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Main => Gospel Music Lounge => Topic started by: phbrown on July 12, 2011, 04:25:07 PM
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Question: What if the economy is down not only because of the housing market but because of people retiring?
Housing peaked 2007 (Wikipedia http://en.wikipedia.org/wiki/Late-2000s_financial_crisis (http://en.wikipedia.org/wiki/Late-2000s_financial_crisis))
Between 1997 and 2006, the price of the typical American house increased by 124%.[27] During the two decades ending in 2001, the national median home price ranged from 2.9 to 3.1 times median household income. This ratio rose to 4.0 in 2004, and 4.6 in 2006.[28] This housing bubble resulted in quite a few homeowners refinancing their homes at lower interest rates, or financing consumer spending by taking out second mortgages secured by the price appreciation.
(http://[url=http://upload.wikimedia.org/wikipedia/en/thumb/c/c1/Median_and_Average_Sales_Prices_of_New_Homes_Sold_in_United_States_1963-2008_annual.png/800px-Median_and_Average_Sales_Prices_of_New_Homes_Sold_in_United_States_1963-2008_annual.png]http://upload.wikimedia.org/wikipedia/en/thumb/c/c1/Median_and_Average_Sales_Prices_of_New_Homes_Sold_in_United_States_1963-2008_annual.png/800px-Median_and_Average_Sales_Prices_of_New_Homes_Sold_in_United_States_1963-2008_annual.png[/url])
Graph showing number of new awards to retired and disabled workers
(http://[url=http://www.ssa.gov/policy/docs/chartbooks/fast_facts/2010/chart13.gif]http://www.ssa.gov/policy/docs/chartbooks/fast_facts/2010/chart13.gif[/url])
Now notice the coorelation. (I did not get the actual number to calculate the coeffeicent). Right around 2003-2005, there was a jump from 1,800,000 new awards to 2,000,000 new awards. Or that during this time period there were 3,800,000 new awards. I assume some of these people were from people who held off retirement due to 9-11 and some where because they were able to sale their homes for a nice profit and move to Florida or Arizona.
Finally the whole point of this.
I may be wrong here and I hope someone corrects me. But what happens when you have 3,800,000 people each selling thousands of dollars a month of stock?
Lets just say each person needs $2,000 a month …
$2,000 * 3,800,000 = 7,600,000,000 or 7.6 billion dollars. Each month
(http://[url=http://www.ritholtz.com/blog/wp-content/uploads/2011/01/Real-Long_term-US-Stock-Growth.png]http://www.ritholtz.com/blog/wp-content/uploads/2011/01/Real-Long_term-US-Stock-Growth.png[/url])
However my analysis breaks down here. I don’t have the slightest clue how to see how much money traded hands nor how much of that money was a direct result of people retiring.:(
Oh well time to get off of work thanks for letting me ramble
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forgot to use spell check
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Question: What if the economy is down not only because of the housing market but because of people retiring?
Housing peaked 2007 (Wikipedia [url]http://en.wikipedia.org/wiki/Late-2000s_financial_crisis[/url] ([url]http://en.wikipedia.org/wiki/Late-2000s_financial_crisis[/url]))
Between 1997 and 2006, the price of the typical American house increased by 124%.[27] During the two decades ending in 2001, the national median home price ranged from 2.9 to 3.1 times median household income. This ratio rose to 4.0 in 2004, and 4.6 in 2006.[28] This housing bubble resulted in quite a few homeowners refinancing their homes at lower interest rates, or financing consumer spending by taking out second mortgages secured by the price appreciation.
(http://[url=http://upload.wikimedia.org/wikipedia/en/thumb/c/c1/Median_and_Average_Sales_Prices_of_New_Homes_Sold_in_United_States_1963-2008_annual.png/800px-Median_and_Average_Sales_Prices_of_New_Homes_Sold_in_United_States_1963-2008_annual.png]http://upload.wikimedia.org/wikipedia/en/thumb/c/c1/Median_and_Average_Sales_Prices_of_New_Homes_Sold_in_United_States_1963-2008_annual.png/800px-Median_and_Average_Sales_Prices_of_New_Homes_Sold_in_United_States_1963-2008_annual.png)
Graph showing number of new awards to retired and disabled workers
(http://[url=http://www.ssa.gov/policy/docs/chartbooks/fast_facts/2010/chart13.gif]http://www.ssa.gov/policy/docs/chartbooks/fast_facts/2010/chart13.gif)
Now notice the coorelation. (I did not get the actual number to calculate the coeffeicent). Right around 2003-2005, there was a jump from 1,800,000 new awards to 2,000,000 new awards. Or that during this time period there were 3,800,000 new awards. I assume some of these people were from people who held off retirement due to 9-11 and some where because they were able to sale their homes for a nice profit and move to Florida or Arizona.
Finally the whole point of this.
I may be wrong here and I hope someone corrects me. But what happens when you have 3,800,000 people each selling thousands of dollars a month of stock?
Lets just say each person needs $2,000 a month …
$2,000 * 3,800,000 = 7,600,000,000 or 7.6 billion dollars. Each month
(http://[url=http://www.ritholtz.com/blog/wp-content/uploads/2011/01/Real-Long_term-US-Stock-Growth.png]http://www.ritholtz.com/blog/wp-content/uploads/2011/01/Real-Long_term-US-Stock-Growth.png)
However my analysis breaks down here. I don’t have the slightest clue how to see how much money traded hands nor how much of that money was a direct result of people retiring.:(
Oh well time to get off of work thanks for letting me ramble
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can't get my pictures to show for some reason
Pic 1
(http://upload.wikimedia.org/wikipedia/en/thumb/c/c1/Median_and_Average_Sales_Prices_of_New_Homes_Sold_in_United_States_1963-2008_annual.png/800px-Median_and_Average_Sales_Prices_of_New_Homes_Sold_in_United_States_1963-2008_annual.png)
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Graph showing number of new awards to retired and disabled workers
(http://www.ssa.gov/policy/docs/chartbooks/fast_facts/2010/chart13.gif)
ahh there is a space after the img tag ...
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Long term stock growth
(http://www.ritholtz.com/blog/wp-content/uploads/2011/01/Real-Long_term-US-Stock-Growth.png)
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Very interesting analysis! There are so many factors to the economic collapase that it's not even funny. It's make me mad (even as a moderate democrat) when folk say "Obama in there to straighten out the mess Bush created." I mean I disagreed with a lot of Bush policies but a pretty good case can be made that this mess has roots in the 80s and maybe as far as Nixon. #justsaying
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*collapse
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Very interesting analysis! There are so many factors to the economic collapase that it's not even funny. It's make me mad (even as a moderate democrat) when folk say "Obama in there to straighten out the mess Bush created." I mean I disagreed with a lot of Bush policies but a pretty good case can be made that this mess has roots in the 80s and maybe as far as Nixon. #justsaying
This. IMO, the US economy was waiting for just the right series of events to occur before we got into the mess we're in. Dubya just happened to be in office at the time.
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Very interesting analysis! There are so many factors to the economic collapase that it's not even funny. It's make me mad (even as a moderate democrat) when folk say "Obama in there to straighten out the mess Bush created." I mean I disagreed with a lot of Bush policies but a pretty good case can be made that this mess has roots in the 80s and maybe as far as Nixon. #justsaying
I agree, especially with the part in bold.
We are in the position that we are in because of excessive spending and now they (government) are trying to place the burden on the backs of the common folk (middle class and working poor) to clear the deficit. One way to begin to strengthen the economy is to increase spending among consumers, but that is hard to achieve when so many people are losing jobs and companies are steadily outsourcing jobs to other countries (no offense). Companies have downsized because of the economy. The fact that they were able to sustain, during this recession (and still make a profit) they are in no hurry to create more jobs. More jobs, means higher expenses in operations, which generally takes away from the bottom line figure.
Lastly in regards to consumption, people are investing less. People are not buying houses or investing in the stock market. More or less most people aren't utilizing long-term investments. Anything outside of your retirement plan, the average person isn't spending their money. Either because they can't afford to or the fear of losing their job tomorrow and not having money to maintain until the next job comes around.
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I agree, especially with the part in bold.
We are in the position that we are in because of excessive spending and now they (government) are trying to place the burden on the backs of the common folk (middle class and working poor) to clear the deficit.
Do you have a source for that info? I thought that the top 20% of earners paid like 85% of the taxes.
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Do you have a source for that info? I thought that the top 20% of earners paid like 85% of the taxes.
It flows downhill
(http://www.keefrichards.com/Flowchart.jpg)
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It flows downhill
([url]http://www.keefrichards.com/Flowchart.jpg[/url])
I'm being serious.
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I'm being serious.
oh my bad :), I'll let Docdb04 answer that then
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It flows downhill
([url]http://www.keefrichards.com/Flowchart.jpg[/url])
You would think that the ones at the bottom would move after being umm... pooped on for so long. :-\
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If they move, they'll just be replaced by others who will be pooped on. *shrug* Doesn't matter much... somebody will be there to be pooped on.
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If they move, they'll just be replaced by others who will be pooped on. *shrug* Doesn't matter much... somebody will be there to be pooped on.
Yeah, someone will probably be elated to get pooped on, but it wont be me.
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Do you have a source for that info? I thought that the top 20% of earners paid like 85% of the taxes.
U13 I know you already know this but I'm bored (its the calm before the storm right now at my job) so here we go
The biggest problem with this debate is people are mixing math terms that shouldn't really be mixed.
Notice the rich talk about percents of the whole economy
Rich view point
We, the rich people (top 20% earners), pay over 50% of all the taxes.
Notice the poor talk about percents of their whole income
Poor view point
We, the poor people (bottom 20% earners), Pay over 50% of our INCOME in taxes.
They are both correct.
The truth of the matter is Fixed dollar amounts in taxes favor the rich. Percent of income taxes favors the poor.
Fixed dollar example
For example lets say there is now a 1,000 dollar tax on income to pay for roads.
The rich person can afford this 1,000 dollar because it is such a small amount.
The poor person now needs to decide between if they can eat or not.
Percentage example
For example lets say there is now a 10% tax on income to pay for the roads
The rich person must now decide between if they can eat or not because 10% of 1 billion is a lot of money.
The poor person can afford this because it is such a small amount.
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sorry the terms people are mixing up is really relative
I know I said terms I was wrong. anytime percentages are discussed it is important to remember what the percent is relating.
amount of tax relative to the amount of money collected for taxes
or
amount of tax relative to the amount of money you make in a year
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I want to respond, PHB... but honestly, all I can come up with is a *blank stare*
Can I get some graphs or a pie chart or something? :D
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:D
I c wut u did thur
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:D
I c wut u did thur
Me too!!
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I want to respond, PHB... but honestly, all I can come up with is a *blank stare*
Can I get some graphs or a pie chart or something? :D
LOL!
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here is an apple pie
(http://www.mccormick.com/~/media/Images/Recipes/Recipe%20Details/Desserts/Classic_Apple_Pie.ashx?w=380)
here is an orange pie
(http://www.kraftrecipes.com/assets/recipe_images/Orange_Pie.jpg)
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Orange pie? eww.
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U13 I know you already know this but I'm bored (its the calm before the storm right now at my job) so here we go
The biggest problem with this debate is people are mixing math terms that shouldn't really be mixed.
Notice the rich talk about percents of the whole economy
Rich view point
We, the rich people (top 20% earners), pay over 50% of all the taxes.
Notice the poor talk about percents of their whole income
Poor view point
We, the poor people (bottom 20% earners), Pay over 50% of our INCOME in taxes.
They are both correct.
The truth of the matter is Fixed dollar amounts in taxes favor the rich. Percent of income taxes favors the poor.
http://www.msnbc.msn.com/id/44143776/ns/business-personal_finance/ (http://www.msnbc.msn.com/id/44143776/ns/business-personal_finance/)
Buffett, one of the world's richest men and chairman of conglomerate Berkshire Hathaway Inc , said his federal tax bill last year was $6,938,744.
"That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income - and that's actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent," he said.
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U13 I know you already know this but I'm bored (its the calm before the storm right now at my job) so here we go
The biggest problem with this debate is people are mixing math terms that shouldn't really be mixed.
Notice the rich talk about percents of the whole economy
Rich view point
We, the rich people (top 20% earners), pay over 50% of all the taxes.
Notice the poor talk about percents of their whole income
Poor view point
We, the poor people (bottom 20% earners), Pay over 50% of our INCOME in taxes.
They are both correct.
The truth of the matter is Fixed dollar amounts in taxes favor the rich. Percent of income taxes favors the poor.
Fixed dollar example
For example lets say there is now a 1,000 dollar tax on income to pay for roads.
The rich person can afford this 1,000 dollar because it is such a small amount.
The poor person now needs to decide between if they can eat or not.
Percentage example
For example lets say there is now a 10% tax on income to pay for the roads
The rich person must now decide between if they can eat or not because 10% of 1 billion is a lot of money.
The poor person can afford this because it is such a small amount.
just realized i didn't talk about the difference between a progressive tax structure and a flat tax structure ...