According to the December 2012 S&P/Case-Shiller Home Price Index, single-family home prices in the San Francisco MSA rose 0.7% from November to December 2012 and ended the year up 14.4% but remain 32.6% below a May 2006 peak.
For the broader 10-City composite (CSXR), home values gained a nominal 0.1% from November to December, up 5.7% year-over-year, down 30.0% from a June 2006 peak.

Housing and residential construction led the economy in the 2012 fourth quarter. In December’s report all three headline composites and 19 of the 20 cities gained over their levels of a year ago. Month-over-month, 9 cities and both Composites posted positive monthly gains. Seasonally adjusted, there were no monthly declines across all 20 cities.

The National Composite increased 7.3% over the four quarters of 2012. From its low in the first quarter, it surged in the second and third quarter and slipped slightly in the 2012 fourth period. The 10- and 20-City Composites, which bottomed out in March 2012 continued to show both year-over-year and monthly gains in December. These movements, combined with other housing data, suggest that while housing is on the upswing some of the strongest numbers may have already been seen.

Atlanta and Detroit posted their biggest year-over-year increases of 9.9% and 13.6% since the start of their indices in January 1991. Dallas, Denver, and Minneapolis recorded their largest annual increases since 2001. Phoenix continued its climb, posting an impressive year-over-year return of 23.0%; it posted eight consecutive months of double-digit annual growth.

On a month-over-month basis, prices rose across the top and bottom tiers in San Francisco but were flat in the middle.
S%26P%20Case-Shiller%20SF%20SFH%20Tiers%2012-12.gif
The bottom third (under $383,919 at the time of acquisition) rose 1.7% from November to December (up 18.6% YOY); the middle third was unchanged from November to December (up 13.4% YOY); and the top third (over $686,706 at the time of acquisition) ticked up 1.0% from November to December, up 9.1% year-over-year versus 7.7% in November.
According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA are back to January 2001 levels, down 53% from an August 2006 peak; the middle third remains at March 2003 levels, down 34% from a May 2006 peak; and the top third is just above May 2004 levels, 19% below an August 2007 peak.
Condo values in the San Francisco MSA ticked up 0.2% from November to December and are up 21.3% year-over-year but remain 23.6% below a December 2005 peak.
S%26P%20Case-Shiller%20Condo%20Tiers%2012-12.gif
Our standard SocketSite S&P/Case-Shiller footnote: The S&P/Case-Shiller home price indices include San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the “San Francisco” index (i.e., greater MSA) and are imperfect in factoring out changes in property values due to improvements versus appreciation (although they try their best).
Home Prices Closed Out a Strong 2012 According to S&P/Case-Shiller [Standard & Poor’s]
San Francisco Home And Condo Prices Gain As US Index Slips [SocketSite] 

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Comments from “Plugged-In” Readers

  1. Posted by Linda

    It is CRAZY how hot the San Francisco market is right now. Rents are getting jacked up by 10-15% while there is no inventory. Very frustrating for renters like myself.
    Starting prices for SFH in District 7 are now around $1.8 million for a 3/2, 2,000sqft. Nutso!

  2. Posted by Keepitup

    You ain’t seen nothing yet. Come 2014 we will have the pleasure of paying for [Obama’s] failed economic policies.
    With inflation and the new [healthcare tax] on real estate sales come 2014— $1.8m for a 3/2 2000sqft will look cheap. Get’em while their hot!

  3. Posted by lol

    Inflation?
    If we have to fear something it’s the return of deflation even 5 years after the 2008 collapse.
    – The Fed last week clearly stated the end of mortgage debt purchases as the economy keeps on recovering: deflationary.
    – The obsession by what Krugman calls the “very Serious People” of giving priority to debt reduction through the bleeding of the government over to a time-proven growth stimulus programs will cut down into incomes.
    Just look at Britain, Ireland, France, Greece, Italy, Spain, Portugal. 3 years of obsessive austerity and growth hasn’t come back. Austerity does not promote growth, period: deflationary.
    Sure Obama had his stimulus, but it was way too muted and not focused enough on what mattered: saving reckless banks instead of much needed infrastructure upgrades. The RE bubble is being re-inflated but incomes are not following.
    Even Gold that used to be a safe haven is not going anywhere. Goldbugs have self-perpetuated the high price on pure faith. Reality is disproving their 4-year-old fear and their faith is showing some cracks. The world is still doing OK and whatever Roubini-Dr-doom rapture-of-the-day theory is always pushed back for another year.

  4. Posted by Jimmy (No Longer Bitter)

    Real estate is BACK!
    I, personally, bought two houses in December… and I already sold one for a $45,000 gain in 2 months.
    The short-sale pipeline is pretty dry these
    days so I’m always looking for more ways to get in.
    Perhaps the Ellis eviction / TIC business is next.

  5. Posted by REpornaddict

    What happened to the YOY gain/loss graph that used to be shown wit this thread…would make nice reading now ;-).
    Double digit MSA price inflation – it’s 2010 all over again!!

  6. Posted by Keepitup

    In response to lol
    ..”- The obsession by what Krugman calls the “very Serious People” of giving priority to debt reduction through the bleeding of the government over to a time-proven growth stimulus programs will cut down into incomes.”
    I’m not sure what your trying to say in this paragraph…but one thing we all know for sure. Middle income wages are stagnant, taxes are rising, and inflation is here today….$5 bucks a gallon for fuel and rising, $4 bucks a gallon for milk and rising. $5 bucks a gallon for gas will look cheap in a few months.
    Lets connect the dots…Diesel fuel powers trucks, trains and boats. The cost for delivering virtually all consumer products is driven by Diesel prices. Bernanke said it today,”…headwinds to economic recovery driven by higher fuel cost….” and ” …poor political choices…”(read higher taxes and few government spending cuts) “…will mean a slower recovery…”.
    Deflation? Yea on wages. But the hidden tax on consumers (inflation) is rising by way of higher fuel cost, higher fuel taxes, payroll taxes, health care taxes, housing prices, rents and food cost.
    The middle class is being squeezed and bleed dry. I’m not sure how you can say all the above is not hitting middle income consumers in the pocket book as inflation. Deflation is when prices stagnate or fall. Do you see any prices falling? Maybe Walmart reduces clothing prices to try and get middle income families back into their stores….but it’s doubtful because they have less disposable income thanks to higher fuel cost and payroll taxes.
    Try connecting the …… it all leads to Obama’s failed economic policies. Time he owned the economy…no blame to shift on to someone else.

  7. Posted by rabbits

    Keepitup,
    How did you find your way here from Red State blog? This site is focused on SF real estate, which has seen a nice turnaround in the Obama economy, as evidenced by the topic of this post. If you have an issue with your health care expenses, food prices, diesel fuel prices, etc. perhaps you could present some alternative policy choices that could have been made. But ad hominem attacks are really more appropriate on whatever AM radio station you listen to.
    Regards,
    Rabbits

  8. Posted by Jimmy (No Longer Bitter)

    I second Rabbits post above. 2012 was my biggest year ever, by far, for earning it and spending it. 2013 is off to a great start with some fast gains in real estate on top of everything else. If there is a recession, its clearly happening someplace else.

  9. Posted by futurist

    Then stop complaining renters, look farther out to neighborhoods south of Dog Patch and create equity and great new neighborhoods.
    It’s not gonna get cheaper in the good ‘hoods.

  10. Posted by Brahma (incensed renter)

    Middle income wages are certainly stagnant, but please spare us the implicit assumption that expansionary austerity is actually something that can happen in the real world.
    Keepitup wrote:

    Bernanke said it today,”…headwinds to economic recovery driven by higher fuel cost…” and “…poor political choices…”(read higher taxes and few government spending cuts) “…will mean a slower recovery…”.

    Sorry, but your reading is patently incorrect. For those socketsite readers who don’t get their news and opinions about what to think about it from zerohedge, you can read the Chairman’s testimony on The Fed’s website.
    The phrase “poor political choices” doesn’t appear, but this is what reads closest to it:

    However, a substantial portion of the recent progress in lowering the deficit has been concentrated in near-term budget changes, which, taken together, could create a significant headwind for the economic recovery. The CBO estimates that deficit-reduction policies in current law will slow the pace of real GDP growth by about 1-1/2 percentage points this year, relative to what it would have been otherwise. A significant portion of this effect is related to the automatic spending sequestration that is scheduled to begin on March 1, which, according to the CBO’s estimates, will contribute about 0.6 percentage point to the fiscal drag on economic growth this year.

    Emphasis mine.
    In case you haven’t been following along at home, the “automatic spending sequestration” is the part that reduces federal spending in the near term, and in a ham-fisted fashion. In other words, the spending cuts that ‘Keepitup’ is saying there are too few of are exactly the mechanism that’s going to slow down the recovery and possibly throw the country into another recession later this year.
    I think the word lol probably should have used above is “disinflation”.

  11. Posted by The Milkshake of Despair

    Interesting to see that Chicago reset all the way back to 2000 and has barely recovered. So the next time someone here holds Chicago up for comparison then SF boosters can say “Well so what if our architecture sucks, at least we could have afforded better”.

  12. Posted by lol

    Keepitup extrapolated on my post that I was saying we were in a deflationary environment. Nope. We are in a controlled inflation with a tepid expansion. It’s not that bad, but it’s not perfect neither.
    My point is that policies can lead to a return of deflation. Like the Fed stopping purchasing debt to abruptly, or an idiotic sequestration or another massive spending cut.
    All economists that called for austerity are eating quite a bit of crow today in light of the dismal results of these policies in much of the Euro zone. Even Germany is at the brink of recession! Britain is in recession even though they have made significant cuts almost everywhere.
    Krugman (him again, I know…) calls it the “confidence fairy”. Downgrades didn’t lead to an increase of the US borrowing costs. deficit reduction does not lead to increased investment.
    And yet the same people that have had everything wrong for 5 years are still calling the shots. Geez.

  13. Posted by Rillion

    When you look at gas prices you can really see the inflation. Why way back in July of 2008 they were $4.10 nationally while just last week they were up all the way to $3.75. Perhaps someday soon they may even hit $4.50 at which point we will have seen them reach the whopping level of 2% annual inflation over the last five years. Cause we all know that gas prices only change because of inflationary pressures in the economy and not supply and demand issues.

  14. Posted by Keepitup

    @Rabbits
    Please don’t let, “hominem attacks”..uhm, you mean facts get in the way of your attacking the messenger there Mr. Wabbit.
    Yea…it’s all about real estate isn’t it? Well let’s talk about SF being an anomaly in the big picture of Real Estate. 49 sq miles of limited inventory and policies design to discourage home building. Nothing abnormal there…lol. No cause for price increases.
    Or how the big Banksters have pulled the REO inventory off the market and are keeping them out of sight. Yea, nothing abnormal there…How Hedge funds, funded by foreign sovereign funds have bought entire subdivisions turning foreign entities into landlords.
    Unemployment is still above 6.5%. Check all normal there…Yep look at all the new home buyers flocking to the market place.
    Seems Mr.Shiller is as pessimistic about the real estate recovery today as he was two years ago…..” we still have high unemployment above 6.5% “….” it’s about jobs and we are not seeing a large enough recovery in employment to sustain a real recovery in the real estate markets.”… ” I’m not sure whats driving this run up in the markets….I would be cautious.”
    Take it up with Mr. Shiller and keep drinking the Kool-aid there Mr. Wabbit.
    Personally I’m cheer for higher housing prices and rents. As temporal as it may be. It makes my retirement much easier to deal with as does deflation. But I still feel for our youth, something that doesn’t seem to be of any concern to Mr. Wabbit or his Hero. But at some point those chickens are coming home to roost as is the repayment for all the loans.
    As for AM radio…uhm I’m going to have to check it out…is there some station I should be listening to?

  15. Posted by lol

    Shiller and Roubini are broken clocks. Sadly for them, 2009 is gone. But they’ll have their moment of glory again in a few years at the next downturn.
    All of this reminds me of what Patrick.net has become. They switched from RE doom-and-gloom to economical doom-and-gloom to irrelevant doom-gloom rant-fests 2 years ago. If they keep it up they’ll have their “15 minutes of fame” back in 2017 or 2018.

  16. Posted by EBGuy

    The short-sale pipeline is pretty dry these
    days so I’m always looking for more ways to get in.

    JNLB, how long was the process from offer to close? Did you have your own representation or go with the sellers agent to ‘sweeten the pot’?

  17. Posted by badlydrawnbear

    While this spike in prices will certainly be good news for some, the reality is prices cannot rise faster than wages and inflation for very long without correcting, again.
    While wages might be good for a small group of tech workers, there is no sign that wages are rising for everyone else.
    Additionally it is becoming clear that the rising cost of living is beginning to drive people from CA again, similar to what was happening in the mid-aughts.
    There is also the danger that rising cost of living will begin to drive companies from the Bay Area as they search for cheaper RE, cheaper wages in lower cost of living areas, and qualified workers who don’t want to live in Stockton and commute to Silicon Valley.

  18. Posted by Jimmy (No Longer Bitter)

    EBGuy: my agent was also the seller’s agent and of course took a cut of the flip (i.e. the subsequent re-sale). He did clear out some liens for me to make the deal work and lined up the new buyers prior to my closing on the property. One stop shopping!
    We have a pipeline of about 8 short-sales and they take about 6-9 months to resolve assuming my agent handles both sides of the sale. If other agents are involved, the transaction usually collapse at some point as most real-estate agents have been shown to be incompetent in these types of deals.
    Its really more of a hobby for me as I have two real businesses to run during the day. I just provide the liquidity (read: dumb money) for his investing business.

  19. Posted by lyqwyd

    While I’m enjoying the recent run-up in prices as much as any SF owner, what’s going on in SF is not the same as what’s going on in the country, or even the rest of the state. People are still hurting severely, and the recovery is mild at best, with many strong headwinds to get through before there is any determination on the outcome of our current problems.
    To those claiming victory for Keynesianism, try looking further than a year or two, or look closely at today, it’s not as if things are going great for the country.
    Those of us promoting austerity are looking at the long term, not just a political cycle. Take a look at our debt growth, more than a trillion dollars a year is nowhere near sustainable, and there will be repercussions for our current debt, and it’s continued growth.
    If Keynesianism actually worked for the long term then there would be no reason to tax at all as the gov could simply craete the money into existence for all it’s needs, but there’s not been a single instance where spending without regard for income has been a long term solution.

  20. Posted by rabbits

    This is where this argument always breaks down. Ask the folks hating on current policy what they would do different and the only answer is “you can’t print your way to prosperity” and “this is all Obama’s fault now!” There is never an alternative proposed. Should we pursue the same policies the EU is trying? Or how about Japan? I’m legitimately interested in knowing, because in the absence of alternatives we are going to get more of the same (GOP hasn’t figured this out yet).
    Also, please spare me your feelings for our youth, among who I count myself. If you haven’t started collecting on your entitlements, or aren’t within 5 years of it, you are the one with the target on your back. We youth will be fine once we’ve diluted the value of said entitlements down to about nil, which won’t be much longer, to lyqwyd’s point.

  21. Posted by lol

    lyqwyd,
    Keynesians asked 4 years ago for a stimulus package twice bigger than the one that was decided by Obama. And not only directed towards the financial industry but towards vital infrastructure projects.
    But we have to make do with an imperfect presidency. In regard to the current results, it’s working as expected.
    In the mean time, the unproven theory of “spending cuts will bring confidence to the markets” has failed everywhere it has been applied.
    Sure, you can believe that this theory will be proven exact in the long term. 4 years is already a long time and so far no results. What’s long term then?
    In the long term, we’re all dead. In the mean time millions are suffering for an ideological theory that is bleeding people and economies dry.
    If I resume the Austerians:
    Times are good: cut government
    Times are bad: cut government
    This is a faith-based theory for a faith-based crowd.

  22. Posted by lyqwyd

    @rabbits
    yes, my camp says, “you can’t print your way to prosperity” and we repeatedly point to history, which agrees.
    yes, many in my camp blame Obama, sadly they are fools for that. The roots go way back, so far that it’s pointless to discuss blame is both parties share it, the real question is what are we going to do to fix things?
    It’s funny how you mention Japan, cuz that’s pretty much what we’re doing right now. Not the end of the world, but more than 20 years later and they are still dealing with the same problem.

  23. Posted by lyqwyd

    @lol
    Keynesians have been asking for stimulus since way longer than 4 years, in fact longer than Keynes was a gleam in his parent’s eyes. Keynesianism is not a new idea, just a new label.
    I’m not sure where you get the idea that “spending cuts will bring confidence to the markets” is the theory, nor why you would quote it. The theory is that high levels of debt will lead to sub-par economic performance for many years, possibly decades, to come. That theory is supported by ample historical evidence.
    Yes, in the long term we are all dead, but many of us still think of legacy, and personally I plan to be here decades from now, which I also consider to be long term. We’ve also got 4 years of very little results from Keynesianism (sorry you didn’t get to spend as much as you wanted, as you mentioned our system isn’t perfect).
    Today’s government is way too big, it should be cut in both good times and bad until we get to a more beneficial level.
    If I reduce the Keynesians:
    Spend money you don’t have today, don’t worry about tomorrow… or…
    Times are good, we can’t cut spending now!
    Times are bad, we can’t cut spending now!
    This is a faith-based theory for a faith-based crowd.
    See how easy it is to reduce your opponent’s arguments to ridiculous (and completely inaccurate) platitudes? It might work great in politics, but actually trying to make improvements takes a little more effort than that.

  24. Posted by lol

    That theory is supported by ample historical evidence
    I am all ears. Was the US in a similar predicament in history?
    Actually yes. The GD was followed by WWII and both created a tremendous increase in debt levels.
    How did we emerge from this? Massive investments I infrastructure , education, innovation.
    Fast forward to the late 50s and what was the situation of the US? Absolute debt numbers were the same as in 1945 but the debt/GDP ratio had shrunk by almost 1/2.

  25. Posted by lyqwyd

    @lol
    it’s been pointed out to you previously that our current situation has very few similarities between now and WWII.
    The most important difference economically is that we were at a budget surplus a year after WWII ended, which was then followed by almost two decades of more or less balanced budget. So if you believe we should be more like we were back in WWII, I couldn’t agree more!
    The real historical evidence is that countries that go into too much debt have impacted economies for decades.
    I’ll also point out that our current deficit spending has a very small percentage of it going towards infrastructure.
    I’m completely in favor of repairing and improving our infrastructure, but that’s not happening. I also believe the spending on such projects needs to be paid for with a sufficient level of revenue.
    I don’t care about the spending level, but I do care what the money is spent on, and there is sufficient revenue to ensure the spending does not become an anchor around our, and our children’s, necks.
    A trillion dollar a year deficit is not remotely close to sustainable, and there isn’t even the remotest inkling of a plan from either side on how to fix that problem.

  26. Posted by OverThere

    Looking at this conversation — and this site — from abroad makes for very interesting reading. Perhaps because readers/posters tend to live in the SF area themselves, your discussions sometimes sound as if there is zero capital mobility into and out of the local real estate market. In an illiquid market where marginal pricing is heavily relied upon to mark the rest of you to market, that’s very curious.
    Compared to where I live in China, SF real estate looks cheap. Apparently the professionals think so too [SocketSite]. Exactly because of the physical constraints on expansion, your proximity to one of the most economically productive areas of the country is a huge asset. (Am I sounding like the scout for an alien horde yet?)
    As much as the Chinese and others may try to replicate American success in the tech industry, fuhgeddaboudit. The US is the global leader and Silicon Valley is the place much of this happens. California’s and the federal government’s fiscal problems pale in comparison to the long-term benefits of being situated in the tech capital of the world. Yet in SF you pay a bit roughly half of the price/sq.ft. for a property of comparable value as I would where I live. There really aren’t any apples to compare between markets so that’s the easiest yardstick; from a lifestyle point of view I like to think of it as getting twice as much home for the same price.
    Sure, my market has outperformed SF over the past couple of decades, and we don’t have ad valorem property tax like you do. That’s worth some of the difference. But that must be offset by my polluted air and costly imported food, albeit a bit harder to value. And with a median apartment price clocking in at almost 20 times the median annual income (MIDMRVAL and HK.HHINC HKST indices for you Bloomberg fans), I’m struggling to see how long my market can outperform SF.
    So that’s what brings me and my money to the SF market. I live in a real estate market where affordability is already in a Twilight Zone of absurdity and yet the money can still flow in. That’s my take on SF: there are good reasons to be in the property market for the long haul and I consider it cheap to my opportunity cost. What Boehner and Obama do or don’t get up to on the golf course is, to me, a sideshow from a long-term point of view. So maybe Vanke and I look like myopic oddballs to you. But for a snapshot of what mobile [Chinese] money can do to an attractive market, take a look at Vancouver’s (Canada) price history over the past decade [3yrs to pre-crisis peak here].

  27. Posted by lol

    Prices are not always directed by what happens outside. Local incomes and wealth levels do matter, and so do local regulations.
    For instance if the locals have 100K median income and can afford a 200K downpayment, with a limited supply and a large renter population median homes will probably be in the 700/900K range. But if the median home is 700sf like in Paris, then prices will be in the range of $1100/sf (the current price in Paris). If the median home is 1300sf (roughly what we have in SF) then prices will be in the $600/sf range.
    People tend to squeeze more in London or Paris or HK. With a similar income, their expenses will be comparable to SF but for a very different product.
    In general I am very cautious about comparisons. Las Vegas was 1/3 of SF at its 2006 peak. The median home was 300K for a median income 70% of SF at the time. A real bargain, right? Then prices were divided by 3… Even today LV is 1/7 of SF. The constraints are different, the people’s mindsets are different. Never extrapolate.

  28. Posted by lol

    lyqwyd
    A one year old Tom Tomorrow cartoon about austerity nuts.

  29. Posted by lyqwyd

    I love tom tomorrow, but I hope that’s not the source of your economic opinions…

  30. Posted by lol

    No but Krugman (pictured in the cartoon) is. After all he’s been rather right for a long time now.

  31. Posted by view_from_shoulders_of_giants

    Lyqwyd and lol may both be correct. From Bill McBride (calculated risk blog) this morning:
    “At this point the biggest downside risk to the US economy is from cutting the deficit too quickly. The deficit is already declining and will continue to decline for the next few years. Additional short term deficit reduction will probably be counter productive (the focus should be on long term deficit reduction, especially health care costs).”
    I believe lyqwyd’s fears are best documented in Reinhart-Rogoff. And lol’s comment about WWII deficit is quite correct assuming (as lyqwid points out) we do not run huge deficits. And only 13 years ago under Clinton we had small deficits and surpluses. Assuming no major policy mistakes, we can achieve the same.

  32. Posted by lyqwyd

    I’m not clear on how Krugman is right. You keep talking about Krugman, but exactly what has he been right about?

  33. Posted by OverThere

    lol
    I agree with you, prices are not always directed by what happens outside. But reading the comments on this site one can get the impression that prices are not ever determined by outside buyers.
    Amid a conversation that devolved into a zerohedge vs. Krugman pop econ cage match, I wanted to share a POV that is somewhat indifferent to either side of that argument. Of course you may not agree with my perception of relative value in SF real estate; in fact, I’d prefer if none of you did since it’s advantageous to me. What I am suggesting is not to lose sight completely of ‘what happens outside’.

  34. Posted by lyqwyd

    There are two issues being discussed here, OT.
    1 is SF / Bay Area, the other is the USA. In the long term, SF will follow the same trend as the USA, that’s pretty much innevitable, although the magnitude of the trend may vary between the two.
    In the short term SF can be completely divergent from the USA, which is the scenario we are in right now, the USA isn’t doing all that well, but the bay area is doing fantastically. I agree that foreign markets can have an impact, but that’s true for pretty much any major economic center, anywhere in the world. But it does not change the long term, and global money flows can change quite quickly without any real basis.
    Right now it’s China sending money, 20 years ago it was Japan, Europe has been putting money on and off into New York for years, New Yorkers put money into Florida, but those impacts only last as long as times are good, and they quickly divest when the trends change.
    Wealthy people are always looking for places outside their home countries to put their money, but the exact location that money is placed is as fickle as any fashion trend. Foreign investment generally rides the wave, but it doesn’t create the trend.

  35. Posted by lol

    I recall the late 80s in France when the Japanese were buying up prestigious castles or Paris manses. They had growth, cash, and a big chunk of arrogance…
    All 3 were gone in less than 10 years.

  36. Posted by lol

    lyqwyd,
    If you aren’t yet aware of what Krugman was right about, I would suggest following his blog or columns. Very instructive. You have 5 years to catch up though.
    I’ll put the Austerity God on the same level of the gold bug’s hyperinflation God. Within the incestuous world of these cults you have no access to contradictory information, even untainted facts. Every fact is filtered and transformed to serve the almighty “austerity/guvt is the problem” deity. They start from the conclusion (cut, cut, cut!) and work themselves to the facts.
    Of course if the only sources of news are WSJ and Fox News you can’t develop much critical thinking.
    Anyone outside that circle has already been discredited simply because they are not inside the circle. Krugman is the devil to this incestuous circle because he has a magic weapon: facts.

  37. Posted by NoeValleyJim

    Keynes actually advised that government budgets should run surpluses in growth periods and deficits in recessions. His main idea is that government spending should be counter-cyclical. So all these places that store up “rainy day funds” are following his advice.
    The US government should run deficits now and put people to work building infrastructure and then cut back on spending once unemployment has abated.

  38. Posted by NoeValleyJim

    So wait, Jimmy the Bitter Renter is now Jimmy the Flipper? How ironic. More evidence that we are moving into bubble territory.

  39. Posted by lol

    NVJ,
    Yeah actually at the end of Clinton.2 we had a surplus and would have created that elusive rainy fund. Then W came to power and gave all these senseless tax cuts we now cannot get rid of.
    Republicans at the time were calling it “giving the American people their tax money back”. Some people can’t see much further than their next tax refund.

  40. Posted by lyqwyd

    @NVJ, yes, that’s the biggest problem with Keynesianism, it doesn’t take into account political reality, or human nature.
    I agree Keynesianism can work in the short term in certain cases, but on the up cycle the spending is never cut appropriately, and in my opinion the cure is worse than the disease as it winds up accentuating the business cycle, rather than smoothing it, and it results in mis-allocation of capital.
    Keynesianism seems to be pop-economics to me, it got popular post WWII, lost favor during the 1970s stagflation, and has now regained popularity post our recent financial crisis.

  41. Posted by lyqwyd

    @lol
    Where’s your critical thinking? Your response to my question about Krugman is that I need to read 5 years of his writings? I read Krugman occasionally, and haven’t found him to be all that useful, and I’ll certainly pass on his 5 year library. You said Krugman is right, you should be able to back up your claims.
    Speaking of claims, you still haven’t explained how WWII is a historical precedent for today despite my evidence to the contrary.
    Just an FYI: I spend about equal time following Krugman, WSJ, or Fox News: almost none. They are all just about equally worthless in my opinion. I try to avoid sources that are clearly biased to the point of being dishonest, and when I do read them I tend to look for the counter opinion to make sure some important details were not left out, which is almost always the case with the above 3.
    You like to characterize your opponents as nut jobs or zealots, but when you get challenged on real facts you seem to frequently change the subject. Either back up your claims, or update you thinking to include the new information you’ve been presented. Ad hominem attacks are not valid forms of debate.
    Keynesianism is at best a short term solution. Sure, spending vast amounts of money can have short term benefits to the economy, but the long term downsides are greater. The problems we are dealing with today are structural, and will be going on for a long time, short term interventions are insufficient.
    Ultimately, as I’ve said previously in this thread and others, it’s not about how much we spend, but the difference in the spending to revenue. Our debt and deficit are way to high, we will be paying for them one way or the other, and the longer it takes us to start addressing them, the more difficult it will be to take the necessary steps.
    5 Years ago we had to spend massively or things would have been worse, but the time for spending without revenue is long gone.

  42. Posted by lol

    Nice try
    1 – Did it look like a huge major clusterfrack in 2008? Yes.
    Where are we today? Unemployment way down. Deficit lowered by 20% a year since 2011. A better growth rate than much of the western world. Compare that with the austerity measures in the EU that are bleeding the patient in pure 1650-style. And thank god we have one country with one president instead of a non-elected central entity that decides on public policy like the EU.
    By the way, we tried austerity once. In 1937. It failed.
    Did Krugman say what was necessary and what would happen with Obama’s 1/2 a$$ed Keynesian policies? He did. And the current numbers prove he was correct.
    2 – If you read carefully my take on WWII, I didn’t say WWII was the reason for the end of the debt levels.
    [begin quote]
    Actually yes. The GD was followed by WWII and both created a tremendous increase in debt levels.
    How did we emerge from this? Massive investments in infrastructure , education, innovation.

    [end quote]
    You’re putting words in my mouth. Nice try again.

  43. Posted by Rillion

    Both Keynesianism and the proponents of smaller government/austerity ignore reality. One of government’s main powers is to spend money. When a politician gets elected, even the ones that have said they favor a smaller government, quickly find that there is no power in cutting spending. This is why those that have advocated tax cuts as a way to curtail government spending have never actually been able to reduce government spending, the closest they really come is reducing the growth of future spending. Also low taxes mask the true cost of government spending, making it harder to get political support for reducing spending. Why should a voter who isn’t paying much in taxes care about government spending, after all, its not coming out of their pocket. Anyone advocating reduced spending without advocating for increased taxes is just advocating for a pipe dream.

  44. Posted by lyqwyd

    Nice try
    1.
    Debt to GDP over 100% and growing almost 10% per annum with total debt growing by over $1 trillion a year for the last 5 years.
    Deficit still way above historical norms.
    Deficit almost the exactly the same in 2012 as it was in 2011 ($1.2 trillion).
    US growth worse than the global average, GDP down last quarter (one more of those and it’s an official recession).
    Employment participation rate is way down, meaning the lower unemployment rate is not about people finding jobs, but about no longer being categorized as seeking jobs (AKA retired, in school, or receiving government subsidies instead of working), purely a technical improvement, not at all a real improvement.
    Not sure why you keep talking austerity, I’m talking balanced budget. Also, our debt to GDP in 1937 was below 50%, so once again you leave out some critical information.
    Republicans also said it wouldn’t work, so by your logic they are right as well.
    2.
    you left out part of your own words:
    [begin quote]
    I am all ears. Was the US in a similar predicament in history?
    Actually yes. The GD was followed by WWII and…
    [end quote]
    Those are your own words, so no, I didn’t put any words in your mouth. You stated that WWII was a historical precedent for today, I showed how it is not. I’ll als point out that the investments you refer to were done in an environment of balanced budget, or even surplus, well after the deficit spending during WWII.
    If you ignore half the story you are bound to come to flawed conclusions.

  45. Posted by lyqwyd

    @Rillion
    I’m not sure who that’s directed at, but just to be clear I’m not advocating anything other than balancing the budget. That could be accomplished by either reduced spending, or increased taxes (or a combination of the two). Personally I believe cutting spending and raising taxes are equally unlikely to happen.
    I’ve discussed revenue (just another word for taxes) as well as spending in my comments above.
    I think a combination of the two is the best approach. A reasonable approach would be to freeze spending at current levels, while gradually increasing taxes over the next 5-10 years.

  46. Posted by lol

    Well, we had a balanced budget in 2K, then the GOP idiots gave themselves their tax cuts (with crumbs for the plebe), flooding the markets with cash, then when the cash ran out we had to resort to debt. In the end, all of this debt ends up on the government balance sheet due to the “privatization of profits and socialization of losses” the GOP loves. Obama inherited a dead economy, dead consumer, dead banks. He’s done a good job reviving all 3. Now if he could have revived the industry along with the banks we’d be in better shape. But his only tool is interest rates and government lending facilities. The rest is locked by the GOP.
    Please re-read my sentence about WWII. The issue is we had a huge debt in 1945 (and a recession to boot) but instead of cutting on expenses, we performed massive investments between 1945 and 1955 that built this country. And that debt did NOT diminish, but was dwarved by a combination of strong growth and decent inflation.
    Is that clear enough or do you need me to explain it a 4th time?

  47. Posted by Brahma (incensed renter)

    What lol said.
    It’s amazing to me that the austerity now! crowd rails on and on against their strawman version of Keynesian policies (as above) when it’s quite clear that Keynesianism calls for reduced government spending when times are good and the economy is expanding. Anybody that’s even remotely familiar with authentic Keynesian ideas knows this.
    George W. Bush said in many speeches circa 2000 that the lack of a budget deficit and the appearance of a budget surplus was “evidence that the government was collecting too much money”, and that called for tax cut while the government went on spending just as much money as before.
    And then just to make sure, W. went on to launch two, count ‘em, two deficit-financed wars plus expanding entitlements for elderly people who wanted to spend other people’s money on prescription drugs.
    And most of the people, including right-wing economists, who are calling for austerity now supported the W. Bush policies then.
    That isn’t Keynesian, lyqwyd. Keynesian policies would have reduced government spending when the economy was expanding, so that we had the financial headroom to support increased government spending now, when the economy is recovering.

  48. Posted by lyqwyd

    Yup, it was terrible when the GOP threw out all the gains of the late 90s, but now the democrats under Obama have only doubled down on the bad policies.
    The economy not fixed, the issues that resulted in bank bailouts are not fixed, the consumer is far from healthy, the economic indicators are being fudged. I agree Obama was dealt a tuogh hand, and he’s done some good things, but he’s also failed in some of the most important. Obama has signed into law numerous policies in direct violation of our fundamental rights, such as due process.
    I understand exactly what you are saying about WWII. You are comparing WWII and the post war period to today. The problem is that you keep ignoring the fact that the spending was done with balanced budget, or even a surplus. 7 out of the 15 years following WWII saw budget surpluses, and averaged out over that period it was roughly a balanced budget. You are also ignoring the many other differences between that time and now.
    Are you advocating that we deficit spend or spend under a balanced budget? I can only assume you are advocating deficit spending or why else are we even having this debate, but here’s your opportunity to correct my assumption.
    I would be happy to return to the way the gov ran it’s fiscal business post-war: spending on worthwhile projects with a balanced budget.

  49. Posted by lyqwyd

    @Brahma, who’s this austerity now crowd you speak of? We’ve already discussed that Keynesianism calls for reduced spending at time, and also that it never actually happens, which is the biggest flaw in the theory.
    I’m not really sure GW’s speeches or policies have any relevance to this conversation. He was a moron, and nobody here has suggested otherwise. Pure straw-man tactics on your part Brahma.
    Did you even bother to read the thread before posting?

  50. Posted by Brahma (incensed renter)

    lyqwyd, if you agree that Keynesianism calls for reduced spending in times of economic expansion, and you agree that’s not what happened circa 2000, then why are you still using that term? You used it again as of 9:06 AM, which is what I was talking about.
    George W. Bush’s speeches are entirely relevant, regardless of whether or not he was a moron, because those speeches discussed policy measures that were put into law, most notably by The Economic Growth and Tax Relief Reconciliation Act of 2001, which cut taxes prematurely, and pretty much removed real, effective Keynesian policy choices from the realm of possibility during the recession of 2008, because the resulting federal budget deficit was so high.

  51. Posted by lyqwyd

    Taxes get cut, and taxes get raised. GWB isn’t the first to cut taxes, so he and his policies irrelevant to this discussion, which is about a balanced budget vs. deficit spending.
    I agree that his policies were terrible, I certainly didn’t vote for him, I marched in the street against the wars, and I opposed pretty much every major policy that he’s enacted. Obama has extended and made worse many of GW’s worst policies, which was certainly shocking to me, as when I voted for him in his first term I was expecting him to turn those policies back. Boy was I wrong about that!
    The reality that is that GW’s policies are in line with those you and your crowd are now promoting: massive spending without the appropriate revenues.

  52. Posted by lol

    lyqwyd,
    Massive infrastructure projects pay for themselves with a multiple. Which means that a few years after you spend a dollar you collect it through tax revenue as dollars get to flow much faster and new wealth is created. Then everything after that is just gravy.
    That’s how you balance budgets over just a few years.
    But this essential part of our collective consciousness has been long forgotten. Yet we love the roads, the schools, the railroads, the airports, the utilities, all subsidized by the tax payer at some point and paid back many many times mainly indirectly. But we couldn’t care less to give that to our kids as long as we can enjoy more tax cuts, even though these kids are supposed to pay for our Social Security and Medicare…
    I’ll give you one analogy: India vs China. India is lagging in terms of infrastructure and it shows in their GDP numbers (1-to-4 vs China) when the people are not smarter or more educated in one or another. China is building as fast as it can. That will make all the difference in the next 20 years.

  53. Posted by lyqwyd

    @lol
    What has that got to do with the deficit? Those same projects can be built with a balanced budget, and as I’ve pointed out about a million times now, the post-war infrastructure building WAS done with a balanced budget!
    Yes, infrastructure projects have a return on investment, but it has absolutely nothing to do with deficit spending, and lets be honest, it takes decades for these projects to break even in value, not a few years. It is a long term investment and there’s no way it’s going to fix our budget problems any time soon.
    I’m in favor of many infrastructure projects, particularly investments in public transit, CAHSR, and fixing our existing infrastructure. Infrastructure projects are absolutely worth doing… but they have nothing to do with the deficit!
    I’m not clear on how your plan is helping the kids when it includes leaving them with tens of trillions of dollars in debt, low economic growth prospects, SS & medicare payments.

  54. Posted by lol

    Yes they can be done with a balanced budget. But this is the chicken-and-the-egg issue. If you are waiting for a balanced budget to do infrastructure work, then you can’t put the economy in position to grow, and therefore cannot get the revenue to balance a budget.
    Which is why Keynesians call for deficit spending on projects that will 1) create jobs and 2) create future growth or intensify that growth when it comes in.
    It’s simple. Yet difficult for conservatives to fathom because it breaks everything they believe to be true.

  55. Posted by lyqwyd

    I never said wait for a balanced budget to do infrastructure, I said the issues are completely unrelated!
    Keynesians call for deficit spending regardless of what it’s for, it could be digging holes, or bailing out banks… and certainly without any regard for the bill that future generations will have to be paying. Only a tiny fraction of money spent over the last 5 years has been on infrastructure.
    I have no opinion about what conservatives or liberals fathom as I’m not one of them, and I don’t presume to know what others are thinking. I merely look at facts and do my best to understand and interpret them to the best of my ability. One fact I’m quite certain of is that the world is far more complex than liberal or conservative. Both sides have some good points, but most that comes out of either is pure garbage and distraction.

  56. Posted by lyqwyd

    A little more information to make it clear where we are with relation to debt and deficit.
    Our debt / GDP ratio, according to IMF report from October 2012:
    in 2011 we had the 12th highest ratio at 102%
    in 2012 we were projected to be 11th highest at 107% (actual was 109%)
    in 2013 we are projected to be 13th highest at 112% (that’s looking quite low at this point).
    This is out of the 174 countries the IMF reports these numbers for.
    The countries that are worse than us:
    Japan
    Greece
    St. Kitts and Nevis
    Jamaica
    Lebanon
    Italy
    Eritrea
    Portugal
    Ireland
    Sudan
    None of these are countries I would want to be grouped with right now. Also note, Spain, one of the PIIGS is actually better off than us in this regard!
    We are also in the top 10 as far as deficit spending / GDP for 2010-2012, and the countries ahead of us are not very good role models either,
    and all of the PIIGS now have lower spending ratios. Yes, we can hold out longer than the PIIGS, but we are well into the financial range that
    got them in trouble, and we’re only digging ourselves deeper every year.
    As far as historical comparisons, there are none, over the last 5 years, on an inflation adjusted basis, we have spent more than we did during any year of WWII, in fact a lot more. The average deficit during WWII was $486.45 billion while over the last 5 years in has been $1,156.65 billion, over twice as much. And not to defeat Nazis, or build infrastructure, but to bail out banks, and not much else.
    Our problems are not going to fix themselves, and thinking that we can deficit spend our way out of the problems that have been, in large part, created by deficit spending is ridiculous.

  57. Posted by lyqwyd

    correction to above:
    in 2013 we are projected to be 11th highest, not 13th highest in debt to GDP ratio.

  58. Posted by lol

    If we were Greece that would matter. But we are the biggest economy of all times and people lend us willingly at a record low rate. There’s no other safe haven and there’s no safer haven big enough.
    We are the masters of our own ecosystem. As such we can pull ourselves out of this mess and the world is proving with their investments that they keep trusting us even when we do not believe in ourselves.
    Now the only thing pulling us back is the very touchy conservatives who are willing to sink their own ship because 1) they have become wildly irrational and 2) they do not like the captain.

  59. Posted by lyqwyd

    So you are saying that debt matters for Greece, but not for us? That’s quite a stretch, I’d like to hear about how this can possibly be true.
    Every time period has had a master of it’s own eco system, and every one of them eventually failed. Realistically, no we, nor they, were masters in any sense that allowed them to ignore the rules of economics. It’s pure fantasy to claim such.
    On top of that, many nations are already abandoning the dollar as the reserve currency, China, Russia, India, and a number of other countries now do a large amount their trade with their own currencies. Our master of the universe status is already degrading.
    Lastly, China will quite likely soon be the number one power (some predict as no later than 2020), so all your claims that rely on us being number 1 fall apart the moment that happens, but we will still have all that debt.

  60. Posted by lol

    1 – yes I do
    2 – obviously the evolution of our borrowing rates for the past 5 years are the proof
    3 – sure empires fall. Sigh.
    4 – Yup. And yet they’re still buying our debt.
    5 – I still believe in our ability to reinvent ourselves. If you do not, see #3
    I have a day job. Bye now.

  61. Posted by lyqwyd

    1 – That’s ridiculous, of course debt matters for us.
    1a – what about Japan, Italy, Ireland, Great Britain, Spain, and every other major country in similar debt situations
    2 – proof of what?
    3 – Yes, so your claim that we are immune from the same problems flies in the face of all evidence and history.
    4 – China’s ownership of US treasuries is flat over the last 2 years, down when adjusted for inflation. Russia and India are both down in total holdings, so no, they are not still buying.
    5 – I’m not sure how that has any relevance to deficit spending… But I sure hope we can reinvent ourselves, cuz we need it right now!
    Me too… I can multi-task.
    Still gonna stick to your position when everything you’ve based it on has been shown to be incorrect?

  62. Posted by lol

    The word count of “evidence”, “history”, “ridiculous” in a post tells me all I need to know about where this debate is going.
    I learned from feuds with fluj ca. 2008 – 2009 that I shouldn’t get sucked into these. It comes close second to watching Hannity in terms of blood pressure.
    You are correct. Everything you say makes sense. I have seen the light. Thank you lyqwyd. Going back to my life now.

  63. Posted by lyqwyd

    Right, because providing evidence is not what one should do it a debate.
    I said your claim that debt does not matter for us is ridiculous because it is when you provide no supporting evidence. There is no case in history where debt has not mattered. If somebody were to say gravity does not exist, I would also call that claim ridiculous.
    Then you go on to compare me to fluj and Hannity. Very legit debate tactics.
    I’ll assume that by your last sentence that no you will not change your view in the face of evidence (or information if you prefer) nor will you provide any to support your position.

  64. Posted by lol

    Evidence? You provided none.

  65. Posted by lyqwyd

    Actually I provided a link to a very thorough study on the impacts of high debt to GDP ratios affect nations economic growth on Feb 26, but here you go again.
    I also provided evidence that our debt & deficit levels group us with some of the worst economies in the world.
    I also provided evidence that the dollar as a reserve currency is being abandoned China, Russia, and India were the specific cases provided.
    I also showed how the evidence you provided to support your claim (post-war spending) actually supports my claim.

  66. Posted by Rillion

    lyqwyd, wasn’t addressing anyone in particular, it was more directed at the entire debate. Advocating a balanced budget in this current political environment is equivalent to me advocating that winning the lottery is my best option for financial security. Sure if it happened it would be great but the odds of it happening are zero because I don’t even play.
    Advocating that the politicans in DC balance the budget is just as realistic, they aren’t going to do it. The Republican party says to the Democrats, no tax increases and you (the Democrats) need to cut $x out of the budget, plus we want you (the Democrats) to specificy where the cuts come from so that we can blame you if you cut anything popular (like they did when Obamacare made some cuts to Medicare). The Democrats on the other hand say they want a balanced approached with tax increases, increased spending now and unspecified cuts in the future.
    There is no compromise between those two positions that will lead to a balanced budget. There are no other options on the table and the last time an compromise was proposed (Simpson-Bowles) it went down in flames.
    So I guess I agree with you that a balanced budget is preferable to deficit spending, as is me winning the lottery, neither is going to happen though so I don’t really see how wishing either would happen is very productive.

  67. Posted by lol

    Actually I provided a link to a very thorough study on the impacts of high debt to GDP ratios affect nations economic growth on Feb 26, but here you go again.

    Very debatable. Is growth cut because of high debt or is debt exploding because of low growth? The supposedly massive expansion in government of the US between 2009 and 2011 was actually mostly due to measures to mitigate the recession, like unemployment insurance. The core of government actually shrunk!
    Cheap interest rates actually allow the debt to be relatively cheap. It’s not ideal, but we can afford our current level of debt.

    I also provided evidence that our debt & deficit levels group us with some of the worst economies in the world.

    An interesting metric. Heck, we have to catch up to Ghana or Malawi who are doing sooo much better than us. Overall we’re in the 4th quintile of the 30 most developed countries. But in terms of unemployment or growth, we’re not doing too bad.
    I also provided evidence that the dollar as a reserve currency is being abandoned China, Russia, and India were the specific cases provided.
    Not abandoned. Otherwise interest rates would shoot up to 5%. Euro didn’t replace the USD and there’s no freely exchanged currency that can even compare with the USD. As for the Chinese, their Renmimbi is pegged to the USD.
    I also showed how the evidence you provided to support your claim (post-war spending) actually supports my claim.
    Not at all. You saw what you wanted to see. Yes you do remind me of fluj in 2009 denial. Plenty of energy but no clarity.
    These are not evidence but opinions, by the way. And our opinions differ. And we’re obviously wasting our times. Yours seem cheap. Mine isnt.

  68. Posted by Anonareader

    “Yours seem cheap. Mine isnt.”
    You post your every thought no matter how inane day after day after day after day on this site. lyqwyd brings in some facts and finally now you pull the “I don’t have time for this” card??? Weak Weak gruel…

  69. Posted by lol

    Someone with axe to grind throws opinions stated as evidence of truth. What’s to do? Sigh.

  70. Posted by lol

    I’ll add that we could throw invectives around like fluj and I did in 2008-2009. I should have known better and let the market speak.
    And it did. I showed I was opened to facts when the market cratered and I switched to the bull side in late 2010.
    But some, like tipster for instance, are too entranched into their opinions and kept the same old tune. I have my opinion today. I will have another in a few years as conditions change.
    By the way, I am a few percentage points away to call this another bubble in the making.

  71. Posted by lyqwyd

    @Rillion, I don’t expect that anything I say here is going to change things, I just enjoy the debate, and I like to think that a couple people might look into the issues.

  72. Posted by lyqwyd

    @rillion
    Also, just to be clear on what I am advocating: a balanced budget in the next 5-10 years, with spending frozen, or growing less than GDP long enough for our total debt to GDP ratio to get down to around 50% or so. A balanced budget sooner would be better than later, but I don’t expect a balanced budget tomorrow, I don’t even think it would be a good idea for it to happen that quickly. 5 years seems perfectly reasonable.

  73. Posted by lyqwyd

    Cheap interest rates actually allow the debt to be relatively cheap. It’s not ideal, but we can afford our current level of debt.
    That’s part of the problem, cheap interest rates allow us to continue growing debt, but interest rates won’t be cheap forever, but the debt is only more of a problem when rates go up.
    …we have to catch up to Ghana or Malawi…
    The fact that some poor countries have better ratios does not invalide the evidence. And just an FYI, both Ghana and Malawi have far better economic growth rates (and growth prospects) than we do.
    Not abandoned…
    I didn’t say abandoned, I said being abandoned. It takes time. The fact that the major competitors are making trade arrangements outside of the dollar is strong evidence they are looking for an alternative.
    But in terms of unemployment or growth, we’re not doing too bad.
    According to the IMF: 2011 & 2012 we were 66th out of the 105 countries they track for unemployment rates. I’ve already pointed out that we are lower than the global average for growth, so again you are wrong.
    IMF Data can be found here:
    http://www.imf.org/external/pubs/ft/weo/2012/02/weodata/weoselgr.aspx
    These are not evidence but opinions
    It is not an opinion that we had a surplus 2 years after the end of WWII, or a roughly balanced budget for 15 years after. It is not an opinion that our debt to GDP, or deficit to GDP are some of the highest in the world. It is not an opinion that China, Russia, and India are no longer net buyers of US treasuries. We should hope the EU stays broken for years to come, they are buying us a nice safety cushion, but it won’t last forever.
    Comparing me to fluj or Hannity is an ad hominem attack, and not a valid form of debate, more so when it is completely false. You denying evidence does not change the fact that it is evidence.
    I’ll add that we could throw invectives around
    Could? You’ve already been doing it. Comparing somebody to Hannity is certainly an invective in my book… but that’s OK, I’ve got tough skin.
    Re: bubbles, which one are you calling? Education lending? Bond market? Stock market? Others? There’s a bunch of them going on right now. I don’t know which will burst first, but one sure will.

  74. Posted by NoeValleyJim

    I disagree that it is against human nature to pare down government debt in boom times. Plenty of countries have done it: I give Canada and Sweden in the 90’s as good examples. Many states and municipalities now have “rainy day” funds which are the exact same idea.
    It is true that you need good political leadership to carry this out and that the United States has not had the self-discipline or leadership to be willing to pare down public debt in good times for at least 40 years. But it is certainly possible.

  75. Posted by NoeValleyJim

    So about a 50% return since 2000 in SF home prices, compared to a 0% return (plus dividends) in the S&P 500. Not too bad. Not quite the 6%/yr I was hoping for, but pretty close.

  76. Posted by Rillion

    More accurately, a 50% return from 2000 to mid-2003 in SF home prices and a 0% return (plus/minus rental income/carrying costs) since then.

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