My parents told me that Friday the 13th is "lucky" for the Irish.
I have no idea where they got this. I suspect they totally made it up.
But they told me so early and so often, I came to believe it.
I still do. Should be a great day!
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I've been informed that "grass" is so "60's" and "hopelessly out of date."
"No one calls it that anymore," Paul said. "Call it Weed, or..." (I've already forgotten the other terms he used.)
"If you can't call it anything else, call it marijuana."
Hey, it was grass when I was a kid and it will always be grass...
I am so unhip.
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Another B.S. callout.
The business section has a front page article entitled: "Signs of Life in Subdivisions."
I guess. Like looking for life in the universe, you can always finds signs and portents. "More earthlike planets discovered!" "Water is more common in the universe than we expected!"
I know this. The industry is absolutely relentless in their boosterism. It's very Terminator like. They never stop, they never get sidetracked, they stay on their killer mission. Housing is good. Housing is Better. Housing is wonderful!!
Meanwhile, the article in the back of the section is: "Number of Foreclosure Proceedings Rose in June."
"Banks are increasingly placing homes with unpaid mortgages on a countdown that could deliver a swell of new foreclosed properties onto the market by early next year, potentially weighing further on home values.
"June provided the latest evidence of this trend, as the number of U.S. homes entering the foreclosure process for the first time increased on an annual basis for the second month in a row..."
My own feeling is that the problems are a vast reservoir which is still being filled, and the occasional seasonal runoff is being mistaken for a true drawdown. I think the Great Recession is too big to be counteracted by 'positive' vibes.
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"What does it say about me that I don't understand anything in this store?" a woman with kids says.
"It says that you are terribly unhip."
"Oh."
"Or that I am a huge nerd."
"Probably says both," she says. "I was a cheerleader in high school, but as I've gotten older I've come to recognize that the nerds got it right."
"Hey, we could always write a comic, Nerds versus Cheerleaders."
"With deadly pom poms!" she says.
I whip off my glasses. "And razor sharp eyeglasses!"
Ha, ha. We both say uncomfortably. A little detente in our older years.
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30 comments:
Looking it up online, it looks to be the complete opposite. Friday the 13th is especially unlucky for the Irish.
Then again, my parents also always told me that, despite our Irish sounding name, we are mostly German in heritage.
I've always ignored that. I've always preferred the Scotch-Irish of my name, Duncan McKinnon McGeary.
"I think the Great Recession is too big to be counteracted by 'positive' vibes."
The Great Recession (like the Great Depression) was caused by serious structural problems in the economy -- to put it simply, working Americans don't have enough money to sustain the level of consumption needed to keep the economy humming. This in turn was the culmination of more than 30 years of offshoring American jobs, busting unions and making the federal tax system less progressive so that middle-class taxpayers bear a bigger share of the burden and corporations and wealthy individuals bear less.
And the right-wingers want to "solve" this problem by laying off public employees, who are just about the last working Americans who still have adequate incomes and benefits. I think they'll only be happy when we have returned to feudalism.
Scotch-Irish aren't real Irish.
Well...there you go.
Not an unlucky day for me.
HBM,
Me thinks that you need to look at real numbers.
The top 1% is paying significantly higher percentage of government income than ever before.
Almost half of the population do not pay any federal income tax.
Because most state income taxes follow the federal system you have lower percentages paying taxes there as well.
On the other hand the Federal government budget is the highest it has been as a percentage of GDP since WWII.
Most of the taxes that do hit the middle class are sales taxes and property taxes. Which go by the way to pay for local and state public employees and are initiated by state and local governments.
The employees by the way that they cannot afford, unless they increase those taxes even more.
Returning to the early 60's would probably work. Back when 85% of the population paid federal income taxes, The tax brackets were higher but there were also more deductions so the marginal rates were not much different. Back when the top 1% paid about 35% of federal income taxes, compared to the 45%+ that they do today.
Back before the cities and states when crazy on unaffordable retirement plans. Of course it was also before most state and local government employees were unionized.
Or as one article put it:
Federal taxes on middle-income Americans are near historic lows,[1] according to the latest available data. That’s true both for federal income taxes and total federal taxes.[2]
Income taxes: A family of four in the exact middle of the income spectrum will pay only 5.6 percent of its 2011 income in federal income taxes, according to a new analysis by the Urban Institute-Brookings Institution Tax Policy Center. [3] Average income tax rates for these typical families have been lower during the Bush and Obama Administrations than at any time since the 1950s, as Figure 1 shows. (As discussed below, 2009 and 2010 were particularly low because of the temporary Making Work Pay Tax Credit.)
Overall federal taxes: Overall federal taxes — which include income as well as payroll and excise taxes — on middle-income households are near their lowest levels in decades, according to the latest data from the Congressional Budget Office (CBO).
RDC: "The top 1% is paying significantly higher percentage of government income than ever before."
The top 1% is reaping a higher percentage of total income (and controlling a greater percentage of total wealth) than ever before, or at least since the 1920s.
"Almost half of the population do not pay any federal income tax."
But they pay into SS and Medicare, plus property taxes, sales taxes, etc. Also many rich individuals pay little or no federal income tax because they report most or all of their income as capital gains and thus enjoy a lower tax rate.
"Returning to the early 60's would probably work. ... Back when the top 1% paid about 35% of federal income taxes, compared to the 45%+ that they do today."
Here's a report on how the top 1% (and top 20%) have outpaced the less affluent in income growth even as their tax rates have declined: http://www.nytimes.com/2011/10/26/us/politics/top-earners-doubled-share-of-nations-income-cbo-says.html. The accompanying graphic on share of income earned by the top 1% also is instructive.
I think you are going to have a tough time convincing people that the trouble with America is that the rich pay too much in taxes and the poor and middle class pay too little. But I'm sure you'll keep trying.
"Federal taxes on middle-income Americans are near historic lows"
Kinda blows the Republican claim that Obama is killing us with tax increases out of the water, doesn't it?
RDC, I'd like to ask you a question re reducing public employee payrolls: How does putting more people out of work help the economy?
Your statement was that the government was on the backs of the middle class. Nope the middle class is paying a lower percentage of taxes. Even with sales and payroll taxes.
To answer you last question. The economy tanked because of too much leverage and debt. It will not improve until that is corrected. Total debt is actually higher now than it was in 2007. That is why the economy lags. Sooner or later we are going to have to take our medicine and reduce the debt. Not that debt is current and long term.
That means that the state and local governments are going to have to right size, just like the federal government is. The consumers are going to have to get their debt down as well.
The current situation is the result of 30+ years of trade deficit, over spending upon consumption, etc.
Unfortunately most of the government programs have only served to make the issues worse in the long term.
For example we now have a massive student debt problem. Universities keep cranking up their costs and can get away with it because students have almost unlimited access to student debt loans.
Students would be far far better off if such loans were much more limited. They might not think so but they would be. Such limits would force the students to manage their expenses, shop for cost effective schools, and maybe think about what the program they are taking is actually worth. Such selection would place increased pressure on the universities to control costs.
I don't know about you but when I went through college in the early 80's student loans were much more limited and were pretty much a last alternative. Instead of the first alternative, don't worry about the cost you can always get a loan that they are now.
As far as the issue of the 1% making a lot of money have you really looked at that.
The top 1% is anything but static. The last number I saw had 50% turn over in a three year period.
As far as Capital gains go that is still 15%. Which is higher then the effective tax rate for the "middle class"
Now as far as payroll tax goes the middle class and below gets a greater return on their contributions to SS then the upper levels. The payout formula provides a bias for lower incomes. So even though a person has contributed the maximum, and might get a higher absolute payment, their payment as a percentage of the money they contributed is lower then those that made much lower contributions. So basically they are still subsidizing the system to some degree.
Sales tax is state and local. Paying for those government employees you adore. Many of which can retire at a pretty young age and draw on pensions that are significantly better then the people whose taxes are paying them will get.
The incomes of the top 1% and top 20% have increased. But the percentage of the government income they pay has significantly increased.
That is because the taxes on the lower quintiles have dropped by a much higher percentage. That does not include the increases in the government programs that have funneled more money in their direction.
As I mentioned before the top 1% or for that matter the top 20% is not static. The higher you go up the faster the turn over rate.
Actually the top two problems are
1. the government and the people spend too much. They have been living above their means for years and it has now caught up. Governments, just as individuals, should not go into debt. For both any debt should be for long term capital projects and not to pay for day to day expenses and that debt should not extend beyond the lifetime of the asset.
As a country we have become conditioned to debt. We have lost the lessons of the generation that went through the great depression and we are having to learn them all over again. Neither individuals nor countries get rich borrowing money.
The check is now coming due.
2. The world is competitive. They understand that. We better remember that. For every factory worker in the US making 60k there are a thousand in other countries willing to do that same work for 2k. Our 60k workers have to be 30 times as productive or their jobs will go away. The US is at a similar stage as the British were in the early 1900's. At that time you have more modern factories being built in the US and the British factories were having problems. Today you not only have cheaper labor, but you are also seeing more modern factories being built with a higher level of automation.
It was easy to compete in the 70's and 80's. 3rd world infrastructure was poor, trade barriers existed, education levels were poor. Today the trade barriers are gone, 3rd world infrastructure is pretty good and many countries have very good education systems.
What is considered the middle class in most countries would be happy to be one of the poor in the US.
How does putting more people out of work help the economy?
By starting to fix the problem, instead of letting it continue to drag out and get worse. Money run though the government is tremendously inefficient. Also you have continuing increases in long term obligations that are tied to those employees that continue to increase.
Governments need to right size and they need to get their personnel costs under control.
At one time Government employees (state and local) had good benefits but a rate of pay lower to the equivalent job in the private sector. That is no longer true. They now make salaries that are equal to or above similar private sector jobs and benefit packages, especially retirement that are way above. That has to be brought under control.
As such it is a necessary first step. Just as a failing company must get their expenses under control.
"The economy tanked because of too much leverage and debt."
Yes, but because of PRIVATE debt (borrowing against phantom assets), not government debt. The US can tolerate, and in the past has tolerated, a larger amount of debt in proportion to GDP than it now has.
It's pretty easy to see what the political agenda is here: The right wing is trying to create a panic over the debt in an effort to finally realize its 80-year-old dream of repealing the New Deal.
"Nope the middle class is paying a lower percentage of taxes."
Can you cite reliable statistics to back that up? Because it runs counter to everything I've been seeing for about the last 10 years.
"As far as Capital gains go that is still 15%. Which is higher then the effective tax rate for the "middle class"
Not higher than mine, even if you just include federal income tax.
"Students would be far far better off if such loans were much more limited. They might not think so but they would be."
The bottom line is that rich kids would go to Harvard, Princeton and Yale and middle-class kids would go to the educational equivalent of Wal-Mart -- if they went anywhere.
You keep talking about how we all will be better off "in the long run" if your remedies were applied, but what I see is that the rich will get a lot richer and the poor and middle class will lose ground ... as they have been doing for the past 30+ years. But they'll have pie in the sky by and by when they die.
Funny how those who preach austerity because "in the long run" it will help everybody are always the folks who are making out like bandits in the short run.
Actually it is government debt as well. The government competes with the private sector for Capital. Every time a dollar is spent to by a t-bill that dollar cannot be invested elsewhere. To much government borrowing and it crowds out commercial borrowing.
Every dollar the government spends, that it borrows, generates a dollar in immediate boost, but adds 1.5 dollar in long term economic drag.
Every dollar the government spends upon servicing debt is a dollar that is not available for other activities.
You mean in addition to the one I listed earlier in the discussion.
There are many sources including CBO, IRS, and census.
They all show percentage of taxes paid by quintile.
There are also several sites that show total tax load by quintile.
15 minutes of research will yield all of the information you need.
No what exactly is you overall federal tax rate? Not your top rate on the last dollar, but your total federal taxes divided by total income.
Now lets take a look. in 2011 the family income by quintiles has the median of the middle quintile at an income of $49,309. the fourth quintile at 79,040 and the top quintile at $169,633.
Now the tax rate for taxable income is 10% for 0-17000, 15% for 17,000 - 69000 and 25% for 69,000 to 139,500.
So clearly even if you ignore deductions the median of the fourth quintile would, without any deductions at all (clearly they have some), 1,700 + 7,800 + 2510 =12010 = 15.19%. So clearly before you can even theoretically hit the equivalent to the capital gains tax rate you have to be in the top 30% of income in the US. Now even the minimal standard deduction, without extra dependants lowers the taxable income by 11,600 so the more real income rate for the income of $79040 is 1,700 + 7566 = 9266 = 11.7%.
So where exactly do you put the cutoff for middle class income?
Garbage.
Are they really better off. Those that are academically qualified to get into Harvard or Yale can. There are lots of programs available for the high achievers, especially poor and/or minorities.
Hate to tell you but the availability of loans for the poor is not a major issue for the students of Harvard, Yale and similar institutions, not for that matter MIT, CalTech and NorthWestern.
The issue is not the poor A students.
The issue is the low B, C and D students. Those that borrow a small fortune to go to an expensive school that they want to go to. Often private liberal arts type. With minimal focus on their degree and what they will make when they graduate.
You put restrictions on student loans and the students will have plan better, will have to make more reasonable selections, will make schools think more on how to make college more affordable.
The students in those categories would often be better off in a local college then in generating large amounts of college debt.
One additional comment.
One good rule of thumb that I have run across is that a person should not borrow more for college then what their first year income would be expected to be after graduation.
If that rule of thumb is used then one can expect to pay off the student loans in a reasonable time frame with financially crippling them for life.
By the way I was one of your middle class, actually not even middle class, that put myself through school, with loans and have ended up doing rather well.
Now because I funded it myself, I really had to want to go, I had a plan on what kind of degree I wanted and made sure that I finished.
Too many go on to college because that is the thing to do, no real plan, no real desire to be there. But they can because the loans are there.
The colleges don't have to control costs, because the loans are there.
"The government competes with the private sector for Capital. Every time a dollar is spent to by a t-bill that dollar cannot be invested elsewhere. To much government borrowing and it crowds out commercial borrowing."
There is absolutely NO EVIDENCE that this "crowding out" is occurring. The private sector is awash in capital. The problem is it's not being used to create jobs in the US.
"At one time Government employees (state and local) had good benefits but a rate of pay lower to the equivalent job in the private sector. That is no longer true."
Mostly because private sector compensation has DECLINED, not because public sector compensation has risen extravagantly.
"The issue is the low B, C and D students. Those that borrow a small fortune to go to an expensive school that they want to go to."
Everybody is in agreement that America is falling behind in education; your "solution" is to make it more difficult for people to go to college. And I doubt that very many C and D students can even get admitted to these "expensive" private colleges.
"Today the trade barriers are gone, 3rd world infrastructure is pretty good and many countries have very good education systems."
So the "conservative" solution is to let our infrastructure crumble and gut the education system. Very smart.
"What is considered the middle class in most countries would be happy to be one of the poor in the US."
I think we should aspire to be a little better than Bangladesh or Cambodia, don't you?
Actually there is evidence. Where do you think bank capital is going? Into treasuries. You can find all of the information you need by looking at financial company 10Qs and Ks.
Actually very few jobs pay less. You need to differentiate between micro and macro statistics. For almost each position, the pay is higher today then in the past. There are cases where classes of jobs have been reduced in number or eliminated. For example the number of production line workers may have been reduced by 50%, but the one that remain make more per person. Some cases of reduction exist, but those are outliers.
State and local government salaries and benefits have increased at a very rapid rate from 1990 until 2007. That information is easily available.
The issue is not the quality of US education. The issue is that the ease of student loans mean that students are borrowing money that does not make sense for them to do so.
Yes, it should be more difficult for some to go to college. There should be a hurdle. College degrees should mean something.
The cost of a college education has increased tremendously, while the quality has dropped. The quality of students have dropped. There is a reason why when you look at class rank at the graduating classes at Stanford, MIT, CalTech, etc the majority of the names are ethnic Chinese or ethnic Indian.
Quite often these are students that have gone through the US education system, but have a dramatically different approach to that system then most students.
Just talk to teachers in school districts that have a good mix of students. You have the average american parent complaining to the teacher that there is too much homework. You have the ethnic Chinese parent complaining that there is not enough and that the course work is to easy.
The US education system demonstrates the results of the everybody gets a trophy approach that is now the main stay of of the philosophy of our schools.
Here the thought is everyone should go to college and we will give them loans. Doesn't matter if it means that the quality of the average college graduate goes down. The diploma means less and they have tons of debt when they are finished.
We are competing now with countries where you have to fight like mad to get into the better schools. Where you have to be the best. Where competition is a fact of life and the education system. Kind of what the US system was more like in the 50's and 60's.
We better learn that lesson ourselves or they will eat our lunch.
If you don't want to look at the data itself here is a recent quote from Greenspan:
“I'm very surprised at the data. But the data themselves are very, very interesting. We show, for example, that if you try to measure the elements of uncertainty in the system, I find that you—there are two ways of doing this. For the business sector, what I tend to do is to look at the share of cash flow that's invested in illiquid assets. The disinclination of business people to take liquid assets and put them into irredeemable long-term assets, even if the rates of return are potentially high, is extraordinarily low at this stage, and indeed, the ratio itself of fixed investment to cash flow from a nonfinancial corporate sector is at the lowest level since 1935.”
Greenspan added that the data show that this “extraordinary expansion” in the deficit is crowding out private-sector investment, a result he said “shocked” him.
“But what it is, if it’s not AAA corporates that are being pushed out or even probably BBB, investment grade, there is major evidence that the extraordinary rise in the deficit is pre-empting the savings that usually fund capital investment,” he said. “But where it is, is it’s heavily concentrated in those areas which pay high interest rates. I mean, to be sure, at 2 percent, you're not going to be stopped by anything.”
Smaller businesses, Greenspan pointed out, would have to pay higher rates. And that has a broad impact.
"For almost each position, the pay is higher today then in the past."
In absolute dollar terms, of course. But inflation-adjusted wages have been declining in this country for many years.
"Yes, it should be more difficult for some to go to college. There should be a hurdle. College degrees should mean something."
I couldn't agree more. But lack of money should not be the hurdle for otherwise qualified students. We should be trying to encourage a meritocracy, not a plutocracy. And there are more than a few mediocre students who have gone on to have successful careers and make significant contributions to society.
"If you don't want to look at the data itself here is a recent quote from Greenspan"
After his performance leading up to the real estate bubble and crash, I regard Greenspan as an economic authority second only to Winnie the Pooh.
But that aside: The "crowding out" argument makes no sense now and maybe never did. Why should corporations invest in increasing their capacity to produce more stuff that they can't sell? So they're looking for a safe place to put their capital, and right now almost the only place that looks safe is treasuries, meager though the return is. It's not a case of the government sucking up capital, but a case of investors wanting to put their money in "the better 'ole," as Keynes said.
The plus side of this, insofar as there is one, is that the US can now borrow money really, really cheaply.
The crowding is not related to large corporations. Job creation is small in small business. Noting that small business include some businesses that might have more than a thousand employees.
The banks are buying treasuries, they are not loaning to small business.
They have no incentive to do so. Regulators want them to build up capital reserves so buy treasuries, the deficit is high so there are plenty available, interest rates are being held low by the fed, so why make long term loans, after all long term interest rates will be higher.
Look at the 10Q's and 10K's of those financial institutions yourself.
If someone is qualified and really wants to go to college there are ways to accomplish it without going up to your eyeballs in debt. I, for example, spent 6 years activeduty Air Force and another 6 in the Air National Guard while going to college. Note I did not say eliminate them. I said make then harder to get and cap the amount that can be borrowed. Tie loan amounts taking into account degree programs and grade performance.
Eliminate the open ended you can pretty much borrow anything that exists today.
To put it another way the most complete study on governmental debt on economic growth is a study done by Reinhart and Rogoff.
From the abstract of their paper:
"At what point does indebtedness become a problem? In our study “Growth in a Time of Debt,” we found relatively little association between public liabilities and growth for debt levels of less than 90 percent of GDP. But burdens above 90 percent are associated with 1 percent lower median growth. Our results are based on a data set of public debt covering 44 countries for up to 200 years. The annual data set incorporates more than 3,700 observations spanning a wide range of political and historical circumstances, legal structures and monetary regimes."
Compare this to the fact about US debt.
As of June 2012, debt held by the public was $11.04 trillion, while the intra-governmental debt was $4.81 trillion, to give a combined total public debt outstanding of $15.85 trillion, roughly 103% of current dollar GDP
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