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  1. #1
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    Barely Staying Afloat

    Editorial
    Barely Staying Afloat

    President Bush's advisers say that the administration should receive more credit for the state of the economy, which, over all, is growing at a strong clip. But voters don't base their opinions on aggregate statistics. They react to their own paychecks and benefits, weighed against their fixed costs, like housing, health care and gasoline. For all but the wealthiest Americans, the latter are rapidly outpacing the former.

    In a time of plenty, more American workers are in danger of slipping into outright poverty. As Erik Eckholm reported this week in The Times, about 37 million Americans lived below the poverty line in 2004: $19,157 a year for a family of four. An additional 54 million lived between the poverty line and double the poverty line: $38,314 for a family of that size. They are the "near poor," and they generally receive little attention. But they are often one injury or layoff away from slipping into poverty themselves.

    If the "near poor" feel insecure, they have good reason to. A group of academics found that during the 1980's, 13 percent of Americans in their 40's spent a year or more below the poverty line. In the 1990's, that percentage nearly tripled, reaching 36 percent. While workers once believed that pensions would provide for them in their old age, now they fret over underfunded 401(k) accounts. Houses are supposed to provide stability, but those with adjustable-rate mortgages are watching their payments rise, and some fear losing their homes.

    The issue here is not handouts; it's about buffering against the shocks inherent in a fast-paced global economy. Perhaps one of the reasons President Bush is generally regarded as such a poor economic steward is that his administration has done little to make the most vulnerable members of the working class believe that any of the good news is directed at them.

    .

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    Re: Barely Staying Afloat

    What does it mean to say that the "economy" is "growing"?

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    Re: Barely Staying Afloat

    Quote Originally Posted by Yirmeyahu
    What does it mean to say that the "economy" is "growing"?
    LOL< I think your guess is probably better than mine. If it means people are spending more on "luxury items", then that should be slowing down. Car sales are down and housing sales are down and I always thought those were big indicators on whether or not the economy was growing or stagnent.

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    Last edited by sojustask; 05-10-2006 at 05:31 PM.

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    Re: Barely Staying Afloat

    Well, as you recall, we discussed that very thing in another thread. My own understanding is that a "growing" "economy" means people are spending more money. According to this standard, then, a nation of people falling further into debt would be indicitive of a "healthy" economy, whereas a nation of people saving and practicing conservative spending habits would be indicative of an "unhealthy" economy.

    I could very well be wrong. But that's my understanding.

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    Re: Barely Staying Afloat

    Quote Originally Posted by Yirmeyahu
    Well, as you recall, we discussed that very thing in another thread. My own understanding is that a "growing" "economy" means people are spending more money. According to this standard, then, a nation of people falling further into debt would be indicitive of a "healthy" economy, whereas a nation of people saving and practicing conservative spending habits would be indicative of an "unhealthy" economy.

    I could very well be wrong. But that's my understanding.
    So, what would we call an economy where people can't spend themselves into more debt nor can they save and restrict their spending habits because they barely make enough just to pay for necessities?

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    Re: Barely Staying Afloat

    "Balanced"?

    Actually, an economy wherein people just keep their head above water but don't get further into debt would be healthier than our own, since most Americans live on credit and debt. Being at 0 is better than being in the - (although not according to economists, apparently).

    Of course, by the accepted standard, that would likely be considered an extremely unhealthy economy, since, under present standards, an economy where people are spending themselves into greater and greater debt (unsustainably, I might add) is considered "healthy".

    The language is really encrypted, more so in economics even than in many other places where one must interpret things within a certain framework, such as in politics, or news journalism, etc.

    The worst mistake one can make would be to interpret a thing at face value or assume the common vernacular usage of a word is actually the intended meaning.

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    Re: Barely Staying Afloat

    Quote Originally Posted by sojustask
    President Bush's advisers say that the administration should receive more credit for the state of the economy, which, over all, is growing at a strong clip. But voters don't base their opinions on aggregate statistics. They react to their own paychecks and benefits, weighed against their fixed costs, like housing, health care and gasoline. For all but the wealthiest Americans, the latter are rapidly outpacing the former.
    If the economy is, in fact, growing, it is growing in spite of this administration, not because of this administration. And the news of a "healthy" economy is "cold comfort to working Americans faced with the reality of struggling to pay their bills” as one Congressman put it.

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    Re: Barely Staying Afloat

    What really woke me up is this:

    "Warren Buffett, the US investment guru known as the Sage of Omaha, plans to buy more businesses overseas in order to protect his investors against a collapse in the dollar."

    http://news.independent.co.uk/busine...icle362756.ece

    Warren Buffett is not the kinda guy who yells fire in a movie theatre.

    So it's time to hunker down and get ready. All debt is paid off. Also I'm going to move the rest of my portfolio international. Collapsing dollar...ouch.

  9. #9
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    Re: Barely Staying Afloat

    We aren't surprised by this are we?
    *****************************************

    Senate Approves 2-Year Extension of Bush Tax Cuts
    By EDMUND L. ANDREWS
    Published: May 12, 2006

    WASHINGTON, May 11 — The Senate voted 54 to 44 on Thursday to pass almost $70 billion in tax cuts, mostly for the nation's wealthiest taxpayers. The action ensures that virtually all of President Bush's tax cuts will be locked in place until after the next presidential election.

    The measure, which the House passed Wednesday, would extend Mr. Bush's tax cuts on stock dividends and capital gains by two years, until 2010, and shield about 15 million taxpayers for one year from an increase in the alternative minimum tax.

    The vote, largely along party lines, was a significant victory for Mr. Bush and beleaguered Republican leaders, who had viewed the tax cuts on stock market profits as a defining party issue and had credited them with jump-starting economic growth and reducing unemployment over the last three years.

    "We're finally here; we have a deal," Senator Charles E. Grassley of Iowa, chairman of the Senate Finance Committee, declared with evident relief on the Senate floor. "More importantly, the American taxpayer has a deal. A deal that is long overdue."

    But even as Senate Republicans celebrated, they failed to reach agreement with House Republicans on scores of other tax breaks, including deductions for college tuition and a savings credit for low-income people that expired last year.

    Democrats charged that the tax bill focused almost entirely on cuts for wealthy investors and that it allowed programs intended for ordinary citizens to languish.

    "There is little in this bill to be proud of," said Senator Max Baucus, Democrat of Montana. "Working people have been left behind."

    House Republicans, meanwhile, remained in disarray over a budget plan for next year. After promising earlier Thursday to vote on the plan, which by law was to have been passed on April 15, House leaders postponed the vote after failing to come to an agreement with Republican moderates who said they wanted $3 billion more for health and education.

    Even if House Republicans pass a budget plan this month, it would have little practical impact because it would probably not be reconciled with a very different plan passed by the Senate.

    The tax bill, which President Bush is expected to sign as quickly as possible, could set the stage for budgetary heartburn in the years ahead.

    Virtually all of President Bush's tax cuts in addition to those passed Thursday — rate reductions for individuals, a bigger child tax credit, the elimination of estate taxes and the tax cuts for stock dividends — will also expire simultaneously at the end of 2010.

    Renewing all those tax cuts again in 2010 would cost hundreds of billions of dollars a year, posing excruciating budget choices for the next president as the nation's baby boomers become eligible for billions of dollars in Medicare and Social Security benefits.

    In addition, lawmakers merely postponed dealing with huge problems surrounding the alternative minimum tax, a parallel tax that was originally aimed at millionaires but is not adjusted for inflation and is rapidly engulfing more middle-class families. The vote only prevents expansion of the tax this year.

    Preventing an expansion of the alternative tax in 2007 would cost more than $40 billion, and the costs increase each year after that. A permanent solution, most experts say, would require an overhaul of the tax code, but neither Mr. Bush nor Congressional leaders want to touch the issue this year.

    The overwhelming share of the tax cuts the Senate voted to extend will flow to the wealthiest taxpayers. People earning $1 million a year would save about $42,700, and reap about 22 percent of the total tax cut, according to the Tax Policy Center, a research group in Washington. People earning $40,000 to $50,000 a year would save about $47 and receive less than 1 percent of the benefits.

    Democrats charged that the measure not only favored the rich but also failed to extend middle-income tax breaks, among them a deduction for college tuition payments, that expired at the end of last year.

    Republicans promised that those and at least $20 billion worth of other expiring tax cuts would be renewed in a second bill.

    But after more than a week of negotiations behind closed doors, House and Senate Republicans had not reached agreement on the second bill and refused to disclose any specific provisions.

    "Can I tell members exactly how these issues will come out?" asked Mr. Grassley, the Senate Finance Committee chairman. "The answer is no. What I can tell members is that we had a good preliminary negotiation."

    The struggle to extend Mr. Bush's tax cuts reflects the broader difficulties of Republican leaders. Rebellious fiscal conservatives in the House are pushing for deeper cuts in spending, including on programs like Medicaid. But Republican moderates, particularly in Northeastern states that lean Democratic, are pushing in the opposite direction.

    Given the budget pressures, Republicans have been torn for months over what tax cuts they truly wanted to extend within a $70 billion "reconciliation" bill that could pass the Senate with a simple majority of 51 votes rather than the 60 votes needed to prevent a filibuster.

    Mr. Grassley said his top priority was to prevent an expansion of the alternative minimum tax in 2006.

    President Bush and House Republicans placed top priority on a two-year extension of tax cuts for stock dividends and capital gains. Those cuts do not expire until the end of 2008, but the administration wanted to lock them in place.

    House and Senate leaders also wanted to extend more than $30 billion worth of other tax breaks that expired at the end of last year. Those included a lucrative provision for small businesses, a longstanding tax credit for research and development expenses, tax deductions for college tuition payments and a tax cut for banks and insurance companies with foreign subsidiaries.

    .

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    Re: Barely Staying Afloat

    i've challenged every repub economy "touter" here to "DEFINE" in their "OWN" words what "ECONOMY"(THE) means!?.......not 1 peep!?hehe!!maybe i should ask the "DEMS" here!?something about the "general" WELFARE!?(just generals!?)or is it WALL STREET confidence(JEW CONTROL)!?welcome to the new world of repub LIBERALISM!?only for the successful/survivors and nepotistic rich!?and yess!!i wish i was born/indoctrinated there!?hehe!!

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