Latest Fiscal Cliff Deal….

[paramount]

Are we certain future generations are going to pay for this all of this debt?

From what I’m reading, about 80% of households will pay around $1600-$1700 more in taxes per year (federal).

And that doesn’t include California tax increases.

At least that’s my understanding…

[flyer]

You may be referring to the reinstatement of the 6.2% payroll tax, which will increase taxes for most households.

IMO, this particular source of revenue will amount to a drop in the bucket with regard to offsetting the trillions in debt we are amassing in this country, the bulk of which younger generations will definitely pay for in one way or another.

[livinincali]

[quote=paramount]Are we certain future generations are going to pay for this all of this debt?
[/quote]

No they probably won’t. They’ll probably be more than willing to throw granny under the bus, right after they default on their obligations to China.

[ninaprincess]

They made such a big fuss cutting approximately 5% of the deficit spendings ($65 bil per year compared to $1100 bil deficit spendings). We are in so much trouble.

I was hoping for the fiscal cliff to happen. Cutting 10% of the government is a good starting point. I work for the government and I think laying off 20% of the most lazy peopole in my group would not affect productivity at all.

[Coronita]

I think what we have here is an opportunity. The majority of Americans are going to piss away money and spend even more money they don’t have. A small percentage of Americans will accumulate even more . Especially now we are pretty certain that cheap credit for well qualified people is here to stay for some time. Coupled with what appears to be reinflating asset prices (home and stock market) I think it is going to be great for people who are comfortable with taking a calculated above average risk. Morale of the story…..borrow as much as you can at these ridiculous fixed term rates. Because in a few years this is gonna look cheap.

[no_such_reality]

Interesting squeeze coming up for the housing market and population centers. I’m seeing a huge 0.5% split between conforming and jumbo.

How I have a choice, do I burn a rental down payment to push my primary to a conforming level?

[an]

[quote=flu]Morale of the story…..borrow as much as you can at these ridiculous fixed term rates. Because in a few years this is gonna look cheap.[/quote]That’s the way I felt when the interest rate I get from a CD drop bellow 3%. It has been working well so far. Here’s to hope that we’ll see a repeat of 1970-80.

[The-Shoveler]

[quote=AN][quote=flu]Morale of the story…..borrow as much as you can at these ridiculous fixed term rates. Because in a few years this is gonna look cheap.[/quote]That’s the way I felt when the interest rate I get from a CD drop bellow 3%. It has been working well so far. Here’s to hope that we’ll see a repeat of 1970-80.[/quote]

1970-80 U.S.A. Cities looked more like Asia cities as far as smog an most people smoked (it was the cool thing to do) and people were expect to (and generally did) only live 1 or 2 maybe 5 years past retirement.
That would not be kind to the current crop of retirees so there is a lot of resistance right now to ANY!!! inflation.

But yea that is really the only way out baring a major flush down the toilet of the economy.

5-7% inflation is really fairly normal IMO.

[carlsbadworker]

[quote=flu]Morale of the story…..borrow as much as you can at these ridiculous fixed term rates. Because in a few years this is gonna look cheap.[/quote]

I won’t over-borrow just because the rates are low.

Couple of years ago when Greenspan first started to offer ridiculous low interest rate, I had a friend who said “I don’t care the housing price is high. Couple years from now, maybe the price will drop but the interest rate will move up. And we end up in the same boat”. Fast forwarding a couple years, he has now foreclosed his house and moved to Arizona.

Maybe the rate will become cheaper again…after the initial bond price hike kills corporate America which is now very addicted to cheap debt. And if unemployment is 25%, I don’t know how one (household or corporation) can pay back the principal regardless of the interest rate.

[flyer]

[quote=livinincali][quote=paramount]Are we certain future generations are going to pay for this all of this debt?
[/quote]

No they probably won’t. They’ll probably be more than willing to throw granny under the bus, right after they default on their obligations to China.[/quote]

Actually, you may be right, and I wouldn’t be surprised if either of those things happened. In many ways the younger generations have been thrown under the bus with regard to well-paying jobs, affordable housing, retirement, etc., so turnabout is fair play.

My kids who are all in their late 20’s were lucky, but the great majority of their friends around their age and younger, seem to be fighting an uphill battle on all fronts, and it doesn’t look like it’s going to get better for them any time soon.

On the plus side, as flu and AN mentioned, for those of us who have the funds, the past few years have been a fantastic time to further cash in on some great buying opportunities with regard to real estate, etc. In that way, it’s actually been a great time to accumulate even more wealth that can be passed on to your kids.

[an]

[quote=The-Shoveler]1970-80 U.S.A. Cities looked more like Asia cities as far as smog an most people smoked (it was the cool thing to do) and people were expect to (and generally did) only live 1 or 2 maybe 5 years past retirement.
That would not be kind to the current crop of retirees so there is a lot of resistance right now to ANY!!! inflation.

But yea that is really the only way out baring a major flush down the toilet of the economy.

5-7% inflation is really fairly normal IMO.[/quote]I’m not talk about a way for the US economy. I’m just saying that I’m set up to reap the most return if we see a repeat of 70-80. If we don’t, I’ll do fine but not as well.

[an]

[quote=carlsbadworker][quote=flu]Morale of the story…..borrow as much as you can at these ridiculous fixed term rates. Because in a few years this is gonna look cheap.[/quote]

I won’t over-borrow just because the rates are low.[/quote]
I doubt flu mean max out borrowing regardless of reason. So, even if we don’t see massive inflation, the rental income would more than suffice.

[SD Realtor]

Maybe it will be an inverted sellout. That is, the younger generation that is screwed by our selfish behavior now, will perhaps in 15 or 20 years massively slash medicare and social security for senior citizens and simply say, sorry we cannot afford your care… so since you put us in this mess, we will create mega sized institutions with nominal care that will be a fraction of the cost of your care. You can go there to live and be cared for, or your families can take care of you.

Wouldn’t that be a laugh!

[The-Shoveler]

Robots,

or maybe they will hook us up Matrix like so we think we are living in shady acres retirement community,

Or

Retirement communes,

some combination of the above,

[flyer]

[quote=SD Realtor]Maybe it will be an inverted sellout. That is, the younger generation that is screwed by our selfish behavior now, will perhaps in 15 or 20 years massively slash medicare and social security for senior citizens and simply say, sorry we cannot afford your care… so since you put us in this mess, we will create mega sized institutions with nominal care that will be a fraction of the cost of your care. You can go there to live and be cared for, or your families can take care of you.

Wouldn’t that be a laugh![/quote]

Actually, it would be a laugh, since everyone will be old someday, and unless they are independently wealthy, something like this would ultimately effect their own grandparents, parents, and, eventually even themselves.

That’s why I, and most everyone I know have planned their lives so we won’t be dependent on medicare or social security. Along with our own financial assets, we’ll receive pensions and healthcare from our employers. Darn unions.

[Author]

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