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WILDJOKER5
07-29-2014, 06:25 PM
If we are losing a third of our net worth over the last decade, then why is there still inflation going on? Thats because the federal reserve and big government requires it. This recession and dismal economic growth is brought to us by the federal reserve dragging out the same poor programs that have been proven to wreek havoc on an economy since the great depression. End the FED and bring a free market to the US as the founders wanted.

http://www.foxnews.com/politics/2014/07/28/median-american-household-lost-third-its-wealth-in-last-10-years/?intcmp=latestnews

http://theeconomiccollapseblog.com/archives/11-reasons-why-the-federal-reserve-is-bad

Measure Man
07-29-2014, 07:06 PM
If we are losing a third of our net worth over the last decade, then why is there still inflation going on?

The rich are getting richer, the rest of us are getting poorer.


Thats because the federal reserve and big government requires it.

That is true to a certain extent.


This recession and dismal economic growth is brought to us by the federal reserve dragging out the same poor programs that have been proven to wreek havoc on an economy since the great depression.

This I'm not convinced of.


End the FED and bring a free market to the US as the founders wanted.

http://www.foxnews.com/politics/2014/07/28/median-american-household-lost-third-its-wealth-in-last-10-years/?intcmp=latestnews

http://theeconomiccollapseblog.com/archives/11-reasons-why-the-federal-reserve-is-bad

sandsjames
07-29-2014, 07:08 PM
The rich are getting richer, the rest of us are getting poorer.

I'm not getting any poorer.

Measure Man
07-29-2014, 07:14 PM
I'm not getting any poorer.

Okay, me neither, personally...you and I as individuals are "changing station"...likely the person at our station 10 years ago was richer than we are...or at least we know the median person was from the median person today...if we are to take the attached articles as true and accurate.

Maybe not a particular person...but whoever the median person at the time is, is poorer than the median person 10 years ago.

If you are, say, 65th percentile...my guess is the 65th percentile person 10 years ago was doing better, but 10 years ago you personally may have been the 40th percentile. As the article only indicates the top 10 percent are doing as well or better.

WILDJOKER5
07-29-2014, 07:21 PM
The rich are getting richer, the rest of us are getting poorer.You think they left the rich out of the equation? How much poorer can the poor get when they already hit Zero? Or are you saying there are more poor? Either way, thank a tax and spend big government person for the poor or middle class becoming poorer. Any tax or fee or regulation or added expense on any business will always be paid by the consumer. Obama even said that his plan is for everyones energy costs to skyrocket. Honestly, you dont really disagree with me either, its just a nice little catch phrase you throw out for some reason.


That is true to a certain extent. Not at all. If the poor are becoming poorer, then why does everything have to cost more because the government requires it? Oh, thats right, to enslave the citizens in debt and make them dependent on the government handouts because what they used to be able to afford is no longer affordable thanks to government regulations and inflation or devaluing of the monatary system. Without the FED, there was an equal balance between income and cost of living.


This I'm not convinced of.
So every recession or depression since the creation of the FED or any other central bank lasting longer than when there wasnt a central bank to socialize the failure doesnt convince you? Well, your belief system is stronger than most Christians.

WILDJOKER5
07-29-2014, 07:23 PM
I'm not getting any poorer.

So your pay has risen at the same rate as inflation to include gas and food? Very few people have, but good on you to have been able to afford the same amount today as you did last year with same amount of money if you havent been given a 10% raise.

sandsjames
07-29-2014, 07:25 PM
Okay, me neither, personally...you and I as individuals are "changing station"...likely the person at our station 10 years ago was richer than we are...or at least we know the median person was from the median person today...if we are to take the attached articles as true and accurate.

Maybe not a particular person...but whoever the median person at the time is, is poorer than the median person 10 years ago.

If you are, say, 65th percentile...my guess is the 65th percentile person 10 years ago was doing better, but 10 years ago you personally may have been the 40th percentile. As the article only indicates the top 10 percent are doing as well or better.

So what your saying is that the person who stays stagnant isn't any better off than they were 10 years ago, right? Should they be? That's part of advancement. We all fall victim to the consequences of our choices and if that choice is to stay in the exact same position (which is fine) and expect to keep up with inflation then someone is being misled.

sandsjames
07-29-2014, 07:27 PM
So your pay has risen at the same rate as inflation to include gas and food? Very few people have, but good on you to have been able to afford the same amount today as you did last year with same amount of money if you havent been given a 10% raise.I'm not going to claim I crunch the numbers. I will say that when we grocery shop we're able to buy all the things we bought before. We go out to the movies or other entertainment venues just as much as we used to. I don't budget but I know that after the bills are paid and the groceries are bought we are able to do just as much as we ever have.

Measure Man
07-29-2014, 07:34 PM
You think they left the rich out of the equation?

What equation?

The article you posted states that the top 10% have fully recovered.


How much poorer can the poor get when they already hit Zero?

Are you saying anyting over zero and you're not poor? Not sure what you mean by this.


Or are you saying there are more poor?

I'm not saying that...though that could be one explanation for the median net worth to be less, couldn't it?


Either way, thank a tax and spend big government person for the poor or middle class becoming poorer. Any tax or fee or regulation or added expense on any business will always be paid by the consumer.

That's simply not true. If this were the case...all products/services would alway have the same profit margin.

Why do you think some products have 500% margins, while others have 10%?

It is a fallacy that added costs to producing a product add directly to the consumer cost of the product...the product is priced at what the market will bear. If that creates a 500% profit, so be it...if a regulation imposed reduces that profit to 450%, there is no reason the company should raise it's price...if it could still achieve optimal sales at the higher price, they would have already raised it to that.


Obama even said that his plan is for everyones energy costs to skyrocket.

Separate issue...this was his energy policy, to get people off of fossil fuels, not economic policy.


Honestly, you dont really disagree with me either, its just a nice little catch phrase you throw out for some reason.

Just stating what the article you posted says.


Not at all. If the poor are becoming poorer, then why does everything have to cost more because the government requires it?

In economic theory...if prices are going up and continue to go up...this spurs economic activity, as people will tend to buy things before prices go up futher.

If we have deflation, and prices are going down...people will tend not to buy, waiting for the price to futher decrease.


Oh, thats right, to enslave the citizens in debt and make them dependent on the government handouts because what they used to be able to afford is no longer affordable thanks to government regulations and inflation or devaluing of the monatary system. Without the FED, there was an equal balance between income and cost of living.

So every recession or depression since the creation of the FED or any other central bank lasting longer than when there wasnt a central bank to socialize the failure doesnt convince you? Well, your belief system is stronger than most Christians.

So...there were no recessions or depression prior to existence of the FED?

WILDJOKER5
07-29-2014, 07:37 PM
So what your saying is that the person who stays stagnant isn't any better off than they were 10 years ago, right? Should they be? That's part of advancement. We all fall victim to the consequences of our choices and if that choice is to stay in the exact same position (which is fine) and expect to keep up with inflation then someone is being misled.

But that also means those just starting off are in a worse place than when you started and should take them longer to get where you are today. If I am an E-5 today living comfortably and really dont want to be promoted, my quality of life shouldnt have to suffer because I am not climbing the ranks.

Measure Man
07-29-2014, 07:42 PM
So what your saying is that the person who stays stagnant isn't any better off than they were 10 years ago, right?

No, what I'm saying is a person who stays stagnant is worse off than they were 10 years ago.


Should they be?

No, they should be the same...hence the term, stagnant. Well, yes, better would be nice...would be a positive indicator for our growth as a country.


That's part of advancement.

I would agree that as a person goes through life, gets older/wiser..they should normally advance.


We all fall victim to the consequences of our choices and if that choice is to stay in the exact same position (which is fine) and expect to keep up with inflation then someone is being misled.

If you remain in the same "station of life"...then, ideally your salary and benefits would at least keep up with inflation.

I don't know if it's good or bad for the person to "expect" that...but as a country, I think it's not a good thing that the same relative person is doing worse today than he was 10 years ago.

sandsjames
07-29-2014, 07:47 PM
But that also means those just starting off are in a worse place than when you started and should take them longer to get where you are today. If I am an E-5 today living comfortably and really dont want to be promoted, my quality of life shouldnt have to suffer because I am not climbing the ranks.Sure...you should have the quality of life of an E5.

If people make more, they spend more. If they make less, they spend less. It's not very complicated. On paper is there a difference? Sure. But in reality? Not much, if any.

The fact that the price of a grocery trip every two weeks might cost an extra $12 over what it did for the same items a year ago isn't that big of a grind. As far as gas goes, I pay less for that now then I did last year at the same time. Everything else I do is pretty much an option of whether or not I choose to do it. I can make up the difference in that grocery bill by avoiding a fast food restaurant once a month.

I'm not really sure what your suggestion would be to avoid inflation. Raise wages with prices? Don't raise either? If everything stays equal then there really isn't a reason to try to improve.

Inflation is just another word used in politics to keep people scared.

Measure Man
07-29-2014, 07:51 PM
Inflation is just another word used in politics to keep people scared.

Deflation is worse.

Imagine investing a lot of money to build a factory/grow a crop/open a store...and by the time you get done prices have dropped to level that you can't recover your investment.

This is why the govt. wants inflation...it encourages economic activity. Of course TOO MUCH inflation can be bad...but don't think we're experiencing that now...look at interest rates.

sandsjames
07-29-2014, 07:56 PM
No, what I'm saying is a person who stays stagnant is worse off than they were 10 years ago. Get rid of the $200 a month cell phone bill and I'm sure they'd be doing just fine.



No, they should be the same...hence the term, stagnant. Well, yes, better would be nice...would be a positive indicator for our growth as a country. Can't happen long term. It's just not possible. Wages will always lag inflation. Then they will catch up eventually.



If you remain in the same "station of life"...then, ideally your salary and benefits would at least keep up with inflation. Impossible. Businesses want to increase their profits. If they give pay raises in step with inflation then they themselves are actually "losing" money as it relates to rising prices. This means they can't employ as many or pay as much.


I don't know if it's good or bad for the person to "expect" that...but as a country, I think it's not a good thing that the same relative person is doing worse today than he was 10 years ago.Honestly I don't know anybody in the same position today that is doing worse. I really don't. My entire family is still doing the same things they were doing and the impact is minimal, at worst. Are we all still living paycheck to paycheck? Yeah...but there's nothing wrong with that.

WILDJOKER5
07-29-2014, 08:01 PM
What equation?

The article you posted states that the top 10% have fully recovered.Sorry, brain fart on the word "median". Sure seems like then the economic recovery promised by Obama's stimulus doesnt really work as well as he promised?



Are you saying anyting over zero and you're not poor? Not sure what you mean by this.Nah, its a very easy thing to see. When our FED is printing billions of dollars and they are being given to those who dont work for it or value the money, they spend it quickly. And since there is never a celing and never should be other than the amount of money in circulation, the rich will always get richer while the poor actually stay the same. There may be more poor, but they do hit a bottom. While the rich get richer with the help of big government.


I'm not saying that...though that could be one explanation for the median net worth to be less, couldn't it?Thats the only explination since the term "Median" means: the median is the numerical value separating the higher half of a data sample, a population, or a probability distribution, from the lower half. Even if the everyone but bill gates had a pay freeze, and Bill Gates went to an income of $1 trillion, the median would still be the same as it was before.


That's simply not true. If this were the case...all products/services would alway have the same profit margin.

Why do you think some products have 500% margins, while others have 10%?

It is a fallacy that added costs to producing a product add directly to the consumer cost of the product...the product is priced at what the market will bear. If that creates a 500% profit, so be it...if a regulation imposed reduces that profit to 450%, there is no reason the company should raise it's price...if it could still achieve optimal sales at the higher price, they would have already raised it to that. Not at all. Yes, the company can raise the price voluntaraly because of the popularity of the product like Apple vs PC. But if you put a sales tax, regulation and fee for using lead, or cap and trade or morality tax on smoking, those added prices will always go to the consumer to pay. If the market can bear it, sure, the product will stay in business. If the product is a necessity like gas or foor or electricity, then people will still pay for those needs while forsaking other such luxuries. The price will be paid by the consumer, and if the private company is smart and sees their products not selling as well because of outside forces, then they will produce less so they arent stuck with unsold products or they will go out of business.


Separate issue...this was his energy policy, to get people off of fossil fuels, not economic policy.Messing with the energy policy is economic policy. Or do you really not believe that the huge spike in gas prices in 2008 didnt have a direct impact on the house of cards bubble that popped? Energy is a need, and to force that price up is to force the spending of luxury items to go down.


In economic theory...if prices are going up and continue to go up...this spurs economic activity, as people will tend to buy things before prices go up futher.Thats an interesting thought. If the market isnt being tampered with and it was a true free market, I can agree. But if you look at the housing bubble, without the government intervention, the prices wouldnt have gone out of control. Same with the student loans and tuition costs. Or health care for that matter.


If we have deflation, and prices are going down...people will tend not to buy, waiting for the price to futher decrease.And thats how we normalize the prices vs the pay of the employees. Now you have more buying power.


So...there were no recessions or depression prior to existence of the FED?
There was, but they lasted much shorter terms and those effected where the ones that made the failed economic decissions. Things like GM would have gone under and given birth to new car companies who would be putting out cheaper and probably more reliable products. Its how Honda and Toyota got their foot in the door in America. Its how Saturn started.

efmbman
07-29-2014, 08:18 PM
If I am an E-5 today living comfortably and really dont want to be promoted, my quality of life shouldnt have to suffer because I am not climbing the ranks.

At the same time, why should your QOL improve if you choose to not climb the ranks?

Measure Man
07-29-2014, 09:04 PM
Sorry, brain fart on the word "median". Sure seems like then the economic recovery promised by Obama's stimulus doesnt really work as well as he promised?

What was the promise?

When Obama took over...the economy was hemorraghing jobs at 600,000-700,000 jobs lost per month...after the stimulus, this trend reversed pretty substantially...yes jobs continued to be lost for a period of time, but the rate of loss slowed, until they actually became job gains...which has continued since.

44


Nah, its a very easy thing to see. When our FED is printing billions of dollars and they are being given to those who dont work for it or value the money, they spend it quickly.

So, when a bailout is given to banks, you mean?


And since there is never a celing and never should be other than the amount of money in circulation, the rich will always get richer while the poor actually stay the same. There may be more poor, but they do hit a bottom. While the rich get richer with the help of big government.

Thats the only explination since the term "Median" means: the median is the numerical value separating the higher half of a data sample, a population, or a probability distribution, from the lower half.

It's not the only possible explanation...but, yes, I know what median means.

Everyone below the median does not have to be "poor"


Even if the everyone but bill gates had a pay freeze, and Bill Gates went to an income of $1 trillion, the median would still be the same as it was before.

Correct. If we have 100 people...and $100,000 to distibute, and we gave everyone 1,000...the median net worth would be $1,000. If we took that $1,000 from 40 of the people and gave it to another 40...the median would still be $1,000. If we took $500 from the other 20 people...and again gave it to the 40 people that got the first $1,000...the median net worth would be $500. In this case...60 percent of the people would be worse off then when they started...and 40 percent would be better off.

In the article cited by you...it would seem that 10 percent of the people are better off, but 90 percent are worse...though there is a chance I"m reading too much into their statement of the top 10 percent.

Anyway...this is why "mean" is sometimes a better measure than "average"...in the above example, the average net worth stays at $1,000, no matter how it is distributed...but the "mean" shows that the average person is doing less well.

Interesting note...this is also why median home price is used to guage the housing market, not average price. They want to know how the price is moving for the average home, not the average price for homes...which could be greatly swayed if just the top homes are increasing.


Not at all. Yes, the company can raise the price voluntaraly because of the popularity of the product like Apple vs PC.

Yes, they will raise it to whatever the market will bear...


But if you put a sales tax, regulation and fee for using lead, or cap and trade or morality tax on smoking, those added prices will always go to the consumer to pay.

IN the case of a cap and trade or morality tax...the government is intentionally trying to reduce the purchase of a product. So, they are, in effect, raising prices to achieve a "less than optimal sales", that would otherwise result from a free market.

IOW...if left to a free market, a lot more people would smoke, or they would smoke more.


If the market can bear it, sure, the product will stay in business. If the product is a necessity like gas or foor or electricity, then people will still pay for those needs while forsaking other such luxuries. The price will be paid by the consumer, and if the private company is smart and sees their products not selling as well because of outside forces, then they will produce less so they arent stuck with unsold products or they will go out of business.

Correct...production should decrease in this scenario...at least in theory.

Now, if fast food restaurants had only an 600% profit margin, instead of 900% profit margin due to the minimum wage increasing...would this mean they'll decrease production? Not likely.


Messing with the energy policy is economic policy. Or do you really not believe that the huge spike in gas prices in 2008 didnt have a direct impact on the house of cards bubble that popped? Energy is a need, and to force that price up is to force the spending of luxury items to go down.

It certainly has a ripple effect on the economy...not sure it would be as easy to tie the direct impact. on the housing bubble. I think that was more directly related to lending policies.


Thats an interesting thought. If the market isnt being tampered with and it was a true free market, I can agree.

Which is why I said "in theory"


But if you look at the housing bubble, without the government intervention, the prices wouldnt have gone out of control. Same with the student loans and tuition costs. Or health care for that matter.

I agree with this for the most part. A large cause of the housing bubble was a change in lending policies that would allow more people to "take part in the American dream of home ownership"...and that change was spurred on by the govt. going clear back to at least the Clinton administration.

I was exasperated by lenders making bad loans to bad customers...The sub-prime shell game was created and expanded by private industry, though...


And thats how we normalize the prices vs the pay of the employees. Now you have more buying power.

..but if there is deflation, salaries are going down also.


There was, but they lasted much shorter terms and those effected where the ones that made the failed economic decissions.

Not going to research a thesis on this...recesssion, depression and recovery are natural business cycles.


Things like GM would have gone under and given birth to new car companies who would be putting out cheaper and probably more reliable products. Its how Honda and Toyota got their foot in the door in America. Its how Saturn started.

I think over the long term, you are probably right...but we'd have to be able to stomach the thousands of folks impacted...weren't we talking about something similar a month or so ago regarding getting generations off welfare...or the Cuban embargo?

Measure Man
07-29-2014, 09:13 PM
Get rid of the $200 a month cell phone bill and I'm sure they'd be doing just fine.

I"m not saying the person is starving or isn't doing fine...just that they are worse off then they used to be. Well, not really me saying that...the article is saying that. Just because that person is "doing just fine"...doesn't mean this indicator is of no use or interest.

If your argument is that it doesn't matter if the average american is doing worse, so long as they can cut back and still survive...from and individual perspective that's fine...the point is it is a negative indicator of how well the country is doing.


Can't happen long term. It's just not possible. Wages will always lag inflation. Then they will catch up eventually.

I don't think that's true. A lot of factors can affect wages...low unemployment and/or labor shortage, for example. Inflation affects wages, and vice versa...but wages do not always lag inflation. There are other variables at work, as well.


Impossible. Businesses want to increase their profits. If they give pay raises in step with inflation then they themselves are actually "losing" money as it relates to rising prices. This means they can't employ as many or pay as much.

If you'd ever had a private sector job...you would know that pay raises are common.


Honestly I don't know anybody in the same position today that is doing worse. I really don't. My entire family is still doing the same things they were doing and the impact is minimal, at worst. Are we all still living paycheck to paycheck? Yeah...but there's nothing wrong with that.

So..what you're saying is you don't believe the article posted?

sandsjames
07-29-2014, 09:28 PM
If you'd ever had a private sector job...you would know that pay raises are common. No more common than in a public sector job.




So..what you're saying is you don't believe the article posted?I'm not saying I don't believe it. The article is, I'm sure, factual based on the information in the studies. What I'm saying is that the numbers are overstated, that's all. They mean about as much as the 14 or 17 trillion (or whatever it's at now) dollar debt numbers do. As I said, I don't know of anyone who isn't living at the same quality of life as they were 10 years ago, all other things being equal.

Measure Man
07-29-2014, 09:32 PM
No more common than in a public sector job.

Maybe...again, pay raises are sort of designed to "keep up with inflation" somewhat.

Were it not for inflation, there would be no reason to give employees a pay raise unless they get promoted.


I'm not saying I don't believe it. The article is, I'm sure, factual based on the information in the studies. What I'm saying is that the numbers are overstated, that's all. They mean about as much as the 14 or 17 trillion (or whatever it's at now) dollar debt numbers do. As I said, I don't know of anyone who isn't living at the same quality of life as they were 10 years ago, all other things being equal.

OK. The only person I can think of that is at their "same station" 10 years ago is my dad...he was retired then, he's still retired. I don't know the specifics of his finances, but he doesn't want for anything, travels extensively and pretty much just does whatever he wants to...same as he did 10 years ago...but, even if he had twice the money, he would still do the same things he's doing now, so I can't use him...for all I know, he's gotten 10X better or 10X worse...but is still above the line where it doesn't matter.

WILDJOKER5
07-30-2014, 12:11 PM
Sure...you should have the quality of life of an E5.

If people make more, they spend more. If they make less, they spend less. It's not very complicated. On paper is there a difference? Sure. But in reality? Not much, if any.

The fact that the price of a grocery trip every two weeks might cost an extra $12 over what it did for the same items a year ago isn't that big of a grind. As far as gas goes, I pay less for that now then I did last year at the same time. Everything else I do is pretty much an option of whether or not I choose to do it. I can make up the difference in that grocery bill by avoiding a fast food restaurant once a month.Thats $24 a month and $624 in a year. Thats each and every year it costs at least that much more. Thats why we have lost 95% of the value of the dollar since 1913. And what you saved 20 years ago for your retirement is now buying less than what you could have bought with it when you started saving for retirement.


I'm not really sure what your suggestion would be to avoid inflation. Raise wages with prices? Don't raise either? If everything stays equal then there really isn't a reason to try to improve.Get rid of the FED which forces and unnatural process of inflation. Go back to backing our money with gold or silver. The value of Gold hasnt changed, just the value of our dollar has become weaker which means it takes more of out fiat currency to purchase the same amount of gold as it used to 100 years ago. But the same amount of gold today can still get you what it would 100 years ago.


Inflation is just another word used in politics to keep people scared.
It is a tricky word really. For prices to inflate, the value of the dollar needs to deflate.

WILDJOKER5
07-30-2014, 12:17 PM
Deflation is worse.

Imagine investing a lot of money to build a factory/grow a crop/open a store...and by the time you get done prices have dropped to level that you can't recover your investment.

This is why the govt. wants inflation...it encourages economic activity. Of course TOO MUCH inflation can be bad...but don't think we're experiencing that now...look at interest rates.

I disagree. Deflation is just a problem when you are more concerned with selling your investment too early. Deflation allows for more competition in the business because more people can afford to get into the game. People were all bummed when their houses lost value (deflated), but you know what, unless you are buying and selling and moving every 2 years, what does it matter? And if it wasnt for the government, there wouldnt have been a bubble to cause the hyper deflation of homes in the first place. Deflation only matters to hedge funds and quick turn investors. Those in it for the long haul will be glad for deflation, that means their products and materials will cost less. Deflation happens all the time in the price of gas, do you see oil or gas companies going out of business very often?

WILDJOKER5
07-30-2014, 12:19 PM
At the same time, why should your QOL improve if you choose to not climb the ranks?

I didnt say it should improve, but it shouldnt get worse as suggested from Sand. Sadly though, with constant inflation and inconsistant pay compensation, QOL diminishes over time.

sandsjames
07-30-2014, 12:24 PM
And what you saved 20 years ago for your retirement is now buying less than what you could have bought with it when you started saving for retirement.

And that's the issue, right there. It's been forced on us that we have to save all our money. All that does is cause the value to go down. Maybe that's why it doesn't bother me. As I mentioned before, my dollar is worth what it's worth right now because that's when I use it.

Economy was much better when the majority of people didn't "plan for the future". That's a lot of money not going back into the economy.

WILDJOKER5
07-30-2014, 01:23 PM
So, when a bailout is given to banks, you mean?Banks get it all the time from the FED. I am also talking about GM, 2 years of unemployment, and welfare growing by leaps and bounds.


It's not the only possible explanation...but, yes, I know what median means.

Everyone below the median does not have to be "poor""Poor" and "Rich" are relative terms. In the US, the "Poor" are typically "rich" to the rest of the world. In the US, we are having more people make less than what they did 10 years ago. And many people saving less than they did 10 years ago. This article was about the median WORTH going down, not income.


Correct. If we have 100 people...and $100,000 to distibute, and we gave everyone 1,000...the median net worth would be $1,000. If we took that $1,000 from 40 of the people and gave it to another 40...the median would still be $1,000. If we took $500 from the other 20 people...and again gave it to the 40 people that got the first $1,000...the median net worth would be $500. In this case...60 percent of the people would be worse off then when they started...and 40 percent would be better off.

In the article cited by you...it would seem that 10 percent of the people are better off, but 90 percent are worse...though there is a chance I"m reading too much into their statement of the top 10 percent.

Anyway...this is why "mean" is sometimes a better measure than "average"...in the above example, the average net worth stays at $1,000, no matter how it is distributed...but the "mean" shows that the average person is doing less well.

Interesting note...this is also why median home price is used to guage the housing market, not average price. They want to know how the price is moving for the average home, not the average price for homes...which could be greatly swayed if just the top homes are increasing.Not sure if I am reading this wrong, but average doesnt mean the same as median.


IN the case of a cap and trade or morality tax...the government is intentionally trying to reduce the purchase of a product. So, they are, in effect, raising prices to achieve a "less than optimal sales", that would otherwise result from a free market.

IOW...if left to a free market, a lot more people would smoke, or they would smoke more.I disagree. People will still smoke if they want to. Maybe some people have stopped because of the price has gone up, but most have stopped because of the health issues or they just died and there really hasnt been many to replace them. But electicity is a need. Raising the prices isnt going to stop people from using the product. Businesses will still keep their lights on. Government buildings will still be running electrcity. Personal homes might cut the lights out during the day, but we are not going to reduce how much electricity we use. And the cost for the elctricity going up means the consumers will be paying more for products to cover the cost of making them due to electricity.


Correct...production should decrease in this scenario...at least in theory.

Now, if fast food restaurants had only an 600% profit margin, instead of 900% profit margin due to the minimum wage increasing...would this mean they'll decrease production? Not likely.If fast food was governed by the economic principles as luxury items, they wouldnt be at a 900% profit margin. Take out the ability for EBT users to spend EBT funds there and see the change in profits for McDs franchises, not corporations, come down to their rightful and respectible places.


It certainly has a ripple effect on the economy...not sure it would be as easy to tie the direct impact. on the housing bubble. I think that was more directly related to lending policies.Lending policies alone wouldnt have burst the bubble. People had to start defaulting on their loans. Gas prices jumped 300% when the popular vehicle was the oversized SUVs.


I agree with this for the most part. A large cause of the housing bubble was a change in lending policies that would allow more people to "take part in the American dream of home ownership"...and that change was spurred on by the govt. going clear back to at least the Clinton administration.

I was exasperated by lenders making bad loans to bad customers...The sub-prime shell game was created and expanded by private industry, though...The lenders werent making the loans until the racebaiters kept saying they were racist for not giving out more loans to minorities and "forced" them to make sub-prime loans to those who really counldnt afford the payments.


..but if there is deflation, salaries are going down also.When was the last time you saw a paycut? There would be layoffs to cover the costs, but without government incisting on inflation, there is a small need for the market to over correct to compensate for a big deflation. And if you obey the rules of saving for an emergency, you have saved huge amounts of money to cover said deflation with money that is now more valueable than it was when you earned it.


Not going to research a thesis on this...recesssion, depression and recovery are natural business cycles.I have, and that is true. But the ones under centralzied banking systems have been worse and longer than the ones without a central bank. 1930s Germany had a central bank pumping out currency to cover their debt from WWI.


I think over the long term, you are probably right...but we'd have to be able to stomach the thousands of folks impacted...weren't we talking about something similar a month or so ago regarding getting generations off welfare...or the Cuban embargo?
That wasnt me.

WILDJOKER5
07-30-2014, 01:27 PM
And that's the issue, right there. It's been forced on us that we have to save all our money. All that does is cause the value to go down. Maybe that's why it doesn't bother me. As I mentioned before, my dollar is worth what it's worth right now because that's when I use it.

Economy was much better when the majority of people didn't "plan for the future". That's a lot of money not going back into the economy.The money always goes back into the economy when its personal savings. Companies that dont plan for the future die when their bubble pops because they dont have anything in the reserve tank to evolve their business.

sandsjames
07-30-2014, 01:35 PM
The money always goes back into the economy when its personal savings. Companies that dont plan for the future die when their bubble pops because they dont have anything in the reserve tank to evolve their business.

You're talking business, I'm talking individual.

WILDJOKER5
07-30-2014, 01:42 PM
You're talking business, I'm talking individual.

Individuals money goes back to the system too. Either by death, retirement, or hard times. And usually its in the system when its being saved in 401ks or IRAs. Unless they save it under their bed or in a tin coffee can buried in their back yard, its always in circulation.

sandsjames
07-30-2014, 01:53 PM
Individuals money goes back to the system too. Either by death, retirement, or hard times. And usually its in the system when its being saved in 401ks or IRAs. Unless they save it under their bed or in a tin coffee can buried in their back yard, its always in circulation.Or don't save at all. Make it...spend it...it's worth what it's worth. I don't lose any at death. I don't lose any at retirement. What is hurting our economy the most is the belief that you MUST have IRA/401k type plans.

WILDJOKER5
07-30-2014, 02:11 PM
Or don't save at all. Make it...spend it...it's worth what it's worth. I don't lose any at death. I don't lose any at retirement. What is hurting our economy the most is the belief that you MUST have IRA/401k type plans.

How do you plan to retire then?

sandsjames
07-30-2014, 02:13 PM
How do you plan to retire then?

Not sure what you mean.

WILDJOKER5
07-30-2014, 03:24 PM
Not sure what you mean.

What are you going to live off of when you dont work anymore?

sandsjames
07-30-2014, 03:40 PM
What are you going to live off of when you dont work anymore?

Well, for one I've got my military retirement, which is great. My wife has her pension from her job, which is great. Add in whatever remains of SSI and we'll be living quite good.

Investments are the reason that inflation/deflation even matters. People used to buy 1 home and live in it for life. The market and inflation rates played no part in the value of the house because it doesn't make a difference if you aren't trying to cash in on it. Same goes for all other investment "opportunities".

Before everyone tried to retire "rich" this country was much better off fiscally.

Measure Man
07-30-2014, 04:00 PM
I disagree. Deflation is just a problem when you are more concerned with selling your investment too early. Deflation allows for more competition in the business because more people can afford to get into the game. People were all bummed when their houses lost value (deflated), but you know what, unless you are buying and selling and moving every 2 years, what does it matter? And if it wasnt for the government, there wouldnt have been a bubble to cause the hyper deflation of homes in the first place. Deflation only matters to hedge funds and quick turn investors. Those in it for the long haul will be glad for deflation, that means their products and materials will cost less. Deflation happens all the time in the price of gas, do you see oil or gas companies going out of business very often?

I believe most economists would disagree with you. When you are talking a single price item, like your house, I would tend to agree that you don't "lose money" until you sell it....and if you are selling one just to buy another, you are selling in the same market you are purchasing, so it's a wash...generally speaking.

But OVERALL deflation causes a lot more problems than just that...as I mentioned it slows overall economic activity. Under deflation, money is becoming worth more value...encouraging people to hold on to their money rather than spend it. It also INCREASES the value of debt...again, encouraging people to NOT borrow.

While that is maybe a nice thing for the individual to do, it is not good for overall economic activity.

Measure Man
07-30-2014, 04:09 PM
Banks get it all the time from the FED. I am also talking about GM, 2 years of unemployment, and welfare growing by leaps and bounds.

"Poor" and "Rich" are relative terms. In the US, the "Poor" are typically "rich" to the rest of the world. In the US, we are having more people make less than what they did 10 years ago. And many people saving less than they did 10 years ago. This article was about the median WORTH going down, not income.

Yes, I understand this.


Not sure if I am reading this wrong, but average doesnt mean the same as median.

If you couldn't tell I was explaining the difference between average and median, then yes, you were reading it wrong.


I disagree. People will still smoke if they want to. Maybe some people have stopped because of the price has gone up, but most have stopped because of the health issues or they just died and there really hasnt been many to replace them.

A lot of people have stopped or slowed down because of price.


But electicity is a need. Raising the prices isnt going to stop people from using the product. Businesses will still keep their lights on. Government buildings will still be running electrcity. Personal homes might cut the lights out during the day, but we are not going to reduce how much electricity we use. And the cost for the elctricity going up means the consumers will be paying more for products to cover the cost of making them due to electricity.

Even in our govt. office, we turn off lights where we can. This has been a base-wide initiative.


If fast food was governed by the economic principles as luxury items, they wouldnt be at a 900% profit margin. Take out the ability for EBT users to spend EBT funds there and see the change in profits for McDs franchises, not corporations, come down to their rightful and respectible places.

Lending policies alone wouldnt have burst the bubble. People had to start defaulting on their loans.

At least initially...people defaulting on their loans were a direct result of poor lending policies. They had gotten loans that they never could have afforded...after prices dropped, many others defaulted simply because they felt so far upside down that they would never recover, so they let it go.


Gas prices jumped 300% when the popular vehicle was the oversized SUVs.

The lenders werent making the loans until the racebaiters kept saying they were racist for not giving out more loans to minorities and "forced" them to make sub-prime loans to those who really counldnt afford the payments.

Yes. This was what I explained earlier.


When was the last time you saw a paycut? There would be layoffs to cover the costs, but without government incisting on inflation, there is a small need for the market to over correct to compensate for a big deflation.

When was the last time we've been in deflation? Just because the price of gas or houses go down does not mean the economy is in deflation.


And if you obey the rules of saving for an emergency, you have saved huge amounts of money to cover said deflation with money that is now more valueable than it was when you earned it.

Exactly! Deflation encourages people to save, not spend. Good for the individual budget, bad for the overall economy.


I have, and that is true. But the ones under centralzied banking systems have been worse and longer than the ones without a central bank. 1930s Germany had a central bank pumping out currency to cover their debt from WWI.

That wasnt me.

hustonj
07-30-2014, 04:11 PM
It also INCREASES the value of debt...again, encouraging people to NOT borrow.


Uh, individuals borrowing money is not really good for the economy. Individuals spending their money is good for the economy, but people spending money they don't actually have or haven't actually earned is NOT. It looks god shorr-term, sure, but eventually that debt has to get paid . . ..

Businesses borrowing money in order ot expand and grow th ebusiness can be good for the economy, but they still have the debt problem. Businesses growing based on their actual cashflow is better.

Yes, I understand that we've taught ourselves that some debt is unavoidable, and that mrotgage debt (for example) is good debt.

That's a lie.

Debt reduces economic growth when it is paid back more than the spending that led to the debt enhanced it.

Measure Man
07-30-2014, 04:24 PM
Uh, individuals borrowing money is not really good for the economy. Individuals spending their money is good for the economy, but people spending money they don't actually have or haven't actually earned is NOT. It looks god shorr-term, sure, but eventually that debt has to get paid . . ..

Businesses borrowing money in order ot expand and grow th ebusiness can be good for the economy, but they still have the debt problem. Businesses growing based on their actual cashflow is better.

Yes, I understand that we've taught ourselves that some debt is unavoidable, and that mrotgage debt (for example) is good debt.

That's a lie.

Debt reduces economic growth when it is paid back more than the spending that led to the debt enhanced it.

Pretty sure most economists would disagree with you.

Yes, businesses borrowing is better...and is nearly always a good sign...and a rise in consumer borrowing is generally considered a good sign for the economy (unless they are borrowing just to survive, for instance).

http://articles.latimes.com/2013/dec/29/business/la-fi-lazarus-20131229

http://business.financialpost.com/2014/05/13/canada-debt/

http://www.bargaineering.com/articles/why-inflation-is-good-for-you.html

hustonj
07-30-2014, 06:26 PM
Pretty sure most economists would disagree with you.

Doesn't make them right, just makes them part of the establishment. Debt is the easiest way for banks to make money. Being in debt does nothing to create wealth. Being in debt consumes wealth.

The economy is driven by people SPENDING moeny, that's why I said debt provides a short-term boost. Then people reduce their spending while paying off the debt. Since paying off the debt costs more money than was spent on goods/services, the long-term is LESS money going into manufacturing/services, and thus less into the actual economy (as opposed to more into the banks).

Nobody talks about 20, 50 or 100 year goals and consequences anymore, not even economists. Everybody talks about todya and tomorrow and gets angry when you want to talk about cutting things now to ensure a longer-term future.

I prefer to try to plan for a longer-term future.

WILDJOKER5
07-30-2014, 06:52 PM
Doesn't make them right, just makes them part of the establishment. Debt is the easiest way for banks to make money. Being in debt does nothing to create wealth. Being in debt consumes wealth.

The economy is driven by people SPENDING moeny, that's why I said debt provides a short-term boost. Then people reduce their spending while paying off the debt. Since paying off the debt costs more money than was spent on goods/services, the long-term is LESS money going into manufacturing/services, and thus less into the actual economy (as opposed to more into the banks).

Nobody talks about 20, 50 or 100 year goals and consequences anymore, not even economists. Everybody talks about todya and tomorrow and gets angry when you want to talk about cutting things now to ensure a longer-term future.

I prefer to try to plan for a longer-term future.

keynesian economics is a wonderful theory, yet it never has worked on the small scale or large scale.

The way you talk about is a biblical principle and we wouldnt want to follow any of them crazies tennants.

Measure Man
07-30-2014, 07:20 PM
Doesn't make them right, just makes them part of the establishment.

LOL...okay. Well consider me part of the establishment, to.


Debt is the easiest way for banks to make money. Being in debt does nothing to create wealth. Being in debt consumes wealth.

No...consuming consumes wealth. Being in debt often creates wealth...not the debt itself, but the leverage you gain with the asset you have borrowed.

Depends on the type of debt...there is certainly bad debt, but then there is also good debt.

Take my mortgage for instance. I bought a larger house in the same neighborhood where I was renting.

Got a 30-year fixed rate at 2.875%. No down payment, financed all closing costs. So, it cost me $0 to move-in.

My mortgage payment, including taxes and insurance, is less than my rent was....house prices have gone up 20% since I've purchased...interest rates have gone up, so since my VA loan is assumable by another qualified vet, I have a tradeable asset.

So..let's see...I've saved about $200/ month in payments
My prinipal has decreased about $14K
The home value has increased about $70K (not counting the improvements we've done.
...not to mention the extra $3K or so I save in tax breaks.

You are not going to convince me that my mortgage is consuming my wealth. Renting was consuming my wealth! After 3 years of renting, I'd spend over $60K on rent with nothing to show for it. AFter about 20 months of purchasing I've built over $80K in equity, while spending slightly less than my rent. Nor did it last time I purchased a home where I walked about with $65K after 3 years, money I never could have saved/made without borrowing in that period of time...even at modest 2-5% increase, there is almost no chance this was a bad idea. If the house crashes completely and I walk away with nothing...I still saved $200/month in rent that had no chance of gaining equity.

Is there a chance the house could go down in value...sure...still a calculated, educated risk, I believe. Had I continued to rent, I would have been assured of losing my entire payment every month.

Yes, I've spent some on maintenance/improvements, as well...the big cost items were improvements.


The economy is driven by people SPENDING moeny, that's why I said debt provides a short-term boost. Then people reduce their spending while paying off the debt. Since paying off the debt costs more money than was spent on goods/services, the long-term is LESS money going into manufacturing/services, and thus less into the actual economy (as opposed to more into the banks).

Nobody talks about 20, 50 or 100 year goals and consequences anymore, not even economists.

Take a look at whereever you live...whether you are renting or paying a mortgage. What would that house have cost 20,50 or 100 years ago...and if you could have been in a position to do so, I'll be you would wish you would have borrowed money to purchase it.


Everybody talks about todya and tomorrow and gets angry when you want to talk about cutting things now to ensure a longer-term future.

Who is angry?


I prefer to try to plan for a longer-term future.

Okay...good luck with that.

I think if you would look at most successful business, they started or expanded by borrowing...time is a valuable resource also, and if you waste the time, you can not get it back. Successful entrepreneurs are often the people with the greatest tolerance for taking risk...usually by borrowing and leveraging.

and again, back to the inflation...if you try and save enough money to buy that house in cash...by the time you get there your money is worth less and house costs more...not to mention all the time you lost enjoying it, or having a nice place to raise your kids, etc.

Going into consumer debt on frivolous purchases...everyone agrees that is bad for the individual borrower, but it is still good for the economy.

I think nearly 2/3 of business spending is borrowed money...do you think all these businesses are consuming their wealth or increasing it? Oh, I know...economists and businesses don't know what they're doing and you do...

If you prefer to invest in the stock market to build your wealth...I'd advise you to look at the companies you are investing in...I'd bet almost all of them are borrowing money. Heck many of the most successful investors borrow money to invest in the market...

If you believe you can make 8% in the market...how can borrowing money at 4% to make those investments consume your wealth?

hustonj
07-30-2014, 07:36 PM
We are not going to agree, because we obviously disagree about the very definition of wealth.

You seem to buy into the idea that lots of tokens in hand is wealth.

I do not.

If we don't agree on what wealth is, we're never going to agree on the topics derived from that position.

sandsjames
07-30-2014, 07:39 PM
You seem to buy into the idea that lots of tokens in hand is wealth.

I do not.



Lots of token NOT in hand is not wealth...no doubt about that. $10 million you never get to spend is worth less than the $500 you do.

Measure Man
07-30-2014, 07:48 PM
We are not going to agree, because we obviously disagree about the very definition of wealth.

You seem to buy into the idea that lots of tokens in hand is wealth.

I do not.

If we don't agree on what wealth is, we're never going to agree on the topics derived from that position.

What is your definition of wealth and how does debt consume it?

Measure Man
07-30-2014, 07:49 PM
Lots of token NOT in hand is not wealth...no doubt about that. $10 million you never get to spend is worth less than the $500 you do.

If that is the definition...then the more you can borrow, the wealthier you are, huh?

sandsjames
07-30-2014, 08:09 PM
If that is the definition...then the more you can borrow, the wealthier you are, huh?

No...what I'm saying is that if I earn $500 dollars and buy something with that money I have more assets than the guy who earns $10 million and invests it for the future...then dies and never buys anything with it.

hustonj
07-30-2014, 08:41 PM
What is your definition of wealth and how does debt consume it?

Real wealth involves physical goods of a reasonably permanent nature. Yes, I believe foodstuffs should qualify, but they are far more transitory than normally addressed during such discussions.

Tokens represent a debt of real wealth and are not actual wealth in and of themselves.

Much of our modern "economic policy" is about increasing token counts without paying attention to whether there's any real goods to justify that debt of physical goods.

When your definition of wealth is based on token count, your idea of economics is about numeric manipulation. Economics applies in a purely bartar society, becuase it is based on wealth, not numbers. Very few professional economists can make a living doing anything other than manipulating numbers, though. They specialize in doing what people will pay them to do, like pretty much everybody else.

Measure Man
07-30-2014, 09:40 PM
Real wealth involves physical goods of a reasonably permanent nature. Yes, I believe foodstuffs should qualify, but they are far more transitory than normally addressed during such discussions.

Tokens represent a debt of real wealth and are not actual wealth in and of themselves.

Okay, fair enough...the 'tokens' are just away to convenientyly quantify your wealth or wealth potential, then.

By your definitin of "debt"...holding onto money, is debt. But borrowing that money to purchase physical goods should be creating wealth, should it not? Someone else has this "debt" of physical goods...that you get to avail yourself of despite not having anything to trade for it.

Using your definitions here...how does borrowing money to purchase or create physical things consume wealth? You don't have any wealth, but are able to obtain and build it through the borrowing of money.


Much of our modern "economic policy" is about increasing token counts without paying attention to whether there's any real goods to justify that debt of physical goods.

Oh, I think plenty of attention is paid to it. Inflation, is, by defintion when the amount of money is increasing faster than the physical goods.


When your definition of wealth is based on token count, your idea of economics is about numeric manipulation. Economics applies in a purely bartar society, becuase it is based on wealth, not numbers.

Following you to a degree...but we don't live in a purely barter society.


Very few professional economists can make a living doing anything other than manipulating numbers, though. They specialize in doing what people will pay them to do, like pretty much everybody else.

Well, if you have no need for those tokens, I'll take them off your hands, relieving you of your debt.

I think we all know that they hold, or at least represent value, thus translate to potential "wealth"...in whichever form. The "tokens" just give an consistent way to quantitatively value things and aid commerce. Otherwise, how many goats is worth a new wagon?

Either way, as I illustrated, I borrowed money...which you might say is inherently value-less on it's own...to enable me to take title to a home...which is physical property. Therefore, I've created wealth where I had none, which I could now, if I wanted to, trade for some goats.

The money is just an intermediate medium, that helps me convert my labor to physical goods...i.e. I work for money, use that money to buy a home, food, etc. From your perch, you seem to me sneering at the "collecting of tokens" as representing any kind of wealth...but, as long a people are willing to accept it in exchange for real goods, it is a convenient way to quantify wealth.

Measure Man
07-30-2014, 09:54 PM
I prefer to try to plan for a longer-term future.


We are not going to agree, because we obviously disagree about the very definition of wealth.

You seem to buy into the idea that lots of tokens in hand is wealth.

I do not.

If we don't agree on what wealth is, we're never going to agree on the topics derived from that position.

With your definition of wealth in mind...can you explain, in practical terms what you mean by planning for a long-term future?

What sorts of decisions do you make?...converting tokens to gold whenever you can? converting them to physical goods and foodstuffs? bartering your labor for physical goods rather than tokens?

Do you shun the saving and investing of tokens?

Measure Man
07-30-2014, 11:05 PM
Real wealth involves physical goods of a reasonably permanent nature. Yes, I believe foodstuffs should qualify, but they are far more transitory than normally addressed during such discussions.

Tokens represent a debt of real wealth and are not actual wealth in and of themselves.

Much of our modern "economic policy" is about increasing token counts without paying attention to whether there's any real goods to justify that debt of physical goods.

When your definition of wealth is based on token count, your idea of economics is about numeric manipulation. Economics applies in a purely bartar society, becuase it is based on wealth, not numbers. Very few professional economists can make a living doing anything other than manipulating numbers, though. They specialize in doing what people will pay them to do, like pretty much everybody else.

Saw this recently...

45

hustonj
07-31-2014, 01:22 PM
By your definitin of "debt"...holding onto money, is debt. But borrowing that money to purchase physical goods should be creating wealth, should it not? Someone else has this "debt" of physical goods...that you get to avail yourself of despite not having anything to trade for it.

Let's try this again: Tokens are not wealth. Creating tokens does not create wealth. Acquiring tokens does not create wealth. Converting tokens to real goods does not create wealth (it does transfer wealth). Only the creation of real goods can actually create wealth. This is why the exporting of our manufacturing base has been such a big deal.

The modern implementation of Wall Street and banking are both based on the idea that the tokens themselves are wealth.

Measure Man
07-31-2014, 02:19 PM
Let's try this again: Tokens are not wealth. Creating tokens does not create wealth. Acquiring tokens does not create wealth. Converting tokens to real goods does not create wealth (it does transfer wealth). Only the creation of real goods can actually create wealth. This is why the exporting of our manufacturing base has been such a big deal.

The modern implementation of Wall Street and banking are both based on the idea that the tokens themselves are wealth.

Okay...tracking. I would argue that the transfer of tokens enables someone to create wealth (borrow money to build a factory).

So, how does borrowing tokens consume wealth?

Also, still interested in how you translate this into practical decisions.