[archie_struthers]

 

guys ...thanks for all the good repartee....at least we still have enough fredom to post online ...let's try to keep iot!

[J_ Crisham]

            Dave,  I also would be curious as to the sales tax rate,propery tax rate, capital gains rates back then as well. As you are well awarethose of us in Chicago pay some of the highest rates in the free world! I can remember when the lottery was supposed to fund our schools providing some semblance of relief for property owners- now it disappears into the black hole known as the general fund.

[Dan Herrmann]

Here's my platform.  Eliminate the income tax.  Institute a VAT. 

[PThomas]

hello Patrick

you mentioned that we should cut gov. spending, I believe

but how?  it seems i read this a lot , but no one ever provides specifics (and i'm not just picking on you Patrick)

Your question implies that it can't be done, or shouldn't be done.
In reality, it's easy.

Years ago, the President of a club where I served on the Board, informed every committee chair that he wanted a 5 % reduction in the operating budget.  Every committee chair indicated that it was impossible.  The President then said, OK, if you don't do it, I'll do it. either you, who are familiar with your budgets, cut them back 5 %, or I'll do it.  And, everyone found a way to reduce their budget by 5 %.  It can be done.  It has to be done.
but it cant be that easy Patrick...because none of our politicians wants to make tough choices esp in terms of the big items like the military or other items i mentioned

about 70% of the Fed budget is for the militray, SOc Sec, Medicare/Medicaid, and interest on the debt (which cant be cut)....these are the big items, but no one ever mentions cutting them...why not?  

Because it's politically unpopular and all these bums want to do is get re-elected

Let's talk about Medicare for a second.
I believe that Medicare is a worthwhile program.
To provide you with an indication of the government waste, Medicare Advantage plans, which provide additional benefits, are as cheap or cheaper than Medicare and the carriers providing this coverage make a profit where the government takes on huge losses.
WHY ?  Inefficiency ?  Fraud ?
But, since it's inception, what's the tax to pay for Medicare  ?
2.9 %.  1.45 by employers, 1.45 by employees.
If we let a private carrier administer the program and increased the tax by 1 % to employees, that would help make it actuarially sound
i think you are right that a lot of the idiots in office jsut want to get re-elected...what happened to the ide of "public service"?? about doing whats best for the country, esp in the long term?? maybe we should limit Presidents to one term - 6 years??-  so they can make tought choices are not have to worry about getting re-elected...i also think we should change the terms for Reps. to at least three years...

we have to pay for things like roads, clean water, etc....i think the anti-tax movement in this country has gone way too far..perhaps all the anti-tax people should go live in the desert where there are no roads to maintain, no water infrastructure to maintain, etc

That's not what's happening .
What happened is that we got away from fiscal discipline.
The Gasoline tax was a dedicated tax to pay for roads, bridges, etc., etc.. but, the reckless politicians, seeing that pool of revenue, co-opted it into the general treasury.  If we returned to dedicated tax programs for dedicated purposes,  you wouldn't see as much waste, and we'd get the jobs done, more efficiently

i agree with that!

during the one of the past Ryder Cups during the Clinton Administration, one of the US team members was whining about how high his taxes were (the poor baby)....they asked Jack his thoughts, and he said "I dont mind paying taxes, i just dont like to see them wasted"....

I don't think many would disagree with Jack's statement

why doesnt politics have reasonableness like Jack's statement implies any more?  this lack of cooperation is so bad for the country...i think Newt Gingrich and the tone he promoted is one of the worst things ever to happen to this country politically

That's because you're a democrat not an independent

boy, i gotta disagree with you there Patrick....i've read that back in the days even as late as the 70s that both sides worked much more together on issues and bills..apparently even Ted Kennedy, who dont get me wrong, I am not a fan of his - passed a lot of legislation working with Republicans....we need to go back to compromising more from both sides of the aisle

and re jobs:  everyone talks about unemployment...but unless factory work comes back to this country in a big way, where are all these good jobs supposed to come from??  perhaps the answer is that our country's populace needs to be better educated, which is certainly the case, since the high school droput rate, for ex in places like CHicago, is still  appalling...it blows me away to think that so many kids nowadays still dont evern graduate from HIGH SCHOOL?

This didn't happen overnight.

In NJ, first jobs were driven to PA and the Carolinas, then overseas.
When you compete in the world economy there's an inate conflict.
Our standard of living and theirs
You can't have minimum wages, OSHA, DEP, Health insurance, Pensions, Workers Comp, high wages and benefits and a zillion other impediments and costs, when your competitors have none of them, and are therefore positioned to produce a product at a much lower cost
The New York Times did a comparison between the costs to build a car, American versus Japanese.
Our wages, benefits and pension costs were significantly higher, therefore our product was priced higher and less competitive

so how do we solve that problem Pat??  even if we get ride of some of the items you mentioned, labor costs woudl probably still be much higher than foreign competitors i think...do we need to start having protective type tariffs?  i dont know the answer and apparently no one else in power in the last 30 years does either as our manufacturing gets smaller and smaller here

and re Obama bashers. pls remember a few things:

1. he inherited the 2nd worse financial crisis in our history...at least some experts felt that the world economy was on the brink of collapse.....and i'm not saying things are perfect now, but why doesnt he get any credit for at least pulling us back from the brink of that?

So did Regan.
At some point and it's almost two years removed, you can't keep blaming your predecessor.
To date, his policies have NOT helped the economy and it's time he stopped whining about Bush.

i must disagree again patrick...while they have not been totally successful, he did halt the economic apocalypse that hung over this country...i dont know if its reasonable to think things could have gotten much better in only 2 years..


2. how quickly some people forget that Pres. Reagan, a REPUBLICAN, was the one who started the massive increase of the federal debt..Reagan seems t get so much credit for helping the economy, but what about the huge deficits he rang up?

The ironic thing is that Bush did almost everything the democrats would have done.
He spent like a drunken sailor, expanded programs, but got none of the democratic love for doing so .

kudos to you for knocking a Republican Patrick (i assume you are Republican)...Bush 2 set this country back a long way in 8 years...whats scary is that he got elected twice...and shame on both candidates that ran against him for not being smart enough to defeat him!

3. a DEMOCRAT actually had us in surplus mode for a few years?

Bullcrap, it was the Republican Congress in 1994 that did that, but, enough Republican versus Democrat.
It's time for common sense and fiscal responsibility, it's time for accepting good ideas and rejecting bad ones, irrespective of who the author is.

If we don't hang together, we're surely going to hang .....

i'm willing to discuss this on a rational level , btw

Me too

Clinton gets credit for RAISING taxes which the markets liked which led to the economic boom....but i agree that both sides need to come together quickly...but i fear that things are only getting worse and not sure what we can do to stop that

i hate all of these political TV shows with people yelling and screaming and only supporting one side...talk about lack of a civil dialgoue...

unfortunatley, my three girls and their generation have a lot of our shit to clean up

[PThomas]

How can this discussion be more civil than the Merion threads?  Who would want to ban this from gca.com?

its awesome that it is more civil, isnt it Jeff?

OCCASIONAL OT threads like these are also a great part of GCA

[Patrick_Mucci]

Two questions:

Looking at David Elvins table on page 1 of this thread (which I have seen elsewhere), when the debt/gdp ratio has ballooned twice.  Anybody notice any similarities in the two episodes?

What you seem to ignore is the environment that existed in Washington then and now.
Then, there was a desire to see business booming and prosperity for those who worked hard.
Today, those who work hard and prosper are demonized and punished through increased taxes.

What were the most prosperous decades in terms of income growth, etc. (and growth in middle-class prosperity), and what were income tax rates in those periods?

Jeff, either you're too young, or your memory is shot
The highest marginal tax rates were almost NEVER attained because of all the deductions available, so you can't compare the two periods or tax rates.  It's disengenuous of you to even suggest a comparison.

Bill Bradley proposed eliminating all deductions and lowering the income tax rates, he stated that people would save more.
In a conversation I had with him I explained that people lived UP to their increased earnings and that the government, once they got rid of all  the dedcutions, would simply raise the rates in the future and F__K everbody, which is exactly what they did.  He also advocated limiting earnings to $ 200,000 for pension and profit sharing plans.  I also told him that doing so would cause company owners to terminate their plans, plans where they were putting away 25 % of every employees wages.  They limited earnings to $ 200,000, owners cancelled their plans and substitited 401K plans, where you can't accumulate diddly-squat


Bonus:  What cured the Depression, and what happened to the debt/gdp ratio during the cure, and then after?

The Arsenal of Democracy cured the depression

[Tiger_Bernhardt]

Kenny, I would rather have my protate probed daily than read anything from Alabama written by a dead bear u type. thank you though for you nieve openmindedness.

[Patrick_Mucci]

Jeff Goldman,

Almost every local club in my area is in serious trouble, mostly related to diminished revenues, vis a vis, membership reduction.

I also know of clubs in Cleveland, Detroit and your city, Chicago, that are in trouble.

Do you know of any clubs in your area that had to levy an assessment in order to make up for operational shortfalls, mostly due to membership reductions ?

I'll bet your club is having difficulty and may be one of them.

If the mortgage-interest deduction is eliminated, along with Section 125 deductions for employee contributions toward their health insurance costs, you can bet that you'll lose more members, making any assessment jump even higher.

And, to make matters worse, increases of 25 % for health care costs are on their way for 2011, depriving working people of even more income.

What we went through in the 80's and 90's is nothing compared to what we're going through and may continue to go through for years to come, especially because of the anti-business environment in Washington, DC

If you think the Triumvirate that's in Washington is Pro-Business, I want whatever drugs you're taking

http://www.infowars.com/steve-wynn-takes-on-washington/

http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Former-GE-CEO-Jack-Welch-Obamacare-costs-going-to-be-out-of-sight-88956612.html

[Jeff Goldman]

Patrick,

Bs.the table shows that the extreme gov't debt levels are not the result of gov't running amok, but a huge decline in tax receipts. In the depression, debt levels got worse even though spending didn't go anywhere. Now, the economic "stabilizers" resulted in higher spending, but the runup in gov't debt is still because tax receipts have fallen to nothing (anyway, only a true moron would argue that unempl comp is bad or causes unemployment-there wasn't any in 1930).
Total taxes and tax rates were higher after the Clinton plan passed, yet, contrary to what conservatives claimed, there was NOT an immediate depression; quite the reverse.in fact, marginal tax rates don't have a hell of a lot to do with economic activity.

You are quite correct that the depression was cured by the largest (and most wasteful) stimulus program ever. We need another one, right now.

What happened (and is happening) is  and not hard to understand if you remove ideology or morality. We have a huge collapse in demand for stuff. Interest rates are Zero, and still nothing). Balancing gov't budgets, by laying off a few hundred thousand more state employees, cutting unemployment comp, stopping all construction of "wasteful" infrastructure (who the hell needs an interstate?) will only dampen demand further. Patrick, if all that you propose happens, will YOU go into the housing business? The car business? Steel?

This is a technical, not a moral problem, and we are pursuing almost exactly the program conservatives preached in 1930 (and 1937), to the same disasterous results (all those economists from the University of Chicago should give back their nobel prizes).

End of rant

[Noel Freeman]

Jeff-

I really don't see the validity of your argument/rant and this coming from myself who has 18y of economics/finance experience in the trenches--sorry I'm not a mainstreet business owner, but I've studied everything from Milton Friedman to rational expectations theory and I deal everyday with professionals who manage billions of $$$.  It is easy to blame Wall St. for what ills.  But let me give you my take- Comparing anything to the Great Depression or cures to the economic ills of that time period is akin to trying to find out who really is responsible for Merion.. It is a waste of time to some degree b/c this is not 75 years ago.  Humans are always trying to build models to forecast the future and using the past as a guide (every wonder why these models break down a lot and then one hears the all too human excuse--i digress).

This is not the Great Depression and the world is a much different place.  This country is now the reserve currency holder (wasnt in the depression, sterling was), for one.  Two, the US has lost 1/3rd of its manufacturing base ceded to China who devalued their currency by 50pct in the late 90s in order to build a manufacturing base and move millions of people into the cities from the rural areas.  Most of the US work force that lost those jobs--blue collar types then went into housing jobs which was a boom created by Congress and Greenspan into a bubble.  That bubble has burst but the real cause of the unemployment was sewn by China's move in the 90s.  Now the US could have went protectionist then or changed economic policies but we did not, hindsight is 20/20.

A new stimulus package?  For what reason?  This country has more debt than anyone understands.  If you add in Social Security and the debt owned by Fannie and Freddie which the government likes to not say it is directly responsible for that our Total Debt to GDP is astronomical.  Paul Krugman is the main proponent of further stimulus and what they call quantitative ease.  Because he won the Nobel Prize, many think his credibility is great, he also studied Japan indepth which has had a lost 20 years due to a collapse of land prices and failed monetary/fiscal policy.  I can assure you Japan has more stimulus packages than bunkers at Oakmont and it has done nothing for them except add debt.  Japan though has a trade surplus, rapidly declining population and a much great egalitarian ethos than we do in America.  It also will eventually go bankrupt or inflate away its debt if it can find a way to do that.  Japan is going poor very slowly, which is what will happen to America.

I digress, ah Krugman, more stimulus.  The theory goes, more stimulus will help the patient (economy recover) and then when things are perculating nicely, ah yes, then lets tackle the deficit.  But you see that will never happen, because all a stimulus package does is borrow future demand and bring it forward to the present.  When you have a massive de-leveraging which is what the housing bust is, it takes many years to work its way thru the system.  And all stimulus packages do is like methadone, keep the patient addicted to something.

What bothers me is this?  No body wants to do the right thing.  The government won’t do the truly free market or Ludvig Von Mises (Austrian school) solution.  Take the hit, go bankrupt and start over.  The economy would recover much much faster instead of this long drawn out death.  I mean seriously, on a micro level, if you are in debt with not enough income to service it, what do you do? You go bankrupt and start over, you don’t go borrow more and keep doing that in the hopes you hit the lottery or get a great new job and can service the debt.  Sure that works if the overall debt level is low, but not when it is uber high like our country’s is.

I could spell out what I think are the right solutions but suffice to say this is what is going on.  Currently the government is going to create lots of inflation (often the resort of heavily indebted countries) thru printing money, if the Obama administration does more fiscal stimulus, well we print more money.  All this eventually does is kill the US Dollar and imports inflation. Guess what we import, OIL and other commodities?  The prices of these goods go up (and don’t get me started on Peak Oil or how exogeneous demand by China/India is going to exacerbate this) and the middle class gets flamed—unless of course demand falls.  Does anyone here know how much the agricultural business is levered to cheap oil?  Hugely, and that feeds in to food price inflation as well.. Want to see a scary world, imagine a $ worthless like the Weinmar republic and inflation high in this country with double digit unemployment?  We’ll see change quickly thru martial law or riots (and I’m not trying to go Michael Savage here).

There is no easy solution, pain is the only given and politicians won’t talk about that with the exception of Mr. Cameron in the UK who is not really conservative to an American, at best in this country he’d be a centrist—one needs to understand the Tories in the UK are way to the left of republicans here.


I could go into micro/macro economics if people wanted with a historical background or into Tuco-speak but Pat is right about clubs in trouble.  Sure after the economy broke in 2008 people initially took a hit then the shot of methadone helped the golf biz in 2009.  But the longer this goes on and real incomes go down, will you want to pay that hefty subscription annually?

[Noel Freeman]

One more thing, economics is know as the dismal science-- It really isnt a science in my opinion and also in my experience the experts in economics are as wrong as the so called experts in anything.. So impugning the University of Chicago guys does nothing and by the way JM Keynes was a speculator himself, you can google that..  He made and lost a good deal of money..

[Colin Macqueen]

Gentlemen,
I cannot add tuppence worth to this thread but it makes for riveting reading let me tell you. No lack of frank commentary here.

But NF if "Take the hit, go bankrupt and start over." is allowed to happen does that simply mean all USA debt is written off like Russia for example.  I know nothing but am engrossed with you chaps arguing the toss!

Cheers Colin

[Noel Freeman]

Gentlemen,
I cannot add tuppence worth to this thread but it makes for riveting reading let me tell you. No lack of frank commentary here.

But NF if "Take the hit, go bankrupt and start over." is allowed to happen does that simply mean all USA debt is written off like Russia for example.  I know nothing but am engrossed with you chaps arguing the toss!

Cheers Colin

I mean the indebted US homeowner who can't afford his home..  Rather than make things worse though, the government should allow the economy to recover on its own, people think governments actually solve their problems, be the magic elixer.. For the most part govts don't solve problems individuals do, the government can make it easier by making a climate to invest thru policies that encourage economic activity but that is a whole treastise on itself.  Maggie Thatcher had it right on solcialism, sooner or later you run out of other people's money..  Anyone seeing what is going on in france with strikes etc on raising the retirement age on 62 from 60.. This is a country with 35h work weeks and generous time off!

[David_Elvins]

NFreeman,

Thats some great reading.  With regard to Wall Street, what are your thoughts on this article.


http://everythingwarrenbuffett.blogspot.com/2010/02/slatecom-charlie-munger-basically-its.html

[Patrick_Mucci]

Jeff Goldman,

Could you answer my questions regarding clubs in your local area and your club, and the trouble they/you may be in presently, and how those financial problems would be exacerbated if the mortgage-interest deduction and Section 125 Deductions are lost.

Thanks

[Dan Herrmann]

Patrick,
Those are very good questions that serve to illustrate that most of us in the USA (myself included) focus only on individual taxes.  I have no problem admitting that I know jack squat about corporate taxation.

Thanks for the questions.

[John Kavanaugh]

Patrick,

I doubt that you have been following the club shipping thread so if not please accept this quote as evidence that eliminating the mortgage deduction will not prevent golfers from golfing.  A $3,500 claim for golf clubs on renter's insurance.  


"Before I was smart enough to keep a set in Mom's garage, I shipped my clubs to Phx for my brother's bachelor party. Not only did they never make it out of Memphis, but FedEX then claimed that I had never declared the value and sent me a check for $100 or something silly like that. Fortunately, after State Farm paid out on my renter's insurance, I wrote a nice letter to their subrogation department, advising of the facts and offering to file their claim against the bastards so long as they covered the costs. About two weeks later I received a tx call from a woman in the subrogation department advising that they had received a check from FedEx for the full amount of my claim (around $3500)."

[Craig Sweet]

This so called deficit commission is primarily made up of members that any reasonable person would call "conservatives".  They have taken defense spending off the table and have been making a lot of noise about cutting Medicare and Social Security.  The SS fund currently has a surplus of over two trillion dollars...yes, it is a surplus consisting of government bonds stuck in there as that fund has been raided by Republicans and Democrats....never the less, they are the same securities that the government uses to back it's debt.

Pat Mucci sees this commission as a threat to a certain way of life and so do I. In my opinion the talk coming from this commission is a direct attack on the middle class...

There are solutions...defense spending is based on an out dated "cold war era" model...change that and cut that department....second, apply the social security payroll tax to the first $250,000 of income....third let the Bush era tax cuts expire...they created no jobs, added a trillion dollars to the deficit, and did nothing to stimulate the economy.

[Mike Hendren]

Jeff Goldman,
Almost every local club in my area is in serious trouble, mostly related to diminished revenues, vis a vis, membership reduction.

Patrick, you are indeed confusing politics with economics.  I'm guessing those clubs pull heavily from the Wall Street wonderboys whose ranks have been decimated by common sense, transparency and half-arsed but needed regulation.   

What's amazing to me is how well club membership has held up given a 19.7 decline in the average American's net worth and 7.9 million jobs lost in the past 24 months. 

As for the relevancy of Patrick's initial post, what's a thinly veiled rant among friends?

Mike

[mike_malone]

 Confidence is the opposite of depression.
    If we create confidence by holding the fraudsters accountable, equitizing the mortgage debt by creating an optionable program for all mortgage holders that won't be chosen by those doing fine, restructure education for the future needs, focus on exporting non commodity goods and services we can change things, incentivize entrepreneurs, encourage savings by ending ZIRP . This won't spur GDP growth and will likely crush the stock market and make old fashioned boring banking return but it will improve the lot of the middle class .

     Country clubs will fail in this environment but isn't expensive golf associated with bubbles ?

[Jim_Coleman]

    In my 40 years of voting, there has not been a single election that was not "the most important election in our history."  Yet somehow, whomever gets voted in has never been able to make the next election less important.  This country is divided pretty much in half on political philosophy, and when your side's out of power, the world is coming to an end.  With Bush, the people on my side bemoaned the deficit spending on a stupid war and deregulation that almost brought down the world.  With Obama, the righties see communism, class warfare, a welfare state, and the end of country clubs.  You know what.  The R's will get lot of people elected next week, we won't be any closer to or further away from communism, life will go on, and weak clubs will suffer the same fates as weak businesses in a tough economy.  For most of us, little will change.

[David_Tepper]

Corporate America is sitting on almost $1 trillion in cash:

http://finance.yahoo.com/news/US-companies-hoarding-almost-rb-2687745036.html?x=0&sec=topStories&pos=1&asset=&ccode=

Maybe things are not quite as bad as some people think.

[Adam Clayman]

Let's face it. The experiment needs to be tweaked.

Over turn Marbury v. Madison and make the Judicial branch carry their weight before a bill becomes law. Ending the influence peddlers in congress, or at least extending that influence peddling to the judges, too.

I'd love to hear all the Lawyers tell me why the above is nutz?

[Phil McDade]

The R's will get lot of people elected next week, we won't be any closer to or further away from communism, life will go on, and weak clubs will suffer the same fates as weak businesses in a tough economy.  For most of us, little will change.

Jim:

I'm reminded of this speech, particularly the section from 2:30-3:00...

http://www.youtube.com/watch?v=MfL7STmWZ1c

[PThomas]

Shivas' point about "having too much stuff" -- isnt that one of the reasons for the Great Depression, namely, that factory outputs were much greater than demand??

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