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You may get downvoted so I just want to say that I agree with you. The dot bomb and housing bubble were political events, not financial. We have fundamental p

You may get downvoted so I just want to say that I agree with you. The dot bomb and housing bubble were political events, not financial. We have fundamental problems in our economy that aren't being addressed: * Tax brackets haven't been adjusted in decades, so when people begin making modest amounts of money, say $50-100,000 per year, their taxes increase too fast and they don't feel wealthier. I would suggest keeping the bracket shapes but shifting them to the right by at least 2x to account for inflation. This amounts to a tax cut for the poor and keeping taxes roughly the same for the rich (the opposite of what's been done since 1980). Then we should (obviously) gradually raise taxes over 5-10 years to match the deficit. * Interest rates are too low because politicians don't want to put the brakes on the economy. The flip side is that they have no way to press the accelerator when the economy tanks. The end result being exaggerated booms and busts, exactly as we have seen in 2000/2001 and 2008 (which means that we're overdue for a bust with current Fed interest rate policy). * Corporations can be based in the US but act as foreign multinationals by hiding their taxes. Fixing this is trivial but depends on getting money out of politics. See: Citizens United, campaign finance reform and publicly funded elections. The above are econ 101. My personal thoughts on this are that rents, houses and cars cost an order of magnitude too much for what they provide. We spend an order of magnitude too much on the military. We don't build enough or reward makers enough because the financial sector of the economy is twice as big as it used to be and we're obsessed with 40 hour weeks instead of progress or quality of life. I'm 41 and have never seen any of these things change in my lifetime, so am expecting a major downturn in the economy sometime in the next 2-5 years, followed by a series of knee-jerk populist reactions that ensure a repeat 10 years later (downturns are where the wealthy make more money, as they have the capital to buy up assets).

charlesdm 8y ago
The problem of 2008 has basically been swept under the rug. My gut feeling is telling me the next recession will be worse, because the only thing that can be done is print more money, which repeats the cycle (but since wages never go up, but asset prices do -- so worsens the problem of more inequality) Easy debt means easy profits, which in turns means that it's better to play a financial game over building something sustainable. It's much easier to turn $10m into $20m in a reasonable amount of time, than it is to build a proper business and sell that for $10m.
hyperpape 8y ago
1. I think tax brackets are adjusted for inflation: https://taxfoundation.org/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-brackets https://taxfoundation.org/us-federal-individual-income-tax-r... 2. The fed funds rate is low, but has been rising: https://tradingeconomics.com/united-states/interest-rate https://tradingeconomics.com/united-states/interest-rate.
- zackmorris 8y ago
  Hey cool thanks. I think the tax bracket page may only work in Edge, which I don't have on my computer, but I found this image associated with it: https://commons.wikimedia.org/wiki/File:Historical_Marginal_Tax_Rate_for_Highest_and_Lowest_Income_Earners.jpg https://commons.wikimedia.org/wiki/File:Historical_Marginal_... I'm having trouble understanding what it's saying though. All I see is that the top bracket was highest during WWI and WWII, approaching 90% on the wealthy, but is effectively zero since Reagan. The low rate's pretty flat and the high rate has gone down. And there are fewer brackets today (that might be why I perceived them as not having been updated). One takeaway though is that the last time tax brackets were similar to today was from 1925-1931... Also if you try clicking MAX on the second link, it seems that we've hit a floor on the fed funds rate, so maybe if it rises then it could move our economy back towards production instead of consumption by making capital more expensive. I might be reading my own gut feelings into that though so take it with a grain of salt.
  - hyperpape 8y ago
    1. Sorry, I gave you the wrong link. Here's the info in a PDF: https://files.taxfoundation.org/legacy/docs/fed_individual_rate_history_nominal.pdf https://files.taxfoundation.org/legacy/docs/fed_individual_r.... 2. We certainly have historically low rates. It's not the case that the Fed has refused to raise them--they've cautiously raised them. One contributing factor is that wages haven't been increasing, and inflation is very very low. The early 80s were an outlier in another way: Paul Volker shot interest rates incredibly high to deal with historically high inflation numbers. So the relevant comparison is arguably 4-10% (late 80s/90s/2000s) vs. 2.25% today.

charlesdm 8y ago

The problem of 2008 has basically been swept under the rug. My gut feeling is telling me the next recession will be worse, because the only thing that can be done is print more money, which repeats the cycle (but since wages never go up, but asset prices do -- so worsens the problem of more inequality) Easy debt means easy profits, which in turns means that it's better to play a financial game over building something sustainable. It's much easier to turn $10m into $20m in a reasonable amount of time, than it is to build a proper business and sell that for $10m.

hyperpape 8y ago

1. I think tax brackets are adjusted for inflation: https://taxfoundation.org/us-federal-individual-income-tax-rates-history-1913-2013-nominal-and-inflation-adjusted-brackets https://taxfoundation.org/us-federal-individual-income-tax-r... 2. The fed funds rate is low, but has been rising: https://tradingeconomics.com/united-states/interest-rate https://tradingeconomics.com/united-states/interest-rate.

zackmorris 8y ago
Hey cool thanks. I think the tax bracket page may only work in Edge, which I don't have on my computer, but I found this image associated with it: https://commons.wikimedia.org/wiki/File:Historical_Marginal_Tax_Rate_for_Highest_and_Lowest_Income_Earners.jpg https://commons.wikimedia.org/wiki/File:Historical_Marginal_... I'm having trouble understanding what it's saying though. All I see is that the top bracket was highest during WWI and WWII, approaching 90% on the wealthy, but is effectively zero since Reagan. The low rate's pretty flat and the high rate has gone down. And there are fewer brackets today (that might be why I perceived them as not having been updated). One takeaway though is that the last time tax brackets were similar to today was from 1925-1931... Also if you try clicking MAX on the second link, it seems that we've hit a floor on the fed funds rate, so maybe if it rises then it could move our economy back towards production instead of consumption by making capital more expensive. I might be reading my own gut feelings into that though so take it with a grain of salt.
- hyperpape 8y ago
  1. Sorry, I gave you the wrong link. Here's the info in a PDF: https://files.taxfoundation.org/legacy/docs/fed_individual_rate_history_nominal.pdf https://files.taxfoundation.org/legacy/docs/fed_individual_r.... 2. We certainly have historically low rates. It's not the case that the Fed has refused to raise them--they've cautiously raised them. One contributing factor is that wages haven't been increasing, and inflation is very very low. The early 80s were an outlier in another way: Paul Volker shot interest rates incredibly high to deal with historically high inflation numbers. So the relevant comparison is arguably 4-10% (late 80s/90s/2000s) vs. 2.25% today.