Wednesday, May 25, 2011

just a thought

Okay, I'm just "thinking out loud" here. What I have to say is based on my belief that a large part of the economic collapse we are in was created by the moneyed elite (ie, the banks), so if you don't agree with that you aren't going to like my solutions.

  1. We are in an economic crisis not seen since the First Great Depression. Things are not getting better, and indeed, are going to be dramatically worsening over the next few years. I don't need to listen to our federal government spokespresident or our mass media's misinformation about the economy improving. I have eyes. Jobs being added a cause for celebration? Not if they are mostly low wage service sector jobs, part time, without benefits. This is what the numbers reflect, not an increase of jobs that will support an even lower-middle class lifestyle.
  2. The US is experiencing a housing crisis of amazing proportions. Millions of foreclosures already in the process, millions more about to hit the market. The actual value of homes is less than 2/3 of what they were in 2006 — and sinking every day.
  3. Fuel and food are rising faster than real wages for most people. 
  4. Jobs are key to any recovery. Ross Perot was absolutely correct about "that giant sucking sound". NAFTA, and any other "free trade" agreements are a core part of what has happened with out economy. NAFTA was brought about by the influence of corporate greed, pure and simple. It's all tied together in an enormous economic death spiral. If people don't have jobs, they can't pay their bills, they go bankrupt, got into foreclosure, don't pay taxes, go on public assistance. Towns and cities die, because there is no tax base. Small businesses go under because their customers can not pay for what they sell.
  5. We can not fix the economy without fixing jobs, it's that simple. Nothing is being done to address this. I believe that we should have had a reinvention of the WPA 2 years ago instead of the "too big to fail" bailouts. Apparently, this is politically untenable, as it could compete with corporate profits based on low wages.
  6. NAFTA must be reversed. The South Korean FTA is a disaster waiting to happen, and the idea of opening up free trade to the middle east strikes me as insane.
  7. Wages — the minimum wage must be increased to a real liveable level. Living in a rural area, I just can not drive 40 miles round trip on four dollar gas for a five hour shift at $7.35 an hour. It just doesn't make sense.
So, in practical terms, what's your basic American in financial trouble to do?

I'm behind on my mortgage, just like millions of others. Unlike a lot of people though, I have a lot of equity in my home. When I bought it, I put down well over half in cash (from the sale of my former home). I have struggled to pay my mortgage, but at this point I just can't. It got me thinking...I could try to sell it, but I'd have to put more money into it to make it marketable, money that I really don't have. The housing market is stalled. Nothing is moving and more and more houses are coming on the market this spring just to sit unsold. According to a real estate professional I spoke to, a wave of new foreclosures is about to hit.

So what if...what if I just stopped paying? My house has little value at this point, both to me as an investment (over 100k) and to good ole Bank of America, who holds the mortgage. Given the glut of properties right now, if it goes into foreclosure, it's going to sit empty for a good long time and deteriorate. So it doesn't really serve them to kick me out, but of course this is a gamble I'll have to take. I'm not in a position to get a modification, which would be an ideal solution. With no job, there are no modification plans out there that I can qualify for.

So here is, if not a real solution, a partial pay-back to the big financial institutions for their greed, creation of the housing bubble, derivatives, and their love of "financial innovations".

What if, on a grand scale, people just stopped paying? I have been advised that because of the collapse, there is a several-year time frame for foreclosure processing. So what could they do, in practical terms? There are no buyers because they have clamped down on lending so drastically. Yes, eventually, they will have the properties, but they won't be worth much because of the continuing collapse of the housing market. I know there are flaws in this, but it might be something to think about.

No comments:

Post a Comment