Lesson 4 - Personal Savings and Investment are Important for the Economy [pt. 1]

[jumpoutatree]

I don't see the reasoning behind the claim of double taxation. If double (or quadruple taxation) is true, why not taxation to the nth power? Every time a dollar is transferred from one entity to another, the transfer is regarded as income, and is therefore taxed. It is the amount of income that is taxed, and only once per transaction. The amount of times each dollar gets taxed is irrelevant. If my father dies, his estate comes to me as income. I pay a tax upon the receipt of that income.

[WideWorldOfWisdom]

Your vids are great.

Fallacy: there are not NECESSARILY "stiff penalties" for borrowing from your retirement plan. There are actually few situations in which you wouldn't want to do so (to invest the borrowed money, of course).

If your 401k has $10,000 in it earning 5% interest, but you have an opportunity that will earn you 12%, it would make sense to borrow from your 401k. The interest on the loan would be ~3-4%, you would still come out ahead.

Plus, you're paying the interest TO YOURSELF.

[Questfortruth86]

Can some one explain the golden rule steady-state situation for the solow model? As far as I understand it it's when an increase in one unit of capital is counteracted by an increase in depreciation, so it's when MPK=0, or MPK=Delta, or MPK-Delta=n+g. But if this is the case, how could any nation have it's steady-state above the golden rule steady-state? They would be incurring losses due to depreciation; doesn't make a lot of sense to me.

[BasicEconomics]

GR = a saving level wherein consumption per worker, is maximized. In this steady state, the level of capital input = capital depreciation maximizing consumption per unit of labor. When capital stock is below the GR level, increases in capital stock raises outputs higher than depreciation so consumption rises. If capital stock were above the GR level, any increase in capital stock would result in a reduction in consumption as the increase in production is outweighed by increases in depreciation.

[Questfortruth86]

"When capital stock is below the GR level, increases in capital stock raises outputs higher than depreciation so consumption rises."

But to increase the capital stock you have to increase the savings rate meaning a drop in consumption, as there is an inherent trade-off. Thanks for the help by the way, I'm kind of confused.

[BasicEconomics]

There is a short term pinch in the transition, in the long run the higher savings rate will generate higher levels of output...

[m16adabest]

What apptendo said. BE is an EXCELLENT source

[Apptendo]

You need more subscribers

[BasicEconomics]

Well my channel has only been up for 2 weeks, but would appreciate any tips on how to grow my subscriber base... any thoughts?