patrick.net

clambo says

Having seen human nature in other situations, people who have had less in life are MORE brand conscious than you or I are.
I for example can own a virginmobile android phone and do not care, but my friends in China all want Apple. My father and my neice and nephew are also unsatisfied with anything less than Apple.

This is true in many foreign countries, particularly developing countries. The reason is that they are used to such crap quality products from local manufacturers. When they see a brand name on something, it can be a proxy for quality, and once people figure out a brand, they stick with it. It's similar for Sony products. You can't just get someone a Panasonic walkman (they still make those overseas, I believe, although I believe they don't sell them in the US any more) or discman, or they'll say, "my dumbass cousin got me a cheap piece of crap"; you have to get them the Sony brand, even if you get them the cheapest base model Sony vs. a fully loaded other brand. I've noticed similar things about iPhones, although a lot of foreigners don't realize that you can't get iPhones here without a contract without a much higher price.

Meh. The data point is a moveon.org commissioned poll. The President is quoting from his base that can't help him win policy debates.

Apple was my first stock I ever bought in 1996 for my Roth IRA. 2k was my initial investment. Unfortunately I've sold about 1/3 of my shares throughout the years. Still I'm not complaining about my 1300% return over 15 years. Not bad for my 2nd best investment.

SoCal Renter says

I fail to see the endless fascination with gold. I'm glad idiots are buying and hoarding it though because it is buffing my mining stocks.

I imagine there is some Scrooge McDuck sitting in a cave somewhere on top of his pile of gold like a leathery dragon thinking to himself, "I'm rich my precious, rich!"

Where is your daughter, old man? Oh yeah, she's smoking a J and banging the Mexican pool boy. Follow my investment advice: Sex, Drugs, and Hip Hop. These are paths to great wealth.

Your wondeful message is bought and paid for by the infinite fiat money of central bankers who have a vested interest in seeing middle class wealth be destroyed. Historically, it's always the middle class that overthrows corrupt govt, afterall. Destroy middle class wealth and you destroy their political power. And the central bankers then get locked in as leaders of our new world communitarian/collectivist bullshit government, for the next 100 years.

Patrick loves that kind of thing. He's not on the people's side. Bought and paid for, right Pat? You paid-for sell-out. Lying sack of excrement. Actor.

Dan8267 says

Gold is clearly in a bubble. Unfortunately, as we have learned from real estate, it's impossible to tell how long a bubble will last. As John Maynard Keynes said, "Markets can remain irrational longer than you or I can remain solvent."

When gold falls, it probably will fall quickly because it is much more liquid and much smaller of a market than real estate. But timing that event is very risky.

I plan to stay away from the gold bubble just like I stayed away from the real estate bubble and the .com bubble. I figure, there are so many sharks in that pool that have insider info and watch the market 24/7. Those of us with day jobs can't afford the time needed to compete with the sharks.

Clearly. In. A. Bubble.

You are clearly. A. JACKASS!!!!

masayako2456 says

Long on Apple & Google.

Good luck with your Google...

http://www.wordstream.com/articles/most-expensive-keywords

I always learn something new here. The #20th highest CPC on El Goog is 'Cord Blood'.

Chinamobile has 600 million subscribers, and Apple is making a phone to sell to them. Oh boy.

zzyzzx, maybe I missed something. What "High crimes and misdemeanors" did President Obama commit? A recommendation to raise taxes to balance the budget isn't a crime. Committing war crimes, instituting torture, and spying on private citizens with no cause or warrant are crimes. I'm not exactly surprised that you can't see the difference.

Sane Americans understand that we need to cut military spending, stop using Social Security in accounting to magically reduce the debt on paper, and raise government revenue in order to balance the budget without destroying our economy and society. Sane Americans understand that we simply cannot afford tax breaks for the rich. As one conservative pointed out, "We're broke."

Obama says: 80% of Americans support being taxed more

Might be true if it were reworded more like:
80% of Americans support being taxed more, as long as it's somebody else taxes being raised.

Pawlenty's star seems to have faded.

What happend to Ron Paul? He was probably the only real conservative out of the bunch.

I do know that he is not running for his House seat next year and is retiring. :(

Looks like Rick the Hair Perry is going to run:
http://www.khou.com/news/texas-news/Anita-Perry-encourages-husband-to-run-for-president-125893574.html

Looks like the plan is balanced on the backs of the middle class.

yup. When they say "broaden the base" they mean uptax the middle class.

The change to 75-year actuarial balance in the SSTF is theft from Generation X too.

The purpose of the FICA tax hike of 1984 was to build the SSTF so we would begin to spend it down by now (i.e. raise taxes on the post-FICA bracket) as the baby boom hit retirement age.

I was paying that excess FICA tax in the 1980s, but now this new proposal seeks to avoid redeeming the SSTF's bonds now, by gradually reducing benefits via the inflation measure change.

Me paying higher FICA taxes 1984-2009 for less benefits in 2030 wasn't the Greenspan deal! But not 1 person in 100 has the understanding to see what they're doing here.

The trust fund wasn't supposed to last to 2086, it was supposed to be spent down by 2040, when the youngest boomer is turning 80.

Fuck these guys. I'd go back to Japan, but they're even more screwed up. Probably too old for Canada now. Best bet is some doomstead away from the rabble and just ignore everything.

BHO is no FDR or LBJ, that is for sure. But he probably is a JFK-type guy.

The American People done screwed up 2001-2007. Increasing military spending $3T while cutting taxes $3T. Borrowing about $4T more than we should have by 2007. Standing around like doe-eyed cows while the trade deficit with China went from $80B on $120B of imports in 2001, to $260B on $320B in 2007. Not get our government to invest in alternate energy initiatives before gasoline hit $4.

We are a very very stupid people. Then again, so is just about everyone else.

"by focusing on exports and controlling financial speculation"

ayup. The media-political complex hasn't leveled with people about our $500B/yr trade deficit.

Our trading partners need some surplus against us thanks to the Triffin Dilemma, but if all of them are running surpluses it's going to be real bad news for us eventually.

Getting cheap goods via free trade with cheap labor countries is one thing, but cheap goods with a massive trade deficit is AFAIK uncharted waters.

The economic illiteracy of this country would probably shock me if it were tested. Basic facts, like what's the annual trade deficit, budget deficit, etc. I'm pretty sure nobody knows anything.

I sure as hell didn't 10 years ago, before I started commenting so much on the internet.

Democracy is reduced to "Gang" of six.

What's next, balanced budget via, Debt Hooligans?

"OI!! Listen here yeah? You'll pass this bill or I'll thrash you rotten, yeah? You fooker!"
[Throws teabagger on the ground and starts kicking him in the ribs]

Wow. That can't be right.

http://news.yahoo.com/poll-carries-warning-signs-obama-2012-213717802.html

WASHINGTON (Reuters) - A poll released on Wednesday carried warning signs for President Barack Obama's re-election chances in 2012.

Obama's overall approval rating was at 46 percent, with 48 percent of voters disapproving of him, and this is in line with other recent surveys.

"There's a very good chance Barack Obama would lose if he had to stand for re-election today," said Dean Debnam, president of Public Policy Polling.

Gullible.

EMan says

What happend to Ron Paul? He was probably the only real conservative out of the bunch.

Depends on how you define conservative.

He's a believer in liberty, and most self-described conservatives only believe in liberty with one hand in the till, the other policing the world.

That ain't Ron Paul, and I don't use the moniker "conservative" since it denigrates the man's reputation through guilt by association.

Let's see how many people still like Mitt Romey when they learn that he spent all of his time at Bain DESTROYING jobs.

If Kudlow likes the Gang of Six proposal, then I am opposing it. I get nervous when I hear things like "pro growth" since that usually entails massive tax cuts for the upper end. WHen Republcians talk about "pro growth" they mean the bank accounts of rich people, not the economy.

But HousingWatcher, a guy who makes money off labor arbitrage by outsourcing and slashing jobs is a "Jobs Creator", a veritable Hank Rearden that we should all worship as a Randian Hero.

Troy says

The change to 75-year actuarial balance in the SSTF is theft from Generation X too.

Troy, this is interesting. Can you elaborate on how the SSTF is accounted for, or do you have a link that explains it?

Thanks!

It's pretty simple, LOL.

Social Security maintains a trust fund ("SSTF") and it's supposed to have 1 year's expenses (currently ~$500B) in it.

But in the early 1980s Congress for some reason allowed the trust fund to run down to zero, and in response from 1984-1990 the FICA rate was raised from 8% to today's 12.4%:

http://www.ssa.gov/oact/progdata/taxRates.html

This overtaxation was such that the trust fund was returned to its legal minimum by 1989.

The 1990s were good for the trust fund and the overtaxation continued to cause the trust fund to grow $100B/yr or so.

Of course, unlike Norway and Alaska's pension trust funds, the Social Security Trust Fund only holds treasury bonds (Norway and Alaska hold stocks and corporate bonds, too). The Treasury took our surplus FICA taxes 1984-2009 and gave SSA special bonds in return.

This disguised the true nature of government's finances somewhat. Eg:

Date Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding

09/30/1998 3,733,864,472,163.53 1,792,328,536,734.09 5,526,193,008,897.62
09/28/2001 3,339,310,176,094.74 2,468,153,236,105.32 5,807,463,412,200.06

Shows the external part of the national debt fell $400B in Clinton's last 3 years and the various trust funds rose $670B.

This was a good thing, within reason, a government that only owes itself money is a happy government indeed.

Due to falling wages in the current recession, the annual FICA tax surplus went away in 2009 (probably for good), but from 1984-2009 a total of $1.5T or so was overtaxed from working Americans, and there's another $1.2T in accrued interest (to pay interest, the Treasury just issues more bonds) so in total SSA is holding $2.7T in treasury bonds today in its trust fund.

This is basically the savings of people (and their heirs) who paid FICA taxes 1984-2009.

Divided by 120 million people, it is over $20,000 per person, so it is not an inconsequential amount of money.

Social security payments are scheduled to double from $500B now to $1T/yr in 2020. In 2020 the front half of the baby boom will be aged 63 to 74.

FICA collections aren't going to rise that fast so SSA will have to start redeeming its treasuries for cash, and for the Treasury to get the cash they either have to sell more treasuries, get more tax revenue, or have the Fed print the money.

The first is getting somewhat difficult due to the $1.5T/yr deficit, and raising taxes is impossible due to the Party of No being in charge of the House and being in a blocking position in the Senate.

Printing the money is possible but if it causes inflation it would be self-defeating since seniors are very vulnerable to inflation.

The sneaky thing they want to do is tweak the annual COLA rises to social security payees, to reduce the cash draw that SS has on the Treasury and extend the life of the $2.7T trust fund, so they don't have to raise income taxes to pay it back as originally intended.

But that $2.7T morally belongs to the FICA taxpayers (and their heirs) who paid into the system 1984-2009! It needs to be redeemed during their retirement, which runs for the next 25 years.

Putting the trust fund on a 75-year balance means they will cut benefits and/or raise FICA taxes such that the people (or their heirs) who overpaid FICA over the past 25 years won't actually get their money back!

The whole trust fund will have been the biggest con ever perpetrated. If these bastards pull it off, nobody will applaud louder than I.

A government that owes it to itself really soft-gloves even that situation. What we tolerate as taxpayers with this program is and always has been a Ponzi scheme of sorts, nothing like a program funded privately for retirement.

This has to do with sources of cash-flow on the "investments" held on behalf of SS TF recipients.

Congress has always been keen on spending the excess SS taxes. In place, they put USTs that are backed by tax revenue.

Let's take a look at this another way: I run and investment company, and I want you to invest your retirement with me. Here's my plan.

Each year you give me a part of your savings. I turn around and immediately spend it and put a personal IOU into your account saying that I owe you money in the future at interest. Each year you contribute more money, and I do the same.

Immediately, each year at the end of the year, I send you a bill. That bill is in the exact amount required for me to cover your interest payments into your retirement plan with me. I put that money in, and immediately spend it, replacing it with another IOU. Each year I bill you for interest, and when your kids are of working age, I start billing them as well. When you have grandkids, as soon as they are working, they start getting a bill.

Ready to sign up, anyone??

Eventually you retire, and I pray that you have enough kids and grandkids to help cover the costs, since that's all I can afford to pay you.

That's basically what Social Security is / has done. Yeah, it's not a perfect analogy because the bills are spread socially across to your neighbors, etc.

But, it's close enough. Congress has spent every excess dollar it collected for SS. When you retire, there's no money set aside other than what can be drained as current cash flow from the existing tax base. Sure, it's laundered through the process of Govt Bonds as IOUs... But their cash flow and repayment are nil without current taxing... Or, piling on more debt.... Or printing money.

A real retirement program would invest in a cash flow secured by real assets from outside parties who are capable of providing a consumer value. Social Security does nothing other than enslave future generations for the excesses of past and current generations.

"If Matt Taibbi is right, this will be Obama's excuse to implement a right-leaning budget proposal, which according to him is what the President wanted all along."

Interesting, I'll have to chase Taibbi article down.

It fascinates me how GOP attacks Obama, he's closer to Reagan than some Republican candidates have been when it counted.

thunderlips11 says

* In return for those rate cuts, a host of tax breaks would be reduced, including popular deductions on mortgage interest, retirement savings, charitable deductions, high-cost health plans and tax credits for families with children.

I personally really like this part. It isn't right to provide random tax cuts to special interests. Time to remove these deductions and let people carry their own weight for a change.

It was one thing that upset me about Rush Limbaugh, he says he is a conservative yet defends interest rate deduction. Yeah lets defend a special interest give away, that's good for America.

I see that some are upset about cuts. But we as a nation can't live in credit forever like a bunch of deadbeats, tough choices are tough. Crying like babies about how life is now more difficult because government isn't giving out free money isn't going to help it.

Suck it up America, time to work on providing a better future for our children's generation instead of consuming their future like parasites.

Good budget deal overall.

Ronnie Honduras says

A real retirement program would invest in a cash flow secured by real assets from outside parties who are capable of providing a consumer value. Social Security does nothing other than enslave future generations for the excesses of past and current generations.

This is largely BS. Social Security is just a savings program that forces all wage earners to put 10% of their gross, up to ~$10,000 in US treasuries.

As long as it's run pay-as-you-go and the contribution rate is sufficient to cover the payout rate, it's a perfectly valid retirement program.

Treasuries are bond on the US taxpayer, and US taxpayers make $13T per year now. They're good for the the $2.7T+ that SSA is owed to cover the baby boom's checks over the next 25 years -- the top 1% alone is going to take home $80T in net income over the next 25 years.

Problem is though, these rich bastards are funding propaganda mills -- Heritage, AEI, Manhattan, Hoover, Cato, Reason, etc -- and own more than a few major media outlets to bullshit people about their social security.

If the system has promised too much to current workers, we simply need to raise their contribution level. Social security as structured makes tons of sense, it doesn't need any major changes, it just needs to have the rich begin pay back the money ($2.7T) they owe it now, something like $200B/yr starting in 2020.

Troy says

The change to 75-year actuarial balance in the SSTF is theft from Generation X too.

No it's theft from the young (the boomerang) generation. They won't get good jobs for 10 more years.

Much better is to cut it by 50% and REDUCE the retirement age. Let retire all those old, slow, stupid, incompetent ones.

Troy says

This is largely BS. Social Security is just a savings program that forces all wage earners to put 10% of their gross, up to ~$10,000 in US treasuries. As long as it's run pay-as-you-go and the contribution rate is sufficient to cover the payout rate, it's a perfectly valid retirement program.

Wasn't Bernie Madoff a "pay as you go" system, as well? If only he could have used the tax man to collect for him, he'd still be in business, too.

Bottom line is Congress spent the money and put "investments" in their place that are dependent on you, your kids and your neighbors, to come up with the cash they spent via taxation. Much different in quality than a bond from a corporation that produces tractors, or something, to pay off its bonds productively.

Troy says

and US taxpayers make $13T per year now

So I'm on the same page, you are talking GDP, right?

Troy says

If the system has promised too much to current workers, we simply need to raise their contribution level.

Same logic would have solved Bernie's problem, too, no?

shrekgrinch says

Sane Americans realize that we have a spending problem, not a revenue problem. So does that aforementioned conservative.

No, sane people typically recognize that the answer to the problem is usually in between the two extremes and is best reached by compromise. Regardless of what the problem is.

Thank god for the dumbification of the American youth.
Me now in the 40s will enjoy at least two or three decades(if I choose) of relevant employment. With out looking over my shoulder for the young guns.

They can facebook about it, while I cash my checks.

Who need SS, and retirement when you can work and be a valuable Sr. member in companies of your choosing?

Seriously the older I get, the more valuable my skill set gets, and the easier my next job becomes to acquire.

This has not been the case for at least the past three generations in America. As after 15, Men were supposed to put away childish things. Before now, men age 21 to 30 were at the TOP of their GAME. Now grown ass kids, age 26 are still at home with mom and dad, and our President is putting the burden of their health care on their parents to further keep them holed up and stupid.

And what are they learning in college these days? Why they are acting out fantasy Children books, fictitious games.

http://sportsillustrated.cnn.com/multimedia/photo_gallery/1107/quidditch.college.campus/content.1.html

It would be pathetically sad, if it weren't insuring my working future.

Go run and Play kiddies, daddy's got work to do...

Dumb ass bitches.

"Sane Americans realize that we have a spending problem, not a revenue problem"

Individiual income tax revenue is $1T and corporate income tax is $200B this year.

Total individual income is $10T and total corporate profits are $1.7T.

http://www.federalreserve.gov/releases/z1/Current/z1r-3.pdf

So we have a 10% tax rate on the national income. When we had a surplus in the late 1990s, the tax rate per GDP was 12%. Now it's under 8%.

http://research.stlouisfed.org/fred2/graph/?g=1bf

We have a tax problem to this extent.

We also need to cut defense spending and other non-productive spending back a lot, and get more care per dollar from our federal health spending.

HousingWatcher says

If Kudlow likes the Gang of Six proposal, then I am opposing it. I get nervous when I hear things like "pro growth" since that usually entails massive tax cuts for the upper end. WHen Republcians talk about "pro growth" they mean the bank accounts of rich people, not the economy.

Sometimes people are wrong about things that they claim are pro-growth. For example, capital gains taxes. It is not really as anti-growth as people think to raise capital gains taxes.

If I buy stocks, then I am buying a share of a company, sure. But only on an IPO or in angel/venture financing is buying stock pro-growth. When buying in the secondary market, I am not causing IBM to grow by buying IBM stock. IBM gets absolutely no money to spend on R&D, employees, or machinery when I buy IBM stock. IBM got money for those things from stockholders only during its own stock offerings, and now it funds those things via profitable operations. IBM itself causes the growth.

Taxing capital gains the same as labor can also be pro-growth. Reagan did this, by the way. That way, people are neutral between work and investment. Work produces growth. Being a passive investor doesn't.

Troy says

This is largely BS. Social Security is just a savings program that forces all wage earners to put 10% of their gross, up to ~$10,000 in US treasuries.

Correct. Social Security is a regressive taxation system, where the tax proceeds function as forced savings with progressive benefits.

Ronnie Honduras says

Bottom line is Congress spent the money and put "investments" in their place that are dependent on you, your kids and your neighbors, to come up with the cash they spent via taxation.

No, not me, since the top 20% -- mostly non FICA payers -- clear 50% of the national income. We need to tax them extra to repay whatever the FICA payers are owed as it is repaid.

This should not be controversial.

So I'm on the same page, you are talking GDP, right?

F.7 Distribution of National Income (1) from
http://www.federalreserve.gov/releases/z1/Current/z1r-3.pdf

Same logic would have solved Bernie's problem, too, no?

No. If the government only owed $4.5T on trust funds there would not be an issue repaying them. The problem is the $10T of OTHER debt -- "held by the public" -- that is over-extension for the overall system as-it-is. Congress should never have let this debt grow so high, cutting taxes in 2003 while expanding a war was a colossal mistake.