nehalem256
Lifer
- Apr 13, 2012
- 15,669
- 8
- 0
Nobody is "required" to invest in anything, btw.
If you dont want to lose your hard earned money to inflation... then yes you are.
Nobody is "required" to invest in anything, btw.
That would be a problem of raises not being frequent enough. The solution would be for continuous adjustment of wages for inflation... which would be impossible.
Or investment returns need to be poor. The last decade or so ring any bells for you?
Or perhaps investments in bonds. Checked interest rates they are paying out recently?
EDIT: And you could save a lot of space by just saying you hate rich people and do not actually care about tax "fairness".
Pure denial of the true believer, one who worships the wealthy as having God-like qualities and who deserve special considerations as sanctified objects of worship. Why, they deserve for the income tax system to preserve the value of their principal above and beyond what it earns, because, well, because they're rich, right? A guy making $500K/yr in earned income deserves to pay a higher rate than investors because he's not really rich at all, because he has no principal to protect, huh?
Riiiight. That's why we've had decoupling for the last 30+ years' and why median family income & below as as % of GDP has shrunk...
7% is the average rate of return in the stock market over many, many years. Your notion that the Fed is suppressing savers is hogwash, because what we're experiencing is a liquidity trap of saving & a flight to safety among investors. Yield on govt securities is low because demand is high, not for any other reason, and yield for savers follows the same rationale. It's about expectations of future inflation & perceived risk wrt other investments. Corporate cash reserves are enormous as well.
Nobody is "required" to invest in anything, btw.
Inflation is near zero, so I don't see how real interest rates are currently negative.
Which is completely irrelevant to my point. That other forces have effected wages has nothing to do with the fact that when any party enters into a contract, they consider expected inflation over the period of the contract. It's only unexpected inflation that has a distributional effect on the parties in the contract.
The Fed is driving demand for risk free assets, which lowers yields if said assets, which pushes investors into risky assets. The Fed currently owns around 12% of US debt and was buying over 60% of new issues at the peak of QE2. I don't know what percent they are buying now to maintain their balance sheet but I would guess it's at least 30%.
Financial repression is absolutely real. Do you dispute that:
1. Real interest rates are currently negative
2. Number 1 is impossible without central bank intervention in the market
SS is the most progressive tax we have. The more SS tax you pay, the less marginal benefit you get. The lesser you pay, the more return you get.
SS is the most progressive tax we have. The more SS tax you pay, the less marginal benefit you get. The lesser you pay, the more return you get.