Capitol Hill Blue Forums Military & Security Non-Conventional Theories Deflation

I'm curious, itstarted. Why do you think houses are more particularly valuable for older married people, as opposed to older single people? After all, I'd guess there are easily as many single older folks as married ones, and their support syste is smaller.

Assuming I live long enough to become elderly, I'll be counting on my own financial gains, and possibly whatever the state might provide (if anything.)

I guess I'm wondering if the difference between married and single older people is as great as all that. Or perhaps your emphasis was on "older" rather than on "married?" I may have misread.

No.. the emphasis was on "married"

This is the reason:


Here's an example. I had a friend who was married, and owned a $280,000 house. He sold it and put the money in the bank for his retirement. He then went to Florida and bought a $40,000 mobile home. That left $240,000 that he had in the bank. His wife developed Alzheimers, and had to go into a nursing home at $60,000/year (at the time). She was there for 5 years before she passed away. During that time the cost for the Nursing home came out of his bank account. He was able to keep his car, $30,000 and his house, ($40,000). When she died, he had his car, his house worth $40,000, and $30,000 in cash.

Had he kept is original house, the state would have paid the full amount of his wife's nursing care, and when she died, he would have had his car, and a house worth $280,000.

Yeah... strange, but that's the law. Like a man's house is his castle. Same thing in other parts of the law.

Example- First man has a $30,000/year pension and no money in the bank. He is sued for $1,000,000 and loses the suit. The government cannot take his monthly pension to pay the other party. He continues to collect his pension.

Second man has no pension. He is living off the income from $1,000,000 in savings. He loses the suit. The government takes the entire $1,000,000 from the bank to pay the other party, leaving him with no money at all.

There are different laws in different states, so this will not apply everywhere. Perhaps some of our lawyers could help here.

Legally right isn't always morally right.

Your question is the kind that I was hoping we could discuss. It goes to the matter of survival.

I'm not into the welfare queen type of giveaways, but when government uses taxes to pay for certain benefits, and when you or I have paid those taxes, then I think it's just part of survival to take advantage of the benefits.

To put it another way... If the government legally gave away $125 Billion to AIG to keep it in business, shouldn't you or I use the medicaid system if it's necessary?... Or, as some would suggest... medicaid is a giveaway.

I'm not particularly religious, but didn't Jesus say "the poor will always be with us"?

I received a tax freeze on my home, as a senior. Is it unethical to accept this even if I can afford pay the extra $300/year?

It's an interesting world, isn't it?

What to do during deflation:
How to manage deflations

A couple of problems with this approach, kap17: It is a one-shot artificial jolt that is not based on increased productivity (thus sending a false signal into the market)and b) if it is tucked away in a drawer for anticipated worse times (which is quite likely given the current fear and reality of escalating job losses) then it will not sop up any overhanging inventory of goods and c) there is a good chance that much of what is spent will be for the paying of bills vs the purchasing of goods and services.

I am not saying that it may not be of temporary help to individuals, but its impact on combating falling prices or resurrecting the economy would be minimal to zero. Just my opinion.
Yours,
Issodhos

I hafta agree Issodhos, $20K might make a difference but $600 bucks is less than a drop in the bucket, less than a mortgage payment, one car payment, a months groceries, a couple of credit card bills. It's gone before you know you had it and it will do nothing for the economy. I'll take the check because I'm poor as dirt but I can't pretend it's anything but a "feel good" measure.
There isn't enough money in the world to throw at this and fix it. Sales and productivity need to increase, millions of jobs need to be created or re-created where business' have failed.

While there certainly are differences in circumstance, timing, and threat level, I am struck, as I have noted before in other threads, by the similarity of: our current economic predicament vis-a-vis the Depression; and the cure being pursued by the Obama team vis-a-vis government spending both before and during the War (WWII).

One of the most serious consequences of the Depression was deflation. Even when folks had the money to buy stuff, there wasn't a whole lot of stuff around because the prices folks could afford to pay didn't cover costs of production and distribution. We as a nation had to find a way to put money in folks' pockets so they could buy so prices could recover so production could resume. (Yeah, over simplification, but this isn't a semester-long course in economics .) So we established "make work" projects to justify giving people money. Restored pride, restored confidence (being jobless saps confidence big time), and put money into circulation. And the worthless paintings, books, parks, etc., that arose from these make-work projects are among our most valuble cultural possessions as a nation.

The War effort built on this by driving the creation of a huge economic engine that drove the global recovery that grew out of the end of the War.

As I understand Obama's proposals (and I have not read them in painful detail, nor am I an economist), he is proposing that we combine these two initiatives into a single stimulus package, to drive both sets of results at the same time. And just as the war effort created new industries, this stimulus package has as a cornerstone the creation of new industries clustered around energy use and environmental products and services.

Having seen no other plan of the appropriate breadth and depth, I can't judge whether it is the best that could be created, but it is the only game in town. And if we don't play and win, the ballpark is going to be closed down. So I'm for playing!

Issodhos, the $600 check that people might get has a chance of jump starting the economy. That money could clear some of the inventories out there and create jobs by creating demand. It is a temporary remedy but it does help (especially the individuals that have recently lost their jobs).

To get out of this economical downturn a way must be found to get money to the people that will spend it. The best way would be to create jobs but creating jobs doesn't happen over night. While you work on creating those jobs any little help to hold people above water is a welcomed sight.

We are pretty much in agreement on this point, kap17. That is what I was referring to when I wrote:
Yours,
Issodhos

Feb 5 Krugman on Deflation
While everyone is caught up in the day today, try to remember that an end result of our crisis may very well be Deflation.

The danger here is longterm, and in many ways, makes the fluctuations of the stock market moot.

Extended deflation... a possibility that few have addressed thusfar, has implications beyond a bad economy. Continued deflation could be more devastating to the stability of government, and social order, than either stagflation, or rapid inflation.

This subject needs more serious study by our think tanks and our government. To most, deflation and the effects are just a matter of degree, but in fact, would trigger an entirely different set of events.

I have some trouble relating our current circumstances to historical periods (usually short) of deflation. As more and more businesses and entire industries seem to be fading away, the normal steps of recovery (historically) appear to be out of reach.

The most troubling part of this, is the world-wide economic weakness, with very little hope on the horizon from any other countries either.

I am back to considering defensive strategies on a personal basis, which could begin with purchasing a defensive firearm...
no kidding.

THE SKY IS FALLING!!!!!!!!11111