Thursday, March 25, 2010

The Resentment Zone

Some NY Times blogger wrote a piece talking about how people with reworked loans are getting different payments out of the deal, depending on their income and he called the posting The Resentment Zone. What a pile of malarkey. This was my comment on his thread.

How about being a renter, who was priced out of the market because these same fools who are now receiving my tax dollars, directly or indirectly, in order to keep them in their ill financed, over priced homes. In essence this program and others like it are using the renters’ tax dollars against them by artificially preserving absurdly high and unsustainable prices. Write a piece about that. That is resentment! The person who has to pay more because they make more should just count their blessings that they aren't being tossed out in the street, like how the system worked before we elected a socialist President and Congress.

I used to be a pragmatic voter, but that was before my government started punishing me for saving and making good financial decisions. I am sad to have voted for Jim Moran and Jim Webb. I will not be making that mistake when they are next up for election, even if they were running against the likes of David Duke.

In nearly every piece of significant legislation that has been passed in the last 15 months, people who made good choices are being forsaken for their neighbors who took every short cut available to them. When I was busy making good grades, my friends were messing around. When I was in college taking tough classes like physics, calculus or symbolic logic my friends were taking psychology, art or theatre. When I was busy saving, my neighbors were filling their ill financed homes with big screen TVs and furniture, all bought with loose credit. I knew the housing market was going to cave in and I didn't buy at late bubble prices, instead I waited for the crash, it came, but government has been busy subverting the free market at nearly every turn. The banks got their bailout. My neighbors got their bailout. Where is mine? I don't actually expect one, but it sure burns to watch BHO, his cronies and Congress drive a stake through the heart of my American dream, all because I made good choices. There is something wrong when stupidity and ignorance are repeatedly being rewarded over prudence and intelligence.

There have been 3 housing bubbles in the last 100 years, prior to our current bubble. In the 70s and 80s, the bubble completely collapsed, with prices returning to historic housing price trend line that essentially parallels inflation and personal income growth. The post WWII bubble did not return to the trend line, because it was fueled by the advent of the 30 year mortgage, which still exists. The current bubble will not behave like this because hyper-loose credit and ultra exotic loans no longer exist. Artificial measures which prop up the market are not going to work. The laws of economics are like the ocean tides. They can be held back for a while, but sooner or later, the tides take over and often very aggressively.

Roughly 30% of this nations home owners, own their house outright with no mortgage. Nearly another 30% own their home with a traditional mortgage that they can afford. Close to a third of this nation rents their home, which leaves less than 10% of the population in over their head with a bad mortgage on a home they cannot afford. A disproportionate amount of money is being spent on a small percentage of the population while forsaking a significantly larger portion of the population.

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