Tuesday, March 10, 2009

Tirade against Federal Budget and Bank Bail-outs

I'm so tired of hearing all this pointless drivel about the economy and the banks and new Stimulus bill. The basic fact that never seems to get stated is this:
The banks lost our money.

So what do we do about it? So far it looks like the only politically expedient solution is to 'print' more money, devaluing our remaining money in the process. But there are other solutions and there's also more back-story to how we got here.

The really important issue that's being ignored is the so-called -- and NON EXISTENT -- Social Security Trust Fund. For decades now the government has been using the excess income from social security withholding to paper-over our deficit spending. Now that money is going to come due and IT'S GONE. Printing more money could 'fix' this problem, too, but only if we stop cost of living adjustments (COLA) and thereby screw all the people who are expecting SS to support them.

Frankly, part of me isn't sympathetic. I mean, all the baby boomers who are about to get screwed by SS are the same people who've been benefiting from artificially low government deficits -- yes, LOW, because otherwise the deficit would have swelled long ago, and taxes would have had to have been raised. So why should I now have to pay all those 'back taxes' ?

Back to the first issue re banks, why isn't anyone talking about a 'windfall profits' tax on real-estate speculators? These are the people who sold houses at the top of the housing bubble (in 2005/06) but did not turn around and reinvest those funds in another house. This is where all "the bank's" money went! It should be easy enough to find these people based on their tax returns. I don't mean to be punitive, in fact, I congratulate them on their financial acumen (and luck). But isn't this the very definition of "windfall profits", i.e., profit at the unreasonable expense of others?

Since the FDIC is totally gonna run out of money I say we recover some of that lost money and directly funnel it back to the original 'owners' via FDIC bailouts of personal savings.
.

Monday, March 9, 2009

Why Renting Beats Buying A House

Did I write this while I was asleep? It sounds exactly like something I would say :-)
http://realestate.yahoo.com/promo/5-reasons-renting-still-beats-buying.html

Basic premise: Home prices never change!
When accounted for inflation and expenses the (financial) value of owning a home is a wash. So treating it like an investment is foolish. For hundreds of years home prices have been a constant-function of the cost of owning them, no more, no less. And the housing bubble of the past 8 years was totally predictable, and has yet to finish deflating.

The author also makes note of this Atlantic article which envisions less future-need for home ownership,
http://www.theatlantic.com/doc/200903/meltdown-geography
.

Tuesday, March 3, 2009

Circuit City Liquidated at Full Price, amazing!

My hat goes off to the company that liquidated the old Circuit City stores. I've been dropping by every couple of weeks, waiting to find a deal on any of several pieces of equipment. And when I heard that this was the last week I thought My Time had finally come. I'd even prepared for this by signing-up for a new VISA card, one that included extended warranty coverage -- i.e., I could get an extended warranty regardless of where I bought something.

But I just went by my local Circuit City and almost everything is already gone! And the few remaining pieces are still full price?! By "full" I mean typical street price, not the fictitious "suggested retail" price. And half the remaining stuff is demo units, too. Who's buying this stuff? Must be P.T. Barnum's friends....
.