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Re: The Greatest Danger Investors Face

I'm spending a couple of weeks in Denmark, which has a high standard of living, large social benefits, plus a free market economy. It's a small, largely homogenous nation. People are happy. Scandinavia seems like a unique place.

This kind of society didn't evolve overnight. It's full of contradictions. For example, people are relaxed, but also careful to follow rules. The police are respected and take their job very seriously. Don't even think about disobeying a policeman. While there's little poverty, there's significant inequality of wealth.

Looking at what has happened in previously lovely cities like Seattle and San Francisco, I'm not very confident that Americans know what they're doing when it comes to creating a functional, socialized state.

Denmark is one possible outcome, but Venezuela is another. Which will it be?

N.

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Re: The Greatest Danger Investors Face

I'm not at all sure a functioning socialist state is what we will ever become.  Guaranteed healthcare in some form is a given, and we somewhat have it now, but very inefficiently because many have to be critical to get it, when a little care early on could save a lot of money.  Life is a crapshoot.  None of us know when we will be hit with some devastating health crisis.  No one should see their life savings gone and their family suffer great economic hardship because of a healthcare issue.  That is coming in some form in the next generation if not before.

On income inequality, income equality is not the goal.  The rich will always be rich.  In a free enterprise system, worker's only way to gain a larger portion of profits through wages and bennies is to organize and have a sympathetic government that will set policies that help to equalize.  There are millions of young people out there willing to fight for their future. 

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Re: The Greatest Danger Investors Face

@bilperk 

I have posted several times that many countries have functional health care systems which might serve as a model for the US. There are several variations. Me, I'm a member of the French system. That doesn't mean it's free, as co-pays are required for everything excepting life threatening conditions. 

No one in France (Europe?) faces destitution because of health care issues.

But, as you state, the inefficiencies are a problem. It simply costs far less to be treated in France or Germany than in the US. FAR less. So, the system works. It will be no easy task to implement a European style system in the US. 

As for inequality, my only concern is equality of opportunity. Not equality of outcome.

Getting back to the subject of this thread, I think a Sanders-style government would kill the stock market ... and the DNC is leaning that way. Be careful about what you wish for.

N.

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Re: The Greatest Danger Investors Face

Bill :

the top 1% will only pay for a small fraction, less than 2% of the increase in Federal spending, because increasing their taxes means they will spend less in the economy. Assuming fed tax collections for 2020 are only down $200B to $1.6T, the 40% of income tax  paid by top 1% will be $640B. A 10% increase in Income tax rate will only raise $64B a year which is a drop in the bucket compared to the $3T spent on the recovery programs so far with another $3T to be authorized when Congress returns in Sept. The only way to pay for the Increased spending is to borrow another $3T from the fed at an interest rate of about 1.2% which will only cost $36B in interest of which about $29B will be returned to the treasury by the fed at the end of the year.

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Re: The Greatest Danger Investors Face


@norbertc wrote:

@bilperk 

I have posted several times that many countries have functional health care systems which might serve as a model for the US. There are several variations. Me, I'm a member of the French system. That doesn't mean it's free, as co-pays are required for everything excepting life threatening conditions. 

No one in France (Europe?) faces destitution because of health care issues.

But, as you state, the inefficiencies are a problem. It simply costs far less to be treated in France or Germany than in the US. FAR less. So, the system works. It will be no easy task to implement a European style system in the US. 

As for inequality, my only concern is equality of opportunity. Not equality of outcome.

Getting back to the subject of this thread, I think a Sanders-style government would kill the stock market ... and the DNC is leaning that way. Be careful about what you wish for.

N.


Nothing will kill the stock market.  It is basically a price gambling game where any price can be rationalized.  Yes it will crash from time to time, but not forever.

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Re: The Greatest Danger Investors Face


@Intruder wrote:

Bill :

the top 1% will only pay for a small fraction, less than 2% of the increase in Federal spending, because increasing their taxes means they will spend less in the economy. 


Nah.  They will spend what they always do which is couch change to them and hoard the rest.  Billionaires don't pay more for streaks at Ruth's Chris than we do.  They already have their boats and big houses and vacation houses and country club memberships.  They probably won't even know that are paying higher taxes unless their CPA tells them.

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Re: The Greatest Danger Investors Face

So then how much would taxes be raised on the top 1%? If you really think the top1% don’t know that they are paying higher taxes then You are totally out of it.

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Re: The Greatest Danger Investors Face


@bilperk wrote:

@norbertc wrote:

@bilperk 

I have posted several times that many countries have functional health care systems which might serve as a model for the US. There are several variations. Me, I'm a member of the French system. That doesn't mean it's free, as co-pays are required for everything excepting life threatening conditions. 

No one in France (Europe?) faces destitution because of health care issues.

But, as you state, the inefficiencies are a problem. It simply costs far less to be treated in France or Germany than in the US. FAR less. So, the system works. It will be no easy task to implement a European style system in the US. 

As for inequality, my only concern is equality of opportunity. Not equality of outcome.

Getting back to the subject of this thread, I think a Sanders-style government would kill the stock market ... and the DNC is leaning that way. Be careful about what you wish for.

N.


Nothing will kill the stock market.  It is basically a price gambling game where any price can be rationalized.  Yes it will crash from time to time, but not forever.


The next crash is scheduled for August, right? 

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Re: The Greatest Danger Investors Face


@norbertc wrote:

I'm spending a couple of weeks in Denmark, which has a high standard of living, large social benefits, plus a free market economy. It's a small, largely homogenous nation. People are happy. Scandinavia seems like a unique place.

This kind of society didn't evolve overnight. It's full of contradictions. For example, people are relaxed, but also careful to follow rules. The police are respected and take their job very seriously. Don't even think about disobeying a policeman. While there's little poverty, there's significant inequality of wealth.

Looking at what has happened in previously lovely cities like Seattle and San Francisco, I'm not very confident that Americans know what they're doing when it comes to creating a functional, socialized state.

Denmark is one possible outcome, but Venezuela is another. Which will it be?

N.


There is no way to compare Denmark with a population less than NYC with the US. 15% of US residents (50M) are immigrants or second generation. Just how much wealth inequality is there is a country of less than 6 million?

Crime will continue to go up in places like Seattle, San Francisco, NYC and Chicago until the weak liberal mayors and councils are replaced with leaders who will focus on reducing crime, not encouraging it as a personal freedom to be exercised when bored. Yesterday 14 people attending a funeral were shot in Chicago and the progressive mayor is no where to be found. Assaults and murders are way up in NYC but all mayor Deblasio offers as a solution is community policing when getting guns out of the hands of criminals is the way to reduce violent crime. NYC today reminds me of what it is was like when Dinkens was mayor in the early 1990s and there were 2100 -2250 murders a year which resulted in Gullaninis election in 1993. More cops were hired to patrol the streets to reduce crime and cops started frisking known criminals to take away their illegal guns which reduced violet crime and murders. NYC is now ready for a new cycle of law and order and Deblasio is up for re-election next year. My bet is he is praying that Biden will be elected and chose him to be HUD Secretary so he can get out of Dodge.

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Re: The Greatest Danger Investors Face


@norbertc wrote:

@bilperk wrote:

@norbertc wrote:

@bilperk 

I have posted several times that many countries have functional health care systems which might serve as a model for the US. There are several variations. Me, I'm a member of the French system. That doesn't mean it's free, as co-pays are required for everything excepting life threatening conditions. 

No one in France (Europe?) faces destitution because of health care issues.

But, as you state, the inefficiencies are a problem. It simply costs far less to be treated in France or Germany than in the US. FAR less. So, the system works. It will be no easy task to implement a European style system in the US. 

As for inequality, my only concern is equality of opportunity. Not equality of outcome.

Getting back to the subject of this thread, I think a Sanders-style government would kill the stock market ... and the DNC is leaning that way. Be careful about what you wish for.

N.


Nothing will kill the stock market.  It is basically a price gambling game where any price can be rationalized.  Yes it will crash from time to time, but not forever.


The next crash is scheduled for August, right? 


I believe I said downturn.  The greatest danger investors face is listening to me about investing :o}

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Re: The Greatest Danger Investors Face


@phenders wrote:

(R48 posted):  "For instance, my strategy of rather than leaving my kids an IRA (which they now cannot "stretch"), I instead started IRAs in their names, starting at their age 12, is now paying off. "

We have been doing this for years with Roth IRA's.  With the elimination of the "stretch" we are increasing our annual Roth gift as one way to speed up transfer of wealth.  Also increasing 529's for our grandkids.

BTW, there is no min age for a child to start a Roth, all they need is earned income - youtube influencer, modeling, lawn mowing, baby sitting, etc.  If a parent own a business, the child could be put on the payroll.

Pete

 


Ah Pete, step up to the bar and join me for a drink!  Of course, stay 6 feet away, and keep that mask on.

Indeed, one needs to have "earned income" for their own IRA;  I filed kid's tax returns every year, starting at age 12, showing their income.  Ditto my grandkids.

Just returned from a "building-boom" new community here in Florida, where New Yorkers are pouring in, rejoicing at having a single family residence that is 10 feet away from neighboring home!...and an open-air swimming pool just down the street.

R48

 

 

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Re: The Greatest Danger Investors Face

Any money not spent by the top 1% will be offset by whatever the gov. spends it on. If it is on healthcare aid, then those receiving it will have more to spend. Its basically a closed system. I do believe money in the hands of the lower 25% is more likely to be spent, and less likely to be saved than those of more wealth. Also, I have at times been in high tax brackets and it never discouraged me from increasing output of my business. 

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Re: The Greatest Danger Investors Face


@archer wrote:

Any money not spent by the top 1% will be offset by whatever the gov. spends it on. If it is on healthcare aid, then those receiving it will have more to spend. Its basically a closed system. I do believe money in the hands of the lower 25% is more likely to be spent, and less likely to be saved than those of more wealth. Also, I have at times been in high tax brackets and it never discouraged me from increasing output of my business. 


There is no correlation between an increase in govt spending on health care and a reduction in health care spending by those receiving it.

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Re: The Greatest Danger Investors Face

I’m not sure if this is the “greatest” danger, but a definite danger is to let your own politics influence your investing. Politics does matter, but people have a hard time setting aside their own convictions. But it’s best to do just that when your finger is on the buy/sell button.

Even more dangerous than investing based on your politics is investing based on your political predictions about the future!

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Re: The Greatest Danger Investors Face

Nothing is safe from the greedy government addicted to tax dollars. 


@chang wrote:

All this talk about higher taxes makes me wonder if I should increase my allocation to municipal bonds. But... who’s to say that muni bonds themselves won’t come under attack?


 

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Re: The Greatest Danger Investors Face


@Gary1952 wrote:

Nothing is safe from the greedy government addicted to tax dollars. 


@chang wrote:

All this talk about higher taxes makes me wonder if I should increase my allocation to municipal bonds. But... who’s to say that muni bonds themselves won’t come under attack?


What’s more fun than spending someone else’s money?

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Re: The Greatest Danger Investors Face


@Gary1952 wrote:

Nothing is safe from the greedy government addicted to tax dollars. 


@chang wrote:

All this talk about higher taxes makes me wonder if I should increase my allocation to municipal bonds. But... who’s to say that muni bonds themselves won’t come under attack?


 


Why would the democrats, the champions of state and local government, tax muni bond interest in a recession when state and local governments are short of funds and cannot afford to pay higher Interest rates because muni bonds are no longer exempt from taxation? Sometimes you need to think through a question before you ask it.

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Re: The Greatest Danger Investors Face


@Intruder wrote:

@archer wrote:

Any money not spent by the top 1% will be offset by whatever the gov. spends it on. If it is on healthcare aid, then those receiving it will have more to spend. Its basically a closed system. I do believe money in the hands of the lower 25% is more likely to be spent, and less likely to be saved than those of more wealth. Also, I have at times been in high tax brackets and it never discouraged me from increasing output of my business. 


There is no correlation between an increase in govt spending on health care and a reduction in health care spending by those receiving it.


To the extent that medicare pays medical bills, the patient is paying less. In my own experience before ACA, I was paying over $800/mo for less coverage than I am now paying $120/mo for, and less copay. I'm sure I am not alone in spending less on healthcare due to gov spending. 

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Re: The Greatest Danger Investors Face


@archer wrote:

@Intruder wrote:

@archer wrote:

Any money not spent by the top 1% will be offset by whatever the gov. spends it on. If it is on healthcare aid, then those receiving it will have more to spend. Its basically a closed system. I do believe money in the hands of the lower 25% is more likely to be spent, and less likely to be saved than those of more wealth. Also, I have at times been in high tax brackets and it never discouraged me from increasing output of my business. 


There is no correlation between an increase in govt spending on health care and a reduction in health care spending by those receiving it.


To the extent that medicare pays medical bills, the patient is paying less. In my own experience before ACA, I was paying over $800/mo for less coverage than I am now paying $120/mo for, and less copay. I'm sure I am not alone in spending less on healthcare due to gov spending. 


Just because you are paying less For health care doesnt mean the govt is replacing the amount you paid. It could mean that the govt has reduced the amount that the providers are paid. I review Medicare EOBs for a part C  Plan every month where the insurance co reduces the providers fee to 1-2% of the amount billed or denies it entirely. You are paying less For health care because the providers are paid less.

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Re: The Greatest Danger Investors Face


@chang wrote:


What’s more fun than spending someone else’s money?


I posed this question to both the teenager creatures that live in my house last night. Neither of them seemed to understand the words coming from my mouth. It seems to be par for the course these days. I just don't understand how such cute cuddly creatures they once were could have morphed into these - well I think I will just stop there with this post. I now know what the greatest danger as an investor might be that I face.

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