Is another recession coming?

[crjack]

In regards to adding more jobs, healthcare is another huge factor for companies, large and small.

Many of the jobs being offered are "contract" positions that do not come with any benefits. The total overall cost of a new employee is much more than just the salary being offered.

 

[ColoradoDisneyFreaks]

I could be wrong since I have read this somewhere, but don't have data to support me ... but 1% of the population controls 40% of the money in the U.S. However, the other 99% who only control 60% (the middle class) pay almost double ... if not more in taxes.

I am all for a flat tax (which is what the two senators Obama commissioned about a year ago stated in their report ... their flat tax would be 23% ... much lower than what I pay now.)

Actually, from a taxes perspective, it's the top 5% of earners who pay more than half of all income taxes in the country, the bottom 50% don't pay any...

WHO PAYS TAXES, AND HOW MUCH DO THEY PAY?


Percentiles by AGI || AGI Threshold || % of Fed Personal Income Tax
____________________________________________________________

Top 1%........................$380,354..........................38.02

Top 5%........................$159,619..........................58.72

Top 10%......................$113,799...........................69.94
.
Top 25%......................$67,280.............................86.34

Top 50%......................$33,048.............................97.30

Bottom 50%................<$33,048...............................2.7

SOURCE: 2008 IRS REVENUE DATA, COMPILED BY NTU.
======================================================
As you can see, the top 1% are those with incomes of $380k/year, well off, but not "super rich" especially when you consider that they're probably not living in Colby, KS where the COL is super low.

I would completely agree with a flat tax, remove all deductions, as well as the EIC, and go with a straight flat tax.

Corporate welfare is another issue, and is given for 1 of 2 reasons:

1. Because a politician is playing "You scratch my back, I'll scratch yours" for campain contributions, cushy lobbying jobs for family, whatever's legal

or

2. Because the gubmint is trying to influence what we buy or how we live, they do this so that the recipient of said welfare can undercut their competitors on price due to the funding coming in. See the CFL and GE situation for a great example of this...

 

[Muushka]

A good friend of mine has 2 friends. One is the owner of Cree, the LED mfgr. The other is the owner of a store that sold (past tense) household storage items.

Last year, the store went out of business. Cree received 7.9 million in grants. The grants came out of taxpayer money.
The government should not be in the business of picking winners and losers.
My friend does not pay that much attention to politics, but I think this one hit a little too close.

 

[BAMLuvMickey]

I didnt even know we were out of the first one yet...Jobs are still hard to come by here in R.I. and CT as far as I know(and I know because I have had a hard time finding work for the last year and a half)

 

[klmall]

Things are even worse on my side of the bay. I know people who've been job hunting for over a year and unfortunately they lived way above their means, with big fancy houses, expensive cars, and maxed out credit cards; that was part of the problem too. I know a family of 5, both parents lost their jobs and they're all living in camper in a relative's back yard. But I have to say, you'd never know there was a recession in Ocean City. I've been going back and forth to be with my mother who has cancer. I don't remember crowds that large and the huge volume of traffic, even in good economic times.

I agree. Our friends have a TH in Ocean City and they have been complaining about the unusually heavy traffic too! FWIW our DS lost his job 18 months ago and hasn't been able to find one since. Luckily he saved a lot to cover his expenses and hadn't moved out yet. We are far from coming out this recession.

 

[Muushka]

Tom Coburn has the right idea. Too bad neither Dem or Rep will listen to his ideas

Give Sen. Tom Coburn (R-OK) credit. In a city where obfuscation and misdirection are the coin of the realm, the conservative Republican lets you know exactly where he stands. While most of his party remains mired in its “job-killing tax increase” rhetoric, Coburn has no misgivings about eliminating tax subsidies and using the money to reduce the deficit. His new budget plan, “Back in the Black” would scale back these deductions and credits by $1 trillion over a decade.

And in doing so, Coburn didn’t mince words:

“Tax expenditures are not tax cuts. Tax expenditures are socialism and corporate welfare. Tax expenditure are increases on anyone who does not receive the benefit or can’t hire a lobbyist…to manipulate the code to their favor.”

Unlike most pols of both parties, who blast tax expenditures in general but refuse to name names, Coburn has a list. In fact, he has 60 pages of details on the tax subsidies he’d deep-six. He targets two of the most controversial: the tax exclusion for employer-sponsored health insurance and the mortgage interest deduction. And he takes aim at a wide range of tax breaks for economic development and energy production.

Coburn’s plan for $9 trillion in spending cuts and tax increases isn’t going anywhere. It is much too ambitious for almost anyone else in Washington and the spending cuts are far too deep. Slashing spending by $8 trillion over a decade would result in draconian reductions in government programs, including important strands of the social safety net for those who need help the most.

But on taxes, he’s mostly looking in the right places. Among his proposals:

Cap the deduction on mortgage interest for primary residences and eliminate it for second homes.

Cap the exclusion on the value of employer-sponsored medical insurance.

Eliminate a range of tax breaks for production of alternative fuels and the purchase of energy efficient products, as well as some tax credits for the production of oil and gas.

Repeal a range of subsidies aimed at encouraging development in certain designated neighborhoods, such as empowerment zones and renewal communities.

Limit eligibility for the Earned Income Tax Credit to just five years.

Abolish a bunch of industry-specific tax breaks for railroads, agriculture, tackle box makers, NASCAR, dog and horse tracks, etc. etc.

Overall, Coburn is on target. My own list would differ from his, as, I am sure, would yours. For instance, I don’t like his EITC proposal. And I don’t buy his socialism label (this word has become far too cheap in our political lexicon).

But the point is that Coburn has a list. Unlike those lawmakers who vote for a balanced budget Constitutional amendment that can neither pass nor succeed, or those lawmakers who support deep, but unspecified, loophole-closers, Coburn puts his cards on the table. And sooner or later, if Congress is going to get serious about deficit reduction, his colleagues must do the same.

There are a bunch of deductions that people take and should not be taking. Coburn addresses many of them. The point is, rather than just adding tax to a certain segment of the population, get rid of dumb deductions.

http://blogs.forbes.com/beltway/2011/07/19/tom-coburn-tax-subsidies-are-socialism/

http://coburn.senate.gov/public//in...&File_id=c6590d01-017a-47b0-a15c-1336220ea7bf

 

[eliza61]

Hey Thanks Muushka, I had not heard of these ideas. Thanks for the info.

 

[Muushka]

Hi E

Looks like Coburn has gotten together with the gang of 6 with a plan that seems to be accepted by both sides.
We'll see as time goes by how it all pans out.

 

[Planogirl]

What's really scary to me is what the kids in high school and going to college will face. Will they even be able to find jobs? What should they study nowadays? Can they even afford college?

I'm not one to run around yelling that the sky is falling but so much seems so uncertain nowadays.

 

[princesspeach]

In regards to adding more jobs, healthcare is another huge factor for companies, large and small.

Many of the jobs being offered are "contract" positions that do not come with any benefits. The total overall cost of a new employee is much more than just the salary being offered.

This is a good point. I am a nurse and many hospitals are increasing there amount of unbenefited nurses. They pay us a higher wage with no benefits. Its actually cheaper for the hospitals to do this than employ full time benefited nurses. It works for me because my husband has benefits. I could see how this could be the trend in other professions also.

 

[snarlingcoyote]

My grandparents lived through the depression too and I've heard all the stories of deprivation and frugal living. They got through it by themselves without gov help.

My DMIL was in the Dust Bowl; there was no government assistance, so when DMIL was 16 her mother married her off to a man she had never met. This man gave her parents money so her younger siblings could eat. They couldn't grow anything; there were no jobs; the cattle had all starved to death. Try going out of state? There were reports of Okies being beaten to death in other states because they came in and stole jobs.

I think we tend to look to the past with rose-colored lenses sometimes, because the stories our parents and grandparents told us were the stories they wanted us to hear. (For example, the "accepted" story DMIL told about her 1st husband was that he was her childhood sweetheart and died of an appendicits.) For many it was a time of starvation, not just belt tightening.

Let's not dishonor the memories of those who suffered so much in that horrible time.

 

[Danibelle]

Its great to think that way, but were facing something that has never happened in our history. This country is very young and honestly we have NEVER had hard times.

My mom and dad lived through the depression in the 30's and told me there were lots of HARD TIMES. There are still many who remember that time.

 

[angwill]

There is a government shutdown looming. We narrowly (by mere hours) avoided a shutdown in April, but they came through with a budget plan to get us through the end of September. As I understand it, we have reached the cap on our loans from foreign countries (China mostly). The government will need to decide to increase the cap, or they will need to decide how we will afford to pay the loans either by a tax increase OR cutting major programs (like Social Security). If both sides (reps and dems) do not come to an agreement in time, the government could shut down for MONTHS. It is a very scary time in this country, and I agree with the PP that said we have never recovered from the CURRENT recession.

Perfectly said.

Also gas prices will not come down till unemployment is under control.

That said there are areas of the country that are harder hit by the current recession than others and it is hard to look outside our own backyard to understand what is going on in other parts of our country.

 

[ilovemk76]

Hi E

Looks like Coburn has gotten together with the gang of 6 with a plan that seems to be accepted by both sides.
We'll see as time goes by how it all pans out.

I hope they do the right thing and start down this path. We really are at a crossroads now and need to make the right decisions.

I do not beleive the sky is falling like many here seem to think. We are taking steps into a new economy. Many people get anxiety or worry when things change from their regular routine but we will adjust. Some will be worse off, some will be better off and for many it will just be another day. It will be an adventure no matter what the outcome.

 

[ilovemk76]

Perfectly said.

Also gas prices will not come down till unemployment is under control.


That said there are areas of the country that are harder hit by the current recession than others and it is hard to look outside our own backyard to understand what is going on in other parts of our country.

How will that cause gas prices to go down. The more people who are employed, the more gas that is consumed. More gas consumptions results is higher prices.

Gas demand is up world-wide and it will keep the cost of gas up.

 

[jjsmom]

My DMIL was in the Dust Bowl; there was no government assistance, so when DMIL was 16 her mother married her off to a man she had never met. This man gave her parents money so her younger siblings could eat. They couldn't grow anything; there were no jobs; the cattle had all starved to death. Try going out of state? There were reports of Okies being beaten to death in other states because they came in and stole jobs.

I think we tend to look to the past with rose-colored lenses sometimes, because the stories our parents and grandparents told us were the stories they wanted us to hear. (For example, the "accepted" story DMIL told about her 1st husband was that he was her childhood sweetheart and died of an appendicits.) For many it was a time of starvation, not just belt tightening.

Let's not dishonor the memories of those who suffered so much in that horrible time.

Absolutely and God bless them. Wow. I've heard similar stories of folks growing up in the dust bowl. Incredible. Fortunately, my gp's didn't have it QUITE so bad, as they lived near water (to fish), woods (to hunt), and a tiny bit of fertile farm land (my great gp was a sharecropper). All the kids (3 of em) were expected to work the land before school and take care of the house. My great gm had a traumatic brain injury due to a farm accident and couldn't do much. In 1940, my gm and her sister went to work in a factory, working 48 hours a week sewing Army uniforms. Their brother went into the army. The money brought in improved their quality of life a great deal.

 

[nunzia]

My DMIL was in the Dust Bowl; there was no government assistance, so when DMIL was 16 her mother married her off to a man she had never met. This man gave her parents money so her younger siblings could eat. They couldn't grow anything; there were no jobs; the cattle had all starved to death. Try going out of state? There were reports of Okies being beaten to death in other states because they came in and stole jobs.

I think we tend to look to the past with rose-colored lenses sometimes, because the stories our parents and grandparents told us were the stories they wanted us to hear. (For example, the "accepted" story DMIL told about her 1st husband was that he was her childhood sweetheart and died of an appendicits.) For many it was a time of starvation, not just belt tightening.

Let's not dishonor the memories of those who suffered so much in that horrible time.

Agreed..as the book says it was "The Worst Hard Time". My parents were kids during the depression and young adults during WWII. It was very tough and I think people had so much more appreciation for the things they had. They respected food and used every bit. There was no credit cards and I remember my Dad had a little notebook where he wrote down each bit of savings for an item he wanted. When you had something you took care of it and clothes were mended until they fell apart. I do not think, as I have said, that this the end of America, but we are teetering..I hope we are learning and will make the adjustments needed before it gets really bad. I think we have all become so spoiled by our standards of living that things will become painful as we adjust, but hopefully we will come out stronger. Not everyone can or should have the right to college degrees, home ownership and high paying jobs. People need to realize that stuff isn't everything. You don't need alot to be happy and have a wonderful life. My Mom's Dad and his wife were well off..what a stuffy visit we had there..my Dad had to wear a suit when we visited and us kids had to dress up like church. My Dad's family came from Sicily in the early 1900's (during WWII they had their radio and other things taken away..many Italians and Germans had a milder form of what the Japanese had happen to them as well..read Una Storia Segreta..anyway) my Grandpa had worked for the railroad as a fireman and during a wreck he lost part of his skull(so odd..you could see his heartbeat on the top of his head) and when he tried to get some settlement from the railroad he was blackballed..unions DID have a place then...so he became a San Jose city bus driver for years and years..They had little money and were frugal and their house was much more fun to be at..I digress..but what I'm getting at is it has only been in a generation that our expectations have skyrocketed and I think it's time for us all to pull back..either voluntarily or it will happen as things collapse because of our decades of foolishness.

 

[Muushka]

What's really scary to me is what the kids in high school and going to college will face. Will they even be able to find jobs? What should they study nowadays? Can they even afford college?

I'm not one to run around yelling that the sky is falling but so much seems so uncertain nowadays.

No, many probably can't afford college. But the government is propping up the educational scheme.
And the taxpayers will be on the hook for the student loans (that will probably be forgiven).

 

[eliza61]

Perfectly said.

Also gas prices will not come down till unemployment is under control.

That said there are areas of the country that are harder hit by the current recession than others and it is hard to look outside our own backyard to understand what is going on in other parts of our country.

What does gas prices have to do with unemployment?

 

[eliza61]

No, many probably can't afford college. But the government is propping up the educational scheme.
And the taxpayers will be on the hook for the student loans (that will probably be forgiven).

Student loan default rate is about 7%. Generally student loans are very hard to forgive. they are not discharged in bankruptcy anymore and federal loans are forgiven only partially & usually only after 10-20 years. not much impact on the national debt.

So let me ask, 'whats the alternative. Seriously. This is a global market, our kids are already at the bottom of the barrel as far as technology jobs are concerned. My company cannot find American born Phd scientist in 2011. Google, Yahoo and microsoft all are screaming that they have to hire from Asia and SE Asia for most of their technology jobs. Google executives were on 60 minutes last summer lamenting the fact that they cannot find American computer science/computer engineering graduate student.

My husband is an oil exc and it takes them months of hiring (and yes oil companies are hiring) to find qualified entry level candidates in science in engineering and his company pay 65K starting salary.
Boeing just got a military contract to build fighter jets and is thinking about moving the operation to the UK because they can't find a qualified pool of trained people here in PA. Don't you think that's sad when we have to get a foreign company to build our military aparatus because we're not tech saavy?

Now add that to the fact that we make absolutely very little here.

Now health care still seems to be a growing field but that's still a field that in order to make a good salary you need a college degree. Do you really want a GP or a Nurse practicioner who was uneducated? A large portion of our population is older, PT, OT, radiologist, geriatric medicine are all areas with expected growth but once again, do I really want some one who is not trained? Radiologist are required to be certified and trained here in the US to ensure that a basic min. of standard is achieve. We complain now when cc companies ship their customer service to India because we can't understand them.

Heck in NYC in order to be eligible to take the Police exam (and this is in order to take the test, not even talking about what they want in order to get hired) you have to have 60 college credits from an accredited college or university or 2 years military service.

So either we educate our children or we get ready for a generation of kids who are only fit to serve breakfast at cracker barrel or a larger and larger population of our country who can only find minimum wage, menial jobs. So now you've got a smaller and smaller middle class base and a growing working poor base that does not pay taxes.

So where does it leave us if our workforce falls further and further behind and let's face it, every thing in 2011 is about technology. Heck, even farmers are changing the way they farm due to the advancements in agriculture. I know so many farmers in Souther NJ who's kids are in college getting degrees in Agriculture and animal husbandry in order to come back and run the family farm.

Seems to me, this would be a worse scenerio.