18 Oct 10
Originally posted by spruce112358I don't think anyone thinks deficit spending and public works alone are a cure, but they do help to mitigate the severity of a recession. Interesting that you recognize that it worked for Japan, then use it as criticism for the US.
Deficit spending and public works. Sound familiar? Have you heard anyone recently proposing that the US take identical steps as a cure for our recession brought on by a property bubble? Krugman, say? Or Thomas Friedman?
Your recession was not 'brought on by a property bubble'. It was brought on by a whole range of really bad policies and poor saving habits by Americans (encouraged by bad policies).
18 Oct 10
Originally posted by twhiteheadI think the article said deficit spending only postponed necessary changes.
I don't think anyone thinks deficit spending and public works alone are a cure, but they do help to mitigate the severity of a recession. Interesting that you recognize that it worked for Japan, then use it as criticism for the US.
Your recession was not 'brought on by a property bubble'. It was brought on by a whole range of really bad policies and poor saving habits by Americans (encouraged by bad policies).
I can see the argument for government deficit spending during a large-scale war. I'm not sure it makes sense any other time -- and certainly not during boom times like we had been having. You pay down debt during boom times (duh!)
If government was more contrarian or level-headed, they would have cancelled the mortgage tax deduction halfway into the property boom. After all, why do you need tax policy to encourage buying houses when everyone is buying houses? It makes no sense.
18 Oct 10
Originally posted by spruce112358In other words they were effective at staving off many of the negative side effects of the recession.
I think the article said deficit spending only postponed necessary changes.
Surely the fact that they are not an ultimate cure, is not an argument against not using them. Thats like saying any doctor that prescribes pain killers is a failure.
I can see the argument for government deficit spending during a large-scale war. I'm not sure it makes sense any other time -- and certainly not during boom times like we had been having. You pay down debt during boom times (duh!)
You brought it up in context of post bubble burst. Now you are talking about boom times. Why the change of context?
If government was more contrarian or level-headed, they would have cancelled the mortgage tax deduction halfway into the property boom.
They shouldn't have had a tax deduction in the first place.
After all, why do you need tax policy to encourage buying houses when everyone is buying houses? It makes no sense.
To make more people buy houses? It does make sense if that is your goal. I have seen it argued though that encouraging mortgages is not necessarily good for the economy. I think it is more of a US cultural thing than an economic thing.
I also find it hilarious how people talk of owning the house when in reality the bank owns it (typically for at least half the mortgage term here in SA, during which you are only paying off interest). Of course many people found that out in the US when the banks foreclosed on them.
18 Oct 10
Originally posted by sh76Japan's birth rate is one of the lowest in the world, and immigration too is relatively low. Consequently, Japan is one of the few countries in the world where population is actually falling. It is not therefore surprising that economic growth should be low. But since a static economy with a falling population actually means that GDP per capita is still growing, I'm not sure why Japan should worry about this too much!
So, are we doomed to decades of economic stagnation, deflation and near zero interest rates or are we really different?
US population is forecast to continue growing over the next fifty years, both through natural increase and immigration, so despite shocks and troubles such as the recent one, I imagine the US economy will continue to grow. Due to low population growth, European economies may look more like Japan's - but again, that may not be a problem in per capita terms.
18 Oct 10
Originally posted by finneganIn the last month (again, just to pick a random time sample; feel free to pick another and measure if you please), I have 12 pages of posts. That is far less than at least a dozen other regulars here (probably more). Yet the impression exists that I do nothing but eat, breathe and sleep this board.
The amount of time you spend on this site, it is by no means certain that you do still have a wife. Have you checked lately?
I should get a RHP award for greatest memorability per post.
When are the Flaming Tomato nominations?
18 Oct 10
1 edit
Originally posted by twhiteheadThe bank doesn't own your house in the US; a mortgage is a loan secured by the property. Foreclosure is merely the enforcement this lien because of nonpayment; the bank cannot foreclose any time they please.
[/b]In other words they were effective at staving off many of the negative side effects of the recession.
Surely the fact that they are not an ultimate cure, is not an argument against not using them. Thats like saying any doctor that prescribes pain killers is a failure.
I can see the argument for government deficit spending during a large-scale war. f interest). Of course many people found that out in the US when the banks foreclosed on them.
18 Oct 10
Originally posted by spruce112358The mortgage tax deduction had little impact on the housing boom. Only 20% of taxpayers even itemize, so the majority who own homes don't use it. That would be even more true during the 2000's when the banks loosened their lending standards to include those with lower income and assets to satisfy Wall Street's desire for more mortgages they could securitize.
I think the article said deficit spending only postponed necessary changes.
I can see the argument for government deficit spending during a large-scale war. I'm not sure it makes sense any other time -- and certainly not during boom times like we had been having. You pay down debt during boom times (duh!)
If government was more contrarian or level ...[text shortened]... u need tax policy to encourage buying houses when everyone is buying houses? It makes no sense.
18 Oct 10
Originally posted by no1marauderWhy would someone with a mortgage not itemize? The standard deduction is less than $6,000. Even on a small mortgage (say, $150,000), the mortgage interest alone is going to be more than the standard deduction.
The mortgage tax deduction had little impact on the housing boom. Only 20% of taxpayers even itemize, so the majority who own homes don't use it. That would be even more true during the 2000's when the banks loosened their lending standards to include those with lower income and assets to satisfy Wall Street's desire for more mortgages they could securitize.