Thursday, January 22, 2009

Down Time

I have been enjoying some much needed down time during all the historic events. I was not thrilled with the country's selection of President Obama, but he is the President and I fully support him as such. What I can't support is the continuing bailout program or his selection of a tax cheat to run the IRS. What the he@#? This country is in the financial crapper and we have Congress on an all out spending spree and the guy that is going to be in charge of our country's revenue is either too stupid or criminal when it comes to his own taxes.

The financial sector is begging for more money, GM is putting its paw out again and Congress still has zero idea where $350 billion went. If we let them they will continue to hand out money like it grows on trees. The experts now say that we should have done was buy up the toxic assets and think that should be the new path for the administration. Thanks for nothing, since we've already sunk $350 billion down the Wall Street rabbit hole.

The economy will not recover until people are no longer afraid of losing their homes. When home purchasing was at all time highs the economy clicked right along because people were safe and secure with a tangible asset over their heads. The economy started crashing when that tangible asset was being ripped from over the head or over their head buyers. This started a domino effect that will not stop until we put an end to foreclosures. If people know that they will have a place to live, then they are more willing to buy stuff which in turn employees people to make stuff and so on.

I think that Congress needs to embrace my plan for toxic mortgages and make the people responsible for getting in over their heads responsible for salvaging their own butts. Sure it will require some help from the government, but it would cost a hell of a lot less than continuing to throw money at the guys that looted billions already. We all know that we have done some dumb things and needed help to straighten things out. It might have been your parents when you were young and dumb, but a helping hand can go a long way to fixing problems. What are we gaining right now by playing the blame game and paying Wall Street? We need to help the dumb and protect the young. I am not for huge government programs that go on for ever and ever, but sometimes you need to put people back on solid ground.

These are the same people that are destroying your home equity and life savings. Sure you are angry with them, but that isn't going to stabilize the housing or stock markets. We need to do something smarter than what has already been done and what we don't need is to keep spending money with zero idea of what is going to accomplish and no accountability. I say take the time to put a good plan in place and stop all the emergency measures because all they do is scare the crap out of people and continue to erode public confidence. In that last four months no positive change has occurred to convince people that their homes are any safer, so they are spending less, thus buying less stuff, which causes companies to make less stuff, which means they layoff more employees and so on.

The government needs only to help people (not companies) and we can break this cycle. Won't you help by contacting your Congressman and Senator. Let them hear about this plan and what you want done with your tax dollars. Tell them to stop throwing your money away or lining the pockets of Wall Street. Let me hear if you have any success or if you think I am out to lunch.

Thursday, January 15, 2009

Housing Student Loan Program

We've been kicking this one around the office this morning, so I thought I would put it out here to see if we can't get some more smart people to help us smooth this idea. What Congress should do with the next batch of magical federal dollars is create a Housing Loan program based on the Student Loan program. People would have to apply to get their chunk of the federal pie each year and the loans would be based on need. Each year they would have to either apply for more aid, start paying the loan back, or prove need to differ for another year. You could cap the maximum amount at some outrageous number and garnish the wages to get the money back. This would be a win/win situation because it would keep people in their homes, which would stabilize the free falling housing market and we would have a reasonable expectation of getting our tax dollars back at some point.

Would this help the truly unworthy mortgage holder, probably not and would it help the greedy, no. Would it help the average Joe that bought a house and because the market went South is now stuck, yes.

To bring this to light a little better I will try to show an example. Joe buys a reasonably priced home for $250,000 with a monthly mortgage of say $2000 (just a rough number probably lower). Joe makes $50,000 a year and has a wife and a couple of kids. He bought the house through creative financing and its current market value is say $200,000. What is Joe to do? Is he going to walk away or stop paying, so there is another empty house driving the market down? Or is he going to apply for this spanking new program that based on his need and ability to pay says that he can reasonably pay $1500 a month for his mortgage and that the other $500 will come in the form of a low interest loan. So, this year Joe and his family receive $6,000 from the government to make his mortgage payments and keep him out of foreclosure and in his house. Next year, Joe needs less help because the housing market has stabilized and his house is still worth $200,000, but Joe is assessed to need only $400 a month to meet his mortgage, so he only gets $4,800. The next year the housing market is doing better and his house is worth $225,000 and Joe is doing better and doesn't qualify for mortgage assistance, but he isn't able to start paying back just yet. The next year the house is still not fully recovered, but the market is strong and Joe is doing okay and doesn't need a thing, plus he can start paying back the money that his fellow taxpayers fronted him. He isn't paying much, but five years later his federal loans are paid off and he is doing great.

I know you say what if he sells, well if he takes a loss then he can finance the loss because that is life and somethings just plain suck, but his interests on that will be low and he will have to pay it back based on ability. If he makes a profit then it would go to paying off his mortgage and then his federal loan. You see how this works, we front the guy the money to stay in his house and he pays us back when he can. Does this mean that everyone will qualify or that we will get all our money back, no but it is better than what is happening now and it makes better sense then letting house after house go empty driving the market further and further down. Does it suck if Joe sells and still has to pay off the balance, sure but where does it say that things will never suck? If I wreck a brand new car and I don't have replacement or I was upside down, I still have to pay for the wreck after it is scrap metal, so why is a house any different?

I want to hear what you have to say because your government wants to keep throwing your money at the bankers hoping they can stop the flood. Give details and specifics on how to make this better and I will send it to my Congressman and Senators.

In The News

Let's see, Irsael bombed the crap out of the terrorist aiding UN building, oops!

Obama says "YES" to repeal of "Don't Ask, Don't Tell".

Congress is lining up for $825 billion more.

Hillary confirmation goes ahead for Sec. State.

If these are not clear signs of the end of the world, I would eat my hat. If things could get worse the President elect and his cronies in Congress will find a way to make the rest of us utterly miserable. Instead of truly figuring out what happened to the money already spent on saving the economy and verifying that it did any good, Congress just wants more money to throw down the rabbit hole to see if things turn around. If I remember correctly, the definition of insanity is doing the same thing over and over, expecting a different outcome. Where are our voices of sanity? Where are those conservative "Blue Dog Democrats"? God knows that Pelosi, Reid and Obama have zero clue about what to do and Franks and Dodd should already be behind bars for their actions leading up to the current situation.

I guess Congress will not get the picture of America's disgust with Congress and its handling of the economy, until we actually march on the Capitol with torches and pitchforks. Promises don't keep people in houses and paying off big banks apparently doesn't either because a couple of them are coming back to the trough saying they didn't get enough the first time. This cycle will continue as long as the housing market is in free fall. Once the housing market stabilizes the level of bad debt can be truly assessed and foreclosures will return to reasonable levels, but in the mean time continuing to let foreclosures occur drives the market down with no end in sight.

Ben Stein made a reasonable argument as to why the bailout of the auto industry makes sense and why the same would hold true for home foreclosures. If you have a way even if it is costly and unpopular to prevent the hole from getting deeper then we should do what it takes. If we don't want more people out of work then we provide the bailout to the automotive industry and if we want the economy and the housing market to stabilize then we prevent foreclosures. Does this fly in the face of free markets and self reliance, yes; but does it prevent things from continuing to free fall hurting everything and everyone, again yes.

I don't agree in rewarding greed and mismanagement, but we need to establish a bottom which to start recovering from. We can put all kinds of new checks and balances in place to prevent such a meltdown again and we can force payback by those asking for a handout, but that can never happen if we continue to free fall from one record low to the next. I don't agree that we should just keep letting Congress have a blank check to give to their lobbyist buddies no strings attached either. I think we should have well reasoned legislation that stops foreclosures and job losses. We need the money to cover the stupid people that bought way more house then they could afford. We should require them to keep the house and pay as much as they can via a restructured mortgage, which could be adjusted as the market recovers or they can afford to pay more. Their wages could be garnished to pay their mortgage and they would be placed in a special tax status which ensures that the American public doesn't pay any longer than necessary for their stupidity.

This idea would prevent people from walking away from their homes and keep the expensive roof over their heads. Would this house be a mill stone around their necks? Yes! They bought a house they couldn't afford and the rest of us are paying for it, so it should be painful for them. I am not sure how hard this would be, but it is the same idea as federal student loans. You pay what you can when you can and they stick with you until they are paid off. You can do things like teach or join the military to offset a portion of these loans, so that maybe an idea here as well. I am open to any suggestions about how to solve the housing market issue. I hate the idea of a free lunch, but unless we do something more targeted we are wasting our tax dollars feeding the greedy bankers.

Tuesday, January 13, 2009

Like the Energizer Bunny

Well there are two things going on in the world that remind me of that pesky little drum beating bunny. The first is Israel kicking the crap out of the Gaza, which isn't going to stop any time soon because Hamas loves the publicity from getting its ass kicked on world wide TV. The second is the government blowing through tax dollars like there is no tomorrow. The Democrats want to get their greedy little mitts on the second $350 billion right now, but have done zero to ensure that they will have better accountability of how it is spent or if it will help home owners as originally intended.

Israel is going to continue the offensive until the rockets stop flying regardless of world opinion and that is how Israel rolls. Iran better watch its back because if Bush wouldn't let the bombs fly on his watch you know Obama sure and the hell isn't going to let it happen on his watch. Israel has no choice but to go it alone and at this point what difference will it really make in world opinion. If I were Iran I would keep and eye to the skies.

As for our wonderful Congress, you would have thought they would have learned their lesson after pissing away the first $350 billion, but oh no they just want to keep throwing your tax money at their benefactors to keep the campaign donations coming in. Unless we the public stand up to them they will piss away the other $350 billion as well. We will have nothing to show for it and people will still be losing their homes. This is what happens when career politicians get their paws on a big stack of unaccountable cash. One second it is there and the next it is gone with zero to show for it, but the public is still hurting with no end in sight. The politicians solution is to authorize another huge stack of cash they don't have to continue to stimulate the economy. This is in no way fiscal responsibility and makes zero sense, instead of finding news ways to waste your tax dollars they should be taking the time to figure out a real solution to the problem and then removing the government impediments to progress. It won't take billions/trillions of tax dollars to jump start the economy, but rather remove the crazy government mandates and pay of the national debt to make the dollar stronger.

There you have it in a nut shell. I am too pissed to even think about how badly the new Congress is going to screw us. As for Israel, you go and kick the shit out the Gaza and then pound Iran for all they are worth since we are too much of pansy to help you. If you have comments lets hear them.

Friday, January 9, 2009

William Perry

I guess that I am in good company of sorts because former Sec Def Perry agrees that "It seems clear that Israel will not sit by idle while Iran takes the final steps toward becoming a nuclear power." So all of you that thought I was pulling this out of my ass there you have proof that I am not as far off my rocker as one might have thought.

In a related subject, as things continue to good badly for Iranian proxy Hamas, how long until they get the northern front into full swing. Israel has zero incentive to stop pounding the crap out of the Gaza and will continue to do so until the people there throw off there terrorist government. I am will Israel on this one and the rest of the world can line up to kiss their collective butts because as they sit safely in their comfortable homes, rockets continue to fall in Israel. War is hell and people die, plain and simple. We should understand that from our little trips to Europe and the Pacific, but the media thinks certain people groups (Jews) should be allowed to die, while all other people groups are off limits. This is absurd and I for one am glad to see that the Israelis aren't listening to their babble.

I'll say it again, if rockets were falling into US territory anywhere in the world we would not stop until we were assured that they would never fall again. Israel has that right and since the terrorist are an elected government they have every right to wage war against that government. Additionally, Israel goes above and beyond to protect civilian lives, while their enemy purposely puts its own civilians at risk in illegal and immoral practices. Storing, assembling, and shooting ordnance from schools, hospitals, and mosques. Life is hard when you are stupid.

Let's hear what you think. I am always willing to answer to the public.

Thursday, January 8, 2009

Economic Stimulus

Everybody line up and put your hand out to get a piece of the federal pie that seems to be falling from the sky since there are no revenues backing the spending. The new administration is already priming the public for huge deficit spending and enormous national debt growth. They can't even agree on how huge this package is going to be or if it is going to be a one time thing or an ongoing cycle of deficit spending. They say once again that it is urgently needed, so we don't have time to peek under the hood to see if this car even has an engine. This was the same argument we saw a few months ago before $350 billion disappeared with zero accountability.

Plus, we want to monkey with the revenue stream to ensure that we have zero clue about how much we will be taking in, so we will have absolutely no way of possibly figuring out how badly we are driving this country into the ground. Instead of maintaining the current tax system, Obama wants to tax the crap out of the people that create jobs and give a break to people that already hardly pay anything in taxes. This is the nightmare we were warned about during the election cycle. So, you tax the crap out of the job makers and investors, which does what to the revenue stream? History shows us that will reduce the revenue stream, which is not a good thing when you are spending an extra trillion that you don't have.

A better plan would be to maintain the current tax system, cut spending, start paying off the national debt, and end the bailouts. This is the simple advice of any personal financial consultant you can find. You would have to be out of your mind to increase spending, monkey with your income and run up even more credit cards, which is exactly the Obama plan. If America wants to get healthy it needs to look in a new direction and away from the federal government for the answer to every problem. The ideas of work harder vice smarter and throw money at it have gotten us to this place. We need to turn this around and start working smarter and stop bleeding federal dollars. At this pace the dollar won't be worth the paper it is printed on and then what?

I know you all have some great opinions on this whole mess, but I've got tell you that unless we stop the great American give away nothing good is going to happen.

Gays in the Military and Women on Submarines

Once again this issue, much like females on submarines raises its ugly head with the new administration. The issue is one in the same because the military isn't like any other job in America and our living conditions are not like most civilians. We have very limited space and funds to allow for privacy and separation of the sexes. On submarines there is precious little privacy and even less toilets/showers.

Under current American mores, we are not comfortable with the sexes mixing in the shower or the head, so we do not have women on submarines on a regular basis. When we do have female visitors, we restrict areas and head times to accommodate the delicate sensibilities of all involved. This is the same issue when you start adding additional sexual orientation groups to this limiting environment. We can not accommodate male, homosexual male, female, homosexual female, and "other" in the limited facilities available either in combat or on a submarine.

You can get all the outsiders you want to line up and say how great it is to allow the gays to serve in the open, but this isn't a 9 to 5 job where you go home and shower alone or the significant other of your choice. This is long separations, rough conditions, and limited facilities that everyone has to share. If it is okay for females to feel uncomfortable and demand separate facilities or at least special hours, so they don't have to feel violated then it goes to reason that everyone should be afforded that right.

I am well aware that many homosexuals proudly serve in today's military and that is just great, but their personal sexual preference would become an issue if it were public knowledge within the unit because there are a lot of people that would find it uncomfortable cohabitating and showering with someone that sees them as an object of sexual desire (see simple male and female example). Until America puts aside its moral standards and opts for fully unisex living, then the military should retain "don't ask, don't tell" and no women on submarines. This is the only reasonable solution because as Joel over on TSSBP has suggested to allow anyone who wants out of the military because of this change in policy can with no penalty would decimate the force and ruin recruiting for the above stated reason. Additionally, the repeal would open the door to huge discrimination issues from all quarters.

Monday, January 5, 2009

Bright Future Ahead

Okay, you can stop laughing now. The future doesn't look to promising in this New Year, but there just might be something that won't be as bad as predicted like the housing crisis mostly manufactured by the media. It is true that the media inflated the market and is doing its best to pop the housing bubble at every turn. In some areas the housing market is going to suck big time because of all the overpriced McMansions, but in areas with more modest homes things will be about the same. Slow long term equity growth caused by paying off your mortgage is the only true home equity. That is awful hard to come by in the age of magically mortgage financing, but it is the way it has been done for many years. This flip the house and make a killing is pure insanity and needed to end. The era of 25% home appreciation is at end and for those who cashed in great and for the rest that played the game it is time to pay. This may be an end of an era, but it opens the door to reasonably priced homes and affordable realistic mortgages.

Another bright spot will be the Congress will be full steam ahead for good or bad. They will be moving (hopefully in the right direction) and enacting lots of legislation. I can only hope that the more moderates win the debate on a lot of the issues and keep the spending to a minimum. Obama wants to cut taxes $310 billion, but this makes little sense with skyrocketing deficits. We need to reign in spending and with that accomplished pay down the national debt and when that is paid off then we can cut taxes. I know a lot of people disagree with the idea of no tax cut, but it is only doing what all the experts say to do with your personal finances. You need to stop spending, pay off debt, and start saving for a rainy day (fund SocSec and Medicare). I don't know if it will happen, but it could and that is at least something to hope for this year.

As for the rest of it, I can't say that I am too optimistic. The military is going to take it in the shorts to fund a lot of the social programs. This could be both good and bad because the Generals need to focus on what is really important and not keep chasing after bogey men. We need a modern well equipped military, but we don't need super cyborg soldiers of the future, sure we could use a couple but at what cost. We might get a whole lot of government spending that will eventually bring this country back to the late 70's or worse the 30's, but I am not counting on WWIII to return us to prosperity. I have zero idea what is going to happen, but it sure is fun or not so fun to think about it. Planning anything is going to be very difficult because huge factors could completely rearrange the puzzle.

Enjoy the shiny new year and lets hear what you think is going to happen in the next twelve or so months.