I came across this while surfing the 'net.
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I think the question at the end is a very valid question, not only in America, but worldwide. The worldwide gap between the rich and poor is increasing, despite the industrialization and development of many regions. Why is this happening, and what realistic steps can we as a nation and global community do to reverse this trend?
Very insightful and intelligent thoughts by Buffet, no doubt. Discuss his observations, your observations, and perhaps your own thoughts on his responses.
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A very interesting observation. Personally I think the Democratic Party (at least at the Federal level) really aren't doing much to realize that goal. Perhaps it is what the party is supposed to stand for, but in reality it takes very small steps to achieve this. I am of the belief that government works best when it is decentralized, at least to the point where city, county, and state government is of much more importance than it currently is.Q: "Buffett, why are you a Democrat?"
A: I have what I call the minus 24 hour genie test. Imagine a genie poofed up 24 hours before you were born and asked you what kind of world you would want to live in. And you being the smart minus 24 hour baby would ask, "what's the catch?" And the genie would respond that you would have to participate in the "ovarian lottery" and draw one of 6 billion tickets. Things such as born United States or Bangladesh; white, brown, or black; male or female; smart or dumb; these would all be completely up to chance. Well then, what kind of world would you create? And my [Buffett's] world would be a society with equality that treated everyone fairly. And the Democrats seem to be better at doing that.
A very valid analysis in my opinion. Clearly Buffett is not the first to bring up the idea of future generations paying off debt that we currently accrue, but his ability to create a sound analogy is what strikes me as intelligent. Notice that his focus is not on the value of the American dollar vs. other currencies, or the fact that he doesn't even address the decline, but more an overall generalization of why the way our economy is currently structured will not work.Q: Your views on the US Dollar?
A: The most important question to ask in economics is "X happens, and then what?". We are living prosperously but every day we are sending 2 Billion dollars overseas because we consume more than we purchase. It is similar to if we owned say a large farm in Texas. We are extremely wealthy, but every year we mortgage a little bit of that farm in order to enjoy more of the present. And it is gradual, but then at some point you have to spend an hour or maybe 2 hours a week of your work to go towards servicing this debt. The problem is at some point either foreign investors will stop financing our consumption, or our future generation will be burdened with a debt and have to work some X hours towards servicing the debt of the earlier generation. But the present over-consumption is unsustainable.
Warren Buffett is one of the wealthiest men in the world. He has an enormous vested interest in many Forbes 400 companies. Why would he be advocating an overhaul to the taxation system and also an increase in real wages if his investments would take an immediate hit? Perhaps he foresees a restructuring of the tax and wage laws as a long-term benefit to the economy and standard of living.Q: On Taxes.
A: In the U.S., 2 Trillion out of 2.5 Trillion in taxes come from income and payroll taxes. Of those, 60% is income taxes, and 40% is payroll taxes. I [Buffett] did a survey at Berkshire HQ and the average worker paid 33.2%. I paid 17.7%.
The worth of the Forbes 400 was 220 Billion in 1987, and for 2007 it is 1.5 trillion. A seven-fold increase. During the same period, wages went up only 80%.
Emphasis added.Q: Sense for the future of our country Warren?
A: In the 20th century, real standard of living increased seven-fold. That was unprecedented, and included the Great Depression and other scares. The American system has unleashed the greatest potential of its citizens. Back in 1790, China had 290 million people, and America had 4 million. But today look where we are at. We will be better off in the future, the real question is how it will be shared.
I think the question at the end is a very valid question, not only in America, but worldwide. The worldwide gap between the rich and poor is increasing, despite the industrialization and development of many regions. Why is this happening, and what realistic steps can we as a nation and global community do to reverse this trend?
Very insightful and intelligent thoughts by Buffet, no doubt. Discuss his observations, your observations, and perhaps your own thoughts on his responses.
Last edited by KEN-JENNINGS (2007-12-18 12:54:12)
