Rolling US Economy Into The Shitbin Thread

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http://bigpicture.typepad.com/comments/2007/10/more-inflation.html

El Tomboto, Thursday, 18 October 2007 23:44 (twelve years ago) link

personally I'm applying for a civil servant position ASAP

El Tomboto, Thursday, 18 October 2007 23:45 (twelve years ago) link

Just FYI, during the 1930s depression, many civil servants were paid with vouchers rather than cash, because local governments were unable to collect property taxes and their receipts fell into the shitbin.

Aimless, Friday, 19 October 2007 00:12 (twelve years ago) link

Economy's doing poorly enough as it stands, why do we deliberately want to roll it into the shitbin?

Abbott, Friday, 19 October 2007 00:14 (twelve years ago) link

Because that way Hillary can rescue us all.

Dandy Don Weiner, Friday, 19 October 2007 00:17 (twelve years ago) link

lol property taxes

El Tomboto, Friday, 19 October 2007 00:18 (twelve years ago) link

shitbin's a great word, BTW.

Dandy Don Weiner, Friday, 19 October 2007 00:20 (twelve years ago) link

you been loving my thread titles lately

El Tomboto, Friday, 19 October 2007 00:26 (twelve years ago) link

i came to this country some time ago with little more than a crippling debt burden in GB Pounds and the shirt on my back. i used to have to send back $1,200 each month to pay off my UK debt, and now I'm sending back over $1,400 to cover the same amount of debt repayment. that's two and a half thousand dollars disappearing from my tiny disposable income every year, for no explicable reason. i *heart* the decline of the US economy.

Roberto Spiralli, Friday, 19 October 2007 00:27 (twelve years ago) link

anyway why start this thread now because the bit where ritholtz points out that domino's pizza can't print new menus fast enough to keep up with inflation was pretty fucking amazing

I wish rasheed wallace was still around to show us the latest and greatest exploding bubble blogs

El Tomboto, Friday, 19 October 2007 00:28 (twelve years ago) link

wow Roberto that was some shitty timing, that sucks

El Tomboto, Friday, 19 October 2007 00:29 (twelve years ago) link

This was in the paper today:

Mortgage defaults

Hit an annual rate of 1.5 million in September. That compares with 900,000 last year from fewer than 800,000 in 2005. At the current rate, more than one million Americans will lose their homes to foreclosure, making this the worst housing recession since the Second World War.

Housing starts

Sank to a 14-year low of 1.19 million in September. Starts are a vital economic engine, creating jobs and growth as people stuff their homes with sofas and TVs. Starts peaked at 2.3 million in early 2006, and the decline will be a drag on the rest of the economy until the slide stops.

Mortgages

A quarter of the roughly 50 million U.S. home mortgages are subprime. That's seven times the number of high-risk mortgages there were in 2001. That means that many more marginal homeowners have mortgages, making it far more likely they'll wind up in default.

House prices

Fell 3.2 per cent in the second quarter. Prices are falling faster and more broadly than they have in decades, according to the closely watched Case-Shiller index.

http://www.theglobeandmail.com/servlet/story/LAC.20071018.IBUSECONOMY18/TPStory/Business

everything, Friday, 19 October 2007 00:29 (twelve years ago) link

where the hell is rasheed anyway?

economic blogs I read (they're all fairly liberal):

http://calculatedrisk.blogspot.com/
http://angrybear.blogspot.com/
http://delong.typepad.com/sdj/
http://www.marginalrevolution.com/marginalrevolution/
http://bigpicture.typepad.com/
http://www.janegalt.net/

Dandy Don Weiner, Friday, 19 October 2007 00:37 (twelve years ago) link

In regard to inflation, in the USA during the past three years inflation has been soaring - but almost entirely in the housing sector. The fact that people are encouraged to see their houses as investments rather than as expenses doesn't mean that skyrocketing housing costs weren't inflationary. They were.

As the bubble market bursts, I predict a recession with an extra added bonus of inflation running close to 10% - before the end of 2008. As it has for the past 30 years, the official CPI will understate the real inflation rate. It was rigged under Reagan so that government entitlement programs indexed to the CPI would not increase at the true pace of inflation.

If Bush continues to shovel shit on the dollar right up to the end of his term in January 2009, the inflation rate could hit 15%-20% by 2010.

Aimless, Friday, 19 October 2007 00:55 (twelve years ago) link

There are some good economics articles put up here as well:
http://www.VoxEU.org

stet, Friday, 19 October 2007 01:02 (twelve years ago) link

Which shit on the dollar are you referring to?

Dandy Don Weiner, Friday, 19 October 2007 01:02 (twelve years ago) link

As the bubble market bursts, I predict a recession with an extra added bonus of inflation running close to 10% - before the end of 2008.

lol

aaaaaaaaaaaaaaaaaaaaaaaaaa, Friday, 19 October 2007 06:11 (twelve years ago) link

this is why i live in canada!

J0rdan S., Friday, 19 October 2007 06:13 (twelve years ago) link

oh wait.

J0rdan S., Friday, 19 October 2007 06:13 (twelve years ago) link

Guys, this is a good time stay in academia right?

Catsupppppppppppppp dude 茄蕃, Friday, 19 October 2007 11:51 (twelve years ago) link

It's a good time to learn a European language.

Nubbelverbrennung, Friday, 19 October 2007 13:33 (twelve years ago) link

Prime shit examples:

When Bush was elected in 2000, the federal budget was in surplus and the national debt was being paid down. Had this state of affairs continued, as projected, it would have led both to lower interest rates and a strong dollar, together. Instead, Bush submitted a series of enormous tax cuts to the Republican-controlled Congress and lobbied them through. Immediately, the CBO's projected budget surpluses turned to projected deficits for the next decade.

Bush also initiated a war of choice, not necessity, in Iraq. This war has already cost well over $700 billion. Yet, Bush insisted on making his tax cuts permanent. Overall, the national debt has increased under Bush by about $2 trillion in seven years. This represents a difference of about $3 trillion of debt from what was projected at the start of his first term.

Because, due to Bush's tax cuts and other policies, the Federal government was in a far weaker position to stimulate the economy when the recession started after 9/11, almost the entire stimulus was delivered via lower interest rates. Because these rate cuts were artificial, and not based on a stronger dollar, this stimulus not only inflated the current housing bubble, but it also undercut the dollar even more than the ballooning national debt did.

Now the dollar is at an all-time low against the euro and the canadian dollar. However, the incomes of the top 10% of American households have increased at a good clip, while the lower 50% of households have seen a decrease in income after inflation. This is largely thanks to Bush's shitty policies. I expect more of the same mismanagement until he is gone.

Aimless, Saturday, 20 October 2007 18:36 (twelve years ago) link

I agree with everything you've just said. You're predictions still seem a tad extreme on the downside though, if I may so.

aaaaaaaaaaaaaaaaaaaaaaaaaa, Saturday, 20 October 2007 18:50 (twelve years ago) link

i wonder if income inequality will ever arrive as a political issue in this country. americans tend to not begrudge the rich - so it'll have to be more of a "for everyone's good" type of angle. no?

jhøshea, Saturday, 20 October 2007 18:54 (twelve years ago) link

I remember the 1970s and early 80s quite well. Back then people couldn't belileve it, either. Bush has done a bangup job of recreating many of the same policy errors under Johnson and Nixon that led to raging stagflation back then, except the underlying economy is now weaker than it was in the 1970s and the oil shocks we are likely to get are not political, as when OPEC was formed, but structural.

Oil will exceed $100/barrel some time this winter. The ever-weakening dollar will lead to smaller profit margins and rising retail prices on all imported goods (which means almost everything we buy in the USA). Transport costs will rise with pil prices. Stock prices will erode along with profits. With so many savings tied up in stocks and home equity, consumer spending will be crunched, and personal debt and bancruptcies will rise like a tide. Businesses will retrench and unemployment will rise. No end in sight.

I hope I am wrong.

Aimless, Saturday, 20 October 2007 19:07 (twelve years ago) link

Anyone want to join my modern-day James Gang? We shall ride across the lower Midwest, robbing and pillaging.

milo z, Saturday, 20 October 2007 19:09 (twelve years ago) link

sounds fun

jhøshea, Saturday, 20 October 2007 19:13 (twelve years ago) link

Sorry, I don't want to relocate. But this scheme sounds ripe for franchising.

Aimless, Saturday, 20 October 2007 19:14 (twelve years ago) link

Oil will exceed $100/barrel some time this winter. The ever-weakening dollar will lead to smaller profit margins and rising retail prices on all imported goods (which means almost everything we buy in the USA). Transport costs will rise with pil prices. Stock prices will erode along with profits. With so many savings tied up in stocks and home equity, consumer spending will be crunched, and personal debt and bancruptcies will rise like a tide. Businesses will retrench and unemployment will rise. No end in sight.

I hope I am wrong.

-- Aimless, Saturday, 20 October 2007 19:07 (14 minutes ago) Link

The coming of $100/barrel oil is not Bush's fault. It's yours and mine and everyone else's for using too damned much energy. I agree Bush could and should have done a lot more with policy to encourage energy efficiency, but there's little he could have done to stop oil's eventual rise to that price level.

Hurting 2, Saturday, 20 October 2007 19:26 (twelve years ago) link

Part of the pricing of oil represents the weakness of the dollar. This hurts the USA more than it does other countries. US citizens are paid in dollars and the US government collects revenue in dollars, so they are stuck. EU countries can use euros to buy increasingly cheap dollars, so they don't see the same rise in prices as we do. The weakness of the dollar is mainly Bush's fault.

Aimless, Saturday, 20 October 2007 19:31 (twelve years ago) link

The US also uses way more oil than other countries.

Hurting 2, Saturday, 20 October 2007 19:33 (twelve years ago) link

he could have done to stop oil's eventual rise to that price level.
Not starting a war in Iraq would definitely have helped here.

stet, Saturday, 20 October 2007 19:57 (twelve years ago) link

arrgh, if that won't work then
http://calculatedrisk.blogspot.com/2007/10/imf-mortgage-reset-chart.html

El Tomboto, Monday, 22 October 2007 17:47 (twelve years ago) link

tombot u r freakin me out

gff, Monday, 22 October 2007 17:50 (twelve years ago) link

i hope my small apartment + modest savings plan + job in "information services" is enough to weather the shitstorm, if it comes. i got myself out of credit card debt a few months ago, at least

gff, Monday, 22 October 2007 17:53 (twelve years ago) link

well if you can hold down a job and don't have to worry about an ARM reset you should be okay, it's the homeowner with kids and a subprime loan and two cars who ought to be shitting themselves

El Tomboto, Monday, 22 October 2007 17:58 (twelve years ago) link

apart from some student loans and binging on credit cards over a few years, i'm kind of debt phobic.

which has actually made me lose out over the past several years, i realize, since i pay for EVERYTHING with a debit/check card... i could have just paid that balance on a credit card with some rewards scheme and has some air miles or something

gff, Monday, 22 October 2007 18:00 (twelve years ago) link

rolling gff personal finances into the shitbin thread, ha

gff, Monday, 22 October 2007 18:01 (twelve years ago) link

This will give you a boner Tombot

http://nymag.com/guides/money/2007/39952/

Dandy Don Weiner, Wednesday, 31 October 2007 11:30 (twelve years ago) link

the economy increased by 3.9% this quarter! bull market forever, baby. economy's better than ever. golden age.

yet me and so many people I know are getting laid off next month. granted we're all in the writing/design field, but urhhhhh. gggg.

burt_stanton, Wednesday, 31 October 2007 14:58 (twelve years ago) link

http://nymag.com/guides/money/2007/catastrophist071105_560.jpg
http://nymag.com/guides/money/2007/catastrophist071105_2_560.jpg

^^^ lol

most of that guy's scenario is not really news to regular bigpicture/CR readers I don't think. But #5, the "we don't pay attention" thing, yeah, well, evidently the awareness campaign is underway, but hell if the big players are paying attention.

He also leaves out the approaching demographic catastrophe as millions of inexperienced thirtysomethings and even some late-twenties kids are forced to move into arguably tougher jobs that the boomers have been holding for two decades. Beyond the social security and healthcare costs associated with mass retirement, I don't really know if this generation has the work ethic and definitely not the rolodex to just start filling in and not fuck up royally. too busy updating their linkedin pages.

El Tomboto, Wednesday, 31 October 2007 15:11 (twelve years ago) link

can someone explain what "being upside down on your mortgage" means, in plain English?

Tracer Hand, Wednesday, 31 October 2007 16:14 (twelve years ago) link

essentially, owing more than your home is worth.

Dandy Don Weiner, Wednesday, 31 October 2007 17:10 (twelve years ago) link

also Tombot I'm not going to blame this generation as much as I blame their parents.

Dandy Don Weiner, Wednesday, 31 October 2007 17:11 (twelve years ago) link

isn't that the way people buy homes? by paying for the privilege of a loan?

Tracer Hand, Wednesday, 31 October 2007 17:12 (twelve years ago) link

When you enter into a contract with a bank for a mortgage, both you and the bank assume that the property value will not plummet. The bank doesn't want you to default any more than you want to default. But if for whatever reason you need to sell your home, and you can't get what you owe on it, then you will owe the difference to the bank. And the bank knows that when that happens, you probably will not have enough assets to cover the difference.

Predatory-type loans (which seems like a nebulous description to me) typically compound the problem because they have higher transaction rates (points, etc.)

Dandy Don Weiner, Wednesday, 31 October 2007 17:17 (twelve years ago) link

oh certainly! well played baby boom letting healthcare slide for the 20 years you've owned the electorate

El Tomboto, Wednesday, 31 October 2007 17:18 (twelve years ago) link

yeah Tracer it's also called "negative equity"

El Tomboto, Wednesday, 31 October 2007 17:19 (twelve years ago) link

the economy is just so obviously a result of the pandemic and not the mover of the crisis itself whereas in 08/09 the economy was the crisis itself.

sorry to quote you a bunch, mordy. not trying to pick on you, and i'm not trying to "provide the correct answers". i'm not sure of a lot of this myself, but your questions are a good foil.

i think one big danger is that even if the prime mover was clearly the pandemic, the secondary and tertiary effects could very easily destabilize other parts of the economy that maybe weren't so stable to begin with. the 2008/09 stuff started with subprime mortgages defaults and credit default swaps, and quickly spread to a banking liquidity crisis and a million other things. this one will start with mass unemployment from the pandemic and also spread to other problems that i'm not going to pretend i understand (at least not at this point in time).

let me be your friend on the other end! (Karl Malone), Friday, 3 April 2020 15:33 (two days ago) link

i feel like the underlying premise you have is that the underlying fundamentals of our economy are strong, so we can just return to BAU when testing is more widely available and more people go back to work. i am working from the lefty assumption that no, it was a house of cards, and this kind of thing can knock the whole house over.

let me be your friend on the other end! (Karl Malone), Friday, 3 April 2020 15:35 (two days ago) link

i just remember months of months of people warning that we were heading into a recession soon, before coronavirus was a thing. not just because it had been a while since the last recession and it seemed like we were "due", but because of underlying issues. the inverted yield curve, for one.

https://www.vox.com/policy-and-politics/2019/3/27/18250823/recession-prepare-when-inverted-yield-curve

let me be your friend on the other end! (Karl Malone), Friday, 3 April 2020 15:37 (two days ago) link

i think it's going to be hard to sort out what was caused by closing down so many businesses and those results (unemployment, debt + default) from what were systemic problems and while i think the left will be very keen to argue that the problems were from pre-existing systemic issuee, i think they will struggle to make that case convincingly bc of this entanglement. it's such an unprecedented event i think it'll be difficult to demonstrate what problems are not the fault of the pandemic and examples i've already seen to the contrary tend to make the case for autocracy much more than socialism (and lots of countries with more socialized medicare for example are not covering themselves with glory here etc when all you have is a hammer...)

Mordy, Friday, 3 April 2020 15:38 (two days ago) link

my argument is that "this kind of thing" can knock your house over no matter what it is built out of and while i agree with your goals generally i think it's hard to make the case here

Mordy, Friday, 3 April 2020 15:38 (two days ago) link

the uniqueness of this event makes using it to conclude anything about about the foundations of our economy seem a little misguided even to me, the conclusory posts guy

silby, Friday, 3 April 2020 15:44 (two days ago) link

mordy why did it take me until this exact second to realize that our usernames are built on almost the same principle, but yours with a first name instead of a last name

silby, Friday, 3 April 2020 15:45 (two days ago) link

lol i'm not sure but i do go by mordy irl

Mordy, Friday, 3 April 2020 15:46 (two days ago) link

I use this as my username in as many contexts as possible which means some people do end up calling me it irl

silby, Friday, 3 April 2020 15:46 (two days ago) link

I don't think you need to subscribe to the belief that american capitalism was a house of cards to believe that a pandemic that's gonna disrupt commerce across the world for the rest of the year will inflict significant, lasting economic pain beyond the temporary shutdown

iatee, Friday, 3 April 2020 15:47 (two days ago) link

at best we're going to walk back out into our cities and see a graveyard of vital community businesses that won't all come back no matter how much small business loan funding there is

silby, Friday, 3 April 2020 15:48 (two days ago) link

fwiw i think in some ways it's an excellent opportunity for massive leftist projects in the US both temporary and permanent (and some temporary measures like UBI might eventually become permanent) depending on the scale of the crisis but i imagine this is just the beginning of the unemployment crisis as both time passes (and so ppl's circumstances become more dire) and grows (as more regions and businesses are impacted)

Mordy, Friday, 3 April 2020 15:49 (two days ago) link

i just don't buy "hey if only we were already socialist we wouldn't have a problem of everyone losing their jobs" even socialist countries need economies.

Mordy, Friday, 3 April 2020 15:49 (two days ago) link

interesting to note mortality rate went down during great recession and great depression

Mordy, Friday, 3 April 2020 15:50 (two days ago) link

my hope for the future is that we can center conversations around the economy less on how much we produce (GDP growth, stock index performance) and more on what we produce (health care, housing, nutrition, employment for all)

majority whip, majority nae nae (m bison), Friday, 3 April 2020 16:05 (two days ago) link

like the rona disrupts what we produce, both frivolous and necessary goods/services, so no economic orientation can possibly be immune to its effects. but an economy predicated on meeting everyone's needs could weather this better than our system which makes these goods out of reach when personal income is gone.

majority whip, majority nae nae (m bison), Friday, 3 April 2020 16:07 (two days ago) link

it's definitely a bit dishonest to peg all the struggles we're going through on Trump/capitalism but at the same time we built a nation where health care is a commodity and our leaders tell us to not trust the experts or the media, so what could've been a 4-week ordeal is gonna extend into the fall. it's like the virus is Tim Tebow and we're all the Pittsburgh Steelers, playing Cover 0 and just begging him to throw deep, and when he finally hits a wide open receiver it's all over

frogbs, Friday, 3 April 2020 16:09 (two days ago) link

i hope something like that grows out of this current situation - i think coronavirus could create a change in consciousness that allows us to better and more compassionately structure our society. it would take nothing less than human enlightenment imho in the pre covid-19 world such a realignment seemed impossible. xp

Mordy, Friday, 3 April 2020 16:10 (two days ago) link

one could easily imagine obama handling this crisis a million times better than trump even before we get to capitalism vs socialsim.

Mordy, Friday, 3 April 2020 16:10 (two days ago) link

fp'd you frogbs

mookieproof, Friday, 3 April 2020 16:12 (two days ago) link

Any "hot takes" on whether these payroll protection programs and government-funded leave programs et al. will keep people employed? Whether these are biased in some way or another?

sarahell, Friday, 3 April 2020 16:26 (two days ago) link

sarahell, how do you feel about the 401k/ira early withdrawal that's in the bill?

Yerac, Friday, 3 April 2020 16:29 (two days ago) link

i missed that part what is it

from Barron's, i guess this is a decent summary:

In addition to allowing retirees options to defer required minimum distributions, the so-called Cares Act will allow eligible individuals to withdraw up to $100,000 from their retirement accounts, in total, without the 10% early-withdrawal penalty as long as they pay back the distributions within three years. The relief package also eases some of the rules surrounding 401(k) loans.

To qualify for the provisions, individuals need to fall into one of two main categories. You, your spouse or a dependent is diagnosed with Covid-19, the disease caused by the new coronavirus. Alternatively, you qualify if you have experienced adverse financial consequences as a result of being quarantined, furloughed, laid off, having work hours reduced, being unable to work due to lack of child care or closures related to the coronavirus pandemic.

Yerac, Friday, 3 April 2020 16:35 (two days ago) link

i mean the idea that you have to pay back as much as 100K (OVER THREE YEARS!?!?!) to a 401K in times of dire need is kinda insane to me but what do I know I'm advocating for violent revolution

yeah, i saw some people thinking this would be a "real gamechanger" and I was like ?????????????????

Yerac, Friday, 3 April 2020 16:43 (two days ago) link

especially since there is a prerequisite of having a 401k in the first place

silby, Friday, 3 April 2020 16:44 (two days ago) link

i mean most of the reason I contribute to an IRA for tax reasons; my galaxy brain says that contributing to an IRA is betting on yourself to Not Die before 66 (or whatever it is now). I wish to live long enough to see the statistical evidence that the past 4 years have shortened humans' live expectancy by, like, ten years on average but

*proceeds to make "this expression" while gesturing thoughtfully to thousands of dead people*

my pt is that it's weird to be shocked about historically high unemployment numbers when you shut down a large % of the businesses in your country. it's not shocking, it's per plan.

Not shocked at all, but they shut down the businesses, they didn't force those businesses to lay off workers. I don't know what to tell people that don't believe executive compensation, stock buybacks, and general need to run businesses as ruthlessly efficient as possible to pump the stock price aren't factors in those businesses having insufficient reserves to weather a shutdown for even three weeks.

Why, I would make a fantastic Nero! (PBKR), Friday, 3 April 2020 16:50 (two days ago) link

many of the closed businesses were not publicly traded like think about every business in your neighborhood they're almost all closed (may vary depending on where you live/coming soon to a neighborhood near you)

Mordy, Friday, 3 April 2020 16:56 (two days ago) link

A lot of excessive business travel is going to permanently disappear.

I know that will cause all kinds of rough ripples for workers in several industries, but workplace observation has suggested to me that 2/3 of biz travel is bullshit. Schmoozing for schmoozers.

brooklyn suicide cult (Dr Morbius), Friday, 3 April 2020 17:46 (two days ago) link

i mean the idea that you have to pay back as much as 100K (OVER THREE YEARS!?!?!) to a 401K in times of dire need is kinda insane to me but what do I know I'm advocating for violent revolution

― Its big ball chunky time (Jimmy The Mod Awaits The Return Of His Beloved), Friday, April 3, 2020 12:40 PM bookmarkflaglink

You don't have to pay it back. It's a taxable withdrawal. The IRS is allowing people to pay back withdrawals (which is not normally allowed) in 3 years, and in exchange, the 10% penalty for being under age 59.5 will be waived.

Most actively working customers under age 59.5 don't have in-service withdrawals available unless they've contributed post-tax monies or rolled money into the plan, as their pre-tax contributions and earnings are restricted before turning 59.5 to prevent them treating it like a savings account. There ARE hardship withdrawals already available in 401(k) plans, but most plans follow the Safe Harbor standard, which mean you can only get the money out for six specific reasons, none of which involve illness/COVID.

The IRS, as they have done for previous disasters, have created a special hardship withdrawal for this situation that makes the money accessible for COVID-related hardship. Without it, this money wouldn't have been accessible to most active customers under 59.5 unless they quit their jobs. People over age 59.5 usually have most if not their entire balance available as before-tax monies are no longer restricted at that age.

Also, nobody has to take 100,000 dollars. Most people probably don't even have that balance available (I sure don't). Most people would probably take far less

The 401(k) loan change is a bigger deal as the IRS formula that determines availability is a two part formula of:

A) 50% of your vested balance OR
B) $50,000 - your highest outstanding loan balance in the last 12 months.

So effectively, you can never get more than 50,000 out for a loan. This rule changes that to maximize the limit to 100k, so swap out 50,000 for 100,000 in that formula.

This would also free up more money for people who had already taken out their max amount available (50,000). If their plan allows for more than one loan, this would give them instant access to another 50,000 that they could repay over 5 years with payroll deductions.

And if they get terminated before they repay it? No negative impact on credit. It gets treated as a withdrawal and subject to taxes the next year. And that money simply doesn't go back into their balance.

I do see this as a positive. No, nobody should have to raid their retirement, but if you're young like me and can make it back up later, it can help bail you out of a hole, and you can even gross-up the payment to proactively put aside money to pay any tax liability.

On a side note - not that anybody is doing it here, but I'm sick of people assuming 401(k)s are this bougie rich person thing. The majority of people in 401ks aren't rich and often have small balances. When i handled 401k withdrawal processing, i used to take call after call from people who had to use their 401k to prevent losing their home.

So I had to snipe at some friends the other day when I posted this news and they all mocked "lol 401ks who the fuck had those, who cares", and i had to point out that I did, and in fact if there was a way for me to be devious and take some money out, i could eliminate two very specific debts that are crippling me at the moment which would help me take care of other family members without hurting my own future.

narcissistic sleighride (Neanderthal), Friday, 3 April 2020 17:49 (two days ago) link

sarahell, how do you feel about the 401k/ira early withdrawal that's in the bill?

I think it's actually a great humane thing. I remember doing taxes for people post 9/11 and post-recession, and they had to cash out retirement plans when they lost their jobs or had serious reductions in income, and then to have to tell them, guess what, you get a 10% tax penalty for needing money to pay for basic living expenses ... that really sucked. It's up there with having to tell people who got paid as 1099 contractors and were low-income people, that actually, they owe $3000 - $5000 in self-employment tax, even though they only made $20k and they live in one of the most expensive places in the world, and also, their employer should have been paying them as an employee, and they could file a bunch of forms and try to get that fixed, but in the meantime, they owe a shit-ton of taxes.

sarahell, Friday, 3 April 2020 18:18 (two days ago) link

I'm sick of people assuming 401(k)s are this bougie rich person thing. The majority of people in 401ks aren't rich and often have small balances. When i handled 401k withdrawal processing, i used to take call after call from people who had to use their 401k to prevent losing their home.

co-sine!

sarahell, Friday, 3 April 2020 18:19 (two days ago) link

how would you make it better? (the early withdrawal in the bill)

Yerac, Friday, 3 April 2020 18:19 (two days ago) link

Not shocked at all, but they shut down the businesses, they didn't force those businesses to lay off workers. I don't know what to tell people that don't believe executive compensation, stock buybacks, and general need to run businesses as ruthlessly efficient as possible to pump the stock price aren't factors in those businesses having insufficient reserves to weather a shutdown for even three weeks.

This is a weird thing to say here? Idk most of the affected workers I know work for small businesses and non-profits. Meanwhile, a lot of the big retail chains (for example) were still open (and their workers still employed) when the small businesses had closed, such that our state government had to make even stronger rules about essential businesses to get them to close their stores.

sarahell, Friday, 3 April 2020 18:25 (two days ago) link

one could easily imagine obama handling this crisis a million times better than trump even before we get to capitalism vs socialsim.

― Mordy, Friday, April 3, 2020 12:10 PM (two hours ago) bookmarkflaglink

obama would’ve been more competent with executive stuff but Obama with republican congress would probably not have passed any stimulus and it would be Great Depression x10

flopson, Friday, 3 April 2020 18:25 (two days ago) link

It maybe shouldn't be a surprise, but it's a completely unprecedented jump, and we have no idea how it will play out over time.

― Mario Meatwagon (Moodles), Friday, April 3, 2020 11:15 AM (three hours ago) bookmarkflaglink

it’s unprecedented nationally, but not at subnational levels for large natural disasters. compares similarly to Louisiana post Katrina. look at the chart here https://www.bls.gov/opub/ted/2015/mobile/hurricane-katrina-a-look-back-at-employment-and-unemployment.htm

flopson, Friday, 3 April 2020 18:29 (two days ago) link

especially since there is a prerequisite of having a 401k in the first place

― silby, Friday, April 3, 2020 9:44 AM (one hour ago)

You aren't a parent, are you? (I'm not either, but ...)... Another fatuous "leftist" gripe about retirement plans and jobs that have them tends to be unrealistic about the economic and uh, personal responsibilities of people with kids. Like, being 35 years old without health insurance and benefits could be fine, but once you factor a kid into the equation? So many of my friends went from under-employed hipsters without benefits and insurance to "full-time with retirement and family health plans" once they became parents.

sarahell, Friday, 3 April 2020 18:30 (two days ago) link

I mean I'm not, but I do have substantial savings in various defined-contribution plans (403b technically for my current employer).

silby, Friday, 3 April 2020 18:32 (two days ago) link

I'm pretty sure poor parents exist though!

silby, Friday, 3 April 2020 18:32 (two days ago) link

if I had a kid I would have even less money tho lol

COVID and the Gang (jim in vancouver), Friday, 3 April 2020 18:32 (two days ago) link

if you have kids and savings you are the monopoly man to me

COVID and the Gang (jim in vancouver), Friday, 3 April 2020 18:32 (two days ago) link

Canada has p generous refundable credits, you’d probably come out ahead jim

flopson, Friday, 3 April 2020 18:34 (two days ago) link

Someone added the GameCube intro to my unemployment graph & it’s significantly better now. pic.twitter.com/c35hS74sok

— Dorsa Amir (@DorsaAmir) April 3, 2020

𝔠𝔞𝔢𝔨 (caek), Friday, 3 April 2020 18:55 (two days ago) link

omfg

silby, Friday, 3 April 2020 18:56 (two days ago) link

now do it with the marimba one

silby, Friday, 3 April 2020 18:56 (two days ago) link

Worth noting in comparisons to Katrina, that property owners in NOLA were practically swimming in insurance payouts for the first 2-3 years thereafter. The country through the insurance and Federal grants, subsidized a local remodeling and real-estate boom, in which shotgun shacks got new wiring, flooring, plaster and paint, and were converted to Air B&Bs, even though the underlying tourist driven economy wasn't much improved. Contractors did really well. Early RE investors did really well. Renters that didn't land permanently in Dallas or Houston, all were screwed by a near doubling of housing costs.

This model of "recovery" doesn't really apply when the whole country is suffering at once, and when 30% of workers at restaurants, hotels, taxi service, massage spas etc see no recovery for a year... One can throw money at a city at get a real estate boom, but throwing money doesn't change new patterns of social behavior.

Sanpaku, Saturday, 4 April 2020 20:29 (yesterday) link

it’s certainly true that it’s harder to insure a nation-wide shock than a regional one. but luckily US can borrow for free right now. the relevant constraint seems more congress’ willingness to spend (so far it’s been compliant) and institutional difficulty of getting cash out everywhere quickly (this one is more binding). the biggest factor that will contribute to a slow recovery imo is the virus lasting a really long time

i don’t think real estate is going to be super important to the recovery from this; there’s no destruction of physical housing stock as in Katrina and construction seems to be continuing apace (at least where i live)

the point of the analogy to katrina is that the labour market recovered quickly; it shows that it’s not the case that the length of the recovery is necessarily proportional to the size of the shock, as seems to be the case with “normal” recessions

flopson, Saturday, 4 April 2020 20:42 (yesterday) link


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