patrick.net

tr6 says

The only place in the economy where I see serious inflation is in healthcare because it's been legislated by ACA

The trees can't grow to the sky.

My prediction is that the government will finance this inflation by subsidizing many policies next year for those with incomes between 30 and 60K

Yes, this is how ObamaCare works. Singles making $20k-30k and families of 4 making up to $90K get massive insurance subsidies.

Thing is, nobody really wants to go out and get medical care unless they need it, and health care is already such a massive wealth sink that even if it does grow it's not going to take over much more than it already has.

Now, Medicare is going to explode this decade and next. But you have to blame LBJ for that, not the Kenyan.

mell says

Aside from energy costs

other than that Mrs Lincoln . . .

http://research.stlouisfed.org/fred2/graph/?g=oPc

Homeboy says

I guess they would have to vote Democrat to voice their disapproval.

We shall see! Thunderdome... two men enter one man leaves....

"But the federal government is the largest employer in the country. So Grassley's amendment means that the largest employer in the country is required to put some of its employees -- the ones working for Congress -- on the exchanges. But the exchanges don't have any procedures for handling premium contributions for large employers.

That's where the problem comes in. This was an offhand amendment that was supposed to be rejected. It's not clear that the federal government has the authority to pay for congressional staffers on the exchanges, the way it pays for them now in the federal benefits program. That could lead to a lot of staffers quitting Congress because they can't afford to shoulder 100 percent of their premiums. (There's also a smaller issue related to how retiree benefits might be calculated. But I'm only willing to go so far into the weeds here.)"

This has nothing to do with Real Estate Patrick, so why is this story here?

fedwatcher says

This has nothing to do with Real Estate Patrick, so why is this story here?

The suspect could be a realtor.

The only options seem to be extermination, followed by mass freezing for post-collapse consumption, or letting them roam the streets freely to prey on the weak, who won't survive the transitional paradigm-shift anyway.

Freezing that much realtor for a few more months of civilization is just not cost-effective. Keep a couple in the big garage freezer, and cull more as needed, but for now just think of them as fat and protein storage for the coming lean times.

After the supermarkets close and the supply chains break down, they'll be everywhere, groveling and slavering at the slightest hint that you want to list. Invite one to inspect the finished basement - really a fully-equipped kill floor with freezers and meat hooks, and you've fed your household for another two weeks.

tr6 says

Japan's economy worked for such a long time because they had domestic savers that financed the debt. I am not sure US has the same capacity.

Correct and that has been changing slowly.

indigenous says

The reasons we are not seeing hyperinflation are that the credit market has shrunk to a fraction of it's size, the dollar is the reserve currency of the world, as fucked up as the US monetary policy is Europe's is worse, China is raising the value of the Yuan this forces the value of the dollar to be lowered, inflation is always realized at the crony level (insiders) first before it filters down to the middle class.

Agreed. Also to debate hyperinflation vs high inflation (>= 2%) or stagflation is moot IMO as all 3 forms are harmful and the US has been clearly suffering from high inflation in daily necessities for a while now. I agree that there was additional scarcity involved in Zimbabwe and Weimar to really hyperinflate the prices, which (scarcity) is not that easy to occur these days with the ease of modern transportation, technology and production and a highly globalized economy. Doesn't mean the middle class cannot suffer from continuous inflation/stagflation as it clearly has been.

I'm working with a Chinese manufacturer on a key lock box that opens using any four-digit combination and then unlatches a trap door in the entryway, covering a greased chute to the kill floor.

A captive-bolt pistol on a hydraulic robot arm then dispatches the prey, now hanging from the basement ceiling, and leaves it hanging for your convenience. A conveyor of the sort you'd see in a dry cleaners is possible here, leading to a walk-in freezer. This would cut out the need to lie in wait - you could take your spouse to dinner or a movie knowing the the freezer will stock itself while you're gone - but there is the problem of accumulating too many parked Audis if you leave the system on while you're away on vacation: depriving your neighbors of parking is an inexcusable moral breach.

One area that scarcity can hit is food.

Either we have to sell our food to China, switch to cash crops, and/or drought wipes us out.

Exports in general are inflationary, in that they give us money with nothing to show for it.

But even in this case i don't see high inflation coming necessarily, since without wage rises there can be no inflation, only reallocation.

There are tons of rents that can be reallocated in this economy.

As for Japan and their savers, what really happened is that they gave themselves tax cuts and called it savings, once their high-growth high-inflation days went away.

http://research.stlouisfed.org/fred2/graph/?g=oPH

I think we're fucked more than they are, but it's difficult to figure out how things are going to fail here.

Clearly 3X GDP national debt is in our future, and clearly the $2.7T social security trust fund is going to be redeemed for printed (vice taxed) monies.

Like Japan, taxes have to double here to actually fix anything, and that's simply not going to happen.

You can argue spending cuts instead, but that's incredibly deflationary, since it rips income directly out of the paycheck economy, which is the most fucked element of the economy.

There are still some components to be filled in.

For example: how to discourage burglars and other normal people from stepping onto the trap door. We need a test with no false positives - I and my customers are uncompromisingly moral people.

In the early phases of design, a massive display of child pornography in the entryway was planned, being something that would repel humans but attract realtor, but it has come to our attention that there is documentary evidence, of sketchy provenance, that there actually exist pedophiles who are not realtors.

Since a non-realtor pedophile, if such exists, is actually a person with some hope of redemption, I can't take the chance that my machine might commit murder, no matter how fancifully chimerical the notion of a non-realtor pedophile seems.

Bellingham Bill says

One area that scarcity can hit is food.

A report came out earlier this year (I forgot whether it was Word Bank or someone else) that claims that we waste/throw away 50% of the food produced. I don't really see food as a scarcity if this report is true.

Bellingham Bill says

Like Japan, taxes have to double here to actually fix anything, and that's simply not going to happen.

There is no other way. For a start, have to make capital gains equal to wage taxes and corporations actually have to pay taxes.

turtledove says

It's an excellent distraction and keeps people from focusing their attention on the fact that we have billionaires who don't even come close to contributing their fair share.

EXACTLY.

Most of the population has been completely distracted from the actual problems when you throw in hatred of abortion, welfare, gay marriage and a black president. It is like a ridiculous reality show/soap opera has been piped in over reality.

APOCALYPSEFUCK is Comptroller says

At least you're honest enough to leave up a post of yourself doing the goofy. Good on you.

Ditto. Props to you :-)

Let's assume a flat tax system of 20% on any income/gains without any deductions/loopholes. Who can explain (now that the oracle is gone without profanity but with reason) why it is unfair that someone earning 50K pays 10K in taxes while somebody earning 5M pays 1M in taxes?

There were no pictures just a video.
That's the problem with this argument, those that make the loudest case. Don't really compare apples to apples. The problem isn't the business people and bankers, it's the people you assholes keep electing that give their power and monopolies. Fuck they even get millions to billions in grants and non payback loans.
Stop electing these bastards, and stop giving these companies billions of my tax dollars. Start there, then get back to me.

mell says

Let's assume a flat tax system of 20% on any income/gains without any
deductions/loopholes. Who can explain (now that the oracle is gone without
profanity but with reason) why it is unfair that someone earning 50K pays 10K in
taxes while somebody earning 5M pays 1M in taxes?

I don't care about "fair". I want a tax structure that will lead to vibrant economy. A flat tax will not do that.

Follow the Yellow Brick Road to Feudalism
http://jonathanturley.org/2013/08/09/follow-the-yellow-brick-road-to-feudalism/

Historical Development of Modern Feudalism:
http://www.supremelaw.org/authors/anonymous/truthshallprevail.htm

tatupu70 says

mell says

Let's assume a flat tax system of 20% on any income/gains without any

deductions/loopholes. Who can explain (now that the oracle is gone without

profanity but with reason) why it is unfair that someone earning 50K pays 10K in

taxes while somebody earning 5M pays 1M in taxes?

I don't care about "fair". I want a tax structure that will lead to vibrant economy. A flat tax will not do that.

Not true. I have shown examples of countries with less wealth disparity than the US who run on flat taxes. There is no correlation. Now, if you talk about a one-time measure to correct a significant imbalance that occurred due to other disastrous policies, then that may make sense as a temporary "emergency" tax on the uber-wealthy. However that would need to go hand-in-hand with abandoning the causes of wealth disparity such as Fed/govt bailouts and crony capitalism (subsidies, deductions, loopholes), money printing which gets held up mostly at the first-in-line receivers and does not trickle down, not adhering to the rule of law and clearing bad debt via bankruptcy as designed, propping up favorited sectors suchs as the FIRE sector, prosecute fraud and counterfeiting for everybody instead of selectively applying and abandoning the rule of law etc. etc. These are the real reasons for wealth inequality, flat vs. progressive tax and the tax percentages (as long as applied equally) have very little to do with it.

Which countries are those?

Bigsby says

Which countries are those?

For example Estonia, Latvia, Hungary, Belarus, Romania.

mell says

I have shown examples of countries with less wealth disparity than the US who
run on flat taxes. There is no correlation

I'm sure you know this, but just because there are one or two special cases does not invalidate a correlation.

It is pretty simple and impossible to deny really. In order to raise the same revenue under a flat tax system, the middle and lower classes would be forced to pay more taxes. That is undeniable. Do you disagree??

And if the middle and lower classes are paying more while the super rich are paying less--doesn't that guarantee wealth disparity will increase??

mell says

However that would need to go hand-in-hand with abandoning the causes of wealth
disparity such as Fed/govt bailouts and crony capitalism (subsidies, deductions,
loopholes), money printing which gets held up mostly at the first-in-line
receivers and does not trickle down, not adhering to the rule of law and
clearing bad debt via bankruptcy as designed, propping up favorited sectors
suchs as the FIRE sector, prosecute fraud and counterfeiting for everybody
instead of selectively applying and abandoning the rule of law etc. etc. These
are the real reasons for wealth inequality, flat vs. progressive tax and the tax
percentages (as long as applied equally) have very little to do with it.

The rest of your post is your usual trite garbage.

mell says

For example Estonia, Latvia, Hungary, Belarus, Romania.

You mean they aren't worse yet, right?

tatupu70 says

The rest of your post is your usual trite garbage.

You can be dismissive without arguments all you want, I am asserting that flat vs progressive tax does very little to increasing/diminishing income/wealth disparity given there are no exemptions/loopholes/deductions. So if it's not that it must be somethin else, could be what you call "trite garbage".

mell says

You can be dismissive without arguments all you want

Uh, I think my argument was directly above the part of my post that you copied and pasted.

mell says

I am asserting that flat vs progressive tax does very little to
increasing/diminishing income/wealth disparity given there are no
exemptions/loopholes/deductions.

And I showed why that assertion is undeniably incorrect.

tatupu70 says

mell says

For example Estonia, Latvia, Hungary, Belarus, Romania.

You mean they aren't worse yet, right?

Well, lets keep following the data over the years. I am still waiting on any explanation on how my outlined simplified flat tax example - given there are no Fed/govt subsidies/deductions and money printing - leads to wealth inequality. Person A pays 10K taxes on 50K income, Person B pays 1M taxes on 5M income. Let's see how Person B grabs all the wealth from Person A in a free market without any "outside" or higher power help.

Mell, I agree with the general idea... in fact my final paper for my second master's was written on this very topic. I'm too busy right now getting ready for a walkthrough of my house tomorrow to go into the details, but one thing I found necessary for it to work is that you have to have a realistic wage exemption specific to a particular county. This would remove some of the regressive nature of a garden variety flat to those most vulnerable. I wish I had more time. I love this topic. Break's over.

mell says

Well, lets keep following the data over the years. I am still waiting on any
explanation on how my outlined simplified flat tax example - given there are no
Fed/govt subsidies/deductions and money printing - leads to wealth inequality.
Person A pays 10K taxes on 50K income, Person B pays 1M taxes on 5M income.
Let's see how Person B grabs all the wealth from Person A in a free market
without any "outside" or higher power help.

I already explained it above. Did you not read it?

The flaw in your thinking is that you need to understand that a capitalist economy naturally leads to wealth inequality. You need a tax structure to slow this natural trend. A flat tax by itself doesn't lead to inequality--it just doesn't stop it. A progressive tax does.

turtledove says

Mell, I agree with the general idea... in fact my final paper for my second master's was written on this very topic. I'm too busy right now getting ready for a walkthrough of my house tomorrow to go into the details, but one thing I found necessary for it to work is that you have to have a realistic wage exemption specific to a particular county. This would remove some of the regressive nature of a garden variety flat to those most vulnerable. I wish I had more time. I love this topic. Break's over.

Looking forward for more on this later - I'm open to all models given that they are as simple as possible which IMO not only ensures fairness but also does away with most of the hassle dealing with tax attorneys, accounts etc. for those who don't want to or cannot afford to as well as for those who exploit deductions, subsidies and loopholes.

thomaswong.1986 says

That's where the problem comes in. This was an offhand amendment that was supposed to be rejected.

Exactly. The republicans keep bluffing, and the democrats keep calling their bluffs. Now Grassley owns this, warts and all. The moral of the story is, don't play political games by proposing amendments as a bluff. If Obama were smart (I mean, he's smart, but if he were smarter), he would immediately coin this fiasco "Grassleycare" or "Republicare", and use that name over and over to drive home the point that this was the republicans' doing.

Those who are multi-millionaires/billionaires (the obscenely rich) should bear a progressively heavier tax burden than those making minimum wage. Otherwise, wealth disparity becomes worse and "stays in the family". The fact that a CEO can make a hundred times more money than the average-paid worker in the same company seems ridiculous. Additionally, the super rich (not someone making $250K/yr) are able to sway the rules of the game in their favor whether it be investing in stocks (or moving stock prices in their favor), buying up small companies, or buying real estate...with all that money comes power, and it no longer makes the rules of the game fair. Unfortunately, that's a downside to capitalism that needs to be regulated to some degree through a progressive tax structure.

bgamall4 says

government shutdown in September

There was a government shutdown?

Mish has been firmly in the deflationist camp since 2008.

More and more people are starting to realize that, in the medium to long time, Keynesianism is highly deflationary as capital destruction would leave less productove asset available to be borrowed against for credit money creation.

I think you have to take a long term view on gold. The investment banks and possibly the Fed are engaged in gold price manipulation. Disclosure: I have no gold position.

Health is wealth.

This fellow claims that the banks are manipulating the price of gold: http://jessescrossroadscafe.blogspot.com/

Lots of buzz about JP Morgan manipulating the silver market. I really don't know, of course, and frankly I can only be along for a ride created by very large and opaque forces.

Homeboy says

thomaswong.1986 says

That's where the problem comes in. This was an offhand amendment that was supposed to be rejected.

Exactly. The republicans keep bluffing, and the democrats keep calling their bluffs. Now Grassley owns this, warts and all. The moral of the story is, don't play political games by proposing amendments as a bluff. If Obama were smart (I mean, he's smart, but if he were smarter), he would immediately coin this fiasco "Grassleycare" or "Republicare", and use that name over and over to drive home the point that this was the republicans' doing.

And what would be the message conveyed by such renaming?
What's plenty good enough for us, proles is not good enough for Inner Party and Grassley is to blame for forcing the inferior product on them? Are you sure that would play out as you think it would? ;)

Blurtman says

Health is wealth.

This fellow claims that the banks are manipulating the price of gold: http://jessescrossroadscafe.blogspot.com/

Lots of buzz about JP Morgan manipulating the silver market. I really don't know, of course, and frankly I can only be along for a ride created by very large and opaque forces.

All markets are manipulated and the Fed has a fund specifically for that purpose.
Gold and silver impact currency exchange rates so of course they hit those markets from time to time
From the Fed's own web site
http://www.newyorkfed.org/aboutthefed/fedpoint/fed14.html

"A herd of idiotic Austrians"

Unlike Keynesians Austrians don't travel in herds.

It's all in the movie, 'Executive Action', starring Burt Lancaster, the head of the black ops ...

http://www.youtube.com/embed/BbF5him-EF8

The Martians have landed on earth.

Call it Crazy says

If they react abruptly to falling sales by building less, the housing market may be “on the verge of a significant correction”, argues Ian Shepherdson of Pantheon Macroeconomics.

Are you sure they don't mean a correction upward? This is The Economist after all who believe higher home prices are a good thing.