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Griswold -> RE: The checks go out today...... (4/30/2008 5:33:29 PM)
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quote:
ORIGINAL: Mercnbeth
Griswold,
quote:
I'll always choose dying over dead.
BEAUTIFUL! I would agree, and make the same choice.
You see this as something more than a band-aid? Is there a future strategy implied that I'm missing? Will this Bill help long term?
Appreciate that life is also good here in the South Bay. I didn't need this latest rate change and would instead rather seen the existing money I have not be proportionally devalued.
Selfishly, things couldn't be better. That doesn't prohibit me from pointing to the fiscal irresponsibility of this Bill. Nor does it make me feel good about how easily the average US citizen can be bought off. I see poor consequences coming as a result for everyone.
Granted 90% of business comes from small companies having fewer than 100 employees. The problem is the 90/10 rule. The other 10%, the ones with thousands of employees, are the companies and industries with huge problems. Although this Bill may get them through November, coincidence (?); I think it is going to be a very cold winter. Having some hard currency on hand at that point is essential.
I'm not spending Corporate capital because despite the bargains being presented I don't think the market has bottomed out. If for no other reason, the government is printing money 24/7, making it worth less every day.
BTW - According today's report; this quote: "See...we're in a recession." isn't accurate. The US saw a 0.6% growth in the 1st quarter. quote:
The country's economic growth during January through March was the same as in the final three months of last year, the Commerce Department reported Wednesday. The statistic did not meet what economists consider a definition of a recession — which is a contraction of the economy. This means that although the economy is stuck in a rut, it is still managing to grow, even if slightly.
Source: http://news.yahoo.com/s/ap/20080430/ap_on_bi_go_ec_fi/economy_78;_ylt=Aj1.0FbMuXETuIik04pSDY3qxQcB
I don't know about you, but I'd love to be able to audit those statistics. However, it kind'a makes you wonder what they'll do to stimulate us when we are in a recession. You may have been able to save even more on your $240k worth of purchases.
I hope your position and prognostication is more accurate than mine. And if we do enter into a recession we both have customers able to pay for the use of your new equipment, and afford my services.
You make some excellent points, and I should say at the outset, you always do.
I saw also the latest in the news today in that the GDP grew by 0.6%...not a great number...but an increase nonetheless.
I actually anticipated a negative number...it was a nice surprise.
I'm not convinced that the stated assumption of when a recession begins is necessarily accurate. The financial issues most Americans are experiencing today are decidedly different than they were in 1974 -79, and so comparisons ("we're finally at the comparative price that we were in 1977 as to gasoline") aren't necessarily accurate.
In 1977 we had 9% mortgages. By 1980 we were already above 12% and by 1981 when I bought my first home, we'd crested 17%.
Today we're at 6.5%.
What the average American spends on daily necessities is not necessarily directly comparative to then.
In 1978, consumer spending comprised approx. 56% of the GDP...as of last year it was above 70%, meaning...when the feds tightened in 1979, the tightening more affected business, but in the end it affected everyone.
In 1979, a car purchased for 21% of your average yearly income lasted 5 years, and you turned it in 3 because you could afford to....in 2007, a car that cost you 31% of your income lasted 6, but you kept it 8 years because you couldn't afford to buy another one.
And some of that was due to the great changes in quality that allowed you to justify the greater cost (and the longer value). Who had DVD players in 1978? Air conditioning that went all the way to the back of the car with the push of a button...and push button windows standard?
Today you can actually purchase a contract for satellite emergency services, and it can be done on 72 easy monthly payments.
Life has changed in the last 30 years, and few remember the times when we all had smaller houses...because we've come to realize we "deserve better".
The rest of the world has been envious for decades...and now, possibly this our due. Who knows.
I don't see this (the current tax bennie thing) as any more than a bandaid. I agree with you on that. It's a stop gap at best.
And its bill will come due.
It isn't any great leap to run the numbers, which in the early 80's seemed extraordinary at 1 or 2 trillion (known) debt...then after Reagan...it was 3 (or maybe it was 4)...today it's an absolutely astounding 8 (or was it 12?).
And yet I've looked back at the national debt figures in the past. It's actually available on some government site I saw some months back.
There were some years where it was as astounding as our current (based on the annual GDP at the time)...in a few cases, it exceeded everything we've seen currently by a factor of easily 12. Indeed, I can't quote specific numbers but, during WWII I seem to recall debt exceeding GDP by a factor of 2. Ours currently is slightly below GDP. During one of the credit crunches of the mid 1800's...it was even worse. And we came out of it (which is not at all to suggest that I think we can this time).
But those ancient figures don't make our current situation any more palatable.
As to wishing your assets wouldn't be devalued, in any manner....you know as well as I do....they will be, simply by the flux of time...and whichever govt. we choose to affectuate.
(And any govt. we opt for, will opt for an excuse to affectuate their own failures).
Ergo...inflation.
And it's not just them...anyone that bought something for 10 bucks...will always want 15 for it....that's human nature. Your house that you bought for $220,000.00...sell it to me for $115,000.00 and I'll buy the contrary argument.
We only argue about it when it hits our pocketbook.
This bill is NO QUESTION fiscally irresponsible....but you choose...who do you choose to suffer?
You be the King that divides the child in half.
The Mother in Appalachia (sp?) who can barely support her children as it is?
How about the fellow who's been building a good solid business for 20 years in Arkansas...who depends on deliveries to the West Coast to large corporations...but he had to make 2 year commitments on price...fuck his materials costs...and he did so because he wanted to ensure the jobs of the 9 people who are his neighbors, and because his business, as small as it is, is still 10% of the local little shithole town he resides in...because it's the place his son grew up, ended up in a wheelchair, and the guy decided to stay there to build a small little franchise because he knew he could...and then....
The world changed...and what was at one point, barely 7% of his cost structure (shipping and transportation), now thanks to fuel, suddenly became 16%...except, there was one slight problem:
He had a 4% margin.
With a 9% increase in expense ratios...that boy's upside down by 5%.
This story's happening nationwide.
It isn't just in Appalachia.
It's in Seattle, Chicago, Miami, Orlando, Houston, San Diego....and even in Palos Verdes California.
There's a lot of people very frightened right now.
This ship will right itself over time. The USA has a history of finding solutions that exceed the worlds expectations, and often surprises them...and I'm confident we'll do it again...this time will take a smidge longer than previous periods...but no, I don't think this current tax plan is a good solution.
I think it's weak, I think it's poor planning, and I think it puts it all on a bunch of people, as likely all of us, in about 5 - 15 years. certainly your children, and at best, I think it was an extremely bad idea long term.
Will it soften the blow for what's about to happen? Yep.
Would another plan have been better? Only if American citizens had been more prudent with their funds...which, had they been, this current plan wouldn't have been necessary.
The simple facts are, we've been living far too beyond our means as a country...and as it turns out....a little morphine is going to make the pain go away for awhile.
At some point, there is going to be a price to pay...and the truth is....the argument others make, that we should do less...is historically correct.
It also involves a lot of gnashing of teeth.
I'm not convinced the USA is ready for, regardless of how much indignity many have for the governments current solution, a solution that involves the truth.
(And frankly, as much as you and I politely debate this subject...that's what the topic is truly about).
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