Archive for the 'Econ' Category


People Avoid Taxes? Or The Law Of Unintended Consequences

This article is a bit old but its been on my back burner for a long time and its just time to get rid of it.

Basically its how companies quickly found a loophole in the latest tobacco tax increase and are exploiting it as any sane company would do. This shows us that behavior is driven in many cases by the law. It applies pressure in one area, so people move on to another area until the Gov makes more laws which just alter peoples behavior. And of course it isn’t in just this one area, nor does it apply to businesses only. There are tens of thousands of pages of law that govern our every day activities. Its enough to make one wonder how much different a really free society would be?


Laughable College Debt

So here I am reading an article about a woman who still owes 97,000 in debt for her time at an expensive college. The article is set up as a sob story and how the paper-mills are taking advantage of poor naive people and give us the example of one Ms Cortney Munna. Ms Munna took out over $140,000* in loans in pursuit of her “higher education” degree. None of this is new of course, many of us are already aware of the marginal utility of most college degrees. But the best part was her course of study.

10 points if you already guessed it….

Course of study: Religion and Womyn’s Studies

*exact total is unknown, but the article does say that she obtained a $40,000 loan after she “already amassed debt well into the five figures


Good News On Foreclosures? HA!

The headline sounds positive, “Foreclosure rates up by smallest amount in 4 years” Can it be that the whole housing mess is over? HA! The article tries to be upbeat but the truth is that this is still an increase from last year, 6% higher than last feb to be exact.

From the article we have the following stats:
More than 308,000 households, or one in every 418 homes, received a foreclosure-related notice
That is in just one month. And that is including those homes that are paid for so its a rather ominous stat. To expand that over the year we would be seeing some 3,696,000 foreclosure notices going out over the next year. And that is with the new lower rate of increase.

Banks repossessed nearly 79,000 homes last month, down 10 percent from January but still up 6 percent from February 2009.
That puts the annual rate at 948,000 repo’d homes. Just shy of a million. Those are some pretty big numbers.

foreclosures were still at record high levels. The number of borrowers who have either missed a payment or are in foreclosure was at 15 percent.
I would expect that number to grow. There was an article in the paper a day or two ago about people, for the first time ever, are choosing to skip mortgage payments to pay instead on credit card debt. The credit reporting agencies are flummoxed by this behavior as they have never seen it before. But I think its quite simple. People are giving up on their houses and know that they have a few months of free living and can use that to pay off high rate credit card debt. They may just be prepared to say goodbye to the house but know that bankruptcy is more difficult now, thanks to the credit card companies, so they will get rid of that debt first. Also, when given the chance to pay all bills but one, or just one, perhaps they are choosing to forego the high mortgage payment in order to pay the bills that they can. As an anecdotal aside to this, my parents met a woman this last weekend who has a masters degree who is working as a security guard in the tunnels in Seattle because she cannot find a job. If someone with a masters cannot find real employment, how can she be expected to pay her bills? She can’t and she won’t. We have a LONG way to fall yet before this is all over.


Icesave Bill Goes Down In Flames

A whopping 93% voted against the Icesave bill which would have repaid failed bank loans to the tune of $5.3 billion to foreign nations. That doesn’t sound like a huge amount of money as our TARP bill was over $700 billion, but to this small nation of only 320,000 it would have meant some extreme measures. According to the AP the deal, brokered by their Congress but intentionally left unsigned by their President so it would go to a vote of the people, would require each person to pay around $135 a month for eight years — the equivalent of a quarter of an average four-member family’s salary. To think that such a deal would be acceptable to ANY population is just absurd and their President was correct to let the public vote on something that would surely make them destitute. They would be so poor that there would be no one getting loans anyways so who gives a rip that their credit rating might be “saved.”

It sure would be nice if We The People could vote on the similar bills that have come out and on the SuperTARP that Vox is predicting will be “necessary” once all the rest of the banks start to fail (actually just to be recognized as having failed)