beowulf 1 #51 March 12, 2013 QuoteQuoteQuoteQuoteQuote Quotewhen it comes to raising money to run government That's the problem - just running the government would be cheap. It's the 90% of the rest of the stuff that is so expensive. Like defense. SocSec is actually solvent, and Medicare has its own tax. Did you know that the average federal tax rate of the richest 400 people in the USA is below that of the average of the top 0.1%, which in turn is less than that of the top 1% So the super duper rich aren't being "soaked" at all compared with the merely rich. How is SS solvent? Check the numbers and you will see. If nothing changes SocSec is projected to become insolvent sometime between 2036 and 2042. Right now it is NOT insolvent. Modest changes (such as raising the earnings ceiling and raising retirement age for full benefits) can even fix the projected insolvency. I have looked at the numbers and it's essentially insolvent as is the Government. They can't pay bills with out having to borrow money. SS has no money, its all treasury bills and it will require more than modest changes for it to be long term solvent as will the government at large. It only appears solvent due to accounting trickery. http://www.theburningplatform.com/?p=46984 Quote Share this post Link to post Share on other sites billvon 2,396 #52 March 12, 2013 >I have looked at the numbers and it's essentially insolvent as is the Government. I think you might be confusing "in debt" and "insolvent." Someone who owes $500K on a mortgage and only has $100K in the bank is in debt but not insolvent. Someone who owes $500K on a mortgage AND can't make the payments is insolvent. Right now both our government and SS is in debt. Neither is insolvent. Quote Share this post Link to post Share on other sites beowulf 1 #53 March 12, 2013 Quote>I have looked at the numbers and it's essentially insolvent as is the Government. I think you might be confusing "in debt" and "insolvent." Someone who owes $500K on a mortgage and only has $100K in the bank is in debt but not insolvent. Someone who owes $500K on a mortgage AND can't make the payments is insolvent. Right now both our government and SS is in debt. Neither is insolvent. Government's that have their own currency can be insolvent and still pay their debts. It's called monetizing the debt. The reason the Gov has such low interest rates is because the Fed is monetizing the debt at the rate of $85 billion a month. The Fed is the biggest buyer of US debt and if they didn't do so, the US would be in big trouble and interest rates would be much higher. It's essentially insolvency, just not the same thing as what is insolvency for a company or you and I since we can't just print money. Quote Share this post Link to post Share on other sites billvon 2,396 #54 March 12, 2013 >Government's that have their own currency can be insolvent and still pay their debts. Then they're not insolvent. "Printing money" (specifically quantitative easing) may be - and likely is - a very dumb way to finance debt, and if done long term will likely end up in insolvency as lenders refuse to supply any more money. But until we can no longer pay our debts we are solvent. >It's essentially insolvency, just not the same thing as what is insolvency for a >company or you and I since we can't just print money. Agreed. The "personal finance' equivalent would be getting more credit cards and HELOC's. And while that is dumb, the person remains solvent as long as they can pay for all that debt. Quote Share this post Link to post Share on other sites beowulf 1 #55 March 12, 2013 Quote>Government's that have their own currency can be insolvent and still pay their debts. Then they're not insolvent. "Printing money" (specifically quantitative easing) may be - and likely is - a very dumb way to finance debt, and if done long term will likely end up in insolvency as lenders refuse to supply any more money. But until we can no longer pay our debts we are solvent. >It's essentially insolvency, just not the same thing as what is insolvency for a >company or you and I since we can't just print money. Agreed. The "personal finance' equivalent would be getting more credit cards and HELOC's. And while that is dumb, the person remains solvent as long as they can pay for all that debt. It's a difference with out much of a distinction when it's obvious that the US can't pay back what it owes with out having to just out right print the money. QE is the same thing as printing money or debasing the currency. It has a long history. Diocletian did it in Roman times and look how well it worked out for them. If you will notice I didn't say it's the same thing as insolvency as you point out as long as they can still pay their bills they aren't insolvent. But when you print money to pay bills the money eventually loses purchasing power so it's not a good way to pay bills and has long term side effects that are really bad. Quote Share this post Link to post Share on other sites beowulf 1 #56 March 12, 2013 Quoteand if done long term will likely end up in insolvency as lenders refuse to supply any more money. Do you really think the Fed will refuse to buy US Debt? Ever? The US can't afford for interest rates to rise at all. Other lenders aren't buying enough to keep interest rates this low. Quote Share this post Link to post Share on other sites billvon 2,396 #57 March 12, 2013 >It's a difference with out much of a distinction . . . Well, since our economy is currently surviving (albeit with problems) and we are currently servicing all our debt, I think there's a pretty big difference. If we stopped paying off debt the shit would hit the fan quite quickly. >QE is the same thing as printing money or debasing the currency. Agreed. >It has a long history. Diocletian did it in Roman times and look how well it worked out >for them. Well, given that the Roman Empire survived another 170 years after that - it was clearly not instantly fatal to their economy. As I mentioned, it's not a good long term strategy. >Do you really think the Fed will refuse to buy US Debt? Ever? No, but other investors will - and the Fed alone cannot control the value of our money. >The US can't afford for interest rates to rise at all. Other lenders aren't buying enough >to keep interest rates this low. Keep in mind that inflation is the friend of the overextended; a period of high inflation tends to devalue our debt and make it that much easier to pay off. (There are, of course, a myriad of other problems with inflation as well.) Quote Share this post Link to post Share on other sites beowulf 1 #58 March 12, 2013 Quote>It's a difference with out much of a distinction . . . Well, since our economy is currently surviving (albeit with problems) and we are currently servicing all our debt, I think there's a pretty big difference. If we stopped paying off debt the shit would hit the fan quite quickly. >QE is the same thing as printing money or debasing the currency. Agreed. >It has a long history. Diocletian did it in Roman times and look how well it worked out >for them. Well, given that the Roman Empire survived another 170 years after that - it was clearly not instantly fatal to their economy. As I mentioned, it's not a good long term strategy. >Do you really think the Fed will refuse to buy US Debt? Ever? No, but other investors will - and the Fed alone cannot control the value of our money. >The US can't afford for interest rates to rise at all. Other lenders aren't buying enough >to keep interest rates this low. Keep in mind that inflation is the friend of the overextended; a period of high inflation tends to devalue our debt and make it that much easier to pay off. (There are, of course, a myriad of other problems with inflation as well.) It always makes me think of that old cartoon of the guy falling from the building saying "so far so good", or something like that. Sure the Roman Empire did last another 170 years, but not with out a lot of problems associated with the debasement of the currency. We are headed down that road. I can't remember which Fed person said this and I am paraphrasing, QE is like peeing the bed it feels good at first but afterwards it's an awful mess. Quote>Do you really think the Fed will refuse to buy US Debt? Ever? No, but other investors will - and the Fed alone cannot control the value of our money. You are assuming that other investors will buy enough to keep interest rates low. QuoteKeep in mind that inflation is the friend of the overextended; a period of high inflation tends to devalue our debt and make it that much easier to pay off. (There are, of course, a myriad of other problems with inflation as well.) That is a very short term mindset. The long term affects of inflation is not good for anyone. Quote Share this post Link to post Share on other sites beowulf 1 #59 March 12, 2013 Missed this in the first reply. QuoteIf we stopped paying off debt the shit would hit the fan quite quickly. We aren't actually paying off the debt. We are accumulating more debt to keep up with servicing the existing debt. There is a big difference. Quote Share this post Link to post Share on other sites billvon 2,396 #60 March 12, 2013 >You are assuming that other investors will buy enough to keep interest rates low. No, I am assuming at some point they will stop doing that. Again, I am not saying that QE is a good idea (it's not) - but it is keeping us going. If we're smart we will cut spending and increase taxes to begin to actually pay off the debt, so we don't need to resort to such tricks in the future. >We aren't actually paying off the debt. Sorry, meant to say "servicing the debt" (i.e. meeting our minimum obligations.) Quote Share this post Link to post Share on other sites beowulf 1 #61 March 12, 2013 Quote>You are assuming that other investors will buy enough to keep interest rates low. No, I am assuming at some point they will stop doing that. Again, I am not saying that QE is a good idea (it's not) - but it is keeping us going. If we're smart we will cut spending and increase taxes to begin to actually pay off the debt, so we don't need to resort to such tricks in the future. QE isn't really keeping us going, it's just allowing the Government to continue borrowing at low interest rates. If the QE was stopped immediately the interest rates would start going up and the Government would be forced to cut spending and actually have a budget. The cost of the interest on the debt would quickly rise and cause lots of problems. Raising taxes only works up to a certain point and then it drives people out of the country and the actual money brought in from taxes will decrease. Cutting spending is the primary way to deal with this issue. Cutting taxes can also cause an increase in tax revenue. The way that happens is by encouraging the increase in new businesses. The more business you have the more tax revenue generated. It's the old business idea of making more money through high volume with a lower profit margin rather then having a higher margin with low volume. Quote Share this post Link to post Share on other sites billvon 2,396 #62 March 12, 2013 >QE isn't really keeping us going, it's just allowing the Government to >continue borrowing at low interest rates. That's what I am saying. I feel like I keep saying "QE is a short term liquidity strategy but it's a really bad long term solution" and you keep saying "no, no, it's a really bad long term solution" so I'll stop here. Quote Share this post Link to post Share on other sites Heatmiser 0 #63 March 12, 2013 Quote Quote Why Not Soak the Rich? I'd recommend a seasoned brine. Nah, vinegar. Pickle em!What you say is reflective of your knowledge...HOW ya say it is reflective of your experience. Airtwardo Someone's going to be spanked! Hopefully, it will be me. Skymama Quote Share this post Link to post Share on other sites beowulf 1 #64 March 12, 2013 Quote>QE isn't really keeping us going, it's just allowing the Government to >continue borrowing at low interest rates. That's what I am saying. I feel like I keep saying "QE is a short term liquidity strategy but it's a really bad long term solution" and you keep saying "no, no, it's a really bad long term solution" so I'll stop here. What I am trying to say is, QE isn't really even a short term solution. The problem is too much debt. All QE does is allow the Gov to avoid having to deal with the debt problem by creating more of the problem, debt. This just makes the problem that much worse and harder to deal with when we finally can't avoid it. So it's not really even a short term solution, it's just avoiding the problem. Quote Share this post Link to post Share on other sites Andy9o8 0 #65 March 12, 2013 Quote Quote Quote Why Not Soak the Rich? I'd recommend a seasoned brine. Nah, vinegar. Pickle em! With their 3-martini lunches, they're already pickled. Quote Share this post Link to post Share on other sites kelpdiver 2 #66 March 13, 2013 Quote>I have looked at the numbers and it's essentially insolvent as is the Government. I think you might be confusing "in debt" and "insolvent." Someone who owes $500K on a mortgage and only has $100K in the bank is in debt but not insolvent. Someone who owes $500K on a mortgage AND can't make the payments is insolvent. Right now both our government and SS is in debt. Neither is insolvent. Indeed - SS is more or less breaking even these days - cash flow might finally be slightly negative after 3 decades (since the last FICA increase) of positive cash flow. It won't be insolvent in the 30s either, it just won't be able to pay its current level of benefits. But those benefits are not guaranteed, unlike a loan. It can lower its obligations with a simple act of Congress and signature by the President. Quote Share this post Link to post Share on other sites tkhayes 125 #67 March 13, 2013 that's my point, you think he's done something 'significant' and I disagree with your meaning of significant or earning. it's just a line and where do you set it? and who gets to set that line? If you think that power does not corrupt, then..... Quote Share this post Link to post Share on other sites tkhayes 125 #68 March 13, 2013 QuoteQuoteQuote20 years ago, Home Depot was a much smaller company. 1992 revenue was 7.1B. It also predated the changes (many driven by tax policy) towards options based compensation. exactly. so revenues were up by 10 times, and profit doubled, but CEO compensation went up by 100 times? Yep, that makes sense. I bet he 'earned it'. And stock value did not rise with profits so he got a $230M severance package. that makes sense too, I guess he 'earned it'. Doubling revenue for a 8 figure company is no small trick, particularly when you look at the major downturn in the early years of the 2000-2005 period. Put it another way - on average every year he increased the revenue more than the entire revenue of the 1992 company. You probably should pick a better example to be so indignant about. He earned it a hell of a lot more than Chainsaw Al did...why not use him as your example, not a guy that doubled revenue and double'd and a half profits in 5 years. And again, if you ignore the change in compensation, any comparison to early 90s and earlier is going to look egregious to you. no argument from me that doubling revenue is no small trick. But if the profit to the shareholders does not follow suit, then have you really done your job? We simply disagree on what is reasonable and what is earned and what compensation should be set. The CEO of IBM Canada (When i worked there) said directly to me one time "IBM exists to send a dividend to the shareholders" And that is it's ONLY purpose, which was the point of the compensation. Of course, then in 1992 or so, he was making about $900K in salary compensation and package. Now if the Home Depot guy gets to decide his salary (with the help of his friends), his compensation and the compensation of everyone else in the company (which he effectively does), then he is bound to pay himself a little extra and structure a deal that works best for him. After-all, he meets (some of) the goals by reducing cost, including the costs of his staff, which arguably do all (most of) the work. Writing a contract for yourself does not define 'earned' in my book. Many companies have been plundered by their higher execs. Tyco for one. Home Depot for another. Wall st for the most recent stuff, and so on. So if reducing their pay is 'stealing from them', then what if the shareholders, the Board of Directors, the committees and everyone else involved in the decision process all agree to reduce the wages and packages of the top executives, then is that also 'stealing'? Or is that democracy within a corporation at work, the way it should be. I mean if they decide to pay them $1, then I guess that means they earned that dollar. and if they decide to pay them $100T and bankrupt the company, then I guess that means they earned the $100T, right? at least that is the logic I am seeing in this thread. Quote Share this post Link to post Share on other sites OHCHUTE 0 #69 March 13, 2013 It's so exasperating seeing Bill Gates spend money in India and Africa when we were the ones who gave him all his money by having to purchase his licenses every other year due to having to upgrade. He should be forced to spend his money here or be taxed. You use to be able to buy a refrigerator and it lasted for 40 years. Now that everything is electrified and turned into a computer including stoves and cars, you have to upgrade every other year. NOW, soon you're going to need an iphone every other year as that's the new computer. Soon your eyeglasses will be a computer. Who needs 40 billion anyway....' Quote Share this post Link to post Share on other sites kelpdiver 2 #70 March 13, 2013 Quote no argument from me that doubling revenue is no small trick. But if the profit to the shareholders does not follow suit, then have you really done your job? We simply disagree on what is reasonable and what is earned and what compensation should be set. The CEO of IBM Canada (When i worked there) said directly to me one time "IBM exists to send a dividend to the shareholders" And that is it's ONLY purpose, in the long term, many feel that the stock price should equal the future flow of dividends with time factored in...ends up being like an integral. And the ability to pay dividends is based on earnings. A lot of CEOs have doubled revenue by opening up too many stores (Boston Market, Krispy Kreme donuts) to get incremental dollars, but at the cost of revenue and earnings per store. Even if the stock was trailing in the long term, quality growth will be rewarded at some point. But in this case, patience ran thin. If the board had thrown him out for poor performance, then accelerating the options seems undeserved. It's not the case here. As I said, there are much better examples to pick out - CEOs who ran their company down (Carly Fiorina?) and still ran off with unvested options. Or if you like, tackle the subject of options/RSUs that are in the money even if the stock stays flat or declines. These should only be worthwhile if the stock returns a reasonable rate, and the value should be the alpha, not the beta of the stock. IOW, the strike price should increase annually. Quote Share this post Link to post Share on other sites Heatmiser 0 #71 March 13, 2013 Quote It's so exasperating seeing Bill Gates spend money in India and Africa when we were the ones who gave him all his money by having to purchase his licenses every other year due to having to upgrade. He should be forced to spend his money here or be taxed. You use to be able to buy a refrigerator and it lasted for 40 years. Now that everything is electrified and turned into a computer including stoves and cars, you have to upgrade every other year. NOW, soon you're going to need an iphone every other year as that's the new computer. Soon your eyeglasses will be a computer. Who needs 40 billion anyway....' Really? I suppose you never spend a dime outside of your city, or county or state, as the tax revenue will go to someone else, too, huh? I'm sure you would be all for a law that would require you to do jut that, too? Maybe, just maybe, we should learn to be competitive on a global scale, and offer something to Microsoft that they can't get overseas? If that is not direct cost savings in initial manufacturing and support, than something else that Microsoft couldn't live without.What you say is reflective of your knowledge...HOW ya say it is reflective of your experience. Airtwardo Someone's going to be spanked! Hopefully, it will be me. Skymama Quote Share this post Link to post Share on other sites tkhayes 125 #72 March 13, 2013 no one said anything about 'forcing anyone' to do anything. The discussion is about whether or not people 'earned' their wages. nice try though. pretty amazing when you try to have a rational discussion and then people take it to the ends of the earth with extreme arguments that are not actually being made. Quote Share this post Link to post Share on other sites tkhayes 125 #73 March 13, 2013 QuoteIf the board had thrown him out for poor performance, then accelerating the options seems undeserved. It's not the case here. As I said, there are much better examples to pick out - CEOs who ran their company down (Carly Fiorina?) and still ran off with unvested options. Or if you like, tackle the subject of options/RSUs that are in the money even if the stock stays flat or declines. These should only be worthwhile if the stock returns a reasonable rate, and the value should be the alpha, not the beta of the stock. IOW, the strike price should increase annually. I tackle them all, but I only used the ones I used. Watching wall st day-to-day is not one of my hobbies. I know that there are abuses out there, and had one or two examples of it, knowing full well there are many others. Quote Share this post Link to post Share on other sites kallend 1,623 #74 March 13, 2013 QuoteIt's so exasperating seeing Bill Gates spend money in India and Africa when we were the ones who gave him all his money by having to purchase his licenses every other year due to having to upgrade. He should be forced to spend his money here or be taxed. You use to be able to buy a refrigerator and it lasted for 40 years. Now that everything is electrified and turned into a computer including stoves and cars, you have to upgrade every other year. NOW, soon you're going to need an iphone every other year as that's the new computer. Soon your eyeglasses will be a computer. Who needs 40 billion anyway....' Bill Gates can spend his money however he chooses. All I ask is that he pays his taxes AT LEAST at the same rate as middle class taxpayers and not at some preferred low rate only accessible to the extremely wealthy.... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites rehmwa 2 #75 March 13, 2013 QuoteThe discussion is about whether or not people 'earned' their wages. those discussions are idiotically subjective, they are really pointless what metric do you like "ounces of sweat per day?" ... Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants Quote Share this post Link to post Share on other sites Prev 1 2 3 4 5 6 Next Page 3 of 6 Join the conversation You can post now and register later. If you have an account, sign in now to post with your account. Note: Your post will require moderator approval before it will be visible. Reply to this topic... × Pasted as rich text. Paste as plain text instead Only 75 emoji are allowed. × Your link has been automatically embedded. Display as a link instead × Your previous content has been restored. Clear editor × You cannot paste images directly. Upload or insert images from URL. Insert image from URL × Desktop Tablet Phone Submit Reply 0
billvon 2,396 #52 March 12, 2013 >I have looked at the numbers and it's essentially insolvent as is the Government. I think you might be confusing "in debt" and "insolvent." Someone who owes $500K on a mortgage and only has $100K in the bank is in debt but not insolvent. Someone who owes $500K on a mortgage AND can't make the payments is insolvent. Right now both our government and SS is in debt. Neither is insolvent. Quote Share this post Link to post Share on other sites
beowulf 1 #53 March 12, 2013 Quote>I have looked at the numbers and it's essentially insolvent as is the Government. I think you might be confusing "in debt" and "insolvent." Someone who owes $500K on a mortgage and only has $100K in the bank is in debt but not insolvent. Someone who owes $500K on a mortgage AND can't make the payments is insolvent. Right now both our government and SS is in debt. Neither is insolvent. Government's that have their own currency can be insolvent and still pay their debts. It's called monetizing the debt. The reason the Gov has such low interest rates is because the Fed is monetizing the debt at the rate of $85 billion a month. The Fed is the biggest buyer of US debt and if they didn't do so, the US would be in big trouble and interest rates would be much higher. It's essentially insolvency, just not the same thing as what is insolvency for a company or you and I since we can't just print money. Quote Share this post Link to post Share on other sites
billvon 2,396 #54 March 12, 2013 >Government's that have their own currency can be insolvent and still pay their debts. Then they're not insolvent. "Printing money" (specifically quantitative easing) may be - and likely is - a very dumb way to finance debt, and if done long term will likely end up in insolvency as lenders refuse to supply any more money. But until we can no longer pay our debts we are solvent. >It's essentially insolvency, just not the same thing as what is insolvency for a >company or you and I since we can't just print money. Agreed. The "personal finance' equivalent would be getting more credit cards and HELOC's. And while that is dumb, the person remains solvent as long as they can pay for all that debt. Quote Share this post Link to post Share on other sites
beowulf 1 #55 March 12, 2013 Quote>Government's that have their own currency can be insolvent and still pay their debts. Then they're not insolvent. "Printing money" (specifically quantitative easing) may be - and likely is - a very dumb way to finance debt, and if done long term will likely end up in insolvency as lenders refuse to supply any more money. But until we can no longer pay our debts we are solvent. >It's essentially insolvency, just not the same thing as what is insolvency for a >company or you and I since we can't just print money. Agreed. The "personal finance' equivalent would be getting more credit cards and HELOC's. And while that is dumb, the person remains solvent as long as they can pay for all that debt. It's a difference with out much of a distinction when it's obvious that the US can't pay back what it owes with out having to just out right print the money. QE is the same thing as printing money or debasing the currency. It has a long history. Diocletian did it in Roman times and look how well it worked out for them. If you will notice I didn't say it's the same thing as insolvency as you point out as long as they can still pay their bills they aren't insolvent. But when you print money to pay bills the money eventually loses purchasing power so it's not a good way to pay bills and has long term side effects that are really bad. Quote Share this post Link to post Share on other sites
beowulf 1 #56 March 12, 2013 Quoteand if done long term will likely end up in insolvency as lenders refuse to supply any more money. Do you really think the Fed will refuse to buy US Debt? Ever? The US can't afford for interest rates to rise at all. Other lenders aren't buying enough to keep interest rates this low. Quote Share this post Link to post Share on other sites
billvon 2,396 #57 March 12, 2013 >It's a difference with out much of a distinction . . . Well, since our economy is currently surviving (albeit with problems) and we are currently servicing all our debt, I think there's a pretty big difference. If we stopped paying off debt the shit would hit the fan quite quickly. >QE is the same thing as printing money or debasing the currency. Agreed. >It has a long history. Diocletian did it in Roman times and look how well it worked out >for them. Well, given that the Roman Empire survived another 170 years after that - it was clearly not instantly fatal to their economy. As I mentioned, it's not a good long term strategy. >Do you really think the Fed will refuse to buy US Debt? Ever? No, but other investors will - and the Fed alone cannot control the value of our money. >The US can't afford for interest rates to rise at all. Other lenders aren't buying enough >to keep interest rates this low. Keep in mind that inflation is the friend of the overextended; a period of high inflation tends to devalue our debt and make it that much easier to pay off. (There are, of course, a myriad of other problems with inflation as well.) Quote Share this post Link to post Share on other sites
beowulf 1 #58 March 12, 2013 Quote>It's a difference with out much of a distinction . . . Well, since our economy is currently surviving (albeit with problems) and we are currently servicing all our debt, I think there's a pretty big difference. If we stopped paying off debt the shit would hit the fan quite quickly. >QE is the same thing as printing money or debasing the currency. Agreed. >It has a long history. Diocletian did it in Roman times and look how well it worked out >for them. Well, given that the Roman Empire survived another 170 years after that - it was clearly not instantly fatal to their economy. As I mentioned, it's not a good long term strategy. >Do you really think the Fed will refuse to buy US Debt? Ever? No, but other investors will - and the Fed alone cannot control the value of our money. >The US can't afford for interest rates to rise at all. Other lenders aren't buying enough >to keep interest rates this low. Keep in mind that inflation is the friend of the overextended; a period of high inflation tends to devalue our debt and make it that much easier to pay off. (There are, of course, a myriad of other problems with inflation as well.) It always makes me think of that old cartoon of the guy falling from the building saying "so far so good", or something like that. Sure the Roman Empire did last another 170 years, but not with out a lot of problems associated with the debasement of the currency. We are headed down that road. I can't remember which Fed person said this and I am paraphrasing, QE is like peeing the bed it feels good at first but afterwards it's an awful mess. Quote>Do you really think the Fed will refuse to buy US Debt? Ever? No, but other investors will - and the Fed alone cannot control the value of our money. You are assuming that other investors will buy enough to keep interest rates low. QuoteKeep in mind that inflation is the friend of the overextended; a period of high inflation tends to devalue our debt and make it that much easier to pay off. (There are, of course, a myriad of other problems with inflation as well.) That is a very short term mindset. The long term affects of inflation is not good for anyone. Quote Share this post Link to post Share on other sites
beowulf 1 #59 March 12, 2013 Missed this in the first reply. QuoteIf we stopped paying off debt the shit would hit the fan quite quickly. We aren't actually paying off the debt. We are accumulating more debt to keep up with servicing the existing debt. There is a big difference. Quote Share this post Link to post Share on other sites
billvon 2,396 #60 March 12, 2013 >You are assuming that other investors will buy enough to keep interest rates low. No, I am assuming at some point they will stop doing that. Again, I am not saying that QE is a good idea (it's not) - but it is keeping us going. If we're smart we will cut spending and increase taxes to begin to actually pay off the debt, so we don't need to resort to such tricks in the future. >We aren't actually paying off the debt. Sorry, meant to say "servicing the debt" (i.e. meeting our minimum obligations.) Quote Share this post Link to post Share on other sites
beowulf 1 #61 March 12, 2013 Quote>You are assuming that other investors will buy enough to keep interest rates low. No, I am assuming at some point they will stop doing that. Again, I am not saying that QE is a good idea (it's not) - but it is keeping us going. If we're smart we will cut spending and increase taxes to begin to actually pay off the debt, so we don't need to resort to such tricks in the future. QE isn't really keeping us going, it's just allowing the Government to continue borrowing at low interest rates. If the QE was stopped immediately the interest rates would start going up and the Government would be forced to cut spending and actually have a budget. The cost of the interest on the debt would quickly rise and cause lots of problems. Raising taxes only works up to a certain point and then it drives people out of the country and the actual money brought in from taxes will decrease. Cutting spending is the primary way to deal with this issue. Cutting taxes can also cause an increase in tax revenue. The way that happens is by encouraging the increase in new businesses. The more business you have the more tax revenue generated. It's the old business idea of making more money through high volume with a lower profit margin rather then having a higher margin with low volume. Quote Share this post Link to post Share on other sites
billvon 2,396 #62 March 12, 2013 >QE isn't really keeping us going, it's just allowing the Government to >continue borrowing at low interest rates. That's what I am saying. I feel like I keep saying "QE is a short term liquidity strategy but it's a really bad long term solution" and you keep saying "no, no, it's a really bad long term solution" so I'll stop here. Quote Share this post Link to post Share on other sites
Heatmiser 0 #63 March 12, 2013 Quote Quote Why Not Soak the Rich? I'd recommend a seasoned brine. Nah, vinegar. Pickle em!What you say is reflective of your knowledge...HOW ya say it is reflective of your experience. Airtwardo Someone's going to be spanked! Hopefully, it will be me. Skymama Quote Share this post Link to post Share on other sites
beowulf 1 #64 March 12, 2013 Quote>QE isn't really keeping us going, it's just allowing the Government to >continue borrowing at low interest rates. That's what I am saying. I feel like I keep saying "QE is a short term liquidity strategy but it's a really bad long term solution" and you keep saying "no, no, it's a really bad long term solution" so I'll stop here. What I am trying to say is, QE isn't really even a short term solution. The problem is too much debt. All QE does is allow the Gov to avoid having to deal with the debt problem by creating more of the problem, debt. This just makes the problem that much worse and harder to deal with when we finally can't avoid it. So it's not really even a short term solution, it's just avoiding the problem. Quote Share this post Link to post Share on other sites
Andy9o8 0 #65 March 12, 2013 Quote Quote Quote Why Not Soak the Rich? I'd recommend a seasoned brine. Nah, vinegar. Pickle em! With their 3-martini lunches, they're already pickled. Quote Share this post Link to post Share on other sites
kelpdiver 2 #66 March 13, 2013 Quote>I have looked at the numbers and it's essentially insolvent as is the Government. I think you might be confusing "in debt" and "insolvent." Someone who owes $500K on a mortgage and only has $100K in the bank is in debt but not insolvent. Someone who owes $500K on a mortgage AND can't make the payments is insolvent. Right now both our government and SS is in debt. Neither is insolvent. Indeed - SS is more or less breaking even these days - cash flow might finally be slightly negative after 3 decades (since the last FICA increase) of positive cash flow. It won't be insolvent in the 30s either, it just won't be able to pay its current level of benefits. But those benefits are not guaranteed, unlike a loan. It can lower its obligations with a simple act of Congress and signature by the President. Quote Share this post Link to post Share on other sites
tkhayes 125 #67 March 13, 2013 that's my point, you think he's done something 'significant' and I disagree with your meaning of significant or earning. it's just a line and where do you set it? and who gets to set that line? If you think that power does not corrupt, then..... Quote Share this post Link to post Share on other sites
tkhayes 125 #68 March 13, 2013 QuoteQuoteQuote20 years ago, Home Depot was a much smaller company. 1992 revenue was 7.1B. It also predated the changes (many driven by tax policy) towards options based compensation. exactly. so revenues were up by 10 times, and profit doubled, but CEO compensation went up by 100 times? Yep, that makes sense. I bet he 'earned it'. And stock value did not rise with profits so he got a $230M severance package. that makes sense too, I guess he 'earned it'. Doubling revenue for a 8 figure company is no small trick, particularly when you look at the major downturn in the early years of the 2000-2005 period. Put it another way - on average every year he increased the revenue more than the entire revenue of the 1992 company. You probably should pick a better example to be so indignant about. He earned it a hell of a lot more than Chainsaw Al did...why not use him as your example, not a guy that doubled revenue and double'd and a half profits in 5 years. And again, if you ignore the change in compensation, any comparison to early 90s and earlier is going to look egregious to you. no argument from me that doubling revenue is no small trick. But if the profit to the shareholders does not follow suit, then have you really done your job? We simply disagree on what is reasonable and what is earned and what compensation should be set. The CEO of IBM Canada (When i worked there) said directly to me one time "IBM exists to send a dividend to the shareholders" And that is it's ONLY purpose, which was the point of the compensation. Of course, then in 1992 or so, he was making about $900K in salary compensation and package. Now if the Home Depot guy gets to decide his salary (with the help of his friends), his compensation and the compensation of everyone else in the company (which he effectively does), then he is bound to pay himself a little extra and structure a deal that works best for him. After-all, he meets (some of) the goals by reducing cost, including the costs of his staff, which arguably do all (most of) the work. Writing a contract for yourself does not define 'earned' in my book. Many companies have been plundered by their higher execs. Tyco for one. Home Depot for another. Wall st for the most recent stuff, and so on. So if reducing their pay is 'stealing from them', then what if the shareholders, the Board of Directors, the committees and everyone else involved in the decision process all agree to reduce the wages and packages of the top executives, then is that also 'stealing'? Or is that democracy within a corporation at work, the way it should be. I mean if they decide to pay them $1, then I guess that means they earned that dollar. and if they decide to pay them $100T and bankrupt the company, then I guess that means they earned the $100T, right? at least that is the logic I am seeing in this thread. Quote Share this post Link to post Share on other sites
OHCHUTE 0 #69 March 13, 2013 It's so exasperating seeing Bill Gates spend money in India and Africa when we were the ones who gave him all his money by having to purchase his licenses every other year due to having to upgrade. He should be forced to spend his money here or be taxed. You use to be able to buy a refrigerator and it lasted for 40 years. Now that everything is electrified and turned into a computer including stoves and cars, you have to upgrade every other year. NOW, soon you're going to need an iphone every other year as that's the new computer. Soon your eyeglasses will be a computer. Who needs 40 billion anyway....' Quote Share this post Link to post Share on other sites
kelpdiver 2 #70 March 13, 2013 Quote no argument from me that doubling revenue is no small trick. But if the profit to the shareholders does not follow suit, then have you really done your job? We simply disagree on what is reasonable and what is earned and what compensation should be set. The CEO of IBM Canada (When i worked there) said directly to me one time "IBM exists to send a dividend to the shareholders" And that is it's ONLY purpose, in the long term, many feel that the stock price should equal the future flow of dividends with time factored in...ends up being like an integral. And the ability to pay dividends is based on earnings. A lot of CEOs have doubled revenue by opening up too many stores (Boston Market, Krispy Kreme donuts) to get incremental dollars, but at the cost of revenue and earnings per store. Even if the stock was trailing in the long term, quality growth will be rewarded at some point. But in this case, patience ran thin. If the board had thrown him out for poor performance, then accelerating the options seems undeserved. It's not the case here. As I said, there are much better examples to pick out - CEOs who ran their company down (Carly Fiorina?) and still ran off with unvested options. Or if you like, tackle the subject of options/RSUs that are in the money even if the stock stays flat or declines. These should only be worthwhile if the stock returns a reasonable rate, and the value should be the alpha, not the beta of the stock. IOW, the strike price should increase annually. Quote Share this post Link to post Share on other sites
Heatmiser 0 #71 March 13, 2013 Quote It's so exasperating seeing Bill Gates spend money in India and Africa when we were the ones who gave him all his money by having to purchase his licenses every other year due to having to upgrade. He should be forced to spend his money here or be taxed. You use to be able to buy a refrigerator and it lasted for 40 years. Now that everything is electrified and turned into a computer including stoves and cars, you have to upgrade every other year. NOW, soon you're going to need an iphone every other year as that's the new computer. Soon your eyeglasses will be a computer. Who needs 40 billion anyway....' Really? I suppose you never spend a dime outside of your city, or county or state, as the tax revenue will go to someone else, too, huh? I'm sure you would be all for a law that would require you to do jut that, too? Maybe, just maybe, we should learn to be competitive on a global scale, and offer something to Microsoft that they can't get overseas? If that is not direct cost savings in initial manufacturing and support, than something else that Microsoft couldn't live without.What you say is reflective of your knowledge...HOW ya say it is reflective of your experience. Airtwardo Someone's going to be spanked! Hopefully, it will be me. Skymama Quote Share this post Link to post Share on other sites
tkhayes 125 #72 March 13, 2013 no one said anything about 'forcing anyone' to do anything. The discussion is about whether or not people 'earned' their wages. nice try though. pretty amazing when you try to have a rational discussion and then people take it to the ends of the earth with extreme arguments that are not actually being made. Quote Share this post Link to post Share on other sites
tkhayes 125 #73 March 13, 2013 QuoteIf the board had thrown him out for poor performance, then accelerating the options seems undeserved. It's not the case here. As I said, there are much better examples to pick out - CEOs who ran their company down (Carly Fiorina?) and still ran off with unvested options. Or if you like, tackle the subject of options/RSUs that are in the money even if the stock stays flat or declines. These should only be worthwhile if the stock returns a reasonable rate, and the value should be the alpha, not the beta of the stock. IOW, the strike price should increase annually. I tackle them all, but I only used the ones I used. Watching wall st day-to-day is not one of my hobbies. I know that there are abuses out there, and had one or two examples of it, knowing full well there are many others. Quote Share this post Link to post Share on other sites
kallend 1,623 #74 March 13, 2013 QuoteIt's so exasperating seeing Bill Gates spend money in India and Africa when we were the ones who gave him all his money by having to purchase his licenses every other year due to having to upgrade. He should be forced to spend his money here or be taxed. You use to be able to buy a refrigerator and it lasted for 40 years. Now that everything is electrified and turned into a computer including stoves and cars, you have to upgrade every other year. NOW, soon you're going to need an iphone every other year as that's the new computer. Soon your eyeglasses will be a computer. Who needs 40 billion anyway....' Bill Gates can spend his money however he chooses. All I ask is that he pays his taxes AT LEAST at the same rate as middle class taxpayers and not at some preferred low rate only accessible to the extremely wealthy.... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites
rehmwa 2 #75 March 13, 2013 QuoteThe discussion is about whether or not people 'earned' their wages. those discussions are idiotically subjective, they are really pointless what metric do you like "ounces of sweat per day?" ... Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants Quote Share this post Link to post Share on other sites