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And I’m simply scared. How do you even prepare for such an event? I always saved up, invested, but now I feel like it’s all pointless as I’m losing money on eve

by b212 4y ago

And I’m simply scared. How do you even prepare for such an event? I always saved up, invested, but now I feel like it’s all pointless as I’m losing money on every front and savings aren’t that fun with double digit inflation…

snshn 4y ago
Whenever anything bad happens you'll be the first one to know.
prewett 4y ago
It's too early to get scared yet, we don't have any idea what's going to happen. In my opinion, a recession is most likely, but could range from nothing much to serious recession. But then who knows what will happen with Ukraine and possibly Taiwan; war tends to stimulate the economy, but also supply chain disruption. No point in worrying until there's something concrete to worry about. Besides, even in the Great Depression unemployment was only 30% or so, so there's a 2/3 chance you'll have a job in the realistic worst-case scenario. Even better chance if you are in software, it's not like there's been an inflation in good developers. > losing money on every front I assume you mean stocks/housing? I can't speak for housing, but regarding stocks, do you still think the company has good prospects? If so, now everything is cheaper. In fact, stocks have depreciated, so while your cash might not buy as many consumer goods, it will buy more stocks than before! I think the market still has at least 10% more to go, the S&P is only down from it's all-time pandemic-bubble high, and interest rates are 4% higher. There's been no "capitulation" as far as I can tell--two weeks ago the market went up after the Fed said that money is getting less valuable a little less quickly (that is, inflation is a little less large than before), because the Fed might stop raising rates. Well, maybe, but interest rates are still 4%... Anyway, when the market falls is a great time to buy! "Be greedy when others are fearful"
- AYBABTME 4y ago
  Wars are expensive as well. If there's any large scale conflict, expect tax rates to jump through the roof. WW1 and WW2 saw rates go to 94% in the worst (arguably incredibly wealthy) case. > World War I In order to finance U.S. participation in World War One, Congress passed the 1916 Revenue Act, and then the War Revenue Act of 1917. The highest income tax rate jumped from 15 percent in 1916 to 67 percent in 1917 to 77 percent in 1918. War is expensive. After the war, federal income tax rates took on the steam of the roaring 1920s, dropping to 25 percent from 1925 through 1931. > The Depression Congress raised taxes again in 1932 during the Great Depression from 25 percent to 63 percent on the top earners. > World War II As we mentioned earlier, war is expensive. In 1944, the top rate peaked at 94 percent on taxable income over $200,000 ($2.5 million in today’s dollars3). That’s a high tax rate. -> https://bradfordtaxinstitute.com/free_resources/federal-income-tax-rates.aspx https://bradfordtaxinstitute.com/free_resources/federal-inco... See the historical rates: https://taxfoundation.org/historical-income-tax-rates-brackets/ https://taxfoundation.org/historical-income-tax-rates-bracke... In my opinion, people aren't ready for a world in which taxes are higher than what they're used to. But peace, and low taxes, are not likely to prevail in a disconnecting, increasingly partisan and hostile world, where most countries are tightening their belts, people are getting poorer and angrier, and tension and hunger for conflict is growing.
  - rsync 4y ago
    Those special tax rates were a form of windfall profit tax to discourage war profiteering. They had nothing to do with raising revenue and were not due to the war "being expensive". They were also not progressive taxation measures and had no social welfare justification (other than, of course, avoiding war profiteering). It is incorrect to compare these wartime rates with current marginal tax rates, etc. In fact, some portion of those taxes paid were eligible for refunds after the war.[1] [1] https://en.wikipedia.org/wiki/Excess_profits_tax#United_States https://en.wikipedia.org/wiki/Excess_profits_tax#United_Stat...
    - deleted 4y ago
      [deleted]
    - AYBABTME 4y ago
      This looks like a different, additional tax to those of the regular income tax rate, aren't they? It appears to me that regular income tax rose to the high levels I shared, in addition to the taxes you shared.
      - prewett 4y ago
        According to your quote, it was a 94% tax rate on income above $2.5 million (in today's money). I'd be ecstatic if I had an income of over $2.5 million and had to pay that tax! Although I wouldn't put much effort increasing my income with those tax rates.
        AnimalMuppet 4y ago
        I'd be delighted to pay a million dollars in taxes next year. I'd love it.
djtango 4y ago
Cash in USD has been one of the better performing assets of 2022
- snshn 4y ago
  I'd say rather everything else went down, including precious metals. Wild to see how disconnected from reality our monetary system is, when you print more of it and it keeps going up in value... or maybe, just maybe there's no turning back so everything that couldn't be artificially created went down in value, with cash serving as a long fuse for the upcoming collapse.

by b212 4y ago

snshn 4y ago

Whenever anything bad happens you'll be the first one to know.

prewett 4y ago

It's too early to get scared yet, we don't have any idea what's going to happen. In my opinion, a recession is most likely, but could range from nothing much to serious recession. But then who knows what will happen with Ukraine and possibly Taiwan; war tends to stimulate the economy, but also supply chain disruption. No point in worrying until there's something concrete to worry about. Besides, even in the Great Depression unemployment was only 30% or so, so there's a 2/3 chance you'll have a job in the realistic worst-case scenario. Even better chance if you are in software, it's not like there's been an inflation in good developers. > losing money on every front I assume you mean stocks/housing? I can't speak for housing, but regarding stocks, do you still think the company has good prospects? If so, now everything is cheaper. In fact, stocks have depreciated, so while your cash might not buy as many consumer goods, it will buy more stocks than before! I think the market still has at least 10% more to go, the S&P is only down from it's all-time pandemic-bubble high, and interest rates are 4% higher. There's been no "capitulation" as far as I can tell--two weeks ago the market went up after the Fed said that money is getting less valuable a little less quickly (that is, inflation is a little less large than before), because the Fed might stop raising rates. Well, maybe, but interest rates are still 4%... Anyway, when the market falls is a great time to buy! "Be greedy when others are fearful"

AYBABTME 4y ago
Wars are expensive as well. If there's any large scale conflict, expect tax rates to jump through the roof. WW1 and WW2 saw rates go to 94% in the worst (arguably incredibly wealthy) case. > World War I In order to finance U.S. participation in World War One, Congress passed the 1916 Revenue Act, and then the War Revenue Act of 1917. The highest income tax rate jumped from 15 percent in 1916 to 67 percent in 1917 to 77 percent in 1918. War is expensive. After the war, federal income tax rates took on the steam of the roaring 1920s, dropping to 25 percent from 1925 through 1931. > The Depression Congress raised taxes again in 1932 during the Great Depression from 25 percent to 63 percent on the top earners. > World War II As we mentioned earlier, war is expensive. In 1944, the top rate peaked at 94 percent on taxable income over $200,000 ($2.5 million in today’s dollars3). That’s a high tax rate. -> https://bradfordtaxinstitute.com/free_resources/federal-income-tax-rates.aspx https://bradfordtaxinstitute.com/free_resources/federal-inco... See the historical rates: https://taxfoundation.org/historical-income-tax-rates-brackets/ https://taxfoundation.org/historical-income-tax-rates-bracke... In my opinion, people aren't ready for a world in which taxes are higher than what they're used to. But peace, and low taxes, are not likely to prevail in a disconnecting, increasingly partisan and hostile world, where most countries are tightening their belts, people are getting poorer and angrier, and tension and hunger for conflict is growing.
- rsync 4y ago
  Those special tax rates were a form of windfall profit tax to discourage war profiteering. They had nothing to do with raising revenue and were not due to the war "being expensive". They were also not progressive taxation measures and had no social welfare justification (other than, of course, avoiding war profiteering). It is incorrect to compare these wartime rates with current marginal tax rates, etc. In fact, some portion of those taxes paid were eligible for refunds after the war.[1] [1] https://en.wikipedia.org/wiki/Excess_profits_tax#United_States https://en.wikipedia.org/wiki/Excess_profits_tax#United_Stat...
  - deleted 4y ago
    [deleted]
  - AYBABTME 4y ago
    This looks like a different, additional tax to those of the regular income tax rate, aren't they? It appears to me that regular income tax rose to the high levels I shared, in addition to the taxes you shared.
    - prewett 4y ago
      According to your quote, it was a 94% tax rate on income above $2.5 million (in today's money). I'd be ecstatic if I had an income of over $2.5 million and had to pay that tax! Although I wouldn't put much effort increasing my income with those tax rates.
      - AnimalMuppet 4y ago
        I'd be delighted to pay a million dollars in taxes next year. I'd love it.

djtango 4y ago

Cash in USD has been one of the better performing assets of 2022

snshn 4y ago
I'd say rather everything else went down, including precious metals. Wild to see how disconnected from reality our monetary system is, when you print more of it and it keeps going up in value... or maybe, just maybe there's no turning back so everything that couldn't be artificially created went down in value, with cash serving as a long fuse for the upcoming collapse.