Reinke Faces Life

http://www.gold-eagle.com/editorials_05/schiff113007.html

The End Of Consumer Credit As We Know It
Peter Schiff

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In an article this week that examined the troubles brewing in Citigroup’s mortgage business, the Wall Street Journal focused on Natalie Brandon, a 51 year old married woman from Granada Hills, CA, who is currently unable to make the payments on her $625,000 adjustable rate home loan from Citigroup, despite the fact that the rate will not even reset higher until June of next year. Amazingly, the Journal reported that Mrs. Brandon bought the house in 1985 for just $105,000, but had chosen to refinance five times over the past seven years, borrowing more than $500,000 and spending every single penny. While this may be an extreme example of American profligacy, it is by no means unique. Unfortunately this type of behavior typifies everything that is wrong with the modern American economy.

Had this homeowner behaved responsibly, as was typical for Americans of prior generations, her current monthly mortgage payments would likely be less than $600 and the remaining balance on her loan would be about $40,000. In eight more years she would have owned her home free and clear, and would likely be on track for early retirement. Instead, after 22 years of making mortgage payments, she is now $625,000 in debt. The article stated that she had recently tried to refinance into a 6%, forty year, fixed-rate mortgage, but it fell through. Even if she had qualified, she would have been obligated to make monthly mortgage payments of close to $4,000 until she was in her nineties.

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Well, they say something like experience is an expensive schoolteacher, but fools will learn from no other.

About the only think that can happen is the foreclosures and subsequent bankruptcies allow folks to start over.

What does one have to show for a life’s work … “experience”.

Seems like there will be a lot of competition for my planned “final job” as the WalMart Greeter?

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http://www.lewrockwell.com/rockwell/money-mania.html

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Let’s ask ourselves: why would this make anyone optimistic? Let’s say that you are playing the game Monopoly and one player proposes to double the money stock for everyone. The problem would be obvious to everyone. If the prices on the board could change, they would double. Since they can’t, the game will only last twice as long as before. Meanwhile, players would become more reckless with their investments in houses and hotels. It wouldn’t really make the players more wealthy; it would only create an illusion that would be temporary.

The analogy isn’t exact, but the point should be clear. Paper money is not the same thing as wealth. Wealth comes from trade, investment, and capital accumulation. Money is merely a tool that facilitates the creation of wealth; it is not identical to it.

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The essence of an advanced course in Economics. If Americans ever re learned that one fact, then the pundits, politicians, komisars, and bureaucrats would be all “out of business”. They couldn’t scam us any more.

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http://www.resourceshelf.com/2007/11/26/resource-of-the-week-consumer-guides-for-getting-and-keeping-health-insurance

Resource of the Week: Consumer Guides for Getting and Keeping Health Insurance
By Shirl Kennedy, Senior Editor

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Here is an issue that, in the United States, needs no elaboration. Even if you, yourself, do not have a health insurance horror story, most assuredly you have a friend, relative or colleague who does. We’re all familiar with these tales by now:

* People who lose their health insurance when their employer kicks them to the curb.
* Small businesses no longer able to offer coverage to employees because premiums have become unaffordable — if they can find a company willing to insure them to begin with.
* Large businesses unable to complete on a level playing field in the increasingly globalized economy, due to the built-in overhead cost of providing health insurance for employees and, sometimes, retirees.
* People without insurance who put off going to the doctor until a health situation reaches the crisis stage, at which point they show up in the emergency room, where they are treated at taxpayers’ expense for something that might have been prevented — or relatively simply and inexpensive to take care of in its early stages.
* People who are tethered to unrewarding/unsuitable jobs — who would maybe like to work part-time and/or start a small business — because of the need for health insurance.

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Note the fine hand of the gooferment in this problem at many places.

* Employer connected benefit plans are a direct result of the WW2 wage and price controls.

* Health Insurance is tax deductible to an employer but not to Joe SixPack (and I’m not referring to abs). Consultants and contractors can deducted by the pretense that they are their own employers. Argh!

* The supply of “doctors”, “nurses”, and “hospitals” are all restricted by gooferment licensing laws. (Like people prior to the AMA were too stupid to figure out what docs were good and what were bad. Docs that screwed up my get shot. Made for motivated health professionals.) Any restriction in supply increases cost. Demand is relatively constant.

* Drugs are restricted by the FDA (whose horror stories are legendary) and, even when “approved”, are further restricted by FDA diktats which ensure the creation of BigPharma (where “regulators” come from and go to retire in an incestuous relationship). Further restricting supply when you can get it. And, too bad, if you happen to die while “your” drug awaits approval. Even if you wave all the claims and accept the risk, you still can’t have it, you peon you. (Unless you’re rich enough and healthy enough to fly to a Third World country where you can have whatever you need. If it’s made at all.

* Drugs, that are evil things that can jump up and put themselves in you, can only be sold in gooferment approved stores. And, then only by prescriptions from gooferment approved “doctors” (qwak qwak) which have to come on gooferment approved forms. These prescriptions can be paid for by gooferment approved insurance companies if they are listed in their gooferment approved “formularies”. Argh!

* Things that BigPharma can not make a profit on — vitamins, minerals, dirt, mold, weeds, bark of tropical trees — can not be advertised to you by anyone — regardless if the have a gooferment license or not — as “curing anything” unless the FDA agrees to the proof. Since, for example, the British Navy discovered that Vitamin C cures scurvy, but you can advertise that claim citizen because the FDA hasn’t been paid so you can do a double blind test — at your expense of course. So no vitamins or minerals for you Citizen regardless of what they cure, prevent, or help. (I know one fellow, gets something for his horse, and takes it himself. For arthritis pain. Horse and owner are doing just fine thanks. Not so, the rest of the non-horse owning population.)

* Now my favorite topic, weed. MJ. Did you see that they think that smoking it prevents breast and brain cancer from spreading? Yup, no joke. And, ignore the fact that some sick people can tolerate it better than the fancy and expensive BigPharma drugs. And, further ignore, that in California, the federal thugs are robbing medical marijuana dispensaries. (Well, what do you call a federal raid where pot and cash are taken, but no one is arrested or charges. OJ does it in LV and he’s an armed robber. The feddies do it in CA and they are heros of the empire. We stopped being a republic a long time ago. Guess they haven’t read the Fourth, Fifth, and Tenth Amendment.)

AND ONE LAST POINT

* The gooferment assuming the medical insurance of all old folks over age 65 under the Social Security / Medicare program is imho the single biggest factor in why we are broke and medical care stinks here. Go to a hospital er and go to one of those “you pay” urgent care places. Guess where you’ll be home from first.

Argh!!!

BTW, the guide is excellent and this is a great find.

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http://www.moolanomy.com/74/7-mistakes-i-made-when-i-went-to-college

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1. Not considering the return on investment

Education is like any other investment — i.e., there are good ones and bad ones. Aside from your house, this is probably the second biggest investment you will be making. The problem was that my heart was set on going to an Ivy League school, and I stupidly turned down full scholarship to the University of Michigan at Ann Arbor (a top notch school). In short, I was young and irresponsible with money (my parents’ money). If I went to Ann Arbor instead I would have saved them about $20,000 a year (after scholarship and financial aids), and that was in 1991. If I had instead saved and invested that money, it would be worth about $265,000 today (at modest 8% annualized gain).

Was my Ivy League education worth $265,000? Definitely not! I do not think I would make any less money today, if I had gone to Ann Arbor.

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Is it really?

I agree that on one level (i.e., I spend X; I then earn Y; if Y GT X, happy, else unhappy) one might think of it as an “investment”. Comparing the IVY to a STATE is more difficult than it seems.

One reason that immediately leaps to my mind is that this is not a “repeatable event”. Probability theory is built up around roulette wheels, dice, and cards. The student is a UNIQUE (i.e., a unique individual with free will). Selection of a college isn’t a repeatable event. As a high school senior in the US you only get one choice. And, it’s destructive. You don’t get to rewind the VCR as in the movie “groundhog day” and get to run repeated trials.

Another reason is that your experience colors everything — every single blessed thing — you do after that point. Your perceptions, your thinking, heck even your speech and the words you use are different. And, it “labels” you to other people. You’ll always be the “Ivy League” guy.

So static analysis is pointless.

In the cited case, you can’t even assume that the mythical 265k — and it is mythical because it exists no where in your own mind — no where — would have been “saved and invested”.

You can’t even be sure that where you have to chosen STATE over IVY, that on the first day of school, as you were crossing from the bus stop to the campus — cause in your mythical dream you’d have saved money on a car and taken the bus — that crossing the street you were hit by the big dump truck. (Hey if you can imagine a “college student saving money” then I can make “runaway dump trucks” materialize as well!)

Nope, that is why they are called “decisions”. One choice precludes (“cide” means to cut) all the others. You come to that proverbial fork in the road and you do a Yogi Berra taking one. Peck advices taking “the one less traveled”. You will never know in this lifetime what would have been if you’d gone down the other one. It’s all guesswork and speculation.

It’s a question philosophers have struggled with like forever. Duh! It’s really easy. The one you took was by definition the “best” one. Unless your were deluded, high, or defrauded, then you chose the one that your perceived “best” at the time. “Right” is left to the Intelligent Designer to decide.

imho.

So, I’d that the premise is flawed. Education is different and unlike other investments.

Interesting exercise though.

I don’t know if my Mom’s money and my time was well-spent by my education? Hope so. But, I don’t “know”!

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