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Wealth implosion: It's not just housing
CNN Money ^ | 06/19/12 | Tami Luhby

Posted on 06/21/2012 6:18:04 AM PDT by TigerLikesRooster

Wealth implosion: It's not just housing

By Tami Luhby @CNNMoney June 19, 2012: 2:32 PM ET

NEW YORK (CNNMoney) -- Americans' net worth collapsed in recent years, but don't blame the housing market for it all.

A CNNMoney analysis of new Census Bureau data shows that if you strip out the effects of the housing collapse, median household net worth still fell by 25% between 2005 and 2010. The decline was driven largely by the plummeting stock market, which devastated Americans' portfolios and retirement accounts.

Overall, median household net worth declined 35% to $66,740 in 2010.

The median worth of stock and mutual fund portfolios fell 33%, while the median home equity value dropped 28%.

"One of the significant factors is housing, of course, but it's not that alone" said Alfred Gottschalck, an economist with the Census Bureau. "It's how business conditions affect stock and retirement accounts."

(Excerpt) Read more at money.cnn.com ...


TOPICS: Business/Economy; Front Page News; News/Current Events
KEYWORDS: 2012; bhoeconomy; democrateconomy; democrats; depression; economy; housing; networth; obama; obamanomics; recession; stock; wealth
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1 posted on 06/21/2012 6:18:06 AM PDT by TigerLikesRooster
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To: TigerLikesRooster; PAR35; AndyJackson; Thane_Banquo; nicksaunt; MadLibDisease; happygrl; ...

P!


2 posted on 06/21/2012 6:22:39 AM PDT by TigerLikesRooster (The way to crush the bourgeois is to grind them between the millstones of taxation and inflation)
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To: TigerLikesRooster

Oh no, no,no...just ask 0bama. It is not at all that pesky issue of wealth devaluation.

As any liberal in fact...they will tell you the rich are sitting on the sidelines with hoards of money & wealth they won’t invest.


3 posted on 06/21/2012 6:27:43 AM PDT by EBH (Obama took away your American Dreams and replaced them with "Dreams from My (his) Father".)
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To: TigerLikesRooster

Good find. Thanks for the perspective. REALITY - - - what a concept!


4 posted on 06/21/2012 6:28:49 AM PDT by Graewoulf ((Dictator Baby-Doc Barack's obama"care" violates Sherman Anti-Trust Law, AND U.S. Constitution.))
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To: TigerLikesRooster

The article focuses on housing and financial assets. Other factors resulting in loss of household wealth in recent years include:

1) Decline in real household incomes. Middle class jobs are going away.
2) Inflation. The hidden tax eroding the purchasing power of money and the result of both government and Federal Reserve policies. Food and energy prices have accelerated and take an increasing share of household income, yet food and energy inflation is not included in the government inflation statistics.
3) Negative rate of return on savings. Savings accounts, CD’s, and bond interest rates have declined due to Federal Reserve low interest rate policy.
4) Total tax burden (federal, state, local) continues to rise.

The factors above will make it difficult for households to accumulate new wealth to offset the lost wealth.


5 posted on 06/21/2012 6:29:27 AM PDT by Soul of the South
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To: TigerLikesRooster

To some considerable extent this decline is not a decline in real wealth, it’s a decline in an illusion.

Some significant percentage, my inexpert estimate around 50%, is the bursting of the bubble. Bubbles, by definition, do not represent actual wealth, they’re merely an illusion.

If you happened to sell out at the height of the bubble, then it was real. But there is, also by definition, no way everybody could sell out at the right time. Therefore most people are going to get caught when the bubble pops.

So we thought we were a lot richer than we were.


6 posted on 06/21/2012 6:33:32 AM PDT by Sherman Logan
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To: Soul of the South

On the other hand, there is an opportunity for thrifty, responsible, industrious households to get great bargains in real assets. There are places in some areas near me where you can buy multi-family units for one half their 2006 sales prices.


7 posted on 06/21/2012 6:39:24 AM PDT by MSF BU (n)
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To: TigerLikesRooster

It doesn’t look like there’s any consideration of savings accounts being slowly (or quickly) depleted by people who are either completely unemployed or working hand to mouth to make next month’s payments.


8 posted on 06/21/2012 6:41:19 AM PDT by jiggyboy (Ten percent of poll respondents are either lying or insane)
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To: Soul of the South

3) Negative rate of return on savings. Savings accounts, CD’s, and bond interest rates have declined due to Federal Reserve low interest rate policy.


This especially is being done to keep the cost of the ballooning deficit managable. Without it, revenues would not even be enough to cover interest on the debt. Then massive transfer payments would cease. Since most of the population gets some subsidy or other these daze, all hell would break loose.

The FED will work to keep interest rates low indefinitely for this reason. Old people won’t riot, but young minorities will. This whole scheme is just one big Hail Mary, with out leaders hoping for some kind of economic miracle to grow us out of this unsustainable mess. But it ain’t gonna happen ‘cause there are no saviors left.


9 posted on 06/21/2012 6:48:14 AM PDT by rbg81
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To: jiggyboy
"It doesn’t look like there’s any consideration of savings accounts being slowly (or quickly) depleted by people who are either completely unemployed or working hand to mouth to make next month’s payments."

Or savings and retirement accounts being depleted by people whose children are hitting college age with devalued college investment accounts.

10 posted on 06/21/2012 6:51:33 AM PDT by Think free or die
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To: Sherman Logan
If you happened to sell out at the height of the bubble, then it was real.

Even this situation goes hand in hand the "illusion". Real money went to the buyer, but the other side of that transaction turned out to be just bits shuffled from lender to Fannie Mae to a line in Stimulus (or "Porkulus") to their final resting place in the Federal Reserve's balance sheet, like the tortured souls captured by the Ghostbusters, fighting each other in the Containment Unit for eternity.

11 posted on 06/21/2012 6:52:44 AM PDT by jiggyboy (Ten percent of poll respondents are either lying or insane)
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To: TigerLikesRooster

So how’s that shipping your entire consumer manufacturing sector off to China working for
you America?


12 posted on 06/21/2012 7:12:47 AM PDT by Last Dakotan
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To: Sherman Logan

“If you happened to sell out at the height of the bubble, then it was real.”
//////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

Yes, for the person selling it was real but what many people don’t understand is that even if you were lucky enough to sell at the top that may have increased YOUR real wealth but the total wealth of the nation did NOT increase. Your gain is offset by the loss of the buyer. I once stated on FR that the constantly increasing appraised value of housing that was happening at that time DID NOT represent an increase in total wealth in the real world. I was called several different kinds of a fool by certain FREEPERS for that statement but I still stick by it. Likewise the drop in housing prices did not represent a real loss in total wealth of the nation. The house is the real wealth and the house is still there. As long as a house is being sold AND PAID FOR any loss to the seller is offset by a gain to the buyer and vice versa. It is only when houses and commercial buildings sit empty and fall into disrepair that there is a REAL decline in total wealth, that is going on now. As I drive around my area I see more and more empty buildings and empty houses. A house can only sit empty and untouched for so long and it starts to fall down. A few leaks begin and in this humid climate the rot begins rapidly. The total real wealth in my community is dropping and dropping rapidly, of this I have no doubt.

In short, barring outside inputs from other nations such as when oil wealthy little nations are able to simply let oil companies from other nations come in and produce oil and pay royalties is there any increase in REAL wealth from any source other than the hard work of the citizens. This is so simple that many people cannot comprehend it. We have large numbers of Americans who imagine that somehow increasing numbers are real wealth. The same people seem to think that a job is a job is a job. They think that a government job that pays $100,000. a year is equal in value to two jobs for plumbers making $50,000. a year each. It ain’t so, never has been, never will be. The plumbers preserve and or produce real wealth, the government worker in all too many cases is tasked with preventing the production or preservation of real wealth.


13 posted on 06/21/2012 7:35:45 AM PDT by RipSawyer
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To: Last Dakotan
So how’s that shipping your entire consumer manufacturing sector off to China working for you America?

Quite well, for the people that shipped them off.

14 posted on 06/21/2012 7:55:49 AM PDT by Wolfie
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To: Last Dakotan

Why do so many Freepers so miss millions of Americans working menial and mind numbing low paying jobs? I’ll never get it,


15 posted on 06/21/2012 8:01:52 AM PDT by gura (If Allah is so great, why does he need fat sexually confused fanboys to do his dirty work? -iowahawk)
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To: TigerLikesRooster

For many years the intentional inflation of the dollar has dropped our purchasing power by a large percentage.

The impact has been especially bad in the Obama era because of the housing collapse, the jobless rate due to Obama’s business killing policies, and the Fed flooding the world with watered down dllars to support humongous deficit spending.

Since 1990 the dollar has lost about 1/3 of its purchasing power.


16 posted on 06/21/2012 8:07:37 AM PDT by Iron Munro (John Adams: 'Two ways to enslave a country. One is by the sword, the other is by debt')
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To: gura
As if the current alternative of sitting on your ass and having the government take care of you isn't even more mind numbing and menial.

When you lose the assembly jobs you lose the higher skilled one too. Besides, not all people were meant to be scientists.

17 posted on 06/21/2012 8:20:22 AM PDT by Last Dakotan
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To: gura; Last Dakotan
Why do so many Freepers so miss millions of Americans working menial and mind numbing low paying jobs? I’ll never get it,

Why do some have so little respect for those who worked, supported their families, and remained independent of government handouts while working in consumer manufacturing?
18 posted on 06/21/2012 8:39:14 AM PDT by khelus
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To: gura

Because we’d rather these millions of American’s be working - menial/mind numbing, or not - than sitting on their azzes and living entirely off of welfare. That’s why.


19 posted on 06/21/2012 8:39:30 AM PDT by Jane Long (Soli Deo Gloria!)
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To: khelus

I have to keep reminding my kids, there is no such thing as a menial job.


20 posted on 06/21/2012 8:46:50 AM PDT by Last Dakotan
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To: Last Dakotan; Jane Long
I have to keep reminding my kids, there is no such thing as a menial job.

Last Dakotan, You are correct.

IMHO One of the problems I see having crept into our culture is lack of an important component of the work ethic ... lack of respect for physical and 'menial' labor.
21 posted on 06/21/2012 8:54:38 AM PDT by khelus
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To: Last Dakotan

Lots of scientist jobs are going overseas too. Scientific jobs are often related to manufacturing.


22 posted on 06/21/2012 8:57:39 AM PDT by virgil
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To: RipSawyer

All quite correct.

I was quite amused by the workers who got shafted by the collapse of Enron 10 years ago. They apparently felt they should have been informed of the poor condition of the company so they could sell their stock off to some poor schmuck who wasn’t informed.

IOW, they were upset they weren’t able to shift their losses to anther totally innocent person. In the process committing insider trading and fraud.

LOL


23 posted on 06/21/2012 9:04:39 AM PDT by Sherman Logan
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To: TigerLikesRooster
The private sector is doing fine everybody so don't get yourselves all wee wee’d up!

Time for another taxpayer funded vacation and a game of golf.

24 posted on 06/21/2012 9:07:18 AM PDT by 4yearlurker (No matter who you elect,the government eventually gets in.)
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To: Soul of the South

By allowing the 2003 tax cuts to retire, President Obama will be increasing the bottom rate from 10% to 15% and the 20% bracket to 25%.

math here:

Raising the 10% bracket to 15% represents what percentage of increase? Hint: The correct answer is NOT 5%.

Raising the 20% bracket to 25% represents what percentage of increase? Hint: The correct answer, again, is NOT 5%.

Finally, raising the 35% bracket to 39% represents what percentage of increase: Hint: The correct answer is NOT 4%.

Extra credit question: People in which tax bracket will see the largest percentage of increase in their taxes?

Extra extra credit question: People in which tax bracket will see the smallest percentage of increase in their taxes?

To those moving from the 35% to the 39% tax bracket...that’s roughly an 11% increase in taxes.

From 20% to 25%...that’s a full-blown 25% increase in taxes.

To those moving from the 10% bracket to 15%, their taxes will be increased by a whopping 50%.

So the low-income people get their taxes raised even more when seen as a percentage. And the rich folks lose a higher magnitude of money, but the percentage compared to what they already make is lower.


25 posted on 06/21/2012 9:26:27 AM PDT by TurboZamboni (Looting the future to bribe the present)
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To: RipSawyer

Many interrelated factors are also creating inefficient capital allocation and unproductive spending. A lot of houses are underwater, creating illiquid market conditions at one end of the market while foreclosures are selling for cash prices at the other end. People and businesses with otherwise good track records for repaying debt can’t get credit because their balance sheets have been negatively impacted. Someone paying on an underwater mortgage could be putting that money to better use but can’t sell the house. The bubble did a lot of damage beyond what can be objectively measured in asset prices.


26 posted on 06/21/2012 9:47:17 AM PDT by JTHomes (A lot of injustice is done under the cover of law.)
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To: gura
Why do so many Freepers so miss millions of Americans working menial and mind numbing low paying jobs? I’ll never get it,

Try thinking.

When I graduated high school, I went to the fields and work mind-numbing agricultural jobs next to the Mexicans and the immigrants from India. I was the only white guy out there. It was menial and mind-numbing, but I learned work ethic, and struggled to rise above it. I learned humility, and I learned to pray. I also went to school to improve my prospects.

Without menial jobs, we have no way to filter out the lazy bums from the good workers. My stepson refused to clean the toilets at the pizza restaurant and quit instead. Twelve years later, he is unemployed. He tries going to school, and fails, but still he gets financial aid. He works at occasional menial jobs when he can get them. He gets food stamp assistance, and leeches off of his parents and grandparents.

So what you are sayimg is that we should want Americans doing work that Americans will do, and what they won't do, what then? Immigrants? Somebody has to do menial jobs.

27 posted on 06/21/2012 9:53:03 AM PDT by webheart (King of the Run-On Sentence)
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To: RipSawyer

Many interrelated factors are also creating inefficient capital allocation and unproductive spending. A lot of houses are underwater, creating illiquid market conditions at one end of the market while foreclosures are selling for cash prices at the other end. People and businesses with otherwise good track records for repaying debt can’t get credit because their balance sheets have been negatively impacted. Someone paying on an underwater mortgage could be putting that money to better use but can’t sell the house. The bubble did a lot of damage beyond what can be objectively measured in asset prices.


28 posted on 06/21/2012 9:55:11 AM PDT by JTHomes (A lot of injustice is done under the cover of law.)
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To: MSF BU

“On the other hand, there is an opportunity for thrifty, responsible, industrious households to get great bargains in real assets. There are places in some areas near me where you can buy multi-family units for one half their 2006 sales prices.”

I agree there are many real estate bargains. My concern with multifamily rentals for the longer term is government regulation and higher taxation. The leftists are extremely creative in creating new taxes as well as playing the class warfare card. I can envision a locality run by liberals instituting a per unit “slumlord” tax on dwellings housing comprising more than one unit or on individuals and corporations owning multiple housing units. Certainly rent control is another vehicle a liberal local government can use to transfer wealth from property owners to renters.

Our economy is grinding to a halt because people with money to invest have no way to reasonably project future returns given the propensity of government to arbitrarily take actions harmful to investors.


29 posted on 06/21/2012 10:15:48 AM PDT by Soul of the South
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To: gura

My father provided a family of 5 with one of those menial, low paying jobs at a papermill. My mother did not work. We lived a hell of a lot better than I am now with my college degree and my husband and both I working with 3 kids.

Its also a matter of national security to have a strong manufacturing base.

If you had common sense you would understand that.

I


30 posted on 06/21/2012 10:29:22 AM PDT by Lil Flower (American by birth. Southern by the Grace of God! ROLL TIDE!!)
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To: gura
Why do so many Freepers so miss millions of Americans working menial and mind numbing low paying jobs?

Because a lot of those jobs were neither menial nor mind-numbing nor low-paying.

31 posted on 06/21/2012 11:29:56 AM PDT by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: TigerLikesRooster

Phuk, I’ve had it. I’m only buying lead from now on.


32 posted on 06/21/2012 12:25:39 PM PDT by crosshairs
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To: TigerLikesRooster
Not really surprised. All those market gains in the 90s turned out to be a mirage. Revisions done in the 2000s showed that the Standard and Poors earnings as a percentage of GDP peaked in 1997.
33 posted on 06/21/2012 3:48:13 PM PDT by Sam Gamgee (May God have mercy upon my enemies, because I won't. - Patton)
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To: Soul of the South

Someone pointed this out to me last week on another thread. I’d supposed it was just housing, but last night I heard from a friend whose wife’s unemployment had run out, they’d been spending their retirement funds to make ends meet. It’s very, very tough out there.


34 posted on 06/21/2012 4:41:37 PM PDT by 1010RD (First, Do No Harm)
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To: TigerLikesRooster

If you HAVE a job - take all the cr@p they give you each and every day and hold on for dear life!

And even if we all do that, we’ll still be meeting one another in the future as Wal-Mart Greeters because we’ll need to work well into our 70’s and 80’s at this point...


35 posted on 06/21/2012 4:47:05 PM PDT by Diana in Wisconsin (I don't have 'Hobbies.' I'm developing a robust Post-Apocalyptic skill set...)
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To: gura

Why do so many Freepers so miss millions of Americans working menial and mind numbing low paying jobs? I’ll never get it,

Because nearly half the population has a below average intelligence but still need a good enough job to keep body and soul together. Without jobs they’ll need to be supported by other workers who still have jobs.


36 posted on 06/21/2012 5:08:39 PM PDT by freedomfiter2 (Brutal acts of commission and yawning acts of omission both strengthen the hand of the devil.)
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To: JTHomes

Remember also Operation Twist - it’s lowering long term rates and punishing businesses that desperately need short term credit. Bailing out our bankers is hurting the rest of the economy.


37 posted on 06/21/2012 5:20:30 PM PDT by 1010RD (First, Do No Harm)
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To: 1010RD

We lost 22 million manufacturing jobs over the last 20 years due to trade policies that opened our markets and allowed the Chinese, employing mercantilist trade policies, to acquire a huge part of our manufacturing infrastructure and knowledge. Given that a factory job typically has a 3 to 4 multiple, had we not adopted these policies we would have another 60 million middle class jobs, a strong US economy, the manufacturing infrastructure to protect us if we ever have another major war where imports are cut off, and a much higher tax base. Unfortunately, the bankers on Wall Street became wealthy financing the gutting of our manufacturing base while the average US citizen has enjoyed a decade of declining standard of living.

Americans are falsely taught in school the Smoot Hawley Tariff caused the Great Depression so tariffs are bad. What they don’t tell you is that manufacturing exports at the beginning of the Great Depression in 1920 comprised only 2.5% of total GDP. From 1929 to 1932 GDP declined 45% and manufacturing output declined about the same percentage. If manufacturing exports comprised only 2.5% of the economy, and if retaliation for the Smoot tariff had been responsible for the loss 100% of our manufacturing exports (it wasn’t as our exports didn’t dry up), the most the tariff could have cost the economy was 2.5% of GDP. The remaining 42.5% drop in GDP was due to the downturn in domestic demand, not trade.

Go to a store or look around your house and see how many products you use are imported and how many are made in USA. Consider the difference in our economy if these products were made in the USA again.

We’ve experimented with globalist “free trade” for over 20 years and it has been a disaster for the middle class and while weakening our national security. Raise tariffs to 1980’s levels and rebuild US manufacturing. The US had high tariffs through most of its history to protect domestic industry. The result was the highest standard of living in the world. Our citizens are suffering from globalist trade policies, excess government regulation, and anti-business tax policies. Let’s admit the trade policies of the 1990’s and early 2000’s have been a disaster for the American worker. It is not to late to return to 1980’s prosperity.


38 posted on 06/21/2012 6:07:20 PM PDT by Soul of the South
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To: RipSawyer
what many people don’t understand is that even if you were lucky enough to sell at the top that may have increased YOUR real wealth but the total wealth of the nation did NOT increase. Your gain is offset by the loss of the buyer. I once stated on FR that the constantly increasing appraised value of housing that was happening at that time DID NOT represent an increase in total wealth in the real world. I was called several different kinds of a fool by certain FREEPERS for that statement but I still stick by it.

As someone who has been called mutliple different kinds of names by certain FREEPERS, I can relate to that. It is even worse, because the illusion of wealth was created by borrowing money to pay for "your" apparent increase in wealth, meaning that someone is now getting a rent that he was not otherwise going to get, so he is going to stop working for a living and enjoy an easy life living off the interest that must be paid by the guy who borrowed to make you wealthy. So not only have "you" quite working to enjoy your newfound "wealth," but someone else has as well.

39 posted on 06/21/2012 6:44:05 PM PDT by AndyJackson
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To: RipSawyer
They think that a government job that pays $100,000. a year is equal in value to two jobs for plumbers making $50,000. a year each

The economists identify three conditions for a free market - 1. no monopoly or monopsony 2. No externalities and 3. no information asymmetries.

In this case the government has a monopoly and monoopsony, and certainly is creating an externality on the market by bidding with taxpayer or printed money to create useless jobs in the place of useful ones.

40 posted on 06/21/2012 6:46:45 PM PDT by AndyJackson
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To: rbg81

Central banks cannot indefinitely peg nominal interest rates (r) since the inflation in the money supply necessary to peg its rate will fuel inflationary expectations (x) which are then worked into the nominal rate (n). n = r+x

In other words, say they pick a r of 2% and that the inflation required to keep it there causes a 2% increase in the expected inflation rate (x). Then rather than have an n of 2% it jumps to 4% (2% r and 2% x). This is the rate people will pay. Plus, of course, whatever the actual inflation rate when this started which was worked into the initial rate.

Low interest rates are part of the standard monetary prescriptions for recession/depression. But we appear to be seeing an example of Keynes’ idea of the Liquidity Trap which makes Monetary Policy powerless especially when risk-takers are not inclined to take risks because of punitive tax policies.

With interest rates this low the correct monetary policy should lock in rates for government debt at the longest possible maturities. Real rates must be extremely low since nominal ones are barely above the rate of inflation.


41 posted on 06/21/2012 7:26:39 PM PDT by arrogantsob (Obama must Go.)
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To: TigerLikesRooster

In my case it is almost entirely a drop in housing value of 1/3. But this drop allowed my boys to buy housing which they could not have afforded five years ago. So I am not complaining too much.


42 posted on 06/21/2012 7:29:29 PM PDT by arrogantsob (Obama must Go.)
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To: arrogantsob

Obviously, the interest rate for everyone isn’t low. But for countries that have “safe haven” status (US, Japan, Germany, UK, etc), they are. I contend that inflation is actually quite high (especially food inflation), but that is not getting factored into the official inflation rate. I also believe that the Fed buying of USTs (with $$ from thin air) is helping to keep interest rates artificially low. Because the alternative means the System will unravel.


43 posted on 06/21/2012 7:40:42 PM PDT by rbg81
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To: gura

There is dignity in all honest labor.


44 posted on 06/21/2012 7:47:14 PM PDT by Lurker (Violence is rarely the answer. But when it is, it is the only answer.)
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To: rbg81

It is pretty hard to have inflation when the housing and construction sectors of the economy are flat on their backs. This is why inflation has remained quite low, lower than I would have expected.

There is no inconsistency in having one or more sector with price increases and have the overall rate stay relatively stable. Inflation is a rise in the General price level. After the initial Obama increase in energy prices they have remained fairly stable as well so are not pushing current inflation up. And unemployment and the bad economy is keeping wage increases down.


45 posted on 06/21/2012 7:48:25 PM PDT by arrogantsob (Obama must Go.)
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To: rbg81

“I also believe that the Fed buying of USTs (with $$ from thin air) is helping to keep interest rates artificially low. “

And what of the future day when the Fed is holding 3% bonds when inflation is 10%?


46 posted on 06/21/2012 8:04:52 PM PDT by mrsmith (Dumb sluts: Lifeblood of the Media, Backbone of the Democrat Party!)
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To: Soul of the South
We lost 22 million manufacturing jobs over the last 20 years due to trade policies that opened our markets

Neat trick, since we've never had 22 million manufacturing jobs, ever.

47 posted on 06/21/2012 8:06:53 PM PDT by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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To: Lurker; All

Everyone seems to have missed the point. You create growth in an economy when you move things from a position of lower value to a position of higher value.

There is absolutely dignity in all honest labor, and a good worth ethic is not only American, but a value we should all aspire to and continue to pass on.

But any weakness in the American economy isn’t due to a lack of shoe factories, sweatshops, and other low-paying jobs. It’s a testament to the wealth of our country that we outsource the production of those goods somewhere else.


48 posted on 06/22/2012 7:15:15 AM PDT by gura (If Allah is so great, why does he need fat sexually confused fanboys to do his dirty work? -iowahawk)
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To: TurboZamboni

Thanks for posting this. I will be sending it the parents of our school age grandkids, nephews and nieces.

By allowing the 2003 tax cuts to retire, President Obama will be increasing the bottom rate from 10% to 15% and the 20% bracket to 25%.

math here:

Raising the 10% bracket to 15% represents what percentage of increase? Hint: The correct answer is NOT 5%.

Raising the 20% bracket to 25% represents what percentage of increase? Hint: The correct answer, again, is NOT 5%.

Finally, raising the 35% bracket to 39% represents what percentage of increase: Hint: The correct answer is NOT 4%.

Extra credit question: People in which tax bracket will see the largest percentage of increase in their taxes?

Extra extra credit question: People in which tax bracket will see the smallest percentage of increase in their taxes?

To those moving from the 35% to the 39% tax bracket...that’s roughly an 11% increase in taxes.

From 20% to 25%...that’s a full-blown 25% increase in taxes.

To those moving from the 10% bracket to 15%, their taxes will be increased by a whopping 50%.

So the low-income people get their taxes raised even more when seen as a percentage. And the rich folks lose a higher magnitude of money, but the percentage compared to what they already make is lower.


49 posted on 06/22/2012 8:44:47 AM PDT by Grampa Dave (ILLEGAL IMMIGRATION IS DESTROYING AMERICA-LOOK AT WHAT IT DID TO THE WHITE HOUSE!)
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To: Diana in Wisconsin

“we’ll still be meeting one another in the future as Wal-Mart Greeters because we’ll need to work well into our 70’s and 80’s at this point...”

Actually, Wal Mart has dced its greeters and put them on the floors to answer questions, help customers find items, restock returned items and items left in carts and not bought.

Target has used this concept for along time.

The hidden objective of the greeters was to let wanna be shoplifters know they were being watched as they were greeted while entering the store.

Now, they have people on the floors helping the video security systms to deter shop lifters.


50 posted on 06/22/2012 8:52:17 AM PDT by Grampa Dave (ILLEGAL IMMIGRATION IS DESTROYING AMERICA-LOOK AT WHAT IT DID TO THE WHITE HOUSE!)
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