Say you started off as a young person in the Great Depression (as some of our readers have): Back then the idea was pretty simple – it’s the philosophy of our way of living, too – Own Everything Outright.
The reason for doing so should be obvious: If you live on five acres of land, with some diligence and ingenuity, you can survive without assistance from anyone and that includes government. All that needs to be done to keep government at bay is to obey laws and pay taxes on your property. End of story.
Since the New Deal, however, government has become much more intrusive, not to mention soaring property and other tax rates.
One reason Elaine and I are reluctant to leave our little place in the woods is that 28.8 acres, a modular home, 40-by-40 shop/office building with it’s own apartment for the brother-in-law, and a 12×12 storage building costs us $843.63 per year in property taxes now that we get the senior discount. Even so, last year it was still under $1,000.
On our fact-gathering travels this year we talked to a lot of people in the different states along the way. We’d ask about the cost of living, but mostly it comes down to how taxes are stacked. In most states there is a property tax, sales tax, and in some even and income tax. By the time you toss in county and city sales taxes, you can make up a simple tax index that explains a lot about the local cost of living.
When we looked as several properties we were shocked to see how Washington had a property tax that was on the order of $3,200 for most homes in the $200-300-thousand range. Did you happen to notice how in the housing bubble collapse, property taxes didn’t come down accordingly for many people?
Still, the cost of living in our home here in the outback is about $71 a month. On Social Security that’s an acceptable number. For people who bought the nice home of the beach in the northwest (typically taxed in the 4,000-6,000 range, you could be talking up to $500/month just to stay in your own home that you paid for.
Government’s your silent partner who will stab you in the back if you blink.
Still, in the wake of the Great Depression, people had a lot of this stuff figured out. Property prices were cheap, and interest rates were reasonable. Even so, a down payment of 50% wasn’t uncommon and homes were usually paid off in 10-15-years. Of course, since America still had a lot of handcrafting and trade skills about, millions of people actually built their own homes.,
A couple of my relatives, including one late uncle in particular, who built fine homes…better than most builders would put in. For about $15,000 in materials (not counting the labor) on e home I remember was sold for well over $100,000. That home was one his family lived in while he built a newer home next door.
Thus, a man with some gumption and get-up-and-go could build a great retirement nest egg with some hard work and sweat equity. Come time to retire, a person could sell the property on a real estate contract, without a bank getting a cut, an Bingo! Retirement set for life with lots of money coming in from mortgages.
If there was social security, fine, but a man (or woman) who likes to work with their hands can easily build 3-4 houses in a lifetime, and develop a pretty good income stream that way.
This is how people thought in the Depression…and for fifty years following…..because it makes sense.
That’s a part of our history that is going away and the design of the PowersThatBe can be seen at many levels
First; in order to really shake the money out of people, you have to “de-skill” them. Convince people that industrial skills lake carpentry, woodworking, metal smithing, welding, working concrete or tile, doing electrical and plumbing; all that is manual labor. Then cast manual labor as bad.
Now you’ve got a government “three-fer” going:
First, people won’t be able to support themselves in America, so it sets up the need to bring in immigrants to do work Americans are no longer willing, or able, to do themselves. This, in turn, sets up social disasters in education, crime, drugs, and so forth, but that, in turn, means more jobs and THAT is a dandy excuse to collect more taxes.
Second thing that happens is the people move into smaller and tighter quarters in suburban areas which are then too small for people to support themselves on. So now hardly anyone is allowed to build their own homes (we’re blessed this way) and as a result, government gets to set up licensing bureaus to issue permissions to bang a nail, install a wire, or toss in a new sink. Permissions is a whole government industry that ranges from the Zoning folks, who have stolen your right to do anything you want if you own your own land, to the building inspectors who won’t let you work on even simple home wiring or construction, unless you pull a permit.
Then, since you probably don’t hold a general contractor’s license, you can’t do your own work on your own property…and strangest of all, it’s in these places that home prices go up the most, which means those governments are rewarded for permission-restrictions and they collect more what? (Property Taxes!)
Thirdly, the requirements to hold a contractor ticket for most trades means industrial arts are not being taught in the schools like they once were. You talk about a complete and utter disaster? But government knows best: It knows that independent people who assert their property and “King of their own Castle” rights wouldn’t put up with such things voluntarily, but then comes the Education Industry which parcels out student indentures for millions of students who will never work in the field for which they have trained. There is NO market for Middle Ages History experts, except regurgitating the same facts to the next group of victims.
I don’t mean to start off on a sour note, like this, but Elaine and I went to the big city Wednesday to do a little shopping.
Sure enough, while listening to the radio on the way back to the ranch, we heard yet-another scheme to turn even more people into permanent “Life Renters.”
It was an ad to lease a used vehicle.
The ad pitch was pretty simple:
“You know how a lease works: A person leases a new car, rather than buying it. But now, you can lease that recent model, low mileage car and the first owner will have taken the depreciation on it! We call this program re-leasing. And it allows you a much smaller monthly payment. In fact, in order to get a car this cheaply, you’d have to take out a six-year conventional loan. So why not just re-lease a car for a much smaller payment?”
The rest of the trip home, I just sat there shell-shocked. America has lost its way Big Time when the idea of building personal equity (ownership) has been hollowed out to this degree.
Not that it hasn’t been tried elsewhere: You remember, I’m sure, my previous rants about the dangers of the 40-year home mortgage.
But this is where America seems to be going: We’ve gone from a fine idea to a population of 317-million asset-strippers in just a few generations.
People who develop and personally hold equity have little use for Big Government. On the other hand, people without two nickels to rub together are totally dependent on Big Government, right down to meals and housing.
In the past, the balance has been somewhat reasonable, but that’s quickly fading in the rear view mirror. And with it, the America that once was.
What is the functional difference between democratic socialism and we have now? I’m having a hard time seeing it. And every time I pay taxes or hear an ad on the radio announcing yet-another-way to asset-strip (into more “rent-your-Life”) the blur continues to build until now it’s looking like the fall of the old Soviet Union was just a trick to push America down the same subtle agenda.
When you change from a Land of Personal Initiative to a Land of Permission, there’s a price. An d the price keeps going up as the level of government dependency is raised. And even more when new schemes to lower personal equity come along.
What disappears over time? Oh, uh, just…uh….Freedom.
Futuring: Disaster in Q2 of ‘15?
Not to put too fine a point on it, but it we are building into a year-end market peak, then we should see a marvelous decline in Q1 that could be tradable, even by us reprobates who manage our own money.
We don’t often put glimpses of the future out there, but this note from chief programmer of the www.nostracodeus.com project, Grady, seems to exactly fit with where some chart projects have things in free-fall:
We’ve been seeing indications that Iran would be going to war but we didn’t think it would be in support of the fight against ISIS. It is. Iranian Phantom Jets have been spotted doing bombing runs on ISIS targets in Iraq. John Kerry cautiously welcomed the help this afternoon. [3 December 2014] It got us to wondering if it will have any effect in future nuclear talks with Iran. There will be more of Iran in this fight April 19, 2015
Markets almost always need a scapegoat. My guess in some golden mushrooms would be a dandy distraction from a self-imploding blow-off market top.
But, that’s only a guess, for now. Still, Israel has made its “line in the sand” clear enough that sooner or later that’s bound to turn into a line in the glass.
You’ll notice I refer to that part of the world as where the Sand Peoples live. Within a decade, tops, I reckon to change the reference to the Glass Peoples for this reason.
Write when you break-even