Skip to comments.Taxnet Becomes Self-Aware on January 1st: Will Housing Maintain its Rebound?
Posted on 11/25/2012 10:27:13 AM PST by whitedog57
Japan and Spain have been in the news quite a bit lately. Japan is notorious for selling more adult diapers than baby diapers (a sign of an aging population) while Spains fiscal woes have been the talk of Europe (European authorities will transfer 35 billion euros to Spains state bank rescue fund on December 15 in exchange for massive layoffs at Spains four nationalized banks, including state-rescued Bankia).
In addition to their demographic (Japan) and fiscal (Spain) woes, both countries have been experiencing a deflation in house prices. While Spain had a housing bubble that burst in recent years (2008) while Japans housing bubble has been continuously deflating since the early 1990s. The USA, on the other hand, has seemingly stabilized after house prices began to tumble in earnest in 2008.
If we compare unemployment across the three countries, Spain currently has an unemployment rate of 25.02%, U6 employment and partial employment in the USA is 14.6% while Japan has an unemployment rate of only 4.20%. Clearly, Japans low unemployment rate is insufficient to overcome the disastrous effects of their housing bubble (and demographics are not leading to increased household formation).
The fiscal cliff lies straight ahead. We will have to see how the USA housing market does after we witness the largest tax increase since World War II (dont forget about the 20+ new Affordable Healthcare taxes) with the expiration of the Bush-era tax rate cuts and new taxes that have been put into place. Suffice it to say, American households will have less to spend on housing (and everything else) after Skynet (or Taxnet) becomes self aware on January 1.
(Excerpt) Read more at confoundedinterest.wordpress.com ...
People here on FR worry to much...the government will take care of us.
That’s what we worry about. They did it so well in Europe and China last century that American academics have fallen in love with their ideas. Millions of deaths are simply the by-produt of our lack of sophistication.
An increase in housing prices is good news for sellers.
Read my tag-line. It works in this case, too.
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