Hannah Blog

May 16, 2005

Save Our Houses

Filed under: Hannah's views — hannah @ 11:13 am

In the interest of getting out ahead of things, most people probably haven’t noticed that the next thing Bush and cronies are out to destroy is owner-occupied houses.

Does that surprise you? Didn’t you hear Bush say that his is the ownership society? Didn’t you also hear him say that his program is to “save” social security? And did you finally conclude that what he meant was that the money saved for old age in the federal retirement program should be turned over to the private sector financiers to play with. (That’s because “savings” in the terminology of economists and accountants is money that is turned over to someone else to manage).

Specialized definitions apply to houses occupied by their owners, as well. From an economist’s perspective, whatever value they have gained through years of occupancy and improvement, represents a capital gain that is in need of being “liberated” for use by the market.

Actually, the assault on traditional owner-occupied housing (that serves more than one generation) has been going on for some time. Oddly enough, the removal of the capital gains tax on owner-occupied housing was part of the scheme to persuade people to cash in their gains by selling their houses and then borrowing to buy a more expensive replacement. The economic argument behind this was that the taxes on the sales expense and the increased revenue that title companies, mortgagors, surveyors, etc would bring in more in taxes than would be lost because people weren’t inclined to sell out and pay a capital gains tax.

Currently, the scam is to persuade elderly people to cash out their equity by taking a reverse mortgage to pay their medical expenses and make up for reduced pensions. That there will be nothing left to leave to their heirs when they finally pass may seem to conflict with the promised benefits of “personal accounts” but a scam doesn’t have to be consistent, it just has to sound good. Besides, when people are confronted with conflicting information, they tend to conclude that one must be right and one wrong and pick the one that fits their situation to be the right one.

I would bet that all over red America there are people who have already experienced the loss of the family homestead and most of them probably think it was their own fault. After all, hasn’t the government been promoting home-ownership for decades? So, those who still lost their’s must have been doing something wrong, right? Wrong. The government has been promoting the “acquisition” of houses because people who own their own houses are a constant and predictable source of tax reveneu, especially if they don’t hold on to them too long. Of course, if they can be persuaded to trade up, even more taxes can be collected?not to mention increased revenues for a whole slew of middle-men

Anyway, what I want to suggest is that we start collecting stories from people about their experience with owning a house, about raising a family, starting a business, learning basic skills like carpentry and plumbing, and, more recently, the prospect of having to “liquidate” their equity in order to have enough food and medecine in their old age.

See, I think red America was even more deceived about traditional family housing in which multiple generations were raised, than they were about social security being “reformed” in their favor. Certainly, there can be no question that the emphasis on relocating American manufacturing and production assets overseas has had the effect of depopulating middle America.

We need to talk about that.

It wouldn’t surprise me to discover, if we ask them, that many people deep down feel really threatened by the pictures of bull-dozers destroying the houses of Palestinians and the bombs wiping out the cities in Iraq. The propaganda coming out of the Pentagon tries to paint a picture of troops bringing benefits, like water and sewer lines, to people who didn’t have them before. But the fact is that these facilities are lacking because they were willfully destroyed by American bombardment in Gulf I & II. It almost seems like there’s the same expectation as there was about our urban renewal program that when the slum housing is destroyed, people will simply build something new and better in its place. But, we know from experience that’s not how it works. When something is finally built to replace destroyed housing, it’s never for the people that were displaced. When people’s housing is destroyed, the fabric of their community is irreparably rent.

Of course, if one is completely cynical, then one might think that the assault on people’s houses, like that on their guaranteed pension, is simply intended to make them fearful and maleable.

Certainly, I’d be fearful if I were one of those 50% of California new home buyers whose monthly payments cover the interest on their loans only. What happens when they go to sell and suddenly discover that any equity they have is negative, that they owe more than the house is worth? There won’t even be reverse mortgages for them when they grow old.

But that’s just speculation on my part. What are the real stories?

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