SoCo Magazine - May 2008 - (Page 16) TO HELL IN A HAND B AS KE T TAXES OR LACK OF THEM BY JOHN CHASE H ere is an issue that you, a taxpayer, can affect through your voice (or vote). Many of you readers are paying a hefty amount of taxes just to stay in survival mode. On average the first four months of your earnings go to the government in some way, shape, or form. This is a conservative estimate because additional taxes are on the horizon thanks to your elected leaders. You might have wondered why this is happening and noticed that, for the past few years, your pay hasn’t kept up with your expenses. In a nutshell, you’re supporting people you don’t know, people you’re not related to, and probably people that live better than you. You see, when others spend your money, they just aren’t as careful with it as you are. When shopping, you might look to save an extra nickel or dime on a jar of pickles, grab that less expensive cut of meat, or use coupons to cut the size of your weekly grocery bill. In government, it’s a little different. Elected officials look around for ways to spend more money. Common practice is to find an organization or project that is not selfsustaining and rescue it like a hero. Politicians do favors for folks who they believe control huge voting blocks in order to assure their positions, and after so many years in office they receive a wonderful pension. But if they are so unlucky as to lose an election, oftentimes they get what looks like a transfer to a job that usually pays much more than you make and sometimes more than what they used to make. Now I realize this short piece is going to raise a few eyebrows, but that is not the intention. Instead, I would hope that voters continue to push their representatives into responding to their demands of less government, curbing spending, removing the self-interest component, and bringing back the word “serving” while eliminating the “career politician” concept. The Mortgage Crisis People go into a mortgage company and ask for a loan so they can purchase a house. They are late on their rent throughout the year, but they ignore this fact because they want a piece of property they can call their own regardless of their ability to afford it. With some quick and creative bookkeeping, the unethical broker makes the deal and the dishonest but soon-tobe homeowners get into their own place. Everyone lives happily ever after—well, not really. On another street a young couple that could have paid a higher interest rate on their mortgage opt instead for a variable interest rate. They believe that the risk is worth the price. For all they know the panacea of home prices going up and interest rates going down will continue long into their retirement years. We also have the dual BMW couple with that lifestyle everyone envies: vacations, fine dining, new wardrobe every season, and a house that looks like it was built for Trump. Yes, they had a plan. An interest-only mortgage was exactly what they needed in order to live the good life. And why not? They figured they could flip the mansion just about anytime and maybe even move up a notch. 16 | s o comagazi ne . i nfo | M ay 2 0 0 8 Obviously all of these people described in these realistic situations gambled and lost. In each case, they walked away from the homes they never could have afforded because, when the market dropped, they had ultimately assumed too much risk. Buying a home is no different—although some would have you believe differently—than making an investment in a business, stock, or bet. All come with risk and everyone’s tolerance is different. When a business fails, no one comes rushing in with fire hoses blasting cash in order to put out the flames. If you buy stock in a poorly run company that becomes delisted and your 401(k) becomes worthless, you don’t expect Merrill Lynch to put the cash back in your account, do you? What I find so difficult to believe is that our government, instead of allowing basic economics to ride out the course of time and correct this mortgage mess, wants to not only bail out homeowners, but also to save the fools who created the problems in the first place. Some have suggested the State of Massachusetts buy up the foreclosed properties and start selling off or renting the homes to low-income people—yes, probably some of the same people who let the houses go back to the banks in the first place. Meanwhile, there are thousands of people who played by the rules, didn’t succumb to the seduction of living large and “to hell with tomorrow,” and are waiting to purchase a piece of property that is getting close to exactly what it’s worth. Also, as prices fall (and they really need to in order for the economy to hit bottom and rise again), there are many families that could probably grab the brass ring and make a homestead. That is, if the government stays out of the way and lets the rudimentary rules of supply and demand take hold. So Much To Do, So Little Space I’ve been watching the New Bedford Seaport closely over the last month or two, and I’m finding the dialogue coming out of the city by the sea almost comical. Here is what I’m hearing: “We have to retain the fishing industry along our shores: It is important to the local economy and our future success. But we must make more room for them.” “No doubt about it, we need a casino along the waterfront where people can shop and visit and spend tourist dollars. It will be a boom for the local economy.” “Absolutely, New Bedford should be a transportation hub to the islands and beyond.” “If only we could attract more cruise ships. Yes, that’s it, we need more cruise ships making the city a destination.” Continued on page 79 http://socomagazine.info
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