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posted by
LaminatorX
on Friday March 14 2014, @11:10AM
from the won't-someone-please-think-of-the-dealerships dept.
from the won't-someone-please-think-of-the-dealerships dept.
einar writes:
"New Jersey's governor Christie has decided that all new motor vehicles must be sold through middlemen. This blocks Tesla from directly selling cars, without traditional car sellers. Although, New Jersey decided so this week, they are in good company: 48 states in the US ban or restrict direct car sales."
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Tesla Direct Sales Blocked by Law in New Jersey
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(Score: 4, Interesting) by Grishnakh on Friday March 14 2014, @04:11PM
Good point. So what will trigger the fall of the USD? Obviously, a major shortage of oil as you mention, but that seems pretty unlikely these days thanks to fracking, Canadian oil shale, etc. Printing more and more dollars can only be done for so long when most of the population is non-productive or doing bullshit jobs [nakedcapitalism.com]. Or is the future portrayed in Karl Urban's movie "Dredd" what we have to look forward to, with 98% unemployment and most people living in gigantic city-buildings, with fascist cops acting as judge, jury, and executioner?
(Score: 4, Informative) by tftp on Friday March 14 2014, @05:05PM
So what will trigger the fall of the USD?
First, let's set aside all catastrophic events; they are not controllable, and they certainly can ruin the day of any country.
Then the next most pressing issue becomes the mass of people on welfare. Social security is incompatible with having a job, so those people are either not working, or looking for a cash job. (I tried to give a job to a person on social security; he refused to take it, saying that "it's too risky - what if I can't hold it?") Not having a job for a year or two means loss of skills, discipline, and ability to hold a job in the future (see just above.)
As the number of people on social security grows, they need to be fed. This money can come only from those who have a job, those who work. Some of them are domestic taxpayers; other are foreign creditors. The taxpayers may be unable to wiggle out[1], but foreign creditors can easily stop buying US debt. (They haven't, so far, because the US debt is a pyramid, and the US government is able to pay interest by borrowing and printing even more.) If the US government cannot borrow, it will default - this had been told to Congress several times already, and that's why Congress obediently raises the plank each time. A default will make getting credits impossible. Without borrowing there won't be enough money to service the existing debt. The value of USD on the international market will crash, as everyone and their dog will be selling USD. The USA will have as many USD as it can print, but nobody will be taking them. Trade partners would want something else - gold, barter items, or maybe fiat currency of more responsible countries. The USA won't have much of that.
One could say: "Let the USD crash and burn - this is an external matter; inside the country it doesn't matter, except that foreign items will be very expensive." That's so. But this country cannot survive on domestic production alone. There is very little manufacturing left. There is R&D, a good amount of that, but no R&D can function if you cannot buy parts for your research. I'm already suffering from that because some ICs are not even sold in the USA, and cannot be bought. Some parts don't even have a datasheet in English. It won't be possible to design another iPhone if your company cannot pay for a phone call to Taiwan.
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[1] Taxpayers can go Galt [wikipedia.org] if holding a job is less appealing than collecting welfare. We already have taxation brackets that require you to watch your income; one extra dollar earned can cost you thousands of dollars in extra taxes. There is also natural attrition - older workers retire, but new ones are not hired. International businesses are OK with that - they have already moved all their manufacturing to Asia, and many R&D facilities are already there as well. A US worker is very, very expensive, and it costs a lot of money in general to run a business in the USA. Ideally, the company would be using the USA only as a market. This is something that the US President should be losing his sleep over.
(Score: 2) by Grishnakh on Friday March 14 2014, @07:55PM
We already have taxation brackets that require you to watch your income; one extra dollar earned can cost you thousands of dollars in extra taxes.
Which brackets are those? I've been doing taxes manually for years and never saw that (but I wasn't exactly looking for it either).
(Score: 2, Interesting) by tftp on Friday March 14 2014, @08:44PM
Most people don't get into those situations because the income tax on earnings is marginal, such as the higher tax rate is applied only to the amount above a certain value. However there are many other taxes, and I remember encountering such a situation before. The most obvious example is the difference between long term and short term capital gains. It is absolutely essential to know when securities were bought before you sell them because you may lose money on a profitable sale. There are other catches, like this one [irs.gov]:
These numbers may look high, but imagine that you were building up a business, saving every penny, living on Ramen noodles for twenty years... and one day you sold your company for $5M. Guess what, you will get a haircut as if you were earning $5M for every year out of those ten. It's very difficult to sell an expensive object (a business, a building, or land) and not be hit by sky-high taxes as if you are Bill Gates.
So generally it's complicated. Nobody knows all of the Tax Code. I do not do my taxes, I outsource it to people who know what they are doing, and I listen to their advice. Here is a great story [wordpress.com] that everyone must read. Sweden at that time was famous for taxes with gradient of +infinity.