# Do you believe the U.S. economy is improving?



## gpurtz (Aug 28, 2009)

This is my very unofficial consumer confidence poll. 

Based upon your personal observations and experience (as opposed to what you read or see on T.V.), do you believe the U.S. economy is improving?

Please answer yes or no and explain only if you feel like it.

My answer is "no".

Gary

http://www.tugbbs.com/forums/images/smilies/eusa_think.gif


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## stevedmatt (Aug 28, 2009)

Yes.

I just wanted to say yes, but my message was too short, so I added this sentence.


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## Passepartout (Aug 28, 2009)

Absolutely YES! The markets are up nearly 20% this year, people and businesses can borrow money, housing sales are up a couple of months in a row, I see new homes being built around our area. Home prices are well below where they were 2 years ago, and it may take several years to get back to those levels. This, of course has an effect on property tax revenues which, in turn affects schools, police, fire departments, parks, recreation and the whole spectrum of services we expect from our local governments. 

Has the economy rebounded (past tense) no. People still need jobs, It's an employer's job market. They will continue to try for greater productivity from the 'skeleton crews' that escaped layoff in the last year or two before workers get recalled, and shifts that were cancelled get restarted. 

I can see light at the end of the tunnel, and unlike a year ago, I'm not seeing it as an oncoming train.

Jim Ricks


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## Patri (Aug 28, 2009)

No. People without jobs still don't have jobs.


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## barndweller (Aug 28, 2009)

Definite YES. My unemployed friends & family members have found work and homes are beginning to sell again in my area. People are still cautious about spending but the movie theater was packed when I went last week. We just booked a trip to Disneyland after putting it off for awhile. We are going the cheap route but at least we are going.


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## beanie (Aug 28, 2009)

yes . it is heading in the right direction


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## ScoopKona (Aug 28, 2009)

beanie said:


> yes . it is heading in the right direction



Yes. 

I am seeing more job openings being posted. House prices have risen a fraction of a percentage in my area.

In general, people aren't as "gloom and doom" as they were.


There is still a long way to go. And I wouldn't even say that we've "turned the corner." But I would say we're now at "the bottom." How long THAT lasts is a matter of conjecture.


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## Barbeque (Aug 28, 2009)

No
Government spending is out of control  
Our investments have gone down
The dollar has been devalued
By the devaluation of the dollar with deficit spending there has been a huge hidden tax increase on those of us that are productive or have been productive for many years to come.


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## dougp26364 (Aug 28, 2009)

No, it's not getting better. It will only get worse when those that have been laid off from the aircraft plants begin to lose their unemployment payments sometime next spring or summer. 

The clock is ticking and, if things don't turn around real soon, there will be thousands who were barely surviving on unemployment checks having to figure out how to live without even that small amount of income. We're keeping a couple of rooms ready in our basement should the kids need to come back home.


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## MILOIOWA (Aug 28, 2009)

Yes AND no. We are seeing some signs of the downturn leveling off. However we are in for a big fall in the near future as the implications of all of these "special" government programs catch up to us.


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## stevedmatt (Aug 28, 2009)

Barbeque said:


> No
> Government spending is out of control
> Our investments have gone down
> The dollar has been devalued
> By the devaluation of the dollar with deficit spending there has been a huge hidden tax increase on those of us that are productive or have been productive for many years to come.



I agree with you about the devaluing of the dollar which has been happening for a few years now, but I find it difficult to believe your investments have gone down in the past 6 months. If so, you're holding quite a few short positions or are not diversified at all.


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## Elan (Aug 29, 2009)

I would say the economy has bottomed, but I am anticipating a longer "U shaped" bottom as compared to a shorter "V shaped" bottom.  I fear that we experience a very long period with little to no growth, as Japan did in the '90s.


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## WalnutBaron (Aug 29, 2009)

No.

The housing market has improved in large part because of the $4500 tax credit for first time buyers.

The auto market was goosed by the horrendously-managed Cash For Clunkers program which has left more than 90% of claims filed by the dealers unpaid and suffering severe cash flow issues, thanks to the ineptitude of the federal government bureaucrats charged with administering the program.

These temporary government programs have served only to prop up a very weak economy that is being overwhelmed by the crushing weight of debt that is being piled on us and our children and their children.

The White House and the Congressional Budget Office just announced that the federal deficit forecast has been raised from a staggering $7 trillion to $9 trillion over the next ten years.

Our economic future is under siege, and major tax increases have been laid in to those budget forecasts.

Unemployment is expected to top 10% nationally--even by President Obama.  

The economy is NOT improving, and negative GDP numbers from the first and second quarters of 2009 prove it.


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## pgnewarkboy (Aug 29, 2009)

Yes.  I see signs all around my area.  The budget deficit is not fatal and can be dealt with by tax increases and reduced spending on needless wars.  We will have a healthier economy when we stop spending trillions of dollars on wars all over the world.


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## dgdbloe (Aug 29, 2009)

No
 No increase in job posting in area
More local closing of small companies (and larger ones)
 Many local companies have gone to 3 weeks on- one off per month
For 30 yrs husband has always gotten 12-26 hrs per week overtime- now being asked to take time off
 In talking to people in restaurant business hearing #'s way down for lunch/dinner.
 Way too many "reduced"  for sale signs on homes


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## pcgirl54 (Aug 29, 2009)

yes, first time buyers and the $8000 tax credit are moving entry level homes. For those who have not lost their home to foreclosure this means that seller  moves up to a better home at low interest rates and reduced prices.

I have had an increase in the amount of jobs for my graduates who are in the automotive field in the last month and the reason my dealers tell me is because of the Cash for Clunkers. Uptick for auto related jobs as well that piggyback.

My loss on my stocks has come back 60-70% from the major loss of a year ago.

Do we have a ways to go -yes indeed but things are falling into place.

People need jobs and and if you are worried where the next meal is coming from you aren't spending.


Are we all being frugal what we buy and what we spend discresionary funds on that is also a yes.

We know the negatives and they are many but there are pluses too. 

My 28 yr old son has his first new car ever from the cash for clunkers program and got $6500 for his 1991 car. Also there is a tax credit of up to $600 I heard on the radio.

He was able to refi his mortgage for a better fixed rate. Many on TUG have done a refi.

Coworkers have bought their first home.

People have focused on reducing overall debt and that is a good thing because it was out of control for many.


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## GadgetRick (Aug 29, 2009)

No. The numbers being released (house prices, sales, new home starts, etc.) are all moving in a positive direction. However, they're _barely_ moving in a positive direction, meaning, they aren't falling but not really rising either. I suspect much of this is due to the tax credit available to first time homebuyers until the end of the year (it takes a while for someone to find a home then close on it).

Banks got a boost from unrealistically low rates a few months back. Had a mini-refi boom. That boom is over. Expect banks to report numbers not quite as good as they were earlier this year.

I'm in the mortgage business and I can tell you it's still (overall) _very_ difficult to obtain financing--even for those of you who actually qualify. Banks have tightened up more and are dragging their feet getting things done. Most banks are also underwriting to stricter standards than actual guidelines allow (ask me how I know...).

Expect rates to start to climb over the coming months. When that happens, purchases will stall again. 

The auto industry just received a false bump due to the CARS program.

Stocks had nowhere else to go but up so it's not surprising to see the markets rising. They had hit (essentially) rock bottom.

More importantly, the job market still sucks and we're still at (essentially) 10% unemployment and that number will climb before peaking sometime next year.

It is nice to see the press not publishing only doom and gloom, however. People are in a better mood which bodes well for the future--when we all have more money to purchase stuff again...


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## sun&fun (Aug 29, 2009)

Improving?  Yes.  Is everyone "whole" yet?  No.


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## vacationhopeful (Aug 29, 2009)

No.  I see too many people viewing themselves as victims and having pity parties.  Can't work on their problem while they blame others instead of asking how they should change.  Changing to fit into the "new economy" is mandatory as the job/career/income you used to have is gone for now and many be gone forever.  Look forward, not to what used to be.

After all, the old quote is "*Ask not what your country can do for you, ask what you can do .*.." IMHO applies.

Have more time off?  Are you helping to build a playground, volunteer at a soup kitchen, visiting your elderly family & friends, taking an evening class, writing a resume, losing 10 pounds, working out, cleaning the garage or looking for PT work?  

I was laid off from that perfect job in November, 1982 after 8 years, 10.5 months there and just 7.5 months from being vested in a defined pension plan.  I cried for a week after selling that new beautiful house while sitting in a place with 3 shades of pink & mauve ceramic tiles on the walls accented with blue metal kitchen cabinets.

Will I be working when I am 67?  Most likely.  Will I have the retirement funds that my parents had - NO.  Will I be happy - *Yes, as I choose to be happy and to enjoy the little things in life.*


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## stevedmatt (Aug 29, 2009)

WalnutBaron said:


> The White House and the Congressional Budget Office just announced that the federal deficit forecast has been raised from a staggering $7 trillion to $9 trillion over the next ten years.



Considering the $6 trillion increase the previous 8 years, $7-9 trillion in 10 years is about the status quo. And government spent a large portion of that money abroad. The future spending will be focused domestically.


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## Cathyb (Aug 29, 2009)

Yes!  Son is mechanic at GM place and work is finally picking up.  Mall was full of back-to-school shoppers.


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## bogey21 (Aug 29, 2009)

dougp26364 said:


> The clock is ticking and, if things don't turn around real soon, there will be thousands who were barely surviving on unemployment checks having to figure out how to live without even that small amount of income.



I agree with this and so must the credit card companies.  They are slashing credit lines to just above what is owed, and they are doing it rapidly.  My guess is that they don't want those coming off unemployment trying to live off their credit cards

George


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## easyrider (Aug 29, 2009)

The ecomomy is sick and will have good days and bad days. As one area of the economy streghtens other areas will fail. All the debt created to "improve the economy" may be what kills it off. Our personal economy is "not bad ".


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## hvacrsteve (Aug 29, 2009)

No, until the banks start working in normal mode again there will be no recovery.
I have perfect credit 800 plus, and plenty of assets, I don't really need the loan.
But I am having trouble getting a loan for a commercial building.

My bank didn't have any money!
The appraiser killed me first,
then BB&T wanted to take my business to give me a loan!
I said no thank you!

Now I have another local bank I am working with, after more than 6 months it may happen, still not positive.
If I really needed the loan I would be in big trouble!

So it is not normal, several years ago I would have this approved in 15 minutes and settled in two weeks.

I will probably never see that again, but it is tough out their!


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## Lawlar (Aug 29, 2009)

*Celebrate the Good Times Are Here!!!*

YES!!!!
There are sooo many ways I see the economy starting to improve – and dramatically.

I tried to buy a foreclosure home in the Palm Springs area.  4 or 5 months ago there were dozens and dozens of them at really cheap prices.  Homes built in the last two or 3 years, that were like brand new.  So I finally went for it and found, to my surprise, that all of a sudden there were a number of people bidding on the homes I was placing offers on.  I kept getting outbid because these people were bidding up the prices above what I thought was reasonable. It was a buying frenzy in the middle of what I thought was a housing crash. There are now only a few foreclosures left and they disappear as fast as they are listed. 

I just tried to buy a short sale.  A few months ago my broker wouldn’t show me a short sale because it was too complicated and took too long.  Now, there are lots of buyers trying to buy short sales because there are no foreclosures.  I lost out on a short sale yesterday when the lender rejected my offer (after I increased my first offer to above the listing price) because the lender was aware of a number of parties that wanted to bid higher on the home. 

The supply of homes for sale has decreased from 11 months to just more than 5 months.  This is happening all over the country (recently, 72 people bid on a property that was listed in the Bay area).  And the Republicans [the Republicans!!!] are in favor of increasing the tax credit for people who buy homes to $15,000. 

My wife’s son, in the Phoenix area, just bought a really nice home after leaving a home that is being given up to foreclosure.  They had no problem getting a loan for a nice home, even though they are walking away from their previous home.

My wife’s other son just started a new business for the first time in his life.  To my surprise, the bank gave him a business loan – he has no assets and he is walking away from a home he invested in that is upside down.  The landlord gave him a sweetheart deal in order to get someone in the space.  This is a great time to start a business because landlords are offering great deals to get commercial space filled.

The restaurants and shops here in Santa Barbara are busy again.  The tourists are coming back.  New restaurants and shops are opening in the spaces that were vacated by the restaurants and shops that went out of business.

I was a bankruptcy attorney for 30 years.  I’ve seen this cycle so many times in the past.  Those who were overextended in credit have closed their businesses and walked away from their homes.  But many of them are starting over now.  It is what keeps our economy strong.  Economists call it constructive destruction. 

Not to get political, but our government is doing the right things to get our economy humming again.  It takes time.  And employment is a lagging indicator of what is happening.  But good times are coming!!!

[Oh, how I wish I had tried to buy a home in Palm Springs just one month sooner – I would have had the deal of a lifetime.  Fortunately, my stocks are going up – so life is good.]


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## PerryM (Aug 29, 2009)

*Live it up...*

The correct answer is Nes - No and Yes at the same time.

Our government is out of control and the bills are coming due - how long we can keep this up is unknown but America is bankrupt both monetarily and morally.

Sadly a slave generation of Americans needs to be born who will have a much lower standard of living than we do to pay for our gluttonous apatite that demands more...more...more...and now.

The Titanic didn't sink in seconds it took 30+ minutes for it to slip away.

But hey, in the mean time free universal health care for all, a new Bentley in everyone's garage, and a "living wage" of $150,000 per year for all.  Live it up, we don't have to pay for it...


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## WalnutBaron (Aug 30, 2009)

stevedmatt said:


> Considering the $6 trillion increase the previous 8 years, $7-9 trillion in 10 years is about the status quo. And government spent a large portion of that money abroad. The future spending will be focused domestically.



Your figures are wrong.  According to the Congressional Budget Office, the national debt increased from $5.7 trillion in 2001 to $9.9 trillion in 2008--an increase (still COMPLETELY unacceptable) of $4.2 trillion over eight years.  By comparison, the debt has _already_ increased from $9.9 trillion to $12.9 trillion in one year, with a projected deficit of $18.4 trillion by 2014--just five years from now.

These figures are staggering, and evidence of a federal government--both under Bush 43 and Obama--that has no fiscal discipline whatsoever.  If you think the government can spend us into prosperity, think again.


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## WalnutBaron (Aug 30, 2009)

*More Evidence Of A Sick Economy*

Yesterday's _Wall Street Journal_ reported that the FDIC has placed a total of 416 banks on its "problem list", meaning those banks are at high risk of insolvency.  This compares to 117 banks on the same list one year ago.  In addition, the FDIC insurance fund--the fund used to insure individuals' bank accounts for up to $250,000--has fallen to its lowest level since 1993.

All this in spite of the federal government's huge cash infusion last fall and winter of TARP money to prop up the U.S. banking system.  

This hardly looks like a recovery to me.


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## laurac260 (Aug 30, 2009)

Using a bandaid to fix the hole in a dike never works.

So, no, it is not improving.  We are just delaying the wall finally giving way.  But hey, as long as we have social programs in the future to look forward to, we can all just suckle on Uncle Sam's teet. (sure hope he shaves it first!):ignore:


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## GadgetRick (Aug 30, 2009)

Lawlar said:


> YES!!!!
> There are sooo many ways I see the economy starting to improve – and dramatically.
> 
> I tried to buy a foreclosure home in the Palm Springs area.  4 or 5 months ago there were dozens and dozens of them at really cheap prices.  Homes built in the last two or 3 years, that were like brand new.  So I finally went for it and found, to my surprise, that all of a sudden there were a number of people bidding on the homes I was placing offers on.  I kept getting outbid because these people were bidding up the prices above what I thought was reasonable. It was a buying frenzy in the middle of what I thought was a housing crash. There are now only a few foreclosures left and they disappear as fast as they are listed.
> ...



You're experiencing the fact more people know about buying foreclosures and short sales rather than a true recovery. I'm a renovation lending specialist--99% of my business is a foreclosed (REO) property or short sale. Sure, I have LOTS more people wanting to buy them but what happens more often than not, someone comes to me and asks for a pre-approval. If I can give them one, they run around and bid on a bunch of properties until they get lucky and buy one. More often than not, the people aren't able to obtain financing so I can't pre-approve them, however. It is a good sign for sure but not a recovery.

Add to that, we're in for another wave of REO properties coming onto the market. Banks haven't listed all of their REO properties because of the market and many more people are losing their homes now that unemployment is running out for them and they've eaten through their reserves.

As far as listing numbers going down, that is also a function of the fact there are still many listings which aren't selling and aren't being relisted. Again, a good sign but not a true recovery.


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## stevedmatt (Aug 30, 2009)

WalnutBaron said:


> Your figures are wrong.  According to the Congressional Budget Office, the national debt increased from $5.7 trillion in 2001 to $9.9 trillion in 2008--an increase (still COMPLETELY unacceptable) of $4.2 trillion over eight years.  By comparison, the debt has _already_ increased from $9.9 trillion to $12.9 trillion in one year, with a projected deficit of $18.4 trillion by 2014--just five years from now.
> 
> These figures are staggering, and evidence of a federal government--both under Bush 43 and Obama--that has no fiscal discipline whatsoever.  If you think the government can spend us into prosperity, think again.



Your right, my figures were wrong. It was around $5T. I apologize. But your figures are incorrect also. $5.7T is a true figure, but the January 20th 2009 figure is $10.6T. Also, don't forget that a portion of the debt accrued in 2009 was earmarked in 2008. Also the current figure is $11.7T, but I'm sure that figure is low considering all the money that has been earmarked but not spent to date.

I also made no claims that the government could "spend us into prosperity". I just find it more logical to spend money domestically than internationally.

Check out this Treasury Department website.


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## falmouth3 (Aug 30, 2009)

For months the government has been telling us that unemployment would continue to rise into next year, even if the economy starts to pull upward.  So why it's such a big surprise that unemployment continues to rise is beyond me.  I don't think it's a good situation at all, but it was anticipated.


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## Rose Pink (Aug 30, 2009)

*Is the economy improving?*

I guess that would depend on one's definition of "*improving*."  Is going back to liberal credit and the outrageous spending of the "good years" an improvement?  

If I can make an analogy: I've become terribly overweight because of my past few years of over consumption.  I don't feel well, I have aches and pains in various body parts, I look puffy, I feel bloated and have little energy.  Now, if I lose that fat by consuming less, hopefully I can regain some of my health and vigor.  By downsizing my body, I may actually be *improving*.  To stay "improved" I cannot go back to my present or previous lifestyle of overconsumption.

So, I guess to answer the question of whether or not the economy is improving, I would need to know what is meant by "improving."  Is it simply unemployment figures or housing starts or stock market numbers?  I don't think so.  

If I have to reduce spending money on entertainment and eating out and thereby spend more time at home with borrowed library books or playing Scrabble with my family is that not an improvement?  Sometimes less really is more.  Of course, I say that from the comfort of my almost-paid-for home.  My DH still has a job.  I wonder what I would think if it were otherwise?  

To some their personal economy is improving and to some it is worsening.  Whether it is an improvement or not also depends, in part, on attitude and creativity, not solely on $ figures.

Personally, for society as a whole, I think it is going to get worse before it gets better.  I think there are going to be some ups before it really crashes.  I don't have anything to back up that forecast except my pessimistic gut feeling.  I sure hope I am completely wrong.


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## John Cummings (Aug 31, 2009)

I do NOT believe the economy is improving. I think that it is probably bottoming out for awhile but will head down again or at best stay level. My financial adviser says that most of the so called experts are looking for an L shaped economy with little job improvement. What improvement we have seen has been a result of government spending which is an artificial stimulus that will lead to future problems. I anticipate that we are going to see a long period of stagflation in the next year or so. The government cannot spend us into prosperity. It has never worked before and never will. The stock market will probably rise some more until mid 2010 and then retreat again. The only way to improve the economy is for the private sector to improve and that does not look too promising.

There are some other real problems yet to hit us. Foreclosures are now hitting the prime mortgages as people cannot pay their mortgages. Most of the foreclosures to date have been a result of people losing their equity in their homes because of falling prices and walking away rather than their employment situation. Another serious problem that will hit us very soon are local and county governments losing a good portion of their revenues due to lower property tax revenue caused by falling home prices. The county where I live has reassessed property values downward by as much as 70%.


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## SueDonJ (Aug 31, 2009)

I'm not too optimistic that we've hit bottom yet.  Maybe the housing market is nearing an upturn, but "they" say that there is still a round of real estate devaluation to come - that of the commercial real estate balloon loans that were issued in the 12-18 months prior to last fall.  Those failures/foreclosures will impact the overall economy much more severely.

Plus I worry that when the upturn happens, folks will go back as soon as possible to spending beyond their means.  Even if banks and credit companies don't allow the wildly irresponsible limits that were the norm, folks should have learned from this that carrying credit card debt can be the backbreaker when all else is stable.  Somehow we need to put that Pandora back in the box and revert to the spending style of previous generations, when credit cards were first introduced and accruing credit card debt was acceptable only on a temporary/emergency basis.  I'm not optimistic about that either, though - we are a nation of "I must have the latest and greatest NOW" consumers.


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## GadgetRick (Aug 31, 2009)

falmouth3 said:


> For months the government has been telling us that unemployment would continue to rise into next year, even if the economy starts to pull upward.  So why it's such a big surprise that unemployment continues to rise is beyond me.  I don't think it's a good situation at all, but it was anticipated.



I don't think anyone is surprised by this. It's bad whether one is surprised by it or not.


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## pgnewarkboy (Aug 31, 2009)

I see signs of an improving economy all over my area.  I don't know what makes a person an "expert" on the economy except that they are self-proclaimed and seek publicity.  The self styled experts have been wrong on everything and right on everything because they never shut up and keep making contradictory statements.   Nobody can see the future.  So they keep reacting to the present and then "extend it out" to the future.  That is part of the reason there are and always will be booms and busts.

I believe that we know certain things about human nature and needs.  People must acquire to live in our society.  When I say live, I mean physically exist.  As long as there are people there will be demand.  It is in my view the natural tendency is to acquire more things.  That is why being an austere monk is considered wonderful.  It is hard for humans to give up their needs and desires.  If it was easy, being a Monk would be no big deal.

Consequently, it is my view that it is inevitable that the consumer will return sooner than later.  I think it is starting to happen already.


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## Pens_Fan (Aug 31, 2009)

Not yet.

Is the decrease slowing?  I think so, but I don't think we have started to improve yet.


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## Ironwood (Aug 31, 2009)

A view from north of the border!  Don't equate stock market gains from the March lows with an economic recovery! Markets have simply bounced from horribly oversold levels to more normalized values...gains from here will be more closely tied to true economic recovery which will be agonizingly slow.  The stock market gains of the past few months have done little for jobs and housing markets.  Burgeoning US deficits are troubling and will weigh heavily on your dollar.  I have significantly reduced my US$ denominated market investments except for two smaller speculative investments as I am concerned any gains would be wiped out by the falling dollar.  While our housing market has not collapsed up here, our unemployment numbers remain staggering and manufacturing in many quarters is stagnant.  But for the first time in a week the sun is shinning this morning!  We will recover, but it will take time.


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## EZ-ED (Aug 31, 2009)

No

Banks still loaded with toxic assets

Commercial real estate ongoing vacancy and refinance issues still to come

Consumer credit card debt

Sub prime home loans borrowers are no longer the foreclosure problem it is now the Prime home loan borrowers who have lost their jobs that is the foreclosure problem

DOW/NASDAQ/SnP are about to dive (imho) as the real traders are now back from summer vacations

Unemployment number do not count the under employed or those that have been dropped from the rolls because they no longer receive unemployment benefits.


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## John Cummings (Aug 31, 2009)

EZ-ED said:


> No
> 
> Banks still loaded with toxic assets
> 
> ...



I agree with most of what you say. However there is one common myth in your post regarding unemployment. Those collecting unemployment benefits are NOT used in the calculation of the unemployment rate. The unemployment rate is based on a household survey of who is available and looking for work and who is working and there is no connection to who is receiving unemployment benfits. Below is a quote from the official BLS web site:

"Some people think that to get these figures on unemployment, the Government uses the number of persons filing claims for unemployment insurance (UI) benefits under State or Federal Government programs. But some people are still jobless when their benefits run out, and many more are not eligible at all or delay or never apply for benefits. So, quite clearly, UI information cannot be used as a source for complete information on the
number of unemployed"

Here is the link to the whole article of the BLS web site on how unemployment is calculated:

http://www.bls.gov/cps/cps_htgm.pdf


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## John Cummings (Aug 31, 2009)

pgnewarkboy said:


> Consequently, it is my view that it is inevitable that the consumer will return sooner than later.  I think it is starting to happen already.



Not if they are unemployed or worried about their jobs. Now that the ill advised "Clunkers for Cash" program is over you will see a large drop in auto sales. It was just like the stimulus cash payouts in May. I received $250 from the government as did many folks. As a result retail sales went up only to fall the following month. Basically the government is propping up the economy but this can't last and will only result in serious consequences later on due to huge deficits being rung up. The dollar will tank, interest rates will go up to combat inflation., and unemployment will remain a serious problem.

There has been no business stimulation done which is what is required as only private business can create jobs. Bailouts and rebates are not business stimulants. They are only band-aids that have future consequences. The rest of the world is cutting taxes to stimulate business while we are talking of raising them. The US has the second highest business tax in the developed world which hurts our ability to compete in the global market.


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## John Cummings (Aug 31, 2009)

Ironwood said:


> A view from north of the border!  Don't equate stock market gains from the March lows with an economic recovery! Markets have simply bounced from horribly oversold levels to more normalized values...gains from here will be more closely tied to true economic recovery which will be agonizingly slow.  The stock market gains of the past few months have done little for jobs and housing markets.  Burgeoning US deficits are troubling and will weigh heavily on your dollar.  I have significantly reduced my US$ denominated market investments except for two smaller speculative investments as I am concerned any gains would be wiped out by the falling dollar.  While our housing market has not collapsed up here, our unemployment numbers remain staggering and manufacturing in many quarters is stagnant.  But for the first time in a week the sun is shinning this morning!  We will recover, but it will take time.



I follow the Canadian business news very closely as I was originally from Canada and all of my family lives there. I basically agree with you though it should be mentioned that Canada's economy is closely tied to basic commodities so is subject to the ups and downs in their prices. However, I would like to say that the Canadian government is doing a much better job than ours in dealing with the recession. One thing that did surprise me was the very large per capita deficits being run up by the provincial governments. For example Alberta is projected to run a deficit of 7 billion $ this year which is staggering. Fortunately they do have a sizable "rainy day" fund to tide them over.


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## PerryM (Aug 31, 2009)

The reason I have a dim view of the future is that the US government has declared war against private enterprise.  This has been going on for 25+ years now and the war gets more intense every day.  Doesn't seem to matter who is running the show in Washington.

I have no idea how much longer private enterprise can withstand the assault.  I doubt it will stop in the next 10 years and government will take over more and more private enterprise.  This problem will be solved, sadly, when its way too late to recover without a generation of Americans who must pay back out debt.

I can easily envision Alaska seceding from America - that will be our first clue that America is broken and needs huge fixes to get it going again, other states may do the same thing if they have the natural resources that are being prevented from enriching their citizens.

I see no joy....I don't see Washington do anything but confiscate industry after industry with no stoppage.


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## pgnewarkboy (Aug 31, 2009)

PerryM said:


> The reason I have a dim view of the future is that the US government has declared war against private enterprise.  This has been going on for 25+ years now and the war gets more intense every day.  Doesn't seem to matter who is running the show in Washington.
> 
> I have no idea how much longer private enterprise can withstand the assault.  I doubt it will stop in the next 10 years and government will take over more and more private enterprise.  This problem will be solved, sadly, when its way too late to recover without a generation of Americans who must pay back out debt.
> 
> ...



You simply have no clue.  What industry has been taken over in the last 25 years.  None. End of case.  The auto industry got an infustion of cash for stock but the government is simply not running these companies.  And what wonders have private industry done recently except bust the entire nation with their recklessness.  We have the debts that we have right now because of reckless tax cuts, reckless actions by private industry, and endless wars.


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## wilma (Aug 31, 2009)

PerryM said:


> I can easily envision Alaska *succeeding *from America - that will be our first clue that America is broken and needs huge fixes to get it going again, other states may do the same thing if they have the natural resources that are being prevented from enriching their citizens.



I assume you mean *seceding* from America, it's good to use the correct words when you're trying to come off as some sort of informed person.


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## PerryM (Aug 31, 2009)

wilma said:


> I assume you mean *seceding* from America, it's good to use the correct words when you're trying to come off as some sort of informed person.



Bad speling checker - bad....


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## PerryM (Aug 31, 2009)

pgnewarkboy said:


> You simply have no clue.  What industry has been taken over in the last 25 years.  None. End of case.  The auto industry got an infustion of cash for stock but the government is simply not running these companies.  And what wonders have private industry done recently except bust the entire nation with their recklessness.  We have the debts that we have right now because of reckless tax cuts, reckless actions by private industry, and endless wars.



Government doesn't have to own the stock to take over an industry - look at the oil industry - America is awash in oil that the government has taken over in the form of restrictions to access the oil.  Name an industry, like the lending industry, and you will find the heavy hand of government replacing free market forces with political forces.

But don't take my word for it - just watch how America is its own worst enemy in the next 10 years.

Free markets are NOT doing this - government is.  But America has gotten fat, dumb, and lazy and we have no one to blame but ourselves.

I just don't see this trend turning around - not now and not for the next generation at least.  So live it up folks because I don't see America turning around until we are dead last at just about everything.

I've said my 2 cents and don't need to be slapped on the wrist so I'll bow out of this now.

Good luck America...


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## pgnewarkboy (Aug 31, 2009)

PerryM said:


> Government doesn't have to own the stock to take over an industry - look at the oil industry - America is awash in oil that the government has taken over in the form of restrictions to access the oil.  Name an industry, like the lending industry, and you will find the heavy hand of government replacing free market forces with political forces.
> 
> But don't take my word for it - just watch how America is its own worst enemy in the next 10 years.
> 
> ...




You will need to support your assertions.  I read nothing that states the U.S is "awash" in oil.  The most optimistic predictions about undiscovered oil on U.S property does absolutely nothing to alleviate U.S.A deoendence on foreign oil.

Second, lending.  The government is doing everything in its power to get banks to lend.  They won't do it because they are making money on higher fees.

Third, the market crash of 1907 was caused by "bucket shops" that did not actually buy stocks but bet on their rise or fall without owning them.  It was illegal gambling.  The states passed laws against it and these laws stood until 2000 when Alan Greenspan and the U.S. Congress, lobbied by private industry made gambling with investments legal again.  What followed was the derivatives market which was nothing but casino type gambling where banks bet on anything including mortgage securities that they did not own.  The banks made bets that they could not cover.  The derivatives gambling market became a multi-trillion dollar business that was completely unregulated.  Nobody knew how much was bet or who was making the bets and on what.  When the mortgage securities market declined those who made bets that it would decline called in their bets and the banks could not cover them.  Boom!  Financial meltdown.  The government bails out the banks to avoid a Depression.

It is clear that there must be a balance between government regulation and the freedom of business to do business.  That balance was destroyed and the taxpayer and the small business and the employee all paid the price.  Checks and balances is the key.  Reason and moderation in all things. Too much government is no good. Too much unregulated business is no good.  It takes work and critical analysis and thinking.  Ideology does not put food on the table.  What puts reasonably priced, sanitary, food on the table is a combination of the hard working businessman and employees being allowed to do what they must do to succeed but with a watchful eye of the people through the government to see to it that they are not cheating the consumer and acting in ways that will ultimately destroy competition in their industry.

"Isms" don't do the job.  Neither do pundits and other "experts" who do nothing but blab away 24/7 without actually having to do anything.  Running a business is hard work requiring hard choices.  Running a government is the same way.  The two must work in harmony.


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## Tia (Aug 31, 2009)

I find this thread interesting and thought this fits in somewhere to what is actually going on-

http://articles.moneycentral.msn.co...s/wall-sreets-high-tech-war-on-investors.aspx

"...computers are ruining investing for the average investor...HFT computers can detect large buy orders for a stock, the kind of buy orders mutual funds make, even when the funds try to disguise them. The HTF system can then purchase that stock before the mutual fund's order is executed. The fund ends up paying more per share, and the HTF traders pocket the difference..."



pgnewarkboy said:


> Third, the market crash of 1907 was caused by "bucket shops" that did not actually buy stocks but bet on their rise or fall without owning them.  It was illegal gambling.  The states passed laws against it and these laws stood until 2000 when Alan Greenspan and the U.S. Congress, lobbied by private industry made gambling with investments legal again.  What followed was the derivatives market which was nothing but casino type gambling where banks bet on anything including mortgage securities that they did not own.  The banks made bets that they could not cover.  The derivatives gambling market became a multi-trillion dollar business that was completely unregulated.  Nobody knew how much was bet or who was making the bets and on what.  When the mortgage securities market declined those who made bets that it would decline called in their bets and the banks could not cover them.  Boom!  Financial meltdown.  The government bails out the banks to avoid a Depression.....
> 
> .


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## stevedmatt (Aug 31, 2009)

John Cummings said:


> Another serious problem that will hit us very soon are local and county governments losing a good portion of their revenues due to lower property tax revenue caused by falling home prices. The county where I live has reassessed property values downward by as much as 70%.



This isn't true. Local governments have to work on a balanced budget. They determine their tax rate based on how much money they need for their budget for their fiscal year. If a local township lost 70% of their revenue for a year, they would also have to cut 70% of their spending. That's not going to happen.

If they do reassess property values down, they then increase the tax rate per $100 of assessed value to meet their budget. I know of noone who has had a 70% reduction in their property taxes, and I'm pretty sure it hasn't happened.


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## SueDonJ (Aug 31, 2009)

stevedmatt said:


> This isn't true. Local governments have to work on a balanced budget. They determine their tax rate based on how much money they need for their budget for their fiscal year. If a local township lost 70% of their revenue for a year, they would also have to cut 70% of their spending. That's not going to happen.
> 
> If they do reassess property values down, they then increase the tax rate per $100 of assessed value to meet their budget. I know of noone who has had a 70% reduction in their property taxes, and I'm pretty sure it hasn't happened.



Hmmm, my town is the same as everyone else's - working with a reduced budget due to reduced federal subsidies.  They're not automatically raising tax rates to cover any shortfalls.  Our assessments are being delayed, though, so that they don't realize less tax income from lower property values.   

The end result isn't that services (road repairs, teacher hirings for expanding enrollment, new fire equipment to update an aging fleet, etc.) are being provided status quo; it's that services are being delayed and/or shelved until the economy rebounds and the government and citizens can absorb the costs.


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## Courts (Aug 31, 2009)

NO

As a small business owner, we depend on credit cards to purchase supplies and services. Our credit has been cut big time and now we just received a notice our rate will go to 18% plus prime.

Inflation and higher "prime rates" are just around the corner. The cost of doing business is going up. Banks are not lending.

At least our sales have not seriously deteriorated YET. Fortunately our product is very competitive in relation to competitors even though our sales have been flat compared to last year.

.


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## stevedmatt (Aug 31, 2009)

SueDonJ said:


> Hmmm, my town is the same as everyone else's - working with a reduced budget due to reduced federal subsidies.  They're not automatically raising tax rates to cover any shortfalls.  Our assessments are being delayed, though, so that they don't realize less tax income from lower property values.
> 
> The end result isn't that services (road repairs, teacher hirings for expanding enrollment, new fire equipment to update an aging fleet, etc.) are being provided status quo; it's that services are being delayed and/or shelved until the economy rebounds and the government and citizens can absorb the costs.



My statement was more related to assessment values and tax rates. I agree, local governments aren't just raising tax rates. They are cutting in various places, but nowhere near 70%. If assessed values in your town drop 50%, they are not going to reduce your taxes 50%. They are going to determine how much money they need (whether or not services are reduced), subtract any state subsidies, and divide that number into the total assessed value of all taxable properties to determine the tax rate. 

Maybe this isn't the way it happens in all states, as local government is controlled by state laws, not federal. And while I'm not positive, I really can't imagine any local government could survive a 70% reduction in income and still provide all of the essential services required by the state.

My tax rate changes every year, but my assessment only changes every 7-10 years when the township does there reassessments. My rates have fluctuated over 60% in the past 5 years without my assessment changing.


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## SueDonJ (Aug 31, 2009)

stevedmatt said:


> My statement was more related to assessment values and tax rates. I agree, local governments aren't just raising tax rates. They are cutting in various places, but nowhere near 70%. If assessed values in your town drop 50%, they are not going to reduce your taxes 50%. They are going to determine how much money they need (whether or not services are reduced), subtract any state subsidies, and divide that number into the total assessed value of all taxable properties to determine the tax rate.
> 
> Maybe this isn't the way it happens in all states, as local government is controlled by state laws, not federal. And while I'm not positive, I really can't imagine any local government could survive a 70% reduction in income and still provide all of the essential services required by the state.
> 
> My tax rate changes every year, but my assessment only changes every 7-10 years when the township does there reassessments. My rates have fluctuated over 60% in the past 5 years without my assessment changing.



Ah, I see what you meant now.  And our tax structure works in a similar fashion - it's restructured much more frequently than our property values are assessed.  But wow!  Your 60% fluctuation is quite large for a 5-year span - was most of the increase during this last year when the economy tanked, or was it a steady increase over the five years?

You and I are "enjoying" living in a part of the country where, although we feel the effects of the poor economy, we're not facing an entire change to our ways of life.  In Michigan, for instance, the auto industry as it was is, for all intents and purposes, gone forever.  MI residents will never be able to regain the auto industry-related employment that supported generations.  They certainly are facing upwards to 70% property value losses, and the resulting assessment devaluations will be followed by higher tax rates but lower tax revenues leading to reduced services.  No amount of budget finagling will remedy that.


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## WalnutBaron (Sep 1, 2009)

pgnewarkboy said:


> Second, lending.  The government is doing everything in its power to get banks to lend.  They won't do it because they are making money on higher fees.



Now it's you who needs to get your facts straight.  I sit on the board of a local community bank whose lifeblood is making *good* loans.  Our bank's footprint is right in the epicenter of residential real estate foreclosures, with some of the highest rates in the country.  Our bank, however, has not changed its lending practices one iota since the crash of one year ago.

A major contributing factor in the mess we're in--including, as you rightly point out, uninhibited greed from Wall Street firms who marketed so-called credit default swaps and derivatives which no one truly understood (including them)--was the outrageous politically-motivated loose lending practices promoted and encouraged by Senator Dodd and others who allowed Fannie Mae and Freddie Mac to become the repositories of billions in subprime loans so that everyone--regardless of their income, employment status, or credit history--could own "a piece of the American dream".  As a result, we had a credit and housing market on steroids which caused a tremendous bubble which not only popped, but nearly brought down the American financial and banking system with it last fall and winter.

Banks *are* making loans.  But they have rightly backed away from making bad loans, and are focused--as they should be--on making loans to good credit risks.


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## WalnutBaron (Sep 1, 2009)

stevedmatt said:


> My statement was more related to assessment values and tax rates. I agree, local governments aren't just raising tax rates. They are cutting in various places, but nowhere near 70%. If assessed values in your town drop 50%, they are not going to reduce your taxes 50%. They are going to determine how much money they need (whether or not services are reduced), subtract any state subsidies, and divide that number into the total assessed value of all taxable properties to determine the tax rate.
> 
> Maybe this isn't the way it happens in all states, as local government is controlled by state laws, not federal. And while I'm not positive, I really can't imagine any local government could survive a 70% reduction in income and still provide all of the essential services required by the state.
> 
> My tax rate changes every year, but my assessment only changes every 7-10 years when the township does there reassessments. My rates have fluctuated over 60% in the past 5 years without my assessment changing.



In California, thanks to Proposition 13, property tax rates are capped at slightly over 1% of assessed value.  Municipalities can play with your assessment--at their peril--but they cannot change the tax rate.


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## GadgetRick (Sep 1, 2009)

WalnutBaron said:


> Now it's you who needs to get your facts straight.  I sit on the board of a local community bank whose lifeblood is making *good* loans.  Our bank's footprint is right in the epicenter of residential real estate foreclosures, with some of the highest rates in the country.  Our bank, however, has not changed its lending practices one iota since the crash of one year ago.



You're working for a small community bank, not a large bank which makes most of the loans out there. My guess is you guys hold your own paper in many cases. Your lending standards were already stricter so you wouldn't have had to change your lending guidelines much.

The problem is the big banks--BofA, Chase, Wells Fargo, etc.--who make up 95%ish of the lending in the US. They HAVE tightened (have been working for 2 of the 3 largest banks in the US over the last 4 years as a loan officer, so I know). They aren't lending to GOOD borrowers these days and they're dragging their feet lending to those they will approve. I could cite several examples of this which have happened to good borrowers I know over the past few months alone. This is a problem.


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## myip (Sep 1, 2009)

*Economy is still bad*

I don't think the economy is improving with unemployment is still going up.

I can still registered my daughter to a private school for K.  Usually all the spots are taken... Due to recession, spots are available even for last minutes.

No problem in registering afterschool care.  Redo my patio for half the cost that was quote 2 years ago.  The person is very happy that he got the job.  Custom services are more responsive and helpful.


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## bogey21 (Sep 1, 2009)

Courts said:


> NO
> 
> 
> 
> Inflation and higher "prime rates" are just around the corner. The cost of doing business is going up. Banks are not lending.



Can you imagine what higher rates will do to our deficits?  Say "skyrocket"

George


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## John Cummings (Sep 1, 2009)

stevedmatt said:


> This isn't true. Local governments have to work on a balanced budget. They determine their tax rate based on how much money they need for their budget for their fiscal year. If a local township lost 70% of their revenue for a year, they would also have to cut 70% of their spending. That's not going to happen.
> 
> If they do reassess property values down, they then increase the tax rate per $100 of assessed value to meet their budget. I know of noone who has had a 70% reduction in their property taxes, and I'm pretty sure it hasn't happened.



You obviously do not know anything about California. Per Proposition 13 passed in 1978 the property tax rate is FIXED at 1% of the assessed value and cannot be raised. The base value of your home for property tax is the price you paid for the home. This is the assessed value and it can be increased up to a maximum of 2% per year regardless of how much the market value increased. Prop 13 was passed to prevent people from being taxed out of their homes when prices were escalating at double digits per year.

Just because you don't know anybody doesn't make it so. There are thousands of people that were paying $6,000+ in property taxes on homes they bought 2 or 3 years ago that will now be paying $2,000 or less if they stayed in the home. If the houses were sold, in the last year or so the new owners will also be paying $2,000 or less depending on what they paid.


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## John Cummings (Sep 1, 2009)

stevedmatt said:


> My tax rate changes every year, but my assessment only changes every 7-10 years when the township does there reassessments. My rates have fluctuated over 60% in the past 5 years without my assessment changing.



What happens where you live is not what happens everywhere else just like where I live is not the same. Our tax rate never changes as it is fixed at 1% by state law period. If your assessed value goes up then your taxes do also, if it goes down then they drop. The law has a cap of 2% annual increase in assessed value but no lower cap if the value decreases. My property tax will decrease by 25% because I have owned my home for 7 years so its assessed value never increased anywhere close to the market value due to the 2% annual cap. On the other hand, my neighbor who bought their home 4 years ago will get a 50% drop. Two years ago my neighbor paid almost twice as much property tax as I did on a home with a lower market value than mine. Those that bought 2 years ago will get near the 70% decrease. This is due to the fact that home prices went up drastically before the bubble burst.

The reason for these drastic changes is because we have seen a huge price increase followed by an even larger price decline over the past 7 years. As a result our county government went ahead and reassessed all the properties in the county based on the market value as of January 1, 2009. They did this rather than wait for the deluge of applications from homeowners requesting reassessments. We received our notice in July of the new assessed value. Not all homeowners will receive a decrease as their assessed value could be lower than the current market value if they have owned their home for a long time. The metro area we live in is primarily newer homes as the population has more than doubled in the last 7 years to over 350,000.


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## John Cummings (Sep 1, 2009)

WalnutBaron said:


> In California, thanks to Proposition 13, property tax rates are capped at slightly over 1% of assessed value.  Municipalities can play with your assessment--at their peril--but they cannot change the tax rate.



You are almost correct. The tax rate is fixed at exactly 1% by state law per Prop 13. There can be additional local fixed fees added which are technically not part of the property tax but to the homeowner they might as well be. For example my rate, including local fees. works out to be 1.18%. I won't even get into Mello Roos fees that some home owners have to pay. We don't have Mello Roos in our development.

The assessed value is determined by the county, not the municipalities. The municipalities have no control over your property tax. They can only charge fixed fees for landscaping, street lighting, etc. These fees show up on your property tax bill and are typically a relatively small amount, 0.18% in my case. I have owned homes in both southern and northern California and the fees were always very similar.


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## John Cummings (Sep 1, 2009)

One last thing. Any drop in the assessed value is temporary and lasts only as long as the market value remains lower than the assessed value prior to the drop. If the market value starts increasing again the assessed value will go back up without the 2% cap until the market value reaches the assessed value prior the the drop. At this point the 2% call will be in effect again.


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## stevedmatt (Sep 1, 2009)

SueDonJ said:


> Ah, I see what you meant now.  And our tax structure works in a similar fashion - it's restructured much more frequently than our property values are assessed.  But wow!  Your 60% fluctuation is quite large for a 5-year span - was most of the increase during this last year when the economy tanked, or was it a steady increase over the five years?




Actually, the 60% occurred during the first 4 years. This year my taxes dropped about 10%. All this happened without my assessment changing. My tax rate has changed significantly during that time. The budget for this year was reduced by cutting some employee expenses (layoffs and negotiations).



John Cummings said:


> You obviously do not know anything about California. Per Proposition 13 passed in 1978 the property tax rate is FIXED at 1% of the assessed value and cannot be raised. The base value of your home for property tax is the price you paid for the home. This is the assessed value and it can be increased up to a maximum of 2% per year regardless of how much the market value increased.



I have corrected myself that local taxes are based on state rules. I actually wasn't aware of this until I did some research, but thank you for elaborating. 

I am still wondering how your town will be able to sustain all essential services while taking a 70% cut in revenue. It seems to me that this would be impossible. Did they just continued to operate at a huge surplus for multiple years and are now using that surplus to pay for the reduction of revenue? If that is the case, it doesn't seem fair to those who lived there and contributed to that surplus, but have now moved and are not experiencing the benefit of the tax reduction. There are laws in place for associations (condo, etc.) that this is not allowed to happen. Also, in my state it isn't allowed to happen. I am just curious as to how CA municipalities handle this type of situation.


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## John Cummings (Sep 1, 2009)

stevedmatt said:


> Actually, the 60% occurred during the first 4 years. This year my taxes dropped about 10%. All this happened without my assessment changing. My tax rate has changed significantly during that time. The budget for this year was reduced by cutting some employee expenses (layoffs and negotiations).
> 
> 
> 
> ...



How they handle it remains to be seen as the big hit is going to occur after December. We pay our property taxes in 2 installments in April and December. The reassessed values will affect the taxes paid in December and thereafter. Not all of California will be affected the same as the price declines vary a great deal in different localities. Our county, Riverside County, has been the hardest hit as we have had the largest price declines and the largest population growth. The large population growth resulted in thousands of new homes sold when prices were very high. The city won't see a shortfall of 70% total as that was the extreme for homes purchased when prices were at the peak. however the overall property tax revenue will drop by at least 40%.

Right now it doesn't appear as the city is trying to save as they just completed repaving many of the city streets a few weeks ago. That may come from another source.


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## beanie (Sep 4, 2009)

from the wall st. journal.

http://online.wsj.com/article/SB125185379218478087.html


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## dmharris (Sep 4, 2009)

Yes.  I am in market research which is one of the first things cut from budgets besides advertising.  We've seen a dismal past 12 months.  Now we're being asked for bids on projects.  That is a significant move in the right direction.  Just praying our bids are approved!


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## John Cummings (Sep 4, 2009)

beanie said:


> from the wall st. journal.
> 
> http://online.wsj.com/article/SB125185379218478087.html



I think this last part of the article tells the whole story:

"One big question: Will the boost evaporate once the programs end?

Stuart Hoffman, chief U.S. economist for PNC Financial Services Group, said the stimulus package "caused this bit of a concentrated burst [that] probably will exaggerate the pace of economic growth," since some areas, such as auto sales, could fall back to low levels."

The government cannot spend us into prosperity.


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## John Cummings (Sep 4, 2009)

dmharris said:


> Yes.  I am in market research which is one of the first things cut from budgets besides advertising.  We've seen a dismal past 12 months.  Now we're being asked for bids on projects.  That is a significant move in the right direction.  Just praying our bids are approved!



I wish you good luck on getting your bids approved.


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## Tia (Dec 18, 2009)

My employer just announced layoffs of 39 full time positions. I work in health care, unfortunately there are more people without insurance who are not paying...


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## pedro47 (Dec 18, 2009)

This is my opinion only: Back in 1972 a commerce trade deal was struck with China that sold the American Manufacturing Industry down the tube.

In the last twenty-five years over 5 millions job have been lost to China in the manufactring industry.

Is our economy improving.  Yes!!!  But the United States of America will never regain a third of the  lost jobs in the manufacturing industry.

By the way the stock market is up !!!  But middle Americans families are hurting.


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## pgnewarkboy (Dec 18, 2009)

Approximately 75% of U.S. economy is the service sector.  The service is sector is beginning to create jobs again.


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## easyrider (Dec 18, 2009)

www.wimp.com/unemploymentgrowth/

no growth expected in the near future


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## Rose Pink (Dec 18, 2009)

pgnewarkboy said:


> Approximately 75% of U.S. economy is the service sector. The service is sector is beginning to create jobs again.


 
DH has been lucky to dodge the bullets so far.  But we've paid off the mortage just in case.  I intend to do some serious budgeting after Christmas.  I do tend to give higher tips to waiters and maids than I used to just because I know the economy is bad and they have physically demanding jobs but we will be cutting back on eating out next year in order to pay off car loans sooner.

The company DH works for has laid off a number of workers, discontinued matching contributions to the 401K and frozen the pensions at current levels.  Fortunately, we still get medical and dental insurance and, again fortunately, enough salary to pay the premiums and co-pays.

We don't know how long it will last so we are going to try to be more responsible with money.


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## Rose Pink (Dec 18, 2009)

Tia said:


> My employer just announced layoffs of 39 full time positions. I work in health care, unfortunately there are more people without insurance who are not paying...


Were these nursing positions or other auxillary departments?


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## zcrider (Dec 18, 2009)

*yep*

yes, I work in the dental field and around Feb. we had at least one patient every week coming in to use up their benefits before they ended b/c they just lost their job.  That is just how many told us about it!  Now I am seeing lots of those people back and they have new jobs and new benefits.  We still have some that when we call to schedule them back for recare don't want to schedule yet b/c they still do not have jobs/benefits, but the # is way down!  Thank goodness!


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## easyrider (Dec 19, 2009)

easyrider said:


> www.wimp.com/unemploymentgrowth/
> 
> no growth expected in the near future



Even with a stimulus package the unemployment growth will at best just flaten.


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## pgnewarkboy (Dec 20, 2009)

There are many different opinions on unemployment.  Here is another one.  It is rather optimistic.

http://www.newsweek.com/id/226493


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## MelBay (Dec 20, 2009)

Personally, I think it's making small strides towards improvement.

But over & over I comment to my husband that I feel like we are becoming a widely divided society.  We are lucky, DH is retired and I still have my job (knock on wood) after 26 years.  We go out to dinner and the restaurants are full.  We go shopping and there's nowhere to park at this time of year.  The movie theater has few empty seats.  I look around and say "what recession?"

We drive home and see homeless people pushing their grocery carts with all their belongings.  The bus stops are full of people who look like their lives have been less than easy.  We own eight pieces of real estate, and one occupant just abandoned the home - no notice.  Only two are 100% current, all the rest are in varying degrees of tardiness.  What will it take for the recession to end for _this_ segment of society?

I think we're at the beginning of a huge cultural shift in this country, and I don't like what I see now.  We've got to get jobs back - good paying jobs.  We can't keep paying Chinese to build cheap crap for us - we need to make good crap  here that everyone wants to buy.

This topic fascinates me.  I only wish I were smart enough to do something to help fix the problems.  I don't know if there are enough collective smarts to repair things and restore social justice.  <sigh>


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## Tia (Dec 21, 2009)

Rose Pink said:


> Were these nursing positions or other auxillary departments?



No direct care positions this go around that I am aware of. The announcement was last Friday and I didn't work today. There have been lots of low census days (unpaid) to go around for nursing staff in direct care leading to this.


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## Kelso (Dec 21, 2009)

As my dad taught me, it is a recession when your friends are out of work and it is a depression when you are out of work. And to answer the question, ABSOLUTELY NO! I believe it is going to get a lot worse.


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## davemy (Dec 21, 2009)

*Construction Spending Way Down This Year*

NO,NO,NO  

I'm in Construction rental industry and just had my worst year ever! Pay down $20,000.00, last 2 years and fear for my job every payday. One more bad year before things will get Better.


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## M. Henley (Dec 22, 2009)

*Maybe*

A local manufacturer of additives and substrates, all used in manufacturing consumer products, has seen an increase in orders and has intentions of recalling workers early in 2010.
This bodes well for the economy.
However, low-skilled individuals will continue to have a difficult time earning a living wage.  Our economy is highly technical and a set of skills is necessary to remain in the middle class.


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## TerriJ (Dec 22, 2009)

I would agree with mixed signals.  Many things have improved.  I work with retirement plans and I have seen some companies add back at least part of the 401(k) match, which is an indicator.  However, it seems that when someone loses a good job, it is very difficult to find a similar type of job, good pay and good benefits.  That is worrisome.

However, in the spirit of the season, I am choosing a positive answer on this one.


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## AwayWeGo (Dec 22, 2009)

*Still Going Down The Tubes.*





-- hotlinked--​
-- Alan Cole, McLean (Fairfax County), Virginia, USA. ​


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## falmouth3 (Dec 22, 2009)

I guess your viewpoint depends on what you and your friends/family members are experiencing.  In my industry, things are still going very well.  I get recruiters calling frequently.

I do believe that the data show that the economy is recovering.  The financial people  have said from the time that the new administration came on that jobs were a lagging indicator and that they wouldn't pick up until 2010We're almost at the beginning of the year so hopefully we'll start seeing more people working again.


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## Timeshare Von (Dec 22, 2009)

*NO!*

Not from where I'm looking.  People here in Wisconsin will continue to see unemployment rise due to economic factors created and perpetuated by our state government.  Jobs are pouring out of Wisconsin due to the unfavorable business environment here.

As an aside . . . we are the only state in the union screwing people who may be inclined to move from a traditional IRA to the Roth because in the words of one state legislator "Do go along with the Federal program will provide another financial benefit to the rich, who do not need it."

Nice, don't you think?


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## Jimster (Dec 22, 2009)

*economy*

The good news is that there still is an economy.  I don't think people realize just how close we were to financial collapse!   I am talking about an economy where barter would have replaced money.  To that extent we are infinitely better than we were.  Are people still hurting?  Yes, without a doubt that is true.  Will there continue to be long term unemployment and economic problems?  Yes.   Some of the unemployment problems have been there a long time just waiting for a cataylst to cause the recession.  Having had that catalyst, it is obvious that it will be a long time before we resolve the problem.  Some of the long term issues were the derrivative tradings made possible in the last administration, the absolute lack of industrial production in this country (we stopped making things in the 70's), the ridiculous dependence upon foreign oil and foreign goods and a banking system which is fraught with greed, corruption and inepitude.  Except for the derrivative trading all of this was quite obvious for years.  Economists have been predicting this problem for several years.It only took ignoring the problem to allow it to fester and finally burst.

So it will not be resolved overnight.  I do believe we are now headed in the right direction (albeit very costly).  I think the one possible cloud on the horizon is the possibility of a commercial real estate meltdown much like the residential meltdown that started this mess.  Assuming we can thwart this, things should start to right themselves.  Although the current health care bill has its many problems, it too will help control the problem.  Don't forget that health care constitutes 1/6th of the entire economy. 

Having said all this, I apologetically also note that the recession has not been a disaster for many.  If you have money or a source of money, it has been a downright boon.  Real estate is cheap, travel is cheap, goods and services have been discounted.  I hate to see my brethern suffering but it has it's upside.  Those huge bank bonuses are made even the more gaudy by the fact that they get the money and it now actually buys more than before.  Anyone looking for economic justice in this economy will not find it.


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## Ironwood (Dec 22, 2009)

A view from outside the country......never underestimate the resiliance of the US economy!!


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## Icc5 (Dec 23, 2009)

*Interest*

So far I have felt lucky since none of my family has been affected by losing a job.  My sibblings all took a big hit in house value living in California and Nevada.  We took a hit on selling a house for a few reasons.  We got a lot less then expected and it took 9 months even though everyone fell in love with the house.
I think things will be back when unemployment gets back to a normal rate and interest in banks starts happening again.  Right now I feel as if we have to pay the bank to hold our money.
Bart


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## pgnewarkboy (Dec 23, 2009)

Jimster said:


> The good news is that there still is an economy.  I don't think people realize just how close we were to financial collapse!   I am talking about an economy where barter would have replaced money.  To that extent we are infinitely better than we were.  Are people still hurting?  Yes, without a doubt that is true.  Will there continue to be long term unemployment and economic problems?  Yes.   Some of the unemployment problems have been there a long time just waiting for a cataylst to cause the recession.  Having had that catalyst, it is obvious that it will be a long time before we resolve the problem.  Some of the long term issues were the derrivative tradings made possible in the last administration, the absolute lack of industrial production in this country (we stopped making things in the 70's), the ridiculous dependence upon foreign oil and foreign goods and a banking system which is fraught with greed, corruption and inepitude.  Except for the derrivative trading all of this was quite obvious for years.  Economists have been predicting this problem for several years.It only took ignoring the problem to allow it to fester and finally burst.
> 
> So it will not be resolved overnight.  I do believe we are now headed in the right direction (albeit very costly).  I think the one possible cloud on the horizon is the possibility of a commercial real estate meltdown much like the residential meltdown that started this mess.  Assuming we can thwart this, things should start to right themselves.  Although the current health care bill has its many problems, it too will help control the problem.  Don't forget that health care constitutes 1/6th of the entire economy.
> 
> Having said all this, I apologetically also note that the recession has not been a disaster for many.  If you have money or a source of money, it has been a downright boon.  Real estate is cheap, travel is cheap, goods and services have been discounted.  I hate to see my brethern suffering but it has it's upside.  Those huge bank bonuses are made even the more gaudy by the fact that they get the money and it now actually buys more than before.  Anyone looking for economic justice in this economy will not find it.



Right on Brother!  Realistic assessment.  I love to see it.  You get it so infrequently.  I will add the following.   I am going to capitalize it because mush heads on TV and Radio are clueless beyond looking in the mirror as they watch themselves blather.  Here it is.  THE CONVERSION OF THE UNITED STATES AND THE WORLD TO NEW SOURCES OF ENERGY WILL CREATE TENS OF MILLIONS OF WELL PAYING JOBS IN THE UNITED STATES ALONE.  IT WILL LIFT MANY NATIONS OUT OF ABJECT POVERTY.


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## fillde (Dec 23, 2009)

I would like to know how the health bill would help most americans. Our premiums are going to go up, meaning less disposable income. We will be taxed more, meaning less disposable income. If we decide to drop our isurance we will be fined, meaning less disposable income. There is no way we will be saving money and the majority of americans know it.


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## pgnewarkboy (Dec 23, 2009)

fillde said:


> I would like to know how the health bill would help most americans. Our premiums are going to go up, meaning less disposable income. We will be taxed more, meaning less disposable income. If we decide to drop our isurance we will be fined, meaning less disposable income. There is no way we will be saving money and the majority of americans know it.



Your statement is full of assumptions and no facts.  I for one can't say for sure if premiums for most will or will not go up.  But here are some FACTS that will go into the mix and impact prices.  When people are insured there will be less visits to the emergency room.  That is a  fact.  Emergency room care is the most expensive care in America.  You and I, who have insurance, pay for that care because the hospitals get that money back from increasing charges , our charges, to our insurance companies.  That increases insurances costs right now.  Another fact, insurance companies will have a much larger pool of insurors and they will have much more money coming in from insurance companies.  That COULD result in stabilized or lower insurance costs for the rest of us.

I don't know what will happen with insurance rates but there will be factors that could stabilize or lower rates.  Inasmuch as the companies can charge what they want - it will be a crap shoot.  Just llike it is  now.

Further, some people will pay more taxes (under both proposed bills) most would not.  That is a fact.  The pharmaceutical donut hole in Medicare will be closed in both bills.  That is fact.  It means that seniors will save money on pharmaceuticals.  Alot of money.

People with pre-existing conditions will have them covered by insurance.  That means they will save alot of money on paying for care they need to survive cancer and other deadly illnesses.  There will be no annual or life time limits on care.  People with cancer and other deadly illnesses will save alot of  money and be able to survive to see another day and perhaps lead a productive life.   The above statements are all facts and in both bills.  Pre-exisitng conditions and lifetime or annual limits are a drain on the finances of our families and therefore negatively impact the economy.

Can I tell you what will happen with insurance rates?   No.  They still get to charge what they want.  Can the mush heads on TV and Radio tell you what will happen with insurance rates?  No.  Did the mush heads tell you what was going to happen with real estate, derivatives, or banking.  No.

Lets look at the facts.  Lets not make assumptions that are not backed by facts.  I can't predict the future, nor can you, the business world, the government or any other living being.


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## SueDonJ (Dec 23, 2009)

Last night I went out to the mall to finish up the last bit of Christmas shopping.  It should have been jampacked to the gills, what with it being so close to the holiday with no weekend shopping days left and the snowstorm pretty much making this past Sunday a non-shopping day.  It wasn't nearly as crowded as I expected it to be - no problem parking, there was plenty of inventory in the six stores I visited although it didn't appear that the usual holiday extra employees were on, every store had discount sales, and it didn't look like a bomb had gone off.  That was the most surprising thing of all, that it wasn't a mess!

It's been the same every time I've gone out during the last month.  People aren't out there shopping like years past.  Nowhere near last year, even.  I know that more people are doing more online shopping than ever before, but from my little sample I'd say that people are doing less shopping overall.  Is that a consumer confidence issue or an unemployment/credit issue?  Both?

Melbay, I love your post.  It's what I see - that those fortunate enough to ride out this recession will be able to recoup their losses eventually while the Great Divide widens and the unfortunate, whose numbers are increasing, have been set so far back that catching up may be a pipe dream.


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## Jimster (Dec 23, 2009)

*Health care Pt 1*

_Posts discussing politics, religion, and controversial social issues that are not directly related to timesharing are not permitted._


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## Jimster (Dec 23, 2009)

*Health Care Part 2*

The current health care bill is not the answer and it is fraught with problems.  But make NO MISTAKE for the vast majority of Americans it is better than the status quo and it is a stepping stone to perhaps a vast improvement.  Will some people be hurt by it?  Yes  Will it solve the problem?  No   But to me it is still all about "the greatest good for the greatest number".  Does it meet this utiliitarian test?  Yes   As Americans, I think we  have always prided ourselves in sticking together and helping all Americans.

The fact that this is not a bi-partisan bill angers me immensely but if you strip everything away the real issue is do you want more of the same or a change for the better for those truly in need.  I opt for the latter.  Finally, let's dispell one myth.  There is nothing hurried about this change.  We introduced the first health care reform bill in 1939.  Both sides have been free to provide a satisfactory alternative since that time, but none has occurred.  To now stand in the way of change and sit back and take pot shots at this bill because it could be better is disgusting.  In America until now, we  have always taken the position "if you don't like something, do something about it".  If you don't like the President, vote.  If you don't like a bill, write another one.  That is not what has happened here and that is why I am so angry.  We have polarized our society so much that neither side listens to or helps the other.  In short, we now have the red states and the blue states.   I liked it better when all the states were under the red,white and blue working together.


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## Jimster (Dec 23, 2009)

*Yeah yeah Yeah*

Sorry.  I know the rule-got carried away although in this forum there is very little connected to timesharing.


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## pgnewarkboy (Dec 23, 2009)

SueDonJ said:


> Last night I went out to the mall to finish up the last bit of Christmas shopping.  It should have been jampacked to the gills, what with it being so close to the holiday with no weekend shopping days left and the snowstorm pretty much making this past Sunday a non-shopping day.  It wasn't nearly as crowded as I expected it to be - no problem parking, there was plenty of inventory in the six stores I visited although it didn't appear that the usual holiday extra employees were on, every store had discount sales, and it didn't look like a bomb had gone off.  That was the most surprising thing of all, that it wasn't a mess!
> 
> It's been the same every time I've gone out during the last month.  People aren't out there shopping like years past.  Nowhere near last year, even.  I know that more people are doing more online shopping than ever before, but from my little sample I'd say that people are doing less shopping overall.  Is that a consumer confidence issue or an unemployment/credit issue?  Both?
> 
> Melbay, I love your post.  It's what I see - that those fortunate enough to ride out this recession will be able to recoup their losses eventually while the Great Divide widens and the unfortunate, whose numbers are increasing, have been set so far back that catching up may be a pipe dream.



It definitely varies by locale. Our malls are packed like sardines in a can.  My son is doing some retail and says where he works sales are great.  I am sure online has an impact on what the malls look like - but online sales reportedly jumped 20%.  When the inventory goes whether online or in stores it must be restocked and that means jobs in the near future.

We will see how the holiday sales shapes up and how long it takes for the economy to get strong again.  I am extremely confident in the U.S economy for many reasons.


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## Rose Pink (Dec 23, 2009)

SueDonJ said:


> ...from my little sample I'd say that people are doing less shopping overall. Is that a consumer confidence issue or an unemployment/credit issue? Both?


 
Maybe it's option #3:  we already have all the "stuff" we need and we can't find a place to stuff more stuff.

We tell our children not to buy us stuff.  We try not to buy them stuff.  We go out to dinner instead.  We stuff ourselves.  Wait, that's not a good thing, either.


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## pgnewarkboy (Dec 23, 2009)

AwayWeGo said:


> -- hotlinked--​
> -- Alan Cole, McLean (Fairfax County), Virginia, USA. ​



I don't understand why you are so pessimistic.  You seem to generally be an upbeat person and I like your posts.  My guess is you are watching too much TV and listening too much to radio.  It would drag anyone down.

You have been around awhile, as have I, and seen the many ups and downs and travails that this nation has gone through - from gas lines and super inflation, loss of jobs to China, numerous recessions and booms and busts and wars.  Yet we have also seen our nation recover from them all.  We have witnessed our people and economy re-invent itself numerous times.  We are now witness to the largest revolution in the history of mankind.  The digital transition.  Many say, and the evidence points to the fact that this transition is still in its early stages.  It impacts every area of life and science.  Everyday wonders occur that will improve our lives and the lives of people around the world.  All of what I am talking about results in economic activity.  The mush heads on TV and Radio lack information and creative thinking.  They are professional loudmouths that actually perform little to no service to people (school closing notices are an exception.   

People listen to these creeps, I guess, because they alway sound confident in what they say and they just keep on saying it over and over again.  Jonas Salk invented the polio vaccine that changed the whole way the world thinks about disease in addition to saving millions of lives.  I am sure that he did not waste a minute of his time listening to  ignorant jerks telling him  "it can't be done", "it will cost too much", blah blah blah.  I could name a thousand others like Salk but you get my point.

Not ONE of these loudmouths on TV or radio have actually done anything important in their wasted lives except pad their bank accounts.


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## John Cummings (Dec 23, 2009)

I believe we will have a slow temporary recovery for the next 6-12 months and then a double dip recession followed by years of stagflation.

This will be the result of massive deficits coupled with tax increases.


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## AwayWeGo (Dec 23, 2009)

*Pessimism, Shmessamizzum.*




pgnewarkboy said:


> I don't understand why you are so pessimistic.


Who's pessimistic ? 

I just used the topic as a plausible excuse for running the commode picture, again. 

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


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## Pit (Dec 23, 2009)

John Cummings said:


> I believe we will have a slow temporary recovery for the next 6-12 months and then a double dip recession followed by years of stagflation.
> 
> This will be the result of massive deficits coupled with tax increases.



Jimmy Carter's second term.


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## easyrider (Dec 23, 2009)

In the past it may have been that only 5% of the USA population could retire without any form assistance. Possibly, 36 % of the population would die before retirement. Maybe 6% of the population will work until they die and 53% of the population will be dependent on the government, friends, relatives and charity until they die.

Now the working until death group may have increased from 6% to 12%. Maybe 75% - 80% will be dependent on the government, friend, relatives and charities. The 5% that didn't need help to retire will increase as it takes money to make money in this economy.  


Disclaimer.......
These are unprovable statistics that show how we are financially as a nation. I just made these statistics up after reading other made up statistics and my made up statistics reflect the unproved made up statistics that were used to demonstrate where we are financially as a nation.


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## fillde (Dec 23, 2009)

[Political posts are not permitted on TUG. - DeniseM Moderator]


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## Rose Pink (Dec 23, 2009)

AwayWeGo said:


> Who's pessimistic ?
> 
> I just used the topic as a plausible excuse for running the commode picture, again.
> 
> ...


 
Alan, you are such a naughty boy.


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## Rose Pink (Dec 23, 2009)

easyrider said:


> Disclaimer.......
> These are unprovable statistics that show how we are financially as a nation. I just made these statistics up after reading other made up statistics and my made up statistics reflect the unproved made up statistics that were used to demonstrate where we are financially as a nation.


 
Okay, _now_ I get it!  Could you help me with my 401K investments?


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## BocaBum99 (Dec 23, 2009)

Pit said:


> Jimmy Carter's second term.



on Steroids.


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## MusicMan (Dec 23, 2009)

[Political posts are not permitted on TUG. - DeniseM Moderator]


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## falmouth3 (Dec 23, 2009)

fillde said:


> EVERYTHING the government touches it screws up. I know one thing I will get less and pay more. I believe the economy is improving but it has nothing to do with health care or green jobs.



And how many people would be willing to go back to the days before Medicare and Social Security?  I would guess that only the very young would think it's a great idea to do away with the programs and <1% of the retired people would be willing to do away with them.


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## cvmar (Dec 23, 2009)

Based on the original OP's question I have no idea about the US economy as a whole and can only speak to personal experience in my area. I have worked for a remodel contractor for 20+ years and all of our work has been referral based. Our remodels jobs typically range from 200 - 350K and our clients pay us directly versus submitting a draw to a bank. So I would say our clients are upper middle class and beyond and they do no appear to be spending  any where near as much money on remodels at this time if at all.

We have a few clients that were going to add 2nd story additions and have down sized to remodeling their existing space. Our jobs now are 65K - 150K which is just fine if there are enough of them.  We currently only have work through early spring with nothing else to even bid beyond that and this is the first time that has ever happened. 

Currently most of our clients are attorneys which based on past experiences we tend to avoid (sorry to any TUG attorneys) but as my mom use to say "beggars can't be choosers" and for whatever reason attorneys seem to have a lot of work right now.

My husband is a painting contractor and he hasn't worked for over a month and has nothing in the near term (except our house  ). He will be painting a couple of customs next year but they aren't even out of the ground. 

I am hoping that 2010 will bring more work but everyone I talk to right now is scared and not spending what money they have, our family included, for fear their jobs are not secure. It seems like a "catch 22" situation. No one is spending so no one is producing good or services since no one is spending.

If I end up out of a job and my husbands work is spotty we can survive for a year or two if no one gets a serious illness in which case all bets are off.

Getting back up to my current salary in my field would be tough. I feel that my age would work against me and it seems as if everyone now wants a BA degree in anything just to get an interview. I am sure I would have to go back to school to get more up to date on MS Office etc.

If I could get my money back I would probably cancel our spring trip to Hawaii but since it is mostly paid for and we have no plans for a vacation after that  we will eat in the condo and do our best to enjoy every minute. I am usually a glass half full type of person but the current state of our local economy is wearing me thin.


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## Pit (Dec 23, 2009)

falmouth3 said:


> And how many people would be willing to go back to the days before Medicare and Social Security?  I would guess that only the very young would think it's a great idea to do away with the programs and <1% of the retired people would be willing to do away with them.



Return all the money (with interest) that retirees paid into those programs over their working life, and I bet a large number would be happy to forego both programs.


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## Rose Pink (Dec 23, 2009)

Pit said:


> Return all the money (with interest) that retirees paid into those programs over their working life, and I bet a large number would be happy to forego both programs.


 
I dunno. My mom is 90 and my FIL is 87 and they have drawn out far more than they ever put in. When my kids complain about all the FICA taken out of their paychecks, I just tell them to think of it as taking care of Granny and Grandpa.


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## Jimster (Dec 23, 2009)

"Return all the money (with interest) that retirees paid into those programs over their working life, and I bet a large number would be happy to forego both programs"

They can return the money but the only reason some of them can is that they are still alive.  Many of them would literally have been dead but for those programs.  How do we kill them off ex post facto?  You can also blame them for not investing in Walmart or McDonalds because the rate of return would have been much better too.  If you measure social programs by how much it cost me as opposed to how much good they did our society, those that contributed alot will always see they could have done better on their own and those that contributed little will always have underfunded their share.  I am sorry but social programs have never been about me me me me.  They are about whether they contribute to the good of society.

We pay taxes.  The govenment governs and spends that money.  If they buy 10 tanks to keep us all alive and defended, I don't think it is fair to say it was my money but I never got to use them, I never got to drive them, I never got to shoot them.  The taxes are for the common good.  Should we close Glacier National Park because I have never gone there?   I think the government needs to provide for all of us and it is VERY clear that we all won't get the same benefits.   Frankly that is fine with me.  That doesn't mean I don't want the government to do these things efficiently, because I do.  Yet sometimes we have to endure these inefficiencies to accomplish the common good.  Just how much can be endured varies from person to person.  Social programs can not be measured by what I got out of it or by how much they helped me.  incidently, as attorney, count me on the side of those who has contributed far more than he will ever receive from his taxes.


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## Pit (Dec 23, 2009)

The problem with your tank analogy is that the Constitution authorizes the federal gov't to tax us for the purpose of national defense. Nowhere in the Constitution is Congress empowered to compel citizens to purchase a commercial product (health insurance). Think about it for a minute. If Congress can force you to purchase a product, whether you want it or not, were does it end. Can Congress force us to buy cars from GM, since the gov't now runs GM, and they would very much like to make a go of it?

Never before in our history has Congress acted to make participation in commerce a condition of citizenship. Healthcare was left as an issue for the States to address (as some have). There are Constitutional issues with the Nebraska compromise as well - buying Nelson's vote in the Senate and expecting 49 other states to foot the bill.



> The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people….
> 
> - James Madison, Father of the US Constitution



http://www.constitution.org/fed/federa45.htm


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## Pit (Dec 23, 2009)

Rose Pink said:


> I dunno. My mom is 90 and my FIL is 87 and they have drawn out far more than they ever put in. When my kids complain about all the FICA taken out of their paychecks, I just tell them to think of it as taking care of Granny and Grandpa.



Maybe Congress can pitch it as a pre-paid vacation.


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## BocaBum99 (Dec 23, 2009)

falmouth3 said:


> And how many people would be willing to go back to the days before Medicare and Social Security?  I would guess that only the very young would think it's a great idea to do away with the programs and <1% of the retired people would be willing to do away with them.



All Ponzi schemes favor those who got in early.  The game is what the game is.  I suggest everyone learn it and take the appropriate actions to optimize their personal situation.

If you want government assistance and don't want to work hard, stay in this country and milk the entitlement programs or get a job in one of those protected industries.  So, easy to do.  No need to work hard.  There will likely be a nice hand out to you in coming years.  Really try to get one of those lifetime pensions that pay you forever.  The rest of the country will pick up the tab.

If you are an entrepreneur, move to a low tax state or another country with lower costs of doing business than the USA.  You will be carrying the burden for everyone else in the above category.  If you don't take immediate action to protect yourself, all of your hard work will end up paying for someone else's vacation.  If you do choose to stay in this country, just don't hire any workers.  Make sure they are all independent contractors. Or, outsource all work to overseas workers who will work twice as hard for 1/5th the pay and have more skills.


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## pgnewarkboy (Dec 23, 2009)

Pit said:


> Return all the money (with interest) that retirees paid into those programs over their working life, and I bet a large number would be happy to forego both programs.



I know - they should have put all their money in stocks - OH, they crashed again - no, they should have put all their money in the banks - OH, I almost forgot they spend all their depositors money on fancy gambling schemes and CRASHED - of course, NOW they pay no interest.

A wonderful suggestion.:hysterical:


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## cvmar (Dec 23, 2009)

Jimster said:


> "Return all the money (with interest) that retirees paid into those programs over their working life, and I bet a large number would be happy to forego both programs"
> 
> They can return the money but the only reason some of them can is that they are still alive.  Many of them would literally have been dead but for those programs.  How do we kill them off ex post facto?  You can also blame them for not investing in Walmart or McDonalds because the rate of return would have been much better too.  If you measure social programs by how much it cost me as opposed to how much good they did our society, those that contributed alot will always see they could have done better on their own and those that contributed little will always have underfunded their share.  I am sorry but social programs have never been about me me me me.  They are about whether they contribute to the good of society.
> 
> We pay taxes.  The govenment governs and spends that money.  If they buy 10 tanks to keep us all alive and defended, I don't think it is fair to say it was my money but I never got to use them, I never got to drive them, I never got to shoot them.  The taxes are for the common good.  Should we close Glacier National Park because I have never gone there?   I think the government needs to provide for all of us and it is VERY clear that we all won't get the same benefits.   Frankly that is fine with me.  That doesn't mean I don't want the government to do these things efficiently, because I do.  Yet sometimes we have to endure these inefficiencies to accomplish the common good.  Just how much can be endured varies from person to person.  Social programs can not be measured by what I got out of it or by how much they helped me.  incidently, as attorney, count me on the side of those who has contributed far more than he will ever receive from his taxes.



I agree very much with these comments. We seem to have lost sight of the common good for the people of our country. We argue too much about me me me and not enough about us as a country. I didn't have my first child until I was nearly 40 but in all the years I was childless yet a tax paying homeowner I never complained about paying taxes for my local school district or voting to approve a school levy because it was for the common good. 

IMO the American people are very kind and generous but we so often seem to show that through our reaction versus being proactive. We are bombarded with information and trying to disseminate it all and find the truth in order to make an informed decision is becoming increasingly difficult.  I fear that until we take the money out of elections the voices of the common good will not be heard. I often tell my son life isn't fair however he still needs to be. I am hopeful the young people of our country can turn things around.


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## Pit (Dec 23, 2009)

pgnewarkboy said:


> I know - they should have put all their money in stocks - OH, they crashed again - no, they should have put all their money in the banks - OH, I almost forgot they spend all their depositors money on fancy gambling schemes and CRASHED - of course, NOW they pay no interest.
> 
> A wonderful suggestion.:hysterical:



News flash for the uninitiated... social security offers a poor return for a lifetime of tax payments. Despite recent volatility, real returns on stocks outpace those of social security.

I've a better suggestion. Instead of Congress coercing people into these schemes, let's allow people to decide their own fate. Let's have an opt-out provision for these entitlement programs. Then we'll find out how popular they really are.


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## Jimster (Dec 23, 2009)

Pit said:


> The problem with your tank analogy is that the Constitution authorizes the federal gov't to tax us for the purpose of national defense. Nowhere in the Constitution is Congress empowered to compel citizens to purchase a commercial product (health insurance). Think about it for a minute. If Congress can force you to purchase a product, whether you want it or not, were does it end. Can Congress force us to buy cars from GM, since the gov't now runs GM, and they would very much like to make a go of it?
> 
> Never before in our history has Congress acted to make participation in commerce a condition of citizenship. Healthcare was left as an issue for the States to address (as some have). There are Constitutional issues with the Nebraska compromise as well - buying Nelson's vote in the Senate and expecting 49 other states to foot the bill. http://www.constitution.org/fed/federa45.htm






First of all, I don't understand how anything you say is a condition of citizenship.   Even if I don't buy health insurance under the new plan, I don't lose my citizenship.   As for Congress's incursion into mandating health care coverage, Congress regulates or causes to be regulated all manner of commercial activity. The battle to keep the government out of commerce was fought and lost in the courts during the New Deal.  There aren't enough gigabites on this server to list all the incursions Congress and the regulatory agencies have made into commercial activity.  Most are not obvious because they done under the purview of regulatory agencies.  There are mandates and prohibitions.  A prohibition is just as clear an incursion as a mandate.  For example, you can not sell a house with lead based paint without a warning.  Some are very clear.  Electricity seems to be a commercial entity yet under TVA the government engages in that enterprise.  We have given MLB a virtual immunity from anti-trust legislation.  We impose taxes on all sorts of excises including alcohol, firearms and tobacco.  If you buy moonshine, you have a problem because the payment of taxes is not optional.  It is mandated.

I agree the issue about Nebraskas Medicare payments is quite irksome.  Perhaps there is a constitutional challenge here but I seriously doubt it.  It is a political compromise and you don't have to look very far to find a very similar example.  Alexander Hamilton's economic plan in 1794 was a very similar economic compromise.  As part of that plan, the states that had paid off their revolutionary war debt were required (and taxed) to pay the war debt for those states that had not paid their debts and were not frugal.  So the frugal states paid twice.  The fact that people in Illinois, Texas etc have to pay for the funding of Nebraska Medicare even though they have to pay for their own too is irksome but it happens.  Am I happy about that?  No.  Also dont forget the hospital in Connecticut for Senator Dodd.    The truth is this type of political horse trading has happened for years, but now with the media scrutinizing it better it just becomes more obvious.
  The true tragedy is this became necessary ONLY because both parties put their party affiliiation before their country's affiliation.  The Democrats voted for it (with some arm twisting) because it was a Democratic proposal and the Republicans voted against it because it was not a Republican proposal.  The compromise should have come between the parties not within a party.  That is why people say this country is polarized- and it is true.

BTW-The constitution allows Congress to provide for the common defense ... [and] promote the General welfare.  That's the preamble.  Note the elastic clause- Article I section 8 provides to do everything else that is "necessary and proper."   Basic constitutional law.


http://www.constitution.org/fed/federa45.htm[/QUOTE]


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## Rose Pink (Dec 23, 2009)

Pit said:


> Maybe Congress can pitch it as a pre-paid vacation.


 
Not sure what you mean by that but both of these good people worked long and hard during the years they were able.  Neither gets enough in social security to do much more than buy groceries and a few necessities.  If it weren't for pensions from employers (which many workers today do not get) they would be in the poor house.  Neither of them is rolling in money.  My FIL has managed to save some but at the cost of what I would consider a decent life.  He keeps the temp low in the winter, does not have an air conditioner for the summer, and rarely goes anywhere.  Entertainment is reading or watching tv.  No vacations.

If it weren't for medicare and supplemental policies, their medical needs would have cost them everything and then some--in fact, bankrupted some other family members as well.  I'm sure you would not just toss out these old people nor deny them healthcare.  I'm not talking about extremely expensive heroics, either.

I don't have the answers but I do think we need to care for those who can no longer care for themselves.  We are living off the backs of these good people.  They helped build the society we enjoy.  They built many of the roads, the businesses, etc.  We owe them.

My mom and my FIL do not consider old age to be a pre-paid vacation.  They don't consider it a vacation at all.  It's not for wimps they tell me.


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## Rose Pink (Dec 23, 2009)

BocaBum99 said:


> All Ponzi schemes favor those who got in early. The game is what the game is. I suggest everyone learn it and take the appropriate actions to optimize their personal situation.


 
Funny you should mention that.  I was just thinking this morning that consumerism is a sort of ponzi scheme.  It depends on people buying more and more stuff.  When they stop buying (or slow the buying) business suffers.  People get laid off, etc.  We have to keep spending (consuming) to keep this economy going.  And growth depends on increased buying (consuming) either by the established customer or by new ones.  This cannot be sustained.  It collapses and then starts to inflate again. 

Again, I don't have the answers but I think we need to start living within our means and save a little.  The people at the top cannot keep hoarding the treasure for themselves for soon there will be no one that can afford to consume (buy) the stuff any more.


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## falmouth3 (Dec 23, 2009)

Pit said:


> Return all the money (with interest) that retirees paid into those programs over their working life, and I bet a large number would be happy to forego both programs.



I don't think so - I read the contribution to SS alone is gone in 18 months.


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## Pit (Dec 23, 2009)

Rose Pink said:


> Not sure what you mean by that ...



It was intended as a tongue-in-cheek timeshare analogy. Nothing personal.


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## Pit (Dec 23, 2009)

Jimster said:


> First of all, I don't understand how anything you say is a condition of citizenship.   Even if I don't buy health insurance under the new plan, I don't lose my citizenship.   As for Congress's incursion into mandating health care coverage, Congress regulates or causes to be regulated all manner of commercial activity. The battle to keep the government out of commerce was fought and lost in the courts during the New Deal.  There aren't enough gigabites on this server to list all the incursions Congress and the regulatory agencies have made into commercial activity.  Most are not obvious because they done under the purview of regulatory agencies.  There are mandates and prohibitions.  A prohibition is just as clear an incursion as a mandate.  For example, you can not sell a house with lead based paint without a warning.  Some are very clear.  Electricity seems to be a commercial entity yet under TVA the government engages in that enterprise.  We have given MLB a virtual immunity from anti-trust legislation.  We impose taxes on all sorts of excises including alcohol, firearms and tobacco.  If you buy moonshine, you have a problem because the payment of taxes is not optional.  It is mandated.



Ok, condition of citizenship was an overstatement. I should have said, as a condition of legal residence. Under the proposed legislation, it would be a crime for me to exist without health insurance. 



> According to the non-partisan Joint Committee on Taxation (JCT), the House health care bill passed last Friday empowers the federal government to imprison people for up to five years if they willfully refuse to buy federally regulated and approved health insurance.


http://blog.heritage.org/2009/11/13/video-pelosi-says-jail-very-fair-punishment-for-not-buying-health-insurance/


Forcing people to purchase a commercial product is not "regulating commercial activity." It is an attempt to regulate inactivity. In every example you cite, the mandates, taxes, prohibitions are optional. I can easily and legally avoid every one of them. Please give me an example of another Congressional mandate that requires citizens to engage in a commercial transaction as a condition of legal residence. I don't believe there is a precedent.



Jimster said:


> I agree the issue about Nebraskas Medicare payments is quite irksome.  Perhaps there is a constitutional challenge here but I seriously doubt it.  It is a political compromise and you don't have to look very far to find a very similar example.  Alexander Hamilton's economic plan in 1794 was a very similar economic compromise.  As part of that plan, the states that had paid off their revolutionary war debt were required (and taxed) to pay the war debt for those states that had not paid their debts and were not frugal.  So the frugal states paid twice.  The fact that people in Illinois, Texas etc have to pay for the funding of Nebraska Medicare even though they have to pay for their own too is irksome but it happens.  Am I happy about that?  No.  Also dont forget the hospital in Connecticut for Senator Dodd.    The truth is this type of political horse trading has happened for years, but now with the media scrutinizing it better it just becomes more obvious.
> The true tragedy is this became necessary ONLY because both parties put their party affiliiation before their country's affiliation.  The Democrats voted for it (with some arm twisting) because it was a Democratic proposal and the Republicans voted against it because it was not a Republican proposal.  The compromise should have come between the parties not within a party.  That is why people say this country is polarized- and it is true.
> 
> BTW-The constitution allows Congress to provide for the common defense ... [and] promote the General welfare.  That's the preamble.  Note the elastic clause- Article I section 8 provides to do everything else that is "necessary and proper."   Basic constitutional law.



Correct me if I am wrong, but "general welfare" in the preamble is in reference to the Nation, not individual citizens, and the preamble itself has no force. Article 1 Section 8 more clearly states "provide for the common defence and general welfare of the United States."


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## Pit (Dec 23, 2009)

falmouth3 said:


> I don't think so - I read the contribution to SS alone is gone in 18 months.



I don't know the context of the statement you referenced, but FICA taxes are 15.3% of your wages up to the taxable limit ($106,800 for 2009). 

The cumulative annual growth rate of the S&P 500 over the past 50 years, including the recent meltdown, is 9.18%. If people saved 15.3% of their income at that rate of return for 50 years, they would have a huge nest egg.

For example, someone earning $50K/yr (saving 15.3% = $7650/yr) would have approximately $7 million after 50 years. And, that assumes they never get a raise in 50 years. Fat chance they would ever collect that much in SS payments.


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## Rose Pink (Dec 23, 2009)

Pit said:


> The cumulative annual growth rate of the S&P 500 over the past 50 years, including the recent meltdown, *is 9.18%*. If people saved 15.3% of their income at that rate of return for 50 years, they would have a huge nest egg.


I have *never* gotten that kind of return.  I never seem to pick the right mix of investments.  The ones that pay high also seem to lose big time wiping out the investment.  So I invest very conservatively and don't get much in return but still have the money that was invested--sort of like putting it under the mattress but at least it's something.  More than what most people have.


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## stevedmatt (Dec 23, 2009)

Pit said:


> Let's have an opt-out provision for these entitlement programs. Then we'll find out how popular they really are.



So what happens to the person who opts out and runs out of money and is physically unable to provide for themselves?

You are right in the fact that many people would opt out. Most of those people would be under 40 (IMO) since those over 40 may feel they have a vested interest in these programs. Many who opt out would never save money, just the way people do today. People live to their means and would likely spend any extra cash they receive as a result of not paying into these programs.

So we will have a whole generation or more of people who didn't contribute. They will live to their means. In 40 more years when they are into their 60's and 70's and are still unable to retire, they will likely be physically unable to work or unable to find employment due to younger workers being more efficient. Then what happens? Who will provide for these people? 

I am actually for a mandatory payroll deduction for an individual retirement account (not social security) that cannot be used until a certain age. One exception would be for those who are terminally ill. 

I have also come around to the mandatory health care. A moderate amount of people whom use the emergency room as a doctors office don't have insurance. When they don't pay their bill, everyone else's bill has to go up to pay for them. Since you have health insurance, you don't pay the bill anyhow, but you do pay the insurance premiums. These premiums could be substantially lower if those who bleed the system are required to have coverage.


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## stevedmatt (Dec 23, 2009)

Pit said:


> Ok, condition of citizenship was an overstatement. I should have said, as a condition of legal residence. Under the proposed legislation, it would be a crime for me to exist without health insurance.
> 
> Forcing people to purchase a commercial product is not "regulating commercial activity."
> 
> Correct me if I am wrong, but "general welfare" in the preamble is in reference to the Nation, not individual citizens, and the preamble itself has no force. Article 1 Section 8 more clearly states "provide for the common defence and general welfare of the United States."



Many states require you to have car insurance, just to sight one example.



Pit said:


> I don't know the context of the statement you referenced, but FICA taxes are 15.3% of your wages up to the taxable limit ($106,800 for 2009).
> 
> The cumulative annual growth rate of the S&P 500 over the past 50 years, including the recent meltdown, is 9.18%. If people saved 15.3% of their income at that rate of return for 50 years, they would have a huge nest egg.
> 
> For example, someone earning $50K/yr (saving 15.3% = $7650/yr) would have approximately $7 million after 50 years. And, that assumes they never get a raise in 50 years. Fat chance they would ever collect that much in SS payments.



As someone said above, good luck getting those returns. As I stated above, good luck getting people to put away 15% of their income. Currently, only half of social security comes from their pay (the employer pays half of that 15%). And doing it for 50 years is quite a feat. Do you plan to work for 50 years, let alone put a percentage of that money away on your own from you very first day of work? If so, I would guess you are in the minority.


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## Elan (Dec 23, 2009)

stevedmatt said:


> So what happens to the person who opts out and runs out of money and is physically unable to provide for themselves?



  Those people will just disappear and we won't have to think about them any more.


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## Pit (Dec 23, 2009)

stevedmatt said:


> Many states require you to have car insurance, just to sight one example.



That is not a good example for a couple of reasons. First, it is not a federal mandate. It is governed by state law (as it should be). Second, it is not a condition of legal residence - it is only imposed on those who drive on public roads (and some states don't even require it).



stevedmatt said:


> As someone said above, good luck getting those returns. As I stated above, good luck getting people to put away 15% of their income. Currently, only half of social security comes from their pay (the employer pays half of that 15%). And doing it for 50 years is quite a feat. Do you plan to work for 50 years, let alone put a percentage of that money away on your own from you very first day of work? If so, I would guess you are in the minority.



To get those returns, one would have needed to do nothing more that dump money into an index fund. No market timing required. No portfolio theory. Just the S&P 500 index.

The point is people are already "putting away" 15% through FICA. Yes, the employer is required to pay half of it, but that is part of an employees compensation (because it is part of the employers expense for hiring that individual). We're not talking about saving money in addition to FICA.

No, I don't plan to work 50 years, if I can avoid it. But, many people do. I just picked 50 years. Here is the calculator. Put in 30 years, or whatever.

http://www.moneychimp.com/features/market_cagr.htm


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## "Roger" (Dec 23, 2009)

Pit said:


> ...For example, someone earning $50K/yr (saving 15.3% = $7650/yr) would have approximately $7 million after 50 years. And, that assumes they never get a raise in 50 years. Fat chance they would ever collect that much in SS payments.


First of all, what percent of society was making $50,000 fifty years ago?  Totally unrealist assumption.

Also, you are picking a charatable date to start your computations.  (This is often done in publications promoting stock investments.)  When you start looking at different starting dates, sometimes you get rosy figures like you cite, but economists have pointed out, that it is not a sure thing.

Finally, how are you going to control the types of investments people make?  (You want no government interference - except maybe forced savings?)  I have an uncle who took his retirement as a lump sum suggesting, like you, he could do better than the company investment plan.  With a dot com bust, he had to go back to work well after retirement age and is now unable to work and destitute.


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## stevedmatt (Dec 23, 2009)

Pit said:


> To get those returns, one would have needed to do nothing more that dump money into an index fund. No market timing required. No portfolio theory. Just the S&P 500 index.
> 
> The point is people are already "putting away" 15% through FICA. Yes, the employer is required to pay half of it, but that is part of an employees compensation (because it is part of the employers expense for hiring that individual). We're not talking about saving money in addition to FICA.



Past performance is not indicative of future results. It is a gamble and not guaranteed.

If the 15% payroll deduction isn't mandatory, IMO 90% of people wouldn't do it. Ask someone in HR at any local company that has a 401K and I think you'll be amazed how many people don't participate. And many that do, don't maximize their contributions even when they are being matched.

And you still didn't answer the most important question about what will happen to those who opt out of the social programs.


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## Jimster (Dec 23, 2009)

*more*

"Ok, condition of citizenship was an overstatement. I should have said, as a condition of legal residence. Under the proposed legislation, it would be a crime for me to exist without health insurance."

Well first of all, while the bill empowers Congress to imprison people that is not the first sanction.  The first sanction is a $750 fine.  I think most people will get the idea but there are a few hardcore people out there.  Ironically, if you were put in prison you would get health care albeit some of the worst care in the US.  Also there are certain exclusions and money qualifiers to exempt some people.  Frankly, I have no idea what a Christian Scientist would do, but some things just have to be worked out.  The bottom line is you are breaking the law if you do not secure health care and I have no sympathy for criminals.  This is especially true when there is a valid reason for universal care-namely that if people are not covered they still receive health care but at our expense.  If a person were to promise to die immediately upon needing health care I have no problem with it.   I just don't want to pay because of some esoteric right he thinks he should exercise or because he is too cheap to comply.  In principal, the breaking of this law is the same as the breaking of every other law.  If you feel you have the right to yell fire in a crowded theater, and want to exercise that right I also have no problem throwing you in jail.  The bottom line is people who don't want to provide health care insurance for themselves do so because they simply don't want to.  The public good trumps their right and it should.  This happens in ALL sorts of legislation and court cases.

As to the forcing people to buy health care coverage, I have already alluded to why that is done.  Furthermore, it is every bit as much a regulation of commercial activity as the items I mentioned.  You can regulate something to death or regulate it to life or anywhere in between the principle is regulation.  This is just another mandate.  If it is the commercial aspect that worries you, I would say I much prefer a public option myself but it is certainly within the authority of Congress to mandate that you have insurance.  Just like the states mandate that you have to have insurance to drive a car, or that you pay a liquor tax or consume electricity from TVA.  In the law we often impose positive duties to act.  If someone is drowning, I can sit and watch with no penalty.  However, if it is someone you pushed in the water or someone to whom you have a duty such as a family member, you have a positive duty to act.  This law places a duty to act upon the consumer-no difference.  You just don't like that the duty is to buy health insurance.  I was not a particularly big fan of the government in the 1960's when they said I had to get drafted with the potential of losing my life.  Somehow buying health insurance pales in comparison.  Yet the Congress and the courts upheld their right to place mandates on their citizens.  In one sense, you can't be a citizen and have all the rights and duties go in one direction-namely toward you.  If you are a citizen, you surrender your rights and assume duties to the federal government.  Before you say anything at all, I know that those govenment minimalists say "Oh but that is just for the common defense"   Government should not do more than that.  Yes, that's the argument unfortunately that is not our society-at least not at this time.  If you want that kind of society, buy an island and inhabit it and be your own ruler.  Our society today is far more complex than that kind of 17th century philosophy.

As to the constitution, the Supreme Court has refused to apply the preamble to any legal effect-you are right.  Article 1 section 8 clauses 1-16 do spell out the power of the federal government as read with Supreme Court "interpretation".  The interpretation would include much more including the right to privacy.  The economic regulatory power of the US was affirmed in the latter New Deal cases and it has been a fact of life ever since. The simple fact of the matter is that individual rights and the rights of society often come into conflict.   Congress and the courts have made a value judgement, the benefits to society outweigh your rights.  I wouldn't want you to jeopardize society any more by yelling fire in a crowded theater than I would want you to opt out of health insurance.


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## falmouth3 (Dec 23, 2009)

Pit said:


> I don't know the context of the statement you referenced, but FICA taxes are 15.3% of your wages up to the taxable limit ($106,800 for 2009).
> 
> The cumulative annual growth rate of the S&P 500 over the past 50 years, including the recent meltdown, is 9.18%. If people saved 15.3% of their income at that rate of return for 50 years, they would have a huge nest egg.
> 
> For example, someone earning $50K/yr (saving 15.3% = $7650/yr) would have approximately $7 million after 50 years. And, that assumes they never get a raise in 50 years. Fat chance they would ever collect that much in SS payments.



In 1959, the average wage was 3855.  The individual and his employer were paying 5% combined.  Gee, that was a whopping $193 per year.

In 1969, the average wage was 5894.  Total percentage paid was 8.4%.  An impressive $495 was paid in that year.

In 1979, the average wage was 11479.  Total percentage paid was 10.16%.  Taxes for the year jumped to $1166.

I think you get the idea.  Minuscule amounts were entered into people's SS accounts for many, many years.   

In Nov. 2009, the average MONTHLY payout was $1163.60.  A total of $13,963.20 a year.  I wish my investments returned that kind of money.


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## Pit (Dec 23, 2009)

stevedmatt said:


> So what happens to the person who opts out and runs out of money and is physically unable to provide for themselves?



There are numerous state operated programs, such as Medicaid, that exist as a safety net for the indigent. Beyond that, what is wrong with expecting people to live with the consequences of their own decisions? People have been around much longer than social security.



stevedmatt said:


> You are right in the fact that many people would opt out. Most of those people would be under 40 (IMO) since those over 40 may feel they have a vested interest in these programs. Many who opt out would never save money, just the way people do today. People live to their means and would likely spend any extra cash they receive as a result of not paying into these programs.
> 
> So we will have a whole generation or more of people who didn't contribute. They will live to their means. In 40 more years when they are into their 60's and 70's and are still unable to retire, they will likely be physically unable to work or unable to find employment due to younger workers being more efficient. Then what happens? Who will provide for these people?



But, the following generation will learn from that and become much more responsible. Social policies breed either self-reliance or dependence. For example, we now have generation after generation of families dependent on welfare.



stevedmatt said:


> I am actually for a mandatory payroll deduction for an individual retirement account (not social security) that cannot be used until a certain age. One exception would be for those who are terminally ill.
> 
> I have also come around to the mandatory health care. A moderate amount of people whom use the emergency room as a doctors office don't have insurance. When they don't pay their bill, everyone else's bill has to go up to pay for them. Since you have health insurance, you don't pay the bill anyhow, but you do pay the insurance premiums. These premiums could be substantially lower if those who bleed the system are required to have coverage.



According to your logic, we should expect to see our insurance premiums decline substantially as a result of this new legislation. However, the CBO has concluded that there will be very little impact on premiums.

What about an individual (or family) that is in generally good health. They pay out of pocket when they need to see a doctor and carry only catastrophic insurance. I'm guessing their premiums will be substantially higher.


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## Jimster (Dec 23, 2009)

*a final thought*

"There are numerous state operated programs, such as Medicaid, that exist as a safety net for the indigent. Beyond that, what is wrong with expecting people to live with the consequences of their own decisions? People have been around much longer than social security."

Hello- but Medicaid is paid for by a matching formula with the federal government by your mandated participation and is part of Social Security.  If Medicaid is ok, then what argument do you have??  If you fail to pay your taxes some of which go to Medicaid, you can be thrown in jail too.

Premiums Shemeums who cares?  30 million people who didnt have health care before will now be covered.  People WRONGLY denied coverage for pre existing conditions will now be covered.  Make no mistake these people did nothing wrong.  They weren't foolish with their money, they weren't stupid, they didn't make bad decisions.  What they did was have the bad fortune to have a disease that is expensive to treat.  Talk about this instead of talking about what it does to your individual pocketbook!


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## Pit (Dec 23, 2009)

It seems that some are hung up on the example I gave. I was talking about someone who today is young (say, just entering the workforce). If they could opt-out of SS and invest that money instead, they could be much further ahead 30, 40, 50 years down the road.

A $50K annual income is not at all unrealistic for someone entering the workforce today.

According to the Heritage foundation, a 20-year old entering the workforce today can expect an annual rate of return ranging from -0.15% to 0.59% on the money paid into SS. Compare that with the historical S&P 500 returns, and hopefully, you get the point.


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## Jimster (Dec 23, 2009)

*I agree*

I agree a person can get a better rate of return by investing themselves.  This has always been the case.  The opponents of Social Security in 1935 probably argued exactly the same thing.  BUT PEOPLE DON'T SAVE!

The US has  had traditionally the lowest rate of savings of any industrial country.  The recession is changing some attitudes but it is still very low.  We just don't save.  If we could be assured everyone would do this it would be fine.   Make no mistake if they don't then we have a problem as a society because we have masses of people without a safety net and humanity cries out that the richest country in the world take care of its citizens. 

I will take a wild guess and say you see yourself as one of those who would consienciously save money.  Great!  Then for your benefit I will pray that you don't get MS or some other crippling disease in your 40's and have all your dreams snatched away from you.  You probably see your savings as a hedge against homelessness.   Don't count on it.  These kind of conditions will exhaust your savings in literally weeks and leave you looking for a public handout.  The leading cause of bankrupcy in the US is ....  A. high credit card bills; B poor spending and savings habits; C. laziness; D. chronic disease.   Yep, that's it D.  Oh and BTW, as it stands tonight any health insurance company could void your policy claiming a pre existing condition so all hospital expenses will come out of your pocket.


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## ondeadlin (Dec 23, 2009)

This has really become a thinly veiled political discussion IMO, and one that's drifted far, far, far from the original topic.

I'm fortunate enough to be receiving a degree from a lesser-known state university in a field that is perceived as depressed. Yet I've found the job market to be extremely encouraging. Not just good, but extremely encouraging, and this despite seeking work in the very battered industrial Midwest.

Times a very tough, obviously. I'm in school because my industry collapsed and I have a lot of friends out of work. That obviously leaves you with a feeling of uncertainty.

But on the whole, I feel the worst has passed. I'm somewhat amused by the amount of people who want to throw up their hands and claim the sky is falling and/or things will never be as good as they were and/or America is being run into the ground by (insert your disliked political party here).

Our history is filled with ups and downs. This was the first real down in a long, long time.

We'll appreciate what we have more when it's over, and it will be over.


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## Pit (Dec 23, 2009)

Jimster said:


> "There are numerous state operated programs, such as Medicaid, that exist as a safety net for the indigent. Beyond that, what is wrong with expecting people to live with the consequences of their own decisions? People have been around much longer than social security."
> 
> Hello- but Medicaid is paid for by a matching formula with the federal government by your mandated participation and is part of Social Security.  If Medicaid is ok, then what argument do you have??  If you fail to pay your taxes some of which go to Medicaid, you can be thrown in jail too.
> 
> Premiums Shemeums who cares?  30 million people who didnt have health care before will now be covered.  People WRONGLY denied coverage for pre existing conditions will now be covered.  Make no mistake these people did nothing wrong.  They weren't foolish with their money, they weren't stupid, they didn't make bad decisions.  What they did was have the bad fortune to have a disease that is expensive to treat.  Talk about this instead of talking about what it does to your individual pocketbook!



Medicaid is a state-run program and is voluntary (not a federal mandate). Who cares if they get tax money at the state level or from the feds - it all comes from the same place, doesn't it? You have mischaracterized my comments, as I never said there was anything wrong with using taxes to help the indigent. Nor have I suggested that all insurance reforms are unpopular.

I said:

A. Congress has no Constitutional authority to require citizens to engage in commercial transactions as a condition of legal residence. This is not the legal equivalent of a tax. This is a mandate to purchase a commercial product from a privately owned corporation. There is no legal precedent to support this (at least I haven't heard of one yet). I believe the individual mandate will fail a Constitutional challenge.

B. Future generations should be able to opt-out of SS and forego the so-called security that it affords.

These are my opinions. Feel free to disagree.


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## Courts (Dec 23, 2009)

Pit said:


> It seems that some are hung up on the example I gave. I was talking about someone who today is young (say, just entering the workforce). *If they could opt-out of SS and invest that money instead, they could be much further ahead 30, 40, 50 years down the road*.
> 
> A $50K annual income is not at all unrealistic for someone entering the workforce today.
> 
> According to the Heritage foundation, a 20-year old entering the workforce today can expect an annual rate of return ranging from -0.15% to 0.59% on the money paid into SS. Compare that with the historical S&P 500 returns, and hopefully, you get the point.


You make a number of very good points. Unfortunately too many seem to want to be dependent.



> what is wrong with expecting people to live with the consequences of their own decisions?





> Social policies breed either self-reliance or dependence.





This is part of any solution.


> They pay out of pocket when they need to see a doctor and carry *only catastrophic insurance*.





.


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## Jimster (Dec 23, 2009)

*con law*

I vowed to myself not to respond but FYI:

Congress can do anything necessary and proper to carry out any of the foregoing powers-Article I sec 8.  Court precedence has made it clear that this would be necessary and proper and would be linked with the interstate commerce clause.  Hence your justification.  Furthermore, Congress has the right to impose a duty on individuals in this as it has in many other crimes.  FANNIE MAE and FREDIE MAC regularly require the imposition of PMI for home mortgages.  I don't see this being on very shakey ground.

Medicaid is state administered but there is no Medicaid without the federal funding that you MUST pay into in your social security tax.

What good is catastrophic insurance if a company can deny coverage as it can today.


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## Pit (Dec 24, 2009)

Jimster said:


> I vowed to myself not to respond but FYI:
> 
> Congress can do anything necessary and proper to carry out any of the foregoing powers-Article I sec 8.  Court precedence has made it clear that this would be necessary and proper and would be linked with the interstate commerce clause.  Hence your justification.  Furthermore, Congress has the right to impose a duty on individuals in this as it has in many other crimes.  FANNIE MAE and FREDIE MAC regularly require the imposition of PMI for home mortgages.  I don't see this being on very shakey ground.



Ok. I'll take your word for it. It wouldn't be the first time I was wrong.



Jimster said:


> Medicaid is state administered but there is no Medicaid without the federal funding that you MUST pay into in your social security tax.



I was speaking to the individual mandate, which to me appears quite different from a tax.



Jimster said:


> What good is catastrophic insurance if a company can deny coverage as it can today.



Assuming you are referring to pre-existing conditions, I agree. The whole purpose of insurance is to allocate risk among those who would choose to own it.


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## pgnewarkboy (Dec 24, 2009)

Rose Pink said:


> Not sure what you mean by that but both of these good people worked long and hard during the years they were able.  Neither gets enough in social security to do much more than buy groceries and a few necessities.  If it weren't for pensions from employers (which many workers today do not get) they would be in the poor house.  Neither of them is rolling in money.  My FIL has managed to save some but at the cost of what I would consider a decent life.  He keeps the temp low in the winter, does not have an air conditioner for the summer, and rarely goes anywhere.  Entertainment is reading or watching tv.  No vacations.
> 
> If it weren't for medicare and supplemental policies, their medical needs would have cost them everything and then some--in fact, bankrupted some other family members as well.  I'm sure you would not just toss out these old people nor deny them healthcare.  I'm not talking about extremely expensive heroics, either.
> 
> ...



You have just delivered a heavy dose of the TRUTH!   Unfortunately many in our society our immune to it.


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## MusicMan (Dec 24, 2009)

[Per TUG posting rules, if you have any questions about why your post was deleted, please contact me privately. - DeniseM Moderator]


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## DeniseM (Dec 24, 2009)

Please remember this TUG posting rule:



> Avoid posting about *politics*, religion, or *contentious social issues*
> Unless directly related to timesharing, such discussions are prohibited in these forums, including TUG Lounge. We've been down that road before, it was ugly, and we are not going there again.


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## MusicMan (Dec 24, 2009)

[Per TUG posting rules, if you have any questions about why your post was deleted, please contact me *privately*. - DeniseM Moderator]


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## DeniseM (Dec 24, 2009)

I know this is a difficult topic to discuss without making it political, but this thread has stepped over the line, and I'm closing it.


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