Shares in London, the rest of Europe and the United States went into sharp retreat today after shock US data showed the housing crisis and credit squeeze are starting to hit growth in the world’s biggest economy.
The dollar also tumbled as the US government reported the first fall in jobs for four years.
Against forecasts for an increase of 110,000 in the payroll numbers, the figures showed there had actually been a decline of 4,000 in August.
Economists were alarmed by the figures. Rob Carnell of ING in London described them as “downright awful”. “For those wishing to see some evidence of the impact of sub-prime on the broader macro-economy – look no further,” he said.
Figures yesterday from the Mortgage Bankers Association in the US showed the rate of home loans entering the repossessions process hit a record high in the second quarter after a surge in the number of failing mortgages.
You have to love Alan Greenspan’s response: “The human race has never found a way to confront bubbles”.
> How about removing all deductions?
Technically, when you hit the AMT, you lose almost all of your deductions. It might be all; I’m not sure. I’ve been lucky/unlucky enough to miss hitting the AMT.
I’m sure the charities would love the idea of removing all deductions since most of their money comes from charitable donations made as part of a deduction. In addition, it would do nothing to stop people from investing in non-taxable investments like municipal bonds.
The rich do not pay less tax by declaring more deductions. They do so by declaring less income.
Like the oil speculators raising the price of oil I suspect media hype may be fanning the flames of the current mortage crisis. I read the other day that the percentage of defaulted mortgages equaled .65% of the total mortgages. Also, the loans held by qualified buyers were doing as well as ever, with foreclosure rates tracking into historical norms. Home construction has been booming, with the majority of houses built being the “McMansion” style of home, big and kind of stupid, so it should be no surprise that the market is saturated and demand, along with prices, are beginning to fall.
This not to say that all is hunky-dory, as our leaders have just about broke us with ill considered economic decisions and the tragic blunder that is Iraq, but the housing situation is not the trigger to the next American depression, unless the media convince us otherwise.
follow the money. Who will benifit from a recession? Raising taxes on the “rich” will never work. They can afford to hire people to find ways to hide income and assets. The “poor” do not pay taxes and evan get money back. Mean while us smucks in the middle give up 30% plus of our earned income..
#21 – Thomas,
Right again. Yup we need to get rid of the concept of tax free income. If the fed wants to subsidize the interest on munis, let them pay a portion of it to bring the interest rate up enough to be competitive. The net effect to the fed would be the same. The difference would be that people would have to pay taxes. And, oh yeah, interest on treasuries needs to be taxed too.
My horribly unrealistic dream would be to have a tax form that looks pretty much like this:
1) Enter your total income from all sources: _____________
2) Look up your tax rate and enter it here: ______________
3) Multiply line 1 by line 2 and enter it: _______________
4) Enter the tax you already paid: ________________
5) Subtract line 4 from line 3: _________________
Line 5 is the amount you owe or the amount of your refund.
Oh no!! I just put a whole boatload of tax accountants and all tax attorneys out of business. Oh well.
19, and it hasnt gone up sense(taxes) and we are going BACK as a sling shot effect.
Business has to COMPETE…They have to give into the Poor,, IF they want money.
#24
What would happen in your world is that the rich would find ways of making item #1 as small as possible. They would do that by finding ways of reducing taxable investments or moving investments so that they were not under their name (but still under their control). In addition, thousands of legitimate charities would disappear overnight. Thousands of city and State projects would fall by the waste side as there would be no incentive to invest in State and municipal bonds. In short, such a change would be an economic catastrophe and the people that would be hurt the most are everyone *except* the rich.
What about the word “selfishness”.
- CEO’s making 400x the pay of regular workers
- Managers once lost sleep at night when they mis-treated someone. Now, they toss and turn trying to figure another way to squeeze a few more bucks out of the workers and push it to the top.
Here are some things to note:
1) We all are going to die
2) I believe there is a God and it’s going to be interesting to see what these selfish people have to say then…Note: They won’t be able to call their lawyer.