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Posted By: Ben Jones @ 12:32 am
Greece is saved, we are all saved; well until the next time
Eurozone finance ministers and the IMF have reached a deal on an urgently needed bailout for debt-laden Greece.
They have agreed to cut debts by 40bn euros ($51bn; £32bn) and have paved the way for releasing the next tranche of bailout loans - some 44bn euros.
Greek Prime Minister Antonis Samaras welcomed the deal, saying “a new day begins for all Greeks”.
So… what they’re saying is… that the EU:
1) Forgave Debt
2) Then.. lended MORE money
Yeah… I’ll bet the Greeks welcomed the deal. Where do I get this deal?
Well…if there’s one thing we know about bankers, it’s that they’re not throwing money away because they love the people of Greece. They’re doing it to help themselves. Which I assume means that something about their system requires the facade that everyone is in it together to continue. At least for now. Which probably means something really interesting will happen in the future when the facade comes down.
Most Europeans are sick of supporting Greece with subsidies. However, just like communism would not allow any country to leave its orbit once they became communist, the reason for invasion of Afghanistan by the U.S.S.R, I think that the one world folks do not want to see any country leave the EU.
The belief that national borders must be done away with is common among the PTB even when the citizens of most countries want to have national boundaries.
“I think that the one world folks do not want to see any country leave the EU.”
My guess is the logic behind it is if no one sees the rats deserting the sinking ship, then the ship isn’t sinking, right?
One reason to throw away 80 billion or so is if you’re strip mining more than 80 billion of assets from the country. So, a greek beach house isn’t worth $1M E… It probably is worth $100K E. But if you crash the economy then the PTB 1%ers whatever can buy it for $10K E…
It doesn’t even have to break even… that “investment” of the public’s 80 billion might be worth it if it results in a couple billion profit for the rich guys. Or if keeping the game going a couple more months results in 80 billion more revenue than hitting the reboot button… The reboot button isn’t going to get pressed until it results in more profit than BAU. It’ll arrive, but not for awhile.
Last time I checked we don’t allow states to quit our little club either. We even had a war about that.
That was then. This is now.
I’ve heard Germany needs the broke states to keep the Euro down. Helps their export driven economy.
Reply to Ben’s request for sources on bailout costs when I quoted 7 TRILLION.
It was posted yesterday directly below his request, but I have re-posted here in case it is missed:
4.6 TRILLION. More or less direct
Googled “total wall street bailout cost”
12.8 TRILLION “According to a team at Bloomberg News, at one point last year the U.S. had lent, spent or guaranteed as much as $12.8 trillion to rescue the economy”
14 TRILLION overall.
9 TRILLION in emergency overnight, super-low interest loans.
Googled “total government bailout spending”
9 TRILLION in gov direct investment
I’ve tried to use the more mainstream and more or less conservative references as the more “fringe” sources say 20+ TRILLION.
Did the Fed ever produce a full accounting of the many trillions in bailout monies it tossed hither and yon over the various tendrils of the global Megabank, Inc cartel in the aftermath of the 2008 financial panic? It is quite challenging to reconcile various estimates of the total which differ by trillions of dollars.
Ok, you’re referring to the Federal Reserve stuff, which is most of what’s listed there. I knew about that. This was only revealed because of Bernie Sanders. It was a one time thing, as most people in DC don’t want to audit the Fed. This could be going on every month, and we’d never know.
If you remember, Bernanke got criticized for ‘printing’ 16 trillion dollars. He came back and said they hadn’t printed it, the Fed had that in reserve. But, we have people even here on this blog that say the Fed gives profits to the government? I guess they call that petty cash at the Fed. (BTW, the Treasury doesn’t bail anyone out. They are broke and have to be bailed out every business day by the Federal Reserve.)
I guess I don’t know what you are worried about. This govt has already gone over the ‘fiscal cliff’ years ago and will never pay what it has promised, because the public can’t pay for it. It’s funny to hear the media gasp, ‘oh they might cut the Mortgage Interest Deduction!’ Ha, there a whole lotta stuff that will be cut. Remember the third rail of entitlements? No third rail anymore.
So you voted for this stuff right? Who can you blame but yourself?
So you voted for this stuff right? Who can you blame but yourself?
This is basically beyond our control. Has been for a few decades, maybe longer.
‘basically beyond our control’
Not really. This past election cycle I was amazed to watch, night after night, young people chanting “End the Fed” on youtube. But I never saw it once on TV. Makes you wonder.
Now the Fed announced, before the election, that the plan to save us is a housing bubble. I haven’t seen one major media outlet ask, “uh, didn’t we just do that?”
Is it too late? I don’t know. When I see people storming Wal-Mart, at midnight, to buy imported plastic crap, I have my doubts.
I’ve said this before; we’re at a point where the govt literally doesn’t need taxes. They slowly moved into a situation where the central bank is funding the govt through fiat. So why do we have taxes? To keep up the illusion? To prevent the majority from accumulating enough wealth to be self reliant? Most people are OK with it as long as the lights don’t go out and MacDonald’s is open 24 hours.
“Now the Fed announced, before the election, that the plan to save us is a housing bubble.”
The plan is working, as seen by home price “improvements” all across the land. We’re saved!
Nov. 27, 2012, 10:34 a.m. EST
City-by-city look at U.S. house prices
By Ruth Mantell, MarketWatch
WASHINGTON (MarketWatch) — Here’s a city-by-city breakdown of the S&P/Case-Shiller 20-city composite, which showed a 0.3% increase in home prices in September, not seasonally adjusted.
Prices rose in 13 of 20 cities in September, but the overall level remained about one-third below a 2006 peak. Full story: U.S. housing ‘in midst of’ recovery: Case-Shiller.
Atlanta: Prices rose 0.3% in September but remain below levels in 2000. However, on an annual basis, prices inched up 0.1%, reversing more than two years of annual declines.
Boston: Prices decreased 0.6% in September, with an annual gain of 1.9%.
Charlotte, N.C.: Prices decreased 0.3%, and increased 3.5% over the past 12 months.
Chicago: Prices decreased 0.6% in September and are down 1.5% over the past year, making this city one of two with negative annual results.
Cleveland: Prices decreased 0.9% in September, the worst among cities tracked by Case-Shiller. However, prices are up 1.4% from a year ago.
Dallas: Prices rose 0.2% in September and were up 4.4% from a year earlier.
Denver: Prices rose 0.4% in September. They’re up 6.7% in the past year.
Detroit: Prices remain below 2000 levels in the city but increased 0.7% in September and are up 7.6% from a year ago.
Las Vegas: Prices here remain below 2000 levels, but they rose 1.4% in September and were up 3.8% from year-earlier month.
Los Angeles: Prices rose 1% in September and are up 4% from a year ago.
Miami: Prices rose 0.1% in September and are up 7.4% from a year earlier.
Minneapolis: Prices rose 1.1% in September and are up 8.8% from the prior year.
New York: Prices ticked down 0.1% in September, and are down 2.3% from the prior year, making this city one of two with an annual decline.
Phoenix: Prices here rose 1.1% in September, and are up 20.4% from the prior year, the largest annual gain among the 20 cities.
Portland: Prices rose 0.2% in September; they’re up 3.7% from a year prior.
San Diego: Prices rose 1.4% in September and are up 4.1% from September 2011.
San Francisco: Prices rose 0.5% in September and are up 7.5% from a year before.
Seattle: Prices increased 0.3% and are up 4.8% in the past year.
Tampa: Prices were flat here in September and were up 5.9% from a year prior.
Washington: Prices were also flat in Washington and were up 3.2% from a year earlier.
“So why do we have taxes? To keep up the illusion? To prevent the majority from accumulating enough wealth to be self reliant?”
Why not just abolish taxes entirely, and openly acknowledge that the fiat money printing press technology is what keeps the system afloat?
Because the sheeple don’t know that fiats are not backed by gold?
Ben Jones wrote: “So why do we have taxes? To keep up the illusion? To prevent the majority from accumulating enough wealth to be self reliant?”
CITB wrote: “Why not just abolish taxes entirely, and openly acknowledge that the fiat money printing press technology is what keeps the system afloat?”
Currency is a logical construct. Be it gold coins or slips of paper. It retains its value due to its scarcity, and the willingness of others to accept it in order to purchase something from them.
The Fed is the fountain of currency. Those closer to it typically are able to gather more currency than those farther away, typically.
The printing press allows those connected to the Fed - its favored sector(s) and those working in it - to enrich themselves. If they’re disciplined about it, and give up just enough so that they avoid popular unrest, they can keep it up for a long time.
Think of this - some guy working in the currency printing office helping himself to a 100,000 here and there a few times a year. Won’t have much impact on the economy at large, although it might drive up prices locally. In wealthier areas, one notices everything is more expensive because the wealthy are willing to part with more money.
Now, if the Fed and those near the Fed’s fountain stay disciplined, the party can continue for some time. The Fed officials live in a bit of an echo chamber. Economics is not an exact science by a longshot.
As long as they keep access to excess currency among a tightly connected and controlled circle, the party should be able to continue. However, the one time inflation really played a significant role was in the late 70s, early 80s. And it was the only time in memory that half of the Senate was swept out (but 91% of the House was retained):
As I’m looking at that opensecrets chart, it does show an increasing turnover in the House and Senate in recent elections. That’s a positive development. Here’s a list of the incumbents who were defeated this time:
I’d like to see a clear breakdown of the rates. But anyway, I’m thinking taxes remain because of historical tradition, and to help maintain the scarcity of the currency, and to force people to gather sufficient amounts of it so that they can pay the US government, which further cements the acceptance of the currency among the general public.
So Ben, I guess my question is:
With what do you replace the Fed? How do we standardize and regulate our currency from State to State domestically and vis a vis the IMF internationally? And how do we structure our banking system so one bank doesn’t end up with a monopoly like…the Fed?
And what of free markets? After all, the bankers who “own” the Fed earned that money fair and square over generations of hard work. Are you suggesting we just confiscate their business? Wouldn’t that be communism?
You’ve obviously given this more thought than most; what do you think should be done?
taxes remain because of historical tradition, and to help maintain the scarcity of the currency, and to force people to gather sufficient amounts of it so that they can pay the US government
The last one is the key. If you must pay your taxes in dollars, then you must get dollars in order to pay. That makes a currency, a currency.
I really enjoyed touring the feed several years ago and got lucky that Carl W. Turnipseed, one of the executives happened to drop by and give us a little speech. I was especially comforted when (I wish I had the exact words here) he told us that America had a strong currency because it was backed by the federal reserve, and that we could trust the federal reserve because it had the full faith of the US government behind it. Funny stuff! I wanted to say something but 80 feet underground in some vault I didn’t want to raise waves and got on any lists.
Was that sarcasm? I’m having a hard time putting together the story you tell of how the delegates were taken from Ron Paul at the Republican National Convention but your belief that the people are still in control here.
‘Was that sarcasm’
I was answering ecofeco, I think. It’s hard to post from the front of a truck.
I’m a bit confused as well. This system was built over the last 30 years and will not be fixed overnight.
And it all began with deregulation during Reagan’s admin and was mostly a product of the Repubs, ALTHOUGH the Dems are not blameless. But it was almost ALWAYS a Repub initiative that resulted in less and less oversight of the FIRE sectors and less and less recourse for J6P.
I too saw what happened at the Repub convention when Ron Paul had enough votes to be nominated and the Repubs changed the rules right in front of our eyes, on national TV, to prevent his nomination. The “people” were screwed.
eco, I’m pretty sure you voted for the people who allow these Fed ‘bail-outs’ to continue. That’s what I was referring to. I don’t hear much talk from Democrats to audit the central bank. Talk about deregulation!
Actually, I didn’t vote this year.
And you’re right, we’re not hearing much from Dems for a Fed audit.
We fondly remember when Congress failed to pass TARP the first time and the DOW dropped 700 points because the pigmen didn’t get their gibs-me-dat from Uncle Sugar
“This is the strongest global economy I’ve seen in my business lifetime” — Treasury Secretary Henry Paulson, July 2007
“We repaid TARP so we’re still the masters of the universe,” they have the nerve to say.
TARP was nothing. Money was taken off the top, for years, but those in control. Those who didn’t get it will be paying for it the rest of their lives.
NY gated, private communities now want public aid.
Ordinarily, New York City or other governmental entities might take over the tasks of restoring a Sandy-damaged middle-class neighborhood like Sea Gate. But with its 850 homes on Coney Island’s western tip, this is not an ordinary neighborhood. It is a 113-year-old private, gated community, where the razor-wire-topped fences and armed security checkpoints that keep outsiders from its streets, beaches and parks serve as a constant reminder that the residents of this community have chosen to live apart from their fellow NYC citizens.
Once the gilded retreat of the Vanderbilt family, Sea Gate, like other gated communities in New York, preserved its exclusivity with the promise that the residents would assume the costs of community upkeep, maintaining their own streets, parks and sewer systems and even fielding the distinct Sea Gate Police Department.
The gated residents who are already struggling to figure out how they will pay to rebuild their homes say they cannot afford to pay the additional cost of repairing communal infrastructure which obligations their organizations had previously agreed to bear.
That turnaround has been ill-received among some on the other side of the fence. “They seclude themselves,” said Mr. Cesar Catala, a nearby apartment dweller who has lived in Coney Island nearly his entire life. “We don’t have problems with Sea Gate, but they put their noses down at us. We get treated like we’re second class, just because they live in houses and we live in the projects and we rent.”
The city does not appear to have a formal obligation to provide infrastructure services, like road and sewer maintenance, that gated communities agreed to maintain.
“Now, with this to anyone who had been paying attention the extent of Sandy’s storm damage was not at all unexpected act of God, those same communities, quite ready to point a finger at government shortcomings, are placed in the hypocritical difficult position of having to reach out to government for a bailout substantial helping hand,” said Paula A. Franzese, a law professor at Seton Hall University who has written extensively about gated communities.
Local government officials are improvising for now, not sure what the fine legal boundaries are and whether their efforts will extend to rebuilding the infrastructure.
“We should help people in disasters but we should hold people responsible for what they’ve agreed to be responsible for,” said Charles Brecher, research director at the nonpartisan Citizens Budget Commission.
In the past, real estate developers of private communities would apply to get the names of any city streets within their plots removed from official city maps, which required a vote by the City Council.
If demapping was approved, the street essentially became private property and the community could choose to bar nonresidents.
Pinny Dembitzer, president of the Sea Gate Association, said that since the national economic downturn, many residents were unable to pay their rent maintenance charges averaging $3,000, which could jeopardize the solvency of the association. Now, he said, they found themselves in “a Catch-22 situation.”
“If they get enough money to build their homes, they can’t have enough money to rebuild the sea wall,” he said. “But if they don’t rebuild the sea wall they can’t rebuild their homes.”
I think I know how this is going to turn out. What say all you HBBers?
What say all you HBBers?
They’re rich and well-connected. I see a total bailout, after which they wall themselves off from the deadbeats who bail them out.
Crony capitalism rules.
To me, they sound plenty wealthy enough to qualify for a federal bailout.
Hadn’t thought of it that way. I like your style.
They can use their bailout proceeds to help fund a propaganda campaign next election season against the 47 percent of the electorate who only take from the rest of us.
from the rest of us.
What do you mean, ‘You people?’
That looks like a punctuation fail. Should be (I think):
What do you mean, ‘You people’?
Socialize the losses, privatize the gains.
“same as it ever was, same as it ever was” — the Talking Heads
The real free sh#t army.
You may ask yourself, how do I work this?
You may ask yourself, where is that large automobile?
You may tell yourself, this is not my beautiful house
You may tell yourself, this is not my beautiful wife
Letting the days go by, let the water hold me down
Letting the days go by, water flowing underground
Into the blue again, after the money’s gone
Once in a lifetime, water flowing underground
How is that “crony capitalism”? If anything, that is crony socialism, as the private parties are asking for bailouts from the government, not other private money interests.
It’s getting old and tiresome, but the liberals round these parts love to blame capitalism for all the evils of the world… meanwhile, they don’t even recognize their own system’s shortcomings. This issue is about the rule of law. The private community decided to go its own way, apart from the rest of New York, and now it needs to deal with the financial and legal consequences of that decision.
Capitalism requires failure, too bad our society, from our K-12 educational system on up through our financial and political system pretends failure doesn’t exist. No, this isn’t capitalism… but it is well on its way to socialism.
How is that “crony capitalism”? If anything, that is crony socialism,
Perhaps you don’t understand what crony capitalism means, just as you don’t understand the difference between liberalism and socialism.
Crony capitalism is a term describing an economy in which success in business depends on close relationships between business people and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, or other forms of dirigisme
Crony capitalism is a term describing an economy in which success in business depends on close relationships between business people and government officials.
I don’t think that word means what you think it means…
This isn’t about a “business” relationship or success in business. It is a housing community that decided to go it’s own way and now has to deal with the financial consequences. This is socialism gone wrong, as these people want a government bailout from their own mistakes…
Capitalism says the market determines what the allocation and cost of capital is. Capitalism and the market says these people can’t afford to live there, so they should move… Socialism says they can continue to live there by redistributing capital from taxpayers to rebuild the community. Who’s right?
Here’s a hint… the market is right, but government won’t let markets determine much of anything these days.
you don’t understand the difference between liberalism and socialism.
As per the Merriam-Webster dictionary…
liberalism: a philosophy that considers government as a crucial instrument for amelioration of social inequities (as those involving race, gender, or class)
socialism:any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods
Turns out both tend to rely on government, one for social equality and one for economics. I understand the terms quite well, and the Democratic party is rife with both socialists and liberals.
Words mean exactly what you want them to mean, eh? Definitions be damned.
the Democratic party is rife with both socialists and liberals.
It is rife with liberals, and there are some socialists, I guess.
But at least you admit that they mean different things.
But at least you admit that they mean different things.
They both rely on intrusive government to further their agenda.
So do “conservatives”, especially those of the religious stripe, as well as neocons. They just have different agendas.
We all have our chosen enemies in life… I don’t agree with the Fundies or the Neocons, but I despise to my core the “limousine liberal” socialists and their agenda of weakness and entitlement for the masses.
It wasn’t limousine liberals that wanted to give Wall St trillions of dollars for failure.
You are correct. They would rather give it to the poor, the minorities, the illegals, etc. Neither the crony-capitalists that Alpha-sloth derides nor the limousine liberals who love to tax and redistribute are right…
Here’s the latest progressive movement from liberal politicians in MA: minorities from poor neighborhoods in MA who have to rely upon bus transit have longer commute times than white, suburb-dwelling commuters who drive or take commuter trains.
This seems “unfair” to liberals and as such, research is underway to come up with a spending plan on transportation development that is more “fair” to poor minorities. Don’t bother to address the fact that tax receipts from those poor neighborhoods dramatically lag the wealthy suburbs, where many of the tax-dollars, aka transportation dollars come from.
Actually it was:
If you remember the bail out bill received about 170 democratic votes in the house and around 90 republican votes and the biggest limousine liberal Nancy was one of them.
Part of it was the way it was structured even though it was a loan it was counted as an expenditure for Bush II but when it was paid back it was counted as income. Thus, in a sense overstating the Bush deficit by 700 billion and understating the Obama deficit by 700 billion. However, since they both defended wall street from the consequences of the masters of the universe actions, they both deserve to be relegated to ash bin of history.
My other post has posted but this is from the NYT on October 3, 2008:
The final tally in the House was 263 to 171, with 91 Republicans joining 172 Democrats in favor. That was a wider bipartisan majority than vote-counters in both parties had expected, completing a remarkable turnabout from Monday, when the House defeated an earlier version of the bill by 228 to 205.
Has not posted, I meant to say. But the point is it was limousine liberals that wanted to give Wall St trillions of dollars for failure, there were not enough Republicans to pass this bill and a greater percentage voted against it. However, since they were the free enterprise party they deserve most of the blame since they acted against their professed ideology. For the same reason I hold the democrats more responsible for NAFTA, WTO since they should have protected labor. However, it is just a shell game, the agenda of the PTB gets passed no matter who is in “power” only the justification for supporting the agenda changes.
“…our K-12 educational system… pretends failure doesn’t exist.”
Huh? Is there a state with a 100% graduation rate?
PDF warning: http://www2.ed.gov/documents/press-releases/state-2010-11-graduation-rate-data.pdf
“What say you…?”
Welcome to Malibu.
Actually this sounds like a great time to pull a California Coastal Commission and claim public domain of the coastline and prohibit the building of new seawalls, importation of new sand, modification of existing foundations and piers, etc.
Or, for the “private” marketeers here, not allowing government to impinge upon the insurance companies’ rights to set extortionate new premium levels to effectively stop any rebuilding. Either way, where there is no money to be distributed, none will BE distributed (unless some of the affected residents are also elected public officials).
(unless some of the affected residents are also own elected public officials).
Or that. Which is probably a lot more likely.
“Either way, where there is no money to be distributed, none will BE distributed …”
But … but … but think of the coastline, the birds, the baby whales, the surfers …
(uh, never mind that bit about the surfers)
The sharks will get them.
They’ll just cut money for the undeserving 47%.
I say they rebuild the sea wall, and couch surf until they can rebuild their houses. Like the rest of us would do in hard times, less the sea wall.
Do they pay:
State Income Taxes?
Federal Income Taxes?
If so - then why can not they request the assistance of the government entities they are supporting with their own taxpayer money?
This really sounds like a local level thing. They have their own police and beaches. And pay for them out of their own pocket.
And they don’t even sound that wealthy. A $3,000 yearly maintenance fee is going to put them in the poor house??? The REAL 1% spend $3,000 on a weekend getaway…
Because bootstrappers are self reliant and don’t need government help … until they need it.
But remember … it’s only “entitlement welfare cheese” when someone else gets the dough.
Only to a liberal does this logic make sense.
We force you to pay HALF your paycheck in taxes. But if you request ANY services for those taxes you are a hypocrite.
Who pays half? Certainly not the wealthy.
“The REAL 1% spend $3,000 on a weekend getaway…”
The middle class spend $3000 on a weekend getaway when you take the whole family.
And the real .01% spend 3k on lunch.
Paying taxes has never meant the government has an obligation to fix your private property.
I’ll paraphrase a great quote from another source:
“When going get’s tough, the Galts start crying.”
The Galts line up for government aid with the rest of them.
Is this a typo? Or a legit possibility…very cool if so…
I believe it will turn out to be a head fake, saved by backroom deals for the NAR to fund select Congressmen’s future political campaign activities.
Just my hunch…
saved by backroom deals for the NAR to fund select Congressmen’s future political campaign activities.
Ruth Mantell pimping on MarketWatch:
Apartment rentals a ‘landlord’s market’ in 2013
“Vacancy rates for apartment rentals are expected to remain low enough next year to maintain a “landlord’s market” and increasing rents, according to a forecast released Monday by the National Association of Realtors, a trade association.”
Maybe in the land of fruits and nuts, where the economic fundamentals of facebook likes and twitter feeds carry the regional economy.
But in the rest of Amerikwa, median household incomes are down $5,000 over the last five years. There is no “pent-up demand”. The future belongs to Lucky Ducky. Welcome to the recoveryless recovery.
maybe they should sh@t can the earned income tax credit? isnt this the credit that people are gaming getting huge checks back from the govt?
getting huge checks back from the govt
Oh yeah they’re huge all right. The maximum EITC is about $5,800, which is granted to those Lucky Duckies earning the sweet spot income of about $17,000.
That’s some fine, rich living, high on the hog, at $17,000/year. And they probably all get SNAP cards too. And Obama phones.
They’d be better off if the government just gave them cabins behind the big house to live in, and massa’s old clothes to wear, right?
The maximum EITC is about $5,800, which is granted to those Lucky Duckies earning the sweet spot income of about $17,000.
And who have umpteen children.
The program is riddled with fraud…so much so that the IRS doesn’t even track it anymore. It’s a great illustration of how the .01%ers and the ruling class can buy the influence of the underclass. Meanwile…the middle class and wage earners foot the bill and become the “forgotten man”.
Long live the status quo!
Exactly, it is the Roman democracy all over again.
And who have umpteen children
Actually, a quick perusal of IRS Pub. 596 tells us that the benefit maximizes at three children. The “sweet spot” income to get the maximum EITC of $5,751 (for 2011 tax filers) is $12,750 to $16,700 for single or head of household, and $12,750 to $21,800 for married filing jointly.
The amount of SNAP (food stamp) benefits is based on household size up to ten individuals regardless of age.
to get the maximum EITC of $5,751 (for 2011 tax filers) is $12,750 to $16,700 for single or head of household,
Are you sure that isn’t “single and head of household? I don’t think you get a check for $5,751 for being a single minimum wage earner without kids.
Correct. The $5,751 EITC is for single, head of household, or qualifying widow(er) tax filers with three children.
The “sweet spot” income for single with no children tax filers to get the maximum EITC of $464 is $6,100 to $7,600, with a phase out to $0 at the magnificent annual income of $13,650.
“The “sweet spot” income for single with no children tax filers to get the maximum EITC of $464″
thank bill clinton for this one…buddy of mine in his mid twenties able bodied and in great shape got his check sometime ago…he actually called me to ask if it was “legit”.
i said hell yeah…party on wayne!
he smokes alot of weed.
FDR, LBJ, Clinton, and now Obama all directly responsible for this:
Ironic that just 20 years ago, there was a cry that we should stop subsidizing the non-working poor so much and do something for the working poor for a change.
It was bi-partisan.
It was bi-partisan
As were all the the trade treaties, NAFTA, GATT, WTO, et cetera that eviscerated America’s manufacturing base and middle class workforce.
But per some HBB posters, the blame lies 100% with labor unions.
Truer words were never spoken.
Didn’t the UK get rid of their home mortgage deduction a few years ago? I don’t recall hearing anything about the UK sinking into the sea after that happened.
I don’t recall hearing anything about the UK sinking into the sea after that happened.
The UK economy is in the crapper, in part because the government is raising taxes like mad. With all the problems in Greece because of increased taxes and spending cuts in the name of “austerity”, you’d think people would understand the simple premise of higher taxes hurts the economy…
And in part, because like us, they offshored their middle class jobs.
Part? Like us, it’s the MAIN reason.
Mortgage interest relief at source, or MIRAS, was a scheme introduced in the United Kingdom by Chancellor of the Exchequer Roy Jenkins in 1969  in a bid to encourage home ownership; it allowed borrowers tax relief for interest payments on their mortgage.
In the 1983 Budget Geoffrey Howe raised the tax allowance from £25,000 to £30,000; unmarried couples with joint mortgages could pool their allowances to £60,000 and this remained unchanged until in the 1988 Budget, when Chancellor of the Exchequer Nigel Lawson ended the option to pool allowances (a provision that had been known as Multiple Mortgage Tax Relief) from August 1988, a decision he later publicly expressed regret at not having implemented with effect from the time of the budget, as it is generally accepted that the rush to beat the deadline from the time of the Budget up until it was ended fueled a sharp increase in house prices.
MIRAS was completely abolished in April 2000 by then Chancellor of the Exchequer (now retired Prime Minister) Gordon Brown who argued it had become a middle class perk.
Receiving MIRAS was one of the justifications given by mortgage advisers when selling endowment mortgages.
With house prices slumping and the British economy going into recession, there are many[who?] arguing for the return of some kind of similar scheme to help those in negative equity and encourage a revival in the housing market.
The reason we are in the crapper (as you so eloquently put it ) is we fell for the “We can all get rich selling houses and services to each other; we don’t need no jobs that mean real work, that’s for third world people”
With mortgage interest rates at around 3%, and a tax rate of around 33%, we’re talking about an annual deduction of around 1% of the mortgage balance per year- right? $1K on a $100K mortgage… and that’s if it was eliminated entirely. Would the damage really be that severe to the housing market if the deduction was reduced by maybe 30% (a few hundred bucks per year on a $100K mortgage)? Or - as I would advocate - it could only be applied to a single primary residence?
The mortgage interest deduction is the only reason I itemize, rather than just take the standard deduction. It’s worth itemizing… but the difference isn’t that huge. A switch to the standard deduction would not be life altering.
It’s never seemed right/fair to me that I get a deduction for renting money (interest), but other folks don’t get an equivalent deduction for (directly) renting a place to live. I also think that it’s asinine that I can borrow money to go on vacation - and get a tax deduction for doing so, so long as I pledge my home as collateral. That’s really encouraging irresponsible financial behavior IMHO.
Nearly all economists agree that the MID is a bad idea.
If we are ever to get rid of the MID, now is the time, since rates are so low, and the benefit low accordingly.
When rates are 6% and 7%, it will be MUCH harder, as the MID will benefit more people, and be an overall larger sum sucked out of the pockets of consumers.
Gotta do something on it now.
I am not very optimistic about the MID going away, as there is this NAR propaganda strawman out there that it somehow benefits a broad swath of Americans. No matter how often more rigorous looks at the MID show how it disproportionately benefits the wealthy, the strawman keeps reappearing in MSM articles supporting the MID.
Illogical Housing Aid
By YONAH FREEMARK and LAWRENCE J. VALE
Published: October 30, 2012
THE tax deduction for mortgage interest may not quite be the “third rail” of politics that Social Security is, but politicians on both sides have long been afraid to touch it. So when Mitt Romney recently floated the idea of capping this deduction, Democrats pounced.
Here, after all, was Mr. Romney arguing to cut a long-favored tax benefit for middle-class homeowners — in the midst of a soft housing market, no less — so as to make up lost revenue from his proposed tax cuts that, critics say, disproportionately benefit the wealthy.
But while Mr. Romney’s tax proposal over all may not be fair or sensible — or even mathematically logical — Democrats shouldn’t be so quick to attack any change to the mortgage interest deduction. In doing that, they’re depriving themselves of a potentially powerful tool for progressive governance, one that could greatly increase funding for affordable housing. In truth, the mortgage interest tax deduction benefits the rich far more than middle-income families. A 2012 study by the nonpartisan Center on Budget and Policy Priorities shows that of federal tax expenditures for homeowners, more than half goes to households with annual incomes above $100,000, about twice the United States median.
Upper-income Americans take advantage of these policies to help them buy million-dollar homes, but there are relatively few federal housing dollars for extremely low-income families — and even fewer for those in the next tier up, who earn between $20,000 and $50,000 a year. Rather than preserve the mortgage-interest deduction as it is now, progressive politicians would do better to redirect the benefits we currently provide to America’s wealthiest homeowners to supporting housing for struggling and moderate-income families.
I agree that it is unlikely that the MID goes away.
However, it could be altered in a way that takes the benefit away from the wealthy.
And if they don’t index the caps to inflation, over time, that MID will benefit fewer and fewer people…a glide path to getting rid of it altogether.
We can hope.
“And if they don’t index the caps to inflation, over time, that MID will benefit fewer and fewer people…a glide path to getting rid of it altogether.”
I’m quite pessimistic, as I have seen little evidence that economists who work in high places have openly acknowledged the huge drain on America’s societal wealth thanks to so much money poured down the real estate rat hole.
Rather than acknowledge the hugely expensive, cumulative mass of federal housing policy mistakes which led up to the housing bubble debacle, policy makers are busying themselves with measures to reinflate the bubble.
A lot of people think that paying $3 to the bank is better than paying $1 to Uncle Sam. And a lot more people don’t do their taxes by hand and therefore have no idea that they are either not benefitting or only minimally benefitting from the deduction. MID is an emotional issue more than a financial one for a huge chunk of the population who own.
MID is an emotional issue more than a financial one for a huge chunk of the population who own.
True, except for those who also tithe 10% to their church. The MID is significant for them even at the median income. When I’ve brought that up before I got the impression that people considered that to be an insignificant percentage of the population. Perhaps that’s true nationwide, but not in places like Utah.
I am not Mormon but the deductions for charity are really what makes the MID work for me.
“True, except for those who also tithe 10% to their church. The MID is significant for them even at the median income.”
Perhaps Uncle Sam could carve out a special MID exemption for those who choose to tithe?
When I first started working, charitable deductions were a separate line on the 1040A. You didn’t even have to itemize to claim them…
“…charitable deductions were a separate line on the 1040A.”
Makes great sense to me. Why commingle charitable contributions with real estate subsidies?
I think they needed to be commingled with all other deductions and compared to a standard deduction to reduce their value as deductions relative to people who don’t make any charitable deductions. Similarly to how we can reduce their value further now by capping deductions.
But probably because when you are thinking about buying a house and trying to determine how much you can afford both mortgage and RE brokers really push the idea that you will save so much on the MID and try to get you to spend more. It’s like a mantra to them.
I personally did not include the MID in any of my calculations, because I prefer getting a nice extra chunk of money at tax time.
Single head of household with kids means tax time is always good to me. I guess that’s the upside of not being able to get married.
Publicly backed pension promises in Puerto Rico, long underfunded & neglected, now causing wider economic problems there.
“I don’t think that there’s a default that’s about to happen, but a default isn’t the only bad thing that can happen when you’ve got bonds,” Mr. Schankel said. Puerto Rico’s bonds are just a notch or two above junk status. If they fall to that level, at least some institutions would be forced to sell, potentially setting off a chain reaction. And individual investors could get a jolt if they saw the value of their holdings fall. Many people own Puerto Rican debt without knowing it, through their mutual funds.
“The concern is that Puerto Rico is a systemic risk to the municipal bond market because it’s so widely held,” said Robert Donahue, a managing director with Municipal Market Advisors.
Three days after the election, Standard & Poor’s, citing “prolonged inaction on pension reforms,”said there was at least a one-in-three chance that it would downgrade Puerto Rico’s credit by early 2013.
Relative to personal income, Puerto Rico’s public debt is almost 10 times that of Hawaii, which has the highest debt-to-income ratio of the 50 states, according to Moody’s Investors Service.
An outside audit of Puerto Rico’s pension system in 2009 found that it had been mismanaged practically from its inception in 1951. Lawmakers never appropriated enough money to cover the benefits, but layered on more and more extras — Christmas bonuses, summer bonuses, medication bonuses, health plan contributions, and others. There was even a provision that allowed people to enlarge their lifetime benefits by 50 percent with a single day’s extra work.
“Many people own Puerto Rican debt without knowing it, through their mutual funds.”
And, perhaps, their pension funds?
It’s mildly interesting to see money somewhere get raptured.
It becomes very interesting to learn some of this raptured money is somehow connected to you.
So the questions is WHY????
Why - because public unions force employees to join their union as a CONDITION OF EMPLOYMENT. The they take out union due WITHOUT CONSENT and before the employee ever gets his paycheck. The public unions then support and run their OWN candidates with their massive war chest in elections.
The candidates they run and support, of course, payback their #1 supporters with ever increasing benefits and golden pensions.
It is one SLICK scam that works until the host (taxpayers) go bankrupt and can’t pay anymore.
Of course, the union then screams and cries that “a promise is a promise” and demands ever higher taxes and/or bailouts.
Because it is only fair.
but layered on more and more extras — Christmas bonuses, summer bonuses, medication bonuses, health plan contributions, and others. There was even a provision that allowed people to enlarge their lifetime benefits by 50 percent with a single day’s extra work.
It is NOT a requirement for public employees to join any union. (Except maybe New York, where, like CA, they live in bizarro world)
Mortgage Interest Deduction, Once a Sacred Cow, Is Under Scrutiny
Sacred cows should be milked for all they’re worth.
Spot on. Don’t you love how the MSM jumps in to help with the milking, by pulling the wool over the sheeple’s eyes?
at what point do people quit working because taxes to pay for the bailouts are too high? If 70% of you pay goes to taxes is it worth going to punch a timeclock?
If 70% of you pay goes to taxes is it worth going to punch a timeclock?
Not if the rich continue to pay far lower rates on their form of income- capital gains.
I incorporated, and now book a good chunk of my income as capital gains.
One of the perks of self-employment.
Uh … how do you book earned income (the kind you invoice for) as capital gains?
Thank you AmazingRuss for what I’ve been trying to tell people here for some time.
Self incorporation is the number one loophole for reducing personal taxes.
Maybe some folks can live happily on public assistance, but I have yet to meet anyone without a job who isn’t struggling and constantly on the edge, economically. I guess if you have a trust fund then not working is an option.
NOT WORKING has never been an option for me or anyone in my family.
” If 70% of you pay goes to taxes is it worth going to punch a timeclock?”
Nahhh…but it will make that small business person start saying “cash only please”.
Causing all the status quoers to demand even higher taxes on those w-2 wage earning schlubs…all for the sake of the children of course.
Poor FedGov and PTB. On one hand they are trying to reinflate the real estate bubble, and on the other hand they are trying to stick it to the middle to upper middle class (of course the very low cap gain rates for the 1% are sacrosanct). What is a oligarch supposed to do?
Here ya go — right out of the book How to Lie with Statistics (I have a copy on my bed stand :-)).
You see, the average mortgage interest deduction “taken” is misleading, because it ignores that many of the dollars deducted by middle class households are below the standard deduction threshold. The only mortgage interest deduction dollars that are relevant to the discussion are those which could be deducted in excess of what the standard deduction allows, and I’m pretty sure the $600 mentioned below as deducted by the “average homeowner” fails to adjust for this subtlety.
As for a move to “cap” the MID, watch for a cap that is created for political show, and actually applies to almost nobody.
P.S. Don’t forget that the NAR is a major National Public Radio donor.
Congress eyes limit to mortgage interest deduction
by Krissy Clark
Marketplace Morning Report for Tuesday, November 27, 2012
As Congress and the president try to reach a deal to address the federal deficit and avoid the harsh package of spending cuts and tax increases better known as the Fiscal Cliff, they’re eyeing something once considered untouchable: The mortgage interest deduction.
Republican senator John McCain is one lawmaker who mentioned the formerly unmentionable on Fox News Sunday, saying a budget deal should involve closing a lot of tax loopholes, including “a limit on the amount you can take on your home loan mortgage deduction.”
An estimated 40 million homeowners take advantage of the mortgage interest deduction, which lets you write off a percentage of the interest you pay monthly on your home loan. For the average homeowner, that savings adds up to about $600 a year.
Psychologically, I think people value the feeling of being special and “getting over on the system” and being an “insider” far more than they care about money. The MID gives them all that for the low low price of $600 to the rest of us. If we structured it right, we could probably get them to pay us for it.
I’m thinking of waiting till January to get an investment RE in DC metro area. Probably later during 2013 as fiscal cliff to get prices to come to reality in that area in the next 4-6 months.
What makes you sure the Fed won’t step up to “sterilize” the effect of any fiscal cliff impact on housing prices? After all, if housing goes down, so does the rest of the economy, or so I’ve been told.
It is the defense spending and huge contractor payouts that keeps the DC market up. Fed would not be able to spend in particular sectors like defense as per their mandate. Fiscal responsiblity and responsible spending would be the fix.
huge contractor payouts
Invisible hand of the free market, baby!
“Fed would not be able to spend in particular sectors like defense as per their mandate.”
Suppose they linked defense spending to their mandate through the employment effects channel — similar to how they justify subsidizing the housing sector.
I frankly don’t see why the employment impact argument couldn’t be used to legitimize subsidizing any sector the Fed chooses.
OK. What mechanism would the Fed use to direct newly created money into private contractor defense spending? They support housing by buying mortgage backed bonds. What is the equivalent for the Pentagon?
“What is the equivalent for the Pentagon?”
Quick Zillow check:
1. Houses in Northern Virginia are Zestimating $75-$100K more than their Montgomery Country equivalents. Still room to fall. Yesterday there was a discussion of a new epidemic of rehab flipping. Here’s an example. 1955 3/2 rambler in Fairfax VA:
Dec 2010: Sold $210K <– probably an insider deal.
May 2012: Listed $447K <– after ~$75-80K Lowe’s rehab. You can’t get any more neutral than this.
Nov 2012: Listed $420K <– chasing market down.
2. Cheerleader Zestimates have crept about 13% upwards from the 2009 low. I’m not sure market prices will fall below this, at elast not for the normal Joe. Any good deal will be insider and flipped, as above.
I wouldn’t invest in RE, not in DC. Too volatile.
The reason I want to buy a second place in DC metro area is good schools for my kids. I still have 3-4 years till they get to High School. I live in WV and schools here are not as good.
One option I’m thinking is is just to rent in a good school district for 4 years till they complete school or buy something if the market corrects.
“One option I’m thinking is is just to rent in a good school district for 4 years till they complete school or buy something if the market corrects.”
It’s working for us; seven years down, six to go…
Six to go for us, too.
I believe once they start high school in one district, you can move to another and they will let them finish school in the original school district.
That thought has crossed my mind. Don’t know if I want him making that commute every day to high school, though.
The kids whose parents rent in my building go to the same Chevy Chase schools as the kids of the parents who bought the $2 million, perfectly ordinary colonials in the next neighborhood over.
You want to be in Howard County, Maryland. Not Montgomery County MD or Northern VA. Much better schools, high incomes, but still possible to find moderately priced housing. Check out Columbia and Ellicott City MD.
Depends on where Martin’s office is. It’s a one-hour drive from The Mall in Columbia to Dulles Airport… without traffic.
Renting is a good option. If you buy only for four years, you’ll probably only break even.
What would be your idea of the market “correcting?”
There is no shortage of fiscal cliff fear mongering underway.
White House issues new warning on ‘fiscal cliff’
By Don Lee
November 26, 2012, 6:49 a.m.
Retail sales for the holiday season got off to a strong start on Black Friday, but the White House warns that the threat of the fiscal cliff could hurt sales in coming weeks. (Gina Ferazzi / Los Angeles Times / November 26, 2012)
WASHINGTON — On the heels of record sales over the Black Friday weekend, the White House warned that automatic federal tax increases set for next year could hurt the rest of the holiday shopping season and would likely crimp consumer spending by about $200 billion in 2013.
The report released Monday projects that if Congress fails to act and middle-income taxes rise, consumer spending growth could be sliced by 1.7 percentage points and economic growth overall would probably be cut by 1.4 percentage points in 2013. Those are not small numbers given that consumer spending drives about two-thirds of U.S. economic activity and that the American economy has been growing by just a little more than 2% since the recovery began in mid-2009.
is it possible we could lose our reserve currency status or do other countries have a lot of faith in the printing press?
USD will remain the reserve currency for a long time. There is no other alternative. Euro was and is in trouble for its own survival.
The first major country to back its currency in gold, will become the reserve currency. China is well on its way to do this by buying lots of gold. It is a question of when not if we will lose that status.
t is a question of when not if we will lose that status.
Agreed. Both China and Russia are buying gold. Russia wants to regain its superpower status and China is already an economic superpower, with it’s sights set on military expansion next. Both have obvious domestic problems, but when the world is drunk on easy fiat money, the beer goggles tend to cover up all those blemishes.
How many DOZENS of times in the last 100 years have the Chinese and Russian currency been worth exactly ZERO.
Not a great track record.
Past performance is no guarantee of future performance…
In point of fact, I would argue that the only reason the US has lasted as long as it has as with the dollar as global reserve currency, is due to the economic and political upheaval of WWII throughout the rest of the world.
But if you can convert the currency into gold, the world will accept it. Besides how many times have the Greeks stiffed their creditors? They can find people to buy their bonds.
True - but a US dollar from 1901 still has value and can be used as legal currency to buy goods and services (greatly diminished due to inflation but still legal).
Go try that with Russian, Chinese, British, German, Mexican, etc. currency. You would be laughed out of the bank.
Where did all the gold ads go? Before the election you couldn’t turn on the radio without hearing one…
Yea, like 99% diminished.
Realistic “Superstorm” Sandy damage cost estimates are beginning to trickle out:
Updated November 26, 2012, 10:32 a.m. ET
Cuomo: Sandy cost NY, NYC $32B in damage and loss
ALBANY, N.Y. — Top political leaders in New York put their heads together Monday on big requests for federal disaster aid as Gov. Andrew Cuomo announced that Superstorm Sandy ran up a bill of $32 billion in the state and the nation’s largest city.
The cost is for repairs and restoration and does not include an additional accounting of over $9 billion to head off damage in the next disastrous storm, including steps to protect the power grid and cellphone network.
“It’s common sense; it’s intelligent,” Cuomo said. “Why don’t you spend some money now to save money in the future? And that’s what prevention and mitigation is.”
New York Mayor Michael Bloomberg had announced earlier in the day that Sandy caused $19 billion in losses in New York City — part of the $32 billion estimate Cuomo used.
New York taxpayers, Cuomo said, can’t foot the bill.
“It would incapacitate the state. … Tax increases are always a last, last, last resort.”
Cuomo met with New York’s congressional delegation to discuss the new figures and present “less than a wish list.” The delegation, Cuomo and Bloomberg will now draw up a request for federal disaster aid.
States typically get 75 percent reimbursement for the cost of governments to restore mass transit and other services after a disaster.
The most basic recovery costs for roads, water systems, schools, parks, individual assistance and more total $15 billion in New York City; $7 billion for state agencies; $6.6 billion in Nassau County and $1.7 billion in Suffolk County, both on suburban Long Island; and $527 million in Westchester County and $143 million in Rockland County, both north of New York City, according to a state document used in the private briefing of the delegation and obtained by The Associated Press.
Hard times were already facing the state and city governments that were staring at deficits of more than $1 billion before Sandy hit in late October. State tax receipts have also missed projections, showing a continued slow recovery from a recession that could hit taxpayers in the governments’ budgets this spring. And there’s the looming fiscal cliff, the combination of expiring federal tax cuts and major spending cuts that could rattle the economy.
“Make no mistake, this will not be an easy task, particularly given the impending fiscal cliff, and a Congress that has been much less friendly to disaster relief than in the past,” Schumer said. “We will work with the (Obama) administration on supplemental legislation, to be introduced in the upcoming December session of Congress, that will set us on the road to meeting New York’s needs. This will be an effort that lasts not weeks, but many months, and we will not rest until the federal response meets New York’s deep and extensive needs.”
For a little perspective on the Sandi damage toll estimates, the estimated 2012 Illinois state budget deficit of $43.8 bn is (was?) the worst in the nation.
New York, New Jersey put $71 billion price tag on Sandy
By Hilary Russ
Mon Nov 26, 2012 7:22pm EST
(Reuters) - New York state and New Jersey need at least $71.3 billion to recover from the devastation wrought by Superstorm Sandy and prevent similar damage from future storms, according to their latest estimates.
The total, which could grow, came as New York Governor Andrew Cuomo said on Monday the state will need $41.9 billion, including $32.8 billion to repair and restore damaged housing, parks and infrastructure and to cover lost revenue and other expenses. The figure also includes $9.1 billion to mitigate potential damage from future severe weather events, Cuomo said.
Neighboring New Jersey, which saw massive damage to its transit system and coastline, suffered at least $29.4 billion in overall losses, according to a preliminary analysis released by Governor Chris Christie’s office Friday. The preliminary cost estimate includes federal aid New Jersey has received so far.
By some measures, Sandy was worse than Hurricanes Katrina and Rita, which tore into the U.S. Gulf Coast in 2005, Cuomo said.
Will Sandy be good for the economy?
if your home was burned to the ground or flooded would it be good for the economy?
People say Europe being bombed flat was great for ours.
Yep. Not so much for theirs or the world as a whole, though.
It does seem that humans prefer to improve their position relative to others over an even larger general improvement that does not improve their relative position. Otherwise I would think the 1% would choose a different path than attempting to enslave the rest of the population.
Yep. Not so much for theirs or the world as a whole, though.
So Sandy will improve the economy for everyone except those who got wiped out.
Eliminating competition by outright destruction can definitely benefit a monopoly survivor.
No, it will only improve the economy for those who benefit from the loss of those houses and infrastructure. For everyone else it’s a loss. We just happened to be in the small group who benefited from WWII. Although I can also see how if a disaster also eliminates a system that was reducing the efficiency of a large number of people, that could skew the math upwards for everyone a bit.
No, it will only improve the economy for those who benefit from the loss of those houses and infrastructure. For everyone else it’s a loss. We just happened to be in the small group who benefited from WWII
Not sure I follow that. By your logic, only those manufacturing things directly needed by those bombed flat would have seen a benefit (”those who benefit from the loss of those houses and infrastructure”), “For everyone else it’s a loss”.
But our whole country was doing well, not just the steel mills and necessities makers.
I didn’t say only those who manufacture things directly needed by those bombed. I said much more generally “those who benefit from the loss of those houses and infrastructure”. For us that included our whole country.
I know two people who are in the process of buying a car because theirs was wrecked in the hurricane.
I’ve read estimates that up to 250,000 vehicles were destroyed.
250,000 X $20,000 = 1,000,000 X $5,000 = $5 bn.
Does that seem like a reasonable estimate of automobile replacement costs?
Parable of the broken window
The parable of the broken window, also known as the broken window fallacy, was originally given in Frédéric Bastiat’s 1850 essay, Ce qu’on voit et ce qu’on ne voit pas (”That Which Is Seen, and That Which Is Not Seen”). It demonstrates the costs to society that occur when property is destroyed, and illustrates the law of unintended consequences with respect to economic activity.
The book Economics in One Lesson by Henry Hazlitt was inspired by this parable.
How does the broken window fallacy square with the US supposedly having such a golden age after WW2 because the rest of the world was bombed flat?
“How does the broken window fallacy square with the US supposedly having such a golden age after WW2 because the rest of the world was bombed flat?”
It doesn’t. Those are competing explanations.
Many economists apparently favor the conventional “broken window stimulus” argument over the less obvious “rest of the world bombed flat” explanation.
World War II Ended the Great Depression?
by RICHARD W. FULMER
In his 2008 book, The Return of Depression Economics and the Crisis of 2008, Paul Krugman writes: “The Great Depression in the United States was brought to an end by a massive deficit-financed public works program, known as World War II.”
But would we have ever been able to pay the money back but for the elimination of our competitors? Sorry Mr. Krugman, we are more like post WW I Britain who was broke due to the costs of the war.
the rest of the world was bombed flat
FWIW, the US wasn’t alone in escaping bombardment. Latin America was also untouched, yet they did not rise to industrial powerhouse status.
“Latin America was also untouched, yet they did not rise to industrial powerhouse status.”
Were they in on the Marshall Plan, whereby the U.S. rebuilt its trade partners’ economies, earning itself a debt of gratitude in the process?
The U.S. already had the capacity so there was not much of a void for them to fill. Also, they really were not much different from Europe since they did not the physical capital to create the factories at the end of the war.
Of course, there is two types of capital: physical and human. The countries most devastated by the war Japan and Germany had the human capital to recover. Two very intelligent groups. While Japan may suffer somewhat due to a lack of immigration, today, someday they will get it right and support their women enough that they are willing to reproduce and Japan will be back on top. Dilute your human capital and you may never recover. See Rome and Greece.
If America had been ruled by oligarchs, who paid their workers very little, and offered no social safety nets, would America have done just as well after WW2?
“Will Sandy be good for the economy?”
Is that you Grover Nordquist?
What ever positive effects you can draw from Sandy you can subtract them by looking at the billions that will be lost from closing the upper Mississippi river next week.
“Fed says drought is worst in 56 years”
But wait! What’s this?…
” Even after the worst drought in a half century shriveled crops from Ohio to Nebraska, U.S. farmers are having their most-profitable year ever because of record- high prices and insurance claims. ”
“What ever positive effects you can draw from Sandy you can subtract them by looking at the billions that will be lost from closing the upper Mississippi river next week.”
What makes you think bailouts won’t be used to compensate those upper-Mississippi losses? Weather disasters are all good for local economies where they occur!
Maybe we’ll get some of that $158B we used to bail out AIG back….
Anti-tax champion Norquist slams Republican ‘impure thoughts’
November 26, 2012, 3:16 PM
Anti-tax crusader Grover Norquist, facing a growing rebellion of Republican lawmakers against his no-tax-increase pledge, says that members of the GOP are merely discussing their “impure thoughts” and that the party won’t cave in.
“No Republican has voted for a tax increase,” Norquist said Monday on CNN’s “Starting Point.” He said “We’ve got some people discussing impure thoughts on national television.”
Impure thoughts? That’s commie talk!
If Santorum had been elected, we would have a cabinet-level Department of Impure Thoughts, similar to the Ministry of Love.
If thy brain offends thee, pluck it out.
I thought it was going to be the Vagina Regulatory Commission
Support your local Nutcracker production this holiday season (or don’t)…
This article makes you wonder about the value of Peter Tchaikovsky’s posthumous contribution to the ballet theater sector.
Nov. 24, 2012, 8:01 a.m. EST
10 things ‘The Nutcracker’ won’t tell you
By Charles Passy
Not only is the Mouse King too scary for some kids, but productions of the holiday classic often offer bland ballet and canned music.
1. “You see sugar plums. We see dollar signs.”
Ah, “The Nutcracker.” That celebration of all things Christmas, that choreographed ode to childhood, that visual spectacle replete with parties, pageants and even candy canes come to life. Oh, and yes: that show that pretty much ensures every ballet company can survive another season. As much as “The Nutcracker” may be an artful expression of holiday cheer, the two-act ballet is also a moneymaker in an industry that’s otherwise heavily dependent on the largesse of deep-pocketed donors. As a result, almost all ballet companies — large and small, professional and student — put on an annual “Nutcracker,” and the larger companies have been known to pump more than $1 million into their lavish productions. Generally, there’s a good return on the investment. Dance/USA, a national service organization, estimates that “The Nutcracker” and other holiday performances account for nearly half of the annual ticket revenue its member artistic groups earn. “I think it’s pretty safe to say virtually any midsize to major ballet company would not exist without ‘The Nutcracker,’” says Roy Kaiser, artistic director of the Pennsylvania Ballet.
If you’re anywhere near Philadelphia during the holiday season, go see the Pennsylvania Ballet’s performance of “The Nutcracker.”
Just do it. You’ll be glad you did.
Nutcracker is has been a vehicle for mommy-shivving and kitty-fighting for decades. And then they put on their precious holiday dresses and make nice at a mommie-and-me event.
No fricken way. I’d rather see Don Quixote again instead.
I’ve seem several Nutcrackers in my day (mostly in Boston). I’ve never seen a dancing candy cane. Which dance would involve dancing candy canes? More importantly, how do you dance in a candy cane costume? Is this a vaguely impressionistic red and white ensemble or a foam rubber thing that actually looks like a candy cane?
The Candy Cane Dance! You must sleep through this part, polly. Or maybe it’s when you go to the bathroom.
“DFW ranks No. 30 in lowest housing vacancy”
DFW has a 9.19 percent vacancy rate, which means 232,786 vacant housing units of 2,532,937 total housing units, which includes houses, apartments and condominiums.
Not too much slack in the local market but looking at Austin it’s much tighter @ No. 19 (8.22 percent). Add to this that the Case-Shiller report came out this morning and national numbers are up again for the 6th. straight month. Taken at face value the best one could say is the housing market has stopped going down.
In a world where everyone ignores the 25 million excess empty houses, the article seems to be accurate.
Actually since the prices increased 3.6% from year to year, the housing market is going up. This number is very close to the increase in rents which was my guess for housing appreciation. Banks right now, as measured by the federal funds rate, are effectively getting money for nothing. With prices now going up they have no incentive to kill the market by dumping houses. They will drip them on to the market slowly taking losses to manage their stock prices. They can carry these properties far longer than most people want to wait to buy. The bast**ards have won even if most of this board does not want to admit it.
“the housing market is going up.”
Guess again. Prices resumed falling in Sept/Oct.
Not sure where you are getting numbers but USA reported this for September and I don’t know anyone that has numbers for October:
The Standard & Poor’s Case-Shiller index of 20 major cities rose 0.3% in September from a month earlier, marking the sixth consecutive month of increases.
I think PW needs to revised his canned response to be “prices resumed falling in Oct/Nov.”
And then he can revise the unprovable statement again next month to be Nov/Dec.
Prices are falling. Even in your beloved “Bay area”.
Get over it.
Again…any source to your claim?
“Prices resumed falling in Sept/Oct.”
Any source to your claim?
The bast**ards have won even if most of this board does not want to admit it.
Gonna name names?
You have been over-using the devil emoticon lately.
‘The bast**ards have won’
Oh really? So the FB’s stuff I’m taking to the dump this afternoon really belongs to a winner? Or the stuff I took yesterday and another houseful later this week? Prices are falling in Flagstaff and have been for years. How can this be? We are told everyday prices are up. The media wouldn’t lie to us, would they?
Here’s a little tip to think about on the way to some open houses; Bernanke is a fool.
Ben, I lived in Flagstaff but one of the reasons I left it was it was so overpriced. It was the typical place that baby boomers picked to buy that investment property but it had very few jobs paying well enough to buy the expensive properties.
I think we all have noticed that where the best paying jobs are, there has been a rebound in prices. Flagstaff is not one of those areas but when I retire I might just move back if housing prices have fallen enough. I just love how you can use the elevation of the city to your advantage. What 20 degrees warmer, easy drive to Phoenix, want ten degrees and the best drive in America, drive to Sedona.
want ten degrees and the best drive in America, drive to Sedona.”
Have you driven the Catalina HWY from Tucson up Mnt lemon ? You will get 30 degrees and some of the best views over S. AZ.
The Tucson area is great but as a former Vermonter I do relate more to Flagstaff. I will have to try your drive. But red rocks, a stream and pine trees is hard to beat.
‘it was so overpriced’
Less so every day.
BTW, they say Phoenix leads the country in prices. The other day I posted info that showed 108,000 vacant houses in greater Phoenix, 50,000 vacant lots,and building permits higher than new home sales.
“…108,000 vacant houses in greater Phoenix, 50,000 vacant lots…”
I assume those are somehow kept ‘off the market.’ Is there any indication of at what point they will become available to households who just want a place to live in, not an investment home?
News Flash: those toxic Flagstaff loans were sold to Fannie Mae years ago. So yes, the b@st@rds won.
‘were sold to Fannie Mae’
Now I’m confused as to who are ‘the bastards’. Are people who take out house loans today bad people because the GSE’s back them? Or HUD? Or is it the people who sell their houses, or make a commission? Or is it the government or central bank?
This is all sounding very 2008, assuming the role of a victim. If you think we’re headed into inflation, do something about it. If you think houses are going up, buy 3 or 4. But you can’t expect to have 15% returns, with zero inflation on a risk free bond, because it’s never been that way and it never will be.
If you are healthy, free and can work, what more do you want? Make the most of it I say.
In this case, it’s the too-big-to-fail banks.
“If you think we’re headed into inflation, do something about it.”
Well pimps. Step right up.
Banging my “low vacancy in CA” drum again:
Out of 109 markets noted in the survey:
San Jose #1
Oxnard/Thousand Oaks/Ventura #4 - 4.3%
Los Angeles/Long Beach #8 - 6%
SF/Oakland/Fremont #10 - 6.8%
Stockton (!!!) #27 - 9%
San Diego/Carlsbad/San Marcos #32 - 9.2% vacant
The worst is Fort Meyers FL, at 36%!
Daytona Beach is 25%
Port St. Lucie is 24%
4 of the best 10 are in CA
10 of the worst 12 are in Florida
The BEST Florida market is #93 of 109.
The excess supply is not uniformly spread throughout the US…FL has more than its fair share (and CA less than it’s fair share).
Don’t know what happened with my marking of vacancies for CA.
San Jose #1: 4.3%
Oxnard/Thousand Oaks/Ventura #4 - 6%
Los Angeles/Long Beach #8 - 6.8%
SF/Oakland/Fremont #10 - 7.1%
Stockton (!!!) #27 - 9%
San Diego/Carlsbad/San Marcos #32 - 9.2% vacant
There, fixed them…
Oxnard/Thousand Oaks/Ventura #4 - 6%
SOAR ( Save our agricultural resources ) keeps new home development almost at a standstill
When I lived in Phoenix I wondered why buy when so many new homes were being built willy nilly everywhere? That will keep prices down I figured.
In Ventura Co. supply is constrained big time that should keep prices up.
“Stockton (!!!) #27 - 9%
San Diego/Carlsbad/San Marcos #32 - 9.2% vacant”
San Diego has a higher vacancy rate than “Ground Zero for the Housing Bubble” city Stockton?
Yup, but both pale in comparison to Florida markets…
It’s irrelevant to me. I moved away from Florida when I was 1 year old, and never looked back.
It’s very relevant if you look at national Shadow Inventory statistics and believe that a proportionate share are in your backyard.
Only if you’re all willing to ignore the 25 MILLION excess empty housing units in the US today.
No… Dimon would be best in handcuffs, shipped to Guantanamo for being a financial terrorist.
How the Lucky Duckies live:
“Nannies, caregivers and housecleaners earn a median wage of about $10 an hour, and few receive benefits like health insurance or paid sick days, according to the first ever national statistical study of domestic workers, which is being released on Tuesday.
The report found that the median wage for nannies was $11 an hour, compared with a $10 an hour median for caregivers and housecleaners. But 23 percent of the workers earned less than their state’s minimum wage, which varies but must be at least the federal level of $7.25 an hour. Domestic workers are generally not covered by federal or state minimum wage laws.”
If they want to stop being such poor loosers, they should teach themselves some programming languages and create their own internet startups and take risks and bootstrap their way to get rich, right?
What languages would you suggest? Is SAP still hot?
I’m looking for a career change but only on functional side and not coding side. Just by learning SAP funcional modules, would I be able to make $150K per year without any travel involved?
You’d have to ask the HBB poster who gave that advice here recently.
Who was it?
What languages would you suggest?
Spanish is indispensable if you wish to pursue an exciting career in fast food preparation. Most fast food joints still use “Americans” in the “Customer facing” jobs however.
Not where I live, they don’t.
You will NOT be hired if you are not “Latino”.
You can do very well as a functional expert in Oracle ERP or SAP, but those jobs often require travel to client sites.
The should be boot strapping like cabana boy and NE’er. Neither of which create any jobs, but love to talk the talk and cover for oligarchs.
What makes you think I haven’t created any jobs with my startup? Sounds like sour grapes to me joesmith…
Not everyone is cut out to code, but just about anyone can clean houses. I know three different people who own residential cleaning services and do well, financially. These are small companies with 3-5 employees. Two of them do very well cleaning upscale properties in Boston and the surrounding burbs.
There will always be people who just want a job and don’t have the means or will to build a business themselves.
Saw an article yest w Buffett touting Jamie Dimon to run the treasury.
Looks like Jamie Dimon plans on pulling a Hank Paulson. He’ll sell his 1 million shares of JPM stock at near second peak prices tax free and then move to treasuries for the next leg down.
See Bloomberg link above posted at 07:25:31.
Next step after move into Treasurys:
Crash the economy again, and reap major capital gains through driving yields still closer to absolute zero.
Which is pretty much what I suspect the last 6 recessions where REALLY all about.
It also serves to drive down wages.
“I do want to point out that there IS a housing bubble in Florida right now. It’s a bubble in defective construction, and how! All that crap they slapped up during the bubble is now starting to deteriorate fast.”
Just reading through yesterdays threads I saw this and wanted to relate my experience.
I’ve lived in 4 FL homes over the past 8 years.
Apartment (converted to condo), built 2005-6 - Total trash. Walls so thin you could see through them. Knockdown everywhere. Rented for 900/mo, went condo, offer to sell it to us at 220K. Now selling in the low 100s. 900sq/ft
Condo, built 2003-4 - Great location. Small condo, but it was downtown and walkable to everything. Construction quality noticeably better than the first place. Rented for 1,200/mo, recently sold for 140K. Owner when we lived there paid over 300K for the unit. 750 sq/ft
House, built 2005 - Construction quality was awful. Things leaked, closets were installed incorrectly, electric was wired wrong. Appliances were all contractor grade and were crap. Did have granite counters though! Rented for 2K/mo, owner paid 511K. Foreclosed and sold for 260K. 1900 sq/ft.
House, built 2002 - This is the place that we purchased. Construction quality notably better than any of the other places. Does not have granite though, and is missing some upgrades that the other places had. Paid 500K for the property, 4000 sq/ft (including a 30′ boat slip). Current Zestimate (not that it means anything) is about 25% over what we paid.
My point, it seems that, from my experience, things built during the boom are garbage. We looked a ton of “boom era” houses before we bought this one, and they were almost all, universally, a nightmare. They all had crowns and all kinds of “upgrades” but then had knockdown walls and wire frame closets. We actually started to carve out boom era houses when we continued to look (which is actually what pushed us to waterfront, they were the older homes).
Moral of this story. If you buy stuff built 2004-2008, make sure you really look at it hard. A lot of the stuff in our 3rd rental would have been very hard for a normal person to detect before they bought the house (and some would have been impossible). Boom era houses are, by default, shoddy construction. Some are good, many are bad, a few are awful.
You are doing what? You are actually living in that house you bought?
These houses weren’t built to be lived in; They were built to be sold.
What was a fun experience for me was to go to my first McMansion and discover the first room I entered, after passing through the threshold, was a sort of “receiving room”, a room built to receive a visitor. Nobody ever spent much time IN the receiving room; the receiving room was just a room one entered in order to GAIN ACCESS to other rooms.
Impressive? Maybe. Practical? Not a chance. But it wasn’t built to be practical, it was built to impress.
To impress = to sell.
You mean an entryway? They are practical, as they normally have a coat closet and have easy-to-clean flooring that acts as a transition between the inside and outside in places where weather is a factor.
The mudroom backdoor acts as the same thing.
I don’t think you have to live in a mcmansion to get an entryway. Mine is less than 2200 sq ft and was built in the 70’s and has a entryway.
No, I do not mean an entryway, I mean a large room with some furniture and maybe some other stuff that looks neat but nobody uses because people who live there and visit there end up inhabiting some other larger and better situated room located somewhere else in the McMansion.
Yeah people dump of their coats and stuff in this room but you don’t need a large furnished room for this, all you need is an entryway.
Receiving rooms are a throwback to a time when the visitor was let in by a butler and the visitor had to wait for the Man of the Estate to finish whatever he was working on to go receive the visitor. Monticello’s receiving room is (still) famously dressed out as a museum, so the visitor could presumably learn some natural history while waiting for ol’ Tom.
Most McMansions have a hybrid Foyer. Large enough to sit and take off boots, not big enough or enclosed enough to be a real room.
So that’s what I’ve seen in a few houses. Right beside the front door/entry way; a smallish room that kinda looked like a living room. But those same houses had living rooms. So those were receiving rooms. Given a choice, I’d much rather have a gift wrapping room than a receiving room.
The Parlor was also where you had your funerals.
Good article in American Banker today:
Stop Subsidizing (and Distorting) the Housing Market
Much as we may have benefited from overpaying the finest fruit of our elite business schools to sell mislabeled mortgage securities into Norwegian towns and Dusseldorf banks, that particular free lunch is no longer on offer. Now we’ll owe the money to, or steal it from, ourselves. So, what’s the goal?
Do we want more new money spent on housing, and a higher percentage of consumers owning homes? Why should the government be promoting this? Our rate of homeownership, at 42%, is only four percentage points below its all-time high, much higher than in other prosperous countries—more than twice as high as Switzerland.
Having more of national income spent on education, research or energy independence might do more good for more people than increasing investment in housing. Additionally, if more of us rented we’d have a more mobile and hence more productive labor force, and household wealth and disposable income would be much better shielded from cyclical shocks such as interest rate increases. Rents are far less volatile.
So, let’s not again inflate homeownership.
Rents are far less volatile
Not according to the NAR-scum and their pimp Ruth Mantell and fluffer Amy Hoak on MarketWatch. They live only to regurgitate lying Realtor® lies.
Marketwatches integrity is that of realtors….. which zilch.
“Rents are far less volatile.”
Again, not where I live. Rents ONLY go up, even in the ghetto.
if more of us rented we’d have a more mobile and hence more productive labor force
The flip side of this argument is that a more mobile labor force makes for more transient communities. A transient population cares less for the upkeep of the area, the schools, the tax-base, etc. It cares less for its neighbors and it separates extended families, just when they should be coming together to help one another. It also impacts children disproportionately, as they can’t settle into a stable life with friends and family.
Lastly, with the ubiquitous nature of high-speed internet, fast mobile device and the convenience of Webex, most knowledge workers have no need to be “in the office”. They can and should work from where-ever is comfortable.
household wealth and disposable income would be much better shielded from cyclical shocks such as interest rate increases.
Fixed rate mortgages shield home owners from interest rate increase just fine.
“A transient population cares less for the upkeep of the area, the schools, the tax-base, etc.”
LOL like many here, I’ve rented and I’ve owned. Its not like signing a rental contract magically made me desire living in a dump, vs signing a mortgage contract magically made me desire high tax rates (as if thats good).
Did you suffer a mild concussion recently?
All this “it takes a village” nonsense you’re spouting here sounds a lot like commie talk.
LOL. People have been self-organizing together into tribes, villages, city-states, and nations since the dawn of civilization. This is regardless of the economic or political system in place at the time…
Even the rugged, individualist, boot-strapping, tea-party supporting, conservative capitalist understands that no man is an island and community serves a purpose. It’s all about degrees of dependence. What is the role of government?
Even the rugged, individualist, boot-strapping, tea-party supporting, conservative capitalist understands that no man is an island
Not the ones I meet. Even in low tax Colorado they clamor to have the public schools shut down because they are a waste of money, even though we have one of the lowest per student spending budgets in the nation (~6000).
Speaking of which, I assume most here have heard the theory that ideally we progress from dependence to independence to interdependence for maximum efficiency. I think it was the “7 habits” guy that talked a lot about it?
Anyway, if that’s true, what happens when people have been at the interdependence state for long enough that they are no longer capable of surviving at the independence state?
Even in low tax Colorado they clamor to have the public schools shut down because they are a waste of money
They are a waste of money, between Unions and Administration and government regulation… and many public school systems are broken beyond repair. Having said that, you need an alternative. What do they say when asked what the alternative should be to public education?
BTW, a recent job posting in a MA school system: Director of Special Education. Reports to the Director of Education. Works with the Principals and Vice-Principals of Schools in the system. Pays $128k-$138k salary.
So, here’s a public school system administration where you have a six-figure director reporting to another six-figure director, working with six-figure administrators. To what purpose? To “Administrate and Manage” special education for a school system…. so the taxpayers are on the hook for hundreds of thousands of dollars and not one child has been educated yet.
BTW, special education is mandated by the Federal government and many states, so local communities have little to no control in determining whether this fits their budget or needs. Also, how much additional money do parents of special needs children in public systems spend to educate their child? That’s right, not a single dollar more than the same taxpayers who have no children at all…
BTW, special education is mandated by the Federal government and many states, so local communities have little to no control in determining whether this fits their budget or needs.
And as a bonus it helps to allow the blue states to look down their noses at the red states for spending more Federal money than they contribute to the national budget. So it’s a win-win.
They are a waste of money, between Unions and Administration and government regulation… and many public school systems are broken beyond repair.
FWIW, our non union Parochial school spends more per student than our local public schools do. And the Parochial school gets to cherry pick its students. No special needs, no ESL, no kids from lower income households. Just smiling, well adjusted, upper middle class Catholic kids who get dropped off by mom in her Lexus SUV.
Anyway, I think you missed my point. We spend less per year to educated kids in our local public schools (where the union is so weak that new hires for the past few years don’t get pensions) than the local private schools do. And with decent results too. Our administrators are few and not as extravagantly paid as elsewhere. Our district superintendent is paid about 180K. This is a district with 15,000+ students.
In other words, or district runs a tight ship, exceeds the CSAP testing results mandated by Denver, has an IB program at one high school and strong AP programs in the others. All while per pupil spending dropped almost 20% during the past few years to $6000.
But this isn’t good enough for the local “Don’t Tread on Me” crowd. Nothing short of closing all the schools and expecting everyone to home school their kids is acceptable.
Also, how much additional money do parents of special needs children in public systems spend to educate their child?
Re-quoted, without comment.
Nothing short of closing all the schools and expecting everyone to home school their kids is acceptable.
As I said, I think a viable alternative needs to be offered, and mass home schooling isn’t it.
From each according to one’s ability, to each according to one’s needs…
How many families of special needs students do you know pay for private specialists instead of just throwing their child into the public system where they are mandated by the Federal government to provide the necessary resources to care and educate them? Or were you naive enough to think that this kind of gaming of the system isn’t done? I guess it isn’t fair that some are learning disabled and others aren’t… why should parents have to pay more? Just let society pick up the tab…
I would have thought that you’d love our system: low property taxes, average teacher pay is around 40K, no pensions for new hires.
I mean, we’re doing everything here that conservatives ask form, namely: make do with a lot less and graduate literate kids. But it’s not good enough for our local “conservatives” that we spend only 6K per student.
Loveland high school needed a new pool. It was paid for 100% via fund raising, which took over 10 years.
But it isn’t good enough. No matter how much is cut, it isn’t good enough. During the 8 years my three kids attended the public high school I could see the physical deterioration of the facility get worse. But it isn’t good enough for the locals, no siree. Spending could drop to 3000 per student and it would still be too much.
I fully agree that spending 15K or more, as is done in some places, is insanely excessive. But after seeing what the local district accomplishes with one of the lowest budgets in the country, I would disagree with the notion that public schools can’t work.
Here’s one family that doesn’t intend to pay for a private specialist, but is forcing their local school district to provide one at public expense:
Northport student gets own teacher to overcome autism
A long-standing case in which the parents of an autistic child sued the Northport Public School district for allegedly providing an inadequate education has ended with the U.S. Court of Appeals for the Sixth Circuit — the last step before the U.S. Supreme Court — upholding the decision of the lower court.
Actually, I was going to say, it sounds like your public school system is well-managed in-so-much as they are getting the job done while keeping costs down… which in general is how private industry does things.
For what it’s worth, the only schools I see making expensive renovations are Universities, and we know where they get their money… the college loan bubble. Even my children’s parochial school is looking a little run-down these days. Sign of the economic times.
Too bad most just think all it takes is raising taxes to fix most problems. Perfect example: politicians in the state of MA are giving government staffers a 3% increase in pay while tax receipts are down YoY. I wonder how they think the state will pay for the increase compensation? I’m sure I’ll be seeing another fee soon. Or maybe the State Treasurer’s plan to force Amazon to collect sales tax in the state of MA will pay for staffer’s raises. Either way, I’ll end up paying more.
“But after seeing what the local district accomplishes with one of the lowest budgets in the country, I would disagree with the notion that public schools can’t work.”
This seems to be a common problem. People see public schools that are failing and assume that the theory behind public education is a bad one. Or capatalism or government or whatever. Bad examples don’t prove a failed system. Right now it seems like the US is rife with corruption, making everything system like a failed system.
BTW, when I said that a viable alternative should be offered, I was referring to the conservatives in your neck of the woods who just say “close the public schools”. Home schooling isn’t viable because in many households both parents work.
Privatization of schools makes sense to me, but I already send my children to private school while paying taxes that support the public school, so my opinion is a bit biased…
People see public schools that are failing and assume that the theory behind public education is a bad one.
I can show you example after example in MA of public high schools where spending has increased 100% in the last ten years, while graduation rates or math and verbal test scores on standardized tests like the SAT have been flat or are declining. And this is in a state where supposedly we have the highest scoring schools in the nation.
It is a broken system, but people are too scared or too entrenched in the status quo to do anything about it.
That’s the breaks, is that what you’re saying? If a person has a special needs kid, they should have to personally pick up the entire tab? Sorry folks, you lost in the child lottery and now you’re gonna pay.
It should provide some ‘consolation’ to know that once these kids turn 18, they are either on their own or their parents become wholly responsible for them.
Privatization of schools makes sense to me
If they are shackled with the same requirements as public schools are (special ed, ESl, etc.), they will have the same problems and cost a lot more.
I’m sure you like the private schools where your kids go. I loved the parochial school where my kids went as well. But I know that privatizing the public schools won’t produce the same result.
Sorry folks, you lost in the child lottery and now you’re gonna pay.
This goes to my theory that “Life isn’t fair.” Let me know when you find evidence to the contrary…
“The flip side of this argument is that a more mobile labor force makes for more transient communities.”
Doesn’t a decision to stay put depend on having a stable employment base? Whether someone rents or owns, if their income source dries up, they most likely will eventually have to relocate.
Doesn’t a decision to stay put depend on having a stable employment base?
Well, as counterpoint to that, certain neighborhoods in Boston are havens for University students in off-campus housing. These students are transient, in that they come every fall and leave every spring. These neighborhoods are avoided like the plague by permanent residents as the buildings are generally run down and the neighborhoods tend to be rowdy, noisy, etc.
Now maybe the University student scene isn’t for everyone, or maybe, because these students rent and have no ties to the local community besides their temporary schooling, it creates an environment that is not conducive to more stable lifestyles.
“Well, as counterpoint to that, certain neighborhoods in Boston are havens for University students in off-campus housing.”
Bad choice of examples to make your point, as University communities clearly have a disproportionately high share of temporary residents. Statisticians call this a ‘confounding factor.’
Is India comfortable?
No, but the chair in my home office is, as is my couch…
Anything you can do from your house, you can do from India much cheaper. I’ll admit that my work with Indians suggest that most of them aren’t good at what you are doing. But for how long?
We tend to be better at the cutting-edge stuff, not to mention real problem-solving and creativity. They tend to be ok if they have lots of direction (i.e. not Agile) and it is old tech stack (Java, PHP, etc.).
Comes down to productivity at the margin… for Fortune 500 businesses I can see it makes sense because of the overall cost-savings and lack of talented individuals to impact the overall performance of the business. Not so much with startups and smal to mid-size companies. Their, individual performance and productivity is key.
The thing about the Indians who are “good enough”, they tend to emigrate to California.
The model I’ve seen work well is core architecture and development done in the US and QC done in India off-hours from US development. Gives you a 24h dev/test cycle without interfering with build quality.
I’ve also seen offshore development teams that augment US-based development, especially in sustaining engineering. Fixing bugs on existing code makes for rote work, but can help mentor off-shore development resources on the code-base without negatively impacting code quality.
Pure development offshore tends to be sub-par. Fine for proof-of-concepts and prototypes and such, or solving simple problems in well-known tech stacks, but severely lacking in anything cutting edge.
Heck, look at NoSQL development… if you want Mongo or Cassandra expertise, you won’t find it in India… and you’ll pay a premium for it here. I’ve seen positions to $150k in Boston for NoSQL. That’s not to say they won’t build that as it becomes more mainstream, but it seems we’re always pushing forward while they’re playing catch-up.
I’d say that the QC/QA and bug fixing work done overseas isn’t all that great either.
“The flip side of this argument is that a more mobile labor force makes for more transient communities. A transient population cares less for the upkeep of the area, the schools, the tax-base, etc. It cares less for its neighbors and it separates extended families, just when they should be coming together to help one another. It also impacts children disproportionately, as they can’t settle into a stable life with friends and family. ”
“…most knowledge workers have no need to be “in the office”. They can and should work from where-ever is comfortable. ”
Not true. Supporting large corporate infrastructures still require a lot of on-site labor or resources (especially security related) that can only be had by being at the office behind the firewall along with easy access to the co-worker with the answer you need) and those that ignore this, end up in big trouble.
I think that has more to do with corporate culture or specific jobs, like support, than anything else. Even when I’m in the office, I attend meetings via webex and conference call rather than sit in the conference room. Many of our development resources work remotely more than half the time. As far as working remotely, VPN’s solve most security connectivity issues. Still behind the corporate firewall, but securely tunneled to the corporate network.
I have friends who work for bigger corporations that spend 6+ hours a day in meetings and deal with hundreds of emails every day. We do most of our question and answer via IM, as it is more immediate. I’m lucky if I look at email more than twice a day. Like I said, different cultures, different work styles.
“Fixed rate mortgages shield home owners from interest rate increase just fine.”
Not always. If you have a mortgage, the house is probably worth more than you are. If interest rates go up, house prices go down. Your “fixed” debt doesn’t prevent you from losing more than you are worth.
BTW, if you have a mortgage, you don’t own yet, you owe.
“Having more of national income spent on education, research or energy independence ”
Thinly veiled attempt at bubbling. Try harder. We’ve already bubbled .edu, health care pharm companies are already downsizing, and a pretty good attempt at bubbling solar.
Why not something actually useful and wealth producing, like infrastructure, or manufacturing? Real green energy? Real health care reform to bring us into the modern 1st world?
Real green energy? Real health care reform
Why not something actually useful and wealth producing, like infrastructure, or manufacturing?
I’m not seeing a way to get rich quick off any of that stuff. And my constituents have definitely gotten used to a higher standard of living than they’ll have for the next 4 years if we go down that path. What else have you got?
’m not seeing a way to get rich quick off any of that stuff.
It’s not about “getting rich quick”, rather about taking advantage of untapped market opportunities before someone else.
Infrastructure is capital intensive and often requires heavy governmental influence (and associated red-tape). Pure manufacturing is a high-volume, low margin business with heavy capital requirements and severe competition. The value is in the product design anyway… given the ubiquitousness of cheap manufacturing capacity.
Recent NPR discussion was on Greek Yogurt facilities in upstate NY. Their competitive advantage was in the manufacturing process and in coming up with inexpensive, novel and environmentally friendly ways to dispose of the Whey waste product.
I see opportunities today in building a better mouse trap… remember, the guys on the bleeding edge often get cut. Anybody remember Excite or Alta Vista? They had first mover market advantage in online Search before Google was even a thought…
Been there, got the scars.
Yeah, those scars can run deep too. It isn’t easy… but then again, if it was easy everyone would do it.
Nov. 27, 2012, 12:02 a.m. EST
Stocks dead, bonds deader till 2022: Pimco
Commentary: Gross, El-Erian warn of very slow growth ahead
By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) — Big money managers are warning investors. They’re now citing the Bible: “Seven lean years.” No recovery till 2016. That was Jeremy Grantham back a few years ago. His GMO firm manages $104 billion.
Now Bill Gross and Mohamed El-Erian, the co-CEOs at the $2 trillion Pimco money managers, are citing the same biblical warning to jar investors awake and prepare for the coming lean years of slow, low growth and austerity. Except in Pimco’s new warning, the future just got much, much darker for investors — no recovery until 2022.
Earlier in the summer — back when most investors were totally distracted by campaign drama and betting heavily on a new president, anticipating a post-election bull market — many were expecting Corporate America would unleash trillions in hoarded reserves, stimulate a recovery and new bull. Back then, Reuters, Forbes, CNBC, Bloomberg, the Wall Street Journal and rest of the obsessed media simply yawned at Gross and El-Erian’s warning that equities hit a “dead end in terms of significant appreciation.”
“Dead end?” No recovery till after the 2020 elections? Yes, one angry headline even said Gross was “faithless” with stocks. Why? Conventional wisdom tells us markets run in cycles. So investors believe it’s now time for a new bull. Gross and El-Erian disagree.
Warren Buffett and Jack Bogle first mentioned a “new normal” with slow, low growth back in 2002. It fell on deaf ears. Since the 2008 meltdown the same warnings are coming from gurus like Grantham, Gross, El-Erian and others. Ignore their warnings at your peril.
America’s economy, markets downshifting to long, low, slow-growth
Except in Pimco’s new warning, the future just got much, much darker for investors — no recovery until 2022.
If the investor class thinks they will have it rough, just imagine how much fun the little people are going to have, especially in the sweatshop countries where they already spend 50%+ of their income on food most of us would refuse to touch.
the little people
“Real Americans” don’t give a sh*t about that. Only commies like you do.
OECD just downgraded U.S. growth in 2013 to 2% and that will only occur if we avoid the fiscal cliff.
Buy stocks when P/Es get below eight. Stay in cash until then.
“P”. Actual profits or what they make up they will profit next year?
So CBIT are you now saying that the economy would have been better if Romney was elected? That seems to be what your article is suggesting.
Sounds more like a global meltdown to me. A world chock full of unrepayable sovereign debts, billions who cannot afford the products they manufacture and who rely on “rich” westerners to buy and housing bubbles in the four corners of the earth.
That sounds like a fair description of the situation. A global crisis of demand due to income inequality and excess debt.
With the excess private debt having covered over the income inequality for 20 or 30 years through 2008, and soaring sovereign debts keeping the whole edifice from collapse a while longer.
The election is history. Get over it.
I was over it ten minutes after it happened. I always was as pessimistic as your article but I made the point before the election that I thought Romney could get some of the business money off the sidelines and you disagreed. So I found it very strange that you would post that article.
They’re now citing the Bible: “Seven lean years.”
And they don’t start until we allow the losses to be taken. We’d be past the halfway point already if we’d have made the guilty parties take the loss in 08-09 instead of putting it off and pushing it onto the taxpayers. But the same people are still in charge and are richer than ever, so “Mission Accomplished” I guess.
Yes, six trillion taken off their books and added to the national debt. Here is why I think they will be able to create far more inflation than the board believes to drive up nominal housing prices. In ordinary times, the government pays for its spending in one of two ways it taxes or it borrows the money from its citizens.
Either way the money is removed from the private sector and thus it reduces spending by the private sector while it increases spending in the governmental sector. This naturally somewhat reduces the inflationary impact of deficit spending. But we live in a new world (really a throw back to the Continental Congress) where we do neither, we just print the money. You can’t be more inflationary than that. That is why the PTB really do not want to raise taxes very much or cut governmental spending very much. They know how much this economy is dependent on the sugar rush of monetized deficit spending. Without either the housing bonds or the government bonds, how is the Fed going to inject the sugar into the economy?
“how is the Fed going to inject the sugar…”
An amount equal to our GDP is “invested” in commodities speculation by those the Fed injects (it didn’t used to be this way). This is not you and it is not me getting injected. You and me see our food bill climb. That rather sucks sugar out of the broad economy IMO, concentrating it in the center.
“That rather sucks sugar out of the broad economy IMO, concentrating it in the center.”
Sounds rather like taxation, no?
America’s economy, markets downshifting to long, low, slow-growth
I guess there are worse things that could happen.
It is easier on the environment.
Long-term, slow, steady growth.
You can see why it would horrify Wall Street bubble merchants.
They should already be horrified. 2% growth with 10% borrowing isn’t going to end well for any of us.
Housing and consumer confidence are both up, and Mr Market is tanking in response.
Do you think the smart money is losing faith in the sustainability of the Fed’s financially engineered recovery?
Nov. 27, 2012, 10:11 a.m. EST
Consumer confidence hits post-recession peak
Best reading since February 2008
By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — Consumer confidence rose in November to its best reading in more than four years, according to data released Tuesday, as growing hopes for the jobs market buoys sentiment.
The Conference Board said its consumer confidence index rose to 73.7 in November from 73.1 in October. That’s above the 72.2 level forecast in a MarketWatch-compiled survey of economists and the best level since February 2008. The October reading was upwardly revised from 72.2.
It was this language in the article:
Fiscal Cliff Hostage Situation Day 14: The Thelma & Louise Caucus
by Daniel Gross Nov 20, 2012 8:30 PM EST
Up for a cliff dive? The outliers in the Thelma & Louise Caucus are—they believe careening over the fiscal cliff is a necessary step to rationalize our tax code. Dan Gross explains why he’s one of them.
Tuesday was Day 14 of the Fiscal Cliff Hostage Situation. With Congress out of session and most representatives heading home for Thanksgiving, there weren’t any formal talks. The presumption seems to be, however, that Congress and the White House will come together to make a deal before Jan. 1, thus preventing tax rates from soaring and feared automatic spending cuts from kicking in.
Most voices in official Washington earnestly assure Wall Street, the wealthy, and companies that they want nothing so much as to make a deal in the next several weeks. And we should take them at their word. But here and there, it’s possible to detect voices who are urging inaction. Some people, left, center, and right, believe careening over the cliff would be an affirmative good, a willful act of liberation, a step that is necessary to rationalize our tax code. I’ve dubbed these folks the Thelma & Louise Caucus. And I count myself a member.
Comparatively few members of Congress can be seen actively advocating for a lack of resolution. It’s frowned upon. But Sen. Patty Murray, the high-ranking liberal Democrat from Washington, isn’t afraid of the cliff. As Matt Yglesias of Slate points out, Murray in July spoke of the utility of going over the cliff in purely practical terms. In her view, the expiration of the Bush tax cuts establishes a new baseline of significantly higher rates, which would then make it much easier for Republicans to sign off on a tax cut deal. “We will have a new fiscal and political reality,” Murray said. “If the Bush tax cuts expire, every proposal will be a tax-cut proposal, and the pledge will no longer keep Republicans boxed in and unable to compromise.” And, in Murray’s view, this gives Democrats the upper hand. “If middle-class families start seeing some money coming out of their paychecks next year, are Republicans really going to stand up and fight for new tax cuts for the rich?” Without the cliff, there’s no prospect of a deal.
Other members of the Thelma & Louise Caucus believe the cliff is desirable for reasons of justice, not of tactics. Jonathan Cohn, the longtime reporter and Ann Arbor–based health-care maven at The New Republic, is the president of the Michigan chapter of the caucus. For Cohn, the cliff solves all sorts of problems. He never liked the Bush tax cuts to begin with and says we need the money. “I always thought that we should get rid of all the Bush tax cuts,” he said. “It seems to me the Clinton-era tax rates were just fine.”
“If middle-class families start seeing some money coming out of their paychecks next year, are Republicans really going to stand up and fight for new tax cuts for the rich?”
Said on HBB weeks ago.
He never liked the Bush tax cuts to begin with and says we need the money.
And what do you need the money for, Mr. Cohn? Who earned the money Mr. Cohn? I think Mr. Cohn needs to be tarred and feathered. See how long he keeps preaching about increased taxes on working folks then…
I think Mr. Cohn needs to be tarred and feathered.
Yee-haw! Let’s round us up a mob, and git ‘im!
Will the stock market go over the cliff before Christmas if no fiscal cliff deal is reached by then?
Nov. 27, 2012, 2:48 p.m. EST
Stocks at session lows on Reid debt talk report
NEW YORK (MarketWatch) — U.S. stocks turned decisively lower Tuesday afternoon after Senate Majority leader Harry Reid reportedly said little progress had been made in fiscal-cliff talks. Peter Boockvar, equity strategist at Miller Tabak, attributed the market’s intensified decline to Bloomberg News reporting the Nevada Democrat had expressed disappointment in how little progress had been made in the negotiations to avert billions of dollars in automatic spending cuts and tax hikes set to start in the new year.
I think that Sen. Murray has hit upon why there may not be a deal. If Obama insists that Republicans raise the tax rates and not just reduce tax loopholes, it will require them to break their no tax increase pledges. They can just wait and vote for a tax reduction for the 98% later. I cannot see their political incentive to make a deal. It is the sitting President that gets the blame or the credit for the economy. Clinton gets the credit for the good economy between 1996 and 2000, not the Republican congress. Of course, the fact that it was a bubble economy is also ignored but that is a whole other post.
I think we’re very close to Grover Norquist becoming irrelevant. As soon as the dam cracks they will all say it’s different now and break their promise to him. Someone respected just has to go first.
Grover may have been brilliant or blind.
He said he’d force his adherents to take a no-tax-raise pledge. That’s very easy. No politician likes to raise taxes.
But… he never said anything about spending. And all politicians, Democrat or Republican, love to spend. And they’ll happily deficit-spend, which is the best way to do it from their perspective.
Until of course… the currency loses its credibility.
“But the currency can’t lose its credibility!” Sure it can. It’s happened in the past to other nations. Again, if the Fed stays disciplined with its printing press, it can enrich its cronies and keep prices relatively stable for the rest. But that’s an “IF” it can maintain discipline. Right now, it’s flexing its muscle, seeing what it can and can’t get away with. And why. But the fact that a currency can lose credibility if it goes Zimbabwe or Weimar is not in doubt.
I assume brilliant, for better or worse. But as soon as the politicians think that the majority of their constituents want them to break the pledge, they will. I think we’re very close.
What will be more difficult is for a new R challenger to survive the primaries without taking the pledge in the first place. If that happens then he’ll be truly irrelevant.
Senate fiscal-cliff bickering spooks U.S. stock market
Sniping between Senate leaders over the fiscal cliff helped pressure stocks on Tuesday, even as the White House insisted that talks about averting tax hikes and spending cuts are on track.
And here is why socialism is evil. The disincentive for productive work and the inherent unfairness of the redistribution of wealth. As posted currently on Zerohedge:
As quantified, and explained by Gary Alexander, Secretary of Public Welfare, Commonwealth of Pennsylvania, “the single mom is better off earnings gross income of $29,000 with $57,327 in net income & benefits [aka entitlements from the redistribution of wealth from the government] than to earn gross income of $69,000 with net income and benefits of $57,045.”
I have family in the $69k income bracket. They both work hard in their respective jobs. This is a slap in the face to their sacrifice, hard work, and moral character.
Most of the difference is Medicaid, I bet. When we have universal single-payer health care coverage, there will be less of these inversions.
Based on the graphic provided in the article, maybe $5k of that is Medicare, another $7k is housing subsidy and a whopping $12k is childcare assistance. The rest is tax credits, food assistance, and actual welfare [cash] assistance.
Since you are a super smart and hardworking start-up guy you should know that chart and article isn’t accurate. The actual chart he is referring to is in my link.
For starters, Emmerich overestimated the federal tax liability of the $60,000 family by failing to distinguish between gross and taxable income (the $60,000 family only has $40,400 in taxable income, according to the CBPP) and by ignoring the child tax credit, which benefits wealthier families more than poorer ones. The family making $60,000 would actually pay only about $8,043 in payroll and income taxes, not $13,034. As for Medicaid, CBPP pointed out that a family making $14,500 wouldn’t actually be eligible in Mississippi, where the cutoff level of qualifying income for a family of three is a paltry $8,064 per year. Even if that family were eligible, however, Emmerich’s estimate of their benefits is way off. Medicaid is a relative bargain for Mississippi—the state spends, on average, $2,510 a year per adult beneficiary and $1,659 per child beneficiary, according to the most recent numbers.
You didn’t read the article from zerohedge or look at the graphic provided by the Pennsylvania department of Public Welfare and quoted in the article.
This was for Pennsylvania, not Mississippi [FAIL 1]. The incomes in question were $29k and $69k [FAIL 2]. The quote and graphic come from Gary Alexander, Secretary of Public Welfare, Commonwealth of Pennsylvania, not a newspaper publisher [FAIL 3]
Sorry, the Zerohedge links I occasionally post tend to get caught in the spam filter. Just google the following:
When Work Is Punished: The Tragedy Of America’s Welfare State
That’s the title of the article…
You are obviously a racist.
Everybody who opposes gibs-me-dat is a racist.
So what do you propose for those whose jobs have been offshored and they now have to be satisfied with lucky ducky wages?
We expect everyone to work. Yet childcare is another one of those astronomically expensive needs in America. And grandma can’t watch the kids either. She has 3 part time jobs to supplement the $700/month she gets from SS.
Why would they be satisfied with their reduced lot in life? I was laid off in 2003, after training my offshore replacement. I spent two years at crappy jobs and took a 50% pay cut. Meanwhile, I sold my condo, sold my luxury car for something much cheaper, and moved in with my parents. It took until 2008 for me to surpass my 2002 income. Today I’m at 150% of my 2002 income and still not satisfied, hence the startup.
It’s hard for me to have any sympathy for someone who laments their lot in life when they live in one of the wealthiest countries in the world, with almost unlimited opportunities to better themselves. Unemployed? Move to North Dakota… they can’t find enough people to work in the oil and gas fields. Need an education and can’t afford it? Join the military… they still need new recruits, even as they are shifting more experienced personnel out. When you’re done, you’ll get the GI Bill. Want to retrain careers? Take classes at a community college… they are still relatively affordable.
Rivlin: ‘Extremely Stupid’ to Go Over Fiscal Cliff
In an interview with WSJ’s Jerry Seib, the founder of the Congressional Budget Office, Alice Rivlin, says a temporary deal to raise taxes on those earning $250,000 or more could lay the groundwork for an overhaul of the U.S. tax code.
11/16/2012 11:53:56 AM10:59
They’re gonna hire David Beckham to kick that can as far down the road as possible.
Allena, just got my copy of your book and can’t wait to read it! Meant to do it sooner, but have been a little discombobulated for the past 2 weeks with jet lag. Have only read through the introduction and I really enjoy your “energy”. Thanks for putting it out there.
I had a heartbreaking talk with a brilliant chemist today. She wants to move… but… she can’t… sell… her… house.
Surely she is clever enough to burn it down without getting caught.
Or maybe she has a friend that likes playing with fire.
(Note to Federal snoopers: I am JOKING)
What’s a strategic default among friends? She could just stop making the payments and rent it for a few years until it’s finally foreclosed. Sounds like a win-win to me.
That’s what I said, too, but I don’t know what Florida recourse laws are like, and she said she has savings.
If you got ‘em, smoke ‘em.
“What’s a strategic default among friends? She could just stop making the payments and rent it for a few years until it’s finally foreclosed. Sounds like a win-win to me.”
Were you the one giving advice to my last 2 LLs?
“(Note to Federal snoopers: I am JOKING)”
We’re not so sure about that.
Hah! You bring to mind a conversation that just played out in my car between sons Number One and Number Two:
Mom: “A car was stolen down the block from us last week, and several car prowls recently took place in our neighborhood.”
Son Two: “Why can’t the FBI send an agent to watch over our neighborhood?”
Son One: “The FBI has bigger concerns than to worry about than people getting their GPS stolen.”
Apologies if this has been posted already -
“Households are in a poor position to sustain U.S. economic growth because their wages are failing to keep pace with inflation, according to Pavilion Global Markets Ltd. strategists.
As the CHART OF THE DAY shows, average hourly earnings at private employers have fallen on an inflation-adjusted basis all but once since February 2011, according to monthly data compiled by the Labor Department. The exception occurred in July, when so-called real earnings were unchanged.”
Might this circumstance of lower earnings flow through to lower housing prices at some point? One can only hope.
My income has dropped by maybe 20 percent since the onset of the Great Recession. Luckily our landlord decided to keep our rent steady for another year in 2013. As of now, the (geometric) annual average rent increase we have experienced is 1.8%/year. Seems fair, especially given that we did not have to share in our landlord’s six-figure real estate investing loss.
Great data from 2011.
Among the tidbits (tab C-13-00):
20 million of the current owners put down between 0 and 5% when they purchased their home. This is out of a todal of 71.6 million.
22.4 million put between 6% and 20%
19.7 million 21% to all cash
9.5 million didn’t report.
15.1 million people have mortgages with rate of 6% or higher.
7.8 million people report being underwater.
38.8 million report fixed payment mortgages. The rest are either unreported (6.3 million) or something else (3.2 million).
Shiller on CNBC.
The slideshow is worth a look.
Down But Not Out: Underwater mortgages
By Phoebe Connelly, Yahoo! News
Thu, Aug 9, 2012
Lisa Apolinski faced a rude awakening when she went to refinance her home in 2008. “The lender told me my home was worth $225,000. I asked him if he had the correct house,” Apolinski told Yahoo News.
The lender’s reply? “You are underwater,” he said, according to Apolinski. Her home has risen in value since then—to $316,000—but is still worth less than what she owes on her mortgage.
In the second quarter of 2012, U.S. home values rose by the largest percentage in seven years. Still, more than 11 million Americans owe more on their homes than the properties are currently worth. We asked Yahoo readers whose mortgages were underwater to share their stories and put together a slideshow of their stories. Of those who wrote in, all had purchased in the ’00s.
http://news.yahoo.com/blogs/lookout/down-not-underwater-mortgages-194849588–finance.html - 291k -
Well this board predicted it and now CNBC has confirmed it:
The proportion of U.S. student loan balances that are in delinquency — that is, unpaid for 90 days or more — surpassed that of credit-card balances in the third quarter for the first time, according to the Federal Reserve Bank of New York.
Of the $956 billion in student-loan debt outstanding as of September, 11 percent was delinquent — up from less than 9 percent in the second quarter, and higher than the 10.5 percent of credit-card debt, which was delinquent in the third quarter. By comparison, delinquency rates on mortgages, home-equity lines of credit and auto loans stood at 5.9 percent, 4.9 percent, and 4.3 percent respectively as of September. (Read More: Debt-Free College? Yes, It Exists)
This generation is so screwed, my generation largerly avoided the decline in unskilled and semi-skilled wages by getting a higher education but now as developing countries produce more engineers and even law and medicine can be outsourced, wages in those fields will be pressured by developing countries but this generation’s student debts will be at first and not third world levels. It is a really bad combination.
BTW, notice the delinquency rates, protect the car first, pay the home equity loan second since it is recourse and pay the non-recourse mortgage last. Who says people aren’t smart?
Obama promotes tax agenda, Congress in stand-off
Darkness sets in over the U.S. Capitol building hours before U.S. President Barack Obama is set to deliver his State of the Union address to a joint session of Congress on Capitol Hill in Washington January 24, 2012. REUTERS/Jonathan Ernst
By Richard Cowan and Jeff Mason
WASHINGTON | Tue Nov 27, 2012 9:25pm EST
(Reuters) - President Barack Obama on Tuesday launched a public relations push for his bid to raise taxes on wealthy Americans, but U.S. lawmakers remained deadlocked over dramatic, year-end tax increases and spending cuts known as the “fiscal cliff.”
At the White House, small business leaders emerged from a one-hour meeting with Obama to voice support for his goal of extending low tax rates for the middle class beyond the end of the year, while letting rates rise for wealthier taxpayers.
The business owners urged Obama “to fight to keep the middle-class tax cuts,” said Lew Prince, co-founder of Vintage Vinyl, an independent music store in St. Louis, Mo.
“What grows jobs in America is consumers spending money, and the average person needs that two or three thousand dollars a year in his pocket to help drive the economy,” Prince told reporters at the White House.
I’ll ask the same question I was asking of Obama before the election.
What does he propose to do about cutting spending? Because raising taxes isn’t going to solve the problem…sigh…leadership on the deficit is completely absent.
Housing pimps are engaged in a major fiscal cliff fear mongering effort.
The upside to the situation is that once the dead cat bounce in housing prices gives way to further declines, housing pundits will have a convenient scape goat: politicians bickering over the fiscal cliff.
Fiscal cliff could be housing’s worst nightmare - Sharga (4:52)
Nov 27 - Carrington Mortgage Holdings’ Rick Sharga says that while the housing market is in the nascent stages of a recovery, if agreement isn’t reached on the fiscal cliff, it could go back into recession.
Even if political leaders decide to drive the U.S. economy over the fiscal cliff, the housing recovery is so strong that nobody needs to worry.
Why not celebrate the housing recovery by going out and buying yourself ten or so investment properties?
HEARD ON THE STREET
Updated November 27, 2012, 3:27 p.m. ET
‘Cliff’ Fails to Dent Home Improvement
By JUSTIN LAHART
So far worries about the “fiscal cliff” don’t appear to be weighing on the housing market. Perhaps they never will.
Housing may help alleviate cliff-related weakness in other areas of the economy during the months ahead.
Businesses have long been on edge over the tax increases and spending cuts scheduled for January, and consumers, to judge by high-frequency confidence readings from Gallup and Rasmussen Reports, are becoming wary of Washington’s ability to come to a deal.
Meanwhile, if anything, the housing market appears to be gaining strength into the end of the year. Indexes released Tuesday by the Federal Housing Finance Agency and S&P/Case-Shiller showed that home prices continued to gain ground through September. Last week, the National Association of Realtors reported that sales of previously owned homes last month were 11% above their year-earlier level, while the National Association of Home Builders said that its measure of builder sentiment, while still showing a bit of pessimism, reached its highest level since 2006.
There is little doubt that if the U.S. really did go over the fiscal cliff, with Washington doing nothing about it, housing would get hurt. With a larger chunk of their paychecks going toward taxes—the Tax Policy Center estimates the average household with $75,000 to $100,000 in income would pay $3,688 more to the U.S. government—many people would have a harder time paying their mortgages. And since the cliff would almost certainly lead to a recession, higher taxes would be the least of many families’ economic woes.
But while investors’ general belief that a deal to avert the cliff by year-end may turn out to be a little optimistic, it seems unlikely that many of the tax increases and spending cuts would be allowed to last long into the new year. Even a brief tumble would dent the overall economy. But it may be the things that housing has going for it—low interest rates, home prices still near their levels of a decade ago, low inventory levels and a pickup in household formation—would allow it to escape unscathed.
Fess up: How many HBB posters belong to the Thelma and Louise Caucus?
Letting All Taxes Revert To 1990s Levels Will Fix The Deficit
The Week | Nov. 23, 2012, 12:15 PM
There are lots of good reasons to avoid letting the U.S. fall over the looming fiscal cliff, some $800 billion in annual spending cuts and tax increases scheduled to start Jan. 1 unless Congress and President Obama reach a deal.
The U.S. could slip back into recession, credit-rating agencies might downgrade the U.S. for political dysfunction, and the military and a host of government programs and agencies would face pretty drastic cuts — the threat of pain was the point of the “sequestration,” after all.
But “some people, left, center, and right, believe careening over the cliff would be an affirmative good, a willful act of liberation, a step that is necessary to rationalize our tax code,” says Daniel Gross at The Daily Beast.
“I’ve dubbed these folks the Thelma & Louise Caucus. And I count myself a member.” Here, five serious reasons people are actually rooting for us to drive over the cliff:
Count me in. Am I Thelma? Or Louise?
Kim Jong Un wins ‘Sexiest Man Alive’: How The Onion tricked a Chinese newspaper
The North Korean dictator wins the satirical paper’s dubious distinction… but not everyone was in on the joke
By Chris Gayomali | 9:55am EST
Kim Jong Un, accompanied by his wife Ri So Ju on July 25, shows off that “boyish charm” that made him The Onion’s “Sexiest Man Alive” 2012.
Not to be outdone by People’s annual ode to chiseled abs, The Onion nominated North Korean dictator Kim Jong Un this year’s “Sexiest Man Alive.” Unfortunately, not everyone was in on the spoof, namely China’s largest Communist Party newspaper, The People’s Daily, which not only took the bait but splashed a 55-page slideshow dedicated to the boyish leader across its homepage.
“The U.S. website The Onion has named North Korean supreme leader Kim Jong Un as the “Sexiest Man Alive for the year 2012,” writes the People’s Daily, underneath a cover photo of Kim majestically atop a horse.
lol… now that’s a good one.
Do Republicans in Congress lack the ability to think for themselves?
Why more and more Republicans are dumping Grover Norquist
A growing number of GOP lawmakers are disavowing Norquist’s no-new-taxes pledge to better confront the country’s dire fiscal situation
By Peter Weber | 6:58am EST
Grover Norquist may be losing favor with some members of Congress who wish to compromise on the issue of tax increases.
“Who’s afraid of Grover Norquist?” asks John Avlon at CNN. “Fewer and fewer Republicans, thankfully.” As negotiations over the dreaded “fiscal cliff” get started in earnest, “the declarations of independence from Norquist’s absolutist anti-tax pledge have been coming fast and furious.” Norquist, the head of anti-tax lobbying group Americans for Tax Reform, has been getting Republicans to sign “The Pledge” — a vow to oppose not just any tax rate increase, but also any measures to increase tax revenue — since 1986. “Norquist’s hold on the GOP has been loosening as congressional leaders recognize that this extreme, unelected activist is helping to hold a balanced bipartisan deal hostage.” Good riddance. “The only pledge members of Congress should take is the Pledge of Allegiance.”
I’m loving this one…
Check out the housing market’s source of future demand:
Life, delayed: Couples putting off marriage due to economy, changing views
By Lois M. Collins, Deseret News
Published: Saturday, Nov. 24 2012 1:00 p.m. MST
Nick and Elizabeth Dall, 26 and 25, waited to get married until they figured they’d be able to make ends meet pretty well, but it’s still challenging. An increasing number of young couples are putting off marriage because of the job market and economic factors.
Marriage used to be a foundation for adult life. Today, it’s not the start of building, but a signal that you’ve arrived, say experts who see young people delaying marriage because of a bad economy and that changing world view.
“One plus one is more than two. When you marry and work together and produce together, you make more money.”
SALT LAKE CITY — Jessica Greenway, 23, of Seattle, Wash., doesn’t see a wedding in her near future, though she and longtime boyfriend Rick Holland, 25, are serious about marrying. Eventually. He’s in school and they both work so they can afford to be together some day, she said. When? She’s not certain.
They don’t feel ready.
Couples have long felt less than ready for marriage, but delaying because of financial fear is relatively new. Marriage used to be a foundation for adult life, a base from which a couple would launch into work, start a family and try to carve a niche in a middle-class lifestyle. Now, young people increasingly delay marriage or having a baby until they feel they’ve achieved some success. Marriage has moved from first step to capstone, experts say, against a backdrop of shifting economic and societal standards. Newlyweds and first-time parents are older. But the numbers alone, demographers warn, don’t capture the nuance of complicated and related decisions that include personal choice, economics, education and expectations.
As trends shift, consider oddly contradictory examples experts provided the Deseret News: People have so much respect for marriage that they choose not to do it, instead cohabiting. Or, young adults are shelving dreams of marriage because of the economy — along with optimism about their futures.
Meeting, falling in love and deciding to start the adventure of an adult life together even on a shoestring is becoming an outdated progression.
“If you look at people today, couples assume they need a middle-class lifestyle going into marriage. They are reluctant to get married without having that middle-class lifestyle well in hand or at least just around the corner,” said W. Bradford Wilcox, director of the National Marriage Project at the University of Virginia.
The economy is a “major drag” on marriage and starting a family, he said. “We have seen marriage rates come down more since the Great Recession than prior to it, although it’s also part and parcel of a larger secular trend” that has seen more cohabiting. But that’s not the whole story. “Plenty of couples are postponing marriage but not cohabiting.”
In a survey by Generation Opportunity in July, 84 percent of young people 18-29 tabled a major life change or purchase they had planned, citing the economy. Of those, 23 percent put aside plans to marry and 31 percent put off having children.
“The No. 1 issue defining this generation is lack of full-time, meaningful jobs and economic opportunities overall,” said Paul T. Conway, president of Generation Opportunity, a politically neutral nonprofit that engages millennials. Its recent poll found that “the once unshakable sense of optimism” that has marked young adulthood has “virtually disappeared.”
Their new reality, he said, is “a series of part-time jobs, periods of unemployment or settling for jobs below their education or skill level — and they know they’re settling.” He believes if more opportunities aren’t made for young adults, nothing less than America’s global competitiveness is at stake. It’s not just a matter of what’s happening to family structure, though that has wider ramifications than people recognize, too, he said.
“When you start to put the data points together, a talented generation is being impacted at the point of entry-level job skills,” Conway said, adding that the progression of work, getting married, buying a home, starting a family “is stalled.”
Why? While I’d argue that any age in the 20s is too early, methinks the real reason is they think that they need a house and must have kids tomorrow, or they need to throw a $50k+ wedding, otherwise it doesn’t count.
If they know the other person is “the one” (assuming of course, that calling someone “the one” is done because they have similar goals and earnings potential, or the earnings potential difference is acceptable), I don’t think the economy is the issue. Their expectations and assumptions of what a married couple is, and have, is the issue.
Notice how “the one” always lives in the same city or at least close enough to bump into in the first place. I found that it’s a little more practical to settle for “you’ll do” and it has just as much chance of working out.
Any predictions on when the current wave of housing market lies and bottom calls will give way to the next leg down in the market?
I’m thinking it’s bound to happen after the Souper Bowl.
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