Fiscal Cliff Primer….

[spdrun]

Considering that buying is cheaper than renting most places these days, why is buying property so implausible, unless you’re looking for something in a trophy area where the buy-rent equation is f’ed?

[Coronita]

[quote=spdrun]Considering that buying is cheaper than renting most places these days, why is buying property so implausible, unless you’re looking for something in a trophy area where the buy-rent equation is f’ed?[/quote]

Because a lot of people don’t have a downpayment and a lot of people won’t qualify for various reasons. And a lot of people have a lot of side debt (student loans, CC debt,etc)…A lot of people got wiped out from Stock Market 1.0 and 2.0. And a lot of people got wiped out from Real Estate Bubble 1.0 and 1.5…And what they really need is to accumulate wealth as fast as they can…..And generally the barrier to entry for purchasing a home in California is much higher.

[spdrun]

You can still get 2 bedroom condos in acceptable areas of SD County for $200k or under. Taxes and HOA are relatively low compared to other parts of the country.

[Coronita]

[quote=spdrun]You can still get 2 bedroom condos in acceptable areas of SD County for $200k or under. Taxes and HOA are relatively low compared to other parts of the country.[/quote]

Would you be surprised some people don’t have $200k to throw around? Or for that matter even $40k?

[spdrun]

Doesn’t apply to me since my primary’s condo board didn’t permit it and it’s not for investors, but aren’t there still FNMA loans with 3% down, assuming other criteria are met? I’d assume most people have $6-10k lying around somewhere.

[poorgradstudent]

It’s extremely unlikely there will be no action on the fiscal cliff.
If nothing else, I do fully expect the Doc Fix and AMT patch to both be passed again with bipartisan support. Neither side wants the Bush Tax cuts to expire for the poor and middle class, but the Republican know they can’t let the Dems have those if they want to keep fighting for tax breaks for the rich.
There’s a ton up in the air right now simply because it’s inconceivable that no action will happen, but it’s also hugely questionable what action will happen. But for you richy rich pants out there, definitely be prepared for your capital gains rate to go up.

[poorgradstudent]

[quote=spdrun]You can still get 2 bedroom condos in acceptable areas of SD County for $200k or under. Taxes and HOA are relatively low compared to other parts of the country.[/quote]
Are they dumps, or in the boonies? Because yeah, 200k doesn’t buy you squat in anywhere desirable.

[poorgradstudent]

[quote=spdrun]Considering that buying is cheaper than renting most places these days, why is buying property so implausible, unless you’re looking for something in a trophy area where the buy-rent equation is f’ed?[/quote]
Based on the numbers we ran this time around, buying and renting aren’t that far off, especially with risk the Republicans may try to kill the mortgage tax deduction off. Renting is more expensive than buying only if you ignore maintenance costs. Buying might be marginally cheaper per month, but the difference isn’t some huge number.

[dumbrenter]

[quote=flu][quote=dumbrenter][quote=paramount]
IMO it’s largely because of people like flu that we in fact enjoy abundance.[/quote]

You mean people who flood the threads with political posts and tax rants are actually contributing to our abundance?[/quote]

What political post? Why do you think this is about politics. This has nothing to do with politics…It has everything to do with fiscal policy. Same crap if it came out of the GOP ass for all I care.

Have you stopped and think about this…

For the past decade middle class americans had a lot of tools at it’s disposal to accumulate wealth besides slaving away at a day job as benefits from a day job/w2 income erodes… However middle class didn’t take advantage of the tools when it had them available.

Today, middle class america is in dire situation..It needs those very tools to accumulate/replenish wealth for which it lost….BUT, now those tools aren’t available….

Now that you won’t have tools available to accumulate wealth besides your day job, and now like most likely your day job’s salary is flat to going down to begin with… How do you propose to be ever get out rat race…For instance, how do you ever think you’ll be able to afford housing instead of perpetually renting from a landlord…You can’t just count on a w-2 job…

Something happened in the mist of our industrial change. Companies and institutions shifted the burden of guaranteed future from pensions that were provided by private and public companies into individuals (401k, self directed retirements, individual investments)…You were on the hook for growing your own money…And at the time, the government provided you a lot of tools to help you get there. That was the key and that was the only shot any middle class american had to get out of the rat hole. It’s gone…It’s not coming back…

If you’re not worried, you should be, especially if your young.

http://www.investinganswers.com/investment-ideas/stock-market/death-pensions-5-emerging-trends-will-affect-us-all-2153

You think taking a 15 dividend rate isn’t going to affect middle class. Let’s think about this…

If you were middle class, and you tucked away your savings in a dividend investment that produced 8% return, you were able to accumulate wealth for the past 8 years much faster than if you were taxed at your normal income tax rate (probably 25-30% if you don’t have a schedule A deduction)…That would have benefited you directly…(Whether you chose to be financial literate, understand, and do it yourself, that was your decision…)..

If that 15% cap rate is gone, even if you wanted to accumulate wealth now for instance to save up for a primary home, you don’t have that option anymore…Gone…You lose, not rich people… You’re still stuck at square 1…Rich people still have their expensive accountants and loopholes they can exploit…That’s historically what happens all the time…[/quote]

You are very abundant with your sentences.
The middle class obviously does not agree with you. If you replace the middle class with a teenager, your post sounds like a parent.
Good for you about getting an 8% dividend rate, I am stuck paying taxes on capital gains on short term profits all through this time. Even my accountant refused to help me with that.

[ucodegen]

[quote=CA renter]Whine, whine, whine.

You do realize, flu, that workers who do all the productive work in society, and who are taxed at far higher rates, have a much harder time “accumulating wealth” than the capitalist parasites who do nothing productive for society, right? Which should we incentivize more: productive work, or speculation?

No capital has ever created itself. ALL capital was first created by labor except for the rights to certain natural resources, but even those must be extracted or improved upon **by labor** if their full value is to be realized. Without labor, there is nothing for capital to trade or bet on.[/quote]This quote demonstrates a complete lack of understanding of industrial society. So lets pose a few questions:

[Coronita]

[quote=dumbrenter]

You are very abundant with your sentences.
The middle class obviously does not agree with you. If you replace the middle class with a teenager, your post sounds like a parent.
Good for you about getting an 8% dividend rate, I am stuck paying taxes on capital gains on short term profits all through this time. Even my accountant refused to help me with that.[/quote]

Well, who’s fault was that? Your accountant didn’t hold a gun to your head to tell you to buy tax unfriendly things in a post-tax account…It wasn’t like there was any hidden information about special tax treatments on dividend income for the past 8 years. So why didn’t you do it?

In an unfavorable tax environment, you would do most of your short term trades in your tax sheltered or taxed deferred account, and you would let your post-tax accounts contain the passive funds that have very little turnover and/or dividend yielding investments, so that it can compound…

In tax favorable environment, you would do the opposite and realize as much gain as you in post-tax accounts and put your passive investments into your tax sheltered account as a safety net, thinking that your tax bill now will be lower than in the future…

This isn’t rocket science…It’s sounds like poor tax planning on your part.

[Coronita]

[quote=poorgradstudent][quote=spdrun]You can still get 2 bedroom condos in acceptable areas of SD County for $200k or under. Taxes and HOA are relatively low compared to other parts of the country.[/quote]
Are they dumps, or in the boonies? Because yeah, 200k doesn’t buy you squat in anywhere desirable.[/quote]

2/2 here were were around $200k…..At the beginning of the year. With very little competition…

http://www.sdlookup.com/Real_Estate-Mira_Mesa-Homes_For_Sale-92126

6 months later they are closer to around $225-30k now, and most of them are already contingent…

Don’t think these places boonies or dump…

But they did get scooped up pretty quickly…

So, with all due respect, the option was there.

[bearishgurl]

[quote=spdrun]Handouts. Military-industrial-parasite spending has increased massively since 2001 without tax increases to support it. Problem is that the handouts are not going to the average American, but being pocketed by defense contractor companies who are sitting on quite a lot of money. And/or being squandered in the Middle East….[/quote]

Absolutely true, spdrun. But the avg “uneducated” Joe 6P has also benefited greatly from the “Military Industrial Complex” (MIC). This country has hundreds of thousands of GED-holder enlistees (no college) making bank in the way of COLAs, special combat pay, special war zone pay, free housing, free utilities, “free” college education for themselves and (and now spouse) and later, college fee/tuition assistance for their children (if they are discharged with even a 5% military-connected “disability”). See:

http://www.calvet.ca.gov/vetservices/education.aspx

http://law.onecle.com/california/education/66025.3.html

And said military-contractor “Halliburton” is another HUGE beneficiary of our MIC largesse. More than half of the VERY high-paying positions they offer are ALSO occupied by GED holders (with no college).

I’m not saying here that military retirees didn’t “earn” their benefits. And I’m not saying that the conditions many of our soldiers and sailors work in every day aren’t dangerous. Nor am I saying that these often isolated, boring laborer jobs which Halliburton offers GED holders are for everyone. What I am saying here is that practically speaking, a CA vet who was discharged within 2-4 years of enlisting with a 5-25% disability could feasibly get a university fee waiver for ALL of his children. I’ve seen this in practice with vets with 3-5 children, ALL UC graduates! If this same vet was deemed 100% “disabled” by a VA doctor (yes, even ~20 years after his/her discharge), his/her children not only would receive CSU/UC fee waivers but they would each receive approx $831 per month from the VA’s “Chapter 30” program to assist them with living expenses for up to 44 months in their respective college towns.

The military industrial complex is the gift that keeps on giving, even long after the death of the member/sponsor. So much so, that the sponsor’s family members often don’t feel a need to make their own way, as they’ve come to rely on military benefits provided for life.

I just think the current pay/bene structure for E-3 and up is now inordinately high compared to what it used to be. It has the effect of causing young uneducated enlistees to marry and have children very young for the sole purpose of availing themselves of HUGE housing allowances or “free” mil quarters with all utils pd. It also causes them to start their families while still a teen and continue to have children where if they were working civilian jobs and paying for their housing/medical premiums, they would think twice about having families that young and about having that many kids.

When they end up discharged in 4-6 years (due to disability or drawdown activities), these young former mil families often have several kids to support and very often neither parent has even started college yet! That’s when they are moved (by the military) back to their hometowns (to live with parents) and often end up going on public assistance.

Due to the tremendous mil drawdown currently underway, I just see a LOT of these former mil families in dire straights in the coming years. In the last 15 years, the military’s “family first” policies have created their own “welfare state” amongst its jr enlisted personnel.

[bearishgurl]

[quote=flu]…There was a reason why I put on the “fat_lazy_union_worker” handle before. It was my experience when I was an intern at then wonderful tech company with a “M “in Schaumburg, Illinois…. We had two move two desktop computers and a few equipement down two offices to finish a project deadline for china…[/quote]

flu, was this the same “M” plant that manufactured the processors for those fabulously-heavy built-like-a-tank-in-the-USA “Macintosh” machines that you and I enjoyed immensely “back in the day?”

Alas, they are now too slow to go on today’s “internet.” :=[

And some of the new “Crapple” laptops/notebook computers (made in China now) I was investigating this last weekend for an X-mas gift (for a certain 16 yo, lol) were too thin and lightweight to even have a DVD player or HD! What’s the purpose of having a computer then? And how is it that these “Macbook Air” (light as air) POS’s are (presumably) worth ~$1000?

Why not just have an iphone or ipad instead?

[no_such_reality]

[quote=spdrun]You can still get 2 bedroom condos in acceptable areas of SD County for $200k or under. Taxes and HOA are relatively low compared to other parts of the country.[/quote]

That’ll buy you 2000 SF Ranch home on 1/4 quarter in Austin with enough money left over to run a full rehab on the property.

[Author]

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