About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

94 comments:

  1. 1
    Cheap South says:

    “Housing Fades as a Means to Build Wealth, Analysts Say”

    http://www.nytimes.com/2010/08/23/business/economy/23decline.html?_r=1&hp

  2. 2
    Sniglet says:

    Here is some more evidence on how the public sector has become the most lucrative place to work. It used to be that public sector workers recieved lousy pay, but at least they had a pension. These days, however, the public sector gets paid better than their private sector counterparts AND they get cushy pensions to boot.

    More than anything else, it is the unfunded public sector pensions and outrageous compensation which are causing budget problems throughout the country.

    At a time when workers’ pay and benefits have stagnated, federal employees’ average compensation has grown to more than double what private sector workers earn, a USA TODAY analysis finds.

    Federal workers have been awarded bigger average pay and benefit increases than private employees for nine years in a row. The compensation gap between federal and private workers has doubled in the past decade.

    Federal civil servants earned average pay and benefits of $123,049 in 2009 while private workers made $61,051 in total compensation, according to the Bureau of Economic Analysis. The data are the latest available.

    http://www.usatoday.com/money/economy/income/2010-08-10-1Afedpay10_ST_N.htm?csp=obinsite

  3. 3

    What does it mean when a Dollar Store chain goes out of business?
    I also drove by the nearest check cashing place to my house, and it too has gone out of business and is for rent.
    These are the kinds of businesses I’d expect to do well in a crappy economy. What’s next? The store specializing in selling 40’s and Mad Dog 20-20 also failing?

    http://www.thenewstribune.com/2010/05/08/1178825/goodbye-to-regions-dollar-stores.html

  4. 4
    David Losh says:

    RE: Cheap South @ 1

    Real Estate has never changed. Massive appreciation in Real Estate between 1998 and 2008, ten years, doesn’t make a market place.

    If you were careful, bought well, and reinvested during those ten years you would be ahead, right now. The market place is still going on but, do know what to buy, how much it’s worth, and is it worth owning?

  5. 5
    Pegasus says:

    RE: Ira Sacharoff @ 3 – Mad Dog 20-20? That would be a sure sign of Armageddon.

  6. 6

    RE: Cheap South @ 1 – Just a sign that we’re about to head into a period of hyper-inflation. ;-)

  7. 7

    RE: Ira Sacharoff @ 3 – Maybe we need deflation for dollar stores to survive. I remember that dollar stores had cheap stuff back in the late 60s and 70s. With inflation their margins much have really suffered. This assumes they still sell stuff for a dollar–I’ve not been in a dollar store for decades. Perhaps they don’t, just like how Hotel 6 no longer rents rooms for $6.

  8. 8
    Sniglet says:

    What does it mean when a Dollar Store chain goes out of business?

    I don’t know that a lot can be gleaned from the closure of one retailer. They could have had the wrong mix of products, they coud have had high-cost leases making it hard to compete with new discounters getting the lower real-estate rates currently available, they could have done a poor job of marketing, I don’t really know. There can even be cases where companies are saddles with debt as part of buy-outs, etc, which then drive the businesses into the ground even if they would otherwise be profitable.

    Some thoughts come to mind: with so much discounting taking place across the entire retailing sector, I wonder if that is making it harder for the low-end places to differentiate themselves? Sometimes I wonder if everyone is becoming a dollar store… Heck, in the last couple years even Saks has started discounting, which is completely unprecedented.

    There is also the phenomena of used/consignment stores like Value Village which seem to be growing in popularity. Maybe used goods are putting even more pressure on retailers of new products.

    This certainly doesn’t tell us anything, one way or the other, about deflation. Cheap good are popular to people looking to save money regardless of whether there is inflation or deflation. An over-all decline in discounting could point to improved employment or incomes, but it wouldn’t say much about inflation/deflation.

  9. 9
    Dirty_Renter says:

    RE: Ira Sacharoff @ 3

    The Money Store next to me shuttered it’s windows this spring. I think it has more to do with the unfavorable legislation passed by the legislature in Olympia, than the economy. Oregon, in essence, banned payday lending last year.

  10. 10
    The Tim says:

    RE: Dirty_Renter @ 9 – Dollar Store (cheap crap from China) != Dollar Tree (lending sharks)

  11. 11
    pfft says:

    By Sniglet @ 2:

    Here is some more evidence on how the public sector has become the most lucrative place to work. It used to be that public sector workers recieved lousy pay, but at least they had a pension. These days, however, the public sector gets paid better than their private sector counterparts AND they get cushy pensions to boot.

    More than anything else, it is the unfunded public sector pensions and outrageous compensation which are causing budget problems throughout the country.

    At a time when workers’ pay and benefits have stagnated, federal employees’ average compensation has grown to more than double what private sector workers earn, a USA TODAY analysis finds.

    Federal workers have been awarded bigger average pay and benefit increases than private employees for nine years in a row. The compensation gap between federal and private workers has doubled in the past decade.

    Federal civil servants earned average pay and benefits of $123,049 in 2009 while private workers made $61,051 in total compensation, according to the Bureau of Economic Analysis. The data are the latest available.

    http://www.usatoday.com/money/economy/income/2010-08-10-1Afedpay10_ST_N.htm?csp=obinsite

    they don’t make more. adjusted for education they make about 10% less. 4% less according to this report.

    http://www.cepr.net/index.php/publications/reports/wage-penalty-state-local-gov-employees/

    “More than anything else, it is the unfunded public sector pensions and outrageous compensation which are causing budget problems throughout the country.”

    no proof? no link?

    it’s the great recession that has plunged revenues worse than any other recession before.

  12. 12
    softwarengineer says:

    RE: Sniglet @ 2

    Public Sector Jobs Took the Biggest Butcher Axe in July 2010

    Article in part:

    “…I think what was less anticipated was the loss of another 50,000 state and local governemnt jobs, which is an overhang that we’re going to be facing because the stimulus from last year is beginning to run off and those state and local governments are having to face budget deficits….”

    http://marketplace.publicradio.org/display/web/2010/08/06/am-economy-loses-131000-jobs-many-lost-in-public-sector/?refid=0

    Add in the Furloughs and IOUs for public sector State jobs and the only way out is raise taxes, like this State is doing. Nope, it’s not rosy for public or private sector of late.

  13. 13
    pfft says:

    I forgot I knocked down the article the other day when scotsman posted it.

    Public employee unions say the compensation gap reflects the increasingly high level of skill and education required for most federal jobs and the government contracting out lower-paid jobs to the private sector in recent years.

    The analysis did not consider differences in experience and education.

    don’t forget older too. older workers typical make more money. the wars in Iraq and Afghanistan have probably also skewed the numbers because they get paid a lot and there are lots of them.

    unbelievable.

  14. 14
    softwarengineer says:

    RE: Ira Sacharoff @ 3

    I Know What You Mean Ira

    Big Lot in Renton shut down too. It’s like even the cheap stores are going down the tube.

    IMO, they overbuilt dollar stores and cash outlets, just like gas stations. I think the next block of businesses to close will be the new rash of ethnic restaurants, way too many started up lately. I’d add fast food restaurants too.

    Hades, even grocery stores are having trouble lately, we’re just plain eating less? LOL

  15. 15
    Dirty_Renter says:

    Facts for ‘Mark to Market’ accounting for banks, re FASB 157.
    It was implemented in November of 2007.
    Modified March 2009. [I could be a few weeks off either way]

    I am not a student of the Great Depression, but it is my understanding that a similar ‘mark to market’ standard was disbanded in the middle of the 30’s, only to be revived as FASB 157, in the fall of 2007. So…don’t be fooled by the FASB 157 screamers, we became the financial center of the world during their ‘mark to fantasy’ epoch.

  16. 16
    hoary says:

    Drove through Southcenter this weekend and Toys ‘R’ Us and Babies ‘R’ Us going out of business too. I bought many a Nintendo game at that Toys ‘R’ Us back in the day, so I was pretty sad to see it was going.

    Welcome to the toyless recovery.

  17. 17
    johnnybigspenda says:

    Facebook has a conversation going on titled: Experts now say housing is a bad investment and always will be. What’s your take? Are you pro-buying or happy renting?

    http://www.facebook.com/topic.php?uid=128015890542670&topic=250

  18. 18
    softwarengineer says:

    RE: The Tim @ 10

    The City of Seattle to Soon Charge Tim’s Seattle Bubble a $300 Operating Tax Too?

    Article in part:

    “…Between her blog and infrequent contributions to ehow.com, over the last few years she says she’s made about $50. To [Marilyn] Bess, her website is a hobby. To the city of Philadelphia, it’s a potential moneymaker, and the city wants its cut.

    In May, the city sent Bess a letter demanding that she pay $300, the price of a business privilege license….”

    http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/philly-requiring-bloggers-to-pay-300-for-a-business-license-101264664.html

    Another article in part:

    “…Taxes already represent 40% of the price of beer, according to a Beer Institute survey. Are you finding all this hard to swallow? …”

    http://www.examiner.com/beer-in-national/proposed-state-beer-tax-increases-hard-to-swallow-impacting-jobs-and-beer-drinkers

    So even when we go to our favorite watering spots to relieve the recent Wash St tax increase stress, those $4 pints with a dollar tip and 10% sales tax added on, are going up to $6? LOL

  19. 19
    softwarengineer says:

    RE: johnnybigspenda @ 17

    As Long As Uncontrolled Growth Continues

    Real Estate price decreases will continue to worsen, as wage decreases continue to worsen.

  20. 20

    RE: johnnybigspenda @ 17
    Bah. A few years ago people were saying that it was a new paradigm, that real estate prices would NEVER go down, and you better jump on the bandwagon. Now we’re being told that housing is a bad investment and ALWAYS will be. You got to be careful with those always and never pronouncements.
    That said, I don’t see any sustained rise in house prices anytime in the near future. But to say that it will always be a bad investment? C’mon! It may take 5, 10, 20, or 50 years, but I think housing will have it’s day again as an investment.
    And even now, there are people out there buying deeply discounted homes, fixing them up, and selling them for a profit, even in the Seattle area. It’s risky, and even people who know what they’re doing make mistakes and lose money, but there are still people out there buying foreclosures or bank owned property, doing a lot of the work themselves, and making money. It’s not common, and there are still plenty of places in the Seattle area where you practically have to give a house away to get someone to take it. But yes, if you’re looking at a single family home in say, Ravenna, and paying market value for it, intending to rent it out as an investment, it’s an immensely stupid thing to do. Will it always be a bad investment? How would I know? Who do I look like? The Amazing Kreskin?

  21. 21
    bob says:

    http://www.nytimes.com/2010/08/23/business/economy/23decline.html?hp

    “More level-headed/negative opinions are now comming out instead of just cheer leading
    Instead, Mr. Humphries and other economists say, housing values will only keep up with inflation. A home will return the money an owner puts in each month, but will not multiply the investment. ”

    “Dean Baker, co-director of the Center for Economic and Policy Research, estimates that it will take 20 years to recoup the $6 trillion of housing wealth that has been lost since 2005. After adjusting for inflation, values will never catch up. ” (Arg … 20 years is pretty harsh … dont tell me we spent it on beemers and vacations)

    “People shouldn’t look at a home as a way to make money because it won’t,” Mr. Baker said. ”

    “If the long term is grim, the short term is grimmer. Housing experts are bracing themselves for Tuesday, when the sales figures for July will be released. The data is expected to show a drop of as much as 20 percent from last year. ”

    —–

    To counteract that – the old thinking …

    “Other buyers have grand and even grander expectations. In an annual survey conducted by the economists Robert J. Shiller and Karl E. Case, hundreds of new owners in four communities — Alameda County near San Francisco, Boston, Orange County south of Los Angeles, and Milwaukee — once again said they believed prices would rise about 10 percent a year for the next decade. “

  22. 22

    RE: softwarengineer @ 14 – Again, rumor has it Big Lots was forced out by the landlord.

  23. 23
    bob says:

    Saw on another blog … someone from seattle claiming that a group of managers were being laid off from a high tech company (not Microsoft) – Any idea which company

  24. 24
    B&W Nikes says:

    RE: Cheap South @ 1 – The Zillow spokesperson says “All those theories advanced during the boom about why housing is special — that more people are choosing to spend more on housing, that more people are moving to the coasts, that we were running out of usable land — didn’t hold up.” Score another one for SeattleBubble.com!

    To add something a little outside the convention, I was reading over the weekend and found a weird footnote. The landmark Ballard-Howe residence at 22 West Highland Drive over on Queen Anne hill was purchased shortly after build in 1901 for $25,000. It was sold for $5,000 in 1932. It is now assessed by the county at approx $2,500,000 and though there aren’t really any comps left on Highland Drive because of the scale of the place, by it’s neighboring prices I’d guess it could be valued near $5,000,000 if someone was in the mood. So even though this property lost a staggering 80% in the depression, in 100 years the value has improved far greater than any losses, and the upside change from its low point in 1932 is mind bending. Though a human can’t actually hold on to a property for that length of time and could not realize similar returns, it really opens a can of worms when talking about real estate trends or the value of a dollar over longer time periods than we are fond of discussing.

  25. 25
    Ouch! says:

    RE: hoary @ 16
    Toys R Us and Babies R Us in Southcenter are only closing temporarily and will be reopening across the street. Also, rumor has it that the Big Lots in Fairwood (Renton) closed because the property owner wouldn’t negotiate the lease and is trying to put a Walmart in that location.

  26. 26
    Cheap South says:

    By hoary @ 16:

    Drove through Southcenter this weekend and Toys ‘R’ Us and Babies ‘R’ Us going out of business too. I bought many a Nintendo game at that Toys ‘R’ Us back in the day, so I was pretty sad to see it was going.

    Welcome to the toyless recovery.

    Toys R us and Babies R Us are not going out of business; they might be closing the South Center locations.

  27. 27

    RE: Ouch! @ 25 – Walmart is one of the rumors, but I don’t see it. First, how many Walmarts do they need with a Renton address? Second, the parking lot isn’t anywhere big enough (and I sort of doubt the space is either unless they consume more parking). The rumor I keep hearing is LA Fitness, but that doesn’t make sense to me either.

  28. 28

    By Cheap South @ 26:

    Toys R us and Babies R Us are not going out of business; they might be closing the South Center locations.

    Maybe they couldn’t compete with Babes in Toyland! ;-)

  29. 29

    Opps, that should have been Toys in Babeland.

  30. 30
    hoary says:

    By Ouch! @ 25:

    RE: hoary @ 16
    Toys R Us and Babies R Us in Southcenter are only closing temporarily and will be reopening across the street. Also, rumor has it that the Big Lots in Fairwood (Renton) closed because the property owner wouldn’t negotiate the lease and is trying to put a Walmart in that location.

    Ahhh, OK. “Oh shit” moment withdrawn.

  31. 31
    pfft says:

    By Cheap South @ 1:

    “Housing Fades as a Means to Build Wealth, Analysts Say”

    http://www.nytimes.com/2010/08/23/business/economy/23decline.html?_r=1&hp

    when everyone agrees they are probably wrong. just a few years ago it was a great way to build wealth. the only way for a lot of people. not it’s not?

    home prices have already bottomed. what they really mean is in the last 5 years housing hasn’t been a good investment. that makes the odds more in favor of it being a good investment not a bad one.

  32. 32
    Blurtman says:

    In the parallel universe of Sammamish, John Buchan has finally started up his Chestnut development off of 212th, after clearcutting a nice piece of property over two years ago and doing squat with it.

    Starting McMansion price: $900,000 and up.

    Good

    Luck

    There!

  33. 33
    Blurtman says:

    RE: Blurtman @ 32 – Correction, it is William Buchan, the handsomer and more talented brother of John?

  34. 34
    Haybaler says:

    RE: Ira Sacharoff @ 3
    I’m surprised you guys haven’t put 2 and 2 together….

    The greenback has lost value against other currencies. It used to be that our importers could go over to China and other foreign manufacturers to acquire cheap stuff and ship it here to sell cheap in the Dollar store. (Has anybody noticed the higher prices at Walmart?)

    Now foreign currencies are stronger and those guys can’t buy really cheap stuff and compete here anymore. The table has turned.

    There is a silver lining…..Heck, I’m selling hay into Canada now for the first time in my history. Canadian dealers are sending semi trucks driving down I-5 to pick up loads of grass hay to take back across the border into Canada because the dollar is flipped in favor of Canadians.

  35. 35
    pfft says:

    By Haybaler @ 34:

    RE: Ira Sacharoff @ 3
    I’m surprised you guys haven’t put 2 and 2 together….

    The greenback has lost value against other currencies. It used to be that our importers could go over to China and other foreign manufacturers to acquire cheap stuff and ship it here to sell cheap in the Dollar store. (Has anybody noticed the higher prices at Walmart?)

    Now foreign currencies are stronger and those guys can’t buy really cheap stuff and compete here anymore. The table has turned.

    There is a silver lining…..Heck, I’m selling hay into Canada now for the first time in my history. Canadian dealers are sending semi trucks driving down I-5 to pick up loads of grass hay to take back across the border into Canada because the dollar is flipped in favor of Canadians.

    falling dollar=export jobs. that’s what the where are the jobs? people don’t get.

  36. 36
    Civil Servant says:

    Never thought I’d say this, but thanks, Pfft — for pointing out that public-sector salaries look less appalling when adjusted for average education level of the salaree.

    Obviously I have a dog in this fight. But I wish to inject a few collegial points into the discussion here. First, all public-sector salaries are not created equal. I have fancy degrees (arf arf) and could be making twice as much if I’d gone into private-sector work doing the same sort of thing. The heads of public utilities earn much much less than they could on the open market. On the other hand, in the public sector it is possible to earn ~$60K with full benefits at a cashier-level job, with only a GED. Go to lbloom.net or whatever, pick a large public-sector organization, and calculate the average per-quartile salaries and you can see this for yourself. I often hear the same people go off on a tear about high public-sector salaries as get exercised about the absurd ratios, in the private sector, of C-level to line-level salaries and/or about the lousy compensation at Walmart (e.g.) of hourly staff, which in some cases qualifies full-time employees for food stamps and other government aid: well, which is worst? Part of the charter of many public-sector organizations is to make it possible for people from the surrounding area without much education or from traditionally underserved groups to earn a middle-class living and — yes — become property owners and, it is assumed, larger stakeholders in their communities. I am not saying this is good policy or that the assumption is correct. But to look at the results of the policy without understanding the policy itself, and the fact that the mission of the public sector is fundamentally different from the economic one of the private sector, is to miss an important point.

    Also, all public-sector jobs and job classifications are not equal in terms of benefit packages. The federal government is definitely the gravy train, which is perhaps why those jobs tend to be the subject of resentment-baiting articles and graphs in USA Today and the like. I don’t know if it’s all skittles and beer in Mason County, on the other hand.

    I am grateful to have a pension. It’s worth a lot to me economically, more even than it costs me. I would gladly pay more for this measure of security, but I have not (yet) been asked to. But if someone was selling for $200K the house for which you thought $300K was fair, wouldn’t you jump on it while you could? That’s a market too.

    Respecfully submitted, etc.

  37. 37

    By The Tim @ 10:

    RE: Dirty_Renter @ 9 – Dollar Store (cheap crap from China) != Dollar Tree (lending sharks)

    Dollar Store= cheap crap from China
    Dollar Tree= cheap crap from China
    Money Tree= Lending sharks

  38. 38
    S-Crow says:

    Just wanted to give a quick thank you to the Seattle Bubble community for using our escrow firm. No matter if you are refinancing or in a purchase/sale, nor if you live in Bellingham, Ballard, Beacon Hill, Bellevue, Seattle, Snohomish or North Bend, we make it exceptionally easy for our clients. Although many hide behind their SB “handles” it is always a treat for Lynn and I to meet you face to face. And ,the best part is the common denominator we share: transparent real estate, building a future for our families, reducing debt and paying off the home mortgage.

    We wish we could provide The Tim with more fun stories (and we are loaded with them) and posts, but work and family obligations make it tough.

    Thanks,
    Tim & Lynlee Kane

  39. 39
    wreckingbull says:

    RE: johnnybigspenda @ 17 – if facebook sez so u know its tru.

  40. 40
    David Losh says:

    RE: johnnybigspenda @ 17

    Thanks, this is what I posted:

    Buying this year after the data, and stats come back from the end of the tax credit should give you good purchase prices. Over the next year, I think prices in Seattle will decline about 20%. Many properties I look at are $100K over priced. There again I have seen probably two screaming deals this week.

    My focus will be on apartment buildings. There will be many with owners who bought thinking only about cash flow, and forgot to maintain the buildings. Real Estate is a hard work investment, and I think more wealth will be built in the next five years than in the last ten.

  41. 41
    Hugh Dominic says:

    RE: Civil Servant @ 36 – Ugh. That post and your handle match perfectly. A civil servant who is satisfied with his entitlements (but don’t you dare take them away).

    Contrary to your opinion, the role of government is not to subsidize a middle class, and government employees are supposed to work for the people as servants, not get paid to be middle-class consumers.

  42. 42
    pfft says:

    By Hugh Dominic @ 41:

    RE: Civil Servant @ 36 – Ugh. That post and your handle match perfectly. A civil servant who is satisfied with his entitlements (but don’t you dare take them away).

    Contrary to your opinion, the role of government is not to subsidize a middle class, and government employees are supposed to work for the people as servants, not get paid to be middle-class consumers.

    where did he say that they don’t work for their money?

    about entitlements, whatever happened to contract law? weren’t people like you yelling about 200 years of contract law!!!

    the pain caucus hates government workers.

  43. 43

    RE: Hugh Dominic @ 41
    Did you actually read Civil Servant’s post?
    Or do you just assume that because someone works for the government they must be either overpaid, incompetent, or evil?
    What he/she said was that he/she could be making twice what they earn now if they were in the private sector. So where’s the problem? Some people work for the government because they believe in what they’re doing, and nobody works for the government to get rich, except maybe some PAC 10 football coaches. I don’t have a problem with bus drivers making 60k a year. I do have a problem with football coaches who are state employees making 5x what the governor makes.

  44. 44
    Sniglet says:

    What he/she said was that he/she could be making twice what they earn now if they were in the private sector.

    I am sure there are SOME people in the public sector who earn less than they would in the private economy. On the other and, I know there are lots of people who earn more. Many cities pay their police more than $100K a year. Fireman in big cities usually earn something in the $100K range too. New York public school teachers make close to $100K. Even in the Seattle area public school teachers get paid MUCH more than their private counterparts, yet they still go on strike when they don’t get wage increases.

    My brother, with a post-graduate degree, earns less than $70K teaching at a private middle school in Atlanta while equivalent teachers in the public schools just blocks away make $20K more. And my brother doesn’t get any sort of a pension whatsoever.

    Why is it that we should have to pay any public employees more than what the private market will bear? That’s just insanity.

  45. 45
    The Tim says:

    RE: Ira Sacharoff @ 37 – Doh. Right. That’s what I meant.

  46. 46
    Hugh Dominic says:

    RE: pfft @ 42RE: Ira Sacharoff @ 43

    I’m taking exception to his point that begins with “part of the charter [of the government is to overpay workers who are not competitive in the job market]”. I do not agree with that, I want the best possible value for my tax money.

    I’d also like to know how much that pension is worth, and if it’s value is properly accounted for in the assertion that he is working for half pay. Federal retirement from the military, for example, was at one time 50% of highest pay, inflation adjusted, for LIFE. Including spouse. Guaranteed by the US taxpayer, the most solid guarantee there is. Where else could you buy an annuity like that, if you retire at 42? How much would it cost?

    The rest of us need to accumulate a massive bankroll to reach that level of financial security.

  47. 47
    Hugh Dominic says:

    RE: Hugh Dominic @ 46 – and that’s to say nothing of the bankroll the working people have to maintain to insure against periodic job loss – something that is infrequent in public service.

    Public servants should be subject to purges during downturns, and as a means to harvest efficiency gains that arise from new technology. (and create opportunity to jettison low performers) I want to see public employment slashed, and pension funds threatened, just like the public they serve.

  48. 48
    D. in Ballard says:

    I work in the public sector, and believe me we are not rolling in the dough. We sacrifice salary for good benefits and job security. We nonetheless had layoffs recently. Many of my colleagues would laugh if you told them they made more money working for the public. The lower-level employees of which we are primarily comprised make so little that they qualify for low-income housing. A friend of mine is too proud to apply for it though. Their pensions are based on their final salary which of course will not be very high.

  49. 49

    RE: Hugh Dominic @ 47
    The City of Seattle, King County, the State of Washington, and local and state governments across the US have been laying workers off in greater numbers and at a faster rate than is happening in the private sector recently. But that’s not enough for you? You want to deny that it’s happening, or refuse to believe the data? Maybe you’d like to see them executed to make sure they really are ” terminated”?

  50. 50
    Sniglet says:

    RE: D. in Ballard @ 48

    I work in the public sector, and believe me we are not rolling in the dough.

    I am quite sure that SOME public sector employees are not getting paid extravagent sums, but clearly there are many who are getting paid more than their counterparts in the private market.

    I see that Bellevue School teachers who have a masters degree and 15 years of experience make $69,651. This is considerably more than our local private schools pay equivalent teachers (and much more than my brother, with a masters, makes in Atlanta). Experienced Bellevue police officers make a MINIMUM of $67,104, not including overtime, pension, etc. The starting salary for a Bellevue firefighter is $62,268, not including overtime, pension, etc.

    These salaries look attractive to me, and I am a highly skilled and trained worker in the tech industry. I don’t get any pension benefits, and my salary mobility is virtually nil. I am making the same income today I made in 1999. Consider that the fireman and police wages I cited are the minimums. The actual take home pay is often MUCH higher. When you add in 10 years of seniority, the average Bellevue police officer and fireman takes home MUCH more than I do, PLUS they get a cushy pension.

    While there are certainly public sector employees who don’t get paid much, Bellevue firemen and police officers are certainly NOT suffering.

    Like I said before, I think it is insane that anyone pays public sector employees more than their private sector counterparts.

  51. 51
    Cheap South says:

    By D. in Ballard @ 48:

    I work in the public sector, and believe me we are not rolling in the dough. We sacrifice salary for good benefits and job security. We nonetheless had layoffs recently. Many of my colleagues would laugh if you told them they made more money working for the public. The lower-level employees of which we are primarily comprised make so little that they qualify for low-income housing. A friend of mine is too proud to apply for it though. Their pensions are based on their final salary which of course will not be very high.

    Oh came on now. You are not allowed in the argument!!! Did you have to bring inside information and facts to the table?? Can’t you see how fun it is to blow hot air out of our asses??

    You too Ira. Layoffs in the public sector?? That’s only if you pay attention to what the f.. is going on.

    I was about to tell my teacher cousin that she gets paid too much; but my wife reminded me she tutors after hours to make ends meet.

  52. 52

    RE: Sniglet @ 50
    Sniglet,
    While I personally value what you do a lot, are you regularly putting yourself in danger of dying of gunshot wounds or burning up while trying to rescue people?
    Also, why do house prices cost so much in the Seattle area? Yes, they’re overpriced, but isn’t some of it related to the high private sector salaries paid around here?
    Haven’t home prices here expanded along with the increase in salaries and employees at places like Microsoft, Amazon, etc?
    I’ve never heard of home prices rising because the county was hiring more dog catchers.
    At the same time, I’ll be the first to admit that the public sector does have way too many ineffectual, overpaid ,middle management suck ups. You can lay off 90% of those and nobody would notice a difference. But you can’t compare what a police officer does to what someone in the tech field does, nor can you compare a private security rent a cop to a publicly employed police officer.

  53. 53

    By Sniglet @ 50:

    I see that Bellevue School teachers who have a masters degree and 15 years of experience make $69,651. This is considerably more than our local private schools pay equivalent teachers (and much more than my brother, with a masters, makes in Atlanta). Experienced Bellevue police officers make a MINIMUM of $67,104, not including overtime, pension, etc. The starting salary for a Bellevue firefighter is $62,268, not including overtime, pension, etc.

    My understanding is that private schools don’t typically have the same standards for their teachers. They don’t need the same minimum level of qualifications to teach, etc.

    And as to mentioning police and firefighters, what profession are you going to compare them to? There aren’t many professions in the private sector where part of the job description is “take armed suspects into custody” or “run into burning building with toxic substances.”

  54. 54

    I forget which thread San Diego was mentioned in, but here’s a good story that explains part of the reason why I wouldn’t put California on the top of the list for places where prices are likely to recover.

    http://www.techweb.com/news/226900013/global-cio-schwarzenegger-shocker-california-strangling-entrepreneurs.html

    Things are not much better there for established businesses.

  55. 55
    wreckingbull says:

    RE: Ira Sacharoff @ 43 – Did you download the 2009 King County salary spreadsheet from the site which Civil Servant referenced? If the data is correct, there are indeed plenty of county employees getting quite rich. In fact, this problem is way worse than I ever imagined.

  56. 56
    pfft says:

    By Hugh Dominic @ 47:

    I want to see public employment slashed, and pension funds threatened, just like the public they serve.

    even if it’s not needed? demand for public services usually increases during a recession. you’re just cutting them to cut them. that’s pain caucus stuff.

  57. 57
    pfft says:

    By Sniglet @ 50:

    RE: D. in Ballard @ 48

    I work in the public sector, and believe me we are not rolling in the dough.

    I am quite sure that SOME public sector employees are not getting paid extravagent sums, but clearly there are many who are getting paid more than their counterparts in the private market..

    no they aren’t. didn’t you read the studies posted? apples to apples they make between 4-10% less than private workers?

  58. 58
    pfft says:

    By wreckingbull @ 55:

    RE: Ira Sacharoff @ 43 – Did you download the 2009 King County salary spreadsheet from the site which Civil Servant referenced? If the data is correct, there are indeed plenty of county employees getting quite rich. In fact, this problem is way worse than I ever imagined.

    public workers are stupid. what they should be doing is running a private sector company into the ground and then collect tens of millions in golden parachute money and ride off into the sunset.

  59. 59
    S. Marty Pantz says:

    By johnnybigspenda @ 17:

    Facebook has a conversation going on titled: Experts now say housing is a bad investment and always will be. What’s your take? Are you pro-buying or happy renting?

    http://www.facebook.com/topic.php?uid=128015890542670&topic=250

    Early Retirement.org has a similar discussion: http://www.early-retirement.org/forums/f28/article-dont-view-a-house-as-an-investment-51764.html

  60. 60
    wreckingbull says:

    RE: pfft @ 58 – If you are suggesting that public organizations be run more like private business, I totally agree. If you are trying to tell me that two wrongs make a right, I can’t say I agree. That seems to be a common straw man around here – point to poorly run private organizations (and there are many) to somehow make the public sector problems acceptable.

  61. 61
  62. 62
    pfft says:

    By wreckingbull @ 60:

    RE: pfft @ 58 – If you are suggesting that public organizations be run more like private business, I totally agree. If you are trying to tell me that two wrongs make a right, I can’t say I agree. That seems to be a common straw man around here – point to poorly run private organizations (and there are many) to somehow make the public sector problems acceptable.

    I was just making a snarky observation.

    “That seems to be a common straw man around here – point to poorly run private organizations (and there are many) to somehow make the public sector problems acceptable.”

    no, it’s too point out that organizations are about people. there are good in bad in both public and private. in these discussions though we only point out all the bad points of the public sector.

    public sector employees don’t make more than than private counterparts when adjusted for experience, age and education. there is a certain type of person who gets involved in these discussion who absolutely had public workers and smear them any chance they can get.

  63. 63
    Sniglet says:

    And as to mentioning police and firefighters, what profession are you going to compare them to?

    Sorry, the work of firemen and police is not as dangerous as TV makes it out to be. There are precious few shoot-outs or towering inferno scenarios, and our Seattle suburban communities are particularly tame. I just can’t accept that it is justified for the police or firemen to earn more than I do in the private sector.

    By the way, King County Sheriff’s get paid less than Bellevue police, and I don’t think the quality of employees is significantly supperior for Bellevue officers. I think it is instructive that many cities in California have been shutting down their municipal police forces and outsourcing to the Sheriffs (for considerable savings), and discovering that community satisfication with law enforcement improves!

    Someone mentioned that private sector wages are wonderful in our region. That is not necessarily the case. I worked at Microsoft for 9 years until recently and saw almost no upward momentum in my income. In fact, many people are being hired into Microsoft now at LOWER rates than those same roles would have had even a year ago. While there are certainly some very highly paid people at local employers like Microsoft, it is very wrong to assume that everyone there is getting rich. The average Bellevue police officer gets paid better than most Microsoft employees (if you include the whole compensation package).

  64. 64

    By wreckingbull @ 55:

    RE: Ira Sacharoff @ 43 – Did you download the 2009 King County salary spreadsheet from the site which Civil Servant referenced? If the data is correct, there are indeed plenty of county employees getting quite rich. In fact, this problem is way worse than I ever imagined.

    As a matter of fact I did. I did a small sample, all full time county employees whose last name started with the letter ” E”.
    Total number of employees was 365. 30 of those employees made 100,000 or more. 58 of those made under 50,000.
    I’ll be the first to admit that the county is top heavy. But that’s not generally how things work. When there’s a purge of public employees, they lay off bus drivers, nurses, firefighters, and cops, but rarely lay off Project Program Manager 111s, or members of the blue ribbon task force on inefficiency.

  65. 65
    redmondjp says:

    OK, I’ll throw my $.02 in regarding public employee salaries, of which I have a particular interest in my own “city” of Redmond. From what I can gather, the salary of professional and management positions tend to be a bit low vs. private industry (but with MUCH better job security and a low stress level and 40-hour work weeks), but the salary of some of the hourly workers (unionized, hint hint) is MUCH MUCH higher than their private-industry counterparts.

    Take a “driver” for the city, whose job it is to drive a dump truck around, or maybe a truck loaded with lawn mowers. May have a GED. Is that worth $75-80K a year with full benefits and lifetime job security (unless M$ leaves town)? There is NO WAY that anybody driving a truck in a non-union private company is making anywhere near that. And short of the citizens gathering en masse at city hall (a la Bell, CA recently), there is nothing that is going to change this.

    Personally, I feel that the job security that most public employees have is worth 25-30% less pay than they would get in private industry which typically has much lower job security. In the past fifteen years working for various manufacturing companies, I have been laid off twice and missed being laid off another two times by switching jobs six months to a year in advance of the ax. If I had been a public employee during that same time period it is highly unlikely that I would have experienced that same level of upheaval (getting laid off can be a blessing, but it still sucks going through it) and spending several months looking for work each time.

  66. 66
    wreckingbull says:

    RE: Ira Sacharoff @ 64

    My point exactly.

    Rather than filtering on the last names which start with “E” you might find it more interesting to filter on any job title which contains the substring “supervisor”

  67. 67
    pfft says:

    By redmondjp @ 65:

    Take a “driver” for the city, whose job it is to drive a dump truck around, or maybe a truck loaded with lawn mowers. May have a GED. Is that worth $75-80K a year with full benefits and lifetime job security (unless M$ leaves town)?

    that’s another thing. if a town is wealthy they may have much higher paid people than poorer towns. if a town is contracting population wise public sector pay could be a mess.

  68. 68
    pfft says:

    By Ira Sacharoff @ 64:

    By wreckingbull @ 55:

    RE: Ira Sacharoff @ 43 – Did you download the 2009 King County salary spreadsheet from the site which Civil Servant referenced? If the data is correct, there are indeed plenty of county employees getting quite rich. In fact, this problem is way worse than I ever imagined.

    As a matter of fact I did. I did a small sample, all full time county employees whose last name started with the letter ” E”.
    Total number of employees was 365. 30 of those employees made 100,000 or more. 58 of those made under 50,000.
    I’ll be the first to admit that the county is top heavy. But that’s not generally how things work. When there’s a purge of public employees, they lay off bus drivers, nurses, firefighters, and cops, but rarely lay off Project Program Manager 111s, or members of the blue ribbon task force on inefficiency.

    the project managers(or white collar people) are the one’s probably doing the laying off. I imagine there is some white collar vs blue collar deal going on too.

  69. 69
    Blurtman says:

    Money for Nothin’, ….

    HUD Offers Interest-Free Loans to Reduce Foreclosures
    http://www.businessweek.com/news/2010-08-11/hud-offers-interest-free-loans-to-reduce-foreclosures.html

    The lunacy continues.

  70. 70
    hoary says:

    By wreckingbull @ 60:

    RE: pfft @ 58 – If you are suggesting that public organizations be run more like private business, I totally agree. .

    Some sectors of government (utilities) can (sort of) be run like a business. Other sectors (criminal justice) cannot be run like a business.

    Would I like an efficient government and to pay less taxes? Of course! Would I want a government whose motive is profit? Hell no!

  71. 71
    D. in Ballard says:

    By Sniglet @ 50:

    RE: D. in Ballard @ 48

    I work in the public sector, and believe me we are not rolling in the dough.

    I am quite sure that SOME public sector employees are not getting paid extravagent sums, but clearly there are many who are getting paid more than their counterparts in the private market.

    RE: Sniglet @ 50

    I am quite sure that SOME public sector employees are getting paid less. In fact, I am quite sure that MOST are. So where does that get us? Have we resolved the argument? Your posts imply a majority which I don’t think the facts support. Let’s be honest. Your assessment is not an observation but rather an explanation that fits your pre-conceived world view. How convenient.

  72. 72
    Dirty_Renter says:

    My take on these posts….and I’ve been hearing this for 50 years(even said it a few times), “I’m underpaid.”
    :)

  73. 73
  74. 74
    Trigger says:

    And now I am really pissed off.

    They take away the tax credit and sales tank. Well hello! This was expected. Instead of taking away the tax credit the govt could have increased the tax credit or even could have started giving away free cash for first time homeowners. So that people can move the houses faster and faster and the builders can build even more houses.

    Next thing – the economy is slowing down. Why not simply just relax and get the printing machines going? We need another stimulus. And then another. Each time a bigger one. We can simply just keep on getting bigger stimuli. And then see in 10 years time what happens. Until then we could push debt to say 500-600% of GDP and then try to make sense of the debt.

    Otherwise you will be left with this:
    http://finance.yahoo.com/news/Economy-Caught-in-Depression-cnbc-1972685111.html;_ylt=Avy6aLiCuM3zqRiK7FTlzqq7YWsA;_ylu=X3oDMTE1Z2U4ZWRuBHBvcwM5BHNlYwN0b3BTdG9yaWVzBHNsawNlY29ub215aW5kZXA-?x=0&.v=1http://finance.yahoo.com/news/Economy-Caught-in-Depression-cnbc-1972685111.html?x=0&.v=1&sec=topStories&pos=7&asset=&ccode=

  75. 75
    Trigger says:

    RE: Blurtman @ 73 – I think Obama should pay for every house that sells. The govt should step in and subsidize sales of houses. Tax credit was a step in the right direction.

    Same was with cash for clunkers. You can just print and have govt subsidize all sales happening in the US.

  76. 76
    Scotsman says:

    RE: Trigger @ 75

    Before this is over the government is going to buy me a house. I’m owed. I’ve bought lots of houses for government employees. Now it’s their turn to buy one for me.

  77. 77
    pfft says:

    By Trigger @ 74:

    Next thing – the economy is slowing down. Why not simply just relax and get the printing machines going? We need another stimulus. And then another. Each time a bigger one. We can simply just keep on getting bigger stimuli. And then see in 10 years time what happens. Until then we could push debt to say 500-600% of GDP and then try to make sense of the debt.

    without the stimulus, tarp and etc the debt levels would be way worse.

    If Washington had not reacted as quickly and as forcefully as it did, the two economists write, “the costs to U.S. taxpayers would have been vastly greater.”

    With no special government intervention, the 2010 deficit would have passed $2 trillion, according to their model. It would have reached $2.6 trillion in fiscal 2011 and $2.25 trillion in 2012.

    forecasted deficits over that same time is 1.3, 1.4 and 1.2. all the government actions actually saved us more than $2.7 trillion in debt. that’s just over 10, 11 and 12.

    depression-like economic contraction= less revenue=more debt

  78. 78

    By Sniglet @ 63:

    And as to mentioning police and firefighters, what profession are you going to compare them to?

    Sorry, the work of firemen and police is not as dangerous as TV makes it out to be. There are precious few shoot-outs or towering inferno scenarios, and our Seattle suburban communities are particularly tame. I just can’t accept that it is justified for the police or firemen to earn more than I do in the private sector.

    If it was like on TV you’d need to pay them $500,000 a year! ;-)

    I realize how often police get in shootouts, or shoot someone, etc. Many if not most never in an entire career. But that doesn’t mean they don’t get paid more because they do have that risk.

  79. 79
    Hugh Dominic says:

    By pfft @ 56:

    By Hugh Dominic @ 47:

    I want to see public employment slashed, and pension funds threatened, just like the public they serve.

    even if it’s not needed? demand for public services usually increases during a recession. you’re just cutting them to cut them. that’s pain caucus stuff.

    No, it’s cutting them to free up resources for the private sector. The government is not going to lead us out of the recession. A positive business climate for private investment, followed by hiring, will. The capital in this economy needs to move into productive uses, after having spent years misallocated into housing construction and government.

  80. 80
    Trigger says:

    RE: Scotsman @ 76 – No Scotsman – You have got it all wrong. Don’t ask what the govt can do for you – ask what you can do for the govt. Now is the time to pitch in your savings etc. You need to buy more houses for govt employees. We need a bigger govt so that everybody can find employment and we need people in the private sector to pitch in more and give more money to the govt. You should only look forward to paying more taxes – this is the right attitude.

  81. 81

    El Paso is a real pit, and having close proximity to Mexico doesn’t really make it much worse. ;-)

    http://www.msnbc.msn.com/id/38836990/ns/us_news-security/

  82. 82
    Scotsman says:

    RE: Trigger @ 80

    My apologies, Yoda-San. I will work on improving my attitude and aligning myself with the new ideas.

  83. 83

    By Trigger @ 80:

    RE: Scotsman @ 76 – No Scotsman – You have got it all wrong. Don’t ask what the govt can do for you – ask what you can do for the govt. Now is the time to pitch in your savings etc. You need to buy more houses for govt employees. We need a bigger govt so that everybody can find employment and we need people in the private sector to pitch in more and give more money to the govt. You should only look forward to paying more taxes – this is the right attitude.

    That might be worth a try. It can’t work out too much worse than everyone giving their money to banks. ;-)

  84. 84
    pfft says:

    By Hugh Dominic @ 79:

    By pfft @ 56:

    By Hugh Dominic @ 47:

    I want to see public employment slashed, and pension funds threatened, just like the public they serve.

    even if it’s not needed? demand for public services usually increases during a recession. you’re just cutting them to cut them. that’s pain caucus stuff.

    No, it’s cutting them to free up resources for the private sector. The government is not going to lead us out of the recession.

    actually yes it has.

    CBO: Up to 3.3 Million People Owe Their Jobs to the Recovery Act
    http://www.offthechartsblog.org/cbo-up-to-3-3-million-people-owe-their-jobs-to-the-recovery-act/

    the whole point of deficit spending is because there is no demand. demand is going into savings and US bonds. giving corporations more cash isn’t going to help because their is already overcapacity. that’s why we are having a recession. business already have a record $2 trillion in cash. they don’t need more. they need demand from deficit spending. spend now have the economy recover and we can work it off when people have jobs not when they don’t.

    CEO: No need to invest right now
    http://www.calculatedriskblog.com/2010/08/ceo-no-need-to-invest-right-now.html

  85. 85
    wreckingbull says:

    RE: hoary @ 70 – Profit has nothing to do with it. Most private organizations can’t print currency or vote to raise revenue, so they must become more effecient.

  86. 86
    hoary says:

    By wreckingbull @ 85:

    RE: hoary @ 70 – Profit has nothing to do with it. Most private organizations can’t print currency or vote to raise revenue, so they must become more effecient.

    I know. It’s almost like business and government are almost entirely different in purpose and funding mechanism and we shouldn’t be comparing them.

  87. 87
    pfft says:

    I issue a challenge to the austerians. show me where austerity has worked. everywhere right now yields are falling. the bond yields in the US are back to crisis levels. however, in greece yields are surging. don’t they know about austerity?

    Greek economy shrinks 1.5% as austerity takes hold

    LONDON (MarketWatch) — Greece’s long-running recession deepened in the second quarter while unemployment rose as government austerity measures took hold, official statistics showed Thursday.

    http://www.marketwatch.com/story/greek-economy-shrinks-15-as-austerity-takes-hold-2010-08-12

    they took austerity and what do they get? higher yields. they are almost back to crisis levels. lower GDP. higher unemployment. meanwhile most of the rest of the world is growing, even in the US where stimulus supposedly didn’t work.

    CBO: Up to 3.3 Million People Owe Their Jobs to the Recovery Act
    http://www.offthechartsblog.org/cbo-up-to-3-3-million-people-owe-their-jobs-to-the-recovery-act/

    austerity=less demand=less jobs=less tax revenue=more debt.

    the US will save almost $2.7 trillion dollars over the next 3 years because the government stabilized the economy. this year mark zandi calculated that w/o any government measure our deficit this year would be $2 trillion instead of $1.3 trillion.

  88. 88
    pfft says:

    By wreckingbull @ 85:

    RE: hoary @ 70 – Profit has nothing to do with it. Most private organizations can’t print currency or vote to raise revenue, so they must become more effecient.

    a private organization can always raise money from investors or borrow money. a publicly listed corporation can borrow or they can “print” by issuing more shares. that’s what REITs and some banks did to survive.

  89. 89
    Hugh Dominic says:

    RE: pfft @ 84 – the stimulus provided stabilization, not growth out of the recession. And the jury is still out as to whether that stabilization will prove to be just a temporary deferral of the decline, aka kicking the problem two years down the road at a cost of trillions and a growth-killing debt hangover.

    Visit NPR planet money or econtalk.org to hear the other side of that debate.

  90. 90
    David Losh says:

    RE: pfft @ 87RE: pfft @ 84

    You don’t know how the bond market works. You’re also confused about what austerity means, globally.

    In Germany the austerity will be well worth the risk because they have a strong manufacturing sector.

    In Greece austerity is a squeeze on tax payers who rely on, to me, an unknown means of wealth. There is wealth in Greece.

    When you look at the yields Germany should be low, and Greece should be high. The risk is lower in Germany.

    Now when you look at the United States I think we are at par with Peru, if I recall correctly.

  91. 91
    Hugh Dominic says:

    By pfft @ 84:

    the whole point of deficit spending is because there is no demand. demand is going into savings and US bonds. giving corporations more cash isn’t going to help because their is already overcapacity. that’s why we are having a recession. business already have a record $2 trillion in cash. they don’t need more. they need demand from deficit spending.

    You make the false assumption that the government has to spend. The government will best serve at this point through inaction, non-interference. Reduce the government burden and ensure that investment-friendly policies and climate is reliably in place. Spending trillions just confuses businesses (what business can compete with that?!) and renders workers inert.

    There are millions of people out there who do not need to be ‘provided’ with a job, because they will go create work or make investments in new ideas. They can lead us out of the recession, simply by giving them a chance to do so. The average person will adapt and create opportunity for himself, but not when the government will pay them to sit on unemployment, and not when the government asserts so much authority and direction that they are disempowered. Or hangs such a heavy debt burden on them that they can only fear that the government will claim the fruits of their investment to repay the debt, as soon as things improve.

    You, pfft, sell us short.

  92. 92
    pfft says:

    By David Losh @ 90:

    RE: pfft @ 87RE: pfft @ 84

    You don’t know how the bond market works. You’re also confused about what austerity means, globally.

    In Germany the austerity will be well worth the risk because they have a strong manufacturing sector.

    In Greece austerity is a squeeze on tax payers who rely on, to me, an unknown means of wealth. There is wealth in Greece.

    When you look at the yields Germany should be low, and Greece should be high. The risk is lower in Germany.

    Now when you look at the United States I think we are at par with Peru, if I recall correctly.

    germany has a strong export sector but to whom are they going to export to when the rest of the world is going towards austerity and depressing their economies? the answer is nobody! certainly not greece.

    you don’t understand what’s happening with bond yields. most bond yields should be lower because of the slowdown. people flee stocks for the safety of bonds as uncertainty of futures earnings drags down stock prices. in germany and the US yields are plunging.in greece yields aren’t just high relative to other countries, they are going up period. they aren’t falling like in most countries because of the austerity measures. austerity is just leading to more misery. nice austerity spiral.

    a quick google shows peruvian bonds yield more than 5%. the highest US yield is the 30-year which is 3.56%. not quite the same.

  93. 93
    pfft says:

    By Hugh Dominic @ 89:

    RE: pfft @ 84 – the stimulus provided stabilization, not growth out of the recession. And the jury is still out as to whether that stabilization will prove to be just a temporary deferral of the decline, aka kicking the problem two years down the road at a cost of trillions and a growth-killing debt hangover.

    Visit NPR planet money or econtalk.org to hear the other side of that debate.

    sometimes I wonder if you people read anything I put down here.

    CBO: Up to 3.3 Million People Owe Their Jobs to the Recovery Act
    http://www.offthechartsblog.org/cbo-up-to-3-3-million-people-owe-their-jobs-to-the-recovery-act/

    increased real GDP by between 1.7 percent and 4.5 percent

    “And the jury is still out as to whether that stabilization will prove to be just a temporary deferral of the decline, aka kicking the problem two years down the road at a cost of trillions and a growth-killing debt hangover.”

    the jury is back. bond yields are plunging. no worry about debt from the bond vigilantes. just how much do you guys think we borrowed and how much in interest we’ll have to pay? the multiplier for government spending is 1.5. that should easily cover payments on the debt.

    austerity would have put us more into debt.

    If Washington had not reacted as quickly and as forcefully as it did, the two economists write, “the costs to U.S. taxpayers would have been vastly greater.”

    With no special government intervention, the 2010 deficit would have passed $2 trillion, according to their model. It would have reached $2.6 trillion in fiscal 2011 and $2.25 trillion in 2012.

    that is about $2.7 trillion more in debt than we will actually have over the 3 years. this year’s deficit is $1.3 trillion. you guys cry about debt destroying the economy and your solution would make the debt situation a lot worse.

  94. 94
    pfft says:

    By Hugh Dominic @ 91:

    By pfft @ 84:

    the whole point of deficit spending is because there is no demand. demand is going into savings and US bonds. giving corporations more cash isn’t going to help because their is already overcapacity. that’s why we are having a recession. business already have a record $2 trillion in cash. they don’t need more. they need demand from deficit spending.

    You make the false assumption that the government has to spend. The government will best serve at this point through inaction, non-interference. Reduce the government burden and ensure that investment-friendly policies and climate is reliably in place. Spending trillions just confuses businesses (what business can compete with that?!) and renders workers inert.

    There are millions of people out there who do not need to be ‘provided’ with a job, because they will go create work or make investments in new ideas. They can lead us out of the recession, simply by giving them a chance to do so. The average person will adapt and create opportunity for himself, but not when the government will pay them to sit on unemployment, and not when the government asserts so much authority and direction that they are disempowered. Or hangs such a heavy debt burden on them that they can only fear that the government will claim the fruits of their investment to repay the debt, as soon as things improve.

    You, pfft, sell us short.

    1. government debt will be high if the economy becomes depressed. austerity depresses revenue and leads to higher debt. just look at greece.

    2. we had a business friendly economy during the bush years and where did that get us? we had tax cuts in 2001 and 2003 and look where that got us.

    3. “hey can lead us out of the recession, simply by giving them a chance to do so.”

    this is voodoo economics. there is a $2 trillion drop off in demand over two years. just how much do you think we’ll innovate? $2 trillion?

    “Or hangs such a heavy debt burden on them that they can only fear that the government will claim the fruits of their investment to repay the debt, as soon as things improve.”

    how much do you think we’ll be taxed? that is an awful large amount. the deficits aren’t going to be that much of a burden to pay back. revenue rises in recovery.

    austerity would have made our debt situation worse.

    If Washington had not reacted as quickly and as forcefully as it did, the two economists write, “the costs to U.S. taxpayers would have been vastly greater.”

    With no special government intervention, the 2010 deficit would have passed $2 trillion, according to their model. It would have reached $2.6 trillion in fiscal 2011 and $2.25 trillion in 2012.

    austerity would have been worse but I know that it won’t change minds. certain people will still believe that stimulus will stunt growth even though it leads to less debt.

    austerity=less growth=less tax revenue=less growth.

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