Thanks Federal Reserve!

[wagner]

I am not super strong in this area of finance, but this seems pretty bad. Have our elected officials and their monetary policy screwed us all?

 

http://www.cnbc.com/id/101062461?__source=yahoo%7Cfinance%7Cheadline%7Cheadline%7Cstory&par=yahoo&doc=101062461%7CThe%20Fed%27s%20%27hidden%20agenda%27

[unfunnyryan]

Have our elected officials and their monetary policy screwed us all?

 

 

for the past 13 years, yeah.

[zeitgeist57]

Yes.

 

^^^That is my response to your original question...typed after the forced tripping of my fiscal-conservative, libertarian circuit breaker.

 

We're fooked.

[Supplicium]

Monies got to go somewhere. Go out and get em. Regardless if they are "worth less"

[2highpsi]

The whole thing was a big Catch 22.

 

Metaphorically speaking....

 

We (the economy) were driving down a mountain road and a semi truck (souring debt, lower revenues, and a dropping market) was about to hit us head on. It would have been certain and immediate death.

 

So we decided to veer right and try out our luck rolling down the cliff. (QE)

 

The problem with that is, once you start rolling down the cliff it's hard to stop. And when you finally get to the bottom you still might be dead anyways.

 

http://25.media.tumblr.com/d3d631c99d68f9fad346d7ccd9c24452/tumblr_mgswoaIX1W1qd7u7yo1_400.gif

[El Karacho1647545492]

This article is complete speculation, generalization and offers no supporting evidence.

 

Author uses the strategy of asking "what if XYZ happened" to imply that XYZ will happen, but because it's a question he doesn't have to support his thesis.

 

EDIT: Not that everyone needs to always be right, but here's another op-ed piece in the WSJ where there's more doomsaying and speculation that we're all going to suffer. Guess what, 4 years after that article was written, we're in a better position than we were prior to the collapse. This recent article is more of him sticking to his guns and not admitting he was wrong.

[Forrest Gump 9]

We still have the most guns out there right?

[Littleguy]

Ben Bernanke is a genius, imo. The world economy would be in the shitter right now if not for his guidance.

[copperhead]

https://en.wikipedia.org/wiki/Balanced_Budget_Amendment

 

We've been underwater since Andrew Jackson was president. The debt was very small until Nixon started tearing down capitalism and turning it into a planned economy, and had to fight off inflation.

 

Clinton claims to have balanced the budget, but he is only able to make that claim because he raided the Social Security fund (which is now on the verge of failing) in order to pull off the fuzzy math it required. Ever since the dot-com bubble popped (before Bush was elected, might I add) the economy has been snowballing towards doom.

 

Now, the Dollar is broken. The national debt is now equal to the national GDP. Congress spent what, 5 years refusing to pass any budget at all? With those kinds of shenanigans going on, there's absolutely no way to pass a balanced budget. Without a balanced budget, there's no way to get out from under this debt.

 

At what point do we declare bankruptcy? I know that if my debt payments alone were more than I was able to bring in, and we are nearly to that point as a nation as that article points out, then I'd have no choice but to declare bankruptcy.

 

As a nation, what do we do when we hit that point? As in, we ignore EVERYTHING else in the budget and only make payments to debt and still miss payments? The credit ratings groups won't let us get away with borrowing to make those payments, our ratings will sink like Greece and Spain, down to the point where our interest rates will soar no matter what bullshit tricks the Fed tries to pull.

 

If we want to avoid this, we need to stop dumping money into the Department of Offense NOW. We need to get people off bullshit disability and off unemployment and off welfare, and get them into jobs NOW. Anything will do so long as they are off the government rolls and doing something productive. We need to stop allowing the federal government to send money to states using hostage situations, such as the DOT giving money to states only if they lower the speed limit, or lower the limit for drunk driving. States should be paying for that shit themselves. If its not involving interstate commerce, the fed needs to GTFO.

 

While we're at it, we should join the World Forum for Harmonization of Vehicle Regulations and eliminate a large portion of the DOT, while also getting better cars.

 

We need to fix all of our broken programs. Social Security has been going down the tubes since I was a kid from being raided to pay for other stupid shit. Healthcare was bad, now is a wreck, and it won't be solved by anyone trying to score political points. It needs a nonpartisan committee full of healthcare and accounting professionals to come up with a plan that actually has a chance.

 

We need to increase revenue. There are easy ways, like mild import tariffs which would also help stimulate US manufacturing. There are hard ways, like fixing the tax code. Make a flat tax. Say good bye to deductions. Make a line in the sand and call it the poverty level, everyone under pays no tax (and also gets no welfare in the form of earned income tax credits). Everyone above pays the same tax rate no matter how much they make. No deductions means no loopholes for the left to whine about, and it heavily discourages people from being baby factories since that no longer earns them more money. If everyone's paycheck has the same percent pulled from it, there's no need for the IRS so eliminate it.

 

I'm sure there's plenty of other things that need to happen, but won't. I'll step off my soapbox now.

[buelliganx1]

https://en.wikipedia.org/wiki/Balanced_Budget_Amendment

 

We've been underwater since Andrew Jackson was president. The debt was very small until Nixon started tearing down capitalism and turning it into a planned economy, and had to fight off inflation.

 

Clinton claims to have balanced the budget, but he is only able to make that claim because he raided the Social Security fund (which is now on the verge of failing) in order to pull off the fuzzy math it required. Ever since the dot-com bubble popped (before Bush was elected, might I add) the economy has been snowballing towards doom.

 

Now, the Dollar is broken. The national debt is now equal to the national GDP. Congress spent what, 5 years refusing to pass any budget at all? With those kinds of shenanigans going on, there's absolutely no way to pass a balanced budget. Without a balanced budget, there's no way to get out from under this debt.

 

At what point do we declare bankruptcy? I know that if my debt payments alone were more than I was able to bring in, and we are nearly to that point as a nation as that article points out, then I'd have no choice but to declare bankruptcy.

 

As a nation, what do we do when we hit that point? As in, we ignore EVERYTHING else in the budget and only make payments to debt and still miss payments? The credit ratings groups won't let us get away with borrowing to make those payments, our ratings will sink like Greece and Spain, down to the point where our interest rates will soar no matter what bullshit tricks the Fed tries to pull.

 

If we want to avoid this, we need to stop dumping money into the Department of Offense NOW. We need to get people off bullshit disability and off unemployment and off welfare, and get them into jobs NOW. Anything will do so long as they are off the government rolls and doing something productive. We need to stop allowing the federal government to send money to states using hostage situations, such as the DOT giving money to states only if they lower the speed limit, or lower the limit for drunk driving. States should be paying for that shit themselves. If its not involving interstate commerce, the fed needs to GTFO.

 

While we're at it, we should join the World Forum for Harmonization of Vehicle Regulations and eliminate a large portion of the DOT, while also getting better cars.

 

We need to fix all of our broken programs. Social Security has been going down the tubes since I was a kid from being raided to pay for other stupid shit. Healthcare was bad, now is a wreck, and it won't be solved by anyone trying to score political points. It needs a nonpartisan committee full of healthcare and accounting professionals to come up with a plan that actually has a chance.

 

We need to increase revenue. There are easy ways, like mild import tariffs which would also help stimulate US manufacturing. There are hard ways, like fixing the tax code. Make a flat tax. Say good bye to deductions. Make a line in the sand and call it the poverty level, everyone under pays no tax (and also gets no welfare in the form of earned income tax credits). Everyone above pays the same tax rate no matter how much they make. No deductions means no loopholes for the left to whine about, and it heavily discourages people from being baby factories since that no longer earns them more money. If everyone's paycheck has the same percent pulled from it, there's no need for the IRS so eliminate it.

 

I'm sure there's plenty of other things that need to happen, but won't. I'll step off my soapbox now.

 

I like your ideas but what are you going to do with all these unemployed IRS and DOT employee's now that you have downsized or eliminated them. They have no idea how to be really productive at a job.

[copperhead]

I like your ideas but what are you going to do with all these unemployed IRS and DOT employee's now that you have downsized or eliminated them. They have no idea how to be really productive at a job.

 

To be fair, most of the people in the DOT that would be affected would be in the NHTSA. I'm guessing there's not that many people employed there to begin with, but they could easily find work with auto manufacturers or the World Forum for Harmonization of Vehicle Regulations, or even insurance companies.

 

IRS employees would be valuable to banks and payroll/bookkeeping departments of businesses. They would still do investigations to make sure nobody is cooking the books, just wouldn't need the people involved in yearly tax returns which I imagine are of lower skill and pay anyway.

 

The underlying problem is that the private sector needs to really get moving. During the great recession, all of the money out there didn't just disappear. It's still out there, just being held much more tightly than before. My belief is that a lot of the reason why it's not moving around is that there is far too much uncertainty for anyone to allow much risk. If the gov would step up with a certain, mid to long term tax and budget plan then companies could make more accurate projections of expenses. With that in mind, they would be able to figure out how much they can spend and how much they can risk on growing. With all of the constant fighting and threats of tax raises, they are simply too scared to budge.

[El Karacho1647545492]

https://en.wikipedia.org/wiki/Balanced_Budget_Amendment

 

We've been underwater since Andrew Jackson was president. The debt was very small until Nixon started tearing down capitalism and turning it into a planned economy, and had to fight off inflation.

 

Clinton claims to have balanced the budget, but he is only able to make that claim because he raided the Social Security fund (which is now on the verge of failing) in order to pull off the fuzzy math it required. Ever since the dot-com bubble popped (before Bush was elected, might I add) the economy has been snowballing towards doom.

 

Now, the Dollar is broken. The national debt is now equal to the national GDP. Congress spent what, 5 years refusing to pass any budget at all? With those kinds of shenanigans going on, there's absolutely no way to pass a balanced budget. Without a balanced budget, there's no way to get out from under this debt.

 

At what point do we declare bankruptcy? I know that if my debt payments alone were more than I was able to bring in, and we are nearly to that point as a nation as that article points out, then I'd have no choice but to declare bankruptcy.

 

As a nation, what do we do when we hit that point? As in, we ignore EVERYTHING else in the budget and only make payments to debt and still miss payments? The credit ratings groups won't let us get away with borrowing to make those payments, our ratings will sink like Greece and Spain, down to the point where our interest rates will soar no matter what bullshit tricks the Fed tries to pull.

 

If we want to avoid this, we need to stop dumping money into the Department of Offense NOW. We need to get people off bullshit disability and off unemployment and off welfare, and get them into jobs NOW. Anything will do so long as they are off the government rolls and doing something productive. We need to stop allowing the federal government to send money to states using hostage situations, such as the DOT giving money to states only if they lower the speed limit, or lower the limit for drunk driving. States should be paying for that shit themselves. If its not involving interstate commerce, the fed needs to GTFO.

 

While we're at it, we should join the World Forum for Harmonization of Vehicle Regulations and eliminate a large portion of the DOT, while also getting better cars.

 

We need to fix all of our broken programs. Social Security has been going down the tubes since I was a kid from being raided to pay for other stupid shit. Healthcare was bad, now is a wreck, and it won't be solved by anyone trying to score political points. It needs a nonpartisan committee full of healthcare and accounting professionals to come up with a plan that actually has a chance.

 

We need to increase revenue. There are easy ways, like mild import tariffs which would also help stimulate US manufacturing. There are hard ways, like fixing the tax code. Make a flat tax. Say good bye to deductions. Make a line in the sand and call it the poverty level, everyone under pays no tax (and also gets no welfare in the form of earned income tax credits). Everyone above pays the same tax rate no matter how much they make. No deductions means no loopholes for the left to whine about, and it heavily discourages people from being baby factories since that no longer earns them more money. If everyone's paycheck has the same percent pulled from it, there's no need for the IRS so eliminate it.

 

I'm sure there's plenty of other things that need to happen, but won't. I'll step off my soapbox now.

 

Maybe you and I are not as ideologically dissimilar as I once thought. I disagree with some things, but agree with many.

 

The only thing you left out is tearing down the ridiculous corporate tax structure. Corporate personhood needs to end as well, but you mentioned closing loopholes and IMO the first step towards that is dealing with companies, not individuals.

[copperhead]

Maybe you and I are not as ideologically dissimilar as I once thought. I disagree with some things, but . agree with many.

 

The only thing you left out is tearing down the ridiculous corporate tax structure. Corporate personhood needs to end as well, but you mentioned closing loopholes and IMO the first step towards that is dealing with companies, not individuals.

 

I don't know enough about the corporate tax world to feel comfortable commenting on it, but I feel that eliminating deductions would probably go a long way here as well.

 

Maybe we could also outlaw nationally the practice of lowered or no taxes as incentives for companies to build in particular places.

[Orion]

Listening to Caxide and Mike discuss national monetary policy makes me feel like a proud uncle. No joke.

[El Karacho1647545492]

I don't know enough about the corporate tax world to feel comfortable commenting on it, but I feel that eliminating deductions would probably go a long way here as well.

 

Maybe we could also outlaw nationally the practice of lowered or no taxes as incentives for companies to build in particular places.

 

Basically for large corporations, the tax rate is 35%. Many use ridiculous accounting practices and loopholes to pay closer to 12%, or even less in some cases. The "we do so much good for the community/country already, we shouldn't have to pay tax" argument is ridiculous.

 

So yes, your idea that deductions need to be eliminated is spot on. Lower the rate, and eliminate bureaucracy and loopholes, and we'll be in a better position.

[greg1647545532]

The numbers seem a bit hinky. For starters, he's using a 2020 projection 16.6 trillion, deriving from that an interest payment based upon a hypothetical interest rate, and then using the 2012 federal income tax payment to show a scary 85%.

 

But in 2020 federal income tax receipts won't be 1.1 trillion like they were last year (per the article, assuming that's accurate). It will be like 1.5 trillion based on inflation alone, meaning his big scary percentage is already down to 62%. And that's assuming the economy stays flat and taxes don't increase. If the GDP continues to grow at the rate it has been the last couple of years, it'd be down to 52%. Which is indeed higher than the 24% we pay now, but again, I'd like to point out that his interest rate (average of last 20 years) is chosen completely arbitrarily.

 

Furthermore, he's talking about personal income taxes, which excludes payroll taxes and corporate income taxes, along with other forms of revenue. Is there any logical reason to only focus on personal income taxes for this comparison? I can't think of any, except to elicit a response. Given that he's made the rather boneheaded move of comparing 2020 expense to 2012 income, I'd say the author has a pretty obvious motive here.

[El Karacho1647545492]

The numbers seem a bit hinky. For starters, he's using a 2020 projection 16.6 trillion, deriving from that an interest payment based upon a hypothetical interest rate, and then using the 2012 federal income tax payment to show a scary 85%.

 

But in 2020 federal income tax receipts won't be 1.1 trillion like they were last year (per the article, assuming that's accurate). It will be like 1.5 trillion based on inflation alone, meaning his big scary percentage is already down to 62%. And that's assuming the economy stays flat and taxes don't increase. If the GDP continues to grow at the rate it has been the last couple of years, it'd be down to 52%. Which is indeed higher than the 24% we pay now, but again, I'd like to point out that his interest rate (average of last 20 years) is chosen completely arbitrarily.

 

Furthermore, he's talking about personal income taxes, which excludes payroll taxes and corporate income taxes, along with other forms of revenue. Is there any logical reason to only focus on personal income taxes for this comparison? I can't think of any, except to elicit a response. Given that he's made the rather boneheaded move of comparing 2020 expense to 2012 income, I'd say the author has a pretty obvious motive here.

 

GET OUTTA HERE WITH YOUR LOGIC

 

if I could rep you, I would

[Littleguy]

I feel like when people like the guy who wrote the article can't understand something as complex as the world economy they just assume there must be a conspiracy....instead of considering if their limited intellects are the problem.

[buelliganx1]

I've got a quick question and please forgive me if it's completely ignorant because my understanding of corporate taxes/personal taxes is one step above Shreks ability to understand why Donkey can't shut up. But Karacho's comment of the "we do enough good for the community why should we pay such high taxes" got me thinking.

If I work for a company that is hopefully paying me out of profits and not subsidies wouldn't I rather either they pay taxes on the profits and I pay no taxes or I pay taxes but have a higher net pay because the company didn't pay taxes as opposed to them paying taxes on profits and then me paying taxes on earnings? I'm sure this is way over simplified since I'm just a dumb ass aircraft mechanic. But it seems like the government is making out like a bandit here.

It seems like if a company sells a product for $10 they are taxed for whatever their net profit is, then when I as an employee get my cut off that $10 it's taxed again not to mention the tax paid by the consumer when they purchase the product. It's actually mind boggling that the government could possibly be running low on money given how much they have coming in.

[copperhead]

Pretty much any time money changes hands it is suppose to be taxed. Gifts under a certain amount and charitable contributions are pretty much the only exceptions that I can think of. The death tax comes and goes.

[copperhead]

You know, attitude change comes from the top and trickles down. Every good manager knows that, and every bad manager has a truckload of pissed off employees.

 

The Fed has been running in panic mode since the 2008 crash. They were hinting that they were going to pull out of it, but then said they are sticking with panic mode until further notified. This is another example of attitude trickling down. Their panic is causing business to panic. Business that panics has spending and hiring freezes.

 

I predict more huge businesses with ancient business models are going to start crashing more and more, and they will be replaced by future Amazons and Googles. My company is one of them, been around since the turn of the century and is just now trying to update their business model, and in the meantime they are running a firesale on all of their failing departments. Hence my thread about looking into going back to school.

 

Listening to Caxide and Mike discuss national monetary policy makes me feel like a proud uncle. No joke.

 

I'm not going to sit on your lap, stop asking.