Biden wants to spend $6 trillion

[Suave]

I have a bit of money in Individual - Treasury Inflation-Protected Securities (TIPS) I'm thinking of adding to that investment.

I would expect there to be some transitory inflationary pressure on our booming economy as recovers from the C.O.V.I.D.-19 pandemic. I am confident this inflation will not be long term as our economy should stabilize with sufficient social safety nets put into place.

 

[sun rise]

I would expect there to be some transitory inflationary pressure on our booming economy as recovers from the C.O.V.I.D.-19 pandemic. I am confident this inflation will not be long term as our economy should stabilize with sufficient social safety nets put into place.

I'm not pushing the panic button (yet) but am considering some inflation hedges such as TIPS assuming they don't have negative interest rates as some auctions had in the past year.

 

[Suave]

I don't think people realize just how much money 6 trillion actually is.

This merely amounts to the amount of income U.S. billionaires ( edited ) ** and millionaires ** collectively made last year in conjunction with how much profit U.S. corporations made last year.

 

[Twilight Hue]

This merely amounts to the amount of income U.S. billionaires and millionaires collectively made last year in conjunction with how much profit U.S. corporations made last year.

Biden wants to spend 6 of these.



6 trillion dollars.

 

[Suave]

Seven trillion dollars might seem like lots of money to us non-one-percenters, but that's nothing more than the collective total amount of income earned last year in the U.S. by all the one percenters and corporations. (Revised) ** Maybe The U.S.treasury does need to print thousand dollar bills that could each then replace ten hundred dollar bills in order to save some space as well as some trees.**

 

[Twilight Hue]

Seven trillion dollars might seem like lots of money to us non-one-percenters, but that's nothing more than the collective total amount of income earned last year in the U.S. by all the one percenters and corporations.

 

[Twilight Hue]

One Trillion Dollars!

Biden wants six of these.

 

[Twilight Hue]

One Trillion Dollars!

Biden wants six of these.

Snippet...


To count one trillion dollars, one dollar per second, would take 31,688 years!

Note:

Biden wants at least 6 of these. Thats.....

190,128 years!

 

[Suave]

One Trillion Dollars!

Biden wants six of these.

Muhahahahahaha!

 

[Revoltingest]

There are lots of zero-sum games like that -- stock and money markets, for example.

On the other hand, lending money at interest to someone who wishes to invest in an idea or product, can actually increase the overall wealth. The lender takes a risk, but gets richer when then borrower actually develops something that others need and will buy -- and pays back the loan. And of course, the borrower gets richer through selling his product. And those that buy the product have merely traded money for something that they would rather have. Not bad, all around.

And I think we all do better when government takes a relatively small portion of all those transactions in taxes, to pay for what a whole society needs to prosper.

And if I recall, the big melt-down of 2008 was really about all those money and stock markets, not about real wealth creation at all.

The 2008 crash was precipitated by the reaction to 9/11.
I must leave, so my explanation (given many times on RF)
must wait til later). In short....it began with lenders failing
because property owners couldn't make payments.
That had been going on in a big way in 2002.

 

[PureX]

The 2008 crash was precipitated by the reaction to 9/11.
I must leave, so my explanation (given many times on RF)
must wait til later). In short....it began with lenders failing
because property owners couldn't make payments.
That had been going on in a big way in 2002.

It happened because the banks became market speculators, and bundled their loans into "investment instraments" of very questionable value. They were wrapping their rotten fish in today's newspaper and selling it as the catch of the day. Until it putrefied and everyone got sick.

 

[Revoltingest]

I have a bit of money in Individual - Treasury Inflation-Protected Securities (TIPS) I'm thinking of adding to that investment.

It appears only to pay interest to keep pace with inflation.
But since you must pay income taxes on that interest,
you'll fall behind. The Fed will slowly waste your equity.
I want a better result....actually making money after taxes.

 

[Revoltingest]

It happened because the banks became market speculators, and bundled their loans into "investment instraments" of very questionable value. They were wrapping their rotten fish in today's newspaper and selling it as the catch of the day. Until it putrefied and everyone got sick.

But it was precipitated by 9/11, which saw businesses closing
& contracting. Employees lost jobs...business owners lost income,
& making loan payments suffered. It's why Countrywide failed,
& other lenders were troubled. Other underlying problems created
the climate of risk to such triggers, eg, the Community Reinvestment
Act, government created PMI, government lending of highly leveraged
loans (via Fannie Mae & Freddie Mac), tax policy that encouraged
speculation & overpaying for too much home.

 

[PureX]

But it was precipitated by 9/11, which saw businesses closing
& contracting. Employees lost jobs...business owners lost income,
& making loan payments suffered. It's why Countrywide failed,
& other lenders were troubled. Other underlying problems created
the climate of risk to such triggers, eg, the Community Reinvestment
Act, government created PMI, government lending of highly leveraged
loans (via Fannie Mae & Freddie Mac), tax policy that encouraged
speculation & overpaying for too much home.

The banks were loaning money to everyone they could talk into borrowing, regardless of their likelihood of being able to pay it back so they could bundle those loans up and sell them as "investment instraments". It had nothing to do with 9/11. Any slowdown in the economy would have caused those bad loans to default. It was basically a giant Ponzi scheme. And like all Ponzi schemes, it had to eventually collapse.

 

[Revoltingest]

The banks were loaning money to everyone they could talk into borrowing, regardless of their likelihood of being able to pay it back so they could bundle those loans up and sell them as "investment instraments". It had nothing to do with 9/11. Any slowdown in the economy would have caused those bad loans to default. It was basically a giant Ponzi scheme. And like all Ponzi schemes, it had to eventually collapse.

You weren't in the business in 2001. I was.
When the towers fell, I saw commercial tenants of mine & elsewhere
layoff employees & even close businesses. This was why borrowers
fell behind on payments, leading to lender failures in 2008.
Reckless lending was also a factor, but only one of many. Note also
that the fed required lending to marginally qualified borrowers in
areas formerly ill served due to red lining.
A Ponzi scheme is a mistaken analogy because it cannot possibly
succeed. The lending & borrowing situation was merely at risk
of collapsing. Had the economy not turned worse in 2001,
things could've gone along swimmingly.
Today we see the same risk factors have risen again, eg, highly
leveraged loans, tax policy that encourages over-buying of homes,
leading to another real estate bubble.

 

[Kooky]

Had the economy not turned worse in 2001,
things could've gone along swimmingly.

"If only things had kept getting better, then they wouldn't have gotten worse."
- the investment broker's chorus since the early days of the Amsterdam Exchange

Today we see the same risk factors have risen again, eg, highly
leveraged loans, tax policy that encourages over-buying of homes,
leading to another real estate bubble.

It's almost as if the same people as in 2001 were in charge of America's banking and stocktrading business. Fortunately, they are guided by the Invisible Hand of the Market, as we all must, unless Market causes us to lose money, in which case the government better bail us out pronto, because our financial misfortunes were really the government's fault all along.

 

[PureX]

You weren't in the business in 2001. I was.

So you should know better. But as always, you defend the greedsters and blame the government (the democrats) at every opportunity.

When the towers fell, I saw commercial tenants of mine & elsewhere
layoff employees & even close businesses.

Why? The towers falling had nothing to do with their businesses. 9/11 is not the reason the housing markets finally collapsed. ANY instability in the economy would have resulted in all those bad home loans going into default.

This was why borrowers fell behind on payments, leading to lender failures in 2008.

Borrowers fell behind in the payments because they were not reasonable loan risks to begin with. Banks were loaning money to anyone who was willing to borrow it, regardless of their ability to keep up with the payments. This is common knowledge and has been reported on many times by every possible news source. And yet somehow you didn't seem to get the message.

Reckless lending was also a factor, but only one of many. Note also that the fed required lending to marginally qualified borrowers in areas formerly ill served due to red lining.

The "fed" is part of the problem. They were all in on the Ponzi scheme and they were all getting very rich off it until it finally collapsed. The greed of the rich and powerful, as always, was the prime motive and ultimate cause of the collapse. They had bribed up the government to rescind the Glass-Stegal act that had previously prevented banks from engaging in market speculation. And once that barrier had been removed, the banks devised a scheme that allowed them to falsely inflate the value (security) of their loan bundles and sell them on the market as investments. These phony investments were highly profitable so long as everyone could keep ignoring the fact that they were primarily bad (insecure) loans. So the greedsters couldn't resist them even though many of them knew their value was just make-believe. They could still make lots of money as long as they didn't get caught holding them when the "balloon" finally burst. Which is very much like any other Ponzi scheme.

The lending & borrowing situation was merely at risk of collapsing. Had the economy not turned worse in 2001, things could've gone along swimmingly.

Every economy has it's ups and downs. Those insecure loans were bound to default sooner or later and the banks all knew it. But until they did, big profits kept them playing the game. That was the big gambling game all the greedsters were playing. Just as with any Ponzi scheme, sooner or later the "investors" were going to get left holding empty "investment instraments" because they were never any good to begin with. Their value was falsified from the start, and the profits being taken on them came from the next buyer in the succession. Everyone made money passing the hot potato around until the bell finally rang and the jig was up.

Today we see the same risk factors have risen again, eg, highly leveraged loans, tax policy that encourages over-buying of homes, leading to another real estate bubble.

Well, of course. No one ever reinstated the Glass-Stegal Act that had previously prevented the banks from engaging in market speculation (and manipulation). So it's bound to happen again. The greed of the rich and powerful never rests and the next big Ponzi scheme (market bubble) is always afoot.

 

[Revoltingest]

"If only things had kept getting better, then they wouldn't have gotten worse."
- the investment broker's chorus since the early days of the Amsterdam Exchange

It can be difficult to explain economics to those not in the game.
We had risk factors for the bubble crashing in 2001. We had
them before too. And we have them now. The bubble doesn't
always burst, but instabilities lurk in waiting for triggers.

Some suggestions to avoid bubbles by encouraging
safer behavior....
- End tax subsidies for home ownership, eg, no income tax
on profit (some limits), deductable property tax & interest
(some limits).
- End monetary policy induced inflation (ie, currency
devaluation), which encourages over-buying homes
as a hedge against inflation.
- Curb high LTV (loan to value) loans, which put home
owners in precarious positions in an economic slump.

Some suggestions to cope better with bursting bubbles...
- Ban high real estate transfer costs. If someone needs
to move to where the jobs are, local government should
not fleece them with high costs of selling.
- Government should allow loan renegotiation with its
troubled borrowers. Historically, Fannie Mae & Freddie
Mac (largest residential lenders of all, & created by
the fed gov) have refused to assist borrowers, preferring
to foreclose. Private lenders are much better behaved.
- Control predatory foreign lenders, eg, RBC, Citizens NA,
which are owned by the British government.
- If aid is to be given, provide it to the borrowers rather
than the lenders. This aids both, rather than just lenders.

 

[Revoltingest]

So you should know better.

In this case I do claim knowledge of what happened.
While you have baseless polemics against capitalism,
I have experience in the field.

 

[wellwisher]

Giving money to the government, as taxes, is a bad investment since you will get a negative rate of return. The national debt is based on money borrowed from China and others. Each dollar of new taxes collected loses 25 cents value up front to pay the interest on debt from previous bad policy decisions. Biden wishes to increase the negative rate of return for the future. Eating the seed potato makes no sense.

The 75 cents left is then divided by lawyers like Pelosi and Schumer who are not qualified to invest in good investments. They are self serving, using tax money to buy votes and pay off donation debts. Add to that the overhead and incompetence of a very bloated government and you get a horrible national investment plan.

The private sector and free market cannot operate this way. No company can have deficits each year and survive. The private sector concentrates itself down to the winners who can make a positive rate of return. If the governed had to compete, it would be forced into bankrupcy and then replaced. The GNP and jobs growth come from the private sect and gives the taxpayer a positive rate of return on non taxed income. Trump and others have demonstrated that if you give tax payers some of their tax money back; tax break, the taxpayer invests in the private sector and gets a positive rate of return; GNP grows.

The two things that make this bad investment of tax dollars possible, are money and power. We raise tax money and give it to the worse examples of investors, who have absolute power to waste and mismanage. We need to tax the monopoly on power at the same rate as the tax on money.

If a billionaire has to do their fair share and give up 30% of their wealth as taxes, then why don't the powerful do their fair share and give up 30% of their power? The bad performance of government is due to not having any tax on power. Those who pay money taxes, but have no power, should have a say on those who use power. This needs to occur in real time and not just at election time. The damage and mismanagement is done in real time.

Since we tax the richest at the highest rates, we should tax the power of the most powerful at the highest rates. Votes in the US House and Senate would count for 70% of one vote, and the tax payer get 30% of one vote; national referendums. This private sector assistance; check and balance, can help direct the tax investment of government in better directions; away from pork barrel, overhead, donation quid pro quo, and bureaucratic money pits of power. If my government could make a positive rate of return on taxes, I would invest more. But I do not invest in mismanaged money pits, with no tax on power, with those in power only able to give me a -35% rate of return. Why do we elect greedy morons instead of good investors?