[davelj]

[quote=CA renter]Like I’ve suggested before…I’m sure most public workers would be happy to roll back their compensation to 1995 levels. But in order for them to maintain their ~1995 purchasing power, we’d have to see asset prices fall to 1995 levels. That means “the rich” would take some pretty significant losses. Not only that, but we should restore ~1995 tax rates in order to correct all the imbalances as well.

In other words, let’s ALL go back to ~1995 levels.

Would you agree to those terms?[/quote]

Well, how about we use 1998 just because I have the stats at my fingertips (and there was no meaningful Bubble Action between 1995 and 1998, so this shouldn’t make a big difference).

The CPI has increased by 2.4% since 1998. The S&P 500 has returned 4.1% (nominal) annually since January 1998. So, where stocks are concerned – a pretty big asset of “The Rich,” I think you’d agree – going back to 1998 wouldn’t be a huge drop from here (in fact, it would be about a 22% decline from current levels – which would be healthy, frankly). But I think you’d agree that this 1.7% annualized real return for The Rich from stocks is nothing to brag about (but certainly better than nothing).

Rents have increased by 3.6% (nominal) annually since 1998, or 1.2% greater than the overall inflation rate. U.S. housing – not adjusted for increased average size – appears to be about 13% higher in real terms (see graph below) than it was in 1998, but two caveats: (1) again, the average home is larger today, which isn’t captured in the graph, and (2) as one of Rich’s graphs (House Payment-to-Income Ratio) illustrates, the actual cost of ownership (here in SD) is lower today than it was in 1998 (and well below 1995 levels).

http://mysite.verizon.net/vzeqrguz/housingbubble/

So, when you say, “Let’s ALL go back to ~1995 levels,” I don’t think we’re that far off in real terms (yes, I’ve used 1998 as my base year).

So, I don’t think most public workers’ purchasing power is too far off of mid- to late-90s levels, but I’ll grant you that it probably hasn’t improved much over the last 13+ years. But, recall, that wasn’t your argument… you said they’d be happy roll back to that level of purchasing power parity, and I think they’re very close to being there now. They just don’t like the fact that it hasn’t gotten any better. (And a lot of these folks have probably gotten into debt keeping up with the Joneses over the last many years – that is, it *feels* like they’re struggling more – and that’s not the taxpayers’ fault.) But that’s a separate argument. An argument could be made that with the stability of a government job comes little in the way of real (as opposed to nominal) wage gains. I’m just sayin’…

[davelj]

[quote=CA renter]Like I’ve suggested before…I’m sure most public workers would be happy to roll back their compensation to 1995 levels. But in order for them to maintain their ~1995 purchasing power, we’d have to see asset prices fall to 1995 levels. That means “the rich” would take some pretty significant losses. Not only that, but we should restore ~1995 tax rates in order to correct all the imbalances as well.

In other words, let’s ALL go back to ~1995 levels.

Would you agree to those terms?[/quote]

Well, how about we use 1998 just because I have the stats at my fingertips (and there was no meaningful Bubble Action between 1995 and 1998, so this shouldn’t make a big difference).

The CPI has increased by 2.4% since 1998. The S&P 500 has returned 4.1% (nominal) annually since January 1998. So, where stocks are concerned – a pretty big asset of “The Rich,” I think you’d agree – going back to 1998 wouldn’t be a huge drop from here (in fact, it would be about a 22% decline from current levels – which would be healthy, frankly). But I think you’d agree that this 1.7% annualized real return for The Rich from stocks is nothing to brag about (but certainly better than nothing).

Rents have increased by 3.6% (nominal) annually since 1998, or 1.2% greater than the overall inflation rate. U.S. housing – not adjusted for increased average size – appears to be about 13% higher in real terms (see graph below) than it was in 1998, but two caveats: (1) again, the average home is larger today, which isn’t captured in the graph, and (2) as one of Rich’s graphs (House Payment-to-Income Ratio) illustrates, the actual cost of ownership (here in SD) is lower today than it was in 1998 (and well below 1995 levels).

http://mysite.verizon.net/vzeqrguz/housingbubble/

So, when you say, “Let’s ALL go back to ~1995 levels,” I don’t think we’re that far off in real terms (yes, I’ve used 1998 as my base year).

So, I don’t think most public workers’ purchasing power is too far off of mid- to late-90s levels, but I’ll grant you that it probably hasn’t improved much over the last 13+ years. But, recall, that wasn’t your argument… you said they’d be happy roll back to that level of purchasing power parity, and I think they’re very close to being there now. They just don’t like the fact that it hasn’t gotten any better. (And a lot of these folks have probably gotten into debt keeping up with the Joneses over the last many years – that is, it *feels* like they’re struggling more – and that’s not the taxpayers’ fault.) But that’s a separate argument. An argument could be made that with the stability of a government job comes little in the way of real (as opposed to nominal) wage gains. I’m just sayin’…

[davelj]

[quote=CA renter]Like I’ve suggested before…I’m sure most public workers would be happy to roll back their compensation to 1995 levels. But in order for them to maintain their ~1995 purchasing power, we’d have to see asset prices fall to 1995 levels. That means “the rich” would take some pretty significant losses. Not only that, but we should restore ~1995 tax rates in order to correct all the imbalances as well.

In other words, let’s ALL go back to ~1995 levels.

Would you agree to those terms?[/quote]

Well, how about we use 1998 just because I have the stats at my fingertips (and there was no meaningful Bubble Action between 1995 and 1998, so this shouldn’t make a big difference).

The CPI has increased by 2.4% since 1998. The S&P 500 has returned 4.1% (nominal) annually since January 1998. So, where stocks are concerned – a pretty big asset of “The Rich,” I think you’d agree – going back to 1998 wouldn’t be a huge drop from here (in fact, it would be about a 22% decline from current levels – which would be healthy, frankly). But I think you’d agree that this 1.7% annualized real return for The Rich from stocks is nothing to brag about (but certainly better than nothing).

Rents have increased by 3.6% (nominal) annually since 1998, or 1.2% greater than the overall inflation rate. U.S. housing – not adjusted for increased average size – appears to be about 13% higher in real terms (see graph below) than it was in 1998, but two caveats: (1) again, the average home is larger today, which isn’t captured in the graph, and (2) as one of Rich’s graphs (House Payment-to-Income Ratio) illustrates, the actual cost of ownership (here in SD) is lower today than it was in 1998 (and well below 1995 levels).

http://mysite.verizon.net/vzeqrguz/housingbubble/

So, when you say, “Let’s ALL go back to ~1995 levels,” I don’t think we’re that far off in real terms (yes, I’ve used 1998 as my base year).

So, I don’t think most public workers’ purchasing power is too far off of mid- to late-90s levels, but I’ll grant you that it probably hasn’t improved much over the last 13+ years. But, recall, that wasn’t your argument… you said they’d be happy roll back to that level of purchasing power parity, and I think they’re very close to being there now. They just don’t like the fact that it hasn’t gotten any better. (And a lot of these folks have probably gotten into debt keeping up with the Joneses over the last many years – that is, it *feels* like they’re struggling more – and that’s not the taxpayers’ fault.) But that’s a separate argument. An argument could be made that with the stability of a government job comes little in the way of real (as opposed to nominal) wage gains. I’m just sayin’…

[davelj]

[quote=CA renter]Like I’ve suggested before…I’m sure most public workers would be happy to roll back their compensation to 1995 levels. But in order for them to maintain their ~1995 purchasing power, we’d have to see asset prices fall to 1995 levels. That means “the rich” would take some pretty significant losses. Not only that, but we should restore ~1995 tax rates in order to correct all the imbalances as well.

In other words, let’s ALL go back to ~1995 levels.

Would you agree to those terms?[/quote]

Well, how about we use 1998 just because I have the stats at my fingertips (and there was no meaningful Bubble Action between 1995 and 1998, so this shouldn’t make a big difference).

The CPI has increased by 2.4% since 1998. The S&P 500 has returned 4.1% (nominal) annually since January 1998. So, where stocks are concerned – a pretty big asset of “The Rich,” I think you’d agree – going back to 1998 wouldn’t be a huge drop from here (in fact, it would be about a 22% decline from current levels – which would be healthy, frankly). But I think you’d agree that this 1.7% annualized real return for The Rich from stocks is nothing to brag about (but certainly better than nothing).

Rents have increased by 3.6% (nominal) annually since 1998, or 1.2% greater than the overall inflation rate. U.S. housing – not adjusted for increased average size – appears to be about 13% higher in real terms (see graph below) than it was in 1998, but two caveats: (1) again, the average home is larger today, which isn’t captured in the graph, and (2) as one of Rich’s graphs (House Payment-to-Income Ratio) illustrates, the actual cost of ownership (here in SD) is lower today than it was in 1998 (and well below 1995 levels).

http://mysite.verizon.net/vzeqrguz/housingbubble/

So, when you say, “Let’s ALL go back to ~1995 levels,” I don’t think we’re that far off in real terms (yes, I’ve used 1998 as my base year).

So, I don’t think most public workers’ purchasing power is too far off of mid- to late-90s levels, but I’ll grant you that it probably hasn’t improved much over the last 13+ years. But, recall, that wasn’t your argument… you said they’d be happy roll back to that level of purchasing power parity, and I think they’re very close to being there now. They just don’t like the fact that it hasn’t gotten any better. (And a lot of these folks have probably gotten into debt keeping up with the Joneses over the last many years – that is, it *feels* like they’re struggling more – and that’s not the taxpayers’ fault.) But that’s a separate argument. An argument could be made that with the stability of a government job comes little in the way of real (as opposed to nominal) wage gains. I’m just sayin’…

[davelj]

[quote=CA renter][quote=davelj][quote=CA renter]
Once those things are done, see where everything stands, and then raise certain taxes, if necessary. I have a feeling we’d end up with a surplus if we enacted the changes noted above, though.[/quote]

How about a 10% additional marginal tax rate on all earned income above $1 million?

And how about figuring out how to change the tax code in a manner that forces the thousands of real estate deci-millionaires in CA to actually pay income taxes?

Currently the depreciation rules are a complete joke. I routinely see credit files during loan review of folks with several $million in cash flow from real estate ventures that have, for all intents and purposes, never paid taxes… and it’s all legal.[/quote]

Great! Now we’re getting somewhere. 🙂

See, hell does freeze over every once in awhile.[/quote]

It ain’t that complicated. The big potential source of revenue is higher taxes on the Super Rich (and it’s politically popular too!). The big expenditures – and thus big sources of savings – are on pensions and health care benefits for public employees (as a group). Everything else is just fiddle-fucking around at the periphery of the problem.

As I’ve said many times… we were in pretty good shape back in 1998. CA’s 2011 budget, adjusted for inflation and population growth (and including illegal immigration) *should* be about $115 billion. Hell, let’s call it $120 billion. So, how did we get to $25 billion ABOVE that number over time? We hired a lot of new public employees and promised the ones that were already there unsustainable benefits… and here we are.

If I were running this state – and I thank the Fates that I’m not – I would just go to every department in the state and say, “Start with your 1998 budget, increase it by inflation + population growth (with a plug for illegal immigration) + an error factor… and that’s your budget. I don’t give a rat’s ass how you want to meet your budget – just do it. If you want to cut wages, then cut wages. If you want to fire people, then fire people. Just do it. Because everything was perfectly acceptable back then. So, it’s Back to the 90s, folks! Learn to love it! Otherwise… (to quote the Donald)… You’re fired!”

[davelj]

[quote=CA renter][quote=davelj][quote=CA renter]
Once those things are done, see where everything stands, and then raise certain taxes, if necessary. I have a feeling we’d end up with a surplus if we enacted the changes noted above, though.[/quote]

How about a 10% additional marginal tax rate on all earned income above $1 million?

And how about figuring out how to change the tax code in a manner that forces the thousands of real estate deci-millionaires in CA to actually pay income taxes?

Currently the depreciation rules are a complete joke. I routinely see credit files during loan review of folks with several $million in cash flow from real estate ventures that have, for all intents and purposes, never paid taxes… and it’s all legal.[/quote]

Great! Now we’re getting somewhere. 🙂

See, hell does freeze over every once in awhile.[/quote]

It ain’t that complicated. The big potential source of revenue is higher taxes on the Super Rich (and it’s politically popular too!). The big expenditures – and thus big sources of savings – are on pensions and health care benefits for public employees (as a group). Everything else is just fiddle-fucking around at the periphery of the problem.

As I’ve said many times… we were in pretty good shape back in 1998. CA’s 2011 budget, adjusted for inflation and population growth (and including illegal immigration) *should* be about $115 billion. Hell, let’s call it $120 billion. So, how did we get to $25 billion ABOVE that number over time? We hired a lot of new public employees and promised the ones that were already there unsustainable benefits… and here we are.

If I were running this state – and I thank the Fates that I’m not – I would just go to every department in the state and say, “Start with your 1998 budget, increase it by inflation + population growth (with a plug for illegal immigration) + an error factor… and that’s your budget. I don’t give a rat’s ass how you want to meet your budget – just do it. If you want to cut wages, then cut wages. If you want to fire people, then fire people. Just do it. Because everything was perfectly acceptable back then. So, it’s Back to the 90s, folks! Learn to love it! Otherwise… (to quote the Donald)… You’re fired!”

[davelj]

[quote=CA renter][quote=davelj][quote=CA renter]
Once those things are done, see where everything stands, and then raise certain taxes, if necessary. I have a feeling we’d end up with a surplus if we enacted the changes noted above, though.[/quote]

How about a 10% additional marginal tax rate on all earned income above $1 million?

And how about figuring out how to change the tax code in a manner that forces the thousands of real estate deci-millionaires in CA to actually pay income taxes?

Currently the depreciation rules are a complete joke. I routinely see credit files during loan review of folks with several $million in cash flow from real estate ventures that have, for all intents and purposes, never paid taxes… and it’s all legal.[/quote]

Great! Now we’re getting somewhere. 🙂

See, hell does freeze over every once in awhile.[/quote]

It ain’t that complicated. The big potential source of revenue is higher taxes on the Super Rich (and it’s politically popular too!). The big expenditures – and thus big sources of savings – are on pensions and health care benefits for public employees (as a group). Everything else is just fiddle-fucking around at the periphery of the problem.

As I’ve said many times… we were in pretty good shape back in 1998. CA’s 2011 budget, adjusted for inflation and population growth (and including illegal immigration) *should* be about $115 billion. Hell, let’s call it $120 billion. So, how did we get to $25 billion ABOVE that number over time? We hired a lot of new public employees and promised the ones that were already there unsustainable benefits… and here we are.

If I were running this state – and I thank the Fates that I’m not – I would just go to every department in the state and say, “Start with your 1998 budget, increase it by inflation + population growth (with a plug for illegal immigration) + an error factor… and that’s your budget. I don’t give a rat’s ass how you want to meet your budget – just do it. If you want to cut wages, then cut wages. If you want to fire people, then fire people. Just do it. Because everything was perfectly acceptable back then. So, it’s Back to the 90s, folks! Learn to love it! Otherwise… (to quote the Donald)… You’re fired!”

[davelj]

[quote=CA renter][quote=davelj][quote=CA renter]
Once those things are done, see where everything stands, and then raise certain taxes, if necessary. I have a feeling we’d end up with a surplus if we enacted the changes noted above, though.[/quote]

How about a 10% additional marginal tax rate on all earned income above $1 million?

And how about figuring out how to change the tax code in a manner that forces the thousands of real estate deci-millionaires in CA to actually pay income taxes?

Currently the depreciation rules are a complete joke. I routinely see credit files during loan review of folks with several $million in cash flow from real estate ventures that have, for all intents and purposes, never paid taxes… and it’s all legal.[/quote]

Great! Now we’re getting somewhere. 🙂

See, hell does freeze over every once in awhile.[/quote]

It ain’t that complicated. The big potential source of revenue is higher taxes on the Super Rich (and it’s politically popular too!). The big expenditures – and thus big sources of savings – are on pensions and health care benefits for public employees (as a group). Everything else is just fiddle-fucking around at the periphery of the problem.

As I’ve said many times… we were in pretty good shape back in 1998. CA’s 2011 budget, adjusted for inflation and population growth (and including illegal immigration) *should* be about $115 billion. Hell, let’s call it $120 billion. So, how did we get to $25 billion ABOVE that number over time? We hired a lot of new public employees and promised the ones that were already there unsustainable benefits… and here we are.

If I were running this state – and I thank the Fates that I’m not – I would just go to every department in the state and say, “Start with your 1998 budget, increase it by inflation + population growth (with a plug for illegal immigration) + an error factor… and that’s your budget. I don’t give a rat’s ass how you want to meet your budget – just do it. If you want to cut wages, then cut wages. If you want to fire people, then fire people. Just do it. Because everything was perfectly acceptable back then. So, it’s Back to the 90s, folks! Learn to love it! Otherwise… (to quote the Donald)… You’re fired!”

[davelj]

[quote=CA renter][quote=davelj][quote=CA renter]
Once those things are done, see where everything stands, and then raise certain taxes, if necessary. I have a feeling we’d end up with a surplus if we enacted the changes noted above, though.[/quote]

How about a 10% additional marginal tax rate on all earned income above $1 million?

And how about figuring out how to change the tax code in a manner that forces the thousands of real estate deci-millionaires in CA to actually pay income taxes?

Currently the depreciation rules are a complete joke. I routinely see credit files during loan review of folks with several $million in cash flow from real estate ventures that have, for all intents and purposes, never paid taxes… and it’s all legal.[/quote]

Great! Now we’re getting somewhere. 🙂

See, hell does freeze over every once in awhile.[/quote]

It ain’t that complicated. The big potential source of revenue is higher taxes on the Super Rich (and it’s politically popular too!). The big expenditures – and thus big sources of savings – are on pensions and health care benefits for public employees (as a group). Everything else is just fiddle-fucking around at the periphery of the problem.

As I’ve said many times… we were in pretty good shape back in 1998. CA’s 2011 budget, adjusted for inflation and population growth (and including illegal immigration) *should* be about $115 billion. Hell, let’s call it $120 billion. So, how did we get to $25 billion ABOVE that number over time? We hired a lot of new public employees and promised the ones that were already there unsustainable benefits… and here we are.

If I were running this state – and I thank the Fates that I’m not – I would just go to every department in the state and say, “Start with your 1998 budget, increase it by inflation + population growth (with a plug for illegal immigration) + an error factor… and that’s your budget. I don’t give a rat’s ass how you want to meet your budget – just do it. If you want to cut wages, then cut wages. If you want to fire people, then fire people. Just do it. Because everything was perfectly acceptable back then. So, it’s Back to the 90s, folks! Learn to love it! Otherwise… (to quote the Donald)… You’re fired!”

[davelj]

[quote=CA renter]
Once those things are done, see where everything stands, and then raise certain taxes, if necessary. I have a feeling we’d end up with a surplus if we enacted the changes noted above, though.[/quote]

How about a 10% additional marginal tax rate on all earned income above $1 million?

And how about figuring out how to change the tax code in a manner that forces the thousands of real estate deci-millionaires in CA to actually pay income taxes?

Currently the depreciation rules are a complete joke. I routinely see credit files during loan review of folks with several $million in cash flow from real estate ventures that have, for all intents and purposes, never paid taxes… and it’s all legal.

[davelj]

[quote=CA renter]
Once those things are done, see where everything stands, and then raise certain taxes, if necessary. I have a feeling we’d end up with a surplus if we enacted the changes noted above, though.[/quote]

How about a 10% additional marginal tax rate on all earned income above $1 million?

And how about figuring out how to change the tax code in a manner that forces the thousands of real estate deci-millionaires in CA to actually pay income taxes?

Currently the depreciation rules are a complete joke. I routinely see credit files during loan review of folks with several $million in cash flow from real estate ventures that have, for all intents and purposes, never paid taxes… and it’s all legal.

[davelj]

[quote=CA renter]
Once those things are done, see where everything stands, and then raise certain taxes, if necessary. I have a feeling we’d end up with a surplus if we enacted the changes noted above, though.[/quote]

How about a 10% additional marginal tax rate on all earned income above $1 million?

And how about figuring out how to change the tax code in a manner that forces the thousands of real estate deci-millionaires in CA to actually pay income taxes?

Currently the depreciation rules are a complete joke. I routinely see credit files during loan review of folks with several $million in cash flow from real estate ventures that have, for all intents and purposes, never paid taxes… and it’s all legal.

[davelj]

[quote=CA renter]
Once those things are done, see where everything stands, and then raise certain taxes, if necessary. I have a feeling we’d end up with a surplus if we enacted the changes noted above, though.[/quote]

How about a 10% additional marginal tax rate on all earned income above $1 million?

And how about figuring out how to change the tax code in a manner that forces the thousands of real estate deci-millionaires in CA to actually pay income taxes?

Currently the depreciation rules are a complete joke. I routinely see credit files during loan review of folks with several $million in cash flow from real estate ventures that have, for all intents and purposes, never paid taxes… and it’s all legal.

[davelj]

[quote=CA renter]
Once those things are done, see where everything stands, and then raise certain taxes, if necessary. I have a feeling we’d end up with a surplus if we enacted the changes noted above, though.[/quote]

How about a 10% additional marginal tax rate on all earned income above $1 million?

And how about figuring out how to change the tax code in a manner that forces the thousands of real estate deci-millionaires in CA to actually pay income taxes?

Currently the depreciation rules are a complete joke. I routinely see credit files during loan review of folks with several $million in cash flow from real estate ventures that have, for all intents and purposes, never paid taxes… and it’s all legal.

[davelj]

[quote=Allan from Fallbrook]
So, while the unions are making concessions, we arrive at the point of, are the concessions enough? [/quote]

This is why playing the game of “who is making concessions?” is a bit of a red herring.

An analogy: If a Fat Cat CEO is making $5 million a year and then reduces his pay to “only” $2.5 million because the company’s facing hard times… well, s/he’s still (way) overpaid.

Likewise, on an aggregate basis, if certain groups of public employees are still earning in excess of what the market would bear (including ALL benefits and amortized over their actual working lives) in the absence of union pressure applied to the political class… then even after making some modest “concessions” they still may be overpaid. My point is that the value of “concessions” is meaningless outside of the context of TOTAL compensation and its relation to what the market would bear absent the wielding of political pressure.

The Fat Cats make too much. Likewise, as a group, so do many public employees.

[Author]

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