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  • On 25 Oct 2014 in Will Millenials ever buy a house?, Bellingham Bill said:

    casandra says

    they may not even inherit that boomer house. if the boomer is smart, he or she will max out the credit cards in late life and not pay them off, enjoying unlimited travel and the good life, so when they die the house is just a financial wash !!

    plus the reverse mortgage to wipe out the home equity. With ZIRP they're not too bad at least.

    is the 1 Mo Libor index rate -- actual interest rate on RMs is ~4% plus that

  • On 24 Oct 2014 in Middle Class Wealth Gone!, Bellingham Bill said:

    Let's look at the chart again:

    The 2001 tax cuts were front-loaded for the middle-quintiles, while the 2003 tax cuts accelerated the scheduled 2005-2009 phase-ins to that year.

    The full package was a trillion-dollar give-back to the wealthy.

    2. Fueled income inequality: This chart from the Congressional Research Service suggests that the Bush tax cuts, which significantly reduce top marginal tax rates and capital gains rates, helped widen income inequality in the 2000s. As the report says, “as the top tax rates are reduced, the share of income accruing to the top of the income distribution increases — that is, income disparities increase.” This chart shows how the percentage of income flowing to the top 0.1 percent of earners increases as top tax rates decrease.

    I'm not going to get into mell's argument, only repeat mine that cutting taxes on the rich basically resulted in them buying treasuries instead of paying taxes.

    Not only will they get the interest -- the 30 year treasury was sold for 5% 2006-2007, but a tax payment hits their net worth while bond buys are neutral to their balance sheet.

    Romney had a 14.1% tax rate in 2011. Case closed.

  • On 23 Oct 2014 in The news leak that almost changed world history, Bellingham Bill said:



    0101. Navy Basic War Plan (RAINBOW FIVE) is the directive which this U.S. PACIFIC FLEET Operating Plan (RAINBOW FIVE) is designed to implement in so far as the tasks assigned the U.S. PACIFIC FLEET are concerned.

    Germany lost its Pacific Ocean possessions 20 years earlier so I fail to see how they're relevant.

    The actual news leak of that time that almost changed history was an anti-FDR newspaper in Chicago mindlessly printing the news that we were reading the Japanese naval code before Midway.

    If that had leaked to Japan or Germany, it could have really made the next 3+ years of war a lot harder than they were already, but by some miracle this leak was squelched. The Navy hit the roof and wanted to prosecute, but that would have just publicized it more.

  • On 23 Oct 2014 in Middle Class Wealth Gone!, Bellingham Bill said:

    tr6 says

    On the other hand the money that's taken in as taxes could be loaned to "students" to make 8% a year.

    it could, yes, but student loans are about 3% of .gov's current outgo

  • On 23 Oct 2014 in Middle Class Wealth Gone!, Bellingham Bill said:

    my only point re taxation vs. bond sales was that in the latter case the bonds are still on the buyer's balance sheet -- so as taxation decreased 1980s to now, the net worth of "savers" aka rich people necessarily increased more vs. the prior regime of higher tax exactions.

    I agree with iwog that deficit spending itself was and is highly redistributive. How could anyone disagree, LOL

  • On 22 Oct 2014 in Middle Class Wealth Gone!, Bellingham Bill said:

    iwog says

    Someone making the claim that the national debt or deficit spending CAUSES wealth disparity needs to step up and make a case or shut the hell up. It's a ridiculous claim.

    Pretty simple case to make here; deficit spending is essentially substituting borrowing for taxation.

    Instead of exacting taxes from someone, .gov is selling them a bond.

    The former reduces personal wealth, the latter accrues interest for the holder (or did in the past at least).
    tr6 says

    but instead he negotiated with Republicans and did not get anything in return

    Back in 2010 the GOP was holding hostage such things as the emergency unemployment benefits for people out of work longer than 26 weeks.

    The president doesn't really negotiate with Congress -- he doesn't have a vote, other than the power to veto bills completely.

    The president's main power here is to go the people and whine how Congress isn't passing his agenda. But the media doesn't want higher taxes on themselves, so that's an uphill battle in this case.

  • On 20 Oct 2014 in Challenge to Keynesians "Prove Rising Prices Provide an Overall Economic Benefi, Bellingham Bill said:

    iwog says

    Stupid people will be the downfall of this country.

    half the electorate has an IQ under 100.

    Throw in people programmed for stupidity -- mainly by fundamentalist religions -- and things are getting dicey.

    When the GOP can count on 30-40% of the country to pull the lever for them to stop babies from being killed and/or prevent gay marriage, things get weird.

  • On 20 Oct 2014 in Challenge to Keynesians "Prove Rising Prices Provide an Overall Economic Benefi, Bellingham Bill said:

    iwog says

    The worst recession wasn't Carter.

    employment went from 80M to 92M under Carter, not bad

    red line is Carter's Fed appointees trying to kill the economy so inflation would go down

  • On 20 Oct 2014 in Survey: Pay raises rarer despite strong US hiring, Bellingham Bill said:

    the gap between the red and blue lines is how far we're away from "full employment"

    it's worse actually since half the baby boom is 60-68, and taking even more jobs away from the 20-39 segment, compared to previous decades.

  • On 20 Oct 2014 in Challenge to Keynesians "Prove Rising Prices Provide an Overall Economic Benefi, Bellingham Bill said:

    deepcgi says

    Saving money is bad.

    Putting money in a coffee can buried in the yard is bad.

    Taking 86% of the wealth of the planet -- that's what the top 10% owns -- impoverishes those with 14%, no matter if you call your excess income "savings".

    Voting for politicians who believe that government should also live within its means is bad.

    "Living within our means" is a thought-terminating cliche.

    These same politicians went off and spent THREE TRILLION on wars 2001-2005 and didn't attempt to pay for these at all -- just borrow the money from our trading partners.

    They are liars.

    As the most productive country on the planet -- $100k+ of GDP per worker -- If we were to really "live within our means" we'd have an economy as powerful as Norway's and a populace as happy.

    Encouraging economic policies where energy, homes, and other costs of living decrease is bad.

    No politician can run on a platform of reducing the cost of housing, since most voters own. Hell, Texas politicians -- your guys -- recently made it harder for renters to vote (renters move more and so their papers are less likely to be in order).

    Those nasty evil republicans want to spend the credit card money, too, but they are evil because they want to spend it overseas and on wars and on people that are even richer than you are.

    Yes, the GOP has thrown away TRILLIONS on waste, spending money and we're not any richer for it, POORER actually since we had to consume resources like copper, concrete, steel, and oil to make that malinvestment.

    How many GM cars did our occupation leave in Iraq? You don't even want to know!

    The bottom line is we need to figure out how to re-start the class war and give the lower 99% of this economy a break -- a New Deal or Fair Deal.

    This does not necessarily have to be a Democratic vs. Republican issue though -- it is REALLY a LEFT vs RIGHT issue, and it's only contingent accident that the parties are aligned this way now.

    Socialized medicine. Export economy. Housing & Energy policy. More public transit. Looks a bit Communist if you ask me, actually.

  • On 20 Oct 2014 in The implications of being right about stocks, Bellingham Bill said:

    iwog says

    It's obvious that idle cash is what drives rates lower, not the federal reserve.

    and the Fed has been pumping out the cash!

    That's the mid-90s regime change.

    Also, too, I guess fractional-reserve lending is also pumping the money supply
    in parallel.

    total debt / GDP

    the mid-90s rise in M3 was offset by a stable debt-GDP ratio.

    Then the Greenspan Miracle fell apart in 2001 and everyone had to leverage up to maintain their consumption, first households 2002-2007 then .gov 2008-now.

    I agree that the Fed is pushing on a string now, but it's always been in their power to PULL on that string, and historically when they done so the economy has tanked rather hard -- each recession prior to 4Q07 was due to the Fed tapping the brakes.

    The Fed totally changed the game in 2008 to preserve the status quo. This was the right play, but if they handn't intervened, we'd still be in recession and all prices would be down, just like they fell in the 1930s.

    There's more intervention BS holding up our current system than what we had in the 1930s, that's for sure. Debt is an ugly master.

  • On 20 Oct 2014 in Challenge to Keynesians "Prove Rising Prices Provide an Overall Economic Benefi, Bellingham Bill said:

    marcus says

    I'm concerned about inflation happening now, because it seems unlikely that wages can keep up.

    price inflation is part of the price-discovery mechanism.

    if wages can't "keep up", price rises stop as suppliers run out of sales.

    granted, that's just half-assed theory and economics really, really needs to model the high-rent sectors -- real estate and healthcare, each ~$3T -- better.

  • On 19 Oct 2014 in The implications of being right about stocks, Bellingham Bill said:

    iwog says

    Anyone who claims that my real estate investments were bailed out by the federal reserve is stunningly stupid and ignorant of some very easy to obtain financial numbers.

    I'd make that claim. In 2009 we were heading for the 1929-33 experience, but they cut it off early.

    By 2010 total jobs had fallen to 1999 levels, knocking us back to dotcom recession levels:

    FTE was even worse:

    By 2010 we were 15 MILLION people short of the full-employment trend (78% of age 25-64).

    In the teeth of the recession the treasury was borrowing $200B/month to keep the lights on --

    $700B of that was an increase in foreign holdings of UST over 2010.

    I don't know anything but I do know that Greenspan changed the dollar regime in the mid-1990s to facilitate the rapid expansion of trade in the USD bloc.

    Now, I don't know why M2 was flat for the early 1990s recession, but it was.

    Back in 2009-2010 I thought we'd repeat that, with a vengeance, as the $3T housing bubble debt overhang continued to collapse, taking the Potemkin Economy it had created along with it.

    But the crash was arrested in 2009-2010 and we've had something resembling a decent expansion every month since.

    Just to get us back to where we were in 2007, but that's a lot better than what "should" have happened, had the Fed not pulled out the stops in 2008 and allowed our economy to take our medicine like the 1990s.

  • On 19 Oct 2014 in Losing the War on Coal, Bellingham Bill said:

    Because there's money to be made by someone paying people to dig it out of the ground, preferably as cheaply as possible, i.e. removing the overburden and moving on.

    being pro-coal is a right-wing shibboleth, along with pro-Israel, pro-Bible, etc.

    one more thing for Fox to wind up the masses with.

  • On 19 Oct 2014 in ALERT! Obama Signs Executive Order to Microchip All Credit Cards Read more at ht, Bellingham Bill said:

    We won't be using paper money in my lifetime, for sure.

    I go months without touching the stuff as it is.

    This is only a concern to you if you're a right-wing nutjob.

    pass the tinfoil, man

    paper currency is not money, it represents money you've taken out of your account at your friendly neighborhood financial institution

    Money is just a $ followed by some numbers.

    welcome to the 21st century, LOL

  • On 19 Oct 2014 in Elizabeth Warren "How the Republicans rigged the game", Bellingham Bill said:

    People making under $100,000 or whatever voting GOP from dogcatcher on up is like jews voting NSDAP in the 1920s.

    Problem is we've got around 30%-40% of the electorate with their brains disabled by ideology.

  • On 19 Oct 2014 in ALERT! Obama Signs Executive Order to Microchip All Credit Cards Read more at ht, Bellingham Bill said:

    oh noes this is clearly the end of the world

    oh wait it's not "all" cards just government-issued cards

    I'm really embarrassed to have to share a country with you dumbshits

  • On 18 Oct 2014 in , Bellingham Bill said:

  • On 18 Oct 2014 in , Bellingham Bill said:

    Should be a law that the monthly rent cannot be greater than 30% of the previous month's after-tax household income.

    Lease or no lease, LOL. LLs would have the right to evict tenants if they can find another tenant willing to pay the lease amount, or greater, but otherwise would have to suck it.

    That'd oughtta drive the bloodsuckers out of the housing sector.

  • On 16 Oct 2014 in Whiny time: When will real estate prices ever make any sense?, Bellingham Bill said:

    I don't think the boomers are going to want to vacate their existing houses to relocate to apartments.

    Gen Y is age 14-32 now, which means our existing housing stock is going to start having to house BOTH the boomers and their demographic echo now.

    Plus us Xers, too.

    Sometime next decade the boomer die-off will begin in earnest (they're age 50-68 now) which will both enrich Gen Y through asset inheritance and also free up the housing supply.

  • On 16 Oct 2014 in Collapse of the 10 Year Note Yield and What it Means to You, Bellingham Bill said:

    hanera says

    House supported economy growth is not good.

    yes, housing (after the basics are taken care of) is mere consumption not exportable wealth-creation, which should be our actual national priority.

    real per-capita (age 25-54) trade deficit

  • On 16 Oct 2014 in Collapse of the 10 Year Note Yield and What it Means to You, Bellingham Bill said:

    Logan Mohtashami says

    Top 1% save 40% of their income in 2012, bottom 90% save nothing at all. Amazing. How can the economy handle this?

    real per-capita (age 25-54) total government spending

    that's the glue that holds our fallen economy together. If the GOP takes over the system in 2016, I expect it to expand actually.

    But if we continue with divided government as we have now, I expect the spending standoff to continue.

    Both expectations are based on the 1990s pattern here.

  • On 13 Oct 2014 in Wealth Inequality destroys Societies, Bellingham Bill said:

    Also, I was reading on how Stalin ran the USSR 1927 ~ 1953. I'd known about the Ukrainian holodomor, the party and Red Army purges of the late 1930s, but didn't realize how thorough he was in basically liquidating anyone who was a potential threat to his personal control of the Communist Party.

    This went well beyond what the Nazis did to terrorize Germany, Stalin and his henchmen actively went after their Communist Party brethren directly, since Stalin rose from relative obscurity in the 1920s and the people like Trotsky knew he wasn't any mainspring of the revolution, just a man willing to out-thug anyone else.

    Basically anyone who crossed -- i.e. disagreed with -- Stalin in the 1920s got whacked in the 1930s. The place was so nutty the NKVD actually ran secret prison camps that skilled political prisoners worked out of -- e.g. Tupolev and Theremin

  • On 13 Oct 2014 in Wealth Inequality destroys Societies, Bellingham Bill said:

    "But by your reasoning North Korea should be the paradigm..."

    Norway and Denmark, actually.

    I was actually doing some deeper self-study this weekend on the actual difference between "socialism" and "communism" since I realized I didn't have much of an understanding of what Marx wrote and what the communists themselves were thinking; it's a subtle answer, actually.

    Communism as preached is the utopian cloud-cuckoo system as achievable as libertarian anarchism (and quite indistinguishable one from the other since they are both equally bullshit)

    Communism as practiced for most of the 20th century by the Soviets, their European satellites, the PRC, Cuba, and Vietnam was supposed to be, technically, a transitory socialist economic regime where society increased its capital sufficient to transform itself into the Communist end state they were ostensibly working towards.

    Of course this was bullshit since the actual Communist Parties were basically thugocracies and required everyone's total acceptance of the dogmatic, totalitarian party line as handed down by the strongman running the place.

    AFAICT Gorbachev was the first reformer of the Soviet system to actually move away from "the Communist Party is Always Right" dogma, and after he unleashed people thusly, the soviet system there wasn't going to last long.

    China is a more curious example, as their party thugocracy is still holding onto power there even though they've backed off a lot on the whole big-C Communist program thing.

  • On 12 Oct 2014 in Wealth Inequality destroys Societies, Bellingham Bill said:

    As Krugman says, an import tax is just the flipside of a strong dollar.

    We can get an import tax by just running a weaker dollar, but I guess problems with that include having to part with more of our food produce since foreign currencies would have more buying power and we'd also face higher energy import costs, too.

    As for wealth disparity, it's not the wealth divide so much that is deleterious, it's the ongoing, continuous distribution of monthly income this divide creates. Wealth is a stock not a flow so it is not a double-entry item, but income is -- for every PAYEE there is a PAYER.

    Great wealth is invested in the rent-seeking areas of the economy -- housing, energy, health care. These 3 sectors pull TRILLIONS out of the middle class paycheck economy every year, and I think we have our colossal gov't spending -- nearly $40,000 per working-age person -- as the only thing keeping the system even remotely sustainable.

    real (2009 dollars) per-capita (age 25-64) total gov't spending

    Unfortunately the critical importance of land economics completely sailed past Piketty's purview for his book. $2T+ sector of our economy, everyone's biggest line-item life expense, not important.

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