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Like what? Mortgages they never would have been qualified to get in the first place that the government forced banks to lend?
That old BS repeated again. Was government forcing banks to lend money to buy million dollar homes in Las Vegas?
But allow me to get you back on track. The poor end up overspending because...
- they don't have savings
- they don't have ability to pay cash for everything
- banks want them as their cash cows (just as merchants did to their lenders which led to Shay's Revolution in the 1780s).
A household with $1 million in cash can afford to buy a house, couple of cars and every necessity with cash, and have enough to start a business to move from that point on. Heck, even kids college expense would be paid for via cash.
A household making $50K/year, cannot do ANY of that. It must borrow money and over time pay several times more than the one mentioned above.
That is reality. Accept it, over the Utopia that you seem to be real.
Median income of renters is approx 40-45% of homeowner median income; they often live in the financial edge daily. According to Mortgage News Daily, half of all low-income renters spend at least half their income on shelter. That leaves little wiggle room for unexpected expenses, and moving isn't cheap (reconnect fees when changing utility service, app fees, deposits, etc).
Most renters have downsized, not upsized.
Exactly my point. Renters have FAR greater flexibility to alter their living arrangements to fit their budgetary needs. Underwater homeowners with skyrocketing property tax bills are stuck.
No way in hell I'm buying that hack job sob story. Look at where the bulk of government spending goes:
The bottom 20% GAINS an additional $7.21 in government benefits and services for every $1 in taxes they pay. The next 20% GAINS an additional $1.51 in government benefits and services for every $1 in taxes they pay. Even the middle 20% GAINS more from the government than they pay in taxes.
That old BS repeated again. Was government forcing banks to lend money to buy million dollar homes in Las Vegas?
Do you really not "get it" or just pretend not to.
The Community Redevelopment Act, signed by Carter (prior to Obama was worst President, now Second-Worst), and given renewed emphasis by Bubba, forced lenders to lend to non-qualified lenders, most with eyes not of blue, or green or hazel. It was, in effect, another form of Welfare for the self-oppressed groups.
All sorts of methods were developed to distribute that bad debt, including derivitives, but eventually push came to show and the housing market collapse hit, and everyone lost value, rich and poor, small house or big house, shack or mansion.
Last edited by Robin Rossi; 11-30-2012 at 10:02 AM..
The poor end up overspending because...
- they don't have savings
Of course not. Why save when you can smoke cigarettes, eat out at fast food places, etc.
Quote:
- they don't have ability to pay cash for everything
Sure they do if they buy what they can afford.
Quote:
- banks want them as their cash cows (just as merchants did to their lenders which led to Shay's Revolution in the 1780s).
They want them but they don't have to have them. No one is forcing the low-income to take out loans or credit cards. If they had any self-discipline, they'd steer clear of credit.
Quote:
A household with $1 million in cash can afford to buy a house, couple of cars and every necessity with cash, and have enough to start a business to move from that point on. Heck, even kids college expense would be paid for via cash.
A household making $50K/year, cannot do ANY of that. It must borrow money and over time pay several times more than the one mentioned above.
Anyone can start a business. As for all the rest of that... no need to buy a house or cars. There are other more affordable alternatives. Anyone can also work their way through college. It may take longer but many people do it.
Quote:
That is reality. Accept it, over the Utopia that you seem to be real.
You're just making a LOT of excuses for people who don't want to earn success, they just want to take others' hard-won successes away from them. How dare anyone actually work to succeed, right? That's anathema to liberals.
You use the same infrastructure, get the same national security, etc., etc., for which the rich pay a LOT more. You definitely get FAR MORE in services and benefits than you pay in taxes.
Exactly my point. Renters have FAR greater flexibility to alter their living arrangements to fit their budgetary needs. Underwater homeowners with skyrocketing property tax bills are stuck.
No, most renters never have a lot of room to downsize. Few apartments are larger than 2BR - the vast majority are 0,1,2BR. (Historically, local governments favored fewer bedrooms because more bedrooms was associated with more kids = net tax drain.)
Renters downsize from 1BR to studio apt to single rooms. I know only one person who ever rented a 2BR by himself - he was a computer guy with a very good income. After two years of renting he bought a house and left renting in the dust.
Underwater homeowners can - gasp - downsize by renting out rooms in their house. I lived in one house where the homeowners slept in the living room on recliners and rented out every other room iin the house (except kitchen and bathroom of course) - 10 people in the house at one point. I also know (unmarried) homeowners who bought houses, rented out the spare bedrooms and effectively lived in the house for free.
the first part -- yes inflation is driven by bank lending, and what we have now is more or less deflation.
however , how do you figure that deflation will lead to a bank run ?
Not a bank run a run of cash out of USD into something else. I will sell my USD for oil, corn, gold, China's currency ETC. We don't have the income to pay the interest on our national debt. We are printing the interest on it.
Quote:
Originally Posted by le roi
we have the FDIC to cover that.. and i can't imagine a bank run in a world where the "savers" hold stocks and treasuries, and the "spenders" live on digital credit.
It isn't a bank run it is something different. Try 100% inflation a day overnight. With out warning.
No, most renters never have a lot of room to downsize.
Sure they do. Rent a room in a house instead of renting a whole apartment. It's done all the time here in the Chicago area.
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Look at where the bulk of government spending goes:
