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Global Economy Bursting?

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:rof:
We just had an earth quake. The house started shaking and .... I have seen the error of my ways ... Raise taxes, I don't care. It is all irrelevant now.
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:rof:
See you guys across the river in the shade of a tree.
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Wasn't that Stonewall Jackson's last words?

In the late 40s and early 50s, the economy was booming, inflation hit big time and our government, with some wisdom, decided to pay off its war debt rather than run huge deficits with the next generations money. Because of the pain, you can go back to the 50s and 60s to see the beginnings of the exemptions, tax breaks, etc. that were created piecemeal to promote one business over another, favor one social outcome over the other, and to promote everything from home ownership to military spending, nuclear energy, and keep food and gasoline cheap...

taxing high wages with high rates only led to capital gains deferrences where "non-wages" were taxed at lower rates and SS was taxed to a maximum amount that is unjustified.

We created far too many breaks...breaks no one wants to give up even with lowering tax rates. Lower rates are necessary because other countries figured out how to subsidize business in other ways (lower labor costs, fewer environmental rules, etc.) thus kicking our butt in the world market that so many politicos over the entire political spectrum was all to happy to embrace.
 
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If you look at the GDP per person growth rate ten years before the financial crises, and compare it to the growth rate now, the picture looks even gloomier for the West. In those terms even Germany has yet to catch up, and the U.S. GDP per person has fallen 10% below trend.

Add that U.S. growth shortfall up, and it comes to a cumulative loss of $14 trillion—$13,000 per person.


Read more: http://www.businessinsider.com/gdp-per-capita-change-2011-8#ixzz1VxQOq77K
 
Boomer Retirement: Headwinds for U.S. Equity Markets?

http://www.frbsf.org/publications/economics/letter/2011/el2011-26.html

To examine the historical relationship between demographic trends and stock prices, we consider a statistical model in which the equity price/earnings (P/E) ratio depends on a measure of age distribution. We measure age distribution using the ratio of the middle-age cohort, age 40–49, to the old-age cohort, age 60–69. We call this the M/O ratio.


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Figure 2 above ought to scare the daylights out of long-term buy-and-hold types because it is expansion and contraction of P/Es that most determines share prices, not earnings.
 
We measure age distribution using the ratio of the middle-age cohort, age 40–49, to the old-age cohort, age 60–69.
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Don't worry. Mr. Bernanke has a plan to take all the boomers and suck their life savings...meager as it is... into high risk speculation on Wall St. and so we'll work until we drop.. no time to retire and we'll shoot ourselves rather than be a burden to the health system... just like the good old days.
 
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