[livinincali]

[quote=gzz]How long can this last without a big price increase? A year ago OB/92107 had around 25 condos and 45 single families on the market, now it is 4 condos and 20 single families.
[/quote]

For as long as buyers remain patient. Put your house up for a with a make me move price and see what happens. That will probably show you the dynamics of this market. It will move if priced right, it will sit if it’s priced wrong.

[livinincali]

[quote=SK in CV]
Nope. Banks have been required to reclassify debt as soon as it’s delinquent. Including taking reasonable impairment charges. That hasn’t changed for decades. Keep in mind that the vast majority of mortgages are not owned by banks.
[/quote]

This was true until the FASB changes in April of 2009. Now there’s a lot more leeway into how you want to treat asset prices. In essence it’s easier to classify something as temporary now.

http://www.fasb.org/sbd040209.shtml

[quote]
The Board decided to replace the existing requirement that the entity’s management assert it has both the intent and ability to hold an impaired security until recovery with a requirement that management assert

It does not have the intent to sell the security; and

It is more likely than not it will not have to sell the security before recovery of its costs basis.
[/quote]

[livinincali]

[quote=Jazzman]
Another major problem is explaining the problem, which you need to do if you’re going to provide a fix. “We’re in debt up to our eye balls, the US economy will crash, taxes must go up, and costs must be slashed”. So everyone gets it, but you are still left with a divided government and special interests. Introduce a parliamentary system?
[/quote]

Best case is probably something like Greece. Default on most of the former obligations and balance the budget via tax hikes and spending cuts. You go into a pretty deep depression but democracy is maintained and eventually things clear up and we grow again. In essence everything becomes pay as you go. Can’t pay for that level of service now than it won’t be available.

Worst case is some kind of hyper inflationary event caused by the government trying to print those promises. That would likely be followed by some kind of revolution where we end up with some kind of dictator that appeals to the masses or the states splinter off.

I figure whatever happens CA will probably go hard core socialist whether it’s with the nation as a whole or by itself.

[livinincali]

I fail to see how this would help anything. The only way you would need money to refi is if you’re underwater. Why wouldn’t you just declare BK if you had a bunch of debts and keep your 401K money. The 401K money is shielded from bankruptcy.

[livinincali]

[quote=CA renter]
This is the part that ticks me off most about the whole anti-union/pro-privatization movement. The unions WERE making concessions throughout this entire period. Many unions even offered to make concessions without being asked, simply because they understood the difficult situation that their employers were in. The media just didn’t report on it because it didn’t fit the agenda of those who want to abolish unions.

This is the same thing as having news outlets go on tirades about the distant outliers, like a single police chief or prison psychiatrist making an absurd amount of money (usually due to incredible amounts of overtime…OR fraud, in which case they are being investigated), while not saying anything about the many union concessions over the years, or explaining how hard Gov. Brown’s reforms are going to hit public employees. The news bias has been very, very one-sided.

BTW, I’ve never heard a “woe is me,” or “it’s not fair” argument coming from the union side. What they have been saying is that they have unfairly used as scapegoats for the economic crisis that was caused by WALL STREET. This totally manufactured crisis has been used by billionaires and big business to push their privatization agenda because the unions are the only obstacle left for them to take out and they knew that this crisis would affect the finances of government entities. They’ve managed to pit Joe Sixpack against the unions (worker against worker) in an effort to divert attention away from themselves and the mess that they created.[/quote]

Really. While some public sector unions did offer concessions it was the various teachers unions across the country that acted hard line and gave all public sector unions a bad name. Did you watch what happened with the SD teachers union over the past year. I suppose you can fault the media for focusing on teacher’s union negotiations but they certainly weren’t offering up major concessions until the last moment.

I personally think people in the public sector for the most part work hard. I think they do a good job in general. I think the defined benefit package is too rich and too risky for the tax payer in general. If the public sector union wants to manage a defined benefit contribution plan where the employees chose to make up the short fall or reduce the benefit I’m fine with that. A defined benefit plan where you can spike your pension payout, where you can retire at 55 and possibly live another 40 years, where you’re protected from inflation via adjustments, is just too good and too risky for the benefit providers. The reality is the current promised pensions likely won’t be paid in full. Maybe in San Diego they will, if all the rich people across the world move here, but many local and state governments will have to violate those promises. The money isn’t there and the citizens aren’t going to accept no services because all the money has to go to services previously rendered.

Deferred compensation is a stupid arrangement. If you can’t pay enough right now to attract qualified people to the position then we can live without the service.

[livinincali]

[quote=CA renter]
I think it’s imperative that we look more closely at the evidence showing how violent video games and movies affect developing minds, and how technology is affecting people’s ability to empathize.
[/quote]

We got so close to actually getting to the real issue which is mental health problems and treatments. Then we had to blame violent video games. Blame the guns, blame the video games, blame the bullying, blame something other than the real issue which is we diagnosis our kids with mental issues and then medicate the hell out of them.

It’s time for people to be parents. It’s time for people to start accepting responsibility for their actions. It’s time to start teaching our kids that winning and losing aren’t the same thing. We think if a kid has a mental issue we can just pop a pill and it will all be alright. It takes more work than that unfortunately. Address the mental health issues and treatment programs. That’s where the real solution lies. Eliminate the guns and next mass murder is a 5 gallon can of gas or a car.

[livinincali]

[quote=no_such_reality]CBO says expiring tax cuts is $4 Trillion over decade.

Let’s keep it simple and say it’s $400 billion. http://www.cbo.gov/sites/default/files/cbofiles/attachments/08-22-2012-Update_to_Outlook.pdf

Or let’s just look at CBO baseline revenue projection: $2.913T.

So $3.035T – $2.913T. So I’m short $120 Billion.

Fine increase cuts by 5%.

45% defense. 25%discretionary. Or would you like to quiblle over the $20Billion?

Of 40% defense and 30% discretionary. net $129 Billion gain to close the gap.

Or let’s really have fun, 50% defense, 30% discretionary, expire the tax cuts, payroll cuts and have enough to pay off the debt in 183 Years![/quote]

It’s really about $300 for 2013 and then projections of 4.3 GDP growth and an increase in the percentage of taxes paid relative to GDP. They assume 4.3 GDP growth starting in 2014 and along with revenues going from 15.7% of GDP to 21.4% GDP. Frankly it’s very optimistic. In nominal terms with higher than average inflation they might get the revenue side right this time, but in that case the spending side will be massively understated.

If you look at their 2003 projection for 2012 it was completely wrong. http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/32xx/doc3277/entirereport.pdf

Actually if their projection for 2012 in 2003 was right we would have 3.549 trillion in annual revenues right now. They we’re only off by $1 trillion or so. They did get the mandatory spending right.

[livinincali]

[quote=no_such_reality]Here, I’ll balance the budget.

Step one, expire the Obama extended Bush tax cuts.
Step two: let the FICA tax reduction expire.
Step three: reduce military budget by 40% bring the war troops home. (Psst, we’ll still be spending a half trillion on the military.)
Step four: reduce discretionary spending by 20%.

There. budget balanced.

IT is the f-ing simple.[/quote]

Ok, let’s see.

Revenue 2.435 trillion.

Expire tax cuts let’s be generous and add $200 billion. Revenue = 2.635 trillion.

Expire payroll tax for another $120 billion or so. Revenue = 2.755 trillion.

Now for spending $3.563 trillion.

Reduce military by 40% so 676*.4 = $270 billion so spending is now $3.293.

Reduce discretionary by 20% so 1.289*.2 = 257.8 billion so spending is now 3.035.

So we got closer but we need another 3.035-2.755 = $280 billion in cuts or revenue.

It gets pretty hard when you don’t touch entitlements, doesn’t it.

[livinincali]

[quote=SK in CV]
Defense spending over the same period went from about $400B to $800B, an increase of 100%.

The biggest portion of entitlement spending is SS. Yet SS collections over those same years exceeded SS spending. That increase in spending is purely a function of more people reaching retirement age. Much of the additional entitlement increases were purely a function of economic decline. Those expenditures will (and already have) decline as the economy improves. There has been no major permanent statutory entitlement expansion in the last 10 years with the exception of the drug coverage for medicare recipients (save for those that have not yet fully gone into effect).[/quote]

Here’s a complete break down of each government category in spending between 2002 and 2012. Social security is currently the biggest, but it’s Medicare that’s probably the biggest problem.

[livinincali]

[quote=SK in CV]I doubt those spending increases you expect are going to happen. You know, federal government growth over the last 3 years has been the smallest it’s been in decades.[/quote]

Great use of picking a good starting point to base your argument. Government spending went up over 15%(3.168 trillion to 3.696 trillion) in one year between 2008 and 2009 so lets use 2009 as our starting point. How about we use 2000 or 2002 as our starting points. From 2002 government spending went up 41% (2515 to 3563) yet government revenue went up 5% (2318 to 2435). Entitlement spending went from 1383 in 2002 to 2053 in 2012 which is an increase of almost 50%. US GDP grew from 11.59 trillion in 2002 to 13.62 trillion in 2012 for an increase of 17.5%.

So where is the big problem in government, it’s right there in entitlement spending. It’s increasing much faster that any of the other categories. GDP growth won’t fix it, tax revenues which are based on GDP won’t fix it. The only way to fix it is to stop growth in entitlement spending or perhaps shrink it.

Guess what the affordable care act (aka Obamacare) does to entitlement spending in the future?

[livinincali]

[quote=CA renter]
I would also point out that the unions have already given on pay and benefits over the past few years. Governor Brown’s pension reforms largely address the issues I’ve stated above. They have reduced benefit formulas, increased retirement ages, increased employee pension contributions (by a lot..and this was the #1 most workable solution to the pension problem), etc. At what point do we stop bashing unions — who did not cause the economic crisis — and address all the other changes that need to happen in order to correct the problems? The unions did not cause the crisis, and they should not be the only ones to shoulder the burden.[/quote]

Public sector unions will probably be bashed until they’re gone. They screwed up big time in the pr war back in 2009-2011 by being hard line. It’s going to take years before they earn back the public’s trust. The best move for the public unions would be to stay out of the spotlight as much as possible. The it’s not fair, woe is me attitude just reinforces people’s negative view of public sector unions.

[livinincali]

[quote=SK in CV][quote=AN][quote=SK in CV]I have no idea. I’ve never seen annual income tax liability compared to net worth. Are you proposing an annual estate tax?[/quote]
It’s only fair right? Why only make it harder for people who are trying to get rich. Why not also make current rich people not rich anymore like the rest of us or make it harder for them to stay rich.[/quote]

Go with that. See how far you get. Not something I’d be in favor of.[/quote]

I think that’s the entire point. When you are the one that has to pay for it then people object. For instance what if we structured medicare/social security as a system where you put in $x and took out $y and we kept track of the net. If your net balance is negative when you die government gets first claim to your assets. I.e. you paid in $200K to the system and take out $400K government gets to liquidate your estate and take the $200K difference first before any inheritance is issued. That sounds pretty fair to me but nobody would go for that. Everybody thinks that’s unfair even though it amounts to the tax payer subsidizing somebody’s inheritance right now.

A free lunch is a pretty popular idea. I’m sure a free lunch poll without any mention of who’s paying would get 80% of the vote. If I say SK is the one paying for it then it’s still pretty popular maybe 70% of the vote. But if I start saying well everybody is paying a portion of it or we’re going to draw straws to determine who pays then it gets a lot less popular.

The social services we have are all nice to have ideas and if we could afford them that would be great, but when you can’t you need to start making hard decisions. We could certainly provide basic shelter, food, clothing and medical services to the 60-70 million Americans in the social safety net system for less than the current $2 trillion, but it would amount to a drop in lifestyle. You’d lose a lot of choices about where you live and what you eat, but you wouldn’t be in the street or starving like some seem to suggest.

[livinincali]

[quote=SK in CV]
I’m not so sure that it doesn’t benefit the economy as a whole, but there’s no question that the biggest beneficiaries are debt holders. That’s the big banks. Is there a better way to do the same thing or better for the economy as a whole without particularly benefitting the banking industry? I could be convinced, but I haven’t seen any ideas that meet the requirements.[/quote]

In my view the primary purpose of QEx is to allow the government to deficit spend over a trillion per year. The government would probably have to pay too much to incur that much debt without it. The fundamental problem is every economist/policy maker is focused on the demand side of the equation and how to create more debt to stimulate demand. It’s an idea that has run it’s course, but it doesn’t stop them from trying it’s the only thing they know.

[livinincali]

I’m just waiting for the never could have seen it coming. We’re about there now. Almost 4 years of various QEs and nothing bad has happened yet, so nothing bad will happen in the future. The only real question now is how and when it comes unglued.

[livinincali]

[quote=CA renter]
Just to be clear, most public employees have not had net raises since about 2008. Many (if not most) are actually making less than they were in 2008, and when you take the pension reform into consideration, they will probably end up making about 10-20% less in the next few years than they were making in 2008, and that is NOT taking into account the other concessions that were being made as the economy slowed.

Not sure where the info is coming from WRT public employees getting raises. Most new contracts are keeping compensation the same, or reducing it. With the pension reform that has already passed, it is a definite double-digit percentage net loss for most employees from ~2008 levels.[/quote]

I’ve been talking wages and BENEFITS. While the compensation the employee sees may remain the same the cost to employee that person has gone up since 2008.

For starters medical benefits have been increasing somewhere between 5 and 10% per year so a $50K employee with a $10K medical benefit that goes up 10% ends up increasing the employee’s compensation by nearly 2%. The fact that the costs of employing somebody are hidden from the person that is employed is one of the biggest problems in society. You should know exactly how much you cost your employer and yet almost everybody doesn’t know.

Second while the city did do pension reform everything else is grandfathered in so as the city’s pension performance continues to lag we have to pay ever increasing amounts to the pension program. This is another cost of employing somebody that is going up and the employee doesn’t see it yet is has to come out of the tax base.

The last issue is that if you look at 10 years of tax data (I found CA from 2000 to 2010) you’ll see an increase of about 24% in the tax base. Of course when you go look at something like CA average teacher salaries for the past 10 years and they increased almost 30% (without the benefit increase included) and you see why we have a problem. Total compensation for public sector workers has been increasing faster than the tax base and that’s why we have so many problems.

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