Saturday, December 31, 2011

Reverse Mortgages

Most of us know how reverse mortgages work. Homeowners of at least sixty two years of age receive cash payments with their homes as collateral, to be redeemed at their death. While I have yet to consider one for myself, I see nothing wrong with such agreement. In most cases the next generation is far enough along that their parents shouldn’t have to stint themselves the use of the wealth they have accumulated in their lifetimes.

But when one party in an agreement benefits directly from the misfortune of the other, in this case death, a double take is in order. I haven’t heard of alleged foul play with these transactions. But, in another part of the financial world, we knew something was amiss on learning that major institutions had been making major bets against securities that their brokers were recommending to clients.  

When it comes to the environment we’re getting involved with some serious reverse mortgaging. There seems to be a difference of opinion here as to how much protection, if any, is needed. As I see it folks who think more caution is in order have science on their side. The other guys claim some random number of scientists who agree with them. I’d like to see the resumes of these experts. They might provide some belly laughs, particularly those institutions of higher learning bearing the brand of well known bible thumpers.

But let’s stretch a point and give equal validity to both sides. In that case there is a fifty percent chance of either being wrong. We’re not dealing with property now, but with the future of the planet and a lot of people who’ll be living on it after us.  As the stakes get higher the need increases for insurance, in this case prevention. True conservatives would want to go green as quickly as possible. I submit the word “conserve” as evidence.

Most of us can do with a little less material wealth and convenience, so as a nation let’s take something out and put it in a policy. Leaving things as they are is a reverse mortgage taken too far, except to those who don’t give a damn about the world they’ll leave behind.  

Tuesday, December 13, 2011

Deep In the Heart of Taxes

It comes as no surprise that Republicans are somewhat less enthusiastic than Democrats on the matter of extending payroll tax cuts. As I understand it the difference involves the means by which the cuts will be paid, either corresponding revenue increases or expense reductions.  Democrats favor a small surtax on income of more than a million dollars. Republicans, opposed to any tax increase, want a decrease in overall government spending.

During the fight over raising the debt ceiling, Republicans were adamant that eliminating benefits, such as subsidies or tax exemptions, was tantamount to a tax increase, sheer heresy in light of elected party officials’ oath of allegiance to that great public servant, Grover Norquist. A most conspicuous instance was their resistance to ending an oil drilling subsidy to Exxon/Mobil, the world’s most profitable corporation. I find it curious that they don’t see ending the payroll tax cuts in the same light. Granted, they are only a temporary part of our fiscal structure and require periodic governmental renewal. But then the same can be said of those hallowed Bush tax cuts. It seems mighty like a matter of different strokes for different folks.   

As well it should, but in the opposite direction! The cost of living in what most people regard as a comfortable manner has nothing to do with one’s income. If a family or individual can afford to live beyond that, the extra income required can be fairly taxed at a slightly higher rate. This reasoning applies in what can be considered “normal” times. But with the nation in worse financial shape than at any time since the Great Depression, this imbalance is even more essential. There seems to be general agreement that sacrifice is in order, but not on who should do the sacrificing. There shouldn’t be any question! A family whose home is threatened by foreclosure can’t afford to give as much as one whose worst case scenario is leaving a smaller inheritance.

Issues like these are rarely if ever decided ethically. The side that makes the most noise is usually the one that prevails. Big Money, as epitomized by the likes of the Koch brothers, has been in particularly good voice of late with the help of the Citizens United P.A. system But don’t lose faith. The time is near, maybe nearer than we think, when this sound will be barely audible over the din of inequity.