Rolling US Economy Into The Shitbin Thread

actually, i think its kind of important the point about money being borrowed into existence, because while more money can be dumped onto the economy, it still has to be borrowed by someone, the question is whether sentiment is holding up enough for people to take on yet more debt and spend, or whether they'll just try pay off what they already have, which returns money to source and is deflationary

Aw man...

President Bush and leaders of Congress joined in a rare show of cooperation in promising urgent action to pump up the economy with upwards of $150 billion in tax cuts and government spending.

http://www.cbpp.org/1-18-08tax-stmt.htm

^ comprehensive dismantling of the president's plan

So I'm a youngish dude. I was in middle school during the dot com crash and didn't have a job in high school during the subsequent recession.

You guys that have lived through this stuff before: how freaked out do I need to be by this talk of "a really bad recession?"

(lol i'm graduating in 6 months, shit.)

graduating into a teaching or a master's program, more like

Yeah I'm going straight into a teaching program this summer I think.

Unless I don't.

GF is moving to NY for grad school next January. Any teaching job I take is gonna require a two-year contract. I might chase her for grad school, who knows. I have about a month to decide lol

Plz read "I might chase her for grad school, who knows" as "damn am I gonna stay with this girl or not?"

It's been a good 4 years and I'd love to continue it, but wtf do I do with a bachelors in English without a teaching cert or any contacts in publishing etc?

work in a record store, duh

learn to pour beer

make the noize bored more fun

re: fears about 401k's etc - I contribute dutifully to my IRA (our co. doesn't match. dicks.) and will likely continue to do so. The low-fee stock index funds I bought 3 or so yrs prior to the "correction" in 2000 and have occasionally contributed to since have weathered the storms pretty well. The key is making sure you're not socking away money in these things that you will likely need in the short term (& obv w/ IRA & 401k you prob don't want to even think about it until your nearing retirement in order to avoid penalties). I guess it's important to remember that the market has averaged something like right over 9% since 1927 - which has includes the Great Depression as well as several nasty recessions.

of course it's entirely likely that I don't fully understand the intricacies of the current economic climate and that we are, in fact, all DOOMED.

learn to pour beer

-- El Tomboto, Wednesday, January 23, 2008 2:08 AM

yeah there are these obnoxious "Texas School of Bartending" commercials on the radio every day and i occasionally consider actually dialing

one-EIGHT HUNNID- bar- TEND!

i was in college during the 1991-1992 recession -- i coped by moving back with my parents, getting a full-time job and finishing up undergrad as a part-time student. it was not fun, but i survived. also, i was very lucky in that my employer at the time had a VERY generous tuition reimbursement policy so my undergrad debt was minimal (i understand that that may not be realistic, and i admit that i was very fortunate in that regard). i ended up graduating in 1997, right when the dot.com thing took off and was able to get a good job. also, my BA is in english/poli. sci. (though i started out as an economics/poli. sci. student) & my undergrad job was in accounting and benefits administration (which may have made me somewhat more marketable when i finally got the BA than the typical english BA).

i survived the dot.com crash/post-9/11 NYC-economy-in-the-shitbin by being in law school during the worst of that -- though those days were financed by student loans (for which i am paying dearly now). i survived that, too, but i would hesitate to recommend doing any kind of post-grad (including law school -- ESPECIALLY law school) if you'll end up deep in student loan debt.

and re IRA investments -- learn the term "dollar cost averaging" (it means make regular deposits into the IRA account at a set time interval [weekly, biweekly, monthly, whatevah). it won't totally prevent losses if you are investing in equities, but it will mitigate them to some extent. dollar-cost averaging is how you invest in 401(k)'s, anyway, so if you do that then you already know the drill.

i also heart low-fee/no-load funds ... paying a load is throwing your money away.

im no economist, but it seems to me the economy today is radically different than it was in keynes time

that is true -- but the basic idea remains the same: put money in the hands of those who are most likely to spend it (pref. lower-to-middle class folks), who then do just that (and thereby put money in the hands of merchants, who then spend THAT money, etc.). if anything, it may be MORE effective now since (as is repeated ad nauseum in the press) our economy is so strongly dependent on consumer spending.

the problem, though, is funding such a stimulus program -- we've got deficits now to worry about (and freaking out the bond traders and the chinese by running the debt even higher) (and thanks to dubya and his stupid tax cuts/even stupider Iraq war). and dubya (and ANY GOPer) WILL veto anything that raises taxes (the ghost of ronnie reagan still roams the land!)

"I might chase her for grad school"

NYC has been a not very good place for those who don't already have jobs or high-demand skills and aren't willing to go into (high?) debt.

And soon (now?) it will be a TERRIBLE place for same. There won't be new jobs outside the service economy, and there will be huge financial layoffs, so you better hope the Europeans learn to tip.

"how freaked out do I need to be by this talk of 'a really bad recession?'"

Incidentally I got my BA in the early 90s recession, and our commencement speaker at my Big State University was the Postmaster General. He told us "there are a lot of good jobs with the post office."

Now that the NYC economy is basically all financial and service (serving the needs of the financial workers), I'm curious to see what happens now, especially since it looks like Europe and Asia are having problems of their own.

will: why would you contribute to a 401K if your company isn't matching?

http://www.nytimes.com/2008/01/23/opinion/23stiglitz.html

short version: "if we had democratic policies in place we wouldn't be in this mess"

Yes and no, when everything is 'booming' people have a tendency not to want any measures that might stop the good times rolling, even though they are the very measures that would stop it falling off the edge of a cliff down the line

um, kinda off-topic, but who made that dolly parton/robert armani mashup?

will: why would you contribute to a 401K if your company isn't matching?

-- Jimmy The Mod Awaits The Return Of His Beloved, Wednesday, 23 January 2008 04:06 (10 hours ago) Link

yeah poor wording on my part. I meant to say that since my company doesn't match 401k I try to max out my Roth IRA instead.

there are tax benefits even if your company doesn't match. You can sell low performing funds and buy into better performing ones or switch over to bonds etc within your 401(k) and not have to pay capital gains on it. You're only taxed when you actually cash out.

Roth IRAs are taxed on the way in but not on the way out, which I think is better. But there's a contribution limit.

also, assets in 401(k)s and IRAs are off-limits to creditors in case of bankruptcy (yes, even after bankruptcy "reform"). not that anyone here is planning on going bankrupt, but it's nice to know that if you do then at least your retirement money won't be on the block.

http://www.stock-market-crash.net/images/ftse.gif
http://etftrends.typepad.com/photos/uncategorized/2007/03/13/japanski.jpg

we gonna die

xp
ah I see

yeah ideally you have the disposable income to do both. Contributing to your 401k reduce your taxable income and (have capital gains benefits as brownie points out), plus, if your company matches, hey! free money!

IRA's don't get taxed when you cash out at retirement (...at least not for now, muahahahaha)

reduces

http://www.nytimes.com/2008/01/23/us/politics/23campaign.html?hp

Mr. Romney, in a speech to Jewish leaders in Boca Raton, sought to portray an air of reassuring confidence as he went through an economic plan that included tax cuts to business to encourage investment, as well as to individuals to spur spending.

“Every time I’ve seen things really get scary and the markets really collapse, I put aside my fear and say — aha, this is a buying opportunity,” he said. “My experience is, whatever goes down goes up.”

Former Mayor Rudolph W. Giuliani of New York was more sketchy as he answered questions about how he would handle the financial upheaval. Addressing a reporter he knew from New York, he pointed to his experience as mayor in suggesting that he was prepared to handle the crisis, but offered no details on what he thought should be in a stimulus package, or what taxes should be cut.

“Congress and the president should do a stimulus package and they should do a spending reduction package,” he said. “You’re familiar with that; we used to do that in New York.”

The shift could prove particularly complicated for Mr. McCain, of Arizona, who, in his own view, began gathering strength as a candidate after conditions in Iraq appeared to improve; he was long a proponent of increasing troop strength there, and national security and the war are the two mainstays of his campaign appearance. He brought up the action by the Federal Reserve before a question was asked at a news conference in Pensacola, and in a speech there, pushed elements of his own economic plan.

Those include eliminating the alternative minimum tax, making the Bush tax cuts permanent and cutting the corporate tax rate to 25 percent from 35 percent. “And, my friends, we’ve got to cut spending,” he said. “Otherwise we will continue to borrow money from the Chinese.”

The Washington Post/ABC News poll found no appreciable differences among Republicans in their ratings of whether Mr. Romney, Mr. McCain or Mr. Giuliani would be best at dealing with the economy.

Harding, Coolidge, Hoover, Reagan, Bush, ??????

Who will be the next Republican to fuck our shit up?

Fucking dilettantes.

The weakened economy and the turmoil in financial markets have helped to cement a gradual shift in emphasis in the presidential campaign to domestic issues from national security, giving the candidates an opportunity on Tuesday to spotlight economic proposals and try to convince voters that they could handle a crisis.

Whoever would have guessed that a stock market crash and almost unprecedented action by the Fed would have put the economy in the spotlight, well done Adam Nagourney for bringing us this brilliant analysis.

I love how Romney and Giuliani place much of the blame on overregulation. Repealing Sarbanes Oxley would not have done a THING to prevent this-- in fact, without SOx some of the losses may have been hidden away, festering to do even more damage.

sarbanes-oxley did absolutely nothing whatsoever except employ a bunch of self-proclaimed sarbanes-oxley experts to consult for every poor bastard business that didn't know where to even begin trying to comply with sarbanes-oxley

it's one of the more asinine and pointless business regulations I'm unfortunately familiar with

just as an aside, the small business i own is completely fuckmared. looks like worst december ever will be followed by worst january ever.

I am very glad I do not own a small bricks and mortar retail operation, that is a fact.

or any retail operation, to be honest.

http://www.newsworld.cbc.ca/arts/images/pics/wonderful2.jpg

well at least the proposed plan to allow rapid depreciation of investments will oh no wait that really only works for the manufacturing sector fucking assholes

steel and auto industry lobbies profoundly more effective than guitar store lobby

if guitar stores and sex workers got together they could probably get some juice tho

plus the meetings would be awesome, esp if we incorporated liquor stores.

that would be great, especially the scene where the liquor store proprietors and the madams got in your face about what the hell guitar stores have in common with two industries whose entire existence is dependent on the whimsy of the state's blue laws and you come up with some goofy wayne's world answer off the cuff and everybody cheers

Now *that's* a stimulus package!

http://www.ft.com/cms/s/0/24f73610-c91e-11dc-9807-000077b07658.html

Soros says it's the worst market crisis in 60 years.

what is renminbi?

is that a srsly question?

As expected: http://krugman.blogs.nytimes.com/2008/01/24/stimulus-disappointment/

If federal funds were lowered beyond a certain point, the dollar would come under renewed pressure and long-term bonds would actually go up in yield. Where that point is, is impossible to determine. When it is reached, the ability of the Fed to stimulate the economy comes to an end.

This sounds analogous to what happened in Japan in the 90's. Is that the kind of recession we're headed into?

If it hits that point, yes. When rates are at, or close to 0%, there's nothing left to cut. Under deflation, it gets to a point where businesses can make more money by saving their cash than by growing the business, and then you get a really nasty deflationary cycle going on. That's what happened in Japan.