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mass transit is only as good as the masses that will use it.
public housing, same thing, sigh
but there are feedback effects here, better mass transit and public housing makes for a better mass public, over time
aleister perdurabo wrote:
The problem is this: As the sovereign government continues to sell Treasury bonds to “get” the fiat dollars it “needs” to spend MORE than it collects in taxes, the interest it will be paying the “citizens” holding the bonds will become a larger and larger component of annual sovereign spending
one thing that hit me recently was that bond sales can be viewed as a way for people to buy down their future tax burden, as the interest received offsets taxes paid.
we should have taxed that $16.4T, but oh well!
but it should be noted. I despise consumer debt but not investment debt, and the latter includes housing debt
housing debt just enables us to bid up the cost of housing more.
talk about "consumption", LOL
housing is only an investment in that you're escaping the clutches of the Rent Man
(and that land is an Eternal good, and housing itself is pretty "durable")
some investor guy wrote:
I couldn't find any other country that separately had to authorize a debt ceiling
Japan went through this same thing, and the LDP opposition basically got the DJP to call a new election in exchange of their vote to raise it without any drama.
Japanese Parties Agree On Debt-Issuance Plan
"TOKYO—Japan's ruling and opposition blocs reached agreement Tuesday on a multiyear package to raise the government's borrowing authority after annual feuds over debt issuance, helping to avoid an unexpected fiscal emergency.
"A political impasse fed by Japan's divided parliament has blocked the passage of a debt-issuance bill for more than six months, forcing a temporary suspension of government spending and threatening to roil the country's debt market. But Tuesday's deal likely paved the way for the passage of an amended version of the bill by the end of this month that would empower the government to issue debt over several years without parliamentary permission."
Thing is, Japan's .gov spending is tiny compared to ours -- about half on a per-capita basis.
Their defense budget is the rounding error on ours (~$50B)
"Aren't we talking about removing one of the disruptions BigGov has introduced to the market?"
Real (2012) Per-Capita Non-Financial Debt
We didn't start the fire. . .
"For example, heart disease, cancer, strokes, respiratory diseases, diabetes, and Alzheimer's disease claimed about 1,650,000 American lives in 2007"
these afflictions clear out the deadwood. If we actually cured this list we'd have to quadruple FICA, or more.
terrorism a) targets the important people and b) makes the PTB politically vulnerable for failing to defend the country
That's why we spend $150B on terrorism and $10B on health research
The only thing that kept us from getting into fiscal quicksand many decades ago was cheap fossil fuels
people forget that housing costs are WAY higher than they need to be based on cost of inputs.
If life gets a lot more expensive, don't expect today's rents and home prices to remain unchanged.
One of the underappreciated causes of the 1990s hiring boom (as % population) was that the Gen X demographic hole (1964-1981) was hitting their 20s then.
he's a fookin loon, that's what
My 1st response would be to ask why in the F Spanish voter materials are being distributed by the government in America
having lived in Japan for 8 years, I fully understand why.
Daily competency in a language does not give one the reading ability to really get into the ins & outs of ballot arguments.
Not that the crap we get sent explains things anyway.
People whose native language isn't English are still Americans, bearly.
Check ur US history, por favor.
The 42 most important economies would suffer total economic losses of 17.2-trillion euros
bbut there's only 11M greeks - 17T/11M is like €1.5M per Greek person. Wah?
Private Equity in Atlanta After Picking Phoenix Clean: Mortgages
it's easy to identify parasitical capitalism -- just look at what new wealth was created with the activity.
If I were king these people would go into plastic shredders.
failing that, LVT their business model away.
UPDATE: Gloomy Outlook
UPDATE: Gloomy Outlook for Japan
FRED Graph - FRED - St. Louis Fed
wages up 6X
rents up 6X
ain't that a bitch
Case Shiller (blue)
So long as they can keep the rich-poor divide widening so as not to compromise their own position
Table 1 from:
"The 1%" had their real incomes grow by 58% 1993-2010, while "the 99%" saw . . . 6.4%
this nation is fundamentally fucked
As for real estate going to the moon... didn't that already happen?
FRED Graph - FRED - St. Louis Fed
I thought people would be turned off for years, but I guess not.
buying now is the only (wage) inflation hedge people have.
I dunno if & when it's coming, but if it's coming, it's going to be pretty big.
Graph: Total Credit Market Debt Owed by Domestic Nonfinancial Sectors (TCMDODNS)/Compensation of Employees: Wages & Salary Accruals (WASCUR) - FRED - St. Louis Fed
the painless way to bring that ratio down to saner levels is increase the denominator.
If & when that happens, real estate will go to the moon, just like the 1970s wage-price spiral.
How to get wages rising in this country is the tricky bit, but I think the Republicans have some ideas they can reuse.
shows housing is a bit less inflated than food, contrary to my expectations.
then again, rent is a much bigger bite out the budget than food, so there's that.
Gen Y is say 1980-2000
(~10 years around their demographic peak of 1990)
so they're aged 12 to 32 right now.
They were too young for the dotcom land rush, though some got into the mobile app land rush.
yeah, food is not out of line wrt most people's budgets today.
but housing rents, housing rents are way out there, since we're not in oversupply of housing like we enjoy with food still.
Consumer Price Index for All Urban Consumers: Rent of primary residence (CUUR0000SEHA) - FRED - St. Louis Fed
OPINION; The Self-Destruction of the 1 Percent - NY Times
this was linked yesterday and it's good as far as it goes but it doesn't connect all the dots.
I was listening to Huckabee berate Obama for not understanding basic economics tonight, how we need to untax the billionaires to make it rain on everyone.
This is not actually how the economy is structured, it is the billionaires siphoning trillions from the workers of this nation, not the 47%.
The flows from J6P to the 1% are immense -- in health care, energy, real estate (commercial and residential), and on top of that we have the trade deficit also ripping $500-600B/yr out of the paycheck economy.
It's a miracle we still have an economy.
Total Credit Market Debt Owed by Domestic Nonfinancial Sectors (TCMDODNS) - FRED - St. Louis Fed
well, maybe not
The 2013 budget is set to introduce sharp income tax hikes
FRED Graph - FRED - St. Louis Fed
shows we need a 10% tax rise here. 10% of after-tax incomes.
Haralambos, my thesis says that falling Greek wages and higher tax burdens -- i.e. falling disposable incomes -- simply have to come out of rents and land values in the end.
Do you see that happening?
"Many Greeks think this resistance led to the diversion of enough German divisions to relieve the eastern front and let the USSR withstand the siege of Stalingrad."
timing's wrong -- that was winter-spring 1941 and Stalingrad was 1942.
1941 was a wet spring in E Europe so the german assault on Russia in 1941 was delayed more due to that than the delay due to the eviction of the British from Greece/Crete.
But this is always an active topic of discussion among East Front warnerds.
IIRC, the LM's computer kept having stack overflows; it just could handle all of the interrupts it was receiving.
the problem was that they left the rendezvous ranging radar on during the descent, and that was causing the overload exception.
"Due to an error in the checklist manual, the rendezvous radar switch was placed in the wrong position. This caused it to send erroneous signals to the computer. The result was that the computer was being asked to perform all of its normal functions for landing while receiving an extra load of spurious data which used up 15% of its time."
Current numbers are meaningless noise.
What matters is future trends.
Positives for the housing market is the rising household-forming population in California, through net migration and the baby boom echo (aka Gen Y) beginning to age into their 30s.
Resident Population in California (CAPOP) - FRED - St. Louis Fed
The main negative I see is the wheels coming off of government spending and/or taxes going up a lot.
The current recovery has been purchased with $6T+ of gov't debt take on.
Graph: Total Credit Market Debt Owed by Domestic Nonfinancial Sectors - Federal Government (FGTCMDODNS)+Total Credit Market Debt Owed by Domestic Nonfinancial Sectors - State and Local Governments (SLGTCMDODNS) - FRED - St. Louis Fed
And on top of this we have the $4T intragovernmental debt that theoretically has to be paid back in the next 20-30 years.
Now, apparently Plan A is to just inflate and borrow our way to prosperity. In that case housing is bullish.
But if we actually find ourselves squaring our fiscal picture, goodbye housing valuations -- rents and prices.
And even with demand-side pressures, rental housing is an immense wealth tap on the 99% -- the more flow of rents out of the paycheck economy, the less the velocity and the sooner the resulting crash.
"It is no accident that in America today the gap between the very rich and everyone else is wider than at any time since the Gilded Age."
Missing from this analysis is the understanding that the rich are not just making money out of the ether, but pulling it from working Americans.
Our $8500/capita health-care costs, $5000/household gasoline costs, $10,000/yr+ housing costs -- these are the rent taps on the 90% the 10% enjoys.
Then there's the $500B/yr trade deficit with China/Japan/Germany:
Top Ten Countries with which the U.S. has a Trade Deficit
we are losing velocity from.
Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.
Obama gets a big fat F from me for increasing public understanding of this. Wrong man for the time. But it's very easy for the conservative message machine to slam anybody who brings this up as "emotional" and rabble-rousing "class warfare".
The right really has done a number on this country.
I believe you are hallucinating
LOL, I changed fool to bozo in my above since I was going to make a joke about re-enabling the bozofilter.
I'd turned it off to see what sm_ll was saying.
So if the SSTF is "gone" then so are the bonds held by China and Japan. Yay! Problem solved.
pretty much, yes.
The stupid thing is that the SSTF's holdings ARE counted towards the debt celing so it is real as far as the Republicans are concerned, when they want to blow up the system at least.
But when it's time to pay for things,
Some folks are born silver spoon in hand,
Lord, don't they help themselves, oh.
But when the taxman comes to the door,
Lord, the house looks like a rummage sale, yes,
How old were the brothers in 1937 when the foundation was formed?
so much of our system has become corrupted by big money.
don't play the bozo here.
Tax Foundation - SourceWatch
Scott A. Hodge - SourceWatch
yeah I know it, but good data is good data.
"Money comes in from payroll taxes, then goes out as benefit checks. "
yeah, you're missing the excess FICA paid in 1989-2009 and its accrued interest there, Tex.
$2,588,653,000,000 as of August 2012.
Like I said, I'm all for raising FICA once the SSTF gets spent down to its statutory minimum (one year of expenses).
My theory is that higher FICA contributions will come right out of rents and land values anyway.
Just like the 2% FICA cut was eaten by rent rises these past 2 years.
Even in Santa Monica.
Now, if the money is simply gone, vanished...where did it go?
Social Security Trust Funds
held in treasury paper, just like all other bond purchasers -- $1.1T each to China and Japan.
The reality of the situation is that FICA payers collectively floated Uncle Sam a ~$1.5T loan 1989-2009, along with another $1.2T of accrued interest.
Now the US taxpayer is on the hook. This is not pocket A paying pocket B because the population of FICA payers (the 90%) is largely disjoint from the people who pay the most taxes in this country.
Top 10% make 43% of the nation's AGI and pay 70% of the income tax.
Summary of Latest Federal Individual Income Tax Data | Tax Foundation
Note that the split point to make it into the 10% was $112,000, just about the FICA cut-off.
social security is a paradigm-bending wealth transfer program, yes.
it substitutes rising productivity for interest and cuts out the middlemen pig-finance skim.
the 5%'s "problem" is that they now need to disgorge their share of the nation's productivity gains they've been pocketing since 1980.
Rather tear our country down than pay 40% marginal rates again.
maybe they'll win. Wouldn't bet against them and their billions.
There was no insurance, there is no trust fund, there is only ponzi and more ponzi. Or should that be pownzi.
another rich motherfucker not wanting to pay back his share of the $100B/yr he owes past FICA payers.
"SS is running annual deficits now. They are in the -$50Bn range for 2012, but the red ink will grow rapidly north of $100Bn in just a few years."
Read more: Page Not Found - Bruce Krasting
Good! That "red ink" is how we liquidate the SSTF, you lying hack!
The SSTF was built up to pay off the baby boomers. They overpaid their taxation 1989-2009, now it's time for the 5% -- who make 30% of the AGI in this country and therefore pay the bulk of income taxes -- to pay that debt they owe the 90% (past FICA payer) off.
But it takes more than 10 seconds to expain this so I expect the Krastings in the system will succeed in stiffing the public on that $2.7T debt they owe.
Nobody will laugh harder than I when this goes down.
Protect the age group that is causing the problem?
fucking Krasting and his typical dishonesty.
The age 55+ cohort overpaid their FICA thanks to the Greenspan Deal ~1989-2009.
They were 32-50 in 1989 so the front half of the baby boom has DONE their part for SS fund security.
The next shoe to drop HAS to be liquidating ~$1.7T out of the $2.7T trust fund over the next 20 years, which is going to be $100B/yr missile directed right at the 5% who owe that money.
And that's why Krasting is such an insistent liar on this topic. He wants to stiff past FICA payers the tax money the rich -- said class Krasting is certainly a member of -- owe them on SSA's special treasuries.
As for the sub-55 cohort, I'm all for raising FICA contributions to cover expected outgoes, AFTER the SSTF is depleted down to $1T, not before.
Matters if we learned anything from history.
"Vietnam presumably taught us that the United States could not serve as the world's policeman; it should also have taught us the dangers of trying to be the world's midwife to democracy when the birth is scheduled to take place under conditions of guerrilla war."
Jeane Kirkpatrick, 1979
Kind of shocking that O puts himself in the drone seat, so to speak.
Past republican outrage at Clinton allegedly not blowing up Osama when he allegedly had the chance has taught the reality-based community a bit more about the necessity to CYA against opportunistic Republican bullshit outrage.
"but this is the highest level since 2007"
amazing what $6T+ of government debt take-on can accomplish!
Total Credit Market Debt Owed by Domestic Nonfinancial Sectors - Federal Government (FGTCMDODNS) - FRED - St. Louis Fed
$7T if you count intragovernmental debt, $8T if you count state debt take-on.
our poor, poor SSTF. ~$1.5T taxed away from the 90%, never to be repaid by the 10%.
Like taking candy from a baby.
"PayPal has almost 13,000 employees."
Having Eric Holder prosecute the apparent fraud that was rife in the mortgage origination and securitization process would have been a nice start.
barn doors and horses, not that I disagree
He had a chance for true reform of what was/is wrong with our economy and instead took the path of least resistance
Bullshit. "He" was just one man and 50% of the country hated his guts from day 1 of his administration.
What was Obama's power base in 2009 to accomplish all this change? Was Congress going to follow his lead?
And the problem wasn't the banks per se at all, the core problem with our economy is that the 1% own 50% of everything.
"He" didn't have the power to go up against that. Nobody does.
. . . yet.
And what are your thoughts on the O dude keeping Timmy G and putting Larry Summers on the job?
O trying to play Clinton without understanding that the 8 years of Bush II 2001-2008 was not Reagan/Bush 1985-1992.
Obama was handed a flaming bag of dog poo 1/2009 so I can't find fault in his change-over team's decision-making.
Keeping the financial system together, as it was, was a necessity, regardless of the optics.
Meaningful reform is not something you can do when everything's collapsing around you.
Just trying to screw around too much would open you up to political attacks of causing the ensuing collapse.
99% of politics is CYA, and it has to be since this electorate is so fucking stupid.
"A free market does not require the existence of competition, however it does require that there are no legal barriers to new market entrants."
Whoops, there goes housing as a "free market", until we invent teleportation or something.
One difference between rents and taxes is rents are still a free market.
Not really. Try living a modern -- ie. non Stone Age -- existence without a legal tenancy somewhere.
Theoretically, "All taxes come out of rents". But I suspect this is a case where theory and reality diverge, given the immense market power of LLs (in areas where demand exceeds supply).
No way in hell your gonna save 12k making minimum wage today...
Since I'm in a mode, nominal college costing was an attempt by the System to cut the bullshit of borrowing -- and its life-partner, Interest -- out of the equation. Get affordable college, pay higher taxes over your life to pay it back to the next generation.
Same thing with SSA in reverse -- since all savings requires risk -- why not just operate a direct transfer system from workers to retired, using our rising wage level -- geared by larger working population -- to simulate compounded interest yields.
This would still work this century but for the increase in retirees and the decline in real wage growth.
Now, the way I see it this graph is basically saying taxes aren't high enough.
Rents have risen 25% since 2000 by that graph. That's still a tax, just taken by the Rent Man and not the Tax Man.
Funny how Simpson Bowles didn't propose just raising the damn FICA tax. We should raise it much until the $2.6T SSTF is drained down to $1T or so, but we do need to raise it!
I was there in the late 60s, and funding was not a big deal.
Looking at the 1969 UCLA catalog, I see that reg fees were $300/yr, ASUCLA cost students another $22.50, and the dorms were $1050, or $116/mo for room and board.
Books were $150 for the year, for at total cost of $2000, or $12,100 in today's money.
This actually compares closely to today's costs for students who qualify for the Blue & Gold plan (basically no-fee education, but the parents have to make under $80k or so).
But if you don't qualify for that, ouch.