How do you determine how much to spend on speakers

Spend the most money on the speakers, only if you are serious about upgrading the electronics later. Speakers make the biggest difference in your system. The differences between dynamic cone driver, dynamic cone driver with ribbon tweeter, planer and electrostatic speakers are bigger than anything electronic. Of course, you have to buy the speakers that match your room and taste.

The GIGO argument is weak because a $500 or less (used) cd player does not put out garbage and is in fact closer than you think to the megabuck cd players. The GIGO argument was valid when it came to turntables and cartridges back in the '80s and computers. Not today with cd players.

Furthermore, Speakers are the not that easy to upgrade because they can be difficult to ship. Most people I know rarely buy used "big" speakers on Audiogon. Electronics are generally easier to ship, so experimenting is more convenient.

again i put my 2 cents in. i still think electronics are more important.mostly amp. but if you are going to upgrade later go ahead and build around your speakers. you can buy the older jm lab electra speakers at half off even from dealers. 2500 for a pair of 920s. dont spend alot on cd players as next month the next 296 499 format will be out. it is like buying the best computer.

The most important thing about building a system is component matching. You can go out a spend all you dough on "class A" components and end up with system that sounds very very bad. This happens more often than not. That is why there so much equipment for sale on Audiogon. Most people don't know what they are doing and have to upgrade all the time because they are never satisfied with the sound.

Make sure you know what you want before you buy anything. I think the most overlooked thing about choosing speakers is their sensitivity and impedance. This will determine what kind of amp you will need to buy.

For instance, if you like electrostatics or planar speakers, you will have to buy big solid state gear since these speakers are difficult to drive and have low sensitivity.

If you like the sound of tube gear, then you should buy effecient speakers (>93db/w/m).

Things like sonic characteristics is also important because if you buy foward speakers and match it a foward amp then you may get an unbearable stereo system.

Everyone will tell you their system is the best sounding system in the world and every review will tell you that some component sounds better than anything twice its price. Its all bunk.

Make sure you know what everything will sound like together before you buy anything.

I always recommend easy to drive speakers because it will give you more options when choosing your other gear.

If you have a very revealing speaker (or video display in a HT), you will hear (see) deficiencies in your upstream components. I would recommend settling on a neutral, musical speaker that does not emphasize detail or soundstaging, but which has the correct overall tonal balance for your ears and type of music. Then get the best electronics you can afford. In other words, high end speakers driven by average electronics will NOT sound as good as good electronics driving average speakers. I am also a fan of Vandersteen speakers; my Model 2cis have continued to show more and more of what they can do as I upgraded my source and electronics. My current system has $(speakers)< $(preamp)= $amp = $CD. Or maybe better stated as 16% speakers, and 28% each in the amp, preamp, and CDP, for a total system list (new) of about $7.5K. Not part of an overall plan, just how it worked out. And this does not count cables and stands. Of course, with the exception of the speakers, I bought it all used for less than 1/2 of list.

It depends.
I used to use the rule of thumb of 50% of the total budget on speakers. That worked well (40%+) until I found a great speaker that could be made arguably the "best speaker on the planet" by actively bi-amping them. Now the actually speaker price is a mere 25% of the total price.
I think that with the high quality of some of the speakers today, the percentage of the total system cost has dropped.