US Budget for Dummies....

because

Sorry but, no, it isn't 'just the facts'. It is opinion of what people might, or might not, do under certain circumstances and presumptions but that opinion ignores numerous factors, some of which I delineated in a previous post.

because

Yep. That's what annoyed me... "open-minded" Schuler quoted an article which does nothing but quote three disparate opinions... that's what provoked my, "And the horse may talk"... which went right over everyone's heads >:-} ...Jim Thompson

I think you're right on about location close to work. I note an alarming increase in Vespa-sized motorized scooters in traffic... clearly students or working people with an Obama-enforced need to cut costs. ...Jim Thompson

THAT is our major problem... the leftists think taxes are BORNE by those evil rich entrepreneurs. ...Jim Thompson

-- | James E.Thompson, CTO | mens | | Analog Innovations, Inc. | et | | Analog/Mixed-Signal ASIC's and Discrete Systems | manus | | Phoenix, Arizona 85048 Skype: Contacts Only | | | Voice:(480)460-2350 Fax: Available upon request | Brass Rat | | E-mail Icon at

he covers that.

They don't. No rents change hand, so no tax.

I doubt the taxers thought it that far through. I suspect one meaning is that they expect it to drive people back to buying again.

Yep.

Right.

but property rents are generally priced at close to what the market will bear. Whether or not the tax will increase vacancy and not affect rates - or - increase rates depends on the place. Some place* with high occupancy will see increases in rates; less occupied regions will not.

It wasn't intended as one.

The thing we're talking about is Bretton-Woods, and the French ( again ) defected, refusing to keep reserves in dollars.

The US had not particularly devalued the dollar. Public debt had *declined* under Nixon-Ford, and under the Democrat regimes before.

Yep. See, that system doesn't work very well.

The gold standard sounds better than it is; in fact, the exchange rate between gold and paper is very hard to get right, and countries can cheat.

I mean those who do economics in the tradition of Irving Fisher and Milton Friedman.

It's not hard to observe , but it makes little sense.

I didn't catch what you were pointed at in the above paragraphs. Was trying to sum it up...

But the money supply will constrain growth. This happened all the time in the early history of the United States.

Not so much. Google for Douglas Irwin France Great Depression. It's a widely under reported story, but I think it holds up. Looking at what happened to the Spanish Empire because of the influx of metals also holds up fairly well. In that case, there was no paper currency but there was a glut of silver, leading to an exhaustion of the Spanish economy.

The problem is that they issued *less* currency than they had gold. The net effect is to reduce currency in circulation globally.

Nossir. Too *much* gold in France, and conversely too *little* gold elsewhere.

They, in effect, held more gold than their published exchange rate for currency would support. I agree it's a confusing thing, and it's not clear why they'd do that, other than that there had been a short sharp hyperinflation in france early in the interwar period.

That was a futile gesture.

I mean that there's more than one version of what is meant by "the gold standard".

But there is more than one story to how panics happen. That's the point. Politically, the tension is expressed through opposition, although that doesn't do any good in the real economy.

I thought you were talking about the 2008 Crisis. indeed, that's what people say happened then, too.

Right.

Nonsense. You assume that people have a choice. "Hmm, let see, roof tonight or no roof." You're flat wrong. Taxes are a cost on all parties so it gets passed on to the bottom of the food chain.

WRONG! You've never studied economics, I see.

"Land is different" comes directly *from* the study of economics. See the work of David Ricardo; it's canonically about agricultural land as a factor of production but it generalizes to any land use within limits.

Ask yourself why people buy rental property. Look into how they are used for building wealth. The principal thing about any rental unit is the expected rise in property value. If one want pure cash flow, you do something else.

People adjust choices based on location.

That is true for transformative "consumer" or durable goods. It may or may not be the case for land-based goods.

An apartment in Wichita transported to SanFran has a lot more value. Why is that?

To a small degree. So they're paying the "tax" by accepting a lower standard of living (and paying more for commuting). You don't consider that a cost? No, given your other recent posting, I suppose not.

Nonsense.

Does the SanFran employee commute from Wichita? Why not?

because

Land is *not* different. If what you say is true, simply raise the taxes on rentals to 1000%. It's free money!

Profit. Duh! Wrong. There is money in cash flow in most areas, though the goalpost relocation attempt is noted.

because

Hong Kong, Japan and even some locations in the US have done exactly that, historically ( although not 1000% ).

Sigh* It's *NOT* a goalpost attempt - it's the point I am alluding to. Under the right constraints, capture of value added because of land-location rents cannot be passed on to end consumers. The rental tax is *partially* that, and will be applicable under some circumstances.

because

Why not? It doesn't matter, right? Raise it to 100% of the rental! That's the leftist's way!

Baloney.

because

I know he supposedly 'covers' it but the point is his stated premise of "If tenants have many options" ignores the landlord's options, which he claims is 'a different category'. It isn't and points to one of the flawed assumptions in his 'opinion' of the '4 possibilities'.

The landlord always has 'options' and he tries to obfuscate that with weasel words like 'many' and 'not many'. It doesn't take 'many options' to pass the tax on.

It only takes one hard fact: if there is a tax to be paid then the money has to come from 'somewhere' and, in a free market, that 'somewhere' is the renter.

That was exactly the point, as exemplified by the next paragraph stating "so the 'purpose' of it [the tax] is defeated."

The taxers never 'think it through' and it's simply a fantasy that the consumer is going to somehow 'avoid' the tax.

"One meaning" of what? The alleged "meaning" that the author is supposed to be explicitly explaining?

Which is precisely why screwing around with taxes only forces it to adjust, at the expense of the renter.

One can 'speculate' it as a 'theoretical possibility' but in the real world its not going to happen. You don't make money with vacant apartments and if they were occupied before the tax, with the vacancy now because the renter is "living in their parent's basement," then you have the situation I described above.

The landlord HAS to because he has to make a profit and renting apartments is never his 'only choice'.

They both will because the 'less occupied' region is already under immense pressure to increase rents to 'subsidize' the fallow space.

NYC is a poor example for your case because it's rent controlled, so they 'pretend' there's no rent increase. But if you look at rental rates they're artificially skewed to the 'high rent' end, producing a horrendous shortage on the low end of the scale. So the consumer is again 'paying' by lack of mobility (try moving and you'll never find another apartment) and "living in their parent's basement," due to the shortage, with the 'high rent' end paying both the increase and to 'subsidize' the 'low rent' shortage.

Then there's no reason to say it.

Which is when the dollar was pegged to $35/ounce. I know what we were talking about: Nixon taking us off the gold standard.

I'm no fan of the French but would you keep dollars at $35/ounce when the market says it's $120/ounce?

You can weasel 'it shouldn't be so' all you like but the cold hard fact is that gold was going for 3 times the peg rate on the open market.

I never said it did. That still, however, begs the question of why.

That's what I just said.

Milton Friedman said essentially what I did above when stating "countries tend to 'print money', regardless of the 'gold standard', as a consequence of the 'monetary policy' (encourage employment, fund a war, or whatever) enabled by the central bank."

Milton Friedman: "If an automatic commodity standard were feasible, it would provide an excellent solution to the liberal?s (i.e., classic liberal) dilemma: a stable monetary framework without danger of the irresponsible exercise of monetary powers. . . . But?such an automatic system has historically never proved feasible. It has always tended to develop in the direction of a mixed system containing fiduciary elements... . . . And certainly the situation is now more extreme as a result of the adoption by country after country of the view that government has responsibility for ?full employment.? . . . It [a gold standard] is not feasible because the mythology and beliefs required to make it effective do not exist."

The issue was "no other way," but there is a way. You just want to 'complain' it isn't to your liking.

I didn't say it was, or was not, the 'best' way either; just that 'there is a way'.

One example, assuming you found one, doesn't make it 'common'.

It doesn't because France DID print money consistent with the gold inflows, so the fact is they did not "hold more gold than they issue[d] paper." The problem was the economic money multiplier.

The Fed, on the other hand, WAS sterilizing gold.

Fer Christ's sake, with no paper currency how the hell can it be "hold[ing] more gold than they issue PAPER?" Since they didn't ISSUE paper?

Except they didn't.

And I quote "Finance Minister Paul Reynaud (1933, 258) pointed out that new francs had been issued in almost equal value to the amount of gold accumulated between 1928 and 1932 ?as is required by the gold standard system.?

Perhaps, but there was only one during the time in question.

If that's the 'point' then it's off topic because we weren't talking about 'how' panics 'happen' but the irresponsibility of government officials promoting economic lynch mob bullshit.

Oh, wait, I forgot. That IS it's purpose, says Pres. Obama.

No, was talking Great Depression, just like everything else in the post was.