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BloodRider

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I hadn't even noticed this was new employees only.

Yeah, which is one reason why the whole "savings rate" argument didn't make sense to me. The President himself pushed for this, expressly mentioning the too-low savings rate and how it needs to be increased. As I said above, the President's expressed desire to increase the national savings rate seems inconsistent with the desire for people to spend rather than save to (supposedly) help the economy.

Now, maybe the response is that it really won't affect the savings rate because it'll only be low income folks newly employed with employers who don't already have retirement plans, and who chose not to opt-out. I'm guessing that's not a huge group, and I doubt their relatively tiny contributions will affect the national savings rate to a significant degree anyway. But then why sell the plan as a way to increase the savings rate if that's not what is going to happen? The only way to really raise the national savings rate significantly -- as the President said he wants to do -- is to have the middle and upper classes save more, because they're the ones with the money. Yet, that's apparently exactly what we don't want them to do.

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Yeah, which is one reason why the whole "savings rate" argument didn't make sense to me. The President himself pushed for this, expressly mentioning the too-low savings rate and how it needs to be increased. As I said above, the President's expressed desire to increase the national savings rate seems inconsistent with the desire for people to spend rather than save to (supposedly) help the economy.

No it doesn't and I've already explained this. Please read the thread better.

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http://www.latimes.com/business/la-fi-financial-reform-20100716,0,2303004.story

Financial reform passed Senate ............... threepeats (stimulus, healthcare and financial reform) for team Obama, lol.

The energy bill will be the next big battle.

I've been doing a bit of reading on this, and it sounds as though this bill, though weaker than I'd like (thanks, Scott Brown), is an improvement on the current state of affairs.

It's funny...disgruntled liberals seem to forget that, two years ago, reform of both health insurance and the financial services industry was a fantasy, but now both are reality. That doesn't even take into account the student loan change (goodbye, middlemen) and two decent Supreme Court nominations. No matter what happens in November, it's a pretty good time to be liberal.

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No it doesn't and I've already explained this. Please read the thread better.

You apparantly can't read so well yourself. I hadn't seen your posts for reasons I gave in the prior thread. I happened to see this one before I'd signed in, so I'll respond. After which I'll be signed in again, if you get my drift.

I assume we both understand that the personal savings rate is the percentage of personal income that is not spent. On a national level, which is the reference point for the discussion, total disposable income minus consumption is a serviceable defintion. There are some things excluded from that definition, but for purposes of this discussion, they don't matter.

The point you made about the wealthy saving more than the poor is correct, as was your point about a tax cut to the wealthy going more into savings versus consumption. I get all that.

My point is that the amount of money those lower income folks are going to be saving is going to have a very minor effect on the overall personal savings rate because they simply don't have that much income. It's the people who make more money, the ones who already have their 401(k)'s and higher income, who really are going to determine the national personal savings rate. In other words, this legislation will have only a very minor effect on the personal savings rate, if at all.

Which brings me back to the point I made. The President himself argued that the savings rate is too low and needs to be increased. That was his justification for this action, not mine, because as I've said, I don't think that will happen.

So on the one hand we have the President advocating a higher personal savings rate, while at the same time deliberately avoiding meaningful economic actions that would actually do that. This new plan may result in a slightly higher savings rate among a limited class of people, but in terms of affecting the national rate cited by the President, the effect is negligible. Which likely is what he desires, despite his statement, because he wants people to spend like hell and buy our way out of the recession. And if we don't spend enough, he'll tax us or borrow more to ensure it gets spent. All the while telling us that he's in favor of raising the personal savings rate.

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I agree completely. Yet we seem to be dis-incentivizing this with discussions of increasing the capital gains tax, because those middle class savers are going to stick their cash in a mutual fund, rather than have their savings eaten away by inflation in a savings account.

Are you arguing that saving rates are influenced by tax rates and inflation? If that's your argument, then I'm afraid that the fact don't support it at all. Looking at historical data, the high savings rates that we have had over the past few decades occured when inflation was highest in the 70s and early 80s; the highest saving rate we have ever occurred during WW2 when the tax rates are at its highest.

My point is that the amount of money those lower income folks are going to be saving is going to have a very minor effect on the overall personal savings rate because they simply don't have that much income. It's the people who make more money, the ones who already have their 401(k)'s and higher income, who really are going to determine the national personal savings rate. In other words, this legislation will have only a very minor effect on the personal savings rate, if at all.

This article argues that high income disparity leads to low saving rates:

http://www.nakedcapitalism.com/2010/03/high-income-disparity-leads-to-low-savings-rates.html

Raising capital gain tax would certainly help to address the income disparity problem.

This article argues that saving more and spending less would help the US economy in the long term and alleviate the problem of relying on foreign debtors:

http://www.csmonitor.com/Money/2010/0402/Could-Americans-saving-more-and-spending-less-rescue-the-US-economy

You apparantly can't read so well yourself. I hadn't seen your posts for reasons I gave in the prior thread. I happened to see this one before I'd signed in, so I'll respond. After which I'll be signed in again, if you get my drift.

Lol, at least dirjj earned respect by just simply quitting the board instead posting in an echo chamber of his own creation.

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The Obama stimulus should have bought us an economy that ran like a Porshe or at least a Lexus but we ended up with a Ford Pinto instead.

Eh, we didn't and don't have the balls to gamble on either economic strategy enough to win a Porshe. And they certainly weren't promising one. Aiming for 8% unemployment is no sports car.

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So the focus will turn to energy/climate. With that in mind..

Depicted as an attempt to deploy Clinton to soothe corporate leaders who are furious at Obama, the Wednesday visit was actually devoted to a mundane subject: the energy efficiency loan guarantee program that Clinton has vainly tried to promote for many months as a source of fresh investment and as many as a million new jobs.

[...]

Back during the fall of 2009, Clinton directed the staff at his foundation to prepare a report explaining how the Obama administration could foster well over a hundred billion dollars of private lending for energy efficiency improvements in commercial, institutional and residential buildings. They found that as little as $9 billion in U.S. Treasury commitments to a Federal Energy Efficiency Loan Guarantee Program would leverage up to $67 billion in lending by banks for green retrofits.

In October 2009, Clinton sent a personal memo to Joe Biden, White House energy advisor Carol Browner and Obama economic advisor Lawrence Summers, telling them that in his opinion, the ratio might be as high as 10-to-1, with $15 billion leveraging as much as $150 billion. Every billion dollars invested in building efficiency creates as many as 9,000 new jobs in construction, design and manufacturing, which would swiftly add up to a million or more Americans rescued from unemployment.

Privately, Clinton spoke with dozens of Democrats on Capitol Hill and in the administration, trying to persuade them that a green loan guarantee might not only create new jobs but save theirs as well in the upcoming midterm elections. Yet despite the president's avowed commitment to clean energy and green jobs, the proposal made little headway until this week -- even as economists have urged the administration to unlock the enormous pool of capital that banks are refusing to lend.

Those business executives present at Wednesday's White House event weren't the Chamber of Commerce types that have attacked the Democrats over healthcare, financial reform and the federal deficit. (So the notion that Obama called upon Clinton to "mediate" his differences with the business community was pure media concoction.) Instead, they represented companies that could participate directly in the Clinton plan, including Bank of America CEO Brian Moynihan, Honeywell CEO David M. Cote, Hannon Armstrong CEO Jeffrey Eckel, Johnson Controls president C. David Myers, and Ameresco founder and executive vice-president Dave Anderson. Indeed, Johnson Controls, which builds and installs energy control systems and other efficiency equipment, is already working with the Clinton Climate Initiative to make the Empire State Building a model of green retrofitting.

For Democrats, this was not merely an occasion for Clinton nostalgia, but a grim reminder of lost opportunities. Had the president and his staff heeded their old adversary when he started pushing the loan guarantee plan last year, they might not need his help quite as badly as they do today.

For Democrats, this was not merely an occasion for Clinton nostalgia, but a grim reminder of lost opportunities. Had the president and his staff heeded their old adversary when he started pushing the loan guarantee plan last year, they might not need his help quite as badly as they do today.

http://www.salon.com/news/bill_clinton/index.html?story=/opinion/conason/2010/07/15/clinton

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Just found this interesting:

One thing that should be unsurprising to readers of the political science literature is that people are often pretty uninformed about the economy, even when it comes to well-publicized statistics or personal experiences:

The public gives the Obama administration little credit for its tax cuts, which according to the Washington-based Tax Policy Center lowered federal income taxes for 93 percent of filers. Asked to compare their federal income taxes to what they paid during George W. Bush’s presidency, only 7 percent say they are lower; 20 percent say their taxes are higher and 65 percent say they are about the same.

This reminds me of Larry Bartels's finding from a survey that was conducted in 1988, at the end of Ronald Reagan’s second term, asking various questions about the government and economic conditions, including, “Would you say that compared to 1980, inflation has gotten better, stayed about the same, or gotten worse?” Amazingly, over half of the self-identified strong Democrats in the survey said that inflation had gotten worse and only 8% thought it had gotten much better, even though the actual inflation rate dropped from 13% to 4% during Reagan’s eight years in office.

Finally, here's an interesting twist on the recent controversy about the extent to which voters care about deficits:

Americans’ anxieties over the economy are reflected in the top issues they see facing the country: Unemployment and jobs, cited by 41 percent, and the federal deficit, cited by 26 percent, dwarfed other concerns. . . . The two big priorities are reversed among respondents who say they will definitely vote in November and say the election is exceptionally important. A 41 percent plurality name the deficit as the top issue, compared with 33 percent who pick jobs among those who say they are intensely interested in the November congressional elections.

http://www.fivethirtyeight.com/
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Just found this interesting:

http://www.fivethirtyeight.com/

My understanding is that a sizeable percentage of federal income tax filers pay no income tax at all. Yet, 95% of filers supposedly got a tax cut. So apparently, around 40% of filers ended up receiving more in tax credits than they actually paid in taxes.

http://finance.yahoo.com/news/Nearly-half-of-US-households-apf-1105567323.html?x=0&.v=1

I'd question whether the correct term for that is a tax cut, or simply a handout.

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Just found this interesting:

http://www.fivethirtyeight.com/

And oddly enough, the two concerns are directly related. The deficits are for the most part baked in the cake until the jobs situation improves. Conversely, the government can't do much about joblessness because they have their hands tied by the deficits. Gonna be a whole lot of fast talking by candidates this November.

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But assuming that assumption -- that this really only will affect lower income folks -- is true, there are two problems. Upthread, someone argued in favor of this program because the savings rate in this country was too low, and needed to be increased. But if only the poor are going to be sucked into it, then it's not really going to have a material effect on the savings rate at all because the poor don't have much money anyway. You can't argue both that it will increase the savings rate to any significant degree, and that it only will affect lower income folks.

The other problem -- if that assumption is true -- is the point Chataya raised. We're going to essentially be "tricking" lower income folks into putting their money into retirement funds when those people already are struggling to make ends meet, and when their regular savings are low already. In essence, you're going to be reducing the disposable income of the people who need it the most.

But aren't you ignoring the fact that there is nine lower income employees for every high income one. And if over time, because it will take time, if every low income person saves 2 or 3% in retirement funds, it will indeed have a big impact on the savings rate.

But if your point is that its not a quick fix, thats true. And if Chataya's point is true, then what is the answer?

Work until you drop dead on the job?

You know my answer. We have to do something to raise wages. And it doesn't seem that there is a something we can do under the current rules we're under. You know, I'm beginning to see more and more economists making the point that the comparative advantage the east is enjoying in trade is the standard of living its citizens will accept, and if the western democracies attempt to meet that standard of living, they won't survive. So the western democracies are doomed under current policies to lose their entire manufacturing sector. I'm afraid thats going to be all too true.

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And oddly enough, the two concerns are directly related. The deficits are for the most part baked in the cake until the jobs situation improves. Conversely, the government can't do much about joblessness because they have their hands tied by the deficits. Gonna be a whole lot of fast talking by candidates this November.

This article essentially says that the EU isn't too happy with the U.S. because they believe austerity rather than stimulus is the only way out of this.

http://www.theaustralian.com.au/news/world/disappointed-europe-fears-deepening-rift-with-barack-obama-administration/story-e6frg6so-1225892066404

I'd probably be the last guy to argue that something is right just because the EU says so. I simply wanted to point out that the prevailing wisdom here that stimulating the economy is the only way to get out of this is not the only legitimate opinion out there.

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But aren't you ignoring the fact that there is nine lower income employees for every high income one.

I don't agree that's a "fact". I think the figure is that approximately half of American workers invest in a 401(k) or retirement plan already, and I'll bet a lot more work for companies that already offer one, so they won't be covered by this new bill at all. So the percentage of people who work for an employer that doesn't even offer such plans is certainly a minority, not a 9-1 majority. And then of those people whose employers don't offer such plans at all, not all of them will be "low income" people anyway, and a fair number of them will opt out.

But if your point is that its not a quick fix, thats true. And if Chataya's point is true, then what is the answer?

Work until you drop dead on the job?

I'm sorry if I wasn't clear. I already said that savings are a good idea for anyone. I was simply saying that the raw amount of money that would be saved because of this plan is small, and wouldn't significantly affect the savings rate.

You know my answer. We have to do something to raise wages. And it doesn't seem that there is a something we can do under the current rules we're under. You know, I'm beginning to see more and more economists making the point that the comparative advantage the east is enjoying in trade is the standard of living its citizens will accept, and if the western democracies attempt to meet that standard of living, they won't survive. So the western democracies are doomed under current policies to lose their entire manufacturing sector. I'm afraid thats going to be all too true.

That's a whole other debate. I'd simply point out that if you engage in protectionism, the prices of those goods are going to rise accordingly, and the people who will be hurt the worst by those increased prices are low wage people.

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This article essentially says that the EU isn't too happy with the U.S. because they believe austerity rather than stimulus is the only way out of this.

http://www.theaustralian.com.au/news/world/disappointed-europe-fears-deepening-rift-with-barack-obama-administration/story-e6frg6so-1225892066404

I'd probably be the last guy to argue that something is right just because the EU says so. I simply wanted to point out that the prevailing wisdom here that stimulating the economy is the only way to get out of this is not the only legitimate opinion out there.

But that wasn't the point. My point is that any austerity measures you wish too enact will not have much effect on the deficit until revenue increases with more jobs. You need to remember that the EU was providing more benefits to its citizens so they have a little more wiggle room when it comes to cutting. If you believe you're going to make drastic cuts in entitlement programs, you're going to run into the same problem Reagan had. He wanted to make cuts, but every time he was shown the impact of the cuts he was considering, he realized there was no way he could do it.

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I don't agree that's a "fact". I think the figure is that approximately half of American workers invest in a 401(k) or retirement plan already, and I'll bet a lot more work for companies that already offer one, so they won't be covered by this new bill at all. So the percentage of people who work for an employer that doesn't even offer such plans is certainly a minority, not a 9-1 majority. And then of those people whose employers don't offer such plans at all, not all of them will be "low income" people anyway, and a fair number of them will opt out.

Well lets get more specific. One half of working Americans not investing in a 401K would be 75 million, or so.

Now you want to bet they work for companies that already offer a plan, but I would bet the other way. These people probably work for small employers who pay low wages and provide little to no benefits. But lets pick a number, say 30 million. So if, over time, 30 million people not in a plan get in a plan and start saving, thats a 40% increase in the number of savers. And even if they save small amounts, that's got to impact the savings rate. And sorry, that 9 out of 10 was what I consider to be low income in todays workplace. I have no idea what type of actual cut-offs their going to use.

That's a whole other debate. I'd simply point out that if you engage in protectionism, the prices of those goods are going to rise accordingly, and the people who will be hurt the worst by those increased prices are low wage people.

True, thats a whole other debate, and I don't want to pretend to be knowledgeable enough to participate. I was just making the point that I don't see any end in sight to the loss of jobs in manufacturing, and what some are saying will be the result. And I didn't advocate protectionism, but rather fair trade.

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That's a whole other debate. I'd simply point out that if you engage in protectionism, the prices of those goods are going to rise accordingly, and the people who will be hurt the worst by those increased prices are low wage people.

Yes, but the wages would rise too, likely more than prices. That means workers will be able to buy more for their money. And even if not - most of the imported goods are hardly essential for life. Does it matter that you have to save a month longer to buy more expensive TV? But people would have more money to spend for necessary goods and services like healthcare, food, energy or housing (beccause they are "produced" in US there won't be any increase at all). It looks like protectionism would be in fact much much better for poor.

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yeah the 2009-2010 class of congressmen seems likely to go down as the most effective congress in my lifetime in terms of getting shit done.

I like your choice of words. Surely O,Pelosi& co can claim they passed reforms. The problem is those reforms are really worth a shit. Financial reform did nthing to prevent future future crisis. Healthcare reform is even worse. Everyone agreed that US HC needs to be fixed but Democrats picked the worst possible option. No cost controls just increased coverage and taxes. I actually think if McCain won the HC reform would be very similar to this one (after all Romney passed petty much the same think in Mass). Not to mention that this most effective Congress wasted hundreds of billions and achieved nothing.

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I'd question whether the correct term for that is a tax cut, or simply a handout.

In the context of the article, who cares? Too few are aware or credit someone of the other party. I thought it made for a bit of black humor, how partisanship keeps so many ears closed. Heck, your only comment was to pick out the part about Obama and tear it down.

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