U.S. Unemployment Rate Drops to Lowest Since December 2008

[Jordan]

bored waiting?

Incredibly.

In this economy, consumer debt is at AN ALL TIME HIGH !

http://finance.yahoo.com/news/us-consumer-borrowing-rises-record-2-75t-200154993--finance.html

Meanwhile, in places where stats are normalized by ratio...

In the third quarter, total household liabilities were 112.7 percent of after-tax income during the third quarter, the lowest since 2003 and down from 113.4 percent in the second quarter.

Economists are divided over how much further households have to go in this deleveraging process. Further debt reduction would leave less money for spending, slowing the wider economy.

While total debt as a share of income remains historically high, one measure kept by the Fed has shown that monthly debt payments as a share of income in the second quarter were at the lowest since 1993.

http://www.chicagotribune.com/busin...-householdsbre8b50zv-20121206,0,7743577.story

 

[Tpoints]

Incredibly.

Meanwhile, in places where stats are normalized by ratio...

http://www.chicagotribune.com/busin...-householdsbre8b50zv-20121206,0,7743577.story

wouldn't even surprise me if he was only referring to total consumer debt, as if that would ever lower if population doesn't decrease.

 

[Jordan]

wouldn't even surprise me if he was only referring to total consumer debt, as if that would ever lower if population doesn't decrease.

He was referring to total consumer debt as in consumer debt only. Really, the amount of debt you carry isn't a big deal unless you don't have the income to back it up. Luckily, Americans do have the income to back it up, as evidenced by the fact that the American consumer carries a debt burden the least costly to them since 1993. Interestingly, I don't remember the years following 1993 to be very bad times for the United States.

 

[KingNothing]

Yeah I've heard this since 2007. At what point will you be wrong?

The idea that hyper-inflation is right around the corner just seems absurd to me at this point.

 

[Tpoints]

The idea that hyper-inflation is right around the corner just seems absurd to me at this point.

you know you're gonna get flogged for that, right?

 

[Jordan]

::: spitting out the idiotic words you put in my mouth :::

Once again there's the attempt to frame what I said as somehow being about the mere fact that you have or express a different view. Wouldn't that be fun to debate instead? Why, that would be so easy to knock out of the park, wouldn't it?

Three strikes, you're now being obtuse. Go back and reread, this time applying whatever comprehension and critical thinking skills you have to what I actually wrote. (Hint: part of it starts with "There's nothing wrong with contrary opinions...")

Quite obvious by now that you're more interested in finding out why I'm posting than discussing what I'm posting. I always try to bring out my best arguments backed with relevant data to the discussion. I really just want to stick to the topic at hand, which is that American unemployment is the lowest since 2008 driven by factors like near-double digit construction growth, 18 months of increases in pending home sales, housing starts reaching a 4 year high, and that the largest share of Americans EVER is confident enough to want to buy a home in the next 6 months.

Additionally, car sales are running at a pace not seen since 2008 and household wealth is catching up to 2007 highs.

I have my reasons for thinking the economy is improving. I've cited them. I don't know why that's such a problem.

 

[No Free Beer]

He was referring to total consumer debt as in consumer debt only. Really, the amount of debt you carry isn't a big deal unless you don't have the income to back it up. Luckily, Americans do have the income to back it up, as evidenced by the fact that the American consumer carries a debt burden the least costly to them since 1993. Interestingly, I don't remember the years following 1993 to be very bad times for the United States.

This is a typical response from a Keynesian follower. "Debt isn't bad unless you can pay it." I've heard this nonsense a million times, especially from professors, and I am so tired of it.

Debt is debt.

The idea is NOT to be in debt.

What are you going to say next, that WWII ended The Great Depression? That a recession is simply defined by unemployment alone?

I personally don't have a problem with opposing views. I think it's great to post shit like this.

I am jsut going after your comment and responding to how ridiculous it is.

 

[Jordan]

This is a typical response from a Keynesian follower. "Debt isn't bad unless you can pay it." I've heard this nonsense a million times, especially from professors, and I am so tired of it.

Debt is debt.

The idea is NOT to be in debt.

What are you going to say next, that WWII ended The Great Depression? That a recession is simply defined by unemployment alone?

I personally don't have a problem with opposing views. I think it's great to post shit like this.

I am jsut going after your comment and responding to how ridiculous it is.

If someone offered to lend you $100,000 at a post-tax rate of 2.8% for the next 30 years would you turn that down?

 

[Tpoints]

This is a typical response from a Keynesian follower. "Debt isn't bad unless you can pay it." I've heard this nonsense a million times, especially from professors, and I am so tired of it.

Debt is debt.

The idea is NOT to be in debt.

What are you going to say next, that WWII ended The Great Depression? That a recession is simply defined by unemployment alone?

I personally don't have a problem with opposing views. I think it's great to post shit like this.

I am jsut going after your comment and responding to how ridiculous it is.

I don't think he's saying abuse the system and get good debt, he too believes debt is always worse than non-debt.

 

[No Free Beer]

In fact, you are justifying debt with your comment.

It's like saying, "in a recession, we need to lower taxes and increase spending. This way, we will run up debt, but when poeple get back to work, we will be able to pay off the debt in the long run."

Maybe I misunderstood you.

 

[No Free Beer]

If someone offered to lend you $100,000 at a post-tax rate of 2.8% for the next 30 years would you turn that down?

please be more specific.

 

[Jordan]

please be more specific.

I'm offering you an amortizing loan that, after taxes, will cost you 2.8%. The loan amount is $100,000, and it will amortize over the next 30 years. Do you take my offer?

If you're rational, you do. You realize that the cost of carry is negligible, virtually zero, in fact, and that you're getting all the time value in the world for mere pennies. Going into debt at today's low interest rates are perhaps the smartest thing you could ever do.

 

[WilliamShrugged]

I don't understand how this can be sustained, but they've sustained it all these years so there's no reason for me to necessarily believe that this is the end. Heck, I thought the 2008 crash was the beginning of the end. I can't believe that hyper-inflation hasn't smacked us hard, yet. But it hasn't, so maybe it won't.

Just a perspective to add. remember the video on the "Morning Joe", where they had Ron Paul's quotes on the housing crash? The quotes date from 2003. That's 7-9 years after the dot-com bubble, and 5 years before the housing crash.

 

[No Free Beer]

Well, it matters what it's for. If it's something I need, like a home for my family (which I doubt you can find for 100K), I would say no. I don't want 100,000 jsut to have 100K, even at 2.8%. That's stupid. Again, you seem to be promoting debt.

The only benefit I could see (maybe) is if you obtain a tax deductible because of it. And the only way I would accept that is if I truly SAVED money.

This is exactly the point I am trying to make. It seems as though Keynesians just say "hey, go get in debt, it's okay! Just look how great those rates are!!!" When, if I don't need it, why accept it?

I don't want to be a slave to anyone if I can help it.

And for you to imply that if I don't accept that, I am "irrational" is ridiculous.

 

[The Binghamton Patriot]

jordan you need to be more specific. 2.8 percent a year? APR? EAR? you need to state whether or not the interest on the loan is tax deductible as well. the cost of carry is below inflation, so if you're talking about a fixed rate loan @ a cost thats less than inflation, its more advantageous than taking on debt at a rate thats higher than inflation without any tax benefits.

I'm offering you an amortizing loan that, after taxes, will cost you 2.8%. The loan amount is $100,000, and it will amortize over the next 30 years. Do you take my offer?

If you're rational, you do. You realize that the cost of carry is negligible, virtually zero, in fact, and that you're getting all the time value in the world for mere pennies. Going into debt at today's low interest rates are perhaps the smartest thing you could ever do.

 

[oyarde]

I do not need the 100k at any interest .Not interested.

 

[tod evans]

I'll safeguard your $100k for 10% annually.....

 

[No Free Beer]

I do not need the 100k at any interest .Not interested.

I tend to agree with you.

But again, this is why Jordan's question, at least as it stands right now, doesn't make any sense because he's not being specific.

 

[Jordan]

Well, it matters what it's for. If it's something I need, like a home for my family (which I doubt you can find for 100K), I would say no. I don't want 100,000 jsut to have 100K, even at 2.8%. That's stupid. Again, you seem to be promoting debt.

The only benefit I could see (maybe) is if you obtain a tax deductible because of it. And the only way I would accept that is if I truly SAVED money.

This is exactly the point I am trying to make. It seems as though Keynesians just say "hey, go get in debt, it's okay! Just look how great those rates are!!!" When, if I don't need it, why accept it?

I don't want to be a slave to anyone if I can help it.

And for you to imply that if I don't accept that, I am "irrational" is ridiculous.

I'm sorry you see it as slavery. I see it as opportunity, as do many Americans. Debt is okay at these rates and assuming that you have the income to cover it. Rising consumer debt levels are not a concern, anyway, seeing as the total debt Americans hold is more manageable than their debt in 1994. We're a well financed country with ample cash flow to cover our liabilities.

jordan you need to be more specific. 2.8 percent a year? APR? EAR? you need to state whether or not the interest on the loan is tax deductible as well. the cost of carry is below inflation, so if you're talking about a fixed rate loan @ a cost thats less than inflation, its more advantageous than taking on debt at a rate thats higher than inflation without any tax benefits.

EAR after tax benefits. All in cost to you is 2.8%/year. But you're making this more complicated than it needs to be. Makes way more sense to borrow money today than at any point in history. And, let's be real here, if you're an inflationist, you should be grabbing every fixed rate loan you can find at today's interest rates. Debt isn't a problem, not at all.

The point of all this: Debt is inexpensive today. It's free if you're an inflationist. Therefore, you should not fear a rising level of debt. It is manageable, and the majority of it is fixed rate. The debt Americans hold today is not like the debt of 2006; it's not debt to a mortgage lender for a negative amortization loan on a bubblicious home with rates that could reset. Catastrophe was built into the system during the debt-fueled mortgage boom of the 2000s due to negative amortization loans and resets. Those are long gone. Debt today isn't relatable to debt in the mid-2000s, and it is much less costly than it was even in 1993. Debt is hardly a weak point for the American consumer.

 

[oyarde]

I honestly doubt the avg American even has a clue what they end up paying on a 100,000 dollar home on a 30 yr fixed rate loan , of any rate by thetime it is done...