Saturday, February 21, 2009

Economy Ramblings

Economy ramblings

I've been thinking about the economy, as are many people. And I have to admit that my spending, when spending large, tends to be global. I spend money on travel, and my biggest expenditures that aren't on things like vet bills and car maintenance are for visiting family and research. Leeds will cost a bundle ...

Fortunately, I fritter money away at the local pub, too.

But anyway, I've been thinking about houses. It looks like I'll be staying here for a while -- at least till I get a second book well under way (and that means getting the first one out the door). (and let's touch wood on that -- the last round of approvals still has to go through).

But as my TIAA-CREF takes huge, sucking dives, I am thinking that it might not be the worst thing to buy a house. Preferably detached. I'm only in the 'thinking about it' stage. And even now, prices are probably too high for a middle-aged single woman to buy what she might like ...

But anyway, I was thinking about the housing boom. And Prop 13. Yeah -- the one in California that has been such a long-term success in terms of state revenue.


Mostly, though, I was wondering: did the unreasonably low property tax rates in California (and in those places that have followed California's lead) contribute to the ridiculous prices for houses and the mortgage bust? That is, if taxes had been higher, might there have been less speculation by buyers and by lenders?

It just seems to me that, had the taxes been higher, California might not be in quite the trouble it's in right now, and (if property taxes are figured into the income checks for mortgages -- I can't remember) there might not have been quite so much crazy borrowing and crazy lending.

Strangely, I'm not so worried about the economy per se, although I'm worried about my retirement and am slightly concerned about my job, although SLAC seems to be in pretty decent shape and fills a niche in our area, and they seem to approve of me, and I'm the only person who does what I do. So not really worried yet. And I did hear someone on NPR today say that he'd rather think of the economy right now as in re-set mode, rather than a depression -- and that actually sounds about right to me. Those boom years boggled my mind, because I never felt I had money to spend on the kind of things people were buying. Why on earth would I want to spend a year's income on a car? Do I need to spend $100 a month on cable?

So I'm thinking a lot of industries will suffer. I'm really pissed off that money going to auto makers isn't tied to re-tooling plants and building smaller, more fuel efficient cars. Hell, if the result is that we'd end up with long-run savings and a cleaner planet? I'm fine with subsidizing that.

And why are we not funding more public transit? There are tons of white- and bluecollar jobs involved with building more train and light rail systems. Where I live, lots of people commute over an hour to work to the nearest big city. Why not spend the money on public transport? And maybe it would even be ok to encourage more markets and shops immediately near that transport, so that people don't need to drive to the store so much, either...

And sidewalks! And encouraging developers to develop communities that encourage walking and have shopping available ...?

I could see that kind of rescue package.

In the meantime, my credit card company is talking about raising my interest rate to 18%. How is that going to stimulate the economy?

I'm confused.

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