Damn Those Bush Tax Cuts ....
- Thread starter ViRedd
- Start date
7xstall
Well-Known Member
actually, that number kind of scares me. i mean, what's it made of??
economics are rather boring and bland to me so maybe i don't "get it" - but i don't see any major progress in our highest-margin markets. i've talked about the subject with a man nominated for the nobel prize in economics but still sat there thinking - what's for lunch?
i guess i need to look at the market more but this is what i see: telecom - negative. hitech - flat. pharma - flat. automotive - negative. retail - flat/neg. the only thing growing is the government and oil. where's all this stock growth coming from?
.
economics are rather boring and bland to me so maybe i don't "get it" - but i don't see any major progress in our highest-margin markets. i've talked about the subject with a man nominated for the nobel prize in economics but still sat there thinking - what's for lunch?
i guess i need to look at the market more but this is what i see: telecom - negative. hitech - flat. pharma - flat. automotive - negative. retail - flat/neg. the only thing growing is the government and oil. where's all this stock growth coming from?
.
iblazethatkush
Well-Known Member
Yeah that doesn't really mean shit, wasn't it at record lows just a few months ago?
ViRedd
New Member
Actually, it was a lot longer than a few months ago. It was during Bush's first term. That was the time when the Left was claiming that it was the "Bush Economy." I haven't heard them talking about the economy for over a year now. *lol*
Oh, and the Left isn't talking about the deficit anymore either since its been cut by two-thirds since the tax cuts.
Hypocrisy is a hypocrisy does.
Vi
Resinman
Well-Known Member
here is another way of looking at the economy,,,since bushes ratings are at near 36%,,,the american public are being told one thing,,,but there pocket book is telling them something else..
Vi Redd there are some micro climates in the states,,,i would say the average joe,,which would be 70% of the USA population are suffering from the bush voodoo economy,,,
this was a article written may 4th 2007
It may come as a shock to many of you, but I too believe that we are experiencing a "Goldilocks" economy. However, unlike most on Wall Street I do not define this as economic growth that is neither too hot nor too cold. I believe the analogy is apt simply because U.S. economic growth is a fairy tale! When such gains are measured against the gains in the price of just about anything people buy, or in just about any foreign currency, it’s a whole different story. For example; measured in euros, U.S. GDP has declined from 11.5 trillion in January of 2000 to 10 trillion today. From a European perspective, the U.S. economy has been in a seven-year recession, with GDP declining by close to 2% per annum.
Also ignored in the rhapsodizing over U.S. GDP growth is the extent to which consumption has been paid for with borrowed money. Since these debts must be repaid with interest, GDP will likely decline even more significantly in the future. Had we borrowed primarily to finance capital investment this would not be the case, as the loans could have been repaid out of increased income. However, as the vast majority of borrowing is simply used to purchase consumer goods, the income needed to repay the debts will have to come at the expense of reduced future consumption.
This week we received new data that illustrates how big of a financial hole U.S. consumers are digging. Despite disappointing sales from major retailers such as Target and Circuit City, first-quarter profits at MasterCard surged 70% to a record $214.9 million following a 19% jump in transactions. I see two possible explanations for this apparent paradox. The first is that despite buying fewer items, consumers were forced to borrow to pay for things that until recently they could afford to pay for in cash. A second possibility is that due to disappearing home equity and tighter lending standards, fewer home owners were able to tap into home equity and were thus forced to use credit cards instead. Since credit card debt carries higher interest rates and is non-tax deductible, it is far more expensive to finance then mortgage debt. Under either possibility, future consumption will suffer as an even greater share of personal income is devoted to making interest and principal payments on items consumed in the past.
Compounding the problem is the fact that job growth is stalling. April’s 88,000 gain in non-farm payrolls is the most anemic in over two years. As falling real estate prices, rising mortgage payments, and tighter lending standards knock the legs out from under American consumers, look for even worse jobs reports in the months ahead. If Americans are struggling to make ends meet now, imagine how much harder it will be without paychecks!
While Americans continue to sacrifice their futures to indulge their present, the rest of the world sacrifices today to build a brighter tomorrow. As a result, the American economy will become increasingly less significant in global affairs. In January of 2000, the U.S. accounted for a staggering 31% of global GDP. While that percentage is still an impressive 28% today, it will likely fall to 20% over the next several years. This will certainly be true if Asian currencies, particularly the yuan, are allowed to rise to more realistic levels. Once the bottom really drops out of the dollar, I expect U.S. GDP to fall below 10% of global GDP. By then the world will surely have realized that the U.S. economy has not been the locomotive of global growth, but rather the caboose. If the actual productive economies decide to decouple the deadweight, the train would actually move much faster.
Vi Redd there are some micro climates in the states,,,i would say the average joe,,which would be 70% of the USA population are suffering from the bush voodoo economy,,,
this was a article written may 4th 2007
It may come as a shock to many of you, but I too believe that we are experiencing a "Goldilocks" economy. However, unlike most on Wall Street I do not define this as economic growth that is neither too hot nor too cold. I believe the analogy is apt simply because U.S. economic growth is a fairy tale! When such gains are measured against the gains in the price of just about anything people buy, or in just about any foreign currency, it’s a whole different story. For example; measured in euros, U.S. GDP has declined from 11.5 trillion in January of 2000 to 10 trillion today. From a European perspective, the U.S. economy has been in a seven-year recession, with GDP declining by close to 2% per annum.
Also ignored in the rhapsodizing over U.S. GDP growth is the extent to which consumption has been paid for with borrowed money. Since these debts must be repaid with interest, GDP will likely decline even more significantly in the future. Had we borrowed primarily to finance capital investment this would not be the case, as the loans could have been repaid out of increased income. However, as the vast majority of borrowing is simply used to purchase consumer goods, the income needed to repay the debts will have to come at the expense of reduced future consumption.
This week we received new data that illustrates how big of a financial hole U.S. consumers are digging. Despite disappointing sales from major retailers such as Target and Circuit City, first-quarter profits at MasterCard surged 70% to a record $214.9 million following a 19% jump in transactions. I see two possible explanations for this apparent paradox. The first is that despite buying fewer items, consumers were forced to borrow to pay for things that until recently they could afford to pay for in cash. A second possibility is that due to disappearing home equity and tighter lending standards, fewer home owners were able to tap into home equity and were thus forced to use credit cards instead. Since credit card debt carries higher interest rates and is non-tax deductible, it is far more expensive to finance then mortgage debt. Under either possibility, future consumption will suffer as an even greater share of personal income is devoted to making interest and principal payments on items consumed in the past.
Compounding the problem is the fact that job growth is stalling. April’s 88,000 gain in non-farm payrolls is the most anemic in over two years. As falling real estate prices, rising mortgage payments, and tighter lending standards knock the legs out from under American consumers, look for even worse jobs reports in the months ahead. If Americans are struggling to make ends meet now, imagine how much harder it will be without paychecks!
While Americans continue to sacrifice their futures to indulge their present, the rest of the world sacrifices today to build a brighter tomorrow. As a result, the American economy will become increasingly less significant in global affairs. In January of 2000, the U.S. accounted for a staggering 31% of global GDP. While that percentage is still an impressive 28% today, it will likely fall to 20% over the next several years. This will certainly be true if Asian currencies, particularly the yuan, are allowed to rise to more realistic levels. Once the bottom really drops out of the dollar, I expect U.S. GDP to fall below 10% of global GDP. By then the world will surely have realized that the U.S. economy has not been the locomotive of global growth, but rather the caboose. If the actual productive economies decide to decouple the deadweight, the train would actually move much faster.
Resinman
Well-Known Member
As the Dow burst through the 13,000 milestone this week, few understood the hollowness of the achievement. Measured against the rising dollar-denominated prices of just about everything else on the planet, the Dow has actually lost value over the past seven years. Measured against the truest benchmark, the price of gold, the record high for the Dow was set back in January of 2000 when its price equaled approximately 43 ounces of gold. Today it is only worth about 19 ounces.
To better appreciate just how much of stock gains can be attributed to inflation, consider that the record high for the Dow in 1929 of approximately 380 also equated to 19 ounces of gold. So despite all of the hoopla and a thirty-fold increase in stock prices, the Dow has actually gained no real value during the past eighty years. The entire rise from 360 to 13000 has been an illusion made possible by the magic of inflation. So much for the concept of stocks being a "can't lose" long term investment -- unless you feel that eighty years is not quite a long enough time horizon!
Now that is not to imply that the Dow has not generated returns during those years: it has. However, those returns have been a function of dividends and not appreciation. But its not yields that Wall Street celebrates, its prices. By dazzling investors with higher prices, they distract their attention from the unpleasant reality that they are actually treading water. What difference does it make if you have more dollars if the dollars themselves have less purchasing power?
Despite its recent eclipse of 13000 the Dow now buys 30% fewer euros than it did then back in 2000 when it was priced at approximately 11500. It also buys 35% fewer gallons of milk, 40% fewer bushels of corn or wheat, 65% fewer ounces of silver, 70% fewer barrels of oil, 80% fewer pounds of copper, and 90% fewer pounds of uranium. Try figuring what the Dow will buy in terms of other necessities, such as housing, insurance, college tuition or hospitalization. Any way you measure it, the Dow is worth far less today then it was in January of 2000.
Back in 1980 one Zimbabwe dollar was worth more than one U.S. dollar. Therefore a billionaire in Zimbabwe was also a billionaire in America. Today, almost everyone in Zimbabwe is a billionaire yet few of them can afford a pack of chewing gum. Do you think that anyone invested in the Zimbabwean stock market these past 30 years cares how many record highs that market has made?
Many might feel that a comparison of the U.S. to Zimbabwe is ridiculous. However, fundamentally there is no real difference between a Zimbabwean dollar and an American dollar. They are both simply pieces of paper, the value of which depends on the resolve of politicians not to print too many of them. During the difficult economic times that lie ahead, the pressure on the Fed to run its printing presses full throttle will be immense.
Think back to the German experience with hyper-inflation during the Weimar Republic. At the time of its currency meltdown, Germany was a major economic power (even after the devastation of the First World War). Yet that status did not prevent its currency from becoming worthless. The impetus for Germany's hyper-inflation was the fact that its industrial base had been badly damaged during the war, yet under the terms of Treaty of Versailles it was obligated to pay enormous reparations to the Allies. Lacking the ability to export enough goods to repay its debts, it resorted to a printing press instead. America is now in a similar predicament. Although our industry was not destroyed by bombs, it's gone just the same. While we might not be bound by a treaty to pay reparations, the trillions of dollars of American IOU's now owned by foreigners will be just as burdensome an obligation. It is hard to image we can "repay" these debts without civil unrest, massive inflation, or both.
The point to remember is that when it comes to records, it is real purchasing power, not nominal value, that counts. Measured by its purchasing power, the Dow has clearly lost value over the past seven years. Those who have remained invested in Dow stocks during that time period are clearly poorer as a result. Those who continue doing so will likely loss even more wealth in the years ahead, regardless of how many more nominal record highs the Dow sets.
To better appreciate just how much of stock gains can be attributed to inflation, consider that the record high for the Dow in 1929 of approximately 380 also equated to 19 ounces of gold. So despite all of the hoopla and a thirty-fold increase in stock prices, the Dow has actually gained no real value during the past eighty years. The entire rise from 360 to 13000 has been an illusion made possible by the magic of inflation. So much for the concept of stocks being a "can't lose" long term investment -- unless you feel that eighty years is not quite a long enough time horizon!
Now that is not to imply that the Dow has not generated returns during those years: it has. However, those returns have been a function of dividends and not appreciation. But its not yields that Wall Street celebrates, its prices. By dazzling investors with higher prices, they distract their attention from the unpleasant reality that they are actually treading water. What difference does it make if you have more dollars if the dollars themselves have less purchasing power?
Despite its recent eclipse of 13000 the Dow now buys 30% fewer euros than it did then back in 2000 when it was priced at approximately 11500. It also buys 35% fewer gallons of milk, 40% fewer bushels of corn or wheat, 65% fewer ounces of silver, 70% fewer barrels of oil, 80% fewer pounds of copper, and 90% fewer pounds of uranium. Try figuring what the Dow will buy in terms of other necessities, such as housing, insurance, college tuition or hospitalization. Any way you measure it, the Dow is worth far less today then it was in January of 2000.
Back in 1980 one Zimbabwe dollar was worth more than one U.S. dollar. Therefore a billionaire in Zimbabwe was also a billionaire in America. Today, almost everyone in Zimbabwe is a billionaire yet few of them can afford a pack of chewing gum. Do you think that anyone invested in the Zimbabwean stock market these past 30 years cares how many record highs that market has made?
Many might feel that a comparison of the U.S. to Zimbabwe is ridiculous. However, fundamentally there is no real difference between a Zimbabwean dollar and an American dollar. They are both simply pieces of paper, the value of which depends on the resolve of politicians not to print too many of them. During the difficult economic times that lie ahead, the pressure on the Fed to run its printing presses full throttle will be immense.
Think back to the German experience with hyper-inflation during the Weimar Republic. At the time of its currency meltdown, Germany was a major economic power (even after the devastation of the First World War). Yet that status did not prevent its currency from becoming worthless. The impetus for Germany's hyper-inflation was the fact that its industrial base had been badly damaged during the war, yet under the terms of Treaty of Versailles it was obligated to pay enormous reparations to the Allies. Lacking the ability to export enough goods to repay its debts, it resorted to a printing press instead. America is now in a similar predicament. Although our industry was not destroyed by bombs, it's gone just the same. While we might not be bound by a treaty to pay reparations, the trillions of dollars of American IOU's now owned by foreigners will be just as burdensome an obligation. It is hard to image we can "repay" these debts without civil unrest, massive inflation, or both.
The point to remember is that when it comes to records, it is real purchasing power, not nominal value, that counts. Measured by its purchasing power, the Dow has clearly lost value over the past seven years. Those who have remained invested in Dow stocks during that time period are clearly poorer as a result. Those who continue doing so will likely loss even more wealth in the years ahead, regardless of how many more nominal record highs the Dow sets.
medicineman
New Member
You're so right about hypocracy, maybe thats because you are a hypocrite. The bush tax cuts only helped the rich and the few thousand individuals that had a large stock portfolio. The rest of us peons got stuck with the tab!Actually, it was a lot longer than a few months ago. It was during Bush's first term. That was the time when the Left was claiming that it was the "Bush Economy." I haven't heard them talking about the economy for over a year now. *lol*
Oh, and the Left isn't talking about the deficit anymore either since its been cut by two-thirds since the tax cuts.
Hypocrisy is a hypocrisy does.
Vi
silk
Well-Known Member
silk
Well-Known Member
Hehehe. I finally agree with you!Actually, it was a lot longer than a few months ago. It was during Bush's first term. That was the time when the Left was claiming that it was the "Bush Economy." I haven't heard them talking about the economy for over a year now. *lol*
Oh, and the Left isn't talking about the deficit anymore either since its been cut by two-thirds since the tax cuts.
Hypocrisy is a hypocrisy does.
Vi
ViRedd
New Member
Resinman ...
That was an EXCELLENT article. Thanks for posting it. You've given me a different perspective on the "worth" of stocks. I knew inflation had an effect on stock prices, but I've never equated the price of stocks with the deflation in the worth of money before. I guess it comes down to paper backed by nothing but air is still paper, weither its paper money or paper stocks.
Also, the part about consumers tapping their home equity to buy depreciating goods is very true. A good friend of mine is an excellent car salesman. He's told me many times about folks who take an equity loan on their home to pay cash for a $60,000 car. The funny part is, they feel all high & mighty because they are paying cash. *lol*
Vi
That was an EXCELLENT article. Thanks for posting it. You've given me a different perspective on the "worth" of stocks. I knew inflation had an effect on stock prices, but I've never equated the price of stocks with the deflation in the worth of money before. I guess it comes down to paper backed by nothing but air is still paper, weither its paper money or paper stocks.
Also, the part about consumers tapping their home equity to buy depreciating goods is very true. A good friend of mine is an excellent car salesman. He's told me many times about folks who take an equity loan on their home to pay cash for a $60,000 car. The funny part is, they feel all high & mighty because they are paying cash. *lol*
Vi
medicineman
New Member
I can't believe you agreed with something that actually makes sense. I thought that was an excellent post myself.
ViRedd
New Member
Well Med ... if you would put down the "hate mask" you might find that we agree on more than you would imagine.
You're stances are confusing. For example, you have a pretty clear understanding of the Federal Reserve and are against it, which is good, IMO. But then on the other hand, you are a proponent of the federal income tax. Have you ever wondered why the two came into existance at the same time?
You take a stand against gun control, which IMO is good, then you turn right around and advocate a larger, more intrusive government. This is the government that has the agencies that are taking the guns away.
You are for wealth redistribution, promote class envy and you're anti-free markets, then you say that you don't side with the socialists.
In other words, you are all over the map politically and that doesn't make any sense. Either you have set principles or you do not. Which is it?
Vi
You're stances are confusing. For example, you have a pretty clear understanding of the Federal Reserve and are against it, which is good, IMO. But then on the other hand, you are a proponent of the federal income tax. Have you ever wondered why the two came into existance at the same time?
You take a stand against gun control, which IMO is good, then you turn right around and advocate a larger, more intrusive government. This is the government that has the agencies that are taking the guns away.
You are for wealth redistribution, promote class envy and you're anti-free markets, then you say that you don't side with the socialists.
In other words, you are all over the map politically and that doesn't make any sense. Either you have set principles or you do not. Which is it?
Vi
medicineman
New Member
Not. I am a reasonable man. If something makes sense to me, I'll accept it regardless of party affiliation. I don't believe in amnesty for 20 million illegals and here's why. I could accept the 20 Million we have but by granting amnesty to them it opens the door to all their relatives to come here free gratis, that is another 100 million. I'd actually rather see the 20 million go back and apply like everyone else, but to blame it on the left is bullshit. It's the rich and the corporations that dont want to lose their gardners, maids and employees that work for 1/2 price and for no benefits. Cheap labor is what is driving amnesty. I do have principles and included in them are a gross dislike of evil people, a hatred of war and a hatred of lying coniving scumbags like the government in power at this time. I remember Richard Nixon and his coniving lying bullshit and this bunch is even worse.
ViRedd
New Member
Well, try to not seperate the left from the right then. I think that's the probem here.
On immigration ... You are correct that the Republicans support open borders to support cheap labor. No doubt about it, Med. BUT ... on the other side, we have the Democrat Party who supports open borders because they see future votes. The Republicans pander to the corporations and the Democrats pander to the illegals using welfare benefits.
On the "rich." I know lots of people who use illegals for household work, yard work and light construction. Most of them aren't rich ... they are just trying to save a buck.
On "evil" and "coniving" people ... Bill and Hillary Clinton are worth, by some estimates, over 50 million dollars. Not bad for people who, with the exception of Hillary's short stint as a corporate lawyer, haven't had a job in the private sector their entire lives.
Again, both parties suck, but the Democrats are the more dangerous of the two.
Vi
On immigration ... You are correct that the Republicans support open borders to support cheap labor. No doubt about it, Med. BUT ... on the other side, we have the Democrat Party who supports open borders because they see future votes. The Republicans pander to the corporations and the Democrats pander to the illegals using welfare benefits.
On the "rich." I know lots of people who use illegals for household work, yard work and light construction. Most of them aren't rich ... they are just trying to save a buck.
On "evil" and "coniving" people ... Bill and Hillary Clinton are worth, by some estimates, over 50 million dollars. Not bad for people who, with the exception of Hillary's short stint as a corporate lawyer, haven't had a job in the private sector their entire lives.
Again, both parties suck, but the Democrats are the more dangerous of the two.
Vi
silk
Well-Known Member
I couldn't agree more.
abudsmoker
Well-Known Member
both parties will have a hidden agenda, just like bush......
"Don't worry daddy i'll get saddam 4 you" you want the troops home get this loser out of the white house.
On the tax cuts i do benifit and i am not rich. but when these cuts wear out were in for a rough ride
"Don't worry daddy i'll get saddam 4 you" you want the troops home get this loser out of the white house.
On the tax cuts i do benifit and i am not rich. but when these cuts wear out were in for a rough ride
medicineman
New Member
Did you catch the part where I said if they were granted amnesty and a path to citizenship they could bring in all their immediate relatives, brothers, sisters, mothers, fathers, grandmothers and grandfathers, that alone would bankrupt the social programs as we know them, plus, 20 million more sucking off my social security benefits. It's a no brainer to me, send them back now. And I see your reasoning about the Democrats, they'll definently raise taxes, they'll have to to pay for G.W.s spending. You can't cut taxes and increase spending, yet that is exactly what this idiot has done. We now owe our soul to the company store....
ViRedd
New Member
Well, here we are again, Med. I agree with you on the illegal alien problems. I'm against amnesty, period. But, on the other hand, if you will check the latest figures, you'll find that the tax cuts have cut the deficit by two-thirds. And I also agree that Bush is no conservative based upon his signing of every spending bill, with the exception of the most recent pork-laden troop funding bill.
Here's an interesting tidbit: Cut federal spending back to its level of 10 years ago, and the entire federal income tax system could be eliminated. I want to be set free ... how about about you, Med?
Vi
Here's an interesting tidbit: Cut federal spending back to its level of 10 years ago, and the entire federal income tax system could be eliminated. I want to be set free ... how about about you, Med?
Vi
silk
Well-Known Member
Actually you can do that and not be an idiot. The most basic way to create wealth from debt in U.S. life is buying a home. The basic idea behind cutting taxes and increasing spending is to produce more growth which creates more revenue. In the case of Bush's administration's strategy, the question is: is the strategy creating more revenue over the mid to long term to offset the cost of debt? Clearly it is not. Personally I wouldn't call what Bush and crew is doing stupid. It's actually brilliant, the issue is: who benefits? Not many! That is actually the problem. By naming Bush as THE problem and discounting him as stupid you only feed the machine, you are just a cog in the soul company store.
