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No rocket science here: Nothing drops to the bottom line of consumer confidence numbers like...

No rocket science here: Nothing drops to the bottom line of consumer confidence numbers like smaller paychecks, and that's what Americans are seeing in 2013 thanks to higher payroll and income taxes. Today's 58.6 read missed expectations by a mile and the outlook for employment fell as well, with those anticipating more jobs declining to 14.3% from 17.9%. The XLY slides 0.8%, the XRT -0.7%.
Comments (23)
  • The 2% tax cut was always intended to be "temporary".
    29 Jan 2013, 10:20 AM Reply Like
  • wyo,


    That's actually quite funny. You assume the average American actually has a clue when it comes to an obscure detail like this - this isn't Snooki's latest boyfriend we are discussing here.


    The Average Joe/Jane just woke up to the fact that we had a tax increase despite the fact that they were told endlessly that the "middle-class" tax cuts have been protected and taxes won't rise on them.


    Apparently the "middleclass" now refers to that group of people that don't work for a living :)
    29 Jan 2013, 10:24 AM Reply Like
  • Galt...
    I agree they haven't a clue; aided and abeted by the MSM.
    29 Jan 2013, 10:27 AM Reply Like
  • Well, at least now they are paying their "fair share" towards their future Social Security and Medicare claims.
    29 Jan 2013, 11:46 AM Reply Like
  • Imagine getting your COL raise for the new year and it's basically wiped out. Talk about demoralizing.
    29 Jan 2013, 12:03 PM Reply Like
  • And just why should you get a COL raise in the first place?
    29 Jan 2013, 12:05 PM Reply Like
  • wyo,
    At my company a LOT of people look forward to their COL increase annually. They are the people Galt talks about (above). They will be bummed. I know this for a fact.
    29 Jan 2013, 12:28 PM Reply Like
  • The government tells us there is no inflation, so I ask again, just why should you get a COL raise in the first place?
    29 Jan 2013, 01:10 PM Reply Like
  • It sounds like like some think it is a privilege to get a tax cut. The money is mine, first and foremost. The government saying its going to take less is, yes, a temporary reprieve, but only until we get these money hogs out of DC and can make it permanent. Regardless of what the law says, long term we either reduce taxes or perish.
    29 Jan 2013, 10:40 AM Reply Like
  • Someone needs to pay for the enormous debt of the country. It’s either taxes or inflation which btw both has the same effect in the paychecks.
    29 Jan 2013, 10:49 AM Reply Like
  • TMW - but just what-if there is never any need to pay anything off? I can show you many corporations that have debt on their balance sheet and they have had it there for more than 100 years.
    29 Jan 2013, 11:48 AM Reply Like
  • Not the best comparison tbh. Corporate debt is very different that sovereign debt. A debt in a company is a put option they sell to the best bid. How can you take over a government if it fails? What are the assets beyond some gold here and there? The government IP, patents?


    Comparing governments to corporations like they can be run in the same way is something that politicians, specially republicans, love to make. They are very different entities and being successful at running one doesn’t make anyone successful at running the other. Starting with the fact that governments are not there to make profit but to actually take a cut on any value generated in its jurisdiction.
    29 Jan 2013, 12:28 PM Reply Like
  • "Someone needs to pay for the enormous debt of the country."


    No. The problem is the spending, not the debt. All taxes have to do is get a little higher and we will be better to stop working and get on the government tit. Once that happens tax revenue will start a downward spiral and then everybody is toast.


    So live high on the hog, till the hog dies, then deal with it? That is a real mature attitude!
    29 Jan 2013, 03:02 PM Reply Like
  • The point was not to compare to a corporation's (although the US is a corporation) reason for existence, but to suggest that holding debt on the US books can be held forever and rolled over forever (absent some catastrophic hiccup).


    At the same time, as a sovereign issuer of it's currency and with a few changes to some existing laws, the US Treasury could easily print money to pay off all debt to debt holders foreign and domestic. The world might not like it, but what are they gonna do? For example, what would China do if the US redeemed their Treasury holdings by depositing $2 Trillion into China's bank account digitally.
    29 Jan 2013, 12:46 PM Reply Like
  • Pollster: "Madam, may I ask what you think about the economic outlook and your financial situation?"


    Respondent: "Well, I'm unhappy that they've raised our payroll taxes, and I'm even more unhappy that Obama was re-elected (if a Republican). I feel very negatively about all of it."


    Pollster: "May I also ask you..." (interrupted)


    Respondent: "Sorry, Sonny, I don't have time for further questions. I have a lot of shopping to do today."
    29 Jan 2013, 02:02 PM Reply Like
  • These confidence polls are useless (except for those making money off producing them), and I think most tune them out over time.
    29 Jan 2013, 02:49 PM Reply Like
  • sometimes i really can't believe the lack of basic wit:


    (1) taxes are a TRANSFER of wealth payment from YOU to the government. we need to swiftly take back control of how, when, why and at what levels those transfers occur, or we're cooked;


    (2) and this i cant believe: the notion of the federal government redeeming foreign holdings of treasury securities with currency? are you kidding me? exactly how inflationary do you think THAT will be and how destructive to economy do you think it will be? and then, just keep printing money? go long wheelbarrows and memorize the words "Weimar Republic" and "Argentina".
    30 Jan 2013, 09:45 AM Reply Like
  • Whatever you do, don't look at the income tax rates during the '50s, '60s, '70s, or '80s; you might have a heart attack.
    30 Jan 2013, 10:45 AM Reply Like
  • catamount


    When you look at the old tax rates do yourself a favor and factor in inflation. A solid middle class family made a salary that didn't put them in a high rate and lived a pretty darn good lifestyle.


    Also, state and local taxes were not what they are today.


    Don't look at one factor in isolation.
    30 Jan 2013, 11:17 AM Reply Like
  • RHGordon as a former leading Wall Street Analyst, perhaps you can explain (we'll limit it to one example) why paying China $2T + in cash would be "inflationary". Please explain exactly what China would do with such cash, and how that would transmit through what systems to produce inflation? Don't forget to assess the impact of China's spending actions on currency and trade.
    30 Jan 2013, 11:39 AM Reply Like
  • to WMARKW:


    first, your condescending comments fully display your lack of understanding of economics, money & banking.


    increasing the stock of anything--including currency--would be enormously in the absence of a like amount of demand. i doubt china would take to kindly to having the treasury holdings--even earning the meager interest that they do--exchanged for non-earning cash. Their first reaction would be to stop funding our deficits (remember those?) thereby driving up our cost of borrowing (it's called competing for capital markets allocation), increasing our deficit further and yes, increasing inflation.


    next, china would likely take their unwanted stash of dollars and start buying both commodities and hard assets around the globe, but especially here in the u.s., given the likely impact your idiotic proposal would have on exchange rates. the effect would be the same: scarcer supply of hard assets and commodities and growing inflation which would only reach an equilibrium level when all those dollars you printed are absorbed. a long time from now.


    go back to class.
    1 Feb 2013, 08:57 AM Reply Like
  • Only matching your condescending comment prior above.


    And then sir ( no condescension intended) what happens to their market for their products? Ooops - it vanishes. So who will they sell all their stuff to?
    1 Feb 2013, 12:47 PM Reply Like
  • reasonable question...but one to which you should already have the answer.


    the flip side of destroying the value of our currency through highly inflationary tactics is that we at the same time create a huge trade imbalance, given the rising cost of imports. now, if you want an economy that manifestly favors exports over imports, that's fine. but, be ready for currency wars and trade restriction across the global economy. AND, given the the U.S. is a decidedly greater consumer economy than it is a producing economy, we'll just push up prices here even more.


    show me one economy that long thrived by destroying the value of its own money. Sir.
    2 Feb 2013, 10:18 AM Reply Like
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