Thursday, April 14, 2011

The State of the Economy - #2814 - House Prices in Free Fall - American Thinker (2) Working Population Percentage Drops to 30 Year Low - Hot Air (3) Feed People Not Machines - American Thinker


The latest house price data (the and P Case-Shiller index) shows a clear downward trend for the most recent six months, as shown in the first  graph above:








The next graph shows how this year's data fits in with the long-term trend. It is clear that the house price bubble, which began in 1997 and peaked in 2006, has not yet finished popping:  The black stars in the above graph highlight 1951 and 1997, the two years when Congress changed how the capital gains tax applies to home sales. The first change produced 46 years of wealth accumulation. The second change produced 9 years of rising house prices and living beyond our means to be followed by about 9 years of belt tightening and economic stagnation.  In 1951, Congress, at the urging of President Truman, instituted the roll-over treatment for taxation of capital gains from home sales, an economically sound treatment of capital gains. As a result, from 1951 through 1997, whenever a homeowner sold his or her primary residence to buy another residence, the capital gains tax was deferred, not forgiven.  Read more.......


Great News: Working Population Percentage Drops to 30 Year Low - Hot Air - Maybe we can call this Generation U — for unemployed. Three decades ago, the US experienced a dramatic shift in culture and economics as women entered the workforce in record numbers, and our economy expanded to meet the labor supply. As USA Today reports, we have now returned to the same working percentage of the population as we had at the beginning of the expansion, an astonishing decline that doesn’t appear to be slowing much:  The share of the population that is working fell to its lowest level last year since women started entering the workforce in large numbers three decades ago, a USA TODAY analysis finds.  Only 45.4% of Americans had jobs in 2010, the lowest rate since 1983 and down from a peak of 49.3% in 2000. Last year, just 66.8% of men had jobs, the lowest on record.  The bad economy, an aging population and a plateau in women working are contributing to changes that pose serious challenges for financing the nation’s social programs.  Read more......... 


Feed People Not Machines - American Thinker -  What are you doing next weekend? If planting a vegetable garden is not on your "honey-do" list, a few unsettling facts may change your plans. Simply stated, we are running low on food in this country. Not surprisingly, the USDA reports that US farmers are reaching the limits of arable land even as corn plantings will be the second largest since World War II, and soybeans the third highest ever. Why the record crops? The USDA's March 2011 Grains Stock reports the following changes in stored grains positions from March 1, 2010 to March 1, 2011.  Corn stocks ... totaled 6.52 billion bushels, down 15 percent............Demand for corn is so strong-thanks to the expanding appetite of the federally supported ethanol-fuel industry, record-high prices of corn-fed livestock and booming farm exports-that grain traders are worried that even the bumper corn harvest farmers could produce this year might not be enough to rebuild unusually low U.S. corn reserves to comfortable levels.  Read more.........

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