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Thread: USA houshold weath rise - 89.1 trill

  1. #26
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    Default Re: USA houshold weath rise - 89.1 trill

    Under Reagan the Average Weekly Hours Worked in manufacturing peaked at 39.2 in 1988. Under Clinton it peaked at 42 ! in 1999. And that was when unemployment was effectively at zero ( the official rate was 3.9 % ). Most economists at the time and since have considered that to be more or less "full employment ". So when Eagle says that 34.4 % is "normal " I am compelled to ask : "Compared to WHAT ? " This matters because most new jobs created under Obama were in either the service or government sectors. Under DeBlasio in NYC the city payroll is at record and unsustainable levels. As it is in many states and cities. Illinois is effectively bankrupt now and New Jersey cannot pay a fraction of what it owes to its own pension funds. Atlantic City just laid off another 100 workers and will sell city land to pay down its $500 million debt and avoid a state takeover of its finances. These are NOT isolated cases. About half our states are technically insolvent or close to it. Eventually they are going to have to lay-off a lot of people ; cut pay and benefits ; eliminate overtime etc.

    As "gw" has pointed out the unemployment figures most often cited come from the Payroll Survey. There is also the Household Survey that picks up small business and self-employment. Small business formation measured BOTH by new applications to form new corporations and by new Taxpayer I.D. numbers issued has barely moved from where it was in 2008 and 2009. So while there have been "new" hires by major companies ( and there have ) there has not been a concomitant increase in small and family business employment. In fairness a lot of employment in this area tends to be "off the books " i.e. Dad has Junior and Grandpa help out at the hardware store BUT the BLS has formulas that are supposed to account for this. More importantly , rather than chart new incorporations or count new Tax I.D. numbers the BLS has been repeatedly caught GUESSING ( and eventually revising their guesses downward ) at how many new businesses are actually being created and /or expanding and hiring new workers. I am not sure but I have heard and read that the BLS "estimates " how many new businesses started in a month and then revises its figures when it looks at hard data like incorporations and new Tax I.D. Numbers. This matters because a lot more people get "rich " or "richer" working for themselves rather than working for somebody else. Especially to those of us who want everyone to have higher incomes.


    Secondly under Obamacare there will be millions of policyholders ( anywhere from 20 to 25% depending on who you listen to ) who will not have any choice in who insures them next year thanks to a number of carriers opting out of writing coverage in more and more states. Oh yeah , premiums will be going UP an average of 25%.
    Last edited by Eric Stoner; 10-25-2016 at 11:47 AM.

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    Default Re: USA houshold weath rise - 89.1 trill

    Where do you get your figures from? It's my guess that your figures are for full-time workers only, not full and part-time workers.

    From:
    http://www2.econ.iastate.edu/classes...s%20worked.pdf

    From 1964 to 1999, average weekly hours fell by a substantial 11 percent, from 38.7 to 34.5 hours, based on annual averages of monthly data.

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    Default Re: USA houshold weath rise - 89.1 trill

    I get my numbers from those well known conservative think tanks - The Bureau of Labor Statistics and the Census Bureau.

    I clearly stated that the 39 hours under Reagan in 1988 and 42 under Clinton in 1999 were in MANUFACTURING jobs. If you look at the numbers they are broken down by employment SECTORS . Average hours worked in manufacturing of 42 hours means that the average manufacturing worker got 2 hours of OVERTIME per week i.e. a lot of things were being made for both domestic consumption and export.

    Your link is from an economist EMPLOYED by the BLS. And if you bother READING it she gives a simplistic overview of the decline in Average Hours Worked.

    Btw - a decline in hours worked , in and of itself, is not necessarily a bad thing. Back in the 1800's it was 70 hours ! And you can make an argument that American hours worked are dropping to Western European and Scandinavian levels. Not necessarily a bad thing depending on the productivity numbers i.e. output per worker per hour worked. What sector we are talking about also matters. Increased automation ; streamlined procedures and other efficiencies in manufacturing can keep output high while actual hours worked go down. In governmental jobs it is generally NOT a good thing. Especially with jobs like TEACHING and POLICING . It is also generally negative when it increases public payrolls i.e. more workers to do the same or less work or things like creating sinecures. For instance the NYPD is notorious for using uniformed police officers to do clerical and maintenance work . Charter schools get the results they do by inter alia expecting teachers to work AT LEAST 45 hours per week ; sometimes more and paying them accordingly.
    Last edited by Eric Stoner; 10-25-2016 at 11:42 AM.

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    Default Re: USA houshold weath rise - 89.1 trill

    Then you're comparing apples to oranges. The figure of 34.4 is for all workers, not just manufacturing. If you're going to go by manufacturing, it's 41.7.

    https://fred.stlouisfed.org/series/AWHMAN

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by gw View Post
    As mentioned by previous posters, this figure is highly questionable.

    Other data suggest it's not so low.

    Attachment 46391
    U6 unemployment has fallen from 17.1 percent in 2009 to 9.7 percent today.



    Quote Originally Posted by gw View Post
    Yes, but what kinds of jobs?

    Attachment 46392

    Attachment 46393
    Median income is up.

    Quote Originally Posted by gw View Post
    Depends on how you measure it. If you use the same method to measure it from 1980, it's 8-10%.

    Education is more expensive, health care is more expensive, rent is WAY more expensive,
    No it isn't. Education, healthcare, and rent aren't going up anywhere near 8-10%. Healthcare inflation has fallen significantly since 1990.



    Quote Originally Posted by gw View Post
    Most people don't make "median" income.

    Most people have been flat (using real dollars, even using the fake inflation number.

    Attachment 46394
    Median income is probably the best measurement for how the average household is doing. In addition to median income increasing, there was a significant decrease in poverty in 2015, meaning income also increased for many poor households.



    Quote Originally Posted by gw View Post
    How about these indicators?

    Attachment 46395
    Most of those charts only go up to 2014, and not all of them are economic indicators.

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by eagle2 View Post
    No it isn't. Education, healthcare, and rent aren't going up anywhere near 8-10%. Healthcare inflation has fallen significantly since 1990.
    With all due respect, what world are you living in? Because I want to move there because I would like to be able to afford my healthcare again and be able to pay rent comfortably again.

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    Default Re: USA houshold weath rise - 89.1 trill

    I'm going by national figures.

    Rent inflation has been fluctuating between 3 and 5 percent.



    Healthcare between 2 and 5 percent

    https://ycharts.com/indicators/us_he...inflation_rate

    Note: Healthcare and health insurance are not the same thing. Health insurance can go up more than the cost of healthcare.

    For college education:
    According to The College Board®, the average 2014-2015 tuition increase was 3.7 percent at private colleges, and 2.9 percent at public universities. However, looking back at the last decade, the 10-year historical rate of increase is approximately 5 percent.

    http://www.savingforcollege.com/tuto..._education.php

    That's where the figures are from. If you disagree, you can contact the sources. Rent fluctuates a lot by region. In some places rent increases faster than others.

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by Eric Stoner View Post
    Secondly under Obamacare there will be millions of policyholders ( anywhere from 20 to 25% depending on who you listen to ) who will not have any choice in who insures them next year thanks to a number of carriers opting out of writing coverage in more and more states. Oh yeah , premiums will be going UP an average of 25%.
    That only applies to ACA exchanges which are used by less than 5% of Americans, and most of them get subsidies.

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    Default Re: USA houshold weath rise - 89.1 trill

    Eagle - where do you live ? Not your street address or even city or town. Just the general area . Because RyanXO and I ( and perhaps other readers of this thread ) want to move there.

    You would be right about Median Income being a reliable measure of wealth if , and only IF you took no account of the fixed costs of trying to live.

    Rent - The average American is now spending AT LEAST half of their net income ( i.e. take home pay ) on rent. Or on their mortgage NOT including property taxes , school taxes and water and sewer charges.

    Utilities - going up and projected to go even higher.

    Gasoline - a lot lower than two years ago but creeping up.

    Home heating oil and gas - Again, lower than two years ago but creeping up.

    Insurance ( excluding health insurance ) - going up.

    Health Insurance - going up on average 25% across the board. In Arizona premiums are going up 100 %. I grant you it varies widely state by state. These increases are NOT limited to the state exchanges. They apply to ALL policies.

    College tuition - Up

    Private School tuition - Up

    Food - relatively stable - things like O.J. will be going up ( a LOT thanks to the wipe out of the Florida crop ) but meat prices are actually going down.

    State and Local taxes - Up , Up , UP !

    Automobile costs - Tolls and registration fees - UP ! A LOT.

    Transit fares - UP.

    Health Care costs - Increases slowing but still going up. Can anyone cite an area of the country where health care costs have gone down ?


    You take all of the above into account coupled with the fact that despite an increase Median Income has NOT recovered to it's pre-Financial Crisis level and then perhaps you can explain how the economy is doing "well" ? How ? For whom ? The top 1 % ?

    Just to keep things in round figures; Let's say the Median Income in 2007 was $50,000. And total expenses as noted above were $45,000 for a family of four. If Median Income today has gotten back to $50,000 ( which it hasn't btw but for purposes of my hypo let's say that it did ) but expenses and fixed costs for that hypothetical family of four have gone up to $49,950 how can you or anyone else say that they are doing well ?

    You note the increase in new job creation but as was pointed out to you and as has been recognized and admitted by those notorious fire breathing conservatives Donna Brazile and John Podesta ( thank you Wikileaks ! ) they are mostly LOW Paying jobs.

    Is the economy now doing better than it was in 2008 and 2009 ? Yes. But I and others have repeatedly pointed out that it lacks anything resembling vitality. It is the first post recession recovery that has been so weak in relation to the depth of the recession preceding it. Post W.W. II we had a recession under Truman and the recovery put us back better than we were. Same for the three Eisenhower recessions. And the JFK-Johnson recovery. And after the Carter -Reagan recession the economy boomed. After the mild and short Bush the Brighter Recession Clinton saw a bounce back to growth rates higher than under Papa Bush with lower unemployment and the economy really took off in his second term for reasons posted ad nauseum which only you and Paul Krugman refuse to recognize.

    I have been relying in part on Census data which itself is highly suspect ( as are BLS statistics ). The Commerce Dept's own Inspector General found massive falsification of data in the Philadelphia region alone. After said investigation the percentage of completed surveys plummeted. Not surprising since with the IG's investigation and Congressional scrutiny it became harder for Census personnel to cheat.

    I know we are not supposed to get political and I mention their names only to illustrate a larger point but does anyone think that Trump and Sanders would have had any success if the economy were doing well ?

    According to a recent survey by Bankrate.com 2/3 of Americans say they are limiting their spending. 30 % of those saying they are limiting their spending say it is to save more ( WHERE ? with banks paying next to nothing on savings accounts ) , 25 % because of STAGNANT INCOME , 15% because they are worried about the economy and 10% because of too much debt. Only 3 % said it was because they feared losing their job. Flat or decreased consumer spending does not bode well for the economy.

    Corporate earnings are still sluggish. They are expected to go up .2 % for the 3rd Quarter on 2016. That is the money needed for new investment and to put in the pockets of workers in the form of higher wages and salaries. At .2 % per year how long will it take for Median Income to return to 2008 levels ? I grant you that this does not include government workers whose jobs have gone up and so have their salaries. But their costs are nothing but a drag on the economy. Their salaries and benefits have to be paid for by taxpayers. I'm not even mentioning the effect on the economy of all the rules and regulations they promulgate and enforce. Plus the costs of compliance. But their jobs do get counted in the unemployment - employment numbers.

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    Default Re: USA houshold weath rise - 89.1 trill

    I live in PA. My rent isn't even going up this year. For my lease renewal, if I sign for 18 months, my rent will stay the same. They're building a lot of new apartment complexes in my area, so that may be why my rent is not going up.

    The average American doesn't spend half of his or her money on rent. According to Zillow, it's 30 percent.

    http://www.zillow.com/research/q2-20...y-10268/#_edn2

    While rent has been steadily increasing, buying a home has become more affordable as a result of the financial crisis in 2008 and low interest rates. Americans who have refinanced are paying less for their mortgage.

    Most Americans don't buy health insurance directly, but get it from the government or their employer, so how much they pay out of pocket depends on how generous their employer is. A lot of those Americans who buy health insurance on the exchanges get subsidies.

    You live in NYC where there are lots of tolls. There are plenty of places where tolls aren't very common. Unless you have to pay a toll to go to and from work, chances are you're not spending much money on tolls.

    As for taxes, in some places state and local taxes have gone up, but close to half of all Americans aren't paying any federal income tax.

    For college tuition, a lot of students get financial aid, so even though costs are going up, not everyone is paying the full cost. One of the reasons college tuition is going up so fast is because people are willing to pay it. Some people have the mistaken belief that because a school is more expensive, it's a better school. I even read one article that after one school raised its tuition significantly, they were getting more applications, not less. The truth is, you can often get just as good of an education and just as good of job going to a public university as going to a private university. I went to a public university. I've had co-workers who went to expensive private schools and they had a similar position and pay as me, but they probably paid three times as much in tuition as I did.

    What I don't think you understand about this recession is that it was far worse than any other recession since the Great Depression. Far more wealth was lost than in previous recessions. To compare this recession to previous recession is oversimplification. What happened in 2008 and 2009 was closer to the Great Depression than previous recessions, and it took 10 years to fully recover from the Great Depression. It would have taken even longer if it wasn't for World War II. In addition, in the past the work force was expanding much more rapidly than it is now, as a result of demographics. When you have an expanding work force, you're going to see stronger economic growth. I read that the higher the percentage of the population of people are in their 40s, the stronger the economic growth is, because people in that age range that spends the most money. That was the case in the 90s. It's not the case now. We now have many people retiring from the work force. so their spending will most likely go down.

    Corporations are sitting on close to $2 trillion in cash. They have plenty of money for increasing investment and pay.

    Nobody is arguing the economy is as good as it was in the 90s, but it's not that bad either. It's true that some things are going up in price, but median income has increased about $4,000 over the past two years. Some people may be struggling, but there are plenty of others who aren't.

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by eagle2 View Post
    I live in PA. My rent isn't even going up this year. For my lease renewal, if I sign for 18 months, my rent will stay the same. They're building a lot of new apartment complexes in my area, so that may be why my rent is not going up.

    The average American doesn't spend half of his or her money on rent. According to Zillow, it's 30 percent.

    http://www.zillow.com/research/q2-20...y-10268/#_edn2

    While rent has been steadily increasing, buying a home has become more affordable as a result of the financial crisis in 2008 and low interest rates. Americans who have refinanced are paying less for their mortgage.

    Most Americans don't buy health insurance directly, but get it from the government or their employer, so how much they pay out of pocket depends on how generous their employer is. A lot of those Americans who buy health insurance on the exchanges get subsidies.

    You live in NYC where there are lots of tolls. There are plenty of places where tolls aren't very common. Unless you have to pay a toll to go to and from work, chances are you're not spending much money on tolls.

    As for taxes, in some places state and local taxes have gone up, but close to half of all Americans aren't paying any federal income tax.

    For college tuition, a lot of students get financial aid, so even though costs are going up, not everyone is paying the full cost. One of the reasons college tuition is going up so fast is because people are willing to pay it. Some people have the mistaken belief that because a school is more expensive, it's a better school. I even read one article that after one school raised its tuition significantly, they were getting more applications, not less. The truth is, you can often get just as good of an education and just as good of job going to a public university as going to a private university. I went to a public university. I've had co-workers who went to expensive private schools and they had a similar position and pay as me, but they probably paid three times as much in tuition as I did.

    What I don't think you understand about this recession is that it was far worse than any other recession since the Great Depression. Far more wealth was lost than in previous recessions. To compare this recession to previous recession is oversimplification. What happened in 2008 and 2009 was closer to the Great Depression than previous recessions, and it took 10 years to fully recover from the Great Depression. It would have taken even longer if it wasn't for World War II. In addition, in the past the work force was expanding much more rapidly than it is now, as a result of demographics. When you have an expanding work force, you're going to see stronger economic growth. I read that the higher the percentage of the population of people are in their 40s, the stronger the economic growth is, because people in that age range that spends the most money. That was the case in the 90s. It's not the case now. We now have many people retiring from the work force. so their spending will most likely go down.

    Corporations are sitting on close to $2 trillion in cash. They have plenty of money for increasing investment and pay.

    Nobody is arguing the economy is as good as it was in the 90s, but it's not that bad either. It's true that some things are going up in price, but median income has increased about $4,000 over the past two years. Some people may be struggling, but there are plenty of others who aren't.
    Pennsylvania is doing relatively well compared to a lot of states thanks to fracking. In most major cities rent has gone up. So have housing prices. Please refer back to the OP. Most of the increase in wealth was a result of HIGHER housing prices.

    Many people in many areas are spending half and even more of their take home pay on rent or housing.

    For everyone buying health insurance the cost has skyrocketed. When employers have to pay through the nose they A. lay off workers to get below the mandate B. cut hours to make part-time workers out of full time and/or C. have a LOT less money for new investment and higher salaries .

    Any place that has bridges , tunnels, ferries or toll roads has tolls. And they have skyrocketed.

    For those Americans not paying Federal income taxes it means their incomes suck. And they still have to pay state and local taxes of all kinds - sales , auto taxes , real estate if they own a home etc.

    College tuitions and fees are going up at BOTH public and private colleges. Despite financial aid a lot of students have to take out loans. Student debt is going up.

    You can believe what you want about the last recession and the lack of anything resembling a robust recovery. I have posted the numbers. If you want to blame it all on retired and retiring "Baby Boomers" go ahead. As I posted the percentage of workers over 60 and over 65 has been going UP. I know what history teaches and that is that nobody has ever taxed their way to prosperity. That Bush The Brighter raised taxes and turned a slowing economy into a recession. That FDR pulled the rug out from a recovering economy by raising taxes in 1937 coupled with idiocy at the Fed and that's why we had a major recession in 1938. Reagan's Recession was just as bad as the last one coupled with high inflation and high interest rates and we got a booming recovery and 20 years of prosperity. With the last recession we tried weakening the dollar ( didn't work ) ; small and temporary tax rebates and credits ( didn't work ) , almost a trillion dollars of infrastructure spending ( didn't work ) not to mention tax increases and the increased burden of a health insurance mandate whose constitutionality was upheld because it was admitted to be and found to be a TAX .

    A lot more than "some people" are struggling. The average person is dealing with flat income and increased costs of living . Remember "close to half of Americans " are not paying any income tax ? If they were making a decent income they would be paying income tax. And wouldn't be on food stamps. Or unemployment . As many as 2/3 of all Americans are worse or no better off ( in REAL dollars ) than they were in 2008. Maybe 1/3 are doing the same or better but afaic those are lousy percentages. It ought to be the converse.

    Corporations are actually sitting on as much as $ 4 trillion. The problem is they are leaving it overseas and will keep it there unless and until we get serious corporate tax reform.

    For the last time - Yes median Income has gone up. It is still well below where it was 8 years ago.

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    Default Re: USA houshold weath rise - 89.1 trill

    Might as well jump in................

    While the good "numbers" may be there, I tend to agree more with Eric in that this recovery has been anemic compared with other recoveries. While certainly better than the way things were in late 2008 to 2009, the fact that interest rates are at historically low levels for so long gives me pause for popping the cork, and proclaiming "spring has sprung, let the good times roll" optimistic giddiness.

    Indeed, the rise in home values, and the stock market (2 key components of the USA household wealth increase) have occurred in no small part because of the low interest rates. Household wealth increase because more people can qualify for loans, which would tend to push home prices up. (More buyers.)

    The ultra low interest rates on savings accounts and CD's drives more people to riskier stock investments. A glance at the closing rate on a 10 year bond shows a rate of 1.79%. (The 52 week low was 1.34%). Many bank/credit union interest rates on checking accounts are in the 0.05% to 0.10% range, with 1 yr. CD rates commonly in the 0.5% to 0.75% range. Shoot, in my early SW membership days, I could get a 1 year CD paying a better interest rate than todays 10 year bond average. That makes some dividend paying stocks paying a dividend rate of 2% to 3% look very attractive. So a low interest rate levitation of the stock market is taking place. If interest rates were to rise to more "normal" historic levels, those dividend paying stocks won't look quite so attractive.

    Lastly, the oft quoted reluctance of Fed to raise rates too much or too fast lest the recovery stops speaks loudly on just how tenuous this "recovery" really is.
    Last edited by minnow; 10-27-2016 at 07:53 PM. Reason: wording corr.
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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by Eric Stoner View Post
    Pennsylvania is doing relatively well compared to a lot of states thanks to fracking. In most major cities rent has gone up. So have housing prices. Please refer back to the OP. Most of the increase in wealth was a result of HIGHER housing prices.

    Many people in many areas are spending half and even more of their take home pay on rent or housing.
    Where are you getting your figures from? According to Zillow, the average amount being spent on rent is 30% of income.

    Quote Originally Posted by Eric Stoner View Post
    For everyone buying health insurance the cost has skyrocketed. When employers have to pay through the nose they A. lay off workers to get below the mandate B. cut hours to make part-time workers out of full time and/or C. have a LOT less money for new investment and higher salaries .
    There's no basis for your statement. You're making assumptions. Job creation is way up over the past 2 - 3 years. The average weekly hours worked is about the same as it was in 1999.


    Quote Originally Posted by Eric Stoner View Post
    Any place that has bridges , tunnels, ferries or toll roads has tolls. And they have skyrocketed.
    You live in NYC which has lots of tolls, so you see tolls as a major expense. Most other places don't have the amount of tolls that NYC has. If you live and work in PA, unless you take the PA turnpike to work, you're probably not paying tolls.

    Quote Originally Posted by Eric Stoner View Post
    For those Americans not paying Federal income taxes it means their incomes suck. And they still have to pay state and local taxes of all kinds - sales , auto taxes , real estate if they own a home etc.
    No, it means the tax cuts passed by Bush eliminated federal income taxes for many families. This is especially true of the child tax credit. For a married couple with two children earning $50,000 a year and no deductions, their tax liability is less than $1,500. If this family has mortgage interest and/or contributes to a 401k plan, it could easily bring their tax liability to $0.

    Quote Originally Posted by Eric Stoner View Post
    College tuitions and fees are going up at BOTH public and private colleges. Despite financial aid a lot of students have to take out loans. Student debt is going up.

    You can believe what you want about the last recession and the lack of anything resembling a robust recovery. I have posted the numbers. If you want to blame it all on retired and retiring "Baby Boomers" go ahead. As I posted the percentage of workers over 60 and over 65 has been going UP. I know what history teaches and that is that nobody has ever taxed their way to prosperity. That Bush The Brighter raised taxes and turned a slowing economy into a recession. That FDR pulled the rug out from a recovering economy by raising taxes in 1937 coupled with idiocy at the Fed and that's why we had a major recession in 1938. Reagan's Recession was just as bad as the last one coupled with high inflation and high interest rates and we got a booming recovery and 20 years of prosperity. With the last recession we tried weakening the dollar ( didn't work ) ; small and temporary tax rebates and credits ( didn't work ) , almost a trillion dollars of infrastructure spending ( didn't work ) not to mention tax increases and the increased burden of a health insurance mandate whose constitutionality was upheld because it was admitted to be and found to be a TAX .
    This is why you refuse to acknowledge anything positive about the economy. You're very devoted to your policies of tax cuts and higher interest rates. You will not acknowledge that an economy can do well without following these policies. Taxes were raised in 2013, and there is no question the economy is doing better today than it was before the 2013 tax increase. Taxes were increased in 1993, and we saw strong economic growth in the following years. Taxes were also raised in 1939, and we saw the strongest economic growth in history in the following years.

    Quote Originally Posted by Eric Stoner View Post
    A lot more than "some people" are struggling. The average person is dealing with flat income and increased costs of living . Remember "close to half of Americans " are not paying any income tax ? If they were making a decent income they would be paying income tax. And wouldn't be on food stamps. Or unemployment . As many as 2/3 of all Americans are worse or no better off ( in REAL dollars ) than they were in 2008. Maybe 1/3 are doing the same or better but afaic those are lousy percentages. It ought to be the converse.
    Again, a two child family earning $50k with a mortgage and 401k contributions can easily end up not paying federal income tax. Only 5 percent of Americans are unemployed. Please provide links for your sources stating "as many as 2/3 of all Americans are worse or no better off ( in REAL dollars ) than they were in 2008". 2015 saw the biggest median household income increase since they started keeping records in 1968.

    http://www.reuters.com/article/us-us...-idUSKCN11J1PP

    2015 also saw the biggest drop in poverty since 1999.

    http://blogs.census.gov/2016/09/13/2...rd-since-1999/


    Quote Originally Posted by Eric Stoner View Post
    Corporations are actually sitting on as much as $ 4 trillion. The problem is they are leaving it overseas and will keep it there unless and until we get serious corporate tax reform.

    For the last time - Yes median Income has gone up. It is still well below where it was 8 years ago.
    No it isn't. In 2008, median income was $55,376 (in 2015 dollars). In 2015, median income was $56,516. These figures are adjusted for inflation, so households with income in the range of the median income are $1,000 better off.

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by eagle2 View Post
    Where are you getting your figures from? According to Zillow, the average amount being spent on rent is 30% of income.


    There's no basis for your statement. You're making assumptions. Job creation is way up over the past 2 - 3 years. The average weekly hours worked is about the same as it was in 1999.



    You live in NYC which has lots of tolls, so you see tolls as a major expense. Most other places don't have the amount of tolls that NYC has. If you live and work in PA, unless you take the PA turnpike to work, you're probably not paying tolls.


    No, it means the tax cuts passed by Bush eliminated federal income taxes for many families. This is especially true of the child tax credit. For a married couple with two children earning $50,000 a year and no deductions, their tax liability is less than $1,500. If this family has mortgage interest and/or contributes to a 401k plan, it could easily bring their tax liability to $0.



    This is why you refuse to acknowledge anything positive about the economy. You're very devoted to your policies of tax cuts and higher interest rates. You will not acknowledge that an economy can do well without following these policies. Taxes were raised in 2013, and there is no question the economy is doing better today than it was before the 2013 tax increase. Taxes were increased in 1993, and we saw strong economic growth in the following years. Taxes were also raised in 1939, and we saw the strongest economic growth in history in the following years.


    Again, a two child family earning $50k with a mortgage and 401k contributions can easily end up not paying federal income tax. Only 5 percent of Americans are unemployed. Please provide links for your sources stating "as many as 2/3 of all Americans are worse or no better off ( in REAL dollars ) than they were in 2008". 2015 saw the biggest median household income increase since they started keeping records in 1968.

    http://www.reuters.com/article/us-us...-idUSKCN11J1PP

    2015 also saw the biggest drop in poverty since 1999.

    http://blogs.census.gov/2016/09/13/2...rd-since-1999/




    No it isn't. In 2008, median income was $55,376 (in 2015 dollars). In 2015, median income was $56,516. These figures are adjusted for inflation, so households with income in the range of the median income are $1,000 better off.
    Now it is my turn to question YOUR numbers.

    According to the N.Y. Times citing ZILLOW ( April 14 , 2014 ) in NYC Median Gross Rent including utilities rose 10% between 2005 and 2011 but median household income fell. 31% of all New Yorkers pay 50% OR MORE of their household income on rent compared to 27% in 2007.
    According to ZILLOW the 90 largest cities in the U.S. all have rent comprising AT LEAST 30 % of median gross income . HALF of all renters are now spending MORE than 30% of their income on housing.

    The worst cities for high rent burdens are :

    Los Angeles - 47% of household income on rent - up from 34.1 % in 2000.
    Miami - 43% up from 26.5%
    College Station, Texas went from 24.4 to 41.3
    Santa Cruz , California from 26.2 to 41.6
    In fact ALL major cities in California saw increases of at least 10 % in the percentage of household income going to pay for rent.
    Ithaca , N.Y. went from 34.3 to 38.6
    Flagstaff, Arizona went from 27.6 to 37.3

    I am just hitting the highlights as far as these numbers are concerned.

    I looked but could not find official numbers for "boom " areas like Fargo , North Dakota BUT there have been reports that rents increased by 100 and even 200 %.
    Likewise I couldn't find rent numbers for depressed places like Detroit as a whole but "Downtown " rents have gone way UP.

    You cited ZILLOW's National average i.e. what the average American renter spends on rent as a % of income. That takes in a LOT of places with low to very low demand for rental housing - Ohio , Michigan, etc.

    Oddly enough in Washington , D.C. high end rents have gone DOWN thanks to a glut of luxury housing BUT mid-range rents are up.

    Despite the above figures Federal HOME grants have been cut in half. Families getting state rental subsidies are DOWN from 27.4 % to 23.8%.

    As far as our economy measured after tax increases vs. measured after tax cuts I have posted the numbers ( supra ). Everyone is free to read them for themselves and draw their own conclusions . BTW , I do NOT support high interest rates. Cite one post where I called for or supported high rates. I want market interest rates set by the credit markets. If we have to have a Fed then I want it following RULES like the Taylor Rule or the Volcker Rule which would give us a Fed Discount Rate of maybe 2 %.

    As to Median Annual Income - according to Sentier Research * ( whose numbers are more reliable and up to date than those from the Census Bureau ) in January , 2008 Median Income was $58, 331 measured in REAL dollars. Now , here in 2016 the September numbers are $57,380. That is 1.6% ( - $ 951 ) LOWER . It was even lower than that but as I have repeatedly recognized it has rebounded. Despite the rebound it is still LOWER than it was in 2008. That was EIGHT years ago. Other than the Great Depression when have we ever seen even a five year let alone an eight year period when median income stayed lower than what it had been ?


    *Sentier's numbers are the most current available. The last Census numbers available are from 2015. Yes, they have estimates i.e. guesses but their latest hard numbers are over a year old.

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by Eric Stoner View Post
    Now it is my turn to question YOUR numbers.

    According to the N.Y. Times citing ZILLOW ( April 14 , 2014 ) in NYC Median Gross Rent including utilities rose 10% between 2005 and 2011 but median household income fell. 31% of all New Yorkers pay 50% OR MORE of their household income on rent compared to 27% in 2007.
    According to ZILLOW the 90 largest cities in the U.S. all have rent comprising AT LEAST 30 % of median gross income . HALF of all renters are now spending MORE than 30% of their income on housing.

    The worst cities for high rent burdens are :

    Los Angeles - 47% of household income on rent - up from 34.1 % in 2000.
    Miami - 43% up from 26.5%
    College Station, Texas went from 24.4 to 41.3
    Santa Cruz , California from 26.2 to 41.6
    In fact ALL major cities in California saw increases of at least 10 % in the percentage of household income going to pay for rent.
    Ithaca , N.Y. went from 34.3 to 38.6
    Flagstaff, Arizona went from 27.6 to 37.3

    I am just hitting the highlights as far as these numbers are concerned.

    I looked but could not find official numbers for "boom " areas like Fargo , North Dakota BUT there have been reports that rents increased by 100 and even 200 %.
    Likewise I couldn't find rent numbers for depressed places like Detroit as a whole but "Downtown " rents have gone way UP.

    You cited ZILLOW's National average i.e. what the average American renter spends on rent as a % of income. That takes in a LOT of places with low to very low demand for rental housing - Ohio , Michigan, etc.

    Oddly enough in Washington , D.C. high end rents have gone DOWN thanks to a glut of luxury housing BUT mid-range rents are up.

    Despite the above figures Federal HOME grants have been cut in half. Families getting state rental subsidies are DOWN from 27.4 % to 23.8%.
    In your previous post you said:
    Quote Originally Posted by Eric Stoner View Post
    Rent - The average American is now spending AT LEAST half of their net income ( i.e. take home pay ) on rent. Or on their mortgage NOT including property taxes , school taxes and water and sewer charges.
    You couldn't even find a single city where the "The average American is now spending AT LEAST half of their net income ( i.e. take home pay ) on rent". You found one city that's close. You found seven cities where 37 percent of income or more is spend on rent. Those seven cities probably make up less than 10 percent of the population, so 90 percent of Americans are averaging less than 37 percent of income spent on rent. That's a lot less than half of their net income.


    Quote Originally Posted by Eric Stoner View Post
    As far as our economy measured after tax increases vs. measured after tax cuts I have posted the numbers ( supra ). Everyone is free to read them for themselves and draw their own conclusions . BTW , I do NOT support high interest rates. Cite one post where I called for or supported high rates. I want market interest rates set by the credit markets. If we have to have a Fed then I want it following RULES like the Taylor Rule or the Volcker Rule which would give us a Fed Discount Rate of maybe 2 %.
    Maybe a better description would be you're opposed to very low interest rates. Your main opposition to the Fed's policies were that we would end up with inflation. You said that back in 2010, and you also predicted 9 - 10 percent unemployment would become the new norm. and neither of your predictions came true.

    You don't seem to understand that tax rates aren't the only thing that affects the economy and you don't seem to understand that not all recessions are the same. Even if it was true that the economy always did better after tax cuts, it doesn't mean it was as a result of the tax cuts.

    In a previous post, you said:

    Reagan's Recession was just as bad as the last one coupled with high inflation and high interest rates and we got a booming recovery and 20 years of prosperity.

    Reagan's Recession was not anywhere near as bad as the last one. There is no comparison. Reagan's recession was intentionally caused by the Fed to bring down inflation. Once inflation was under control, all the Fed needed to do was lower interest rates to bring us out of the recession, which is what happened. The most recent recession was caused by millions of people defaulting on their mortgages. Trillions of dollars of wealth was lost. There was no easy way to bring us out of the recession. Without the bailouts and massive stimulus from the government and the Fed, we could have easily gone into another depression. The stimulus from the government and the Fed did work. The economy gradually improved every year. We never had the high inflation you predicted and the 9 - 10 percent unemployment that you predicted would be the new norm for the decade never happened. Instead the unemployment rate gradually fell to 5 percent.

    Quote Originally Posted by Eric Stoner View Post
    As to Median Annual Income - according to Sentier Research * ( whose numbers are more reliable and up to date than those from the Census Bureau ) in January , 2008 Median Income was $58, 331 measured in REAL dollars. Now , here in 2016 the September numbers are $57,380. That is 1.6% ( - $ 951 ) LOWER . It was even lower than that but as I have repeatedly recognized it has rebounded. Despite the rebound it is still LOWER than it was in 2008. That was EIGHT years ago. Other than the Great Depression when have we ever seen even a five year let alone an eight year period when median income stayed lower than what it had been ?


    *Sentier's numbers are the most current available. The last Census numbers available are from 2015. Yes, they have estimates i.e. guesses but their latest hard numbers are over a year old.
    From:
    https://www.factcheck.org/2016/06/ti...talking-point/

    Sentier Research, “Household Income Trends April 2016,” May 26, 2016: The April 2016 median income of $57,243 is 2.5 percent higher than the median of $55,859 in June 2009, the end of the recent recession and beginning of the “economic recovery.” The April 2016 median is 0.6 percent higher than the median of $56,900 in December 2007, the beginning month of the recession that occurred more than eight years ago.
    Last edited by eagle2; 10-27-2016 at 11:11 AM.

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    Default Re: USA houshold weath rise - 89.1 trill

    There always are the statistics that say one thing and the practical experience people know from real life that tells a very different story. Most Americans take statistics like this as a joke because it does not accurately reflect the way the economic situation is for most Americans. I think the reality is what Bill Gates had said that you have to look at this globally. Although the US is becoming sluggish other countries, especially those that use to be very poor are making great Economic growth like China for example. Of course the other countries around the world will eventually catch up to the US, that is the nature of capitalism and economics.
    Last edited by November_Scorpio; 10-27-2016 at 11:06 PM.

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by eagle2 View Post
    In your previous post you said:


    You couldn't even find a single city where the "The average American is now spending AT LEAST half of their net income ( i.e. take home pay ) on rent". You found one city that's close. You found seven cities where 37 percent of income or more is spend on rent. Those seven cities probably make up less than 10 percent of the population, so 90 percent of Americans are averaging less than 37 percent of income spent on rent. That's a lot less than half of their net income.



    Maybe a better description would be you're opposed to very low interest rates. Your main opposition to the Fed's policies were that we would end up with inflation. You said that back in 2010, and you also predicted 9 - 10 percent unemployment would become the new norm. and neither of your predictions came true.

    You don't seem to understand that tax rates aren't the only thing that affects the economy and you don't seem to understand that not all recessions are the same. Even if it was true that the economy always did better after tax cuts, it doesn't mean it was as a result of the tax cuts.

    In a previous post, you said:

    Reagan's Recession was just as bad as the last one coupled with high inflation and high interest rates and we got a booming recovery and 20 years of prosperity.

    Reagan's Recession was not anywhere near as bad as the last one. There is no comparison. Reagan's recession was intentionally caused by the Fed to bring down inflation. Once inflation was under control, all the Fed needed to do was lower interest rates to bring us out of the recession, which is what happened. The most recent recession was caused by millions of people defaulting on their mortgages. Trillions of dollars of wealth was lost. There was no easy way to bring us out of the recession. Without the bailouts and massive stimulus from the government and the Fed, we could have easily gone into another depression. The stimulus from the government and the Fed did work. The economy gradually improved every year. We never had the high inflation you predicted and the 9 - 10 percent unemployment that you predicted would be the new norm for the decade never happened. Instead the unemployment rate gradually fell to 5 percent.



    From:
    https://www.factcheck.org/2016/06/ti...talking-point/

    Sentier Research, “Household Income Trends April 2016,” May 26, 2016: The April 2016 median income of $57,243 is 2.5 percent higher than the median of $55,859 in June 2009, the end of the recent recession and beginning of the “economic recovery.” The April 2016 median is 0.6 percent higher than the median of $56,900 in December 2007, the beginning month of the recession that occurred more than eight years ago.
    We are going to have to agree to disagree about some of this stuff. You have your interpretation of what various numbers mean and I have mine.

    While I was a bit hyperbolic , YOUR source on rent as a % of income i.e. ZILLOW says that 31% of New Yorkers spend 50% OR MORE of their household income on rent and there are similar numbers for at least 20 other major cities in the U.S. A substantial part of the renter population is paying 50% or more of their income on rent.

    You have deliberately mis-stated and misinterpreted what I have had to say about interest rates in particular and Fed policy in general. As I have posted before, the Fed only controls two interest rates both of which directly impact banks that are members of the Federal Reserve System. They now include investment banks like Goldman Sachs and Morgan Stanley. The Fed also sets reserve requirements for its member banks and controls the money supply. It prints the stuff that we carry around in our pockets and purses.

    I agree that we have not seen the type of inflation that has historically been caused by similar type Fed policy. I also explained that A reason high inflation has not occurred is because the money injected by the Fed has NOT trickled down ; it has been glommed by the big banks and most of it has NOT been lent out. Thus there has not been any pressure on wages and prices that we saw under "The Village Idiot " in the 1970's i.e. too much money chasing too few goods. Prices going up thanks in part to a weak dollar causing workers to demand higher wages to try and keep up in turn putting more upward pressure on prices. At present we have a RELATIVELY strong dollar ( compared to other major currencies ) and wage increases have been few and far between in the PRIVATE sector.

    As far as unemployment is concerned you are correct if all you look at is the Payroll Survey. If you look at the Household Survey AND look at the type of jobs being created AND the fact that the average worker has not had a raise ( in real terms ) since 2000 AND the fact that a lot of the "new" jobs being created are part-time and low-wage then the overall economic picture is not very rosy. In addition to the Unemployment Rate I have cited to other employment and income numbers that dampen any enthusiasm for the current state of affairs.

    I grant you that the Fed managed to keep our banking system afloat. I personally would have preferred making it more punitive for the banks i.e. I was serious that all executives at banks taking Federal bail-out money ought to have had their salaries limited to the Federal Civil Service maximum for GS-18's which at the time was roughly $175,000 per year. As far as the Federal stimulus package we are going to have to agree to disagree. If it had "worked " as advertised I submit we would have seen an economic boom with resultant increases in incomes. I know , I know , Krugman , Dean Baker et. al. have argued that it wasn't big enough and we should be doing likewise every year. In "stimulus " I include "Cash for Clunkers" and "Dollars for Dishwashers ".

    I don't know how you or anyone else can say that the CARTER -Reagan Recession ( which was really the "Johnson - Nixon - Ford - Carter" recession because it was well under way and in full bloom when Reagan took office and its causes went back AT LEAST ten years -Jimmy and Ronnie were just left holding the bag) was not at least as bad as the Financial Crisis Recession of 2008-9. First of all it lasted three years instead of less than two. Secondly it was coupled with high inflation and high interest rates. Yes, part of the recovery was a result of Fed easing BUT as I explained Volcker kept a tight rein on the money supply and did not just focus on interest rates as Miller and the Village Idiot had done before him. I know you are pathologically incapable of recognizing any benefit from tax cuts but for those readers with open minds - all they have to do is look at the unemployment numbers BEFORE Reagan's cuts and after ; Federal revenues Before and After ; Median Income Before and After ; total charitable giving Before and After ; corporate profits ; the stock market and just about any other measure of economic health and vitality. And then compare them to the current numbers. And then do the same for Coolidge's Tax Cuts ; JFK's Tax Cuts ( the difference between the Before and After was striking ) and Clinton's Tax Cuts.

    Btw- Your numbers on median income do not contradict mine. You just chose different measuring points than I did. For January , 2008 it was $58,331 That was before the Recession . June , 2009 the number was $55,859. That was at the low point of the recession. The latest available numbers are from September NOT April , 2016 and the number is $57,380 vs. $57,243 for April and your point was what ? YOUR number for April and mine for September are both BELOW the high point for Median Income i.e. January ,2008.
    Last edited by Eric Stoner; 10-31-2016 at 07:10 AM.

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by November_Scorpio View Post
    There always are the statistics that say one thing and the practical experience people know from real life that tells a very different story. Most Americans take statistics like this as a joke because it does not accurately reflect the way the economic situation is for most Americans. I think the reality is what Bill Gates had said that you have to look at this globally. Although the US is becoming sluggish other countries, especially those that use to be very poor are making great Economic growth like China for example. Of course the other countries around the world will eventually catch up to the US, that is the nature of capitalism and economics.
    My views aren't just based on economic numbers and indicator. According to a recent survey, two-thirds of Americans say their own households are faring well.

    http://www.usnews.com/news/business/...s-than-economy

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by Eric Stoner View Post
    You have deliberately mis-stated and misinterpreted what I have had to say about interest rates in particular and Fed policy in general. As I have posted before, the Fed only controls two interest rates both of which directly impact banks that are members of the Federal Reserve System. They now include investment banks like Goldman Sachs and Morgan Stanley. The Fed also sets reserve requirements for its member banks and controls the money supply. It prints the stuff that we carry around in our pockets and purses.
    If I misstated or misinterpreted anything you said, I'm sorry. It wasn't intentional.


    Quote Originally Posted by Eric Stoner View Post
    I grant you that the Fed managed to keep our banking system afloat. I personally would have preferred making it more punitive for the banks i.e. I was serious that all executives at banks taking Federal bail-out money ought to have had their salaries limited to the Federal Civil Service maximum for GS-18's which at the time was roughly $175,000 per year. As far as the Federal stimulus package we are going to have to agree to disagree. If it had "worked " as advertised I submit we would have seen an economic boom with resultant increases in incomes. I know , I know , Krugman , Dean Baker et. al. have argued that it wasn't big enough and we should be doing likewise every year. In "stimulus " I include "Cash for Clunkers" and "Dollars for Dishwashers ".
    It's impossible to say how much the stimulus helped, because there is no way to know what would have happened without it. After the stimulus was implemented, the economy did go from getting worse every month to getting better, even if it didn't turn around over night. It is possible that the economy could have continued to keep getting worse. There were increases in income. You're selecting one or two years when median income was exceptionally high to use as a base. If you compare median income today to median income in 2009 or 2010, there was an increase. One of the reasons why median income was so high in 2007 was because many Americans were spending money they didn't have, especially on houses, which increased economic growth and wages. If there were tighter regulations in the credit market prior to the crash, we wouldn't have see the economic growth we did, but we wouldn't have seen the economy crash like it did in 2008 - 09.

    Quote Originally Posted by Eric Stoner View Post
    I don't know how you or anyone else can say that the CARTER -Reagan Recession ( which was really the "Johnson - Nixon - Ford - Carter" recession because it was well under way and in full bloom when Reagan took office and its causes went back AT LEAST ten years -Jimmy and Ronnie were just left holding the bag) was not at least as bad as the Financial Crisis Recession of 2008-9. First of all it lasted three years instead of less than two. Secondly it was coupled with high inflation and high interest rates. Yes, part of the recovery was a result to Fed easing BUT as I explained Volcker kept a tight rein on the money supply and did not just focus on interest rates as Miller and the Village Idiot had done before him. I know you are pathologically incapable of recognizing any benefit from tax cuts but for those readers with open minds - all they have to do is look at the unemployment numbers BEFORE Reagan's cuts and after ; Federal revenues Before and After ; Median Income Before and After ; total charitable giving Before and After ; corporate profits ; the stock market and just about any other measure of economic health and vitality. And then compare them to the current numbers. And then do the same for Coolidge's Tax Cuts ; JFK's Tax Cuts ( the difference between the Before and After was striking ) and Clinton's Tax Cuts.
    The differences between the current recession and the recession in the 80s are, there was a lot more wealth lost in the most recent recession, interest rates were higher in the 80s, which gave the Fed more options, and national debt was much lower, so there was much less opposition to deficit spending.

    If you look at Reagan's tax cuts, unemployment continued to increase after taxes were cut. It was only when interest rates were lowered that unemployment began to drop. Unemployment was about the same after Reagan's first term as it was when he took office. It is impossible to say how much of the economic growth resulted from tax cuts, as opposed to other factors such as the lowering of interest rates, the deep drop in the price of oil, and increased spending on defense, since they were all going on at the same time. Maybe the economy improved more because of the tax cuts and maybe it didn't. The main reason I disapprove of Reagan's tax cuts is because of the big increase in budget deficits we saw after taxes were cut. Supporters of Reagan's tax cuts like to blame this on increased spending, but government increased spending in the 50s and 60s without any major increases in budget deficits. If government can cut taxes without increasing deficits, like in the 1960s, then I support them. If there were no major increases in budget deficits after Reagan cut taxes, I would approve of them. I don't see anything wrong with temporarily increasing deficits during a recession, but we still continued to see large deficits in the 80's, even after we recovered from the recession.

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    Quote Originally Posted by eagle2 View Post
    If I misstated or misinterpreted anything you said, I'm sorry. It wasn't intentional.



    It's impossible to say how much the stimulus helped, because there is no way to know what would have happened without it. After the stimulus was implemented, the economy did go from getting worse every month to getting better, even if it didn't turn around over night. It is possible that the economy could have continued to keep getting worse. There were increases in income. You're selecting one or two years when median income was exceptionally high to use as a base. If you compare median income today to median income in 2009 or 2010, there was an increase. One of the reasons why median income was so high in 2007 was because many Americans were spending money they didn't have, especially on houses, which increased economic growth and wages. If there were tighter regulations in the credit market prior to the crash, we wouldn't have see the economic growth we did, but we wouldn't have seen the economy crash like it did in 2008 - 09.


    The differences between the current recession and the recession in the 80s are, there was a lot more wealth lost in the most recent recession, interest rates were higher in the 80s, which gave the Fed more options, and national debt was much lower, so there was much less opposition to deficit spending.

    If you look at Reagan's tax cuts, unemployment continued to increase after taxes were cut. It was only when interest rates were lowered that unemployment began to drop. Unemployment was about the same after Reagan's first term as it was when he took office. It is impossible to say how much of the economic growth resulted from tax cuts, as opposed to other factors such as the lowering of interest rates, the deep drop in the price of oil, and increased spending on defense, since they were all going on at the same time. Maybe the economy improved more because of the tax cuts and maybe it didn't. The main reason I disapprove of Reagan's tax cuts is because of the big increase in budget deficits we saw after taxes were cut. Supporters of Reagan's tax cuts like to blame this on increased spending, but government increased spending in the 50s and 60s without any major increases in budget deficits. If government can cut taxes without increasing deficits, like in the 1960s, then I support them. If there were no major increases in budget deficits after Reagan cut taxes, I would approve of them. I don't see anything wrong with temporarily increasing deficits during a recession, but we still continued to see large deficits in the 80's, even after we recovered from the recession.
    I accept your apology. I've probably been guilty of the same thing once or twice.

    Median Income measures just that. INCOME. Not spending. I cited to the January , 2008 Median Income number BECAUSE it represented the high point of median income. Unless I am mistaken you are now arguing that we should contrast and compare current Median Income to what ? A lower number so that today's number doesn't look so bad ? You want to compare today's number to 2009 numbers when we were in recession ? We've already agreed that A. we are not currently in a recession and B. the overall numbers are better today than they were then . I'm sorry but there is a limit to how much cherry picking and data spinning you can do before somebody shouts out : "Hold the phone ! Just a minute ".

    Comparing the Carter Reagan Recession to the 2008-9 Recession : Unemployment was comparable between the two recessions. In 1979 - 82 we had stagflation ( high inflation , high interest rates , high unemployment and negative growth ) compared to low inflation , low interest rates , high unemployment and negative growth in the 2008-9 recession. In both cases we had looser monetary policy ( on RATES ) and Federal stimulus . Under Reagan we had increased defense spending and increased infrastructure spending. Federal fuel taxes were raised a nickel a gallon to fund bridge and highway projects. The big difference was Reagan cut marginal tax rates , the top rate was cut from 70 % to 50%.

    Yes , it took a while for Reagan's tax cuts to kick in ( at least a year ) but when they did we had GDP growth as high as 7.3% and unemployment tumbled. And there were a lot of good paying jobs in construction and manufacturing in addition to white collar gains. That is just common sense. Less money deducted from one's paycheck ( or Sub-Chapter S distribution ) coupled with the INCENTIVES of lower rates on FUTURE income caused there to be more business expansion and investment and more rehiring and hiring.

    As has been discussed and explained many, many times in this forum , we did see increases in the Federal deficit but in Reagan's Second Term those deficits declined as a percentage of GDP. The trajectory of the deficits lowered dramatically as Federal revenues almost doubled. Reagan actually raised taxes various times culminating in the Bradley Tax Reform Act of 1986 which lowered the top rate to 29% but also eliminated most Federal deductions and credits. Part of the deal was that Congress agreed to cut spending but they never did. Papa Bush forgot the old axiom " Fool me once shame on you , fool me twice shame on me " and fell for another Congressional promise of spending cuts in exchange for a tax increase. The spending cuts never happened and Bush the Smarter helped turn a slow down in the economy into a recession. The deficit went up as GDP fell along with incomes and Federal revenues. It was Clinton who raised taxes in his first term and was dragged kicking and screaming into signing Gramm- Rudman which limited the INCREASES in Federal spending and who cut capital gains and business taxes. What happened ? The economy boomed and we had budget surpluses.

    Btw, with JFK's tax cuts that were in fact passed by Johnson and which were supported by every major Democrat and liberal of the time ( Wilbur Mills , TED KENNEDY, HUBERT HUMPHERY etc. - the opposition came from racist Southern Democrats and myopic Republicans who only seemed to care about the deficit and balanced budgets ) we had an increase in the deficit BUT it declined as a % of GDP even with The Vietnam War and Johnson's Great Society programs . Higher GDP led to higher employment , greater investment , higher salaries , higher earnings , higher home and car ownership , a booming stock market with resulting higher capital gains all of which resulted in higher Federal Revenues. We also had a strong dollar and a sane Fed who controlled the growth in the money supply. At the time other countries could still redeem their U.S. dollars for gold at $35 an ounce. It was Johnson's 10% Income Tax surcharge in 1968 coupled with the Village Idiot taking over the Fed and Nixon totally taking us off the Gold standard without any brakes or restraint on money printing that set the stage for a severe recession after years of stagflation. I have posted before that on economic policy Nixon deserves an "F". In addition to all his other crimes , sins and shortcomings.
    Last edited by Eric Stoner; 10-31-2016 at 08:15 AM.

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    Default Re: USA houshold weath rise - 89.1 trill

    The latest GDP numbers are out. The economy grew by 2.9% in the 3rd Quarter. That followed 1% in the 1st Quarter and 1.5% in the 2d Quarter. BUT over half of the increase in the 3rd Quarter is directly attributable to massive soybean sales in the early summer and when those are taken out growth was an anemic 1.5 %

    Corporate Investment is down 4.5 %

    More small businesses closed or dissolved last year than opened according to The Brookings Institution.

    Home ownership is down to 62.9 %. The lowest rate since 1965. That means that 37.1 % of Americans did not see an increase in their household wealth UNLESS they are renting but own a stock portfolio. Nationwide at least 20 % of renters are paying 50% or more of their income on rent.

    Oh and wage inflation is markedly UP. We'll have to see how long that lasts and what effect it ultimately has.
    Last edited by Eric Stoner; 10-31-2016 at 08:16 AM.

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    Default Re: USA houshold weath rise - 89.1 trill

    During the 1960s, the budget deficit went up and down from year to year. There were big increases in 1967 and 1968, when it peaked at over $25 billion, but the deficit in 1970, at $2.842 billion, was lower than the deficit in 1961. In 1971 it went up to $23 billion. Then from 1971 to 1981, it increased to $78.9 billion. Part of this growth was due to inflation. Then after Reagan cut taxes, we saw unprecedented increases in the budget deficit. In 1982, it increased close to $50 billion, to $127.9 billion, and the following year, another $90 billion to $207.8 billion. From 1961 to 1981, the deficit went from a little over $3 billion to $78.9 billion. In just two years, from 1981 to 1983, the deficit increased approximately $130 billion. That's more than the preceding twenty years, including the 1970s when we had the high inflation. It stayed around that level for more than 10 years. The lowest deficit was approximately $150 billion in 1987, and the highest was $290 billion in 1992. In 1993, Bill Clinton increased taxes significantly and the deficit went down every single year, eventually turning into surpluses.
    Last edited by eagle2; 10-31-2016 at 10:41 PM.

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    Default Re: USA houshold weath rise - 89.1 trill

    Here is a graph showing the historical national debt as a percentage of GDP. Notice how the only significant increases occur after Reagan and Bush's tax cuts.



    The economic crisis of 2008 - 2009 compounded the problem.

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by eagle2 View Post
    During the 1960s, the budget deficit went up and down from year to year. There were big increases in 1967 and 1968, when it peaked at over $25 billion, but the deficit in 1970, at $2.842 billion, was lower than the deficit in 1961. In 1971 it went up to $23 billion. Then from 1971 to 1981, it increased to $78.9 billion. Part of this growth was due to inflation. Then after Reagan cut taxes, we saw unprecedented increases in the budget deficit. In 1982, it increased close to $50 billion, to $127.9 billion, and the following year, another $90 billion to $207.8 billion. From 1961 to 1981, the deficit went from a little over $3 billion to $78.9 billion. In just two years, from 1981 to 1983, the deficit increased approximately $130 billion. That's more than the preceding twenty years, including the 1970s when we had the high inflation. It stayed around that level for more than 10 years. The lowest deficit was approximately $150 billion in 1987, and the highest was $290 billion in 1992. In 1993, Bill Clinton increased taxes significantly and the deficit went down every single year, eventually turning into surpluses.
    The deficit increased in 1967 and 1968 AFTER Johnson spent billions on Vietnam and The Great Society. You did look at Johnson's spending numbers compared to JFK's ? Nixon actually had a balanced budget in 1969 but as you note it increased exponentially.

    In 1982 we were in the middle of a horrible recession. GDP was DOWN ; employment was DOWN and so were Federal revenues. By the end of Reagan's second term Federal revenue had almost doubled. The problem was spending. Including a lot of defense spending that we probably didn't need. We had a $150 billion deficit with a GROWING economy i.e. we could afford that level of debt. As you note the deficit increased to $290 billion in 1992 just as we were emerging from a short and shallow recession and AFTER Bush "Not As Dumb As His Son " had gone along with a tax INCREASE and revenues had leveled off in real terms.
    Yes, Clinton raised taxes and he also held the line on spending and enjoyed the benefits of the "peace dividend " i.e. decreased defense spending. Deficits declined and then disappeared altogether AFTER he cut business and capital gains taxes and Revenue went UP !

    Your chart measures DEBT as a % of GDP. I was talking about DEFICITS as a % of GDP and under Reagan the deficit as a % of GDP went DOWN starting in 1984.

    I have posted extensively about deficits and the national debt. For one thing , as I have previously explained, the national debt will NEVER be paid back. Not in the way that a mortgage or business loan or even state and municipal bonds get paid back . It's impossible. For years the budget would have to go toward nothing else but interest payments and repayment of principal for the debt to be "paid back". The issue is whether we have a debt that we can afford. When Reagan was President we could afford the deficits he rang up because Federal revenue went up and the economy grew. The deficit got bigger under BOTH Bushes . Under Papa Bush it grew because revenues flattened and spending went up. Plus Greenspan had tightened at the Fed. Under Bush The Dumber we had a War On Terror and a spendthrift REPUBLICAN Congress that treated the Federal budget like a luau with roast pork as far as the eye could see. At the time Melonie and others were taking them all to task for fiscal irresponsibility.

    In contrast Reagan tried to hold the line on spending and in fact went along with several tax increases. When he felt that taxes had been raised enough he jokingly said that the "deficit was big enough to take of itself ". And in a sense it was because a growing economy and increasing Federal revenues made it a deficit that we could afford. Thanks also to declining interest rates. That is the only thing that is keeping Obama's deficits affordable i.e. the very low rates being paid on Federal debt. The latest deficit is now over $500 billion and that is AFTER Obama raised taxes.

    According to YOUR chart - Did you see what happened to debt as a % of GDP after 2010 ? It skyrocketed ! That is after tax increases and almost a decade of lousy economic growth. Under Obama we haven't had a single Quarter , not one, with growth of AT LEAST 3 %. Small wonder that we've had record deficits. In current terms. In REAL terms i.e. adjusted for inflation and worst of all as a % of GDP. According to YOUR logic the deficits ought to have leveled off after Obama raised taxes. Likewise according to your logic the deficit ought to have increased after Clinton cut taxes . Instead we went into surplus thanks to low interest rates and INCREASED Federal revenue. That increased Federal revenue resulted from a GROWING economy with virtually full employment and higher incomes. OMG ! Under Clinton the rich got richer AND paid more in taxes as a result. Just as they had under Reagan. And under Johnson . And under Coolidge. And we had a lot less income inequality than we do now.

    Under Johnson Federal spending as a % of GDP went up and he raised taxes 10%. Same thing under Nixon , Ford and Carter. Under Reagan we did have increased defense spending BUT as a % of GDP it was lower than under JFK. It was all the other Federal spending that gave us such large deficits. I've already explained how Bush "41 " turned a business slowdown into a mild recession by raising taxes that did NOTHING to shrink the deficit. And he had the S & L mess to clean up and a Gulf War to fight. In contrast Clinton raised taxes AFTER we were already out of recession and he did not have any significant spending or budgetary challenge. After he took office Greenspan got it mostly right at the Fed although an argument has been made that he helped facilitate the housing bubble and resulting financial crisis. Clinton clearly enjoyed the fiscal benefits of the "peace dividend ". Bush the Dumber inherited an economy that was in recession thanks to the business cycle , Greenspan's Fed policies and the bursting of the "dot.com bubble". Then came 9/11 , his idiotic war in Iraq and zero fiscal discipline by a Republican Congress followed by the Financial Crisis and resulting recession.

    Recessions cause deficits. Congress doesn't stop spending when the economy slows down. Usually they want to spend more to "stimulate ".
    I'd love to comment on "political spending " trying to "buy" re-election etc. but that would be naughty. Suffice to say Both parties are guilty of spending too much. Slowing or negative growth causes Federal Revenues to slow and shrink. Increasing unemployment creates more mouths that have to be fed without being able to contribute income taxes. Not to mention corporations and businesses that want Federal help to survive or at least better weather the recession. This is also where modern Keynesians like Krugman , Baker et. al. continually miss the boat. According to Keynes when times are bad the government ought to increase spending and ought to CUT spending when times are good. That did NOT happen under Johnson , Reagan and both Bushes. Johnson had Vietnam and his social programs ; Bush 41 had a Democrat Congress that refused any serious spending cuts and Bush 43 had his War On Terror , NCLB and a Republican Congress with a horrendous fiscal record.

    If you are really such a "deficit hawk" then you ought to be arguing for spending restraint ( we have had NONE ) and a healthy tax cut to jump start the economy. Perhaps a reduction in the corporate tax rate to make us competitive with China and Europe ? And incentives so that American corporations will repatriate a healthy portion of the $ 4 TRILLION they have sitting overseas ? And wiping out all the "crony capitalism " - Eliminate all the various credits and deductions cluttering up the Tax Code ? We've done it before. It has worked every time that it has been tried. Even Bush The Dumber's tax cuts improved the economy.
    Last edited by Eric Stoner; 11-02-2016 at 08:16 AM.

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    Default Re: USA houshold weath rise - 89.1 trill

    I actually have a degree in economics so, while the people in this thread are all very knowledgeable I look at these facts and figures with a more scientific approach, but based on historical trends and models and not just current day statistics and graphs. It is late and I do not feel like using SAT vocab so bear with me. I am going to go back tomorrow and read some of these longer posts in detail. I agree the post recession growth is "anemic", median income growth is stagnant as fuck- even if it has gone up it is not even close to being on par with the increase in expenses (like energy, groceries or even health care as Eric pointed out).

    I think we are going to see prosperity in this country again in the near future because of American innovation and the fact that we do not "need" manufacturing jobs anymore. It is more beneficial to our economy to train people who do manual labor to fix our infrastructure and implement new technologies like solar and wind energy than to build widgets that we can get in china for 4.00. There are 2 major, major problems that are going to really cause problems. Sorry if anyone talked about this.

    1. More baby boomers are retiring. They believed they would have social security and many had pensions that lost value in this last crash, as they were tied to portfolios and mutual funds that lost value. I have a client whose pension went bankrupt and while he still gets a check it is 40% of what he planned to retire on.These people are also living longer due to medical advances. This, unless social security is abolished (which I do not see happening) it is going to become to burden of younger people to pay MORE into social security. I would bet money that this will happen within the next 2 presidential terms.

    2. Young people are straddled with debt. I am not talking about people who bought a 52" TV on credit, I am talking about massive student loan debt because we were beat upside the head to go to college only to graduate and learn employers want to pay people with a bachelor's degree a few bucks over min. wage; that plus rising housing costs means there is little to save even if they are frugal and try to put money away- they have to actually invest to see any return and many young people (30 and under) do not have one month of living expenses in the bank; never mind invest with a planner or Scott trade account what the fuck are they going to do? Work until they die? Start saving for retirement at 50?? I know 2 people besides me that have a retirement or brokerage account and mine (brokerage) is nothing to write home about at the present moment. Most of my friends are not in the adult business if this matters. I know I am still young and in 20 years or so it will be much healthier but I have to make a very significant contribution every month to feel like I will be able to keep my lights on and fridge full in old age; never mind do something I might enjoy in my retirement like travel or play the occasional game of golf.

    I agree with Eric that our tax code needs a huge overhaul- the whole thing of people getting refunds every year is asinine, dated and a huge waste. I think we should have a better way of estimating people's tax liabilities so they are not over paying and then we waste resources to figure out how much to give back. It is archaic. Eliminate the whole damn thing. I will go more into that later on. Of course, I am referring specially to the US.

    My point is, even if US household wealth "rises" there are many factors off-setting that marginal increase that will make it harder and harder for middle class people. I do not think we will ever see prosperity like we did post WW2. This could be compensated for if people planned a little better but I am worried that they will not.
    XoXo Gia
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