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To: gpowell who wrote (24635)	10/18/2004 9:49:30 PM
From: stockid	Read Replies (1) \| Respond to of 306849

Socialism is not the transfer of wealth from the rich to the poor. It's more along the lines of the means of production being owned by government.... [Socialism] was first applied in England to Owen's theory of social reconstruction, and in France to those also of St. Simon and Fourier . . . The word, however, is used with a great variety of meaning, . . . even by economists and learned critics. The general tendency is to regard as socialistic any interference undertaken by society on behalf of the poor, . . . radical social reform which disturbs the present system of private property . . . The tendency of the present socialism is more and more to ally itself with the most advanced democracy. Socialism, looks for a more even distribution of wealth. The ideal social society would be everyone being middle class with free education and health care. As oppose to the have and have not society of capitalism. SK

To: gpowell who wrote (24635)	10/19/2004 12:23:10 AM
From: Mike Johnston	Read Replies (1) \| Respond to of 306849

In a Socialist system, the means of production and distribution are collectively owned. In practice, this means a central authority decides how and where resources are allocated, and consequently, which of societies wants and needs are satisfied. What you have just described here is a definition of communism not socialism. There are countries like Sweden where means of production are privately owned however those countries are considered socialist because of very high tax rates ( up to 90%), significant welfare programs and government controlled health care and education. Some people even would go as far as to call France a socialist country. Thus socialist state is a welfare state with a minority of means of production owned by the state ( power plants for example)high tax rates and transfer of wealth from rich to the poor. Communism is a centrally planned system where majority of means of production are owned by the government. How can banks pay below market rates for deposits? Money market and 3 month and 6 month certificates of deposit yields are similar to t-bill yields which are very dependent and not that far from fed funds rate and fed funds is not a free market interest rate. Those yields are significantly below inflation. There is not much choice if you want to move money somewhere else, you can go into the stock market or the overpriced bond market or you can go into foreign currencies.

To: gpowell who wrote (24635)	10/19/2004 12:47:18 AM
From: Mike Johnston	Read Replies (2) \| Respond to of 306849

Further, savers and retirees invested in fixed rate assets, such as bonds (and to some extent real estate), had their wealth increase as the market interest rate dropped. Actually bond investors have made some money off the coupon and bond appreciation, but they lost much more than that, because they have suffered close to a 50% loss in the purchasing power of the dollar during the last 5 years no matter whether you want to measure it against real estate, the euro, food, gasoline, college tuition or health care. Therefore bond investors have lost wealth. Investors that had their money in CD's have really been slaughtered by a double whammy of interest income slashed around 80% while suffering from loss of purchasing power as well. As for first time homebuyers, it is difficult to make a case that they have been hurt by a lower cost of borrowing. If i am a first time homebuyer i would rather pay 200 K for a house at 8% interest rate with 40 K downpayment than pay 500 K for the same house with 100 K downpayment and 5% rate. Thus it is not a homebuyer that benefits from low interest rates, it is the seller who is getting an extra 300 K. Also i would rather buy at my leisure, than compete with dozens of desperados or flippers who buy without inspection.