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Statistically the US looks pretty bad right now but being in Montgomery county I don't feel anything. If the OP can write a piece from April 2015- April 2016 that would be really cool
Timelines tell more about the author than history.
But a couple of comments: " I think while Reaganomics was heavily favoring the rich and that was what started the growing income equality"
This is a statement repeated so many times that people actually start believing it!!! Reagan RAISED the tax rate on capital gains, dividends, interest, and income so they were ALL the SAME!! at 28/33%.
After that the capital gains rate was lowered while the ordinary income rate remained went up to 43.7%. Remember that the rich make most of their money from capital gains!! That rate hit bottom in 2010-2012 when it was 15%. Remember in 2012 when Obama and Romney paid tax rates of 12% while my 25 year old daughter was paying a tax rate of 25%.
Also the middle class invested heavily in deductible IRA's and 401K's. That converted ALL THEIR LONG-TERM CAPITAL GAINS into ORDINARY INCOME which is taxed at a much higher rate than capital gains. The rich could only invest their retirement savings into ROTH IRA. That converted their retirement saving from a capital gains rate to ZERO.
Oh, I did see an article by a well-respected economist that said the Bush Tax Cuts led to the greatest economic boom in history. Interesting, more people lifted out of poverty, more people moving into the middle class. Truly an impressive economic achievment.
No wonder Obama and the Democrats did NOT repeal the Bush tax cuts!!
The unfortunate part for middle-class Americans was the boom happened in China and other developing countries with the investment of money generated by Bush tax cuts.
I wonder why the media isn't covering this story???
Could you redo the misery index using U-6 and the CPI number for low income or seniors??
U-3 is a pretty bogus measure of unemployment. Also the poor and elderly are paying more for food, health care, housing, and transportation. Oh, and taxes, but they are not part of the CPI.
The reason for CPI being so flat is "rich" items like computers, TV's, IPHONES, etc. have been dropping in price.
IF you are not rich....your CPI is much higher. So is your misery index.
I would have to add some math to show the effects of contracting work force participation and some other things like % change in the % of population on government benefits, % given up looking for work etc.
I was basing off of what I knew, I will look further into that. Thanks for the link. ^
Quote:
Originally Posted by 509
Timelines tell more about the author than history.
But a couple of comments: " I think while Reaganomics was heavily favoring the rich and that was what started the growing income equality"
This is a statement repeated so many times that people actually start believing it!!! Reagan RAISED the tax rate on capital gains, dividends, interest, and income so they were ALL the SAME!! at 28/33%.
After that the capital gains rate was lowered while the ordinary income rate remained went up to 43.7%. Remember that the rich make most of their money from capital gains!! That rate hit bottom in 2010-2012 when it was 15%. Remember in 2012 when Obama and Romney paid tax rates of 12% while my 25 year old daughter was paying a tax rate of 25%.
Also the middle class invested heavily in deductible IRA's and 401K's. That converted ALL THEIR LONG-TERM CAPITAL GAINS into ORDINARY INCOME which is taxed at a much higher rate than capital gains. The rich could only invest their retirement savings into ROTH IRA. That converted their retirement saving from a capital gains rate to ZERO.
Oh, I did see an article by a well-respected economist that said the Bush Tax Cuts led to the greatest economic boom in history. Interesting, more people lifted out of poverty, more people moving into the middle class. Truly an impressive economic achievment.
No wonder Obama and the Democrats did NOT repeal the Bush tax cuts!!
The unfortunate part for middle-class Americans was the boom happened in China and other developing countries with the investment of money generated by Bush tax cuts.
I wonder why the media isn't covering this story???
I myself am a Republican, NOT a democrat. The biggest economic boom in history was the 2000s, though not for the US. The Post War Period from 1946-1973 was the biggest boom. The 1990s was also a huge boom in the Economy for the US. The 2000s though it did cause the biggest bust thus far. The 2000s was a boom decade for only 2003-2007. The low interest rates by the Fed and the Bush Tax Cuts helped with that, but that was a temporary placebo. Bush Tax Cuts favored the Middle Class, which that is why the Middle Class was able to sort of grow in the 2000s, though slightly. I support Reaganomics that will help all, but we need to get rid of the Corporate Tax and Investment Loopholes first.
The media is not covering the story because we are all too busy focusing on The Kardashians and Social Justice.
Also the poor and elderly are paying more for food, health care, housing, and transportation. Oh, and taxes, but they are not part of the CPI.
The United States has the lowest food costs in the world. The poor pay zero for health care. The elderly have Medicare for incredibly low premiums and the elderly poor pay almost zero for health care. The poor pay zero federal income taxes. Poor families receive the EITC and get their payroll taxes refunded, too.
On a global standard, the poorest of the poor in the United States have a higher standard of living than the median household in the rest of the world.
Lots and lots of subtle and not so subtle differences...
Quote:
Originally Posted by GeoffD
The United States has the lowest food costs in the world. The poor pay zero for health care. The elderly have Medicare for incredibly low premiums and the elderly poor pay almost zero for health care. The poor pay zero federal income taxes. Poor families receive the EITC and get their payroll taxes refunded, too.
On a global standard, the poorest of the poor in the United States have a higher standard of living than the median household in the rest of the world.
The US is, to borrow from a very loud mouthed reality TV personality, YUGE! That size makes it very difficult to really make valid international comparisons. The sorts of "poverty" that somebody with a low paying parttime job in a truck stop in central Iowa has vs somebody in urban Detroit or rural West Virginia are all very different. In contrast, the poorest folks in some fishing village in Sweden are probably not nearly that different than the poorest folks in the capital, Stockholm or the industrial / port city of Gothenburg. The whole country has a population of about 9M, that is HALF the people in the greater LA area. The land area of Sweden is about 400 sq km, Los Angles metro is under 90 sq km... Yeah, Sweden does get cold and snow, but it also has very nice benefits. Things are just really hard to compare for either the well off or the poor.
The bigger questions, when it comes to either backward looking timelines or forward looking projections of what might happen in the future, is what can we learn from other countries. I would suggest reading up on the history of Sweden's successes and problems -- US calls on "Mr Fix It" - Telegraph
I have not been on here in a while, wow! This is my first post in the Economics forum, I may not be very very knowledgeable but I try my best.
I made this timeline a while ago, what are your thoughts?
Deregulation and such started under Carter, which I didn't believe at first but looking at it it started under him but Reagan accelerated it. I think while Reaganomics was heavily favoring the rich and that was what started the growing income equality, it did trickle down somewhat as the 1980s was the last time the Middle Class's income rose. I think a modern republican president would need to do Reaganomics except it would favor the lower and middle classes more instead of the rich. Reagan could have done WAY more to balance the budget which I think if we were not in a huge buildup and overspending in the Military he would have achieved that. I favor some deregulation but when it becomes dangerous to our country and our economy like repealing the Glass Stegal Act and having bad standards for mortgages and auto loans, thats when it goes too far.
The Economy in my book can be separated into this super long timeline/chart since the Reagan Presidency started.
January 1980-November 1982 The Carter/Reagan Recession, caused by Paul Volcker's shock therapy of interest rates to 20% to end the Stagflation Era of the 1970s, it worked but it was an extremely sharp recession that made Reagan very unpopular in his first term.
December 1982 - August 1987 Significant HUGE economic growth caused by lowering of interest rates after it was seen inflation was under control and by massive deregulation. Oil Prices finally collapsed in 1986 to normal levels, the economy was gaining steam and there was prosperity for all but it favored the rich significantly. The DJIA begins its bull market and grows from around 1,000 to 2,200 in 8/1987.
September 1987- June 1990. The 1987 Stock Market Crash, caused by the debt and bubble through August 1987 slows down the economy significantly. However by some miracle even though many were predicting a Recession in 1988, the economy trudged along with relatively moderate growth through early 1990. The S&L Crisis worsens in 1989 due to failures of many large S&Ls. However by January of 1990 signs of Recession were popping up. Economic growth was slowing even more compared to 1988 and 1989 due to The Federal Reserve hiking interest rates up to 10%. The Gulf War collapsed Consumer Confidence due to the surge in Oil Prices in the Summer of 1990 and effectively put the US in Recession.
July 1990- June 1991 The Early 90s Recession which was relatively shallow compared to other Recessions like the Early 80s and Mid 70s Recession was still pretty bad. The refusal by the Federal Reserve to stop hiking and instead lower interest rates until December 1990 caused even further tightened credit. George HW Bush blamed the Federal Reserves lateness on lowering interest rates for his reelection loss. Unemployment Rate jumps from 5%. There is a cyclical bear market in early 1991 but not enough to stop the bull market that started in 1983.
July 1991- December 1993. This period saw slow modest growth which was exasperated by the high unemployment rate which peaked at 7.8% in October 1992. The economy was recovering but it was not fast enough and with the jobless recovery caused George HW Bush not to be reelected and Bill Clinton to win in 1992. The deficit spending from the Gulf War and Recession caused debt to increase dramatically but Bush 41 started to cap spending in 1992 which was the beginning of a nine year period of decreased/stabilizing government spending. Bush had to make taxes higher which made him further unpopular. Clinton started with a stagnate economy but by the end of 1993 the economy was gaining speed.
January 1994 - December 1995 the US Economy grows exponentially in 1994 caused by the Federal reserve lowering interest rates to 3% in mid 1993. The Economy grows at 4% this year and the US has its best jobs year ever with over 2 million jobs being created that year. However the Federal Reserve worried about inflation decides to hike interest rates exponentially from 3% to 7%. This causes bond markets to crash and for a stock market correction in 1994. In 1995 growth slows significantly due to the Federal Reserve hiking interest rates even nearing zero growth territory in Q2 1995. However Alan Greenspan is ahead of the curve and stops hiking interest rates in March 1995. This was the first successful soft landing any world economy had ever had. Growth picks up in Late 1995 setting up for the dot com boom. However the weakest year of the 90s other than the recession at 2.7%. The Government Shutdown in 1995 slows down growth in the 4th quarter.
January 1996 - October 1997. Growth is huge and strong for these two years. The economy grows a 3.9% in 1996 and 4.5% in 1997. The economy is robust the consumer is strong and the dotcom bubble starts in May 1997 due to the lowering of the capital gains tax, this causes the Economy to accelerate in growth in mid-late 1997. The Asian Financial Crisis starts this year and causes a mini crash in October 1997. Many see this as the beginning of the end of the boom of the 90s' but I think differently.
November 1997- June 1999 The economy is resilient and strong even with the world economy having issues from 1997-1999. Consumer confidence dips in early 1998 and so does growth but an interest rate cut to 3.9% from 5% restores confidence and further makes the economy grow further. growth in the economy accelerates in the 3rd and 4th quarter despite the stock market crash in August-October 1998. With it growing 5.0% and 6.5% respectively. The economy grows at 4.8% this year overall. The Federal Reserve decides in April 1999 to start hiking interest rates again after seeing the the economy is slightly overheating. There is a slowdown in Q2 1999 at 2.9& but the economy gains steam and so does the dotcom bubble. The US has a budget surplus starting in 1998-2001.
July 1999- March 2000 This time period is when the US economy reaches its peak. It has huge growth in Q3 at 5.8% and grows at an astounding 7% in Q4 1999. The Y2k Bug comes into the public's eye and with the prospect of computers having to all be replaced, tech stocks increase EXPEDIENTLY. The NASDAQ goes from 2,800 in October 1999 all the way up to 5,100 in March 2000 a huge gain. The unemployment rate drops below 4% a huge achievement. 2000 hits and there is relatively no side effects from the Y2K Bug. The stock market peaks in March 2000 and heads down into a three year long bear market. Ending the 1983-2000 bull market. The Economy grows at 5.2% in 1999. Oil prices after dropping down from 30$ a barrel in 1996 down to 10$ a barrel in mid 1999 starts a huge new bull market that does not end until the Financial Crisis.
April 2000 - March 2003. The US Economy at first has no side effects from the dot com bubble bursting as it grows at 4.1% in 2000. However by late 2000 it is clear that the US is heading for recession and Alan Greenspan starts cutting interest rates from 6.75% down to an astounding 1% in March 2003. Unemployment rate has its downward peak of 3.7% in December 2000. While the US does not enter recession under Clinton, he hands Bush a ticking time bomb of deregulation, Osama Bin Laden, recession and debt. The US enters a Recession in March 2001. This slowdown probably would not have been called a recession if 9.11 did not happen. 9/11 is what spiraled the US into Recession. The US Stock Market crashes further with the DJIA losing 680 points after 9/11. The US enters out of a Recession in December 2001 but the effects of it do not wear off easily as the unemployment rate only peaks about two years after the recession ended in September 2003. The US Economy is stagnate for a year and a half after the recession. Two huge bankruptcies happen during this time. Enron in December 2001 at 65 billion dollars and WorldCom at 84 billion dollars in September 2002.
April 2003 - December 2006. This is where the using bubble starts continues rises and by the end of it starts falling. The US economy grows at 3.8% in 2003. And 3.9% in 2004 3.1% in 2005 and 2.4% in 2006 Housing prices around the US start rising at a bubble rate. ARM(Adjustable Rate Mortgages), Home Equity Loans and Subprime Loans are fairly common. A housing building boom starts in the US. Banks are incompetent. People are greedy. Nobody realizes just how bad things will get Hurricanes in 2004 and 2005 dent the economy in the South and further make oil rise significantly. Housing prices start falling in late 2006.
January 2007 - July 2009 THE GREAT RECESSION. A systemic economic 9/11 happens and while most people know what happened it is still fairly bad. the unemployment rate goes from 4.4% in April 2008 up to 10.5% in October 2009. The Fed starts lowering rates in 2007 as the cracks start appearing in the world financial system. It does not really hit home until Bear Stearns has to be bought out by JP Morgan in March 2008. The Fed further cuts rates until its at 0% in December 2008, a rate kept until December 2015. Lehman goes bankrupt in September AIG is nearly bankrupt and has to be saved. Washington Mutual goes bankrupt.. CitiBank nearly goes bankrupt. Merryl Lynch is bought out by Bank of America. The stock market crashes from DOW at 14,000 down to 6,675 in March 9th 2009. The World Economy is saved by the Central Banks taking decisive action. however this starts the world debt binge that has been in place since.
August 2009 - March 2015 The recovery years that have seen roller coaster growth. We haven't grown at 3% since 2005. The Fed launches QE1 QE2 and QE3. This helps the stock market bubble rise. The US Economy almost goes into recession in late 2012 but is saved by QE3. The stock market only has one sizable correction in August-November of 2011. The US Economy grows at 2.9% in 2010, 1.7% in 2011 1.6% in 2012, 2.7% in 2013 and 2.8% in 2014. The growth is pretty slow compared to where it was in the other recoveries. This era ends with Oil Prices collapsing in late 2014-early 2015.
April 2015 - present. I think the economy peaked and has started going downhill since then, obviously you can tell with the the GDP numbers. I think we will be entering a recession in the next year or so. This is the beginning of a new era. The August Stock Market Crash was big blimp in the public's mind. With the Federal Reserve just now deciding to raise interest rates, we are now stuck in a liquidity trap that will prevent us from effectively fighting the upcoming inevitable recession.
Clinton may be credited with a great economy until the last year of his term(2000; dot com bubble bursting and such) but it started under Reagan. The Federal Reserve I believe was more responsible than any other government agency, policy or president to have caused the three great bubbles of the last 25 years. Alan Greenspan caused the Dotcom bubble which accelerated in late 1998-early 2000 due to him lowering interest rates too much which caused the bubble to really accelerate and hiking the interest rates too late in mid 1999 caused the bubble to pop in 2000. Then they lowered interest rates to 1% 2 YEARS AFTER A RECESSION! This caused the housing bubble and they horrible subprime loans which then when the Federal Reserve hiked interest rates to 5.5% in 2006, again too late on the curve that again popped the bubble. I think we are at the beginning stages of the end of our current bubble, what I call the Central Bank bubble with excessive credit, record low interest rates, quantitative easing, negative interest rates. I cannot believe they JUST hiked interest rates in December, they should have done it all the way back in early 2014!! With recent stock market trouble and signs of a Worldwide Recession looming, its safe to say this bubble is bursting.
Seriously ALL of our problems are due to the existence of the Federal Reserve.
If people do their research, all of this fancy economics is basically over time devaluing yours (and mine) currency/savings.
Any "wealth" that is imagined by the numbers on your stock portfolio can disappear overnight. All of it is very fickle and unpredictable.
I don't recommend putting a lot of stock (pun intended) in all these fancy financial analysis. The financial world as you know can all come crashing down, and we can thank our fiscal policy for that.
In reality, a government is only a strong as their resources. Right now we don't look so well.
How in the world has this debt gone so high since the eighties. The graph is adjusted for inflation. Any fool knows that if they have to get more and more credit cards to pay the bills knows that they are not headed in the right direction.
Yet we have all these "experts" in Washington getting paid well off tax payer dollars that can't correct the imbalance?
What in the world is going on here? It sounds to me like people should have been ousted from their jobs years ago.
Instead they enjoy fancy meals at high end restaurants paid by the taxpayers so they can pat each other on the back playing politician as the public grovels over them.
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Lots and lots of subtle and not so subtle differences...
