Krugman: Mortgage Rates Still Too High
Despite having come down considerably in recent weeks, mortgage rates are still too high, says Paul Krugman in a recent blog post. Why too high? Well, the spread between 30-year mortgages and 10-year Treasurys historically is around 150 basis points. And now? About 300 bips. Krugman’s prescription: “Declare that Fannie and Freddie are backed by…
Despite having come down considerably in recent weeks, mortgage rates are still too high, says Paul Krugman in a recent blog post. Why too high? Well, the spread between 30-year mortgages and 10-year Treasurys historically is around 150 basis points. And now? About 300 bips. Krugman’s prescription: “Declare that Fannie and Freddie are backed by full faith and credit, and if that doesn’t work, have the Treasury borrow on their behalf.”
According to Nobel prize laureate James Tobin, “[t]he ‘Laffer Curve’ idea that tax cuts would actually increase revenues turned out to deserve the ridicule with which sober economists had greeted it in 1981.”
but a richer fool than you Hoboken!!!
art laffer is a fool…
A slooooow day at work so . . .
Certainly a novel approach IronBalls.
Aside from the difference between corporate and personal tax rates that you might have got confused about and the difference between profit and personal income, few other points to consider –
The number of direct employers as a percentage of the total number of people benefitting from Bush’s tax cuts is pretty low. Nationally, the vast, vast majority of people making $250k and above are probably corporate drones like me. My income and my hiring choices have no bearing on each other.
Kind of like touting farmers as an example of the folks that’ll suffer as a result of the estate tax. Certainly a theoretical possibility but in reality pretty much an issue that exists only on right wing talk radio.
Benefit of this “populist” approach is it puts more dollars to work. Buffet (one of your employers) got a $50 million personal income tax cut from Bush and the net economic benefit is zero – Buffet already has far more money than he spends. A common problem for millionaires and billionaires. Cost to tax payer is $50 million.
But take that $50 million and give it (back) to people making under $50,000 and the net effect on the economy is much, much greater.
Laffer curve anyone??????
So you tell me, Snarkslope, how are increased taxes going to encourage folks to expand their businesses and start hiring?
As my multifamily property taxes have increased, I’ve scaled back spending accordingly.
You can call it trickle-down economics or whatever you like, but high taxes kill businesses and are absolutely the wrong path for Obama to take if he’s serious about ending this recession.
But maybe he’s not serious. Maybe he’s just another egomaniacal politician eager to appease his voting base.
I may get that Bh townhouse after all for 1 million. The current market has another 15-20 percent downside and the higher priced properties are in bigger trouble. Unless the market has a good year the real estate market is going to suffer. Especially areas where prices are way higher than the rents people would pay on those places.
The trickle-down economics of Reagan are a fallacy, and the drastic reduction of the taxes on the most wealthy has drained the federal coffers.
By the way, I can’t believe Obama’s talking about eliminating or not renewing the Bush tax cuts again. I thought he’d canned that stupid populist idea, and I’d started warming up to the guy.
Talk about hurting the economy. If he increases taxes on employers (the folks who happen to make over 250k/yr) the stock market will plummet much further and millions of folks will be fired.