It's almost as if Republicans have been pushing homeownership as if it were some sort of investment rather than a potential anchor to hang around your neck when you need to move to where the work is. It's almost as if the credit crackdown against small businesses and bankruptcies had an impact on the availability of credit. It's almost as if people recognize that the steady paycheck they enjoy is in constant peril and jeopardy. Hey, David - know any statistics like that? Thanks, bud!For example, Americans used to move a lot to seize opportunities and transform their lives. But the rate of Americans who are migrating across state lines has plummeted by 51 percent from the levels of the 1950s and 1960s.
Americans used to be entrepreneurial, but there has been a decline in start-ups as a share of all business activity over the last generation.
Americans tell themselves the old job-for-life model is over. But in fact Americans are switching jobs less than a generation ago, not more. The job reallocation rate — which measures employment turnover — is down by more than a quarter since 1990.
For every one American man aged 25 to 55 looking for work, there are three who have dropped out of the labor force. If Americans were working at the same rates they were when this century started, over 10 million more people would have jobs.
"Pushing homeownership" is of course a proxy for "pushing mortgages." They could give a fuck whether or not the home even exists, so long as you're borrowing as much as you can for it. The gift wrapped presents that our government gives the mortgage industry (30 year fixed mortgage and mortgage interest deduction, e.g.) probably should be rescinded. Both of those were instituted to ostensibly help consumers purchase homes, but the real effect is to shovel money away from the government and into the industry's coffers. Every dime I get to deduct from my taxes due to my interest payments is a dime that some poor bastard needs to get taxed to make up for it. Considering on the top 1/3 of mortgagees even qualify for this deduction, it's clearly not a help-the-poor-get-homes type of policy. It would be really difficult to phase it out at this point (because so many people mortgage all the way to their borrowing limit), but I'm all for it. It's regressive, and benefits one particular industry at the expense of everyone else. There are many good reasons to buy a house at a particular time and place in life, but we should stop peddling the fantasy that home ownership should be striven for as soon as possible.It's almost as if Republicans have been pushing homeownership as if it were some sort of investment rather than a potential anchor to hang around your neck when you need to move to where the work is.
So... I built a business. It's fuckin' expensive. We've got a business loan with a balance of over a quarter million dollars on it. And my wife got a medical degree. there's nearly a quarter million dollars on that one, too. My family is a half million dollars in debt before you even get to the house. But I realized last week that if you take the appreciation on the house and subtract the business loan from it, we're tens of thousands of dollars in the black. I could sell my house right fuckin' now and pay off the loan. BAM. But I'm not going to do that. Because see we got a TARP bailout which means the thing will be paid off in like nine years. And that TARP bailout was on our mortgage, which was refinanced over ten years ago. And the student debt? Income-based repayment. And the loan counts as a loss. Which we get to depreciate over a number of years. And we make 360 payments and the loan is forgiven. Income-based repayment on that sucka right now covers about 1/5th the interest on the loan. My family is a half million dollars in debt and deeply fat and happy. If I were a 1040EZ kinda guy I'd be fucked but since I've gotten in the habit of playing with six-figure balances I've learned some of the horrific games rich people play. To even get the loan we had to get all sorts of insurance to prevent against hardship and loss so there really aren't many things that could go wrong that would actually put my family in financial jeopardy. The business? Sure. But it doesn't run around in a tutu so I don't give a fuck. It's a symptom of the problems we're in that you need to go to school for six weeks to be legally allowed to cut hair but a quarter million dollars in debt? Sign on the dotted line. On the one hand, any schmuck who bought this house in 2001 would be sitting pretty. On the other hand, any schmuck who bought this house in 2001 would have faced weekly or monthly exhortations to open a line of credit, take a 2nd mortgage, refinance over and over again (and reset the 30-year clock) and piss away her investment. "Here - we're going to give you a whole bunch of money! Then we're going to spend the rest of your life tricking you out of it! Welcome to capitalism!" Our basic problem is we live in a caveat emptor society and we teach our citizens exactly nothing about what they should be aware of or how to stay out of danger.
To clarify, I have nothing against debt. I've taken on housing and business debt, made money on the former and plan to on the latter. Debt is neither good nor bad in its own. What's bad is artificially derisking debt in such a way that a few people make a lot of money off of it, while the risk is spread across the US taxpayer. Caveat emptor doesn't quite describe that situation, because debt is being foisted on you and I through no consent of our own, with little chance of reaping any of the benefits. My two specific examples, the 30yr fixed and the interest deduction are both cases that encourage people to take on way more debt (risk) than they probably should. I could finance an $800,000 house if wanted to, according to Fannie Mae's guidelines. The taxpayer would be paying for my foreclosure within a couple years if I actually did that.