Next move in the war against the economy falls to Fed
"Yellen believes more people working and earning causes inflation. But that’s wrong. Excess money and a cheap dollar cause inflation. And Democrats think taxing success and printing money will lead to a better economy. Wrong again. Higher taxes stem investment and sink the economy, and when combined with easy money they generate higher inflation."
A really good look at many of the markers that say despite a "positive" jobs number, this economy still stinks like yesterday's bovine excrement...
A really good look at many of the markers that say despite a "positive" jobs number, this economy still stinks like yesterday's bovine excrement...
new waitress and bartender jobs............300,000
unemployed working age adults....record 94 mil
current odds on recession in 2016...65%
Janet Yellen and the Fed is trapped and they know it...
Its as rational as curing illegal immigration by inviting everyone in the world to move into our guest rooms and providing free room, board, medical care, and a generous allowance.
The thing I recently realized is when inflation occurs, property values increase, which seems like a good thing for the borrower and it is short term. But when property is sold, capital gains taxes must be paid on, inflation. That is the inflated value of the property and it's improvements and then death taxes that eat up most of the increase in value. Maybe I have missed something in my thought process but in the end it seems the only real beneficiary of inflation is government.
Both are actually true. To the individual who only sees their checkbook, inflation is good because it means their debts are worth less. Society as a whole loses, however. You are absolutely correct. Only the government wins because their debts get devalued at the expense of the taxpayer. Even banks get hosed, because their deposits are devalued and so are their returns on loans.
"property values increase"
Yes. It's all part of the lie. The taxpayer - again - get hosed by being forced to pay higher property taxes even though nothing has changed on the part of the individual. It's one of the reasons I'm for setting property tax values as fixed values according to the purchase price of the home. They don't change after that. Period. This incentivizes people to stay in their homes, it doesn't penalize retirees, and it simplifies the accounting for everyone. In addition, it forces local governments to work to counteract inflation AND to keep prices stable. They can't just tell their tax assessors to arbitrarily alter the taxable value of homes to suit their budgetary decisions.
Borrowers versus lenders are affected differently by monetary inflation. Government intervention always causes distortions, with further distortions and injections of "loopholes", subsidies, manipulated interest rates, and more distorting regulations claimed to fix the distortions.
Fixing property taxes at the last purchase price discriminates against anyone who moves and forces people to stay in homes they would rather leave. That is a penalty, not an incentive.
Tax assessors don't ordinarily arbitrarily re-assess property, they base the assessments on market values statistically. They are granted exemptions on the size of statistical deviations that shaft some individuals, but that doesn't change the average.
Local officials have no incentive to "keep prices stable" and cannot, they have nothing to do with prices or Federal inflation.
Local spending funded by property taxes does not remain tied to home prices, the tax rate increases to whatever is the ratio of spending to total assessed value, with state subsidies to the town governments when public resistance to increasing property taxes becomes too much of a problem. Push in on the balloon in one place and it pushes out somewhere else. That will remain true of taxes, borrowing, and spending as long as the statist premises of higher spending continue. Meanwhile all of us -- except the rulers -- lose from the constant and pervasive pressure group warfare battling for favors and defenses against them.
You and I know that, but most people do not. They equate a higher dollar amount with higher value, which is why the system is so out-of-whack.
"Fixing property taxes at the last purchase price discriminates against anyone who moves and forces people to stay in homes they would rather leave. That is a penalty, not an incentive."
I don't see how. You are choosing to move. You are choosing the new price at which you are going to purchase accommodations. And you are required by law to have disclosed to you the property taxes which will be assessed prior to your purchase (your escrow account). There is every opportunity to be an informed buyer.
I would also point out that there is a very real penalty on those who do stay in their houses for a long time. My wife's aunt has been in the same home in California for 40 years. She bought the house for around $40,000 and now it's assessed value is about $800,000. I can tell you similar stories of others - retirees forced to move from the homes they have lived in for decades simply because of tax assessments outstripping their fixed incomes. Are those people really seeing an increase in what they get from government which justifies the tax increases? Not hardly.
"Tax assessors don't ordinarily arbitrarily re-assess property, they base the assessments on market values statistically."
The taxable value on my home went up over 10% the past year. Yet market conditions really haven't changed much. I'm not in a booming economy. They just wanted more revenue in the State's coffers and since they have complete control, they can play with it all they want. I would also point out that from a strict FASB accounting principles standpoint, property values aren't re-calculated every year. It is based on the purchase price of the land. That value only changes when the property changes hands. I want taxable values tied to accounting values.
I also look at it from the standpoint of value and gain. Property owners don't actually deriving any value from the arbitrary re-valuation of property for taxation. None whatsoever. Until they choose to sell the property for a higher price than what they paid. I object to taxation merely for existence, and even more so when the taxman has the ability to arbitrarily change the rates and charges without providing equal return to me.
"Local officials have no incentive to "keep prices stable" and cannot, they have nothing to do with prices or Federal inflation."
"All politics is local." Federal policies won't change until local policies do. Individual states (through their elected representatives) must fight for changes to policies that adversely affect their districts.
"Local spending funded by property taxes does not remain tied to home prices..."
It may not in your area, but it does in mine. There is a constant battle in my State Legislature and city over funding for various projects and the inevitable procession is that they decide they need to do something, then raise taxes to pay for it. This goes double when they overestimate growth and property values in certain growth areas and leave themselves a revenue shortfall.
The only thing I could add for your consideration is the fact that sooner or later the individual looking at their checkbook, is moved into a higher tax rate with them losing and the government winning...again, thanks to our disgusting progressive tax.
but they hedge their bets with all kinds of other corruption. -- j
.
if you or anyone else on this forum believes that there are positive jobs numbers i'll sell you the brooklyn bridge. --if more people were working more gasoline would be sold and then oil prices wouldn't be heading to $20.00 a barrel. the economy stinks and is getting worse.
There likely was an uptick in jobs due to holiday employment but even what they tell us will be adjusted down in the coming months. If my memory is correct, we need at least 275,000 new jobs each month just to keep up with new entrants into the workforce. That does not include jobs for all those that left the workforce. We have a long ways to go.
Then with all those jobs you can build more bridges to sell. And so the "economy" grows.
Number of eligible workers in the United States (workers 18 years of age or older not attending higher education and not declared as ineligible due to physical or mental disability) is the base. Then the only ones you actually count as working are those with a full-time job (30 hrs per week or better) who are not receiving any kind of government assistance or being employed by a governmental entity. Then you start adding in the extra chunks of the pie chart as following:
- workers working 30+ hours per week receiving government assistance
- government workers
- workers working <30 hours per week not receiving government assistance
- workers working <30 hours per week receiving government assistance
As addendums to the chart I would list the following:
- the number of people declared ineligible due to disability
- the number of minors (<18 years old) working 30+ hours per week
- the number of minors (<18 years old) working <30 hours per week
IMO, that's where we should start. We should be maximizing the main base and minimizing the other sectors of the chart - especially those receiving government assistance and those working directly for government.
I say, the FEDs and the central banks should be accountable for this mess, however, there are reasonable suspicions to think that they did it on purpose. Purpose or stupidity...no excuse.
https://www.nolanchart.com/article558...
In a recent rant, without thinking I described raising interest rates in this environment as "diabolical". I think I might have nailed it. The FED is now driven to raise rates just to "normalize" them. The ONLY thing that kept us (I hate to admit it) from entering a depression was Ben Bernanke pumping steroids into the dying body.
I'll shut up. I've written, and spoken about this over the past couple years...
Ask my daughter's economics professor. He practically worships at the altar of the Federal Reserve. I gagged when I heard some of the crap he has been teaching her.