compound interest Archive

The Pundit Wars

By John Lumbard. The economy is accelerating.  It’s been almost four years since the official end of the 2007-2009 recession, yet New York Times op-ed columnist Paul Krugman is still calling for more stimulus spending!  Maybe if we were to pave every road every year . . . Last month the former...
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On Savings and Debt

By James Schaefer. Some years back, at an annual company off-site retreat, a presenter was elaborating on money.  He gave many definitions, then asked us to think of money in a slightly different way.  Rather than thinking of it as a medium of exchange, he asked us to think of money as...
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Taking the Long View

By James Schaefer. In America nearly everyone has the opportunity to acquire substantial retirement savings; it's simply a matter of applying self discipline (and some common sense) consistently over a very long period of time.  Starting at age 22, saving a million dollars -- or more -- in retirement accounts is fairly...
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The Safe Withdrawal Rate

By John Lumbard.   The “safe withdrawal rate” is the amount of cash a retired person can withdraw from an IRA or other investment account without someday running out of money.  It’s not an easy figure to calculate, because you need to project your investment returns and your cost of living...
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Statutory Debt

By James Schaefer. Corporations, sole proprietorships, unions, and government all share a common mandate to Grow the Franchise. In the private sector this growth is constrained by the ability to make a profit---while laboring to provide goods or services that have value to others.  For them, the cost of money is real,...
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An All-Consuming Interest

By John Lumbard TAX REVENUE of $2.2 TRILLION, and INTEREST COSTS of $1 TRILLION A YEAR. In my last post I suggested that we shouldn't count the U.S. Treasury bonds held in the Social Security trust fund when talking about the size of the debt.  The reason is that we don't have to pay...
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