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Illinois’ political leaders said the goal of this tax hike was to pay down the state’s backlog of bills, stabilize the state’s pension crisis and strengthen its economy.
My state explicitly raised taxes including sales and income taxes because of pension fund short falls. How again did taking 2% out of everyone's pay check, and raising corporate taxes in a large state like Illinois stimulate the economy again? Bit confused on that....
That isn't the only one. Same thing at the municipal level.
Last fall, Mayor Rahm Emanuel proposed — and the City Council approved — a 2016 budget with $755 million in tax and fee increases, including the largest property tax hike in modern Chicago history to cover contributions to pension funds for police officers and firefighters.
Yes I did refinance and I was able to save a few hundred a month. However that cost me refinancing fees to get it. In a normal inflationary environment it would have been far better to pay down my mortgage with rising income.
Another twist on this is low interest rates just turn into housing capital. First time home buyer will just see higher principle balances on "lower rates" . Big stimulus there too. It is also a wee little problem that low interest rate environments make qualifying for loans more difficult. One of my friends had trouble qualifying for a refinance. Those under water could not do so at all.
So again, its no surprise that low interest rates have still resulted in stagflation. At best the effect was marginal. Its possible that the net result might make a little difference, but with saving short falls, tax hikes, delayed retirement and lower retirement income , there is a lot of head wind.
The years from 1940 to 1980s where characterized by low debt, good wages, a strong middle class, and secure careers and employer sponsored pensions.
Now we have minimum wage stock boy jobs, no careers, no job or retirement security, no ability to save AND we get to borrow on our credit cards at 20%. Some, but not all, homeowners can refinance but it doesn't even come close to the losses in well paying jobs AND job and retirement security.
The Bankers have changed our society from savers to debtors and guess who gets the interest on the loans? The Bankers have convinced us, as Tom Sawyer did, that we should be grateful that we can borrow and have lifetime debts to pay back. What a strange world we've morphed into.
Americans spent 5.8% of their after-tax income paying interest on mortgages, credit cards, car loans and other debt, according to the latest data from the Bureau of Economic Analysis. That's the smallest share since 1977 and a steep drop from a record high of 9.1% in 2007.
Household interest payments fell to an average of $469 per month at the end of last year, down from a peak of $728 in 2007, after adjusting for inflation. That equals $3,100 a year.
Three-fourths of the interest savings stem from falling rates, the rest from a reduction in debt.
Mortgage interest payments are down 30% from their 2007 peak. Interest payments on other debt, such as credit cards and car loans, are down 50%.
You are a broken record. Much of that savings is someone else's income. Working one side of an equation always produces garbage results.
A lot of retirees complain that it's hard to get a reasonable amount of income from their retirement accounts because interest rates are so low. A 10-year Treasury bill pays less than 3 percent interest. The average stock in the S&P 500 yields less than 2 percent. And if you want the safety of a bank CD, you get less than 1 percent interest.
Good thing the boomers are such a tiny little cohort...
So I will be a broken record too. The impact is simply very little in the aggregate. We also see this same pattern in oil. In the 70s the US was on the loss side of the equation. Now that we produce oil from shale its as muted as interest rates that simply causes savings by reducing someone else's income.
you are dreaming if you think these low rates have not helped most american family's .
Right. There is nothing helps the working families more than more debt and more interest on that debt. Nice story to spin.
As Trump and Bernie have pointed out, there wouldn't be these massive crowds at their takes if people felt they were doing better. One person described his support for Trump as giving the middle finger to the Establishment. The Electorate is sick and tired of this wholesale theft which had moved 20% of the middle class wealth to the top 1%. They are voting their pocket books. Finally the electorate is going to b have their say on how well the Debt Society is working for them.
Gross believes the U.S. economy would be better served by a jolt of government spending -- especially to fix the country's crumbling roads and bridges.
Or ya know da gubement could simply have, instead of handing treasuries over to bankers, dumped them into social security to fund a SS withholding holiday. Nope can't do anything that obvious....Nope your plan to encourage more private debt overhang is best.
no one said we can stay at zero , but if you want to argue the fact , low rates have helped more Americans then hurt them since most with some bucks saved made it back elsewhere .
argue all you want but you would be wrong , they already have the existing debt .
Gross believes the U.S. economy would be better served by a jolt of government spending -- especially to fix the country's crumbling roads and bridges.
Or ya know da gubement could simply have, instead of handing treasuries over to bankers, dumped them into social security to fund a SS withholding holiday. Nope can't do anything that obvious....Nope your plan to encourage more private debt overhang is best.
Now that would be an excellent example of trickle down economics to where the money would flow to more middle class jobs for the majority rather then putting money into accounts that Wall Street is paid a percentage based commission to "manage" by leveraging them out of existence.
Main Street would be booming along with having nice highways to drive to go shopping on.
Economics. The second-most popular pseudoscience, right behind psychology.
Well said
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