The trick was lowering the Federal income tax rate. Enough deductions were retained to make sure that deficits soared. We got the growth from the infusion of all that spending. Then it all petered out a few years later. A rising tide was to lift all boats, one of the bogus nostrums.
But what really happened was an open assault on wages for working people and layoffs for the middle class. Then there was the off shore movement and decline of the industrial base. Somehow, Germany can maintain an industrial base and compete while we were told we couldn't do that.
Soaring deficits, gutting unions, bloated military budgets (for what). Here's a nice summary of the Reagan era: "Supply-siders boast about the 18 million jobs created in the 80s, but they grow unusually mum over the 24 million jobs created during the 70s. The 80s put 2.6 percent more of the population to work, but the 70s outdid them at 3.4 percent. The increasing percentage of the population joining the workforce during these two decades can be attributed to two factors: baby-boomers coming of age, and women joining the workforce in record numbers." The Reagan Years (main link)
Reagan was never able to wander into the fog of superstition and strangeness that Bush claimed as home. And Reagan had his moment of brilliance when he and Gorby came up with the plan to get rid of nuclear weapons in their entirety. That was one of those rare moments that could have changed history. At least he had the thought and tried to accomplish it.
Reagan's "charm" faded shortly after the election. At the time of the shooting, he was not at all popular. The transformation was remarkable and the financial manipulations became a major factor. He was the beginning of the end, imho, for our fiscal sanity. Less taxes equal more revenue, trickle down, etc., haunt us to this day.
You have an excellent point on drug ads. How lame is that? The manufacturers are allowed to create both self-diagnosis for ailments that only MD's are qualified to assess and demand for drugs, new releases, that are much more expensive than reasonable alternatives. They can't lose and the costs soar because of this. What a system!
Supply side didn't do us in the first time around but it will certainly do so the second, if it gets a shot.
he delinquency rate for commercial mortgage-backed securities posted its largest increase ever in March, Moody's Investors Service reported Wednesday, blaming most of the gain from the collapse of a $5.4 billion housing deal in New York.
The ratings agency said that the rate rose 69 basis points in March, a $4.3 billion increase as 343 loans became delinquent.
But 45 of the basis points were attributable to the loan for the Peter Cooper Village and Stuyvesant Town housing project in Manhattan. A $3 billion loan for the development moved into delinquency in March.
getting them down to the bare bones and then leaving them there. A true inventory build up would imply they believe future sales will dramatically increase, but this was a stopping or a dramatic slow down of the inventory "blood letting".
I have charts, if you look at the Q4 GDP post and it becomes way more clear what happened with a chart.
I wasn't because Caulk is made in China and you can give every person in the U.S. a tube of Caulk for $300 million dollars and that's full retail price.
Another remark from the Chinese about replacing the dollar as the worlds currency reserve? This will happen sooner than I thought and thats the real WW3 coming.
BTW we have an international celebrity close by here:
You can only get the shelves so bare and then you have to buy fill them again at least a bit. So given that that type of activity will be more gradual now it won't show a spike again.
Frankly I was happy with the stimulus this year which was supposed to involve a lot of rebates for new energy efficient equipment sales but it looks like thats already been expended, less then 4 months into the year.
I saw the blurb on Zero Hedge and said WTF, knew it was huge and didn't understand the details.
The ultimate bail out and America, of course, is the great purse string. So glad they are busy making the U.S. taxpayer the personal bitch of the globe. I'm sorry but it's beyond privatizing the profits, socializing the loss, this is ridiculous.
They offshore outsource the jobs, wage repress, age discriminate, remove retirement funds, now are taking the houses and here we go, obligations to the rest of the globe on top of it.
This is just unbelievable and it's only been 10 years since the China PNTR passed. Also less than 10 years since they removed financial regulations and this is the result.
But lets not forget that a state employee making only $40k has a $35k a year benefit package. Rightly so but its a part of the costs, just noting that.
I noted value in public sector jobs - they exist for a reason, a good reason but as with everything else people can price themselves out of a job. Plus the value is not equated in income either so those stats you have while I'm sure they exist I'm not sure how tangible they are. Is me not waiting an extra minute in line once every 5 years for my license renewal worth the cost of hiring extra clerks? I'd rather they hire an extra garbage man first! But I hope you get what I mean.
Thats the point no one seems willing to discuss. Its not a black or white issue. Of course we need government but do we need as much as we have at the cost of it? In fact thank God for the government we all need a strong government. We also need a government that is focused on the forgotten middle class! 'Change I did believe in' included killing tax breaks for US companies sending jobs over seas. What has happened to that promise?
Its simple math. The earning ability of the middle class is being squeezed and reduced simultaneously.
We are rapidly approaching a turning point in US economic history where a large number of people will at some point as a group be transferred from the unemployment rolls to welfare. Think about that. Taxes will have to rise at some point to cover all these expenses and there are less people to pay them. Really very scary.
I'm sure everyone is already seeing increases in economic crime at the local level, I know I have seen it. Pizza delivery people being held up at gunpoint - just for the pizza! Things like that. There are people starving and the government can't hire them all realistically.
The only reason a lot of this is coming up locally and online etc is because people are being squeezed. Its not a hate of government or its workers. Those are my neighbors also. I would just like to see the cost of government held in check by the same CPI that holds many things in check and it always goes up by more.
BCBS ended up with a 9% increase here (they asked for 20+%) National Grid 11%, Cox Cable 9% (I note that this is not a necessity by any means although for people with children maybe it is), and my property taxes will be 4.5-6% depending on the school systems lawsuit outcome.
At this point I would welcome Nixon's wage and price controls as long as they applied to everyone.
The real reason for the blow out Q4 2009 GDP numbers was inventory adjustments, which isn't much of the "real" economy per say, it was the slope of decline dramatically decreased. i.e. inventory gutting was over.
The NBER is a group of economists and business cycle experts and this is all technicalities.
There is some good evidence on Industrial production, but it's relative, it basically cliff dived died, so signs of life do show a dramatic increase, but the slope up is consistent at this point.
Check out this forum category, macro economics. I write up, try to show graphs on all of these data elements which determine business cycles.
There is a good discussion on what components make up GDP and I noticed I'm relatively ignoring GDI, so I plan on doing a post on that one to get it up to date.
So, you cannot say it's just "Gov. spending" and really, if you look at the overall GDP components, which I do in those posts, esp. those on GDP, you'll see the overall breakdown.
That said, a lot of the "double dip" worries are due to Stimulus funds drying up with nothing to replace them. That is enough to dip GDP negative potentially but that's because in terms of real growth, it's not robust.
Isn't what positive data they do have do directly from Government spending? It wouldn't seem to be reality based to declare a recession over if thats the case but then again reality appears to have little to do with the goings on at top levels.
I think we seriously need some corporate capital controls and frankly this is one area I need to personally go research/learn more on precisely why Financial institutions pushed things like the China PNTR....from what I can tell, they make huge loans in EEs (emerging economies) and get a series of tax breaks plus incentives to do so and also almost push EEs as a marketing thing to get very high returns. Kind of the Thailand bubble deal. But I don't know the specifics.
I just know they are pushing pushing China, India, Brazil, even Vietnam as an investment and instead of building plants and facilities in the U.S. Then, there is the currency swap situation like Greece and Goldman Sachs, these lease as loans deals and so on.
Then, there is manipulation of the international tax codes and a motivation to offshore outsource. IBM literally tried to patent their "find the cheapest country" offshore outsourcing algorithm, which was calculating all of this out.
I notice this thread is getting into philosophy instead of numbers. While it's much harder to get the numbers, that's why we're here, let's shred some real data on this debate.
On NAFTA, I think digging around on some new stats from just Mexico might be in order. I think the issues with China and other ASIAN countries literally low balling those already slave wages from NAFTA, plus over 80% of our non-oil trade deficit is with China, really makes NAFTA a little less strategically important. That's why I'm pounding on Chinese currency manipulation.
And these people who claim the Yuan will decrease are smokin' somethin'. There is no evidence to support that, which is another topic to write up, with the numbers, with the stats.
On the VAT, a VAT can be for all countries, it's an at the border tax, so it can apply to all imports, regardless of country of origin. It also can be legally fine tuned, per item, per import and it can be dynamically changed. That's what China is doing and the WTO already ruled VATs legal...we're about the only nation who doesn't have one.
Not that I'm real thrilled with any tax on end consumer goods, but this is to do something about trade, jobs, manufacturing so obviously we need a serious Progressive "leveler" somewhere else in the tax code to balance out a VAT effects on the overall taxes paid by middle class and poor Americans.
It's interesting to see how much has changed since the 1990's and free market fundamentalism.
(Bloomberg) -- The International Monetary Fund said regulators should consider imposing capital surcharges to discourage financial institutions from evolving in ways that threaten the stability of financial markets.
Regulators may find it necessary to weigh “direct preemptive measures,” including constraining the size of certain activities to limit the emergence of “systemically important” firms, the Washington-based IMF said today in its bi-annual Global Financial Stability Report.
But it still requires additional certification, no? My point is, one needs at least a four year college degree and some form of further achievement.
And for crying out loud, you never never calculate a teacher's work hours based on just the school day. Grading, lesson plans, and other forms of preparation add up to a second shift when you get home.
What's wrong with a share under $40k? That's actually fairly low - at the 25th percentile for teachers. And I would imagine that the hourly rate is designed to discourage teachers from being asked to do work outside their contract.
What I find strange here is the attitude that it's better if no one has economic security - should everyone be able to retire after giving 20-25 years of their life to a company? Most of my relatives in Europe who're retired, retired in their 50s, and have moved on to more personally fulfilling jobs and activities, whether it's local politics, or prisoner's rights, etc.
But I am glad that you noted that public sector jobs great value - which actually includes wealth. The question before us is how valuable that wealth/value is. Given that output per worker in the U.S is $105k a year, and that the median public sector pay is $40k a year, I'd say you're getting a pretty good return on your money.
I agree education costs have gone through the roof. I can't see how education costs which are 90% labor are related to Wall Street greed. Maybe some small portion.
Its not just wages either (which was a response to this), but the benefits side of the coin and the early retirements also.
assumptions.
The trick was lowering the Federal income tax rate. Enough deductions were retained to make sure that deficits soared. We got the growth from the infusion of all that spending. Then it all petered out a few years later. A rising tide was to lift all boats, one of the bogus nostrums.
But what really happened was an open assault on wages for working people and layoffs for the middle class. Then there was the off shore movement and decline of the industrial base. Somehow, Germany can maintain an industrial base and compete while we were told we couldn't do that.
Soaring deficits, gutting unions, bloated military budgets (for what). Here's a nice summary of the Reagan era: "Supply-siders boast about the 18 million jobs created in the 80s, but they grow unusually mum over the 24 million jobs created during the 70s. The 80s put 2.6 percent more of the population to work, but the 70s outdid them at 3.4 percent. The increasing percentage of the population joining the workforce during these two decades can be attributed to two factors: baby-boomers coming of age, and women joining the workforce in record numbers." The Reagan Years (main link)
Reagan was never able to wander into the fog of superstition and strangeness that Bush claimed as home. And Reagan had his moment of brilliance when he and Gorby came up with the plan to get rid of nuclear weapons in their entirety. That was one of those rare moments that could have changed history. At least he had the thought and tried to accomplish it.
Reagan's "charm" faded shortly after the election. At the time of the shooting, he was not at all popular. The transformation was remarkable and the financial manipulations became a major factor. He was the beginning of the end, imho, for our fiscal sanity. Less taxes equal more revenue, trickle down, etc., haunt us to this day.
You have an excellent point on drug ads. How lame is that? The manufacturers are allowed to create both self-diagnosis for ailments that only MD's are qualified to assess and demand for drugs, new releases, that are much more expensive than reasonable alternatives. They can't lose and the costs soar because of this. What a system!
Supply side didn't do us in the first time around but it will certainly do so the second, if it gets a shot.
(PS What was the cause of stagflation?)
No comments all day long! I know I'm doing mine.
Commercial Mortgages:
That's a lot of basis points for one loan!
time to introduce some subhuman vampire lawyers to reality....
I'm sure a stake or two would bring them back to the real world.
getting them down to the bare bones and then leaving them there. A true inventory build up would imply they believe future sales will dramatically increase, but this was a stopping or a dramatic slow down of the inventory "blood letting".
I have charts, if you look at the Q4 GDP post and it becomes way more clear what happened with a chart.
I wasn't because Caulk is made in China and you can give every person in the U.S. a tube of Caulk for $300 million dollars and that's full retail price.
Another remark from the Chinese about replacing the dollar as the worlds currency reserve? This will happen sooner than I thought and thats the real WW3 coming.
BTW we have an international celebrity close by here:
Irish Bank Crime Boss Hiding on Cape Cod
I understand.
You can only get the shelves so bare and then you have to buy fill them again at least a bit. So given that that type of activity will be more gradual now it won't show a spike again.
Frankly I was happy with the stimulus this year which was supposed to involve a lot of rebates for new energy efficient equipment sales but it looks like thats already been expended, less then 4 months into the year.
Will ya all hit those share buttons? Submit to reddit and so on? I think others need to see this one beyond the regulars on the site.
I saw the blurb on Zero Hedge and said WTF, knew it was huge and didn't understand the details.
The ultimate bail out and America, of course, is the great purse string. So glad they are busy making the U.S. taxpayer the personal bitch of the globe. I'm sorry but it's beyond privatizing the profits, socializing the loss, this is ridiculous.
They offshore outsource the jobs, wage repress, age discriminate, remove retirement funds, now are taking the houses and here we go, obligations to the rest of the globe on top of it.
This is just unbelievable and it's only been 10 years since the China PNTR passed. Also less than 10 years since they removed financial regulations and this is the result.
But lets not forget that a state employee making only $40k has a $35k a year benefit package. Rightly so but its a part of the costs, just noting that.
I noted value in public sector jobs - they exist for a reason, a good reason but as with everything else people can price themselves out of a job. Plus the value is not equated in income either so those stats you have while I'm sure they exist I'm not sure how tangible they are. Is me not waiting an extra minute in line once every 5 years for my license renewal worth the cost of hiring extra clerks? I'd rather they hire an extra garbage man first! But I hope you get what I mean.
Thats the point no one seems willing to discuss. Its not a black or white issue. Of course we need government but do we need as much as we have at the cost of it? In fact thank God for the government we all need a strong government. We also need a government that is focused on the forgotten middle class! 'Change I did believe in' included killing tax breaks for US companies sending jobs over seas. What has happened to that promise?
Its simple math. The earning ability of the middle class is being squeezed and reduced simultaneously.
We are rapidly approaching a turning point in US economic history where a large number of people will at some point as a group be transferred from the unemployment rolls to welfare. Think about that. Taxes will have to rise at some point to cover all these expenses and there are less people to pay them. Really very scary.
I'm sure everyone is already seeing increases in economic crime at the local level, I know I have seen it. Pizza delivery people being held up at gunpoint - just for the pizza! Things like that. There are people starving and the government can't hire them all realistically.
The only reason a lot of this is coming up locally and online etc is because people are being squeezed. Its not a hate of government or its workers. Those are my neighbors also. I would just like to see the cost of government held in check by the same CPI that holds many things in check and it always goes up by more.
BCBS ended up with a 9% increase here (they asked for 20+%) National Grid 11%, Cox Cable 9% (I note that this is not a necessity by any means although for people with children maybe it is), and my property taxes will be 4.5-6% depending on the school systems lawsuit outcome.
At this point I would welcome Nixon's wage and price controls as long as they applied to everyone.
The real reason for the blow out Q4 2009 GDP numbers was inventory adjustments, which isn't much of the "real" economy per say, it was the slope of decline dramatically decreased. i.e. inventory gutting was over.
The NBER is a group of economists and business cycle experts and this is all technicalities.
There is some good evidence on Industrial production, but it's relative, it basically cliff dived died, so signs of life do show a dramatic increase, but the slope up is consistent at this point.
Check out this forum category, macro economics. I write up, try to show graphs on all of these data elements which determine business cycles.
There is a good discussion on what components make up GDP and I noticed I'm relatively ignoring GDI, so I plan on doing a post on that one to get it up to date.
So, you cannot say it's just "Gov. spending" and really, if you look at the overall GDP components, which I do in those posts, esp. those on GDP, you'll see the overall breakdown.
That said, a lot of the "double dip" worries are due to Stimulus funds drying up with nothing to replace them. That is enough to dip GDP negative potentially but that's because in terms of real growth, it's not robust.
Isn't what positive data they do have do directly from Government spending? It wouldn't seem to be reality based to declare a recession over if thats the case but then again reality appears to have little to do with the goings on at top levels.
I think we seriously need some corporate capital controls and frankly this is one area I need to personally go research/learn more on precisely why Financial institutions pushed things like the China PNTR....from what I can tell, they make huge loans in EEs (emerging economies) and get a series of tax breaks plus incentives to do so and also almost push EEs as a marketing thing to get very high returns. Kind of the Thailand bubble deal. But I don't know the specifics.
I just know they are pushing pushing China, India, Brazil, even Vietnam as an investment and instead of building plants and facilities in the U.S. Then, there is the currency swap situation like Greece and Goldman Sachs, these lease as loans deals and so on.
Then, there is manipulation of the international tax codes and a motivation to offshore outsource. IBM literally tried to patent their "find the cheapest country" offshore outsourcing algorithm, which was calculating all of this out.
I notice this thread is getting into philosophy instead of numbers. While it's much harder to get the numbers, that's why we're here, let's shred some real data on this debate.
On NAFTA, I think digging around on some new stats from just Mexico might be in order. I think the issues with China and other ASIAN countries literally low balling those already slave wages from NAFTA, plus over 80% of our non-oil trade deficit is with China, really makes NAFTA a little less strategically important. That's why I'm pounding on Chinese currency manipulation.
And these people who claim the Yuan will decrease are smokin' somethin'. There is no evidence to support that, which is another topic to write up, with the numbers, with the stats.
On the VAT, a VAT can be for all countries, it's an at the border tax, so it can apply to all imports, regardless of country of origin. It also can be legally fine tuned, per item, per import and it can be dynamically changed. That's what China is doing and the WTO already ruled VATs legal...we're about the only nation who doesn't have one.
Not that I'm real thrilled with any tax on end consumer goods, but this is to do something about trade, jobs, manufacturing so obviously we need a serious Progressive "leveler" somewhere else in the tax code to balance out a VAT effects on the overall taxes paid by middle class and poor Americans.
It's interesting to see how much has changed since the 1990's and free market fundamentalism.
instead of name-calling?
But it still requires additional certification, no? My point is, one needs at least a four year college degree and some form of further achievement.
And for crying out loud, you never never calculate a teacher's work hours based on just the school day. Grading, lesson plans, and other forms of preparation add up to a second shift when you get home.
What's wrong with a share under $40k? That's actually fairly low - at the 25th percentile for teachers. And I would imagine that the hourly rate is designed to discourage teachers from being asked to do work outside their contract.
What I find strange here is the attitude that it's better if no one has economic security - should everyone be able to retire after giving 20-25 years of their life to a company? Most of my relatives in Europe who're retired, retired in their 50s, and have moved on to more personally fulfilling jobs and activities, whether it's local politics, or prisoner's rights, etc.
But I am glad that you noted that public sector jobs great value - which actually includes wealth. The question before us is how valuable that wealth/value is. Given that output per worker in the U.S is $105k a year, and that the median public sector pay is $40k a year, I'd say you're getting a pretty good return on your money.
I agree education costs have gone through the roof. I can't see how education costs which are 90% labor are related to Wall Street greed. Maybe some small portion.
Its not just wages either (which was a response to this), but the benefits side of the coin and the early retirements also.
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