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Slowtwitch Forums: Lavender Room:
The Truth: What Obama and McCain won't tell you about your money

 
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FLA Jill

Oct 9, 08 8:06

Post #1 of 10 (264 views)
The Truth: What Obama and McCain won't tell you about your money Can't Post
One of the best blog posts I've read in a while:

http://www.iwillteachyoutoberich.com/...you-about-your-money

"Homeowners are delusional about how much their houses are actually worth (see this, too).
As a wise commenter said, “I love the fact that it’s “acceptable/normal” for a home to increase its value by 100% during a five-year time frame, but it’s “unreasonable/impossible” for a home to decrease it’s value by 30-40% during a similar time frame.”

Taxes: Pandering to ordinary Americans instead of telling them to stop spending on stupid stuff
The reason Obama and McCain spent so much time talking about taxes is that most Americans are historically horrible at managing their spending. Since they make a fixed amount of money (revenue) and can control only one thing (costs), both politicans use tax breaks to pander to voters. Most people have never seriously thought about how to make more money. Fine. But what’s even more outrageous is Obama and McCain’s complete lack of honesty about what people really need to do to weather the economic crisis. Did you hear either one plainly say, “You’re going to need to buckle down and save more?” Of course not. You might as well walk into a Dave Ramsey seminar and argue that credit cards are a useful tool. It’s a suicidal suggestion. But it’s true. "


tegra

Oct 9, 08 8:19

Post #2 of 10 (247 views)
Re: The Truth: What Obama and McCain won't tell you about your money [FLA Jill] [In reply to] Can't Post
they also won't tell me that a dollar bill is worthless, but in reality, it is! the financial system is based on a fairy tale of make believe!


TwinDad

Oct 9, 08 8:29

Post #3 of 10 (226 views)
Re: The Truth: What Obama and McCain won't tell you about your money [FLA Jill] [In reply to] Can't Post
In Reply To
Did you hear either one plainly say, “You’re going to need to buckle down and save more?” Of course not. You might as well walk into a Dave Ramsey seminar and argue that credit cards are a useful tool. It’s a suicidal suggestion. But it’s true. "
  LOL. This is funny, especially if you've ever heard Dave light into a caller who tries to argue about credit cards on his radio show.

Unfortunately, it's also very, very sad... the part about it being (political) suicide for a politician to tell people to save more. Very, very sad.

--------------------
Yes, I too now have a Blog. Don't laugh.


dave_w

Oct 9, 08 8:30

Post #4 of 10 (221 views)
Re: The Truth: What Obama and McCain won't tell you about your money [FLA Jill] [In reply to] Can't Post
In Reply To

"Homeowners are delusional about how much their houses are actually worth (see this, too).
As a wise commenter said, “I love the fact that it’s “acceptable/normal” for a home to increase its value by 100% during a five-year time frame, but it’s “unreasonable/impossible” for a home to decrease it’s value by 30-40% during a similar time frame.”
 

Nice sound bite, I actually have not seen this to be the case. It's the financial industry's house of cards, predicated on the above, that cannot accept the loss of value. Most homeowners realize there are good and bad 9or at least less good) times to own a home, and that home valuation experienced the same "irrational exuberance" that the market did ten years before. This is a correction, and it's hard to fathom that ANYONE could be surprised. The surprise is the level to which the financial experts pushed it, hoping they'd get their huge returns.

"It's all about self-esteem"


M~

Oct 9, 08 8:31

Post #5 of 10 (219 views)
Re: The Truth: What Obama and McCain won't tell you about your money [FLA Jill] [In reply to] Can't Post
It's so true but can you imagine a politician trying to get elected based on the "smarten up people and spend/save your money wisely" platform? ;)


desert dude

Oct 9, 08 8:52

Post #6 of 10 (193 views)
Re: The Truth: What Obama and McCain won't tell you about your money [dave_w] [In reply to] Can't Post
In Reply To
I actually have not seen this to be the case
 
Move to PHX. Talk to about 10 of my neighbors who wanted to sell. One was even a realtor. I had two types of neighbors that I talked to. The first type knew the market was dropping and did the math, realized that they were either going to have to live there for another 5 years or so or write a check when it came time to close. The second group, was the group that thought their house was the exception to the slump in the market and still put thier houes on for peak market prices. Then they wondered why no one came to look at it or they got no offers. (I also blame their realtor for not pulling comps, not using a calculator and not pricing it reasonably)
On the other hand, I knew the market was in the shitter. I wanted to move and not have my house anymore. My house was 234K or so when I bought it. Based on comps of the hood at the peak of the market my house was worth about 360K (2 years later). When I sold my house sold for 225K (4 yrs after I bought), at the 90th+ percentile of recent house sales, I sold it in under 60days from the day I signed the papers with the realtor to closing b/c I was realisitic. But I still had dumb ass neighbors still trying to sell their house for $350K or more and wondering how mine sold so fast.

Unfortunately many of thise same dumbasses, have not started to save up to pay up when they sell their home. If you want to sell in a declining market and you only have 12-15K in equity you should expect after realtor fees and closing costs to write a check.

Brian Stover
http://accelerate3.com


MJuric

Oct 9, 08 9:14

Post #7 of 10 (160 views)
Re: The Truth: What Obama and McCain won't tell you about your money [M~] [In reply to] Can't Post
And that's the problem in many areas.

I was looking at the "National savings rate" versus the "Gap between the top1% and lower 50%". Not surprisingly there appears, by my little digging and far from a scientific study, to be a pretty large correlation.

The percentage of wealth held by the top 1% was the smallest when the national savings rate was the largest. Makes sense really. If those at the bottom 50 % are saving 10% of their income they build wealth which closes the gap. If they are spending it not only do they not build wealth but that spent money usually ends up in the hands of the top 10% especially the top 1% because they are often times the folks that own the companies that sell you the stuff you're buying.

~Matt


M~

Oct 9, 08 9:27

Post #8 of 10 (140 views)
Re: The Truth: What Obama and McCain won't tell you about your money [MJuric] [In reply to] Can't Post
As my dad says, "You don't get rich by spending your after tax income".
M~


last tri in 83

Oct 9, 08 9:31

Post #9 of 10 (131 views)
Re: The Truth: What Obama and McCain won't tell you about your money [FLA Jill] [In reply to] Can't Post
dude looks a little young to be dispensing financial wisdom.

_____________________________________________
Conservative in exile.


Number5

Oct 9, 08 10:57

Post #10 of 10 (95 views)
Re: The Truth: What Obama and McCain won't tell you about your money [FLA Jill] [In reply to] Can't Post
Interesting, poking around a little, I find three things:

http://www.census.gov/...istoric/hvgraph.html

http://www.census.gov/...e/histinc/f07ar.html

http://www.census.gov/...istoric/hograph.html

So, it looks to me like the rate of home ownership rose after WWII, and then pretty much leveled off. More people buying houses than should be? Doesn't look like it.

Home values have gone up by a factor of 4 since 1940.

Median income has gone up by a factor of 2 since 1940.

So what goes on here? Has the price of homes gone up unreasonably, or have wages not gone up reasonably?

I realize that it's a bit risky to look at medians - quite a few McMansions out there.

But it kind of looks to me like plain old joe six-pack wages aren't keeping up. But that's globalization. Joe had better get used to living in that factory dormitory ... that's the new middle class.