Senators Ask Fannie, Freddie to Freeze Foreclosures

[LargoWinch]

Re: Senators Ask Fannie, Freddie to Freeze Foreclosures

Other than that i can't see where we differ?

Outback, I should have explained my view more clearly: Personal debt cannot grow forever without an increase in personal income. So my comment is quite narrow: personal housing vs personal income...

Besides that, yes we are on the same page and equally frustrated by this insane system of housing bubbles et al.

Gotta grab one of those Fosters now!

[metalman]

Re: Senators Ask Fannie, Freddie to Freeze Foreclosures

crikey! that's a hellava lotta post.

agree with all of it.

hudson is to notch critic but falls down in the 'solutions' area.

the answer is... work to save not for pay interest.

that goes for households and businesses.

use credit very carefully for the right purposes... on appreciating assets like businesses and land not buildings and cars and tvs.

how to get the 'movement' going?

oh, not to worry... the depression will do that for us.

[c1ue]

Re: Senators Ask Fannie, Freddie to Freeze Foreclosures

Outback,

I clearly see where you are coming from.

Your assumption is that higher property taxes mean the inability to save.

However, this is not true.

Even 'high tax' states like Texas - the property tax is only 3%, then minus a homestead exemption.

The net overall tax is only 1.82% of home price.

This is hardly a barrier to savings.

In fact, I would argue that having high asset prices is much MORE of a barrier to savings - having to devote 40% or more of your pre-tax income to paying a mortgage is NOT conducive to saving.

As for your belief that somehow I am criticizing your abilities - again you are reading something from nothing.

The point I am making is that - for all your work - the environment was conducive to your actions.

The same actions started today will have dramatically different results.

You are also incorrectly stating that I as well as Hudson are talking about capital gains tax.

We are not - at least in this context.

Hudson talks about economic rent - that is the rent someone using your warehouse would pay, or more appropriately the rent paid by renters in the 30,000,000 US homes owned by the 0.1% demographic of the income spread.

Sure, having lower capital gains taxes than income taxes is a distortion which benefits the wealthy - more as relative wealth increases - but it is nothing compared to what property taxes such as California's Proposition 13 result in.

I have clients living in $4M homes bought in 1947, with 3 other rental properties, for which the average property tax paid is $1,200/year.

The rent being charged is literally 10x that per month per home.

The point again is that if property tax rates were higher (AS YOU SEE IN STATES LIKE TEXAS), the burden of keeping the property is MUCH higher and the 'economic rent' much lower.

Instead of $1,200/year, the tax were these houses in Texas would be $120,000/year. That removes a whole lot of free ride.

It is this dynamic which keeps housing prices affordable.

As for inflation - you again fail to recognize that neither Dr. Hudson nor myself, nor iTulip believe that inflation is a good thing.

It is just that all 3 of us see inflation as the inevitable path out of our current situation.

Sure, you want to be Sampson: start the Great Depression, have your own personal cash hoard grow in value and laugh at all the stupid poor slobs around you by smashing the pillars of society and bringing down the whole building.

But that ain't gonna happen.

For one thing, them slobs all have exactly as many votes individually as you do: one. And they're not going to vote themselves into a terrible situation.

So while I understand your outrage, I refuse to accept your completely self centered as well as unrealistic rantings.

Your 'concern' for the saver is nothing more than self interest.

Look at the bigger picture.