Gawd. I gotta tell y’all, its a little bit scary when even the supposed experts can’t get a handle on whats best for the economy. The stimulus package had plenty to dislike, but it also moved the ball forward and i fully support it. The housing situation is another matter…
There have been discussions all over the internet, and I find myself nodding in agreement with all sides. By world standards, our family is incredibly wealthy. Of course, by world standards, if you have clean water, a roof, and abundant food available 12 months a year, you are also incredibly wealthy. So, theres that. And i feel its important to acknowledge that, every damn day.
But I want to address a few of the talking points i see consistantly offered up during almost any discussion of the housing crisis. Its probably true that the housing market is the engine that drives our economy. The problem of high foreclosure rates must be addressed. But how?
When we took out our mortgage, (on a home we built) we were quite happy with our 6.25 interest rate. We had immediate equity, and a 30 yr note payment was proportional to our income. We have had numerous opportunities to refinance, and we could have done so for more than our house was worth. I even had friends suggest that borrowing at 5.65 % (our new rate) was so good, that we should borrow all the way up to our appraised value and invest the money in stocks. In stocks! Suffice to say, that friend is bankrupt now and we still have equity.
We are cautious people. Part of that is our age. We are at an age where we cannot stand much risk as there is precious little time left to earn, should we need to recover. So, ok, what i am getting at is that we will not benefit from The Plan. We aren’t even really affected by foreclosures in our area, as we do not live in a neighborhood and our property is unique enough to always attract a buyer. Sure, I’d love to refinance at 3%. I keep trying to muster up the outrage at being one of those “who did everything right”, only to see those who mismanaged and over-reached get “rewarded” by The Plan.
The truth is, I don’t care that my neighbor refied and bought a new car, a new boat, a new 112 in plasma tv and a wii. (ok, the wii thing kinda ticks me off. I want!) Every one of those purchases had a ripple effect on the economy, and people earned money providing those products. But he can’t eat those products. I have no problem paying taxes that go to help my neighbor out of his bind, provided the boat gets sold, the car is traded for a fuel efficient model, and that he doesn’t bitch about where his taxes go.
I’m well aware of how complicated this whole thing is. I’ve read and read about bubbles, speculators, traders, deriviatives, credit default swaps and sub-prime predators. I fully get that many people approached home-buying irresponsibly. I spent a few months, last year, watching a friend go about it smartly. I wish more were like her. This whole mess might just force future generations to be smarter and more disciplined about their finances. I applaud that. But i refuse to be angry because I’m not getting a piece of the action. I don’t need it.
I intend to be grateful about that.