patrick.net

Nomograph says

The actual reason for the two income problem is that beginning in the early 60’s households began to have two incomes and housing prices adjusted accordingly. Prior to that 99% of households were single income, with the wife staying at home.

Did you notice how I took the only statement you made out of your post and the rest was Ad Hominem?

In response to your false statement: OK, so women started working outside the home. This meant more income. The money to pay these women was not taken from men, rather it was created out of thin air (printed and or added to the balance sheets on banks). This is INFLATION.
Your FED and the corrupt fractional reserve banking system made this possible.

Perhaps you could get your logic correct before you go accusing others of needing an education.

Furthermore there is an explosion in credit and deficit spending beginning in the 1980's. Do you really care to debate that? And is not the FED's inflationary policy NECESSARY to allow the credit expansion that finances these credit expenditures?

Nomograph says

You are free to use any exchange medium you see fit, rather than rely upon your government.

This is untrue. There used to be private currencies, but that is no longer legal.

Nomograph/Winston says

You are free to use any exchange medium you see fit, rather than rely upon your government.

In a world where gubmint makes it legal to pay with potatoes and gold or silver bars you might be a genius. Here you are just a misguided liar Winston.

Nomograph says

Currency is NOT a meant to be a store of wealth.

Perhaps in your world Winston. But here on earth...

Aristotle defined the characteristics of a good form of money:

1.) It must be durable. Money must stand the test of time and the elements. It must not fade, corrode, or change through time.

2.) It must be portable. Money hold a high amount of 'worth' relative to its weight and size.

3.) It must be divisible. Money should be relatively easy to separate and re-combine without affecting its fundamental characteristics. An extension of this idea is that the item should be 'fungible'. Dictionary.com describes fungible as:

"(esp. of goods) being of such nature or kind as to be freely exchangeable or replaceable, in whole or in part, for another of like nature or kind."

4.) It must have intrinsic value. This value of money should be independent of any other object and contained in the money itself.

"It is provided to you as a courtesy by your government."

Actually, currency existed well before our government did. The US government adopted gold because Americans already excepted it universally. They later pulled a bait and switch on the US public.

AdHominem says

tatupu70 says
Affordability has only gotten better over time
maybe in the flyover states, but then again there is a reason they are flyover states.

I know this is a Bay Area centered website, but that statement cracks me up. I've lived on both coasts but given the choice, I'll live in the Midwest every time. There are a lot of good jobs in the Bay Area, no doubt, but what else is appealing? The astronomical cost of living? The cold summers? The horrible traffic? The "keep up with the Jones" attitude? No thanks.

AdHominem says

Nomograph/Winston says
You are free to use any exchange medium you see fit, rather than rely upon your government.
In a world where gubmint makes it legal to pay with potatoes and gold or silver bars you might be a genius. Here you are just a misguided liar Winston.

Of course it's legal. Nobody will get thrown in jail for paying off a debt with potatoes. It's just not legal tender, so the service provider is under no obligation to accept potatoes, just as he is under no obligation to accept mastercard or visa.

Kevin says

Capitalism DOES NOT WORK WITHOUT REGULATION. It simply devolves into monopolies, which are exactly the same as socialism.

Please define regulation. Was it government regulation that has brought us a market more varieties of beer than you can drink in a night on the town? Or was it government "regulation" that brought us salvation for AIG/Goldman at the expense of Joe sixpack and Lehman Bro.?

tatupu70 says

AdHominem says

Nomograph/Winston says

You are free to use any exchange medium you see fit, rather than rely upon your government.

In a world where gubmint makes it legal to pay with potatoes and gold or silver bars you might be a genius. Here you are just a misguided liar Winston.

Of course it’s legal. Nobody will get thrown in jail for paying off a debt with potatoes. It’s just not legal tender, so the service provider is under no obligation to accept potatoes, just as he is under no obligation to accept mastercard or visa.

I guess I'll send a few thousand pounds of spuds to the IRS this year then smartguy.

Nomograph says

When women entered the workplace en masse, the currency supply must be adjusted to enable the exchange of this new supply of service.

Yes, that is what I said. It is called INFLATION. (the expansion of the money supply). All of a sudden you have more money chasing goods and services and prices go up. Thank you FEDERAL RESERVE.

Since credit is another form of money, expanding credit is INFLATION too. Hence since the beginning of the 1980's true inflation (as opposed to the government CPI fabrication) has accelerated.

We have yet to fully realize all of the effects from the creation of all this funny money.

"When women entered the workplace en masse, the currency supply must be adjusted to enable the exchange of this new supply of service. "

Did we get about 800 billion more women in the past 2 years or something?

theoakman says

“When women entered the workplace en masse, the currency supply must be adjusted to enable the exchange of this new supply of service. ”
Did we get about 800 billion more women in the past 2 years or something?

Yes, we did. We was hiding under a rock and all comed out at once 'cuz we heard thar was money in them thar hills. And we'll crawl back under it when we please, taking all the money with us.

And chocolate. Prepare for a chocolate shortage.

AdHominem says

Or was it government “regulation” that brought us salvation for AIG/Goldman at the expense of Joe sixpack and Lehman Bro.?

Actually it was lack of regulation that caused that mess...

AdHominem says

tatupu70 says
AdHominem says
Nomograph/Winston says
You are free to use any exchange medium you see fit, rather than rely upon your government.
In a world where gubmint makes it legal to pay with potatoes and gold or silver bars you might be a genius. Here you are just a misguided liar Winston.
Of course it’s legal. Nobody will get thrown in jail for paying off a debt with potatoes. It’s just not legal tender, so the service provider is under no obligation to accept potatoes, just as he is under no obligation to accept mastercard or visa.
I guess I’ll send a few thousand pounds of spuds to the IRS this year then smartguy.

You can try it, I suppose. But like I said in my post, the US Government is under no obligation to accept the potatoes.

AdHominem says

Yes, that is what I said. It is called INFLATION. (the expansion of the money supply). All of a sudden you have more money chasing goods and services and prices go up. Thank you FEDERAL RESERVE.

Wrong again. If there are all these women entering the workforce and producing goods and services, don't you think that there might be more goods and services too?? So it's more money chasing more goods. No inflation. Just like increasing the money supply with increasing population doesn't cause inflation either. You make the mistake of assuming all else constant in your theories--which is almost never the case.

tatupu70 says

AdHominem says

Or was it government “regulation” that brought us salvation for AIG/Goldman at the expense of Joe sixpack and Lehman Bro.?

Actually it was lack of regulation that caused that mess…

Yeah, like we hadn't defined what too big to fail meant, and the Fed didn't have enough printing presses. If only Bernanke knew that interest rates were too low, he could have printed enough money to pay for all the bad loans sooner.

tatupu70 says

AdHominem says

tatupu70 says

AdHominem says

Nomograph/Winston says

You are free to use any exchange medium you see fit, rather than rely upon your government.

In a world where gubmint makes it legal to pay with potatoes and gold or silver bars you might be a genius. Here you are just a misguided liar Winston.

Of course it’s legal. Nobody will get thrown in jail for paying off a debt with potatoes. It’s just not legal tender, so the service provider is under no obligation to accept potatoes, just as he is under no obligation to accept mastercard or visa.

I guess I’ll send a few thousand pounds of spuds to the IRS this year then smartguy.

You can try it, I suppose. But like I said in my post, the US Government is under no obligation to accept the potatoes.

But they are obligated to accept Federal Reserve Notes? Sounds like a monopoly to me. Where are the cries for regulation?

AdHominem says

And I’m sure we are all better off today because one income is not enough but when two people work 40+ hours a week families are more stable, there is less stress and life expectancies go up. Thank you Big Brother and Federal Reserve for saving us from the freedom of a sound monetary system.

Where did you get the idea that one income isn't enough? One income is plenty--especially if you're content to drive a Hyundai instead of a Beamer, and live in a modest 1500 sq ft house instead of a 3000sq ft. mansion. And one income is more than enough to live the same lifestyle that people lived a generation ago...

Nomograph says

The fact is that cars are MUCH cheaper now than they were a generation ago. The amount of labor I exchange for a vehicle is MUCH less than the amount of labor my father exchanged for a vehicle. In fact, cars are so much cheaper today that almost everyone has one, and most people have several.

A "generation ago" it was very unusual to buy a car on credit. Today, almost everyone finances or leases their cars. If you're going to compare car ownership and costs, you need to compare the method of payment that was used to make those purchases. Ease of credit policies infuses an unnatural flow of money into the economy; excessive money chasing goods which drives inflation. The fact that more people own cars today, or that most own several is not a valid point when comparing to other generations that typically owned their car outright. A person that "owns" 2 cars worth $60,000 that has financed $55,000 doesn't actually own much. The same point can be made for housing. When 20% down payments were common a generation ago, can we really compare ownership and the prices then as compared to the peak of the housing bubble when 0% down was common?

Nomograph says

I don’t know why anyone would demand that the government store their wealth for them.

Me neither. That is why taxes ought to be almost zero (no income tax). And there should be competing currencies instead of the Federal Reserve Note monopoly.

Nomograph says

The fact is that cars are MUCH cheaper now than they were a generation ago.

I suppose we make 10X what our parents made right? Nice try. This just doesn't hold water. And we haven't even began to discuss housing.

Oh, and Tatu perhaps in your neck of the woods one income (for someone with a good income of course) can buy you a 30 year mortgage payment on a comfortable house. But in a large percentage of the country one income will not even buy you a 30 year mortgage that is "affordable."

Nomograph says

simply prove my statement wrong?

I don't need to prove you wrong when you and everyone else here knows that Federal Reserve Notes are the only "legal tender for all debts public and private." It is a monopoly, and to make matters worse they keep devaluing the currency.

Are you really this childish NOMO?

Nomograph says

Complete bullshit. Are you saying that barter is illegal? I can pay for something using ANY exchange medium as long as the seller is willing to accept it.
My neighbor just sold me two heads of homegrown spinach. I paid for these with a bag of homegrown oranges. Are you trying to say that we broke the law?

We are legally FORCED to accept FED minted currency as money. Barter is a grey area. How does one pay sales tax when dealing in potatoes, oranges, and spinach? How does one declare income to be taxed when bartering.
http://www.irs.gov/taxtopics/tc420.html --a link on declaring bartering income to the US government.

If you do this on a small scale with your neighbor it is not considered illegal. If you do this on a larger scale I would bet you'd be made to be a public example of a tax cheater. Obviously, I am no expert on barter, or US tax code, but a bartering transaction is generally considered to be part of the underground economy, and could be considered illegal if done as part of a commercial enterprise.

http://www.bargaineering.com/articles/four-ways-youre-unknowingly-cheating-on-taxes.html

"So taking turns mowing lawns with your neighbor without claiming the “barter income” is okay, but trading website design work with a landscaping business requires claiming barter income. If you’re part of a barter exchange or network, it sounds like that’s automatic grounds for claiming it as income."

However, if you want to actually issue a competetive currency to the US dollar, you would absolutely be charged with a federal crime. "However, under the Constitution (Article I, section 8, clause 5), Congress has the exclusive power to coin money of the United States and to regulate its value. The United States Mint is the only entity in the United States with the lawful authority to mint and issue legal tender United States coins."
http://www.usmint.gov/pressroom/index.cfm?flash=yes&action=press_release&id=710

Nomograph says

Complete bullshit. Are you saying that barter is illegal? I can pay for something using ANY exchange medium as long as the seller is willing to accept it.

You are quite self rightous for someone that is just flat out wrong. You do not have the "freedom" to coin and use your own currency, as many banks did in the 1800's. Nor do you have the "freedom" to pay with, or accept payment via barter, except under very strict circumstances.

AdHominem says

Kevin says

Capitalism DOES NOT WORK WITHOUT REGULATION. It simply devolves into monopolies, which are exactly the same as socialism.

Please define regulation. Was it government regulation that has brought us a market more varieties of beer than you can drink in a night on the town?

No, but it was regulation that brought us 5 major telephone carriers to choose from rather than one. So far as I know, beer has never been an industry under threat from monopolies (largely due to the very low cost of entering the market).

Or was it government “regulation” that brought us salvation for AIG/Goldman at the expense of Joe sixpack and Lehman Bro.?

You're conflating some unrelated things.

The crisis itself was largely the result of a lack of regulation (as long as everyone's making money, why regulate it, right?). Lehman failed because nobody intervened and they were insolvent.

Joe sixpack isn't footing the bill for anything, because joe sixpack doesn't pay fuckall in taxes. It's people like me and other $250k+ folks who are paying for it, in the form of the taxes that we're going to be paying in the future to pay down debt.

...and it also has nothing to do with regulation.

You can certainly argue that we should have just let AIG and other financial entities fail, but most people who actually have to deal with the very real ramifications of the collapse of the entire global economy will disagree with you.

Nomograph says

YOUR INABILITY to convince others to accept your form of payment.

Oh, it is my fault government created a monopoly on money and then proceeded to devalue it by over 95%.

Way to go Winston! Big Brother forever!

Kevin says

Lehman failed because nobody intervened and they were insolvent.

It is called fraud. There was plenty of regulation. It was not enforced.

Kevin says

It’s people like me and other $250k+ folks who are paying for it

Oh, that and the printing press. Everyone pays taxes. Even illegal aliens, maybe not income tax but we are all taxed. And then they devalue the currency anyway so yeah, we all pay.

By the way congrats on the high taxable income!

CBOEtrader says

I am making an argument for a constitutionally limited central government to do its job without overstepping its legal authority.

Exactly A constitutional republic. Where "leaders" must abide within the confines of the law of the land and whose job is to enforce that law not write an endless barrage of spending and regulatory bills so long that no one reads, so expensive that no one can pay for them, and so restrictive that we cannot presume the pursuit of happiness anymore without Big Brother's permission. Wasn't it supposed to be the other way around?

By the way CBO thanks for your comments. It is nice that someone can contribute without resorting to Ad Hominem.

Nomograph says

AdHominem says

government created a monopoly on money and then proceeded to devalue it by over 95%.

I am a saver. People say that inflation punishes savers, which is completely incorrect. Inflation punishes people who are foolish enough to store their wealth in currency. I store my wealth in property and business ownership. If I were to liquidate my assets I would be worth at least several million dollars, yet I am completely immune to inflation. You can be too, if you give up on the idea of a government-run wealth management system. Are you afraid of freedom, AdHominem?

It seems to me this is a perfect example of Elitism. NOMO, you don't know what it is like to grow up in poverty. You don't know what it is like not to have more than a few hundred bucks in a savings account.

You are an elitist. Your BIG BROTHER makes it possible for YOU to preserve your wealth at the expense of the peasants, who have essentially no chance of ever achieving what you have. And with every regulation, every tax, every dollar they print they make it harder for the little guy to climb the ladder. They are literally removing the rungs.

Congratulations you have proven my point. YOU ARE A LOYAL PARTY MEMBER WINSTON.

Why are you afraid of freedom? Because it will cost you your elite position?

AdHominem says

Oh, and Tatu perhaps in your neck of the woods one income (for someone with a good income of course) can buy you a 30 year mortgage payment on a comfortable house. But in a large percentage of the country one income will not even buy you a 30 year mortgage that is “affordable.”

That is just patently false.

CBOEtrader says

You always seem to leave out the fact that Reagan’s tax cuts created MORE governemnt tax revenues, not less.

The problem with analyzing the effects of the tax cuts is that Reagan spent money like a drunken sailor. And he came in during a bad recession. So, of course governmental revenue will increase when the Government spends money to get the economy out of recession. When people go back to work, they start to pay taxes, and revenue increases.

The real question is Reagan had spent all that money getting the US out of the recession without the tax cuts, where would Government revenue have been in that case?

The oft-repeated lie that tax cuts increases revenue has been proven false many times over.

The most commonly cited case for this is the 1980s "tax cuts".

What most people don't know (or pretend not to) is that there were no tax cuts. The top marginal rates changed, but the total amount of taxes that people were paying didn't change much at all. What Reagan did was tax reform, not tax cuts -- his changes were designed at the outset to be revenue neutral. It was tax simplification, not tax reduction.

What it did do was shift the tax burden away from businesses and high income earners and onto the middle class, largely through the elimination of most deductions.

The increase in revenue came because the recession that Volker triggered to stop inflation finally ended. Yes, revenues go up when people are making more money -- who knew?

Flash forward now to the Bush tax cuts -- they did not increase government revenue.
Flash backward to the cuts of the 1960s -- they did not increase government revenue.

And, of course, the implication of the "tax cuts increase revenue" theory is that raising taxes will reduce revenue -- but there are no examples of this happening at the federal level.

Nomograph says

AdHominem says

NOMO, you don’t know what it is like to grow up in poverty. You don’t know what it is like not to have more than a few hundred bucks in a savings account.
You are an elitist. Your BIG BROTHER makes it possible for YOU to preserve your wealth at the expense of the peasants, who have essentially no chance of ever achieving what you have.

Every U.S. citizen has the opportunity to achieve what I have achieved, including you. I grew up in a family of modest means. I served in the military, went to school, earned M.D. and Ph.D. degrees and paid my debt entirely by myself. Anyone can do what I did, as long as they are smart enough and hard working enough.
I reject your claim that that the government is responsible for your lack of success. You can, right now, do what I did. Log off, join the military, go to school, study hard and get better grades than the competition, earn acceptance to medical school, pay off your debts, save and invest, and then you will have what I have. The path forward is perfectly clear.

Not that it is any of your business but I happen to be mildly successful when compared to my peers. Perhaps one day I will even be an elite like you. However, I am the exception. And you are too. And it still does not change the fact that all of us contribute too much of our labor to a growing Federal bureaucracy that is trashing freedom in favor of government control and corporate interests.

And if you want to deny that our bureaucracy is making it even harder for those in poverty to climb the ladder you are sadly deceiving yourself.

Your military suggestion is also laughable. You are suggesting I join and add further support to Empirical USA, pledging my life to obey orders to shoot, kill and occupy the lands of sovereign men, women, children and nations around the globe. Perhaps I will be one of the lucky ones like you who manage to retire before I get my leg or head blown off by someone defending their homeland. Or perhaps I won't be so lucky.

But none of this changes the fact that you are a loyal party member. You support the system because it has served you well (at the expense of others of course). And now that you are an elite you are able to continue to succeed using your property, MD monopoly on "medicine", and your relatively massive earnings potential as compared to the average, let alone below average American. Currency debasement doesn't bother you because you have plenty of it.

You have worked hard to get where you are. I am happy for you. But surely not everyone has the same opportunity, let alone the same results as you. And until we have a sound currency, a right sized government, and a parred down military (end the occupation of foreign lands), the little guys will continue to suffer at your expense Winston.

CBOEtrader says

Having a constitutionally limited federal government, while keeping the vast majority of government authority in state and local hands is a much better way to run a country

Just out of curiosity-what makes you think state or local governments will do things any better? California, Illinois, NJ, etc. sure don't seem to have any better ideas...

Doing everything at the local level is a lot less efficient, but the benefit is minimizing the damage when government does something stupid.

When I was taking my real estate classes last year, and being exposed to all the differences in state law wrt RE, I finally figured out what the Federalist Society was all about: full employment for lawyers, where 50 states have 50 different sets of laws.

The general idea that states should handle welfare etc isn't a bad one, though I don't know why the red staters are pressing this issue. Without Uncle Sam sending cash by the billions via military bases, ag subsidies, and the SS/SSI checks they'd be entirely screwed economically, reduced to the standard of living as shown on the "The Waltons". Perhaps they want that, dunno.

It doesn't matter what level government is done, what is necessary is intelligent actors. And I'm not talking Schwarzenegger, though he is in fact I guess an intelligent member of the acting profession.

tatupu70 says

CBOEtrader says

Having a constitutionally limited federal government, while keeping the vast majority of government authority in state and local hands is a much better way to run a country

Just out of curiosity-what makes you think state or local governments will do things any better? California, Illinois, NJ, etc. sure don’t seem to have any better ideas…

You named a bunch of "liberal" states. Try ND, NH, MT

tatupu70 says

CBOEtrader says

Having a constitutionally limited federal government, while keeping the vast majority of government authority in state and local hands is a much better way to run a country

Just out of curiosity-what makes you think state or local governments will do things any better? California, Illinois, NJ, etc. sure don’t seem to have any better ideas…

This is a great question, with an easy answer.

Of course local and state government politicians are no less corrupt than federal politicians. That is simple human nature.

However, the fact there are 50 states means competition. For instance, states have always been free to levy income tax, and many did so. However, the simple fact that the tax base was free to move to any state meant that states had to keep taxes low and government relatively efficient to keep its citizens happy. If one state, like California, wanted to implement a single payer health care system, citizens would be free to move to Arizona in protest, or move TO CALI in support of such a system.

Also, it is MUCH more difficult to steal, rob, or cheat someone that you know, who's family members you see in a town hall meeting, who's businesses you frequent, etc. Basically there is a much higher level of moral accountability within smaller political spectrums, than from an impersonal far off federal government.

It is also relative to point out how the passage of the 16th amendment turned state representatives and senators into professional beggars. These politicians try to statistically prove they are doing a good job by getting more pork spending into their districts than they pay to the government in taxes. Not only is this extremely wasteful, but this results in complete loss of state sovereignty.

As Frank Chodorov said in his "Income Tax: The root of all evil",

"Thus, every federal dollar spent in a state becomes an obligation on the state. The obligation is paid off with sovereignty; the state sells out its independence. It is all done without change of the law, without any modification of the Constitution, and is as imperceptible as the gradual wearing down of a proud horse by a resolute trainer."

I would love to hear some honest criticism of "Income Tax: The root of all evil" by one of the educated liberals in the forum.

http://mises.org/etexts/rootofevil.asp

CBOEtrader says

I would love to hear some honest criticism of “Income Tax: The root of all evil” by one of the educated liberals in the forum

I don't claim to be either educated or a liberal, but I find the essay to be less than persuasive. All the Judeo-Christian morality and talk of evil serves to get peoples' emotions going, but doesn't really present a good case.

For me the question is simple. The government needs revenue--everyone agrees to that. So, what is the fairest way to generate this while allowing the economy to flourish. Taxes aren't good or evil. They are just a way to collect revenue for the government.

tatupu70 says

CBOEtrader says

I would love to hear some honest criticism of “Income Tax: The root of all evil” by one of the educated liberals in the forum

I don’t claim to be either educated or a liberal, but I find the essay to be less than persuasive. All the Judeo-Christian morality and talk of evil serves to get peoples’ emotions going, but doesn’t really present a good case.
For me the question is simple. The government needs revenue–everyone agrees to that. So, what is the fairest way to generate this while allowing the economy to flourish. Taxes aren’t good or evil. They are just a way to collect revenue for the government.

It doesn't sound like you read the essay. Chodorov uses very logical arguments, and NEVER uses emotion baiting. You are also wrong about your premise. I, for one, do not agree that the government needs revenue. The federal government needs to massively cut spending, and give power back to the states.

CBOEtrader says

It doesn’t sound like you read the essay. Chodorov uses very logical arguments, and NEVER uses emotion baiting. You are also wrong about your premise. I, for one, do not agree that the government needs revenue. The federal government needs to massively cut spending, and give power back to the states.

OK--we'll have to agree to disagree then. Here's an example of what I meant:
Thus, the fabric of Judeo-Christian morality is undergoing deterioration as a result of the "evil" that has infiltrated our political life
How about this--boil down the logical arguments for me then. Just a few bullet points. And "income tax is evil" doesn't qualify.
And btw--I agree we need to reduce spending, but that wasn't the point of the discussion. There will always need to be some governmental revenues, so the question is how to collect them.