81–90 of 122 posts
It might follow that we might see localized bursting rather than a system-wide meltdown if this "bubble" pops.
Earlier quoted context omitted.
I wonder when we’ll admit wholesale that interest rate and money supply just aren’t very good economic levers in the absence of fiscal policy? Re tax cuts, instead of tax cuts on the middle class, make wage increases tax deductible for corporations. As someone in the middle class, I don’t care what my rate is, I care what the take home is. Reward corporations for passing more money through to employees by lowering th…
Wages are already tax deductible for corporations.
Wage stagnation worries me a lot, specifically because of what it does to aggregate demand.
Earlier quoted context omitted.
The value of my condo has gone up by over 60% in two years. Canada, Toronto especially, is in for some rough times in this housing bubble. The real issue is that the big cities like Toronto are the economic centers of the region. When they pop, everything else will be in trouble too.
The value of your condo going up gives very limited information if there is bubble or not. If you want to figure out what the correct price level is, find statistics that compares price of housing to median income in your area over time. That's the single most important metric determining the correct property valuations. Prices can go up as long as incomes go up. Major cities have higher productivity and prices can g…
The reason? Too much capital, not enough growth to invest in because demand isn't growing. Demand isn't growing because 60% of the population is barely scraping by. How do you increase demand? Roll back the tax cuts to the wealthy who have nowhere to put that money except into speculation and bubbles. Redistribute it back to the working class in the form of tax cuts, credits, higher minimum wage, and social programs.…
Yes there is too much capital, after all the US printed over a trillion dollars to avoid the collapse of the financial industry. None of those banks except for two went bankrupt, which means that now you have an extra trillion dollars that will eventually funnel through the system. Well, look we are nearly a decade later from that moment so that money has gone through the system, aggregated usually with the 1% and th…
[0]https://en.m.wikipedia.org/wiki/Troubled_Asset_Relief_Progra...
Earlier quoted context omitted.
QE3 inflated the things in question, not 'tax cuts to the wealthy'. in fact, taxes have gone up on the richest and that bubble continued to inflate. if you want to make it about politics, (and if this is a bubble of bubbles), it was done under the fed under a liberal president - who claimed credit for its 'success'. when you put funny money in the market, tech booms, paper assets boom and investment in hard industry…
This is factually incorrect. No funny money is put in by QE. QE is an asset swap, treasuries for reserves, and it nets to zero. The goal of QE is to lower the price of money in hopes that people will borrow more but they are not. All of the lending/borrowing aggregates are going sideways and down. The reason that the stock market is up is the expectation that QE will someday work to bring get the economy growing fast…
http://www.thomaspalley.com/docs/articles/macro_policy/quant...
The reason? Too much capital, not enough growth to invest in because demand isn't growing. Demand isn't growing because 60% of the population is barely scraping by. How do you increase demand? Roll back the tax cuts to the wealthy who have nowhere to put that money except into speculation and bubbles. Redistribute it back to the working class in the form of tax cuts, credits, higher minimum wage, and social programs.…
Among the things that people can't afford and really need, the most common ones are healthcare and housing. The problem with giving people more money to stimulate demand for those things is that it only solves half of the problem. Healthcare is limited by the supply of doctors so no matter how much government subsidizes it, the amount of people who can be seen by the constant number of doctors will be the same. In pr…
That's important, true. But that's not the only thing that would increase the amount of healthcare available to people. Dean Baker, for example, makes the important point that we could greatly increase the supply of doctors simply by allowing qualified foreign doctors to be certified in the U.S.[1] Lower class workers in industries like manufacturing have had to compete with foreign workers because of free trade, but upper class workers benefit from extreme protectionism that shuts out foreign competition. Protectionism is also why drug prices are so high; if people were allowed to import drugs from places like Canada, the cost would be substantially cheaper.
[1] http://cepr.net/blogs/beat-the-press/more-of-free-trade-in-d...
The reason? Too much capital, not enough growth to invest in because demand isn't growing. Demand isn't growing because 60% of the population is barely scraping by. How do you increase demand? Roll back the tax cuts to the wealthy who have nowhere to put that money except into speculation and bubbles. Redistribute it back to the working class in the form of tax cuts, credits, higher minimum wage, and social programs.…
Among the things that people can't afford and really need, the most common ones are healthcare and housing. The problem with giving people more money to stimulate demand for those things is that it only solves half of the problem. Healthcare is limited by the supply of doctors so no matter how much government subsidizes it, the amount of people who can be seen by the constant number of doctors will be the same. In pr…
In any field x, you have people who specialize in x and people who specialize in extracting money. It's no surprise where the money ends up. (This is independent of particular mechanisms for extracting money that vary across economic and political systems.)
Earlier quoted context omitted.
US spends significantly more money per capita to healthcare than other countries. US healthcare problem has nothing to do with lack of resources (human or financial resources). US could save money in healthcare while improving it by reorganizing the healthcare. Even wealthy people get worse treatment than they could because the way incentives work. https://www.reddit.com/r/medicine/comments/6addvo/the_wealth...
healthcare sucks a lot more out of the customer in the US than elsewhere in the world, so the fact that the US spends more is combined with healthcare patients spending more money per capita in the US. Having experienced both, I can tell you that I am terrified of having a motorcycle accident in the US. Or breaking a leg.
If pure cold economic calculation would be applied to public policy, it would become clear that healthcare is not just personal issue, good healthcare provides positive externalizes for all. Your neighbors good teeth are not completely unlike investing in a bridge or other public infrastructure.
If someone stays healthy and can work full time 5 years more because he had free healthcare, he pays 5 years more taxes, generates more profits fro employer, and consumes less medical services during his lifetime.
Earlier quoted context omitted.
Wages are already tax deductible for corporations.
yes, I should clarify, offer better deductions. i.e. For every dollar of wage, deduct 2 from the tax bill, or some such. Wage stagnation worries me a lot, specifically because of what it does to aggregate demand.
Earlier quoted context omitted.
I'm not concerned. Auto loans are inherently secured - they just repo your car. And unlike houses, auto prices are not drastically over valued.
So when they repo lots of cars due to a downturn the second hand market will crash. Which means the book value for all cars goes down the toilet.
which isn't that big a deal, because average people aren't buying their cars as investments (or repeatedly refinancing them). your car still gets you to work just fine even if it is worth less than you owe. and that state of affairs would resolve itself in > So when they repo lots of cars due to a downturn the second hand market will crash.
that would only happen if folks could no longer service the debt on their vehicles. the amount of auto loan debt isn't evidence that will happen any time soon.
folks were able to "suddenly" develop problems servicing their mortgage debt because they'd gotten adjustable rate mortgages. adjustable rate loans for automobiles are much less of a thing.
