On 5/29/2014 9:43 PM, wrote:
On Thu, 29 May 2014 16:16:00 -0400, "Mr. Luddite"
wrote:

I *said*, "The roots of this grew deep during the Clinton years". I
didn't say it "started" in the Clinton years. It started way before
Reagan too.

I think the decline actually started when all of those counter culture
60s guys finally graduated from college and came up with the
ridiculous strategy that it was better to go in debt and pay it back
with inflated money later. That morphed into never actually paying off
anything and refinancing every time you had a little equity. It was
during the 70s when the bankers invented the 125% equity loan.
I predicted the housing crash then. It took 40 years to happen but it
happened. The higher house prices got, the more I knew I was going to
be right.

Unfortunately our government thinks the same way and the next crash
will be a lot worse, We can't keep printing money to hide our debt
forever.


I 100 percent agree.

Somewhere the concept of fiscal responsibility .. both personal and in
government was tossed in the ****can. We are now paying the price.

In article ,
says...

On Thu, 29 May 2014 16:16:00 -0400, "Mr. Luddite"
wrote:

I *said*, "The roots of this grew deep during the Clinton years". I
didn't say it "started" in the Clinton years. It started way before
Reagan too.

I think the decline actually started when all of those counter culture
60s guys finally graduated from college and came up with the
ridiculous strategy that it was better to go in debt and pay it back
with inflated money later. That morphed into never actually paying off
anything and refinancing every time you had a little equity. It was
during the 70s when the bankers invented the 125% equity loan.
I predicted the housing crash then. It took 40 years to happen but it
happened. The higher house prices got, the more I knew I was going to
be right.


That was a product of the late '90's and 20*. In the late '90's I still
had to put down 10% and prove I could pay my mortgage.
It all went to hell in the 2000's.
And it wasn't primarily the boomers buying houses. Most were set for
life.

On Fri, 30 May 2014 11:38:45 -0400, wrote:

On Thu, 29 May 2014 22:06:38 -0400, Wayne.B
wrote:

On Thu, 29 May 2014 21:43:02 -0400, wrote:

I think the decline actually started when all of those counter culture
60s guys finally graduated from college and came up with the
ridiculous strategy that it was better to go in debt and pay it back
with inflated money later.

===

There's nothing ridiculous about the strategy of repaying loans with
inflated dollars. It's a sure fire money maker when you sell the
house.

That is great as long as you have an asset that appreciates faster
than the inflation but there are still plenty of people who are upside
down on their house.

The part you are leaving out is the "interest tax" that easily doubles
the price of anything you buy on credit. Inflation never covers that,
particularly in the last 20 years when the fed has had their thumb on
the scale.

A strategy like this might make sense for a person who has the money
to pay cash and the discipline to have it invested in something that
pays a greater return than the interest on the loan but that is not
how you can describe 99% of the people who borrow money.

The flip side of this is when an opportunity popped up for me to
retire at 49, I could take it, simply because I did not owe anyone any
money and I already owned all of the big ticket items I needed. My
obligations were very low.

===

You make some valid points but you overlook some also. First and
foremost is the mortgage interest income tax deduction. For people
who work and make a decent buck it is one of the last great tax
shelters. When I was living and working in the hgh tax north east
with both state and federal income taxes, the government was
subsidizing almost half of my mortgage interest. The second tax
related item is the forgiveness of capital gains taxes (up to a
$500,000 gain, filing jointly) on a house that you have lived in for
the last two years. That is a huge benefit.

You are correct that some amount of price appreciation is necessary
but over a period of 10 plus years that has never been an issue in my
lifetime. It is also important to remember that mortgage payments
are a form of forced savings and long term wealth accumulation. For
many people the equity in their home becomes a major portion of their
net worth. It has been my experience that you are better off to buy
the house you really want up front rather than wait the many years it
would take to save that much.

jps wrote:
On Wed, 28 May 2014 12:29:24 -0500, Califbill
wrote:

jps wrote:
http://www.theonion.com/articles/no-...re-this,36131/

Well it is the onion. And why do you think we are one of the developed
nations these days? We manufacture little, we have a huge welfare roll,
and we have inner-city areas where the violence is on a par with Somalia
and Ruwanda and other 3rd world countries. Our government polo is are
leading us to a 3rd world status, and may already be a 2nd world. Living
on credit does not work forever.

Spending all your resources on war and tax cuts doesn't help.

We are not spend all are resources on war. Spending too much. Tax cuts?
We are still paying some of the highest overall tax rates in our history.
In the 1950's when we built an interstate highway system, and lots of other
infrastructure, we had an overall rate of about 22%. Add up all the taxes
we paid and average family paid 22% of their income. Closer to 46% now.
What are we doing with record spending? Some for war, but more for a huge
dole to non workers. 2 years of unemployment, with no requirement to even
look for a job, or get training. Multigenerational families on welfare.
Want to spend more money on social engineering, when we are not spending
much on keeping the country functionally running. Keep buying votes for
yourself. Huge spending on education, or at least on salaries and
benefits. But little actual education being done. First in spending, 24th
in results per student. Cities that are bankrupt, because they pay both
the highest salaries for jobs, with solid platinum retirement bennies.
Unfunded future liabilities. What are your grand kids going to say, when
they get the bill for our indulgences?