Head of largest hedge fund says economic downturn could leave U.S. at each others throats

[steve2470]

https://www.marketwatch.com/story/head-of-largest-hedge-fund-says-economic-downturn-could-leave-us-at-each-others-throats-2018-01-03?mod=MW_story_top_stories


Ray Dalio is worried that an economic recession could foment unrest in a polarized America, resulting in segments of the population feeling marginalized in the face of stagnant wages and tax cuts for the wealthy.

The founder of Bridgewater Associates, widely viewed as the largest hedge fund on the planet with assets of about $150 billion, made his comments during a recent interview with The Wall Street Journal.

Dalio makes the case during the interview, reiterating some long-held views, that the Federal Reserve’s policies have fostered outsize risk-taking and lofty valuations in the stock market, with the S&P 500 index SPX, +0.70% the Dow Jones Industrial Average DJIA, +0.88% and the Nasdaq Composite Index COMP, +0.83% setting repeated records over the past the year amid ultralow interest rates.

The hedge-fund manager believes that despite less regulation, corporate tax cuts will leave out the bottom 60% of U.S. households, fostering resentment. The investor says recent fiscal stimulus espoused by President Donald Trump won’t result in economic growth and that rich returns in the future will be hard to come by.

[elleng]

1. Major segments of the population already feel marginalized

in the face of stagnant wages, but this fact is covered up by trump and his major sycophants' bluster. Unrest not far away, imo.

[unblock]

2. Foxnews has been sowing the seeds of civil war for decades

Donnie merely makes it obvious

[Raster]

8. Faux News is nothing but an overbearing digital pander...

...to lower-class, uneducated white malcontents. Faux News feeds on their dissatisfaction and plays on their pain.

I sincerely hope Rupert Murdoch soon joins Roger Ailes* as he burns in hell.

[Turbineguy]

3. No worries.

Trump will just tell his supporters that having no job and living in their cars is a sign the economy is booming.

[Raster]

4. Nick Hanaeur has been warning about wealth disparity in this country for awhile...

From 2014:

https://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014


The plutocrats and wealthiest of the wealthy have no intention of sharing the wealth... their focus is to INCREASE their wealth as much as possible. I believe the lure of wealth at that level is somewhat of a drug. And I believe the morality index tends to fall the more a person chases the drug of wealth.

[quartz007]

6. Yes, wealthy must pay more!

More than $1 million income/year, should pay 50-75% range.
No individual can wisely spend more than one million in a year.
But I am opposed to the death tax, because it is tax on top of tax.

[Raster]

7. It's called the "Estate Tax", and I am not opposed to it...

...it helps hinder dynastic family monopolies from taking hold and remaking the long-term societal fabric to their liking. We rid ourselves of genetic royalty years ago, now is not the time to start anew.

[quartz007]

10. If you earn big money honestly,

and you already have paid your very high tax rates,
your estate belongs to your natural heirs,
and not the IRS.

And I have seen historically that MOST heirs of rich people squander their wealth and disappear into the wood work.

How many dynasties do you see named Carnegie, Vanderbilt, Astor, Stephen Girard, Alexander Turney Stewart
Weyerhaeuser, Jay Gould, Marshall Field etc who are among the 10 richest Americans ever.

[unblock]

9. it is not a tax on top of a tax. on the contrary, without it, there would be a tax-free transfer.

if a rich person, an hour before death, gives a fortune to a child there would be a gift tax on it.

if that same gift happens upon death, why should it be tax-free?


the cries to repeal the estate tax are literally pleas of extremely privilege heirs to multi-million fortunes who want free money.

[quartz007]

11. if you made very big bucks HONESTLY

and you already have paid your very high tax rates,
your estate belongs to your natural heirs,
and not the IRS.

And I have seen historically that MOST heirs of rich people squander their wealth and disappear into the wood work.

How many dynasties do you see named Carnegie, Vanderbilt, Astor, Stephen Girard, Alexander Turney Stewart
Weyerhaeuser, Jay Gould, Marshall Field etc who are among the 10 richest Americans ever.

[unblock]

12. I convince bill gates to give me a million bucks. I pay gift tax.

I convince bill gates to leave me 90 billion bucks, his entire estate, when he dies. No taxes?

Why on earth should that be exempt from taxes?

[quartz007]

13. You are NOT his natural heir

unless your mother knows otherwise!!! j/k

But yes, it is Bill's money, earned honestly, and he paid taxes every year on his income, so Bill can do whatever he wants with HIS money. It does NOT belong to the IRS.

I will grant you, though, that Bill's tax rates were not high enough! If I were to set the tax rates, Bill Gates would be worth no more than $9 Billion instead of $90 Billion.

Point is, what your parents earned and accumulated, belongs to their heirs.

[unblock]

14. that makes no sense.

first off, i don't know why it matters to you whether or not an estate beneficiary is a "natural heir".

neither tax law not public policy regarding taxes should care.

it may come into play where there is no will, fine, but that has nothing to do with taxes.


regardless, the fact that "it's bill's money" also has nothing to do with tax policy. if he gives it to me when he's alive, there's a tax. why should it be different if he gives it to me when he's dead?

generally speaking, the irs gets a cut every time money is transferred from one person to another. there are some specific exemptions and exceptions, such as charities or gifts below some $14,000, but there's no logical reason why a transfer of billions should be exempt from taxes just because it happened through a will.

[quartz007]

15. There is NO EVIDENCE

that lack of high estate taxes has created dynasties in America.

These people below were among the top 10 richest ever
in America, adjusted for inflation

Carnegie,
Vanderbilt,
Astor,
Stephen Girard,
Alexander Turney Stewart
Weyerhaeuser,
Jay Gould,
Marshall Field

I have not seen those names in any of the current crop
of richest people in America. Their heirs obviously lacked the caliber to prolong the dynasty. That happens again and again. So, I am not ready to confiscate any estate which was legally and honestly accumulated.

On the other hand, I am all for increasing CURRENT taxes on rich incomes, so we build fewer dynasties in future.

[unblock]

16. you seem fixated on this one argument about estate tax and destroying dynasties

the estate tax does not, per se, have anything to do with dynasties.

bill gates could bequeath all his money to his family, sure; or he could randomly pick 1,000,000 people and give them each, whatever it comes to, $85,000. doesn't matter, the estate tax applies either way.

and justifiably so, because it's a transfer of money from one person to another, which is taxed in virtually every other context.

the estate tax simply plugs a gap in tax coverage. it's a transfer that otherwise would be tax-free for no good reason.

why should billionaires get a special pass to allow tax-free transfers that aren't tax-free in any other context.


doesn't matter whether the transfer is passing on a dynasty or not.

[quartz007]

17. Yes, because of one simple reason

Whatever money I save for my children, should go to them 100%. The rate at which my house is appreciating, and my 401-k and IRA is appreciating (up 40% during last 12 months) I may very well end up paying death tax when I kick the bucket.

[unblock]

18. Ah, there we go. Its a bad idea because it affects *you*. I see.

I get money from my boss, I pay taxes.
I give money to my grocer, he pays taxes.
He pays his landlord, his landlord pays taxes.
The landlord wins the lottery, she pay taxes.
She gives more than $14,000 to a friend, the friend pays taxes.

But *you* give multiple millions to your kids in your will, and *that* transfer is oh so special it needs to be tax exempt.

Wow. Love it when a multimillionaire tells me there’s some kind of principle behind the notion that taxes are for other people to pay.

[quartz007]

19. Yeah, I love my kids more than IRS

I am not there yet, to pay any death tax.
But should I get there, I want my savings to go to my kids, and not the IRS.

[quartz007]

5. The traffic in my city is horrible!

Especially during rush hours, Jacksonville,FL expressways become parking lots. Too many cars, not enough hiways, too many jobs, and cheap gas = Horrible traffic jams.