How We Make Our Purchasing Decisions
Readers suggested a topic on decision making. “Land of the biggie house, the biggie mortgage, the biggie vehicle, the biggie belly, and the biggie cereal box. Cereal box?”
“Yeah.. try this: Open a cereal box and remove the contents, squeeze the air out of the bag and look at what five bucks got you. Somewhere in this observation is a analogy for how we make many of our purchasing decisions. Guess what that analogy would be?”
A reply, “This morning’s Dow Jones Money Report (radio) mentioned that great rooms had fallen out of favor with consumers, because they ‘take up too much space.’ I’m wondering if McMansions will lose more value relative to normal 3 or 4 bedroom houses as real estate prices continue to slide.”
Another said, “And yet CNN is reporting today that house prices (they must mean median prices) have risen slightly!”
“Every month upbeat figures are released by this or that organization or agency, then then next month ‘revised’ downward. It’s so regular and predictable, it has to be deliberate. Why the Press bothers reporting anything positive NAR or homebuilders say is beyond me, since it ALWAYS proves wrong.’
“Even the sales figures are baloney, since they reflect banks and mortgage companies buying back their own foreclosed or abandoned properties, often at their fake original valuations, or even higher (thus boosting that tricky median price number).”
“When Fannie and Freddy can declare losses as temporary, and avoid factually writing them down, nothing related to real estate appears to be believable, except that it isn’t worth a fraction of what we’re told.”
The Seattle Times. “Sue Wilson was among the 3,000 laid off by Washington Mutual in December. She’s had no success finding a job since.”
“‘It’s a little scary,’ she admits. ‘I had recently gone part time, so I felt more vulnerable. It’s worse for a lot of my friends there. … These are people who felt they were very secure and making good money. Now they’re faced with being laid off. There’s not a lot out there to go after.’”
“The state lost 1,800 nonfarm payroll jobs in April, and nearly 159,000 residents are seeking work.”
“Some observers to speculate that the worst of the credit crisis is over and the recession will be mild. That would bear out the ‘incurable optimism’ of Patsy Carmichael. Even so, in a recent interview she says with a rueful laugh, ‘I’m a Realtor without clients. … There’s a bunch of buyers waiting. I say, ‘What are you waiting for? It’s a buyer’s market.’”
“Carmichael is 75 and has been selling houses here for 20 years. With a good year in 2007 and three closings earlier this year, Carmichael considers herself fortunate.”
“‘A lot of agents are hurting,’ she says, adding that she’s grateful for her frugality.”
The Philadelphia Inquirer. “We thrifty Americans should all take a bow. Our national savings rate just crept above zero, clocking in at 0.2 percent of income in the first quarter of this year, up from a goose egg at the end of last year!”
“OK, so we’re not a nation of savers; at least, not anymore. Our long-term savings decline is worrisome in and of itself; many economically stressed households currently have little to fall back on. But of even greater concern are (a) our continuing dependence on debt, and (b) the sources of our more recent borrowing.”
“Debt became a much larger driver of growth in the 2000s than before. Now that the main channels that financed all of that borrowing are closed, we’ve got some tough lessons to absorb.”
“Consider this. Forever in American economics, the mantra was that “consumer spending is two-thirds of the economy.” Yet, during the last decade, that share climbed to 71 percent, the highest on record, a shift equivalent to $575 billion today.”
“At the same time, real incomes for most families were flat. Even though the 2000s have been a period of fast productivity growth, the nation’s real median income - the income of the family smack dab in the middle of the income scale - was actually a bit lower in 2007 than in 2000.”
“As incomes stagnated for many yet consumption soared, we made up the difference with borrowing. Household debt, including mortgages, just about doubled in seven short years (2000-07), from $7.4 trillion to $14.4 trillion.”
“Now, with home prices once again obeying the law of gravity, millions of homes are worth less than their mortgages. At the same time, we have a fading job market and paychecks that have lagged behind inflation for the last seven months.”
“In this climate, it’s no surprise we’re stuck borrowing from our retirement funds and our credit cards. We (not all of us, of course, but enough of us to bring down the house) bought into a bubble, felt a lot wealthier than we were, got hooked on debt, and our consumption grew untethered from our incomes.”
The Dallas Morning News. “Henry Potter: Have you put any real pressure on these people of yours to pay those mortgages?”
“Peter Bailey: Times are bad, Mr. Potter. A lot of these people are out of work.”
“Potter: Then foreclose!”
“Bailey: I can’t do that. These families have children.”
“Potter: They’re not my children.”
“Bailey: But they’re somebody’s children, Mr. Potter.”
“Potter: Are you running a business or a charity ward?”
“Our current crisis was a product of the new century, a fairly conventional speculative bubble involving legislators, regulators, lenders, great financial houses and borrowers in roughly equal culpability. Under the mantra that ‘housing prices in America have never gone down,’ modest eligibility standards for taking out mortgages were essentially scrapped.”
“Risk was ’shared’ - i.e. hidden - by the relatively new process of bundling mortgages for resale to investors. As housing prices soared, the rush to get into the game produced all the usual assurances from the financial talking heads, until the inevitable collapse.”
“How many of the imperiled homebuyers are actually young families with children? How many are singletons who used this speculative opportunity to jump onto the housing escalator? How many are empty-nesters who rode the bubble to move into a McMansion? How many are would-be investors looking for quick turnarounds?”
“George Bailey would surely marvel at the stupidity and greed of our current crop of great financiers, who make Mr. Potter look like a genius - even a humanitarian. He would want to see the sham geniuses and their boards of directors held personally liable to stockholders and investors. He would expect criminal fraud to be vigorously investigated as well.”
“Over the long haul, George Bailey would probably try to return the housing and mortgage industries to their real purpose: providing homes to families. He would support limiting the tax deduction on home-mortgage interest to one principal residence per family.”
“He might even favor a cap on the amount that could be deducted, so that only good shelter - not princely luxury - enjoyed favored tax treatment.”
“Our current crisis was a product of the new century, a fairly conventional speculative bubble involving legislators, regulators, lenders, great financial houses and borrowers in roughly equal culpability. Under the mantra that ‘housing prices in America have never gone down,’ modest eligibility standards for taking out mortgages were essentially scrapped.”
The scrapping must continue!
“In this climate, it’s no surprise we’re stuck borrowing from our retirement funds and our credit cards. We (not all of us, of course, but enough of us to bring down the house) bought into a bubble, felt a lot wealthier than we were, got hooked on debt, and our consumption grew untethered from our incomes.”
What’s this “WE” business?
Giggle. Snort. LOL
Quotes attributed to Susie Orman.
“Consumers are spending money they don’t have to buy things they don’t need to impress people they don’t know.”
Another is: “consumers are in financial denial and addicted to debt.”
Heard these on the radio some time ago and remember them because they so succinctly describe the majority of our society today.
“Consumers are spending money they don’t have to buy things they don’t need to impress people they don’t know.”
Correction. This comes from Dave Ramsey.
Suzu Orman couldn’t find her own butt with both hands, a searchlight, and crack sniffing dog.
She was a bubble denier for longer than most.
My mother didn’t believe me when I told her that ARMs were a terrible idea until Suze Ormond finally pulled back and said they weren’t for most people. The woman is a fracking menace.
Suze Orman sold your mother an ARM loan? I’m not sure you correctly identified the menace.
well sir, at least crack and sniffing go together.
Geez, I dunno, I’ve often said I’m not the sharpest tool in the financial shed, but here’s a coupla simple rules I try to follow:
1) Make money. Spend less than you make.
2) Buy low, sell high. That one comes from my years in the “stuff business”. It has a caveat, though, because sometimes in the stuff business, you make a mistake and find you can’t sell it for more than what you spent. So in that case, the rule is, dump it and get what you can, package it up with other stuff and move it out. Recoup your loss somewhere else.
As far as a house goes, that’s simple. Buy what you can comfortably afford, in a place you don’t mind living.
“Buy what you can comfortably afford..”
Exactly. The entertainment room, the granite countertops and the gaudy chandelier in the front hall will not help you sleep at night. On the other hand, a low PITI is like a sleeping pill.
This is very basic stuff that denies the extent of the economic problems that have arisen. Bubbles are tempting to a broad audience, at least at first. Houses are not something one just does without, and if everyone in your family always bought before then you have to somehow realize that you are different and need to be the one that rents. Not everyone has that skill or that level of individuality. In the background costs have been rising while incomes have been going down. People didn’t have a sense of entitlement so much as they had the idea that buying average homes was something people used to do. Housing markets had smaller bubbles in the past, but various regulations kept the marketplace from going too far out of bounds. Saying that people needed to review their finances in order to avoid toxic loans and collapsing appraisals avoids the question of why toxic lending became pervasive and why appraising got so far out of line that the numbers became pernicious junk that led people in completely the wrong direction.
Agree, Mole Man.
People were usually buying homes that they **should have** been able to buy if there weren’t a bubble.
Middle-class people buying middle-class homes should not be surprising nor frowned upon in normal circumstances.
Not everyone has an above-average IQ. Not everyone has experience buying homes and obtaining mortgages, and when they sought “expert advice” from those who **should have known better** they were told that everyone was doing it, and they’d better hurry, or they’d be priced out FOREVER. They were also told **by the people who were originating the loans and were thought to help borrowers** that they could afford it. Why would a lender give them money which they could not repay? It really is logical.
Most of the people on bubble blogs seem to be college graduates and/or high IQs. Otherwise, we’d be drinking beer and watching TV like everyone else — not obsessing over credit markets and the financial consequences of bubbles and politics!
We need to be a bit more sympathetic. Even though most FBs brought their problems on themselves; oftentimes, they were just too stupid to know any better.
How do I make a purchasing decision?
If it says
chipotle
caramel
grapefruit
tequila
spicy
2 carats
VVS1
incendiary
I buy it.
Hmmm.
Diamond-encrusted spicy enchilada, tequila-grapefruit compote, with a side of caramel flambé for you madam?
as long as you serve it to me in a Speedo.
vegan
organic
two row barley
100% agave azul
lambic
barrel aged
When I used to work on the beach, there was this speedo-wearing crazy homeless guy with no teeth that would plop down next to attractive women and start doing sit-ups until they got up and left.
And I can’t find a firkin for sale in the US to save my life.
Just open a bar already
Hey, I gotta Sudsbuddy at my house!
Was that Waikiki? I think I saw him last Nov. Real leathery ol guy.
So you dig scantily-clad pasty keyboardy types eh? You are one weird chick.
I like the ones whose blood tends to stay at the north end of the body.
“I like the ones whose blood tends to stay at the north end of the body.”
You’re into ckicks????
I live in the north, and there’s blood all through my body. Sounds like a perfect match. See you on eHarmony later?
Just kidding. I tried internet dating years ago and it didn’t work for me. Women always posted their ‘before’ picture, but when we met in person I saw the ‘after’ picture. Ai caramba.
So I finally met someone the old-fashioned way: I married one of my ex-students.
“spicy…incendiary”
Habanero, roasted, cut into strips, put on a hot dog.
Or made into “poppers”.
TX-
When you said “incendiary” I didn’t realize you were referring to foodstuffs.
I am soooo disappointed.
What do you mean “we” debt man. What I find so amazing about this stage of the bubble is that its been collective acknowledged, sort of. Yet even though the acknowledgment has taken place, people refuse to draw the obvious conclusion. Spending must be reduced, house prices must shrink. Debt will be repaid or defaulted even for, “” .
Josh
$2 trillion government handout that has to be used to repay debt, for people that have debt (no debt, you get the cash) and strict tightening of debt standards. Increase taxes and cut government spending.
We have too much debt. It can’t be fixed with more debt. It has to be fixed with paying down debt, tightening lending standards, economic responsibility…
But….but… How will we be able to buy stuff we don’t need then??
‘Household debt, including mortgages, just about doubled in seven short years (2000-07), from $7.4 trillion to $14.4 trillion.’
Ouch, that’s gonna leave a mark. But then again, think of the tax advantages!
Insanity. The amount of debt we added in the last 7 years is far more than all the federal budget deficits of the last 28 years. That has to collapse.
“Well, here’s a call to return to good old-fashioned economic common sense, where regulators stay awake at the switch, growth is broadly shared, and households prosper through fairly rewarded work - not through borrowing against their retirements or their credit cards.”
This is a small beef I have with many in the mainstream media. Although it’s bad policy to have wages stay stagnant, prices rise, and speculation run rampant, it’s ALSO bad PERSONAL policy to buy things you cannot afford just because you “feel” wealthy due to increased access to credit.
Most of the borrowing that I saw was to buy things people WANTED, not things people NEEDED. Things like expensive cars, shiny ’spinner’ rims, boats, jet skis, ATVs, fancy vacations, cosmetic surgery, evenings eating out, second homes and condos in Las Vegas, flatscreen TVs and expensive audio equipment, to name but a few.
So let’s place blame squarely on the shoulders of those that caused this mess: on the regulators, the financiers, AND the consumers. Most of them, far from feeling squeezed, were living what they thought was the high life, the life of the high roller.
The devil let them do it.
“So let’s place blame squarely on the shoulders of those that caused this mess: on the regulators, the financiers, AND the consumers.”
Abolish the FED. That would be a good start. Shut down Wall Street, if it can’t be regulated. A buncha big swingin’ dicks playing craps with the lives of people in order to line their own pockets just doesn’t seem very healthy. As to the consumers, education is what’s needed. Real education. How to budget, how to balance a checkbook, critical thinking, a healthy suspicion in business dealings, etc. etc. When people are lulled into a sense of false security and then the bottom drops out, it’s a rude awakening. However, this rude awakening might just cause people to realize how badly they’re screwed.
Regulations worked fine until they were removed. What you are saying avoids the serious questions raised by securitization which is not going away. None of this would fix appraisals either. That is a most important issue since there is some evidence that simple disclosure rules could fix appraisals. Judging the capacities of regulations based on what happened when people who loathe government take them away doesn’t make any sense.
and households prosper through fairly rewarded work - not through borrowing against their retirements or their credit cards.
Yesterday, my once-a-week cleaning lady showed up all teary-eyed and upset because she’d gotten some sort of court notice about an overdue Capital One credit card bill. I found her the contact info for the local legal aid and consumer credit counselling (the good, non-profit ones, not the fake one-more-fee-for-nothing-useful ones).
Is she planning to make up a formal budget, cut back on discretionary spending, change habits, give up her SUV (and/or her husband’s truck), save more, pay down credit cards, get her husband to get a second job, make her spoiled kid work chores instead of goof off, anything?
No.
She’s firmly convinced that, because she works hard (and she really does work hard!), that she deserves the “few luxuries” she wants. She may not buy some one thing, then feel virtuous and spend on something else since she “saved”.
And it’s not that she spends on fancy clothes, but she *has* to have cable, and a house (no renting!) which she’s re-decorating, and a giant vehicle, and private school and private after-school and vacation activities for her kid (no, he’s never been to the library!), and money to “lend” to all her assorted relatives here and back in Mexico, and trips to visit them in Mexico, and take-out when her kid won’t eat what she cooks, and her Prozac, of course…
Her main solution to her budget problems is the court should let her husband stop paying support to his first wife and the daughter from that first marriage.
Looking at her, she does work hard, and I think her work (and her husband’s job, including health insurance) *is* fairly rewarded, but her ideas of what she *should* be able to afford is two or three times above what their income actually translates to, in terms of lifestyle.
That is terrible and by terrible I mean terrible that she is totally overspending, not that she is in trouble for overspending. But I actually feel a little more sorry for her than for native born credit abusers.
Let me explain.
I was a kid in the 70’s. My mom stayed home. My grandparents were walking distance away, though my mother did have a car starting when I was about 7. Our summer activities in a middle class town involved swimming lessons at the public beach, going to grandma’s house (near the lake), an occasional arts and crafts class at the community center and lots of trips to the public library. I think that was the last decade when the middle class actually lived a middle class life style. If you didn’t live in the US in the 70’s you don’t have any frame of reference of how a middle class family needs to live, including the ultra cheap meals my mother managed to put together and basically no restaurant meals unless grandma was treating.
If you have only ever seen a society in the midst of a spending binge, how do you figure out how to live in that society without participating. She can’t recreate her lifestyle from Mexico here. I assume that would include lots of more casual work relationships, multi-generation households, and totally different influences on the kid.
Since she went through the 1986 amnesty, that’s a minimum of 20+ years she’s lived here, and I don’t know how long before 1986 she actually first came here, it may have been all the way back in the 70’s.
I do agree with a lot of what you said, but I think a lot of her problems are the same as “native born” credit users — her math skills are abysmal (especially in not understanding interest and especially compounding), and she truly believes credit card offers, tv commercials, sales pitches, etc are all up-front, trust-worthy, and would never lead her astray or try to cheat her.
She’s panicked about the court papers, but thinks all she has to do is just call up Capital One and they’ll work it all out (since the letter with the court papers told her she didn’t *have* to come to court).
I just hope she does call legal aid and the credit counselling people, but I have a feeling she’ll put it off, and ignore the court thing too (just like the stories about people ignoring calls from their mortgage servicers about being behind, or not opening bills). She’s a good person but surprisingly (to me, anyway, being a born-and-raised-in-the-Lower_East-Side cynic myself) naive.
On the opposite side of the spectrum I know a technologist here in Silicon Valley who used to live with his family in a comfortable and cute little bungalow. Then the housing bubble came and everyone he knew moved up. His friends all caught the fever and dropped millions on mansions, so whenever he visited them he found them living the big lot big house lifestyle and loving it. He should have been able to resist. He should have known better. Before too long he got swept up in the whole mess. His wife, much to her credit, tried to get him to forget the whole thing and enjoy the house that served them well. Instead he spent millions on a big, fancy, customized house.
So what is the result? Is he now destitute and spiritually crushed? No! He refuses to admit he spent too much on his house and caused his family problems with the move, and he is still filthy rich. The move was a bad one and his family and especially his wife know it, but life goes on. The millions that this guy spent made a huge difference. Once open spaces around him are now filled with trophy houses. Huge amounts of money were wasted on what amounted to a reduction in quality of life. How does the staying within your means lesson apply to people like this who overspent? The bubble was still bad and damaged them, but they are not poor. Far too much effort goes into repeating the strawberry picker bankruptcy story. This bubble is not about immigration or poor people who can’t handle their finances. It is about a society that went nuts, trashed its own regulations, and went off in directions that didn’t make sense even for those who could afford it with a wide margin.
Also, the growing disparity of wealth creates an even greater urge to keep up with the Joneses.
When working people watch the lifestyles of the top 1-5% of the population move up by a certain amount, the working people think their situation ought to increase by the same amount, relatively speaking.
We were always told that each generation is better off than the last. That probably gave us the sense of entitlement that we **deserve** to live in a house and neighborhood that’s similar to the one in which we grew up.
What’s also changed is that middle-class/working neighborhoods used to be safer and cleaner. Now, the safe, clean neighborhoods are filled with McMansions and regular people are either forced to live in more dangerous ‘hoods or stretch way beyond their means to live in a safer area. The number of regular, middle-class, affordable, clean, safe neighborhoods is disappearing because of the wealth disparity. (So Cal perspective)
The point I was trying to make isn’t related to “immigration or poor people who can’t handle their finances”.
It was about so many people in general expecting to live a lifestyle significantly above their income level, *whatever* their income level actually is.
That’s a large part of “good old-fashioned economic common sense” that’s been lost in the past decade or two.
I see a significant failure to face reality in so many people, either in what they can afford, or in facing the consequences and changing their behavior and expectations when they so spend more than they can afford.
I actually think that most millionaires live well below their means and do not live the kind of lifestyle that most people associate with wealth. The two people that I know of that are millionaires drive a 1996 dodge intrepid and 2001 F-150, their wives drive a chevy astro van and a saturn; they each live in houses worth about 250k; they are not country club members and do not even have cable TV because they know that the idiot box mostly lies to them. Their hobbies are building furniture and golfing at $30 municipal courses. There is no way on earth some tool living in a McMansion driving an escalade 50 miles a day to his McJob would believe that they could buy him 20 times over.
Our last “Real” recession was 1991-95….2001 was not a recession IMO, at least from a consumer stand point…After 2001, the consumer was given “unprecedented” access to cheap easy money on ridiculous terms…From boats to flat screens, vacation cruises to 2nd homes, the drug of the day (Debt) was embraced by many…Now comes rehab and reality that comes with it…Gosh, I really fricked up….
“Now comes rehab and reality that comes with it…Gosh, I really fricked up….”
“They tried to make me go to rehab, but I said, no, No, NO!”
Rehab is for quitters.
“Sue Wilson was among the 3,000 laid off by Washington Mutual in December. She’s had no success finding a job since.”
“‘It’s a little scary,’ she admits. ‘I had recently gone part time, so I felt more vulnerable. It’s worse for a lot of my friends there. … These are people who felt they were very secure and making good money. Now they’re faced with being laid off. There’s not a lot out there to go after.’”
Ben didn’t note that the article mentioned that when she had her job Ms. Wilson was commuting from Blaine (i.e. the Canadian border) to Seattle - 110 miles each way. Wow - the lives some people lead…
Of course Buffett is right:
Blame for the sub-prime crisis lies at the feet of banks who took too many risks in mortgage lending, U.S. billionaire investor Warren Buffett told newspaper El Pais in an interview published on Sunday.
“The banks exposed themselves too much, they took on too much risk …. It’s their fault. There’s no need to blame anyone else,” he said.
Exactly.
i find the blame-game uninteresting.. anyone can play with an equal chance of success… but how about:
“I don’t think the situation will get worse in financial markets. General conditions in the business world will get worse, but it will only last a while,” he said..
“Even the sales figures are baloney, since they reflect banks and mortgage companies buying back their own foreclosed or abandoned properties, often at their fake original valuations, or even higher (thus boosting that tricky median price number).”
I was wondering if the reports on the house prices were factoring those in!!! I keep seeing those bank buy backs come up on trulia. Sometimes I’ll look at a house thats for sale, and down at the bottom it’ll have the same house listed as a comparable recent sale. I’m just wondering what’s going to happen in the coming months, with all these houses sitting on the market for months still competing for the attention of the few buyers willing to pay top dollar. Are prices going to trickle down slowly for the next couple years, or is something going to happen to make sellers finally slash prices like crazy? If anything winter should see some sharp mark downs.
Come on 2002/2003 prices!!!!
Whether by inspiration or desperation we will see millions jumping off the “hedonic treadmill”. Shopping as a leisure activity will go away.
OT: I have to give props to the Chinese government for their response to the quake. They really made our government look pathetic. God I cannot wait to throw these bums out in November.
dude, they already have that
“He might even favor a cap on the amount that could be deducted, so that only good shelter - not princely luxury - enjoyed favored tax treatment.”
120 billion = $ 3600 each for actual fed taxpayers- you can send in more,
cmopare Katrina to 1938 NE cain
yeah.. we can safely put our trust and faith in the next crop… things will be different.. good times are a’comin’.
Being cynical and not voting would be even worse than putting faith in a new crop of politicians. Keeping most of the incumbents would be an absolute disaster.
People who “don’t pay any attention to politics” shoulder the real blame for the direction this country has taken.
People who continue to support the status quo “shoulder the real blame.”
A one party corporatist state that is corrupt at all levels is making the US look bad?
Perhaps you should ask them why there schools fell down? At least we still have codes and quakes don’t kill 50000 people.
Bush lovers do not watch this.
http://www.informationclearinghouse.info/article19936.htm
That was friggin awesome. Keith is the best. I just hope that I live to one day see Bush, Cheney, Rove and the rest of this admin all go to the Hague. They all have it coming.
Idiots. Bush may have flaws but he’s not a terrorist.
Idiots. Bush may have flaws but he’s not a terrorist.
It’s true that Bush is not a terrorist. That’s because a terrorist is, by definition, not acting on behalf of a government. He is, however, a war criminal.
He is, however, a war criminal.
You have a lot of company. All of America’s enemies agree with you.
If Bush’s plan was to bring disgrace, insolvency and tyranny to America on purpose, he could not have done a better job. The terrorists who hate America are probably cheering him on.
And a lot of America’s friends too.
hmm.. A career sportscaster and sports commentator for 30 years is really miffed that Bush won’t play golf when there’s a war on.. interesting.
testing
This afternoon, at the end of the street I live on, a Sandy Springs, GA police car was in an office condo complex with its blue lights flashing. The police were there because a nice middle class family, the type you see at any Wal-Mart on a Saturday, was living under a tree. A once normal family: mom, dad, and two little girls. All they had left were their pillows. It just about broke my heart to see this. We now live in a land that subsidizes thieving Wall Street brokers, a land where working families live on the streets because they can’t afford a home, a land that can no longer claim the right to be called America, because we have trashed everything the American Dream stands for. This Memorial Day, I am going to remember what my country once was. After that, I am going to fight politically to get it back.
You feel sorry for some FB that blew off other people’s money and is now broke.. ok.
Using that as an excuse to smear America… not ok.
Kid Clu? I suggest Kid Clueless.
Your nice middle-class family living under a tree must’ve been abysmally stupid with their money. Yes, the middle class is getting relentlessly screwed and squeezed, but most of their problems are self-induced - and start with voting for the Republicrat fraudsters who are Wall Streets willing accomplices in sucking this country bloodless.
Not necessarily. They could have been regular folks who lost their jobs due to downsizing, or health issues, and couldn’t make their mortgage payments, so now they’re out on the street. If you have to work to get the money to live on, then you’re a few paychecks, or a few more paychecks depending on your savings, away from living under a tree, too. Not everyone who’s in difficult circumstances is their because they’re ” abysmally stupid with their money. ” How effin’ shallow can you be to think that ? Pretty damn shallow, or never knew any hard times yourself. And yeah, I already figure you’re gonna say you hiked to school both ways through 6′ tall snowdrifts while holding down a fulltime job shovelling coal to support yore pore toothless grandma, so if you can do it, why can’t anyone else, the stupid shiftless bums. Too bad for those 3-year olds, though. The ones under the tree with the parents, I mean.
Joey,
In this part of town, the people under the tree have a 99.9% chance of being FRenters. Landlords who have not been paid have the eviction right in GA to toss a renters belongings on the curb while they are at work or at school, where the stuff almost instantly finds a new home. Hence, these people were left with only their pillows. And yes, it is OK to say bad things about our country when economics are engineered by our government so that harm insues to working class families. Standing up, doing and saying something about what is wrong is what caused our country to come into existance, and is what separates us from animals–sheep in particular.
Bill,
I’d like to see you do something about making our country better, instead of sitting back & calling other bloggers names. “If you are not part of the solution, you are part of the problem.”
Sammy,
Alhough it is comforting to imagine that people who wind up in situations like this family are stupider, lazier, etc. than oneself, truth is, they are probably just not as lucky.
Silver,
Thanks for your comment below.
He might even favor a cap on the amount that could be deducted, so that only good shelter - not princely luxury - enjoyed favored tax treatment.
A wuss. I might suggest scrapping the housing “deduction” altogether.
If anyone ever wanted to encourage home ownership the **right way,** they’d eliminate all subsidies for second homes and investment properties (except multi-family housing).
Even things like Prop 13 (which I LOVE) should only apply to one owner-occupied residence.
This would discourage hoarding of land by the wealthiest, let prices drop to affordable levels by putting more supply on the market, and keep people in their homes rather than being taxed out of their own homes (original and best intent of Prop 13 & other state measures).
Multi-family residences should still get favorable tax treatment, because there will always be renters, and they should not be priced out of their homes, either. Also, it might encourage multi-family and multi-generation building which would help the coming retirement crisis (no SS & no DB pensions) because families could once again care for their parents and children in the same home.
There should be NO mortgage interest deduction. And I’m no bitter renter! While I’m now 100% paid off, in the past, I’ve benefited from it.
Though, maybe not….if there was no mortgage interest deduction, house prices would simply drop and I would have paid the same amount.
Agree with you on the mortgage interest deduction.
It simply pushes prices up to make up for the “savings” people think they’re getting with the deduction.
Prop 13, OTOH, is necessary precisely because California is so prone to bubbles, and I don’t think old-timers and natives should be priced out of their homes (primary residences only) due to speculators with Monopoly money.
“Even the sales figures are baloney, since they reflect banks and mortgage companies buying back their own foreclosed or abandoned properties, often at their fake original valuations, or even higher (thus boosting that tricky median price number).”
So even while there are investigations of fraud going on due to the last few years of absolute scamming, this sh7t is still going on? Isn’t this outright fraud?