Economics, what's that?

[Frigidus]

Not spam at all. Hey, what's with that US economy I've been hearing about?

[InkL0sed]

Logically, the recession.

[MeDeFe]

And high oil prices, food is getting expensive, too.

[jay_a2j]

Not spam at all. Hey, what's with that US economy I've been hearing about?

The international bankers are destroying it so they can go forward with their plans for a one world government. <<< That's the truth of the matter.

[Dancing Mustard]

So they're deliberately destroying the economy so that they can come to power over the shittest super-power possible, and immediately be faced by a disgruntled populace and mass civil dissent?

Makes perfect sense...

[tzor]

We are in a recession. People where I live who bought the McMansions barely with their two full time jobs are in trouble as the loans which were sold to them by sharks suddenly becomes ... well what they should have been all along. This is causing all sorts of ripple effects, especially since they were the ones who moved so very far away from the city in the first place and have to comute every day with their gas guzzling mini vans which they have to have because every kid has to go to their own unique event eveyr day of the week.

[Frigidus]

We are in a recession. People where I live who bought the McMansions barely with their two full time jobs are in trouble as the loans which were sold to them by sharks suddenly becomes ... well what they should have been all along. This is causing all sorts of ripple effects, especially since they were the ones who moved so very far away from the city in the first place and have to comute every day with their gas guzzling mini vans which they have to have because every kid has to go to their own unique event eveyr day of the week.

Indeed, people need to exercise fiscal responsibility. And by people I of course mean the whole of the US government. How the shit did our debt get this massive? Pretty soon the entire damn country will be foreclosed.

[Curmudgeonx]

Actaully Tzor, it has everything to to with monetary policy on the macro level, rather then the consumerist mentality of the common man.

Unemployment - reasonably low (4% is considered to be about the best an economy can do)and we are at 5.1% or so
Inflation - even with rising fuel/food costs, still about 4%, a little high, but not unmanageable
Interest rates - prime is low (5%), mortgage are around 5.75% (based on T-bills, not interbank interest rate)

So why is their a perception that our economy is in a recession? because the dollar sucks. How does an country strengthen its currency? Lower its deficits.

Stop the 50 billion monthly drain on an iraqi war, and quit generating such massive deficits, the dollar will strengthen, things (oil/food/imports) will get cheaper. Exporters will suffer, but we have turned into a service economy anyway, and the major industries exporting goods are multi-national anyway, so it really is not an impact as it was in historical terms when America was the factory for the world. Today China and other second world economies are the exporters.

[PLAYER57832]

You cannot continually lay off folks, cut wages to appease stockholders... raise prices ... and still expect folks to have money to buy things.

In this recession and downturn and time of poor business... the divide between the wealthy and the not wealthy (I don't say poor ... we are not truly poor in the US, despite all) is the highest it has ever been.

And, the percetage taxes they pay has never been lower ... though you would never know that listening to most of the news. (the "a bit above middle class" group, to contrast pay a great deal ... the truly wealthy don't).

[suggs]

Logically, the recession.

The USA (as a whole, in terms of national/federal stats) IS NOT IN RECESSION.
Yet anyway. I believed i have bored for Britain before on this, so i'll keep it brief.
The definition of a recession is 2 consecutive quarters of NEGATIVE growth.
You guys haven't had one quarter of negative growth yet.
The Us economy is slowing down, but its still growing - just VERY slowly -so, relatively, it feels shit.

Note: I'm not talking about feelings or expectations - no doubt it is tough times for a lot of people who ARE losing jobs.
Just you're not in a recession.
Get the facts right, and a whole lot of ill informed debate can be skipped

[InkL0sed]

Logically, the recession.

The USA (as a whole, in terms of national/federal stats) IS NOT IN RECESSION.
Yet anyway. I believed i have bored for Britain before on this, so i'll keep it brief.
The definition of a recession is 2 consecutive quarters of NEGATIVE growth.
You guys haven't had one quarter of negative growth yet.
The Us economy is slowing down, but its still growing - just VERY slowly -so, relatively, it feels shit.

Note: I'm not talking about feelings or expectations - no doubt it is tough times for a lot of people who ARE losing jobs.
Just you're not in a recession.
Get the facts right, and a whole lot of ill informed debate can be skipped

We two have talked about this before... I know we're not actually in a recession at the moment, but it's easier to say "recession" than "the soon-to-be recession" or the "sub-prime mortgage crisis."

[jay_a2j]

So they're deliberately destroying the economy so that they can come to power over the shittest super-power possible, and immediately be faced by a disgruntled populace and mass civil dissent?

Makes perfect sense...

Obviously you are not as smart as they are.

[CoffeeCream]

You cannot continually lay off folks, cut wages to appease stockholders... raise prices ... and still expect folks to have money to buy things.

In this recession and downturn and time of poor business... the divide between the wealthy and the not wealthy (I don't say poor ... we are not truly poor in the US, despite all) is the highest it has ever been.

And, the percetage taxes they pay has never been lower ... though you would never know that listening to most of the news. (the "a bit above middle class" group, to contrast pay a great deal ... the truly wealthy don't).

I would like to look at the data supporting that idea. I'm a big believer in raising the minimum wage but the rest of that seems like back-handed socialism. The rich get richer and the poor get poorer. I can't think of a time when we haven't heard this charge leveled during an election year.

[got tonkaed]

i can probably find you the data on the rising income gap within the united states if your interested coffee. Its to the best of my knowledge pretty accessible information. The percentage taxes i would probably have to check, but im pretty sure theres a lot of truth to that. For a long time taxes were as a percentage higher than they are now, especially in the upper income brackets.

[CoffeeCream]

i can probably find you the data on the rising income gap within the united states if your interested coffee. Its to the best of my knowledge pretty accessible information. The percentage taxes i would probably have to check, but im pretty sure theres a lot of truth to that. For a long time taxes were as a percentage higher than they are now, especially in the upper income brackets.

Thanks, I'll look for it myself too. There may be some truth to that but to repeat what I said, I think this charge comes up so many times that after awhile it loses it's power even if it is true.

*edited: never mind, I found some stuff and am reading it right now. It appears that there is a myth about income gap inequality if you refer to percentage of income increase over the last 10 years but it's true if you refer to actual dollars over the last 10 years.

[got tonkaed]

just a quick note on the tax rate issue...while i could probably exert a little more energy, there appears to be something worth note in the first commenter down at the end of this article, discussing tax rates for the top percentile in the late 80s. The person is qualified, so despite the odd medium in which the point is made, there is something to be had. I suppose i could try to find a handy dandy chart, but that may take some time.

http://www.voxeu.org/index.php?q=node/264

its a pretty sizeable amount, and probably like the commenter suggests, has a lot to do with the way in which purchasing power began to shift in the early to mid 90s.

and perhaps a more drawn out history...

Hoover originally raised the top bracket tax rate from 25 percent to 63 percent - to reduce the deficit.
FDR in 1936 raised it to 79 percent (no joke)
during the 40s-50's it appears to peak above 90 percent according to one of the tables in this pdf
LBJ cuts the rate in 1964 back under 80 percent.
Reagan appears to cut it down to around 50 percent in 1980
it then drops to around 29 percent in the mid 80's as previously mentioned
rose to around 40 percent in the 90's
and i think it hovers somewhere in the mid 30s right now, but someone who makes a lot of money would know more about that.
http://web.mit.edu/ipc/publications/pdf/07-002.pdf

theres a lot of history going on there obviously, from the rise in the new deal, to the upward mobility fest in the 50s to the financial shifts in the 70's to the washington consensus in the 80s moving forward. That however, is what the tax rate appears to do for the top bracket in the 20th century. On this pdf i think the 7th figure is what your looking for.

[CoffeeCream]

FDR in 1936 raised it to 79 percent (no joke)
during the 40s-50's it appears to peak above 90 percent according to one of the tables in this pdf

Yikes!

[got tonkaed]

FDR in 1936 raised it to 79 percent (no joke)
during the 40s-50's it appears to peak above 90 percent according to one of the tables in this pdf

Yikes!

I mean theres backhanded socialism...and open handed socialism...But you werent going to pay for the G.I. Bill with nothing.

[CoffeeCream]

FDR in 1936 raised it to 79 percent (no joke)
during the 40s-50's it appears to peak above 90 percent according to one of the tables in this pdf

Yikes!

I mean theres backhanded socialism...and open handed socialism...But you werent going to pay for the G.I. Bill with nothing.

According to what I'm reading the income gap actually closed from 1996 to 2005 by percentage of income. The poorest quintile's incomes rose by just over 90% while the top 10% only rose by about 3%. If you look at the top 1% in the U.S., their incomes actually fell by almost 26%. It also shows that 5% of the people in the bottom quintile back in 1995 had jumped all the way to the top quintile by 2005. That's pretty encouraging!

Now, I can see that if you're in the top bracket and your income jumps only 3% you are still making more than someone who jumps from the bottom quintile and moves into the middle class. But I don't see how that's a bad thing for either the person or for the country, for that matter. Someone who increases their income percentage is still increasing their standard of living. Why do they need to be compared to someone else, anyway? We should be happy that those in the poorest bracket have moved up to the middle class. Also, why is it necessary for everyone to be economically equal?

A final thought for this post. Player made the case that the reason for a income inequality gap, which I disagree with, is due to: layoffs, cutting of wages in order to appease stockholders, and raised prices. Well, I do agree with the raised prices part. The Consumer Price Index backs her up on that. The study you quoted claims that the reason for inequalities are because of skill-biased technical change and international trade. That doesn't gel with why I was originally questioning her post. Why wouldn't companies hire and maintain workers who are more skilled with technical equipment? There's nothing wrong with that. If I were an employer I would want to hire and keep people who knew how to use the equipment instead of people who didn't.

Well, I still think we need to raise the minimum wage because it eventually trickles up pay scales. And yes, I know that people here will criticize me for that saying it drives up inflation.

[got tonkaed]

According to what I'm reading the income gap actually closed from 1996 to 2005 by percentage of income. The poorest quintile's incomes rose by just over 90% while the top 10% only rose by about 3%. If you look at the top 1% in the U.S., their incomes actually fell by almost 26%. It also shows that 5% of the people in the bottom quintile back in 1995 had jumped all the way to the top quintile by 2005. That's pretty encouraging!

I think i dont like the way these statistics present the picture. To me this seems like an approach that ends up showing something that isnt really there. First if you take the tax schedule from 2007 (the 2008 isnt published as far as i can quick search) if you take a family filing the bottom of the 6 brackets cuts off at 11,200. So we say they raise by 90 percent. Being generous (since we probably will need to be...) 90 percent of 11,200 comes out as =10080 bringing us to a total of 21,280. As that bumps us up... we should be paying 1,120 plus 15 percent of anything over 11,200 which is 1512. So it seems we are paying 2632 knocking us back under the 20k mark. The poverty line for the family of 3 in 2008 is 17,600. So i think its pretty fair to say that 90 percent increase, while incredibly helpful, isnt exactly creating fertile conditions for upward mobility.

What does a 3 percent increase in the top 10 percent look like? I cant get a reliable number unless we use 5 percent, so lets use the top 5. census data puts that at 297,405 dollars. 3 percent looks like 8922.15 putting us a little over 300,000 (306,327). Running that through the tax schedule that puts us in the second highest tax bracket giving up 41,810 plus 1/3 of anything over 178,350. Using the same gorilla math as before...70245 and change as the money being taxed. So while 70 thousand dollars out of your bank account probably hurts, theres still 236k in there to cheer you up.

At the end of the day its a far rosier picture with those statistics that it would seem to bear out, given a relatively simple calcuation that admittedly doesnt deal with a lot of the technicalities that arise, but shows i think what the difference actually looks like. The income is also somewhat skewy as it isnt really as important as the share of wealth. While your income is going to be reflective of current economic situations globally, having the larger piece of the pie is what matters. When the tide rises so to speak, you are only going to rise as much as you have a piece of the pie. Given that the share of wealth is really skewed toward the top, when things turn around, they might not really turn around enough for the people hit hardest by the recent down turn.

Now, I can see that if you're in the top bracket and your income jumps only 3% you are still making more than someone who jumps from the bottom quintile and moves into the middle class. But I don't see how that's a bad thing for either the person or for the country, for that matter. Someone who increases their income percentage is still increasing their standard of living. Why do they need to be compared to someone else, anyway? We should be happy that those in the poorest bracket have moved up to the middle class. Also, why is it necessary for everyone to be economically equal?

I think the previous little bit shows that you arent actually upwardly mobile if your in the bottom bracket there. The issue really is that there are some assumptions which arent necessarily true. Someone increasing their income percentage by 90 percent is likely increasing their standard of living, but not by as much as youd think necessarily. Improving from poverty to working poor while important, isnt really finishing much of the american dream, which i think is all most people want (not that many people really are out for income equality). I think the little model shows there are some flaws in your assumptions from there, that i probably dont need to readdress.

A final thought for this post. Player made the case that the reason for a income inequality gap, which I disagree with, is due to: layoffs, cutting of wages in order to appease stockholders, and raised prices. The study you quoted claims that the reason for inequalities are because of skill-biased technical change and international trade. That doesn't gel with why I was originally questioning her post. Why wouldn't companies hire and maintain workers who are more skilled with technical equipment? There's nothing wrong with that. If I were an employer I would want to hire and keep people who knew how to use the equipment instead of people who didn't.

Personally i would fall on the side of the study that i posted as it is most consistent with the majority of information ive ever read or received on the topic. However i will say that the points player bring up exacerbate the issue and probably do contribute in a day to day way with the income gap rising. Im not sure of the original discussion, but i can only comment that in general in america, jobs that require technical skill are disappearing, as a consequence of the service orientation of the newer economy.

Well, I still think we need to raise the minimum wage because it eventually trickles up pay scales. And yes, I know that people here will criticize me for that saying it drives up inflation.

if it makes you feel any better, i think we should raise the minimum wage until it becomes a living wage. But im a hippie, who cant do math.

[borox0]

The bad economy, while not quite in recession, is having repurcussions in other countries as well.

[got tonkaed]

The bad economy, while not quite in recession, is having repurcussions in other countries as well.

with integration the way it is and will continue to be in the future, that is the sort of thing that will go without saying in the near future, if it already isnt.

[Nobunaga]

... The United States owes over 57 TRILLION in liabilities. These are "debts" that absolutely must be paid, including social security benefits to its citizens, veterans' benefits, medicare and medicaid payments.

... This equates to approximately $500,000 per household in the US.

... You guys have that kind of cash? I know I don't. And still Congress is promising to "Do this", and to "Do that" for you, and in an election year they're getting crazy with promises of money, to say nothing of the billions being poured into wars.

... Case in point, the war funding bill (not yet a go) is loaded with tens of billions in domestic programs attached (mostly) by Democratic senators. Now, the bill itself, untouched, is huge. Now pile on so many billions more when we have nothing but debt... It's quite insane.
<first relevant link I could find posted below>

http://ap.google.com/article/ALeqM5hj7b ... AD90QI43O0

... When the uprising begins, give me a gun. I'm in.

...

[Napoleon Ier]

You cannot continually lay off folks, cut wages to appease stockholders... raise prices ... and still expect folks to have money to buy things.

In this recession and downturn and time of poor business... the divide between the wealthy and the not wealthy (I don't say poor ... we are not truly poor in the US, despite all) is the highest it has ever been.

And, the percetage taxes they pay has never been lower ... though you would never know that listening to most of the news. (the "a bit above middle class" group, to contrast pay a great deal ... the truly wealthy don't).

Err...yes, you really can. You see, you cut wages, appeasing stockholders, who have more money, and buy things. Meanwhile, if dissatisfied with their wages, the workers can go provide a service for which there is a higher demand, and hence receive a higher wage. This makes the economy more efficient. Yah?

[suggs]

Logically, the recession.

The USA (as a whole, in terms of national/federal stats) IS NOT IN RECESSION.
Yet anyway. I believed i have bored for Britain before on this, so i'll keep it brief.
The definition of a recession is 2 consecutive quarters of NEGATIVE growth.
You guys haven't had one quarter of negative growth yet.
The Us economy is slowing down, but its still growing - just VERY slowly -so, relatively, it feels shit.

Note: I'm not talking about feelings or expectations - no doubt it is tough times for a lot of people who ARE losing jobs.
Just you're not in a recession.
Get the facts right, and a whole lot of ill informed debate can be skipped

We two have talked about this before... I know we're not actually in a recession at the moment, but it's easier to say "recession" than "the soon-to-be recession" or the "sub-prime mortgage crisis."

Who cares whats easier to say? Its easier to say "WIBBLE" than recession, but it has no bearing on reality.
Anyway, i think "growth slow down" or simply "tough times" covers it.
You are not in a recession, so if you talk about the recession, you are not living in the real world.
Its really quite simple.