Marty

'Too Much House' Buyers To Be Rewarded?

While I do agree the "plan needs work" , the plan with a payback of some kinds might make sense. However the whole article misses the point.

This downturn is NOT about Subprime mortgages and housing, that is the symptom of the disease which has been the decimation of the good paying job market for 10 years.

I am a CPA in CT . In 2006 the savings rate in our country went negative for the first time since the Great Depression. Inflation had been running way higher than cost of living increases. Decreases in benefits and pensions offered by companies also hurt.

The average person became unable to pay their bills. Many FIXED mortgages are defaulting and PRIME defaults now outnumber subprime defaults.

The problem is not the house cost as most borrowers can just call up their lender and get a legit modification right now. ITs the cost of everything else.

When I moved into my house the cost of a tank of heating oil was 200 bucks, it rose to 1000 bucks and now its about 800. Gas was 1.50 a gallon and rose to 4.5 (now down to about 2.60) . Property taxes were 3000 now 6000. . Food went out of control this year.

In the 1970s inflation resulted in huge increases in the cost of living adjustments for social security recipients. From 1976-1986 I believe COLA increases were 75% . My father who worked for the Govt at the time had even higher COLAs with his performance based increases.

So you could be ten years later in an inflationary period and be making 75-90% more to pay your fixed debts.

This is how we crawled out of the last inflationary period into growth. People had higher incomes to pay mostly fixed debts.

THis time around due to outsourcing , and limited investment by our country in THIS COUNTRY, people have gone backwards in income and many at best stayed equal or fell behind inflation. Social security only received about 30% over 10 years in increases while their costs soared out of control. At the same time medicare premium increases ate up a chunk of that as well.

This is the root of the problem. At first people borrowed on credit cards some and paid it off with bonuses and sometimes home equity loans. As things got worse, people got stuck with every larger bills. Millions of high paying jobs have been lost. In 1982 80% of jobs had company or Govt paid for pensions that number is like 18% today. Most had medical ins. Today people are lucky to get it and usually have to pay towards it.

Unemployment doesnt measure underemployment.

The bottom line ? Until this country invests in infrastructure, alternative energy, energy development in general, the space program etc etc we are not going to see a recovery.

The standard of living is evening out across the world due to the greed and concentration of wealth once again the masses cant afford life in the USA. This means prices will adjust dramatically and people will just not spend.

We have stood by while more debt was added to the federal deficit in 8 years than in the last 200 of our country and while the uber rich got richer without the need to invest in new companies here in the US due to outsourcing.

We watched our Pet food contain poison, our kids toys contaminated with lead , all because we could get it cheaper from China.

Well the new news is Amercan workers are going to be as cheap as the new China, welcome to the new America.

Like I said its not SUBPRIME mortgages , its a symptom of the jobs , opportunity mix here. As always the same Govt that just a year ago told you the "economy was doing well, the jobs market was strong" is telling you its the "sub-prime mortgages"

The same people that told you we were "running out of oil" and "China was using all our oil" when $147 dollars a barrel oil prices were bankrupting the middle class, and encouraged you to "drill more NOW" while oil now is sitting at $64 bucks a barrel

The same people that give 25 billion to Citibank on the verge of failure only to allow them to pay 25 billion in bonuses ..

The Greed, speculation, concentration of wealth , corruption, selling out of the manufacturing base , war , all without an investment in the future of our country's new industries has been and is the problem.

We have been left with a huge mess, leaded kids toys, poisoned pet food, a bunch of rich people on TV trying to explain why they have hundreds of millions in salary while their companies failed and a very divided public.

Marty

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