That is correct. You either reduce your expenditures such as the defense budget or raise taxes such as taxing the super rich. However it is easier for the government to simply increase the national debt. We had high debt during WW2, but it was managed by raising taxes and there was less military expediture after WW2. When we ever recover from the virus and the economy improves, then we should reduce government expeditures and raise taxes to pay down the expeditures that is happening right now.
Is a depression priced in?
- Thread starter BigNick
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That is correct. You either reduce your expenditures such as the defense budget or raise taxes such as taxing the super rich. However it is easier for the government to simply increase the national debt. We had high debt during WW2, but it was managed by raising taxes and there was less military expediture after WW2. When we ever recover from the virus and the economy improves, then we should reduce government expeditures and raise taxes to pay down the expeditures that is happening right now.
BeachOrCity
Full time employment: Posting here.
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These things take time to play out. When I look at the consensus S&P 500 earnings forecast, I just think "set up". They simply are not realistic. Companies (mostly) withdrew guidance not just because they "don't know", but because if they give guidance they know to be false, they can go to jail. Analysts don't risk jail for giving wildly optimistic earnings forecasts, so they continue to forecast as optimistic as they think they can get away with.
Its kind of like wall street always rate equities as "buy", and only the worst of the worst get "hold". By the time they rate something as "sell", its long over. The whole "set up" is to keep everyone (us) in the market.
While I am disappointed about some trades I made at levels a bit lower than current; I just don't think I am missing much potential upside for some time at these price levels.
I almost think we have to have actual reported earnings be quite low (2Q / 3Q), then the analysts can cheer 2021 being sequentially 20% / 30% higher or whatever. In other words, they are minimizing the bad news coming, then after it happens talk up about how things will be so much better next year.
I think the best thing to do is look at overall market pricing relative to 2019 actual earnings. I can't see a scenario where that earnings level is achieved before 2022 at the earliest.
**Caveat I think much more downside is already priced into smaller caps, international, and emerging markets. But even those are not fully priced for what is to come.
Its kind of like wall street always rate equities as "buy", and only the worst of the worst get "hold". By the time they rate something as "sell", its long over. The whole "set up" is to keep everyone (us) in the market.
While I am disappointed about some trades I made at levels a bit lower than current; I just don't think I am missing much potential upside for some time at these price levels.
I almost think we have to have actual reported earnings be quite low (2Q / 3Q), then the analysts can cheer 2021 being sequentially 20% / 30% higher or whatever. In other words, they are minimizing the bad news coming, then after it happens talk up about how things will be so much better next year.
I think the best thing to do is look at overall market pricing relative to 2019 actual earnings. I can't see a scenario where that earnings level is achieved before 2022 at the earliest.
**Caveat I think much more downside is already priced into smaller caps, international, and emerging markets. But even those are not fully priced for what is to come.
BeachOrCity
Full time employment: Posting here.
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There is no agreed upon definition for "depression".
GravitySucks
Thinks s/he gets paid by the post
A recession is when the working man is unemployed.
A depression is when the economist is unemployed.
A depression is when the economist is unemployed.
Mr. Tightwad
Thinks s/he gets paid by the post
It wont be JUST the super rich or any other segment of tax payers. Me and you and everyone reading this will get an increase. Unless you don't pay any income tax in the first place.
Things like car registrations, citations, etc will also be on the move.
copyright1997reloaded
Thinks s/he gets paid by the post
A recession is when your neighbor is unemployed.
A depression is when you are unemployed.
I love these things, anyone else have others?
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