it would be impossible to predict the winner of the general election more than 50% of the time. At least one of the two Iowa winners must loose, it can be no other way. 

Furthermore, if you want to analyze the question "how often does the winner in Iowa go on to be President" you have completely inflated your estimate.  There have not be 15 Presidential races since 1976 - there have been 10.  And if you are going to remove years when a candidate ran unopposed you have to remove both sides. You can't decide to remove the Republicans in '84 or '04 (both of whom went one) or the Democrats in '96 or '12 (again, both of whom won) and conclude that Iowa was unable to predict the winner in those years (because they did, but admittedly they had no real otehr alternative).  That leaves you with 6 races.  In those 6 races Iowa selected the next President 50% of the time.
I concede some excellent points on your part (particularly your last one), but would want to look at the larger fields to see what portion of the candidates were viable (and perceived as viable).  I believe that this is relevant, particularly in years like this one where the field is so deep that there were candidates who got none of the vote.  However, largely, I do see your (well explained) points.

tmoneyearlyretiree

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #28 on: February 03, 2016, 03:39:57 PM »
Voters do have a habit of becoming more conservative as they age, but if you start from a point much further to the left, is the terminal ideological point farther to the left as well? I would think that it is. Not many people will go from being a Sanders supporter to a Cruz Republican.

*Full disclosure, I'm 26 and I basically did that. I went from knocking on doors for Obama in 2008 to being a Cruz or Rubio supporter. So take what I say with that grain of salt

sol

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #29 on: February 03, 2016, 04:11:35 PM »
I'm 26 and I basically did that. I went from knocking on doors for Obama in 2008 to being a Cruz or Rubio supporter.

That sounds like a fascinating journey.  Would you like to share it with us?  I have trouble identifying the common thread that someone might follow from one to the other.

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #30 on: February 03, 2016, 04:20:16 PM »
I'm 26 and I basically did that. I went from knocking on doors for Obama in 2008 to being a Cruz or Rubio supporter.

That sounds like a fascinating journey.  Would you like to share it with us?  I have trouble identifying the common thread that someone might follow from one to the other.

No kidding. I can't imagine.

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #31 on: February 03, 2016, 05:20:15 PM »

I concede some excellent points on your part (particularly your last one), but would want to look at the larger fields to see what portion of the candidates were viable (and perceived as viable).  I believe that this is relevant, particularly in years like this one where the field is so deep that there were candidates who got none of the vote.  However, largely, I do see your (well explained) points.
I see your point about not including the completely non-viable candidates when deciding how good a predictor Iowa is, but how do you decide who's viable and who's not?  You can wind up chasing your own tail on that one.  Going by poll numbers is hardly independent, as the polls are asking likely voters who they plan on voting for.
Think back 6-12 months ago.  It seemed possible that Carson might win, or maybe the more well known candidates like Bush or Christy.  Many thought Huckabee might win again as he did in the past.  Most severely doubted the chances of Trump or Cruz.
Similar story in the past - Carter was unheard of outside of Georgia.  Reagan was the actor-turned-governer of that liberal-leaning western state (hmm... deja vu?).  Howard Dean looked unstoppable for a while until he imploded. etc etc

Point is it's not so easy to decide who is viable and who isn't until shortly before people start voting. 

Ultimately it all gets back to how you ask the question.  What bugs me is this often repeated statement about Iowa.  Immediately before the election I watched a reporter say "bad news for who ever wins Iowa - history is not in your favor".  This was followed by several articles talking about how Clinton and Cruz should be worried because of the "history of Iowa." Whaah...?  Iowa is far from a perfect predictor, but it's also far from a curse either.  As you correctly pointed out, it gets it wrong about 25% of the time...

If someone says "not all winners in Iowa do well in the rest of the election" - I'm cool with that.  It's when people start talking about how Iowa is a poor predictor, or that history shows very few winners there go on to win the nomination that my statistical brain blows a gasket. 

ender

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #32 on: February 03, 2016, 05:29:49 PM »
I'm not worried at all about our beloved FIRE tricks going away. If congress starts taxing capital gains and dividends as earned income tomorrow, so be it.

The sweet spots and loopholes will come and go. Having the drive to look for opportunities and the flexibility to adapt accordingly, that's what really matters.

Realistically, there are only a few things Congress could do to taxes that would purely affect early retirees and not devastate the middle class (and not the 'we're really upper middle class but want to be considered middle class' folks).

Healthcare and making retirement income taxes somehow proportional to assets (like, if your IRA is $1MM you are taxed at least X% on it or taxing 1% of your IRA value ever year, etc).

Otherwise, since nearly all of us plan on low incomes in retirement, any income tax situation that severely impacts us will destroy people who are retiring more normally.

It's possible they could also destroy the American economy, too, I guess...

tmoneyearlyretiree

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #33 on: February 03, 2016, 09:18:42 PM »
I'm 26 and I basically did that. I went from knocking on doors for Obama in 2008 to being a Cruz or Rubio supporter.

That sounds like a fascinating journey.  Would you like to share it with us?  I have trouble identifying the common thread that someone might follow from one to the other.

A lot of things happened. Obamacare was a big part of it, seeing investments get targeted for tax increases, learning about costs in healthcare when I had a really bad car accident and feeling like the govt involvement in the system was a big part of the high costs. Also had a 'millionaire next door' type in my extended family. He challenged my views on redistribution. Since he was someone who saved 50% plus of his income and never made more than $60-70k while having a net worth much higher than that, the traditional narrative of 'rich guy has plenty of money and can afford tax increases' looked less plausible to me. Also dad was a low income earner (teacher) and he had one significant property investment that he was going to use to supplement retirement. It was mostly cap gains, and then i learned more about tax policy and how he was going to pay a very high tax rate thx to obamacare as a high income earner when he sold it, despite being a low income earner for many years (ie no allowance to spread cap gains over many years for low income earners). Add this on to playing four square with some hippies in the quad who were bragging about getting their boss to fire them so they could get the new extended unemployment benefits, and I was pretty much done being leftist.

I used to be a columnist for the student newspaper at my large public university. I wrote this in 2011, which is when my ideological transformation was nearing completion. Here is the article in its entirety, for the few people that are interested haha

<<<<<  from 2011
In a recent response column to my piece on Social Security, the writer suggested that I came from a wealthy background and loved to walk all over the poor to get ahead.

I thought it would be helpful to discuss how I went from being a door-to-door campaigner for the Obama campaign to actively writing against the policies of the Obama administration.

Conventional wisdom says that you become more liberal in college, and while that is true for me in the social sense, I had the opposite experience in my political worldview.

I grew up in a family that was middle-class but not comfortably so. My dad was a middle school teacher, and my mom stayed at home to raise me and my brothers. Where I'm from, Democrat is kind of a dirty word in some circles. Countless jokes were made about my family's party affiliation.

I went to rallies to increase teacher pay with my dad, and I went to the local campaign headquarters of John Kerry, where people yelled obscenities at me from their cars as they drove by. I was about as liberal as they come in the Florida Panhandle.

Upon coming to college, I supported raising taxes on the rich, protecting labor unions and expanding social programs. Then, I switched majors and started taking economics classes, and that is when my world began to crumble.

I learned about how labor unions are sometimes like monopolies, taxes generate deadweight loss and government programs often keep the poor mired in poverty. Furthermore, I met some "millionaires" and realized they weren't different from me except for a few zeros in their bank accounts.

After seeing my activity and service fees spent by SG on HBO actors and a utility bill from GRU that exceeds what my parents pay for their inefficient two-story wooden house, I began to wonder whether I might be able to spend my money better than public officials.

I started to wonder what right these officials had to spend people's money beyond the core functions of government like police, fire, roads and national defense.

Another blow to my "progressivism" came after hearing one of the four-square players on Turlington brag about how he was able to qualify for an unemployment check that he didn't need. Another friend mentioned he got a bigger tax credit from his work at a grocery store than he earned in hourly wages. I watched as my little brother received a check from Social Security because our dad was over 65.

People all around me responded to incentives created by my government, which rewards behavior that robs the economy of growth and, thus, jobs.

One of the most shocking graphs I've ever seen is from Harvard economist Gregory Mankiw's blog. It shows that the marginal tax rate for workers making between $0 and $40,000 a year is 100 percent as every new dollar of earnings is negated by a loss of $1 in benefits.

Our government is responsible for creating a poverty trap where the impoverished are discouraged from fighting to rise up out of their condition.

Looking back on my childhood, I began to see that the teachers union that kept my dad's wages the same as other less-effective teachers contributed more to his lack of pay than anything.

Taxation was not a zero-sum game where the economy would grow no matter what we did to the wealthy. Morally, I decided that it doesn't matter whether the rich have a lower marginal utility to their spending because I simply don't have a right to their money.

It is wrong to take what is not yours, whether from theft or through the ballot box.

That is why I'm no longer a liberal.
>>>>>>>> end article

FINate

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #34 on: February 03, 2016, 10:24:36 PM »
Second, I'm astonished anyone would actually say "I only care about fiscal issues" out loud.  Like you'd seriously rather live in a world with a balanced budget but we still have slavery?  Fuck that noise, man.  Money is an artificial construct but civil rights is like the defining characteristic of civilized societies.  Government exists for the sole purpose of making our lives better, and how well balanced its budget looks seems a lot less important to me than how much better it can make our lives.  The budget is only a concern if it starts to impact government's ability to make our lives better, which so far hasn't happened.

The amount our government taxes and spends (and time spent debating related issues) strongly suggests they don't view civil rights as the defining characteristic of our society. This is true for both political parties. Fiscal policy includes much more than whether or not the budget is balanced, which is a distraction since we are talking about the feds who also happen to control the money supply. Fiscal policy also includes how revenue is raised and allocated and the many facets of these, and other related policies which influence our economy such as employment incentives. Taken together fiscal policy reaches deeply into the lives of average citizens, so I think it is a fair thing to focus on as a voter.

The Happy Philosopher

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #35 on: February 03, 2016, 10:39:06 PM »
Predictions are difficult to make...especially about the future.
« Last Edit: February 03, 2016, 10:59:13 PM by frugaldoc »

sol

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #36 on: February 03, 2016, 10:44:32 PM »
fiscal policy reaches deeply into the lives of average citizens, so I think it is a fair thing to focus on as a voter.

Sure, it's important.  I didn't mean to suggest anyone should ignore it.

But I instantly toss aside all matters related to fiscal policy when our government starts trampling basic human rights.  What good is sound policy if you're putting people in concentration camps, or assassinating citizens without due process, or denying the right to marry or own property or work or have children?  Some things are more important than money.

Money can come back to bite you in the ass, in the long run.  An insolvent government is a temporary government, and social collapse probably leads to the loss of a bunch of those rights that I think are more important than budgets.  But in the short term, abrogating those rights is a much more immediate threat and I would gladly vote to incur debt, even with all of it's potential future problems, than sit quietly while our immediate rights and  freedoms are destroyed.

So when Schaefer Light says he cares about money more than people, I see at work the same twisted logic that lets people murder for profit, or a car company skimp on a part that endangers their customers, or a trader destroy lives by shilling credit default swaps, or an oil company blow out a deepwater well because they couldn't be bothered to follow safety protocols.  People have to matter more than money. 

FINate

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #37 on: February 03, 2016, 11:07:04 PM »
Sure, it's important.  I didn't mean to suggest anyone should ignore it.

But I instantly toss aside all matters related to fiscal policy when our government starts trampling basic human rights.  What good is sound policy if you're putting people in concentration camps, or assassinating citizens without due process, or denying the right to marry or own property or work or have children?  Some things are more important than money.

Money can come back to bite you in the ass, in the long run.  An insolvent government is a temporary government, and social collapse probably leads to the loss of a bunch of those rights that I think are more important than budgets.  But in the short term, abrogating those rights is a much more immediate threat and I would gladly vote to incur debt, even with all of it's potential future problems, than sit quietly while our immediate rights and  freedoms are destroyed.

So when Schaefer Light says he cares about money more than people, I see at work the same twisted logic that lets people murder for profit, or a car company skimp on a part that endangers their customers, or a trader destroy lives by shilling credit default swaps, or an oil company blow out a deepwater well because they couldn't be bothered to follow safety protocols.  People have to matter more than money.

The USA is not putting people in concentration camps, or executing citizens without due process, thankfully no longer interfering with marriages, and such. Therefore these aren't very relevant this cycle. Would I go so far as to say they are of no concern to me? No. But much less so.

I don't see people vs. money (or rather, fiscal issues) as being mutually exclusive. The people issues you list are closely related to fiscal policy since they involve how we regulate the economy, how we make tradeoffs between costs and risks. Products and engineering projects will never be 100% risk free. Saying that "people have to matter more than money" is no better than saying that "only fiscal policies matter" - both statements miss the nuance involved in making necessary tradeoffs.

Telecaster

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #38 on: February 03, 2016, 11:12:50 PM »
The amount our government taxes and spends (and time spent debating related issues) strongly suggests they don't view civil rights as the defining characteristic of our society. This is true for both political parties. Fiscal policy includes much more than whether or not the budget is balanced, which is a distraction since we are talking about the feds who also happen to control the money supply. Fiscal policy also includes how revenue is raised and allocated and the many facets of these, and other related policies which influence our economy such as employment incentives. Taken together fiscal policy reaches deeply into the lives of average citizens, so I think it is a fair thing to focus on as a voter.

It is not only a fair thing to focus on as a voter, IMO it is your citizenly duty to do so. 

But that wasn't the issue.  The issue was if one should be concerned about social policy.  Most reasonable people agree that racial discrimination is bad, and that there needs to be some sort of minimal safety net (even if we disagree how big the net should be), that some amount of national defense is good, it is beneficial to have a food supply that is mostly safe, bank deposits for regular folk are insured, the stock market is moderately transparent so regular people can participate, we build roads and transit, having a functioning court system, fund a certain amount of basic research, etc. 

Those are all social policy questions, and to say you don't care is ditching your duties as a citizen. 



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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #39 on: February 03, 2016, 11:56:44 PM »
Money can come back to bite you in the ass, in the long run.  An insolvent government is a temporary government, and social collapse probably leads to the loss of a bunch of those rights that I think are more important than budgets.  But in the short term, abrogating those rights is a much more immediate threat and I would gladly vote to incur debt, even with all of it's potential future problems, than sit quietly while our immediate rights and  freedoms are destroyed.

So when Schaefer Light says he cares about money more than people, I see at work the same twisted logic that lets people murder for profit, or a car company skimp on a part that endangers their customers, or a trader destroy lives by shilling credit default swaps, or an oil company blow out a deepwater well because they couldn't be bothered to follow safety protocols.  People have to matter more than money.

Money is people. Think about where money comes from and you'll really get down to the meat of argument. Talking about 'people before money' is really a discussion about 'people before other people'. Someone, somewhere has to work, to labor, in order to earn that money in order for the government to tax it. I think it's incredibly manipulative and naive to announce you're all about helping people via government spending, but then downplay the damage that taxation does to a society to provide that benefit.

This is really what modern politics has devolved into. It's using the power of government to redistribute based on a subjective view of 'fairness' via taxation. When you're voting, you're voting for violence. You're voting to have men with guns threaten other citizens with force, or jail, to financially support your interests. We hide behind pretty words and lofty ideals, but don't kid yourself.

sol

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #40 on: February 04, 2016, 12:28:12 AM »
the power of government to redistribute based on a subjective view of 'fairness' via taxation. When you're voting, you're voting for violence. You're voting to have men with guns threaten other citizens with force, or jail, to financially support your interests.

We've addressed this "taxation is theft at gunpoint" argument here many times before, but maybe you're new?  Let me reiterate the standard response everyone on the forum already knows.

Taxes are not your money.  They are the cost of providing the framework under which you can create wealth, and they are owed in the future to pay for the benefits you have already received in the past.  Your public education, your power grid, your transportation infrastructure, your food supply, your clean water, your vaccines, your internet, your security, all of the things that make modern life possible are funded for the public good with public money, and we pay back that debt with taxes on the wealth we get to create as a result of those things having been created for us in the past.

I know there is a vocal minority, mostly self-entitled white men, who feel that all government is tyranny and that the IRS is the mafia.  But the truth is that the IRS are just accountants, public servants who want us to be able to continue to provide future generations with food and water and power and security.  They do not want to steal from you, they want you to gratefully say thank you for all of the benefits you have been granted by living in a first world democracy.  Had you been born in Somalia or North Korea you would pay no taxes, and you would not have received those benefits, and your children would be doomed to exactly the kind of poverty and despair that you fantasize about imposing on all of us with this "taxes are theft" bullshit.

Government is the extension of the people.  We vote for them, they represent our interests, and they ensure that we get what we want from the system.  Government cannot steal from you because the government is you.  We're not "voting for violence" when we elect leaders, we're voting for people we believe will provide us the services we desire, and if they don't then we vote for someone else.  This whole thing is voluntary, there is no gunpoint, and you are free to leave the system at any time you like by moving to another country that does not impose taxes.  Whatever "interests" are served are our interests.  What redistribution there is is done with our consent, deliberately, because it is what we as a society have democratically decided is the most moral thing to do, and the best thing for our nation.  You are free to disagree with it, you are free to rail against it, but don't misconstrue the voluntary arrangement you have chosen to live under as some sort of forced arrangement.  There is no tyrant.

You have benefited enormously, maybe show a little gratitude instead of so much hate.

FINate

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #41 on: February 04, 2016, 12:50:13 AM »
We've addressed this "taxation is theft at gunpoint" argument here many times before, but maybe you're new?  Let me reiterate the standard response everyone on the forum already knows.

Taxes are not your money.  They are the cost of providing the framework under which you can create wealth, and they are owed in the future to pay for the benefits you have already received in the past.  Your public education, your power grid, your transportation infrastructure, your food supply, your clean water, your vaccines, your internet, your security, all of the things that make modern life possible are funded for the public good with public money, and we pay back that debt with taxes on the wealth we get to create as a result of those things having been created for us in the past.

I know there is a vocal minority, mostly self-entitled white men, who feel that all government is tyranny and that the IRS is the mafia.  But the truth is that the IRS are just accountants, public servants who want us to be able to continue to provide future generations with food and water and power and security.  They do not want to steal from you, they want you to gratefully say thank you for all of the benefits you have been granted by living in a first world democracy.  Had you been born in Somalia or North Korea you would pay no taxes, and you would not have received those benefits, and your children would be doomed to exactly the kind of poverty and despair that you fantasize about imposing on all of us with this "taxes are theft" bullshit.

Government is the extension of the people.  We vote for them, they represent our interests, and they ensure that we get what we want from the system.  Government cannot steal from you because the government is you.  We're not "voting for violence" when we elect leaders, we're voting for people we believe will provide us the services we desire, and if they don't then we vote for someone else.  This whole thing is voluntary, there is no gunpoint, and you are free to leave the system at any time you like by moving to another country that does not impose taxes.  Whatever "interests" are served are our interests.  What redistribution there is is done with our consent, deliberately, because it is what we as a society have democratically decided is the most moral thing to do, and the best thing for our nation.  You are free to disagree with it, you are free to rail against it, but don't misconstrue the voluntary arrangement you have chosen to live under as some sort of forced arrangement.  There is no tyrant.

You have benefited enormously, maybe show a little gratitude instead of so much hate.

"Taxation is theft" is an extreme and bogus argument. I agree that taxes are necessary and desirable, however, the idea that "government cannot steal from you because the government is you" is also bullshit. There are plenty of examples of the government stealing from people. Just ask the Native Americans, or the Japanese citizens during WWII.
 

Yaeger

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #42 on: February 04, 2016, 12:55:14 AM »
the power of government to redistribute based on a subjective view of 'fairness' via taxation. When you're voting, you're voting for violence. You're voting to have men with guns threaten other citizens with force, or jail, to financially support your interests.

We've addressed this "taxation is theft at gunpoint" argument here many times before, but maybe you're new?  Let me reiterate the standard response everyone on the forum already knows.

Taxes are not your money.  They are the cost of providing the framework under which you can create wealth, and they are owed in the future to pay for the benefits you have already received in the past.  Your public education, your power grid, your transportation infrastructure, your food supply, your clean water, your vaccines, your internet, your security, all of the things that make modern life possible are funded for the public good with public money, and we pay back that debt with taxes on the wealth we get to create as a result of those things having been created for us in the past.

I know there is a vocal minority, mostly self-entitled white men, who feel that all government is tyranny and that the IRS is the mafia.  But the truth is that the IRS are just accountants, public servants who want us to be able to continue to provide future generations with food and water and power and security.  They do not want to steal from you, they want you to gratefully say thank you for all of the benefits you have been granted by living in a first world democracy.  Had you been born in Somalia or North Korea you would pay no taxes, and you would not have received those benefits, and your children would be doomed to exactly the kind of poverty and despair that you fantasize about imposing on all of us with this "taxes are theft" bullshit.

Government is the extension of the people.  We vote for them, they represent our interests, and they ensure that we get what we want from the system.  Government cannot steal from you because the government is you.  We're not "voting for violence" when we elect leaders, we're voting for people we believe will provide us the services we desire, and if they don't then we vote for someone else.  This whole thing is voluntary, there is no gunpoint, and you are free to leave the system at any time you like by moving to another country that does not impose taxes.  Whatever "interests" are served are our interests.  What redistribution there is is done with our consent, deliberately, because it is what we as a society have democratically decided is the most moral thing to do, and the best thing for our nation.  You are free to disagree with it, you are free to rail against it, but don't misconstrue the voluntary arrangement you have chosen to live under as some sort of forced arrangement.  There is no tyrant.

You have benefited enormously, maybe show a little gratitude instead of so much hate.

You're completely mislabeling people that think protesting social programs and government action is a result of 'hate'. It's insulting and dismissive without a hint of evidence or proof. Did I demonstrate 'hate'? Or is any objection construed as hateful by you and do you find that constructive?

The money taxes take from you are your own money. In fact, our country was founded on the right to economic freedom and protection from burdensome, disproportional government taxation. I don't see how ANYONE could effectively argue that you don't have an inherent right to the results of your personal labor. This idea that you owe your success, if you have success, to social, tax-funded programs is utterly ridiculous. These programs have existed for a relatively short period in America's history and are in no way representative of our unique success. Education, retirement, welfare, roads all existed before the federal government took over and the fact that no one even considers a workable alternative plan is a failure of our society. Can I blame my failures on social programs as well?

The government is an extension of the people, that's true. James Madison once said "No man is allowed to be a judge in his own cause, because his interest would certainly bias his judgment, and, not improbably, corrupt his integrity." Meaning, there's a great moral danger to society when we allow the government to start selling itself for votes. People will vote for their own interests at the expense of others. Basically, trading votes for bread.

We democratically supported slavery, segregation, oppression of women, conscription. You're saying that any action, if supported by a majority, is moral and is for the best? No, it needs to pass the tests, and even then it needs to be 'fair' and just. It needs to be Constitutional. I bet the majority of the populace would vote to take 100% of the wealth from the rich today. It's not Constitutional. It's not moral, it's not right. You can't defend mob justice, populism, by saying that it's inherently just if the majority want it.

Edit - It's funny that we tell people they can leave the system anytime they want if they don't like being taken advantage of. However, we levy an additional high 40% Expatriation tax (on top of the regular taxes) on the people fleeing from high taxes. We also make it difficult for businesses and corporations to make the same decision and tax them accordingly. So when people put out there that it's 'voluntary', it's kind of a joke. We actively seek to punish people who think about leaving.
« Last Edit: February 04, 2016, 01:36:53 AM by Yaeger »

Paul der Krake

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #43 on: February 04, 2016, 04:30:53 AM »
They levy an expatriation tax to call BS on the people who claim they could have attained their successes anywhere. Put your money where your mouth is and leave before you use the perks of the system to amass your millions.

You do have a right to your own labor, as dictated by the terms and conditions of the social construct in which you live. If you don't like the terms, work to change them (and be glad there are options to even attempt do that), or try your luck elsewhere. Don't mooch off and come back with revisionist history crap.

ender

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #44 on: February 04, 2016, 06:24:36 AM »
The money taxes take from you are your own money. In fact, our country was founded on the right to economic freedom and protection from burdensome, disproportional government taxation. I don't see how ANYONE could effectively argue that you don't have an inherent right to the results of your personal labor. This idea that you owe your success, if you have success, to social, tax-funded programs is utterly ridiculous. These programs have existed for a relatively short period in America's history and are in no way representative of our unique success. Education, retirement, welfare, roads all existed before the federal government took over and the fact that no one even considers a workable alternative plan is a failure of our society. Can I blame my failures on social programs as well?

I'm pretty strong conservative/libertarian leaning, but this attitude is fairly naive. I agree completely that my success is largely the result of my actions.

However, the opportunities I have been blessed with in my lifetime so far? I had no responsibility for those. Did I choose where I was born? Did I choose to be born into a family where my parents stayed together? Where financial stability was part of my childhood? Did I choose my intelligence? What about my health (I was in children's hospitals often as a kid for relatively minor things - there are children there who were not blessed with the health I was)? Did I choose to have been lucky when I was younger and not end up doing drugs, or otherwise ruining my life? Why was I born with a more frugal nature compared to others my age?

Was I personally responsible for creating these opportunities for myself? Of course not, it would be ridiculous to presume I divinely intervened on behalf of baby-ender and predetermined those things. I could just as easily been born in an inner-city environment where I would have had none of the opportunity I have had in my life. Or in rural Africa where statistically speaking I wouldn't even be alive still. You could argue my parents created some of those opportunities, but realistically if we are talking about entitlement to the benefits of my personal labor - it still doesn't matter as I didn't do that myself.

The fact is, my ability to have success through my actions is the result of many things I had no control over, no ability to influence, and opportunities I was blessed with. To act otherwise is completely naive.

There are clearly people who have had those opportunities and squandered them, but for me to act like I'm a self made person entirely and anyone who makes $10k/year [who grew up in an inner city environment, with deadbeat parents] has gotten themselves into their situation, so the government should benefit me and punish them? That gets trickier from a moral perspective.

The minute you recognize what you "earned" vs how you were born into your opportunity, it becomes easier to see taxes not as oppression. It is more gray. The conservative/Democrat/Republican differences in approach to resolving this societally are different, but the notion we are entirely self-made and therefore entitled to the entirety of the results of our personal labor because we earned all of it ourselves is completely naive.

If we allow ourselves to be entitled to the portion which is directly and solely our responsibility (ie if we were born in different circumstances, our success that would remain), that percentage would probably be a much lower percentage than nearly everyone thinks.

Big Boots Buddha

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #45 on: February 04, 2016, 06:54:28 AM »
I'm 26 and I basically did that. I went from knocking on doors for Obama in 2008 to being a Cruz or Rubio supporter.

That sounds like a fascinating journey.  Would you like to share it with us?  I have trouble identifying the common thread that someone might follow from one to the other.

I went from a high school student subscriber to The Nation to becoming a supporter of Trump. Though no party in the world seems to support my line of thinking at all.

I voted for Obama - change - to immediately end the wars and bring the soldiers home. To bring about rational change in medical insurance. Both of those didn't happen.

I support strong nationalist economic policies, less immigration (possibly down to almost zero, Id have to think more about it), an end to wars other than if the USA is attacked, reduction of military spending, strong laws reducing abilities of Wall street (think derivatives, subprime loans), an end to corporate donations to political parties, pay to play system that exists now in DC, so many other policies.

These things are somehow mostly not talked about by either party. So far Trump seems to be the only person I hear talking about these ideas, even though I don't agree with him on many points (military spending, some social issues). People change.

andy85

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #46 on: February 04, 2016, 06:55:41 AM »
My history could be wrong, so feel free to correct me if i am wrong...

...but I'm pretty sure the federal income tax was proposed by Lincoln as a means to fund the Civil War. I also think he said it would be repealed once the war was over. Idk....some of the history on how taxes came to be is pretty interesting. They argued back then about federal and state/local taxes, so not much has changed in the last 200+ years...

thd7t

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #47 on: February 04, 2016, 07:08:26 AM »

I concede some excellent points on your part (particularly your last one), but would want to look at the larger fields to see what portion of the candidates were viable (and perceived as viable).  I believe that this is relevant, particularly in years like this one where the field is so deep that there were candidates who got none of the vote.  However, largely, I do see your (well explained) points.
I see your point about not including the completely non-viable candidates when deciding how good a predictor Iowa is, but how do you decide who's viable and who's not?  You can wind up chasing your own tail on that one.  Going by poll numbers is hardly independent, as the polls are asking likely voters who they plan on voting for.
Think back 6-12 months ago.  It seemed possible that Carson might win, or maybe the more well known candidates like Bush or Christy.  Many thought Huckabee might win again as he did in the past.  Most severely doubted the chances of Trump or Cruz.
Similar story in the past - Carter was unheard of outside of Georgia.  Reagan was the actor-turned-governer of that liberal-leaning western state (hmm... deja vu?).  Howard Dean looked unstoppable for a while until he imploded. etc etc

Point is it's not so easy to decide who is viable and who isn't until shortly before people start voting. 

Ultimately it all gets back to how you ask the question.  What bugs me is this often repeated statement about Iowa.  Immediately before the election I watched a reporter say "bad news for who ever wins Iowa - history is not in your favor".  This was followed by several articles talking about how Clinton and Cruz should be worried because of the "history of Iowa." Whaah...?  Iowa is far from a perfect predictor, but it's also far from a curse either.  As you correctly pointed out, it gets it wrong about 25% of the time...

If someone says "not all winners in Iowa do well in the rest of the election" - I'm cool with that.  It's when people start talking about how Iowa is a poor predictor, or that history shows very few winners there go on to win the nomination that my statistical brain blows a gasket.
I guess that I'd disagree that people thought that Carson or Huckabee were viable national candidates, but as Iowa Republican Caucus candidates, I agree that they were very viable.  Looking at the trend and demographics in the Republican Caucus from the last few elections, Iowa has turned out a disproportionate number of white evangelical voters, when compared to the nation at large.  This appears to be the result of changes in the rest of the country (and consistency in Iowa) and could reasonably be cited as reason for concern among Republican candidates whose support is deep in that/those demographics.  Based on these shifting demographics nationwide, it may be reasonable to project that Iowa's predictive value (on the Republican side) is on the decline.

2lazy2retire

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #48 on: February 04, 2016, 07:12:27 AM »
the power of government to redistribute based on a subjective view of 'fairness' via taxation. When you're voting, you're voting for violence. You're voting to have men with guns threaten other citizens with force, or jail, to financially support your interests.

We've addressed this "taxation is theft at gunpoint" argument here many times before, but maybe you're new?  Let me reiterate the standard response everyone on the forum already knows.

Taxes are not your money.  They are the cost of providing the framework under which you can create wealth, and they are owed in the future to pay for the benefits you have already received in the past.  Your public education, your power grid, your transportation infrastructure, your food supply, your clean water, your vaccines, your internet, your security, all of the things that make modern life possible are funded for the public good with public money, and we pay back that debt with taxes on the wealth we get to create as a result of those things having been created for us in the past.

I know there is a vocal minority, mostly self-entitled white men, who feel that all government is tyranny and that the IRS is the mafia.  But the truth is that the IRS are just accountants, public servants who want us to be able to continue to provide future generations with food and water and power and security.  They do not want to steal from you, they want you to gratefully say thank you for all of the benefits you have been granted by living in a first world democracy.  Had you been born in Somalia or North Korea you would pay no taxes, and you would not have received those benefits, and your children would be doomed to exactly the kind of poverty and despair that you fantasize about imposing on all of us with this "taxes are theft" bullshit.

Government is the extension of the people.  We vote for them, they represent our interests, and they ensure that we get what we want from the system.  Government cannot steal from you because the government is you.  We're not "voting for violence" when we elect leaders, we're voting for people we believe will provide us the services we desire, and if they don't then we vote for someone else.  This whole thing is voluntary, there is no gunpoint, and you are free to leave the system at any time you like by moving to another country that does not impose taxes.  Whatever "interests" are served are our interests.  What redistribution there is is done with our consent, deliberately, because it is what we as a society have democratically decided is the most moral thing to do, and the best thing for our nation.  You are free to disagree with it, you are free to rail against it, but don't misconstrue the voluntary arrangement you have chosen to live under as some sort of forced arrangement.  There is no tyrant.

You have benefited enormously, maybe show a little gratitude instead of so much hate.

You're completely mislabeling people that think protesting social programs and government action is a result of 'hate'. It's insulting and dismissive without a hint of evidence or proof. Did I demonstrate 'hate'? Or is any objection construed as hateful by you and do you find that constructive?

The money taxes take from you are your own money. In fact, our country was founded on the right to economic freedom and protection from burdensome, disproportional government taxation. I don't see how ANYONE could effectively argue that you don't have an inherent right to the results of your personal labor. This idea that you owe your success, if you have success, to social, tax-funded programs is utterly ridiculous. These programs have existed for a relatively short period in America's history and are in no way representative of our unique success. Education, retirement, welfare, roads all existed before the federal government took over and the fact that no one even considers a workable alternative plan is a failure of our society. Can I blame my failures on social programs as well?

The government is an extension of the people, that's true. James Madison once said "No man is allowed to be a judge in his own cause, because his interest would certainly bias his judgment, and, not improbably, corrupt his integrity." Meaning, there's a great moral danger to society when we allow the government to start selling itself for votes. People will vote for their own interests at the expense of others. Basically, trading votes for bread.

We democratically supported slavery, segregation, oppression of women, conscription. You're saying that any action, if supported by a majority, is moral and is for the best? No, it needs to pass the tests, and even then it needs to be 'fair' and just. It needs to be Constitutional. I bet the majority of the populace would vote to take 100% of the wealth from the rich today. It's not Constitutional. It's not moral, it's not right. You can't defend mob justice, populism, by saying that it's inherently just if the majority want it.

Edit - It's funny that we tell people they can leave the system anytime they want if they don't like being taken advantage of. However, we levy an additional high 40% Expatriation tax (on top of the regular taxes) on the people fleeing from high taxes. We also make it difficult for businesses and corporations to make the same decision and tax them accordingly. So when people put out there that it's 'voluntary', it's kind of a joke. We actively seek to punish people who think about leaving.

Not getting into the argument but your bit on the exit tax is factually incorrect - there is no "additional tax". You are taxed on the day of exit as if you had sold all your assets on that day, the tax due would reflect that capital gain. Not to mention it only applies to persons with a net worth in excess of 2 million and the tax only applies if the net gain exceeds $600k. To me this seems a reasonable ruling to prohibit high net worth persons from leaving without paying tax which would come due in the future if they were still US persons.
Always funny how people spend time writing what appears to be well thought out argument and then f@ck it all up by posting some complete inaccuracy which anyone with a passing interest in tax law will pick up on, at least google it before posting FFS.

Schaefer Light

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Re: The Iowa Caucus results should make everyone love Roth IRAs
« Reply #49 on: February 04, 2016, 07:59:51 AM »
I only care about fiscal issues, and on those I tend to agree with conservatives a helluva lot more

Wow.

Okay first off, conservatives certainly haven't been any better on fiscal issues than liberals, despite all the rhetoric you hear.  Reagan started to balloon our debt to fight communism, and every President since, including three terms of Bushes, has followed that pattern of low taxes and high spending that has created our current budget deficits.

Second, I'm astonished anyone would actually say "I only care about fiscal issues" out loud.  Like you'd seriously rather live in a world with a balanced budget but we still have slavery?  Fuck that noise, man.  Money is an artificial construct but civil rights is like the defining characteristic of civilized societies.  Government exists for the sole purpose of making our lives better, and how well balanced its budget looks seems a lot less important to me than how much better it can make our lives.  The budget is only a concern if it starts to impact government's ability to make our lives better, which so far hasn't happened.

Equality is more important than dollars, and hearing anyone say otherwise strikes me as literally evil.  Like dark side of the force kicking puppies Hitler on a bad day kind of evil.  Money is a thing, a tool, an idea we came up with in order to make our lives better.  We shouldn't sacrifice making a better life in the service of the tools used to make a better life.
I think you've taken what I said out of context.  My point was that someone running on social issues isn't going to move the needle for me.  You're pro-choice?  Great.  Pro-life?  That's fine, too.  But if you know your fiscal policy and understand economics, that goes a long way towards getting my vote.  Lowering my taxes goes even further.

And I disagree with your statement about govt. being here to make our lives better.  The purpose of a government is to protect us from those who would do us harm (either physically, by taking our private property, or taking away our natural rights).

 

Wow, a phone plan for fifteen bucks!