ideas on how the (USA) economy might recover

Even just the economics is not that simple; however, with the current exceptional low mortgage rates and income high enough to use the mortgage interest tax deduction, which needs to be killed for the good of the country, etc.* buying is now the more economical option in much of the country; but renting is the only option for many with low incomes and tigher mortgage loan requirements. Thus, there are low vacency rates now for rental property and that too makes renting currently more expensive, except in the areas listed in the NYT article below.

In more normal time, renting is almost always the more economical option If the renter has the self displine to invest the saving from his lower monthly cost.

The relatively high cost still in 2010 vs renting when home prices had hit their bottom of the curve in the graph would be turning up now with home prices recovering in most of the country.

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Renting is almost always more economical, and certainly more convenient, if you will be moving in 5 years or less due to all the "settlement cost" and real estate comission paid at the start of buying a home. At the NYT link above there is an interactive graph that shows only after 5 years is owning often cheaper, but it will not copy and post (I bet becuase it is "interactive"). You can enter other than NYT´s typical data too.

* In general I am against the government thinking it knows best and biasing what should be economic decisons to favor one alternative over another - for example $5000 given you if you buy an EV or Home mortgage tax deduction if you buy instead of rent. Too "big brotherish" for me.

 

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It would be a good idea to scrap the present the fed. , or the so called federal reserve as the central bank , and have a real central bank would it not ?

Since the fed. Bank is actually private bank conglomerate of several private banks

The US has NO central bank of the USA

Hence the US government has no real control over monetary policy at all really

 

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So which is it, either the Fed is or is not the US central bank? The answer is the Fed is a real central bank. Just what makes you think it is not a central bank? Do you know what a central bank does? Apparently not...

http://en.wikipedia.org/wiki/Central_bank

Hogwash, the Federal Reserve is an agency of the US government. It is not a conglomerate of private banks.

http://en.wikipedia.org/wiki/Federal_Reserve_System

More hogwash, the Federal Reserve is an agency of the US government. Congress can change Fed operations at any time by changing the law. Further Fed governors are appointed by the POTUS and ratified by the US Senate. They are not appointed by private banks nor do they answer to private banks. So to say that the US government has no real control over monetary policy is hogwash. The Fed creates and manages monetary policy under the authority and oversight of Congress.

 

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The central bank of Canada is NOT the same entity as the so called central bank of the US

And you know it

 

LOL, what does that have to do with your previous post? Nothing, absolutely nothing . . . you wrote about the Fed, not the Bank of Canada. The Fed is an American institution, not a Canadian institution.

 

Exactly my point , the difference

 

Well if you want to talk about the Bank of Canada, how about you call it the Bank of Canada instead of the Fed? Because it isn't the Fed. And the Bank of Canada is still not a conglomeration of private banks. It is a publically owned corporation, a Corporation owned by the Canadian government.

 

Me too. I rented for a few year just after Ph.D. graduation, save most of my salary and then bought for non-economic reasons you named and others (only way to get into best school district in the state of MD for the child about to enter school.)

 

A radical idea, do you have proof or any reason to believe it would be successful? What you are proposing is very protectionist. Transition to a “red currency” would not be as smooth as you seem to think it would be. Dollars sitting in foreign banks and central banks would flood into the US as you are devaluing them to zero as long as they remain outside the US. Your plan would create a run on the dollar with foreign holders running to dump them in mass bringing on the very apocalypse you have been predicting. Your Red Dollar would end the reserve currency status of the US dollar. The costs of imports would soar and exports would collapse – a significant portion of the economy vanishes and unemployment would soar. Foreign buyers would not have US dollars to purchase US goods. In order to purchase US goods those countries need US dollars. And under your Red Dollar scheme, they could not buy US dollars on international markets as they do today. Your Red Dollar would make international trade very difficult for the US.

Almost all oil contracts would and many others would be invalidated as they are denominated in US dollars. They would have to be renegotiated. It would send international commodity and financial markets into panic mode. You saw today the effect of a simple wealth tax which took a small portion of foreign investment from a small and insignificant country; what you are proposing would result in a massive devaluation and elimination of the world’s reserve currency.

US exports would dry up overnight, as foreigners would not have dollars to purchase US goods. They couldn’t trade their currency for US dollars. If you are a foreigner and don’t have anything you can exchange for US dollars, you would not have US dollars to buy US goods and services. Your Red Dollar idea runs squarely counter to classical economics (e.g. Adam Smith’s, The Wealth of Nations” and the whole division of labor and free trade ideas).

And here is the kicker; all the advantages you attribute to the Red Dollar can be achieved with the current dollar. So in the end, your Red Dollar would result in massive global and domestic economic disruptions and provide no value. And the Red Currency offers no benefit that is not provided by the current US dollar.

I think there is almost universal agreement that the US tax schemes are far too complex. But getting tax reform and sustaining that reform is going to be a near impossibility unless we change the way we elect and compensate our representatives. Special interests in Washington have far too much power and too much ability to use Congress to create sweetheart tax deals for themselves. That is how the tax code became so complex to begin with.

You are correct in that this is of historical interest only as the banks have been recapitalized and are in the process of being reregulated. But unless and until we get a better way of legislating (i.e. keeping special interests and Congress from colluding to weaken Dodd-Frank), it will be an ongoing challenge to keep the banking system free from systemic risk. Dodd-Frank is the new plan, the new way of dealing with this kind of problem. And the housing industry is not in recovery and growing.

 

I don´t know if flood or dump are the right word, but yes I noted that in the first 10 years, most $100 bills would be used to buy US made goods, and before the $50 bills went void 15 years after start of the plan, they too would be spent buying Ameican goods. - I thought that was a plus for the plan.

Why? We don´t use green paper dollars much (92% of the money is electronic entry on computers. The red dollars only replace the paper green ones. I seriously doubt it the IMF, or central banks are holding green paper dollars. They would still hold the same assets they do now mostly bonds and perhaps a few electronic dollars in some of the most important US banks.

Again why & why. Don´t you think most foreigners do like Amercian do and say "charge it." Their credit card are still valid. You don´t actually think that some foreigner buying a book from Amazon.com must pack up some green dollar and mail them do you?

Nonsense. they have credit cards and will use them as they have for decades or write check or send bank wires.

More nonsense for same reason. You are too intelligent to be assertin such stupid things. I assume you failed to grasp the point. Red dollars are only making sure that all transaction with foreign (buying and selling) leave a trail for the police to follow, catching drug dealer and tax doddgers etc.

More nonsense - Nothing would change. When one speculats buy buying contract for future delivery of copper or oil, etc, they don´t need or use green paper dollars!

Yes the Crprus government planned to take electonic currency not paper currency. The Red dollar plan I admit would not stop the US govenment from doing the same.

still more of the same nonsense.

Not true. currently green paper dollar have value in Columbia (and all over the world, so the big drug dealers collect $100 bills by the suit case full, but red dollars are worth less in Columbia and everywhere else in the world, except inside the USA.

I agree. that is why I have a plan and thread about how to change the way they are elected. See it at: http://www.sciforums.com/showthread...presentation&p=2770368&viewfull=1#post2770368

Yes that is why my plan to change the election process had to have some "honey" in it for those currently in congress to get them to vote for it. Mainly it gives them a better chance to remain in office until the want to quit or die. As I recal in the district of current members of Congress the voters can only chose between re-electing them or no one and if "no one" wins, then in the next elections new candidates can run. I.e. a bright young articulate and popular new candiated can not take their set in and election by running against them. I don´t have time to correct my typing and dislexia erros - read thu them.

 

The economy, like any area of study, requires experts in the field, not amateurs in that field, who are trained to do other things. We would not call an electrician to fix the plumbing. Or a doctor to fix your car. Sometimes we elect plumbers during times we need roofers or elect roofer when we need brick layers. If you don't have the right skills and tools, the jobs takes much longer with additional complications. Picture your doctor changing your transmission.

Say IBM as looking for a new CFO. Would they recruit a micro-biologists or a lawyer? The answer is neither, since these candidates, although experts in their own field, have the wrong training for the job required.

Say IBM decided to elect the new CFO, instead of handpick him/her based on job profiling. Joe, in the warehouse, is the strongest candidate since he is the most popular, due to large numbers of warehouse workers. Joe normally drives a forklift, but he is charming, tells good stories and knows everyone name. He becomes the new elected CFO. Is this a smart choice, and would you expect a quick turn-around in IBM?

The Senate did not submit a budget for 5 years, which is against the law. But if your consider you have lawyers instead of businessmen this is what you will expect. The lawyers will take a lawyer approach; skirt the law. Maybe one solution is to have more than one set of elected officials. We can have the business set, science set, doctor set, etc., so we don't always have plumbers screwing up the electric panel.