News What are the potential impacts of public confidence on the economy's recovery?

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The discussion centers on the precarious state of the U.S. economy, emphasizing that restoring public confidence is insufficient for recovery. Critics argue that reliance on cheap credit and government interventions has exacerbated the financial crisis, suggesting that a significant restructuring of the economy is necessary. The conversation highlights the ongoing challenges of rising unemployment, projected to exceed 10%, and the slow pace of economic recovery, with GDP still declining. Various recovery scenarios are debated, including V-shaped, W-shaped, and L-shaped recoveries, with pessimism about the immediate future.The dialogue also touches on the implications of national debt, which is growing rapidly and could lead to a future crisis if not addressed. Participants express skepticism about the effectiveness of government stimulus measures, pointing out that only a fraction of allocated funds have been spent, and stress the need for job creation and productive investments to drive genuine recovery. The discussion reflects a broader concern about the sustainability of economic policies and the potential for long-term consequences stemming from current fiscal practices.
  • #511
Obama announced today that the Bush-Era tax cuts would be extended for 2 years, in exchange for an extension of unemployment benefits. It appears that Obama has conceded that raising taxes during such a recession will not help the economy.

http://www.boston.com/news/nation/w...s/?rss_id=Boston.com+--+Top+political+stories

They also mention that a "payroll tax" will be reduced from 6.2% to 4.2%. I think this refers to the Social Security contribution from workers, which will help give workers higher take-home pay but will definitely accelerate the bankruptcy of Social Security as well. I'm still waiting for the day (perhaps in vein) that I can opt-out of Social Security and instead put that money in a Roth IRA or 401k of my choosing.
 
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  • #512
Mech_Engineer said:
...It appears that Obama has conceded that raising taxes during such a recession will not help the economy...
I look at it that he conceded he wouldn't get anything he wanted if he didn't give the rich what they wanted, so he gave in. Fixing the taxes for millionaires isn't going to affect the economy much, but it would help the deficit and fix some of the imbalances in the current tax system. Republicans, as usual, were douche bags, and didn't allow this to happen.
 
  • #513
dreiter said:
Fixing the taxes for millionaires isn't going to affect the economy much, but it would help the deficit and fix some of the imbalances in the current tax system.

You know what would fix the "imbalances in the current tax system"? A http://en.wikipedia.org/wiki/Flat_tax" model. Flat tax would certainly simplify the US tax code quite a bit...

dreiter said:
Republicans, as usual, were douche bags, and didn't allow this to happen.

Republicans are D-bags for defending citizen's right to keep money they earned?
 
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  • #514
mech_engineer said:
you know what would fix the "imbalances in the current tax system"? A http://en.wikipedia.org/wiki/flat_tax" model. Flat tax would certainly simplify the us tax code quite a bit...
+1

republicans are d-bags for defending citizen's right to keep money they earned?
+2
 
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  • #515
Mech_Engineer said:
Obama announced today that the Bush-Era tax cuts would be extended for 2 years, in exchange for an extension of unemployment benefits. It appears that Obama has conceded that raising taxes during such a recession will not help the economy.

http://www.boston.com/news/nation/w...s/?rss_id=Boston.com+--+Top+political+stories

They also mention that a "payroll tax" will be reduced from 6.2% to 4.2%. I think this refers to the Social Security contribution from workers, which will help give workers higher take-home pay but will definitely accelerate the bankruptcy of Social Security as well. I'm still waiting for the day (perhaps in vein) that I can opt-out of Social Security and instead put that money in a Roth IRA or 401k of my choosing.

I absolutely LOVE the idea of putting the Democrats tax increase plan on the ballot (more or less) for 2012.

As for the "payroll tax" reduction - why would anyone propose to cut funding for a (long term) under-funded program? The other aspect of such an idea (one of my personal pet peeves) will the Earned Income Tax Credit also be reduced (if not/why not)- it's designed to give back Social Security withholdings?
 
  • #516
dreiter said:
I look at it that he conceded he wouldn't get anything he wanted if he didn't give the rich what they wanted, so he gave in. Fixing the taxes for millionaires isn't going to affect the economy much, but it would help the deficit and fix some of the imbalances in the current tax system. Republicans, as usual, were douche bags, and didn't allow this to happen.
It's easy to shift the tax burden to the rich when you don't count yourself among them. It's like having a broken leg and saying that people with good legs should run more. This mentality of spend money and send the bill to someone with more money promotes an extremely irresponsible approach to economy. I would like to see people who advocate more spending do so from the perspective of how much labor they themselves are willing to contribute to the public good. If taxes would be taken in labor instead money, I wonder how many people would be voting to raise the amount of labor the government would demand from them.
 
  • #517
http://www.myfoxny.com/dpp/news/national/average-familys-wealth-soars-ncx-20101210"
What are Americans going to do with their $10,400 of added wealth? That's how much the average US family's wealth increased between July and September, according to the Federal Reserve -- cited by the New York Post -- which reported Thursday that the nation's 115 million households gained $1.2 trillion in worth.

A forward from one of my facebook financial buddies.

Don't really know what it means, but several of his buddies asked where their $10k was.

:cry::smile::cry:
 
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  • #518
brainstorm said:
What other basis is there for establishing that legal tie besides a value exchange between labor contributed and labor consumed in old age?

Fiat, of course.
 
  • #519
OmCheeto said:
A forward from one of my facebook financial buddies.

Don't really know what it means, but several of his buddies asked where their $10k was.

:cry::smile::cry:

I'd bet it's because the average savings rate in the US went up due to the crappy economy. If your "buddies" want to know where their $10k is, ask them why they didn't save it!
 
  • #520
OmCheeto said:
A forward from one of my facebook financial buddies.

Don't really know what it means, but several of his buddies asked where their $10k was.

:cry::smile::cry:

I'm guessing mine was re-distributed?
 
  • #521
Mech_Engineer said:
I'd bet it's because the average savings rate in the US went up due to the crappy economy. If your "buddies" want to know where their $10k is, ask them why they didn't save it!

I imagine it's paper wealth from real estate revaluation.
 
  • #522
Mech_Engineer said:
I'd bet it's because the average savings rate in the US went up due to the crappy economy. If your "buddies" want to know where their $10k is, ask them why they didn't save it!

Actually, my financial buddy said he saw his. I think the others were just joking.

The article also said:

Since the depths of recession in December 2008, the average household net worth has climbed by $51,309 to a current level of $477,315

That's about 12% in two years. Not too shabby.

The DJIA is up 62% from it's low.

My top 6 stocks are up 45%
My bottom 4 stocks pull that down to only 12.5%.

BTW, does anyone know if it helps the economy when I invest in growing companies?
 
  • #523
OmCheeto said:
BTW, does anyone know if it helps the economy when I invest in growing companies?

Yes, typically. Of course the effect is small unless you're particularly wealthy.
 
  • #524
OmCheeto said:
That's about 12% in two years. Not too shabby.

The DJIA is up 62% from it's low.

My top 6 stocks are up 45%
My bottom 4 stocks pull that down to only 12.5%.

I was happy to see my 401K is up 12% for the year, a lot better than a few years ago!

Seriously though, times of economic turmoil tend to trigger higher savings rates, but it's hard to know if the full $10k was due to savings alone, and not reevaluation of monetary factors...
 
  • #525
generally a high level discussion here..bravo...

The original NY Times article has some good ideas...but also panders to NY Times liberals so they'd print it...cigarette (boat) gas guzzlers? give me a break...OBAMA a popular President? at 39% approval?...his PERSONAL approval is higher but the authors appropriately discount such things in discussing economic activity.

If you want to understand why the economy is doing so poorly, why so few jobs are being created, why 2011 will be no better than 2009 and 2010, why this is weakest economic "recovery" since the great depression...try reading about Bill Ayers (Obama's buddy and inspiration), Cloward and Piven...and see why Obama and Company are picking winners (supporters like Goldman Sachs, Bank of America, unions, GE, now 522 union and company exemptions granted from OBAMACARE, etc) and losers ( Merrill Lynch, Lehman Brothers, the wealthy). US Business, properly, does not TRUST Obama and fears he will collapse the US financial system as planned by his extreme left wing supporters. When the government gives $600M to BOA can buy out Merrill Lynch, nobody knows who Obama will try to crush next.

The solution is obvious: eliminate most federal taxes (to strip the federal government of its power) so they can't distribute (earmarks,etc) it via politics and darkroom deals, let States do the work and exercise their legitimate powers,
and constrain the federal government via enumerated powers specified in the Consiitution of the United Sates.

http://en.wikipedia.org/wiki/Cloward–Piven_strategy



Post #522:
Since the depths of recession in December 2008, the average household net worth has climbed by $51,309 to a current level of $477,315

Household net work HAS never been anywhere near that high...I don't thion it has EVER exceed even $100K...Could not find a current figure but the government tracks that...here is one chart that seems in the ballpark:

http://en.wikipedia.org/wiki/File:Graphic.png
\Note the peak at about $65K.

Check this on CURRENT Dem and Rep nonsense:

http://www.politico.com/news/stories/1210/46383.html
 
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  • #526
Post #522:
Since the depths of recession in December 2008, the average household net worth has climbed by $51,309 to a current level of $477,315
Does household net worth include human capital? If you would take age of retirement and subtract age of employability (e.g. 67 - 17 = 50), you could multiply that number by minimum wage or higher and come up with a lifetime earnings-projection. Using this number, you could extend credit lines to people and allow them to stimulate the economy by buying real-estate, cars, and other expensive items on credit. Sure, some would never make enough to pay off all their debt and would spend their lives indentured, but wouldn't the economic growth be worth a little enslavement? I mean, at least they would be able to feel like their "net worth" was higher than if they were free.
 
  • #527
brainstorm said:
Does household net worth include human capital? If you would take age of retirement and subtract age of employability (e.g. 67 - 17 = 50), you could multiply that number by minimum wage or higher and come up with a lifetime earnings-projection. Using this number, you could extend credit lines to people and allow them to stimulate the economy by buying real-estate, cars, and other expensive items on credit. Sure, some would never make enough to pay off all their debt and would spend their lives indentured, but wouldn't the economic growth be worth a little enslavement? I mean, at least they would be able to feel like their "net worth" was higher than if they were free.

Re: bolded: In fact that's some of what you'd calculate on an actuarial table for a number of purposes. Although it isn't usually advertised that way, what do you think drives insurance profits, credit cards, loans and especially mortgages? You're not describing an Orwellian nightmare, you're describing accounting.
 
  • #528
brainstorm said:
Does household net worth include human capital? If you would take age of retirement and subtract age of employability (e.g. 67 - 17 = 50), you could multiply that number by minimum wage or higher and come up with a lifetime earnings-projection. Using this number, you could extend credit lines to people and allow them to stimulate the economy by buying real-estate, cars, and other expensive items on credit. Sure, some would never make enough to pay off all their debt and would spend their lives indentured, but wouldn't the economic growth be worth a little enslavement? I mean, at least they would be able to feel like their "net worth" was higher than if they were free.

Please help me to understand.

If someone never works a day in their life and lives on Government benefits from cradle to grave - they have a negative net worth under your calculation?

I guess it could also be said they're indentured to the Government system - in this example?
 
  • #529
Naty1 said:
[...]
The solution is obvious: eliminate most federal taxes (to strip the federal government of its power) so they can't distribute (earmarks,etc) it via politics and darkroom deals, let States do the work and exercise their legitimate powers,
and constrain the federal government via enumerated powers specified in the Consiitution of the United Sates.
Clearly the lack of revenue ($1.6 trillion short) has not stopped the Congress from issuing earmarks, nor stopped it from doing much of anything.
 
  • #530
mheslep said:
Clearly the lack of revenue ($1.6 trillion short) has not stopped the Congress from issuing earmarks, nor stopped it from doing much of anything.

I strongly believe we need term limits in the House - and without lifetime benefits for serving a single term (or a portion thereof) - the past election meant nothing to these people.

Anyone the voters want to re-elect when their term has expired - would be eligible to run for the Senate. This might help turn the Senate (occasionally) as well.
 
  • #531
WhoWee said:
I strongly believe we need term limits in the House - and without lifetime benefits for serving a single term (or a portion thereof) - the past election meant nothing to these people.

Anyone the voters want to re-elect when their term has expired - would be eligible to run for the Senate. This might help turn the Senate (occasionally) as well.
Get started on the Article 1 amendments then, as we've been there already through legislation: http://en.wikipedia.org/wiki/U.S._Term_Limits,_Inc._v._Thornton" .
 
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  • #532
mheslep said:
Get started on the Article 1 amendments then, as we've been there already through legislation: http://en.wikipedia.org/wiki/U.S._Term_Limits,_Inc._v._Thornton" .

:smile: I don't think limits in the Senate are realistic. However, a focus on the House only - might be possible?
 
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  • #533
WhoWee said:
:smile: I don't think limits in the Senate are realistic. However, a focus on the House only - might be possible?
Not without a constitutional amendment. See the link.
 
  • #534
mheslep said:
Not without a constitutional amendment. See the link.

Never said it was easy - I said possible.
 
  • #535
nismaratwork said:
Re: bolded: In fact that's some of what you'd calculate on an actuarial table for a number of purposes. Although it isn't usually advertised that way, what do you think drives insurance profits, credit cards, loans and especially mortgages? You're not describing an Orwellian nightmare, you're describing accounting.
That's what makes it a poignant social critique instead of dystopic scifi.
 
  • #536
brainstorm said:
That's what makes it a poignant social critique instead of dystopic scifi.

I find that the latter is often a preview of the former, beyond which I see little difference.
 
  • #537
nismaratwork said:
I find that the latter is often a preview of the former, beyond which I see little difference.
Excellent point. So why did you differentiate between accounting and an Orwellian dystopia?
 
  • #538
brainstorm said:
Excellent point. So why did you differentiate between accounting and an Orwellian dystopia?

I didn't, I simply pointed out that you weren't delivering news... I'd say that most here grasp the situation that the average wage-slave or indebted 1st worlder finds themselves in. That reality has led to global economic chaos, so it may not be Orwellian at the moment, but it's a dystopia.
 
  • #539
nismaratwork said:
I didn't, I simply pointed out that you weren't delivering news... I'd say that most here grasp the situation that the average wage-slave or indebted 1st worlder finds themselves in. That reality has led to global economic chaos, so it may not be Orwellian at the moment, but it's a dystopia.

I don't think people think of debt and wage-labor as modernized indenturement. I think people realize that when banks assess the ability of a borrower to pay, that they are calculating their prospective wages over the period of the loan but what I don't think they consider is that when you add up all the value of someone's labor for their entire life, it is basically the same thing as pricing a slave on an auction block. Obviously there are some significant differences with slavery, but it's kind of sad that people live for wage-labor to pay for acquisition and consumptions. Some things in life are priceless, but that seems to be a shrinking part of too many people's lives.
 
  • #540
brainstorm said:
I don't think people think of debt and wage-labor as modernized indenturement. I think people realize that when banks assess the ability of a borrower to pay, that they are calculating their prospective wages over the period of the loan but what I don't think they consider is that when you add up all the value of someone's labor for their entire life, it is basically the same thing as pricing a slave on an auction block. Obviously there are some significant differences with slavery, but it's kind of sad that people live for wage-labor to pay for acquisition and consumptions. Some things in life are priceless, but that seems to be a shrinking part of too many people's lives.

I'm not sure this comparison is valid. If you walk into a bank and ask for a loan, yes they will inquire about your ability to pay. However, they are more interested in the asset you are using to secure the loan - my bank likes CD's - they own enough real estate, cars, boats, commercial buildings, and restaurant packages.

In your example, the bank might have loaned money to someone to buy the slave being offered - based upon the slave (assets) ability to produce income?
 

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