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Originally Posted by Mircea
No, it would not be an increase in taxes. The tax rate would remain the same, you just wouldn't be able to take the deduction.
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I swear ... what on earth are you talking about? If a change is made in tax law and you wind up with less money in your pocket due to those changes ... it's a tax increase! The interest deduction is a REDUCTION in tax liability ... eliminating that deduction is an INCREASE in tax liability. WOW ..... this is really simple stuff.
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Originally Posted by Mircea
You do have the option of acting financially responsible and saving enough money to put a large down-payment on the house so that both your monthly payment and your interest rate is reduced.
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What house a person buys or how much they put down has NOTHING to do with how much tax is too much or too little. And the government's insatiable thirst for more and more money has nothing to do with the people's financial responsibility, but has everything to do with the government's financial irresponsibility. This too is very simple stuff.
Quote:
Originally Posted by Mircea
It's not a panacea, but it would be a step in the right direction. The deduction is only part of the problem. A bigger problem is low interest rates. That results in "Interest Inflation" where the price of anything that is tied to interest rates, like homes, autos, boats etc are inflated in price because there are more dollars chasing the same or fewer items tied to interest.
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I can almost see how you might come to this conclusion, given your state of confusion about everything else. Yet it is another example of your "lack of understanding" of how taxes, finance and banking actually works.
First, increasing taxes has proven to have a net negative effect in overall tax revenues due to the negative impact to economic growth, resulting in lower tax receipts. I know that may seem counter intuitive to you, as it has for generations of liberal democrats, but it is a fact nonetheless, and has been proven over and over again. The reality is, it is the cutting of taxes that actually increases tax revenues due to increases in economic activity. Now, it hasn't worked out that way this latest time around simply because those tax cuts were pocketed and not re-invested into the economy, because those with good business sense have long understood where this train wreck was heading, so they have been converting that money into hard assets rather than business expansion. But raising taxes in an economic decline is like throwing gasoline onto a fire. It's the last thing you want to do.
Secondly, inflation has nothing to do with interest rates, and is simply the measurement of the loss of purchasing power of money due to increasing the money supply, diluting its value. The more you devalue the currency, the more of that currency is required to buy the same things. In fact, supply and demand is the ONLY thing that actually causes prices to rise or fall ... not inflation. Again, I know that may sound ridiculous to you, but only because you don't understand the relationships. And I can prove it to you.
When I was born (1957) the price of gasoline was .23 per gallon. So you could go to the gas station and give them a dollar and get 4 gallons of gas, and receive 8 cents in change. And now today, at $2.75 per gallon, you think the price of gas has increased, don't you? Of course you do ... so do many of your woolly friends among the American sheeple. But I tell you, it hasn't gone up ... the price of gas today is actually lower now than it was in 1957!
Think I'm crazy? Nope. You see ... that $2.75 per gallon gas costs that much because the dollar is only worth 3 pennies ... so even at $3 per gallon, that would only be 9 cents in 1957 dollars. In 1957 we were still using real money ... sure we had dollar bills, but we also had silver dollars too, and you could go to the bank and request a silver dollar instead of a paper dollar, and it would be just fine with them to give you one. Don't try that today ... a Sliver Dollar now will cost you about $30+ of today's paper dollars. So, using that same silver dollar (real money) today, you can buy 10 gallons of gas at $3.00 per gallon, rather than 4 gallons in 1957. Has gas gone up in price? No ... it's actually gone down by over half. It's the paper money that has lost most of it's purchasing power ... and it has NOTHING to do with interest rates.
It's very simple math ... a silver dollar that used to be worth 1 paper dollar is now worth 30 paper dollars, 30/1 = .03 ... that is what the dollar is worth.
When you apply that to today's prices, you're going to find that a lot of things are cheaper today than they were 53 years ago, not more expensive. Like that $30,000 car really costing $900 ... when a comparable car in 1957 was about $1,800 .... or the $150,000 home actually costing $4,500.
But Interest rates having no affect on prices, doesn't mean it can't affect economic activity, either spurring growth or hindering it, depending on other factors.
So you can't say that interest rates do anything specifically without accounting for the other main factor ... the supply of money. It's the combination of the two that produces the effect.
If there is no money to lend ... then the interest rate is a non-issue to the potential borrower. It has no effect at all ... no more so than an a bottle of whisky will get you drunk without drinking some of it.
Quote:
Originally Posted by Mircea
A good example of a Sucker's Scam is "0% Interest." Those people don't understand they are paying 19% interest or more, because the base price of the vehicle is inflated (and that's one of the things that happens when you have Interest Inflation).
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Again ... prices are set by supply and demand ... not interest rates. Interest rates ... in the example of cars, simply determines the division of profit for that business transaction. When the rates are high, banks receive more of the profit, and when the interest rate is low, the car manufacturer receives more due to increase in sales. I know, I spent 4 years in the car business ... low interest rates were a selling point, not a price setting point. The cost was the cost to the auto dealer, and had nothing to do with interest rates ... and guess what ... consumers have those cost figures too (the smart ones), and know what profit they're willing to pay for any given car. Of course, limited production cars sold for MSRP and sometimes higher .... "Supply and Demand".
Houses are another story ... and it's not so much the pricing of houses being affected by interest rates ... as it was the total amount the banks were willing to loan for any given house ... the terms ... and the interest rate ... so the banks totally control the housing prices, and who qualified to buy them, which is why they are TOTALLY responsible for the housing bubble and it's eventual bursting.
People like you want to blame the consumer for this, but it was the banks that artificially inflated the housing prices, along with their subprime mortgages to qualify those who would otherwise never qualify. The buyer was hoodwinked by the banks, and the banks KNEW these people were destined for eventual default. In fact, they were counting on it, because that's how they made a killing ... first by getting the initial paper ... insuring that paper ... and repackaging and selling those mortgages as derivatives to multiple buyers. A gigantic scam, from start to finish.
So no, the real sucker's game is falling for the ridiculous banker scam of blame the victim, and believing nonsense like higher taxes and higher interest rates are somehow beneficial for the average person ... it really takes a sucker to swallow that one. You have to be almost insane to believe that, or be a banker or a government, in which case, one could understand your attraction.
Our economy has been operating as the largest ponzi scheme in the history of crooks .... and it's about to become all to evident in the not so distant future.
The American people have been conned right out of their shirts ... is it our collective stupidity to blame for this? Perhaps a little ... but that doesn't let the Banker Gangsters off the hook ... they are ultimately to blame, and are criminals of the highest order.
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