Financial News

[StrangeSox]

Oh, so if I am mayor of soxtalk and I take out a 1 billion dollar loan and I give 900 million to myself and the other 99.95 million to my friend brett05 for always supporting me, but then give you and all other posters $1000 and know that the rising debt payments that will raise costs and be inequitably distributed, you can't say this is bad policy because I gave you $1000?

 

I can think something is bad even if it benefits me. I think the zoning policy around me is bad, but it certainly contributes to inflating the equity i have in my house. Should I take out a home equity loan and give it to a family to move there? Maybe that would be a good idea. I could also just try and cobble together a working majority to change how zoning policy is done so it is more fairly distributed.

 

This would at least be directly helping someone. In Jenks' scenario, you should instead take out a home equity loan and then give the cash to The City of Oak Park because you're a hypocrite otherwise.

[Balta1701]

I agree to an extent. By my problem is the double standard here - people complaining about how this tax cut screws the poor while they do nothing. If you want to pay more in taxes, go for it. Take the tax cut you're going to get and give it back to the government. Nothing is stopping you.

I'll save mine up for 2025 when the Middle Class tax increase part of this kicks in, fair enough?

[ptatc]

Less of one, and substantially so in many cases, for whatever it's worth.

 

I want different tax policy. I live in a world where this is the current tax policy. An individual voluntarily paying more is completely meaningless, and following the current rules doesn't make one a hypocrite. I'd gladly give up whatever tiny benefit I may see from this tax plan for something different, but that's not an actual choice I have.

The old tax brackets were 10,15,25,28,33,35,39.6.

the new tax brackets are 10, 12,22,24,32,35,37

 

so other than the lowest bracket the benefit of the tax cut decreases for the wealthiest but the benefit is the greatest for the middle tiers.

[Soxbadger]

Um, who are these economists and why are people still listening to them? Unemployment was lower than this in 1998 and there is still a large pool of people who left the labor force after 2008 and haven't yet been drawn back.

 

https://economix.blogs.nytimes.com/2013/11/...low-can-you-go/

 

Most economists place the rate in the range of 5 to 5.5 percent, though some estimates go as high as 6 percent. The Congressional Budget Office‘s latest projections have it at 5.5 percent.

 

https://www.federalreserve.gov/faqs/economy_14424.htm

 

Many estimates suggest that the long-run normal level of the unemployment rate--the level that the unemployment rate would be expected to converge to in the next 5 to 6 years in the absence of shocks to the economy--is in a range between 4.5 and 6 percent.

 

https://www.npr.org/2013/01/03/168508910/wh...t-number-really

 

NARIMAN BEHRAVESH: Well, full employment is defined as basically everybody who's looking for a job or is looking to be employed is, in fact, employed.

 

INSKEEP: The first time I ever heard of this concept - when I was a teenager, maybe -people talked about full employment as being about a 5 percent unemployment rate. They didn't think of the zero percent unemployment rate. They said 5 percent.

 

http://money.cnn.com/2017/06/02/news/econo...ment/index.html

 

Some experts believe it's starting to get too hot. The U.S. unemployment rate fell to 4.3% in May, according to Labor Department numbers published Friday. It's the lowest level since 2001.

 

That's why some experts think the U.S. economy is at, or getting close to, something called "full employment," which means employers can't find many more available and qualified workers for open jobs.

 

 

 

If youd like more I can gladly pull them. But its not really a controversial statement.

[Balta1701]

If youd like more I can gladly pull them. But its not really a controversial statement.

Ok, i'll accept. I'll also say these people are fools. This was easily done because there is still a large portion of workers who have left the job market - here's an EPI version with some interactive graphics summarizing.

 

Also worth noting that the opiod epidemic is probably at this point large enough to matter.

[StrangeSox]

The old tax brackets were 10,15,25,28,33,35,39.6.

the new tax brackets are 10, 12,22,24,32,35,37

 

so other than the lowest bracket the benefit of the tax cut decreases for the wealthiest but the benefit is the greatest for the middle tiers.

 

There's a lot more to it than just those tax brackets, though.

 

https://www.npr.org/2017/12/19/571754894/ch...he-middle-class

 

The average household would get a tax cut of $1,610 in 2018, a bump of about 2.2 percent in that average household's income, according to a report released Monday by the Tax Policy Center, a nonpartisan think tank that has been critical of the tax overhaul plan.

 

However, extremes make averages, and the benefits would be much larger for richer households. A household earning $1 million or more would get an average cut of $69,660, an income bump of 3.3 percent. Compare that with the a tax cut of $870, or 1.6 percent, for the average household earning $50,000 to $75,000.

 

In absolute terms, 83% of the benefits of this tax cut go to the top 1%. If you actually wanted to have a "middle class" tax bill, there would be ways to bring that ratio way down. That it's targeted mainly to favor the wealthy really comes through in relative benefits shown above. the $50-75k household, which is right in the "middle class" sweet spot, sees about half the tax breaks a $1M+ household sees in relative terms, and that's before even considering the actual life impacts of 1.6 or 3.3% cut on the day-to-day life of those two households.

[StrangeSox]

Ok, i'll accept. I'll also say these people are fools. This was easily done because there is still a large portion of workers who have left the job market - here's an EPI version with some interactive graphics summarizing.

 

Also worth noting that the opiod epidemic is probably at this point large enough to matter.

 

Does EPI's "missing workers" get captured in any of the other BLS U-rates? Or is this their own metric? Because while U-6 isn't at the lowest point it's ever been, it is the closest we've been since the late 90's.

[Soxbadger]

Ok, i'll accept. I'll also say these people are fools. This was easily done because there is still a large portion of workers who have left the job market - here's an EPI version with some interactive graphics summarizing.

 

Also worth noting that the opiod epidemic is probably at this point large enough to matter.

 

Balta,

 

What you posted actually works into the idea of why unemployment will never be 0. Now there can be argument as to what the floor of unemployment may be, but generally speaking for as long as I can remember that range is between 4-6%. The reason is that while Job A may be available, there are certain workers who just dont want it. Whether its because the pay isnt good, whatever.

 

So lets say they increased minimum wage, that would increase the amount of people who would work Job A, but there also would likely be a decrease in jobs available. So it would likely be a net wash. The only way to counteract this is to give extra incentive to break the cycle.

 

IE You get some sort of tax break if you hire X amount of employees. You get some sort of tax break if you dont lay off X% of employees etc.

 

Unless you create incentives, it will simply be a shell game.

Edited December 21, 2017 by Soxbadger

[Jenksismyhero]

This would at least be directly helping someone. In Jenks' scenario, you should instead take out a home equity loan and then give the cash to The City of Oak Park because you're a hypocrite otherwise.

 

This is akin to people complaining about minimum wage and workers' benefits but balk when companies start to raise prices on their goods. You can complain about the tax cuts favoring the wealthy when they don't need the extra help. But if you're complaining about the poor losing out on certain programs or whatever, and you go ahead and take the benefit of the cut anyway, then yes, you're a hypocrite. If you want to pay more in taxes, do it. Pay more. Don't stick to what you're obligated to pay. Your contribution isn't meaningless if everyone does it.

Edited December 21, 2017 by JenksIsMyHero

[Dick Allen]

Government says you need to pay X. But you pay X and then something additional.

You do have that option on your tax return.

 

The fact is Trump brags about how much he is worth, how great his companies do, yet doesn't pay taxes.

 

If he doesn't have to pay, why do I?

[Jenksismyhero]

Balta,

 

What you posted actually works into the idea of why unemployment will never be 0. Now there can be argument as to what the floor of unemployment may be, but generally speaking for as long as I can remember that range is between 4-6%. The reason is that while Job A may be available, there are certain workers who just dont want it. Whether its because the pay isnt good, whatever.

 

So lets say they increased minimum wage, that would increase the amount of people who would work Job A, but there also would likely be a decrease in jobs available. So it would likely be a net wash. The only way to counteract this is to give extra incentive to break the cycle.

 

IE You get some sort of tax break if you hire X amount of employees. You get some sort of tax break if you dont lay off X% of employees etc.

 

Unless you create incentives, it will simply be a shell game.

 

I think it would be really tough to create an incentive large enough to offset the costs of hiring employees and providing them the full wages and benefits that people want. Isn't the general rule that you triple an employees wages to get to the real cost of the employee to the employer once you factor in training, insurance and whatnot? (maybe it's double, I can't remember). That's a pretty huge tax incentive you'll have to come up with.

[Jenksismyhero]

You do have that option on your tax return.

 

The fact is Trump brags about how much he is worth, how great his companies do, yet doesn't pay taxes.

 

If he doesn't have to pay, why do I?

 

See when republicans point out that the poor pay no income tax either, the response is they pay taxes, just in other ways. So does Trump. I'm sure the amount he spends on sales and property taxes is more than our combined income taxes.

 

 

[StrangeSox]

This is akin to people complaining about minimum wage and workers' benefits but balk when companies start to raise prices on their goods. You can complain about the tax cuts favoring the wealthy when they don't need the extra help. But if you're complaining about the poor losing out on certain programs or whatever, and you go ahead and take the benefit of the cut anyway, then yes, you're a hypocrite. If you want to pay more in taxes, do it. Pay more. Don't stick to what you're obligated to pay. Your contribution isn't meaningless if everyone does it.

 

I think minimum wages should be raised but I don't voluntarily pay more money for goods and services because that doesn't actually raise wages or benefit low-wage workers in any way.

 

Your last sentence is so close to getting it but then falls apart. It's meaningless unless it's codified policy against which revenue expectations can be set. It's also meaningless because even if everyone earning less than $100k foregoes this tax cut, it's still a drop in a bucket compared to the corporate and wealth tax cuts.

 

I want better public policy and broader social services. That may result in higher taxes for me to fund them. I believe the wealthy and corporations pay too little in taxes, and a good majority of the country agrees with me. Me paying extra taxes right now won't change anything at all. Me and a million other people doing it won't change anything because it doesn't produce any sort of reliable, predictable revenue streams on which to base national policy.

[StrangeSox]

See when republicans point out that the poor pay no income tax either, the response is they pay taxes, just in other ways. So does Trump. I'm sure the amount he spends on sales and property taxes is more than our combined income taxes.

 

As a percentage of his income, it is far, far less.

[bmags]

https://economix.blogs.nytimes.com/2013/11/...low-can-you-go/

 

Most economists place the rate in the range of 5 to 5.5 percent, though some estimates go as high as 6 percent. The Congressional Budget Office‘s latest projections have it at 5.5 percent.

 

https://www.federalreserve.gov/faqs/economy_14424.htm

 

Many estimates suggest that the long-run normal level of the unemployment rate--the level that the unemployment rate would be expected to converge to in the next 5 to 6 years in the absence of shocks to the economy--is in a range between 4.5 and 6 percent.

 

https://www.npr.org/2013/01/03/168508910/wh...t-number-really

 

NARIMAN BEHRAVESH: Well, full employment is defined as basically everybody who's looking for a job or is looking to be employed is, in fact, employed.

 

INSKEEP: The first time I ever heard of this concept - when I was a teenager, maybe -people talked about full employment as being about a 5 percent unemployment rate. They didn't think of the zero percent unemployment rate. They said 5 percent.

 

http://money.cnn.com/2017/06/02/news/econo...ment/index.html

 

Some experts believe it's starting to get too hot. The U.S. unemployment rate fell to 4.3% in May, according to Labor Department numbers published Friday. It's the lowest level since 2001.

 

That's why some experts think the U.S. economy is at, or getting close to, something called "full employment," which means employers can't find many more available and qualified workers for open jobs.

 

 

 

If youd like more I can gladly pull them. But its not really a controversial statement.

 

The problem with these is some consideration needs to be given to the employment/population ratio. Unemployment can be at 5% or below 5% but still have slack if the prime age employment groups which there was up until recently, then it doesn't mean you are at full employment.

 

There is a floor to the unemployment rate, it's just not an isolated number.

[Balta1701]

Balta,

 

What you posted actually works into the idea of why unemployment will never be 0.

No it doesn't. The spike in workers who are no longer in the labor force occurred starting in 2008. That spike has yet to be fully removed.

[Balta1701]

Does EPI's "missing workers" get captured in any of the other BLS U-rates? Or is this their own metric? Because while U-6 isn't at the lowest point it's ever been, it is the closest we've been since the late 90's.

This is their own metric, but yes the U3 unemployment rate is at levels seen in the late 90s but the U6 rate is not. That right there tells you there is still additional slack in the job market - and notably, the late 90's were the only time we saw broad wage growth in the last 30 years. So yeah, that gap widened in 2008 and it still has not come back down.

[StrangeSox]

No it doesn't. The spike in workers who are no longer in the labor force occurred starting in 2008. That spike has yet to be fully removed.

 

Labor force participation rate declined from 2008 and has been flat for several years, but how much of that is due to Boomers aging out of the workforce?

 

https://tradingeconomics.com/united-states/...ticipation-rate

 

This is their own metric, but yes the U3 unemployment rate is at levels seen in the late 90s but the U6 rate is not. That right there tells you there is still additional slack in the job market - and notably, the late 90's were the only time we saw broad wage growth in the last 30 years. So yeah, that gap widened in 2008 and it still has not come back down.

 

U-6 is basically back where it was in 2006. It was lower for about two years in the late 90's. 8% U-6 may not be the lowest ever, but it's still really low. If the only way to get broad-but-still-not-great wage growth in our economy is to get to historically low U-6 levels, then something is fundamentally wrong with the structure of our economy.

Edited December 21, 2017 by StrangeSox

[Soxbadger]

I think it would be really tough to create an incentive large enough to offset the costs of hiring employees and providing them the full wages and benefits that people want. Isn't the general rule that you triple an employees wages to get to the real cost of the employee to the employer once you factor in training, insurance and whatnot? (maybe it's double, I can't remember). That's a pretty huge tax incentive you'll have to come up with.

 

Lets say ATT makes 86,902,000,000 in profit. Lets say you give them a 5% tax break incentive.

 

Thats a 4bil tax break. Att has 247k employees.

 

That would work out to approximately 16k benefits per employee.

 

The problem with the tax cut, is you just gave it away, when you could have tied them to something and made it better for average employees, while still giving the company something significant.

 

 

[StrangeSox]

Lets say ATT makes 86,902,000,000 in profit. Lets say you give them a 5% tax break incentive.

 

Thats a 4bil tax break. Att has 247k employees.

 

That would work out to approximately 16k benefits per employee.

 

The problem with the tax cut, is you just gave it away, when you could have tied them to something and made it better for average employees, while still giving the company something significant.

 

You could have just cut a $16k check to every household in the country for the price of this tax plan.

[bmags]

Labor force participation rate declined from 2008 and has been flat for several years, but how much of that is due to Boomers aging out of the workforce?

 

https://tradingeconomics.com/united-states/...ticipation-rate

 

 

 

U-6 is basically back where it was in 2006. It was lower for about two years in the late 90's. 8% U-6 may not be the lowest ever, but it's still really low.

 

There is still slack, but there will be shocks industry by industry. Construction and Restaurants feeling it now. Quit rates getting higher in construction.

 

I still don't see us at full employment yet, partially because of the restructuring from retail to other industries.

[Soxbadger]

You could have just cut a $16k check to every household in the country for the price of this tax plan.

 

Well ATT is going to pocket some of the money obviously

[StrangeSox]

Well ATT is going to pocket some of the money obviously

 

Huh didn't even recognize that your hypothetical worked out to the same amount as the "$1.5T/125M households" math, neat

[Balta1701]

There is still slack, but there will be shocks industry by industry. Construction and Restaurants feeling it now. Quit rates getting higher in construction.

 

I still don't see us at full employment yet, partially because of the restructuring from retail to other industries.

The simplest and 100 most obvious, textbook level signal that "unemployment can't go any lower" would be wage pressure. Maybe added in with productivity growth as well since that has been so badly depressed along with the job market since 08. We might finally have some hints of that the last few months, but that is completely different from the "economists said unemployment couldn't get this low" thing that I'd still call laughable.

[Soxbadger]

The simplest and 100 most obvious, textbook level signal that "unemployment can't go any lower" would be wage pressure. Maybe added in with productivity growth as well since that has been so badly depressed along with the job market since 08. We might finally have some hints of that the last few months, but that is completely different from the "economists said unemployment couldn't get this low" thing that I'd still call laughable.

 

Misquoting (imo) is really a deceptive practice. The comment was:

 

 

Many economists thought it was impossible to get unemployment this low. 4% unemployment is really low.

 

If youre going to say something is "laughable" at least have the courtesy of commenting on the actual quote, which is supported by fact. You have yet to bring in all of these other economists who think 4% unemployment isnt low. Or have yet to bring in any articles etc where economists dont talk about a range of unemployment floor.