Posted by: guinness222 | September 14, 2010

“OK,…what happens if…….”

           The big economic term bandied about for the past 12 to 18 months has been “too big to fail”. They said that about Goldman Sachs, they said it about General Motors (a/k/a,  “Government Motors” now), and it’s been the exact opposite of what should be happening.

          For example, and I’ll speak on a close to home level, the County in which I live has had a HUGE Real Estate bubble that didn’t just burst,…it freakin’ exploded on them. My home is now worth less than I paid for it in the year 2000, and despite being “upside down” ( a new euphemism for you owe more than it’s current value) what are we to do about it? Now the County is responsible for the roads, the schools, the security, the public welfare, and they are in the same boat! Every year the County sends out a “pro-forma” property and real estate tax bill for the owners to review. I just got mine.

         After the nitroglycerin tablets kicked in, and the almost overwhelming urge to simply run an IV of Jack Daniels into my arm subsided, I began to review it, and guess what? I guess the good news is that my County is too big to fail as well. Despite the spending like “a drunken sailor on liberty” (something I have intimate knowledge of from past years of “evil”) of the 2003 to 2006 period they sort of failed to figure out rationally who is going to make the payments if this all shrivels up like a raisin?

          It’s easy when they finally review it. Just send out bills to the taxpayers. It’s their DUTY and RESPONSIBILITY to pay for it. BUT that required some really fancy numerical juggling and “creative accounting” to make it even seem reasonable to the cretins that run the government. For example, according to the Pro-forma tax bill the value of my humble abode went DOWN by 31%, BUT (in true bureaucratic “fuzzy math”) the actual amount of taxes I have to pay on my diminished value abode this year is going UP by 27%. (In the words of the immortal,….well whoever said it,….WTF????)

        So I get a 31% cut in the actual value of my property investment, AND, a 27% increase in it’s  taxes? It’s like going down and buying a set of jeans six sizes too small and paying twice the original cost for them! I personally feel that WTF more than covers it.

         Now it’s just like the work I do for a living, managing Condominiums and Home Owners Associations. If 25% of the owners can not afford to pay the electric bill for the streetlights and common areas by simple divisional math, and voluminous “governing documents” saying they have to,…. then the 75% that did pay their share have to make up that 25% that is missing! Cool, now I really understand the “Too big to fail” concept. Afterall the electric company is not in the habit of accepting only 75% payment of the monthly bill, nor in turning off only 25% of the unpaid amount for power requirements,…. so we have a conundrum.

         Boiled down into it’s simplistic terms, the rich get poorer, and the poor just keep on keepin’ on. That is until the “everyone should feel good about themselves” government gets involved. That’s when they give the poor more money and credit and other “stimulus” which of course they get from increasing the taxes to gain more government income which incidentally is only being paid by the rich. (Ahhhhh! the “redistribution of wealth” concept,….got it!) I guess it’s true, “Socialism is great,…until you run out of other people’s money. Then What?

        The poor local house painters can’t make a living because no one can afford to have the houses painted, and even the owners can’t afford to spend the money and do it themselves because they are working longer and harder just to keep their jobs and at least try to be able to eat and keep a roof over their families heads.  But have no fear, between unemployment compensation, food stamps, medicare, and other “stimulus” package items and then passing the cost on to the folks who own the homes (gee, I thought they were the ones who couldn’t afford to pay it anymore?) so they can afford it. Does that make sense to you?

        Well back to the point here,…..what if, and it is becoming a reality, ….that more folks CAN’T pay it than can pay it? Is it like the Russian Revolution all over again, but here in the USA.

        What part of, the house painter needs someone to hire him and paint the  house, then the painter will go out and buy a new washing machine for his wife, which will insure a number of folks continue to work and get paid to make washing machines, and they in turn will be making so many and so much in overtime that they in turn will buy a new car, made by the other “worker bees”, who in turn will spend the money on the new carpet which the guy who hired the painter in the first place will gladly pay for and he goes to work every day and the big circle of life goes on and everyone is happy. See how simple it is?

       So if a few of these things fail, and a bunch of people get burnt, then trust me there will be new businesses that will pop up, the County I live in will learn to get four years out of a text book for the school kids by teaching the kids the proper way to care for them, and rather than buy 85 new police cars every year, like the County does now,….maybe we can find a more motivated mechanic in a private business than the “goof off” mechanic who sits around the police garage all day at $85,000 a year plus, plus plus, waiting for a brand new cruiser to break down, and whose highly skilled finger can dial the dealer and say “I’m sending this cruiser over, fix it, it’s under warrantee.” (That’s a great use of our tax money isn’t it?

    Enough rant for today, there is far more rabble for me to raise before I sleep!

    But I do love my new bumper sticker that I put on the car, …”I love my country,…it’s the government I don’t trust.”

-30-


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