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dwb
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That Forbes article says the median net worth of people over 55 is 179,400, and the median net worth 65+ is $206,700. Why on earth would you exclude home equity in assets? If my home is paid off, as it should be at 65, I can live on significantly less and don't need other financial assets. The census and Fed consumer survey data contradicts your claim. It says that people over 55 have significant net worth and control most household assets. People over 65 have a mean value of interest earning assets and stocks/bonds of nearly 2 mil. People 55-64 have half that, and younger people even less. Since the census data contradicts your claim, the burden of proof is on you to show the data is flawed. By the way, who exactly are these puppeteers controlling your vote and your mind in the voting booth?
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yes, a wealth of information from the census that shows that 50+ age group owns 75% of assets, as one would expect from simple demographics.
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Domhoff has not "shown" anything. It's a story. Disprove me, show me the age demographic.
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you are confusing wealth and income. I checked the census data and 50+ year olds have significantly higher net worth and asset ownership. The graph shows *wealth*. Simple demographics explains most of this.
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well, people over 50 own about 75% of financial assets, and they are about 15-20% of the population. Not evil, just normal per the lifecycle model of savings.
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The progressives passed laws in CA, NY, MD, and other states that were very unfriendly to gun rights, and the only "message" - an empirical fact - is that they do not intend to stop with the measures passed in CO. Moreover, voters know that the homicide rate in CO, and Denver, is lower than in NYC or in Oakland. People are not willing to give up rights unless there is a real benefit, and there is NO empirical benefit. Stop and frisk, gun restrictions, they have little to no impact on public safety. People know it, so why should they have to choose or give up something for no benefit?
they could try to directly monetize some govt debt, kill two birds with one stone.
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which one of those four animals in the photo is the invasive species?
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indeed, I left out a lot of examples. WWI and WWI were also partly financed through seigniorage, er, i mean inflation. besides redistribution, tax + debt finance is the only way to be sure that govt spending does not exceed the productive capacity of the economy.
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"If you follow Ip's analysis through to its logical conclusion, then why should the Treasury issue debt at all? " Presumably because of the redistributive consequences. Under "normal" circumstances when issuing a coin is inflationary, then an inflation tax would have undesirable redistributive consequences as compared to debt (which imply future taxation). Low inflation + taxes => the government is trying to engineer a redistribution that would not happen through inflation alone, or at least a redistribution that is hampered by inflation. If we dropped this illusion that Social Security is "funded" (current workers pay the benefits of current retirees) then what would dropping payroll taxes and funding entitlement programs through seigniorage look like? What if we dropped all taxes except a sales tax equal to inflation and used the revenue to redistribute income? interesting topics. oh, and the USA *has* resorted to seigniorage to pay debts... the revolutionary war was paid through seigniorage.
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no, there is another factor which i have direct experience with: taxes. Take the example of friend A, who works at a small start-up service based business. Friend A works very hard and travels a lot to build the business. When the time comes to get paid, the company, which would rather plow cash back into the business, defers the "bonus" and instead pays her in securities with a very low tax basis, whose gains will eventually be taxed at capital gains or dividend rates. There are many ways tax-avoidance scholars can effectively game the tax code to pay compensation as dividends and capital gains to lower the tax bill (any wonder "compensation share" dropped precipitously after the Bush tax cuts on dividends etc.). If I start a consulting company, I can reclassify my wages as "revenues," deduct all sorts of things (and avoid a bunch of payroll taxes) and then dividend out some of the "profits" after a suitable amount of time. Small businesses account for a significant fraction of gdp in the US, most are service based with little capital, and if you look into it you will find a lot of entrepreneurs getting "compensated" for their hard work in tax-favorable ways.
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I dunno about "pent-up" inflation. Inflation is not like steam where pressure builds up. Ultimately, any price level increase will be proportional to the amount of debt monetized - assuming they are at full employment. But I suspect not despite the official statistics and (real) wage rigidity and initial disbelief in any new target will reduce the impact of debt monetezation on inflation. If anything is pent up, its the frustration that the "bitter lessons learned from the long economic and financial history in Japan" is that deflation stinks and the BOJ has not learned this lesson, so they deserve to be threatened with loss of independence. An authority as powerful as the central bank deserves political and democratic accountability, in a democracy, regardless of what some 1980s models that justify independence say. Ultimately, adoption of a 2-3% inflation target with a commensurate kick-start through some debt monetezation would probably not result in "pent-up" inflation, just 2-3% inflation consistent with target. If the floodgates open, its because the politicians let them open, not because the laws of macro-economics dictate it. But Japan has such a cautious culture that I doubt this would happen. Not only do I think they will revise the target and increase stimulus, but I hope it does, to show the developed world how to escape a liquidity trap (which Sumner and Friedman would just argue is a bad-policy trap).
Toggle Commented Nov 27, 2012 on Meanwhile, in Japan... at Tim Duy's Fed Watch
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Are these the same guys who thought Romney was going to win by a landslide? I would say this fits the definition of cognitive dissonance, except that these hawks don't seem to be confronted by at any reality whatsoever.
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"feels more like a continuation of the slow and steady pace of the past two years. " the difference being that this time around we have open ended monetary policy with active discussions about holding steady until unemployment is below 7% or so, the state and local fiscal crunch is receding, while the housing market is showing signs of life. This should mean that monetary policy has significantly more traction than in the last few years. As for the end of year fiscal cliff, its a tempest in a teapot. just like last years debt ceiling brinkmanship, politicians are not going strangle their constituencies. They may wait until jan when the new house is sworn in and make the law retroactive, but one thing you can count on in DC is some goodie bags to reward people who helped with the election.
Toggle Commented Nov 2, 2012 on A Solid Report at Tim Duy's Fed Watch
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Bullard is also ignoring the well-established term premium and tax issues in TIPS that the Cleveland Fed Series attempts to adjust for with their regression. Honestly, let him cry wolf repeatedly as far as i am concerned. Lets get him a Bloomberg interview alongside Peter Schiff. The more times he repeats it the better - and the less likely people are to listen when he speaks the next time since the aforementioned hyperinflation has not materialized.
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well, high inflation is the same as high taxes. I think all this tells me is the obvious - taxes have to be raised in some form and if there is no political will to raise direct taxes then the govt resorts to inflation. Probably the good combination is low inflation *and a surplus* with the economy at full employment. The only time i recall having that in the US is the late 90s.
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"And one wonders if he would have made it back full circle without the persistent critiques of the certain elements of the blogging community to push him along." well, Sumner certainly deserves credit. But so does Tim Duy! Its ok to pat yourself on the back from time to time.
Toggle Commented Sep 17, 2012 on Now We Wait at Tim Duy's Fed Watch
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"Any other theory?" Fed policy is endogenous: the Fed sets a 2% goal, with no make-up. expectations matter, Fed policy - implicit or not - gets baked into business plans, because when one is doing a budget, one just knows the central bank will shoot for 2% inflation.
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my favorite line: Mitt Romney is not pro-choice, hes not anti-choice, hes multiple-choice. hes the quantum candidate whos position changes every time you try to measure it.
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and the costs are what?? after 2+Tn of QE and zero rates, show me.
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^^ "(but now, sell forward, etc). Please can can do sell forward" ugh: should be "(buy now, sell forward, etc). People can amd do sell forward"
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I think that you hit the idea a while back with transaction costs and risk shifting. As Bob Smith and others have noted, there a variety of "transaction costs" including tax, accounting, and bankruptcy-related issues. Yes, a repo is equivalent to a set of transactions (but now, sell forward, etc). Please can and do sell bonds forward. However the point you are still missing I think is that each bond is idiosyncratic. there are reasons one might need a *very specific bond* to hedge some risk. The demand for a very specific bond may be greater than supply, hence the need to create essentially a derivative transaction (a repo).
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in economic terms, a rising population means what while the opportunity cost is low now, its increasing. the real rate of interest is negative as the housing stock depreciates, but its also increasing and will eventually be positive. regardless of what happens outside the US, its a question of when, not if, the housing market rebounds (and i am using "housing" in the broad sense not just owner occupied).
Toggle Commented Aug 8, 2012 on US Baseline at Tim Duy's Fed Watch
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"It's difficult to buy a home if you don't have a job or two." ok, hang on there, i think you are conflating some issues. there are factors that affect price, and factors that affect demand (Q). Who says everybody wants to buy? If people want to move to assisted living facilities en masse, they need to be built first, which means new construction. The relative price of homes to assisted living facilities will go down. There are enough people to fill the homes, if the price is zero. People do not need to buy, they can rent and/or move in with roommates. my point is that "housing demand" is not merely single family owner occupied: its rentals, assisted living facilities, trailers, vacation homes etc. there will be plenty of demand at some price, and there will be new housing built because the population is growing 2MM per year (which means 1 MM households) and i forecast that at some point people get tired of elbowing each other and hormones take over (opportunity cost!). Now, at what price owner-occupied housing gets built is a function of substitutes.
Toggle Commented Aug 8, 2012 on US Baseline at Tim Duy's Fed Watch
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"Pleny of negatives exist - tighter underwriting standards, shadow inventory, and sustained lower home ownership rates. " I doubt home ownership rates will return to the 2006 high soon. In my mind its not home ownership rates and shadow inventory its demographics and vacancy rates (because demographics drive demand for total housing = rentals + owner occupied) that drive demand. Shadow inventory speaks to prices, but those folks have to move out and live somewhere. Construction jobs can be channeled to either rentals or owner occupied. USA mints about about 2 MM 20+ yr olds every year, that's ~1 MM households which will eventually either need to rent or buy. Of course, they need jobs before they can move out of Ma's basement. Housing has been depressed for so long, and its demographics that eventually drive it, so i am less bearish than you, i tend to think that external factors will not harm the housing recovery much. Although i do doubt that the "housing" recovery will look much like the past: likely more rental construction.
Toggle Commented Aug 8, 2012 on US Baseline at Tim Duy's Fed Watch
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