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Bush spending 5X that of Clinton spending

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Guest $iLk

Reagan Revolution architect calls it 'era of obese government'

quote:

WASHINGTON ÔÇô Federal spending under the Bush administration has grown five times larger than that during the second term of the Clinton administration, charges a conservative Republican activist in a new book that paints the president as a traitor to his party.

In "Conservatives Betrayed," Richard Viguerie, credited with being one of the architects of the Reagan Revolution, says George W. Bush has set the stage for the punishment of his party by voters.

Viguerie compares spending by the federal government, adjusted for inflation, during the Clinton years vs. the Bush years. In Clinton's first term, federal expenditures rose 4.7 percent. In his second term, they rose 3.7 percent. In the first term of the Bush administration, however, spending rose 19.2 percent.

"If ever there was a case for divided government, here it is," writes Viguerie. "The lesson for many Americans is that today's Republicans cannot be trusted with the keys to both the executive and legislative branches of the federal government."

No matter how you slice it, Viguerie says, Bush makes Clinton look like a spending piker by comparison. For instance, the Transactional Records Access Clearinghouse at Syracuse University in New York keeps records that show how much the federal government spends on average each year for each person in the country. When this standard of measurement is used, the comparison between the two administrations is even more pronounced.

Cumulative growth in federal expenditures, adjusted for inflation, during the Clinton years actually shrunk by 1.1 percent. Yet, in the Bush first term, it rose 15 percent.

"During President Bush's first five years in office, the federal government increased by $616 billion," Viguerie writes. "That's a mammoth 33 percent jump in the size of the federal government in just his first five years! To put this in perspective, this increase of $616 billion is more than the entire federal budget in Jimmy Carter's last years in office. And conservatives were complaining about Big Government back then! How can Bush, (Dennis) Hastert, (Bill) Frist and company look us in the eye and tell us they are fiscal conservatives when in five short years they increased the already-bloated government by more than the budget for the entire federal government when Ronald Reagan was assuming office?"

Another standard of comparison offered by Viguerie is discretionary domestic spending, adjusted for inflation.

"When we strip away defense, homeland security and entitlements and adjust for inflation, leaving only discretionary domestic spending, George W. Bush has grown the federal government at a faster pace than Lyndon Baines Johnson," Viguerie writes. "His record for profligate spending is outmatched (for the time being) only by another Big Government Republican, Richard Nixon. And when Bush's second term is over, there's every reason to expect that Bush will hold the record as the president who's grown the federal government at its fastest pace in modern times."

The numbers?

* Johnson: 4.1 percent

* Nixon/Ford: 5 percent

* Carter: 1.6 percent

* Reagan: 1.4 percent

* Bush I: 3.8 percent

* Clinton: 2.1 percent

* Bush II: 4.8 percent

Viguerie compares the modern presidents on the use of the veto, too. While Johnson used the veto power 30 times, Nixon 43, Ford 66, Carter 31, Reagan 78, Bush I 44 and Clinton 36, Bush didn't use it at all in his first term and has used it just once ÔÇô for a non-spending issue ÔÇô in his second term.

"Bush apologists give the excuse that it's harder to veto bills that are passed by your own party," Viguerie writes. "Yet LBJ and Carter each cast 30 or more vetoes while their own party controlled Congress. In fact, the all-time master of the veto was Franklin Delano Roosevelt. He used the veto power an incredible 636 times during his four terms ÔÇô despite having a Democratic Congress with majorities as lopsided as 75-17 in the Senate and 333-89 in the House! Congress overrode his vetoes a mere nine times."

Yet another formula for measuring presidential fiscal responsibility, according to Viguerie, is rescissions. Reagan used rescission power to rescind funds authorized by Congress. Ford rescinded $7.9 billion in spending. Carter rescinded $4.6 billion, Reagan $43.4 billion, Bush I $13.1 billion, Clinton $6.6 billion.

But George W. Bush has not rescinded even $1 in congressional spending.

"The best illustration of the corrupting influence of power on the Republicans is the explosion of pork-barrel spending projects since 2000," says Viguerie.

Viguerie points to a 121 percent increase in pork-barrel earmarks in the first five years of the Bush administration.

"The size of the federal government is the single most important barometer of the health of the American republic," writes Viguerie. "When domestic federal spending goes up, it's a surefire indicator that something is wrong. And the way spending has been increasing under the Bush administration and the Republican Congress shows that things are seriously wrong."

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quote:

Originally posted by Jaguar:

I don't like Worldnet daily much, but on this one they are almost right on the money...

Here is one of my more trusted sources to back you up on this $iLk.


Well keep in mind that the report by the Cato Instintute is about 3 years old. 9 months after W took over, we had the WTC disaster that threatened to push us into a full blown depression. Only massive spending by the Feds staved that off.

Also, keep in mind that while outlays have grown by over 33% since Bush has been in office, Reciepts have grown by over 14% in just a single year (Between 2004 & 2005). In addition, the GDP of our economy has grown by over 20% just in the last 3 years, since the Bush tax cuts. I mean seriously, do any of you even know of anyone that's unemployed? All the reports talk Gloom and Doom, but come on! Here in Florida, it's at 3% and the rest of the country is at an average of 4.8%.

Another thing to keep in mind is that since the Government never dies, theoreticaly it never needs to pay off it's debts. The key is to keep the interest payments on these debts at a managable level. During the Clinton Administration, the average we were paying for servicing the interest was 3% of GDP, where today it's down to 1.5%, basically half of what we were paying before. While it's true that the actual amounts of debt have changed little and actually grown substantially, when compared to the much larger pie that we have today, coupled with lower interest rates of today, it seems miniscule by comparison.

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Guest $iLk

What really seems miniscule is the fact that while the Bush administration is reporting a deficit of 350 billion dollars, the actual books show that the real deficit is around 3.5 trillion dollars for this year alone. See USA Today from yesterday.

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quote:

Originally posted by $iLk:

What really seems miniscule is the fact that while the Bush administration is reporting a deficit of 350 billion dollars, the actual books show that the real deficit is around 3.5 trillion dollars for this year alone. See USA Today from yesterday.

Actually the report says that they're assuming a 750 Billion Defiicit for last year. and the TOTAL DEBT, which is a different thing altogether, is 3.5 Trillion. This is no big secret, the fact that they don't count the SS Trust fund, is no big secret, every administration since Truman has done this, because the system has ALWAYS been a "Pay as you go" system. The "Trust Fund" is a fallacy that has been sold to the American public ever since the program was started.

At any rate, it's like I said before, What's really important is that the PAYMENTS to that debt stays at a managable level. I recently refinance my house to a negative Amortization loan. My payments went from $4000.00 a month to less than $2000.00 a month. On top of it all, I took out $30,000.00 in equity to pay off all my credit cards, which I was paying close to $1000.00 a month for. Do I care that I'm adding $5000.00 a year to the debt on my house? Not really, over the past 2 years my house has apprecitated over $100000.00 a year and I'm planning on moving from this area in about 4 years. The term on my Negative AM mortgage is 5 years. In other words, even though I'm piling up debt, my payments between my credit cards and my house is $3000.00 less than before, so I'm happy and I don't care. By the time that I sell my house, it's going to be worth so much more than I paid for it, I'll still be OK.

This is kind of like how the feds are right now. Interest rates are so much lower these days than they've been in the past that they can afford to have more debt, with less payments. In addition, because the economy has been growing so much lately, the size of the debt becomes almost irrelevant. It's like I said before, it's not like the government HAS to repay debt, they just HAVE to make the payments on it. As long as the payments are manageable, that's all that really matters.

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I agree ... Bush is not Reagan. However, Reagan's challenges were not quite the same as today's. Furthermore, Reagan had the priviledge of inhereting a rock-bottom economy so the percentages are skewed out of a recession versus a boom.

This is simply another example of how "truth" is somewhere between statistics and relevence. While I would be loathe to celebrate Bush as another "Reagan", it would be silly to compare Clinton economics to current economics.

It's the underlying problem with America ... too many people are too invested into making too many points that, somehow, the truth is lost in between.

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Guest $iLk

The size of the public debt is not irrelevant considering that countries such as Saudi Arabia, and many countries which have terror ties have a certain amount of money invested in us which makes us handle them with kid gloves.

It is becoming a national security concern given that at any point these loans can be called due should someone wish to ruin us.

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And they would ruin themselves in the process. That's like Bill Gates saying he wanted to divest himself of Microsoft, it would cause the company stock to collapse and he would no longer be a Billionaire. Everyone SAYS that these loans could be called at any time, but when has something like this ever happened? Unlike the IMF, the United States is considered a VERY safe haven for cash and other investments. What other stock market in the world delivers such consistent returns? What other country in the world has the financial stability that we do? People don't "Call" loans and investments to sit on the cash, they call them to put the money else ware. Previousely I had posted that our economy, since the Bush tax cuts, has grown by roughly the same size as the ENTIRE Chinese economy. A lot of people in these boards have posted how China was going to overtake us in terms of economic might. Well how's that going to happen if our economy grows by such a large margin, that we've gone from 5X the size of their economy to 6X the size of their economy? Finally, what does this mean to all the foreign investors who have their assets here? Do you really think with that type of performance, they're going to want to take their investments out? You underestimate people's greed.

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quote:

Originally posted by $iLk:

Do you believe that the United States will default on entitlement payments?

I don't believe in retirement, I think it dulls the senses and makes you weak. However, life is all about expectations, and people have come to expect that SS will be there for them when they retire, so we don't have too much of a choice, but to provide the benefit. When Social Security was first designed, it was actually an illusion created to raise taxes on income by 10%, half paid by employers and half paid by employees (It's now up to 14% on SS and an additional 3% for Medicare). People were told that it was a "Trust Fund" setup for them so when they retired, they wouldn't have to worry about going hungry. It was a scam, the money went directly to the general treasury, where part of it was used to pay the most impoverished retirees, and the rest went to Trumans Building projects and other things like that. They knew when they first put the program into place, that they wouldn't have to pay too many people, because the retirement age of 65, was also the average age of death for most Americans. However, something happened that totally screwed up their little scam, the average life expectancy started going up and now sits at close to 80, 15 years of more collections in Social Security and Medicaid, then when the programs were first concieved. This has created a REAL problem, that is only masked by the fact that the US has had unprecedented growth in prosperity. However, I believe that at some point, we will HAVE to raise the retirement age, or cut back benefits. The system has always been a "Pay as you go" system, even when Republicans have TRIED to setup a REAL trust fund and have people setup investments to go into that trust fund, the Democrats have screamed so loudly about it, that nothing was ever done, and so it has STAYED a pay as you go system. To me, this is insanity, because in essense, they were trying to give people something they NEVER had, a REAL trust fund, but instead people would rather keep their ILLUSIONARY trust fund that NEVER existed!!!

In the end, it will become self evident that you cannot have 1 person working for every 1 person living off the government, so the increase in the retirement age will become inevitable. Besides, retirement is something relatively new, 100 years ago NO ONE ever talked about retirement, except those who actually planned for it, and saved for it. The whole idea of thinking that after a certain age, you're going to live off others, to me, is just wrong.

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quote:

Originally posted by Darkling:

When Social Security was first designed, it was actually an illusion created to raise taxes on income by 10% ... a scam, the money went directly to the general treasury, where part of it was used to pay the most impoverished retirees, and the rest went to Trumans Building projects and other things like that.

Not according to a rather comprehensive history of Social Security.

Truman didn't even show up until ten years after the plan began. And Social Security, as finally adopted by the federal government, wasn't the only plan to be considered. I quote:

Radical Calls to Action

The decade of the 1930s found America facing the worst economic crisis in its modern history. Millions of people were unemployed, two million adult men ("hobos") wandered aimlessly around the country, banks and businesses failed and the majority of the elderly in America lived in dependency. These circumstances led to many calls for change.

The Establishment Response

If America was to avoid the siren songs of the "radical calls to action," responsible political leaders would need to offer some persuasive alternatives. As the Depression grew, three general approaches emerged: do nothing; rely on voluntary charity; and expand welfare benefits for those hardest hit by the Depression.

quote:

They knew when they first put the program into place, that they wouldn't have to pay too many people, because the retirement age of 65, was also the average age of death for most Americans.

Actually, a lot of people were living beyond what was then considered the age of retirement ... meaning, the age at which a person usually became too sick or weak to work. Keeping in mind the number of men who still made a living as manual laborers ... farmers, coal miners, steel mill workers, etc.

quote:

The system has always been a "Pay as you go" system, even when Republicans have TRIED to setup a REAL trust fund and have people setup investments to go into that trust fund ....

I always find it ironic that there are people who want to put Social Security monies into the very same institution that created a desperate need for Social Security in the first place. Again, I quote:

When the New York Stock Exchange opened on the morning of October 24, 1929, nervous traders sensed something ominous in the trading patterns. By 11:00 a.m. the market had started to plunge ...

Before three months had passed, the Stock Market lost 40% of its value; $26 billion of wealth disappeared. Great American corporations suffered huge financial losses. AT&T lost one-third of its value, General Electric lost half of its, and RCA's stock fell by three-fourths within a matter of months ...

As America slipped into economic depression following the Crash of 1929, unemployment exceeded 25%; about 10,000 banks failed; the Gross National Product declined from $105 billion in 1929 to only $55 billion in 1932. Compared to pre-Depression levels, net new business investment was a minus $5.8 billion in 1932. Wages paid to workers declined from $50 billion in 1929 to only $30 billion in 1932 ...

So as 1934 dawned the nation was deep in the throes of the Depression. Confidence in the old institutions was shaken. Social changes that started with the Industrial Revolution had long ago passed the point of no return. The traditional sources of economic security: assets; labor; family; and charity, had all failed in one degree or another. Radical proposals for action were springing like weeds from the soil of the nation's discontent. President Franklin Roosevelt would choose the social insurance approach as the "cornerstone" of his attempts to deal with the problem of economic security.

Social Security was designed as insurance against another stock market crash. Against when businesses go bust and employees lose their jobs. Why in the world would a sane person want to, now, put any portion of an insurance fund into that same stock market? That's like putting all your backup files on the same hard drive where you keep the originals.

quote:

Besides, retirement is something relatively new, 100 years ago NO ONE ever talked about retirement, except those who actually planned for it, and saved for it.

In fact, one hundred years ago (1906), most Americans were still living as an extended family.

The year 1920 was a historical tipping-point. In that year, for the first time in our nation's history, more people were living in cities than on farms.

When grandpa got too old to work the farm, his grown sons and daughters took over ... leaving grandpa to his rocking chair on the porch.

Originally, here's what the President intended for Social Security:

"Security was attained in the earlier days through the interdependence of members of families upon each other and of the families within a small community upon each other. The complexities of great communities and of organized industry make less real these simple means of security. Therefore, we are compelled to employ the active interest of the Nation as a whole through government in order to encourage a greater security for each individual who composes it . . . This seeking for a greater measure of welfare and happiness does not indicate a change in values. It is rather a return to values lost in the course of our economic development and expansion . . ." --Franklin D. Roosevelt: Message of the President to Congress, June 8, 1934.

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And yet none of what you're talking about will do anything to alleviate the situation. We are on a collision course with too many people in retirement, the average age of death HAS risen from 65 to 80 and unless you want to start killing all the old people, the average lifespan will go even higher.

I find it hilarious that a 3rd world country like Chile, has a better retirement system, completely in private hands, than what we have today. The average worker in that country now has more in savings than the average worker in the US, don't you find that disturbing? In addition, all your talk of Gloom and Doom with putting the money in Stocks & Bonds, keep in mind that a lot of the things that CAUSED the market to crash, like Futures and Margin trading, are now HEAVILY regulated. You must now have at least 50% of the capitol required for Margin Trading (in the 20's it was only 5 to 10% depending on the Broker and your standing with him) and for Futures Trading, you need to certify that you have a certain level of liquid assets and a full understanding of the downside, before being allowed to trade. Back then, any Joe could get into Futures trading, put down 5% and he's off to the races. Of course, if the stock dropped by 10% he would lose DOUBLE what he put into it, not just the 5% he originally invested. It was that over extention of credit that caused the bubble and it's subsequent collapse. The ONLY people who lost money, were those trading Futures, and on Margin. Anyone who decided to keep their investments, lost nothing on that day. The conditions that caused the great depression, no longer even exist.

But you know what, even if you WOULD have invested your retirement in the Stock Market 40 years prior in the 1890's and cashed in your chips in the 1930's AFTER the collapse of the stock market, you would STILL have faired better with your money than if you had depended on Social Security, and even if you started working in 1928 and retired 40 years later and invested during that period in the Stock Market, you would STILL have faired better than if you were to depend on Social Security. Over long periods of time, the Stock Market beats out any other type of investment, this is a proven fact. Every single "Pay as you go" system in the world is facing bankruptcy, so why would you want to stay that course?

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Guest $iLk

danielcooper.us, back in 2004 I did a writeup on Social Security history using only material from ssa.gov and the Congressional Budget Office.

Start at the very bottom post on the page at http://www.danielcooper.us/ and continue up.

Lies, lies, and more lies.

According to the SCOTUS - you have 'no right' to Social Security payments. Congress can cancel them at any time with no notice.

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Guest $iLk

Not to mention that the return on Social Security is lower than an interest bearing checking account at INGDirect... Your money would be better in a savings account.

Americans deserve choice.

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I could deal with privatization, provided that they pay out my SS balance in full

Savings rates of any kind are just way too low now though. I remember back when I worked in Banking and the rates were much, much better then. How long have they been so low?

If you really want to earn on your savings and prepare for retirement, you've got to play the stock market or resort to crime.

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quote:

Originally posted by Grizzle:

I could deal with privatization, provided that they pay out my SS balance in full ...

Well, what they did in Chile, is you had a choice to either stay in the existing SS system, or go with the Privatized system, basically 95% went private. If you chose to go private, they gave you a SS Bond, that paid market interest rates for the life of the Bond, the only difference between these bonds, and regular Bonds, is that they didn't pass to your estate, (and your Heirs) like regular Bonds, and stocks, at the time of your death. However, you can't bequeath your social security payments either, so it's not a big loss. A HUGE advantage with the Chilean system, is that they have computers setup where you could actually calculate how much you need to retire keeping 70% of your income, so you can plan your own retirement at whatever age you choose. You don't have any restrictions pre set by the government that says that you can or cannot retire at a certain age. You MUST put in 10%, but you can choose to put in higher amounts to retire early, it's all in the citizen's control, instead of the government.

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quote:

Originally posted by Darkling:

The conditions that caused the great depression, no longer even exist.

No, I suppose they don't. Leastwise, not as long as the current regulations remain in place. And I guess we need not worry about conditions that never before existed. Like, for instance, as long as new international players behave themselves.

Another major crash would be a one in a million shot. Unfortunately, when it comes to one in a million, this country behaves a lot like Discworld.

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quote:

Originally posted by Marvin:

.... Another major crash would be a one in a million shot...

Actually market corrections of 12% or so are fairly common about every 5 years, and outright crashes of 20-50% have occured about every 30 to 50 years. Before the 50% drop of 1929, there was a massive drop around 1890, I remember reading about it, but I don't remember the details. The point is, that crashes and major corrections happen all the time, but it's not like the market is sitting still when this happens. Corrections usually erase only about 1 to 2 years of gains, while major crashes usually erase only around 3 to 5 years of gains. Why? Because crashes usually come on the heels of MAJOR run ups in price.

This is the reason why they say that the stock market is a very safe investment, when you're looking to invest for at least 3 to 5 years, because generally if you where to purchase a portfolio today, and in 5 years there was a crash and you sold at that point, you most likely would not lose any part of your INITIAL investment, and if you held your investments for 40 years, you would definietly see some HUGE gains. (Assuming you're investing in Large Cap Mutual funds that do the managing for you).

What people fail to realize is that if you're not leveraged during a crash, you usually have nothing to worry about. You don't rush to sell your home if you find out it's dropped 20% in value, so why would you do the same with your stocks? Did Coca-Cola all of a sudden go out of business? Did the Home Depot you invested in start shutting their doors? No, so don't rush to the exits just because everyone else is panicking, the world ISN'T coming to an end, and if it is, you selling your stocks and converting it to paper money won't change that.

People lose money in the stock market because they get emotionally involved, or they don't have a strategy. If you don't have a strategy, invest in a well respected Mutual fund, if you do have a well thought out strategy, STICK TO IT, and don't be swayed by market emotions.

I remember back in 1987 when the stock market crashed, I bought 200 shares of Home Depot Stock at 13 bucks a share, after it fell from a high of $36.00. Why, because I had been following it for a while, just started working there, saw that it was a great company in the making and decided to take a bit of a risk.

One year later, there was a 2 for 1 split, and the stock was selling for $24.00 a share, almost quadrupling my investment in the company (keep in mind because of the split, I now had 400 shares instead of 200). A crash could be a great buying opportunity, so it's not all bad.

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quote:

Originally posted by Darkling:

This is the reason why they say that the stock market is a very safe investment, when you're looking to invest for at least 3 to 5 years, because generally if you where to purchase a portfolio today, and in 5 years there was a crash and you sold at that point, you most likely would not lose any part of your INITIAL investment....

Generally ... but not always. And, in this game, it's not the rule that counts ... it's the exceptions.

I bought heavily into a Science & Technology mutual fund in 1999. In the first year, I picked up about 5%. The year after that, the stock lost nearly 50% of its value. It still hasn't recovered much more than 60% of its initial investment.

Lucky for me, it's not my only source of money. But others might not be so lucky ... especially when you're talking the entire population of the country dabbling in the market.

Like the guy who put all his money in vacuum tubes just prior to 1947. Or 8-track tapes. Or Betamax. Or laserdiscs. Or White Front. Or GEMCO. Or Rambler. Or Enron. Or Dot-coms. Or on and on and on.

Granted, you wouldn't call that a proper portfolio. But, even my "proper" portfolio leaned considerably toward tech stocks. Why? Because some people just can't accept the possibility that an industry with as good a track record as technology could turn sour.

It's a crap shoot.

But the guy I worry about isn't the guy with what could be considered a balanced portfolio. It's the guy who in 1946 hears about a company making a new breakthrough in vacuum tubes and (if he had had the choice) puts all his social security into that company. Then, out of nowhere, along comes the transistor. Now he's broke and needs an even bigger win just to break even. So he does the same thing year after year ... until, forty years later, he has nothing. Or until he finds himself unemployed and still has nothing.

Who, then, pays for that guy's mistakes?

If this country ever decides stocks and bonds are as good as money in the bank, this guy will show up and do dumb things. And, after he does, all the old arguments will surface again ... protesting the rude and callous way society treats those who are down on their luck.

And we will be right back where we started in the 1930s.

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You know that letter from Social Security that shows up once a year? The one that details how much you have contributed and estimates what you can collect when you retire.

Well, the one that showed up this year, told me how social security wouldn't be around when I retire. However, if it is around, it would only be able to pay out 70% of those who will be retiring.

So, what am I paying for right now? Instead of having the government spend my money right now, for MAYBE a crumb of it when I am 65 (that's if they don't raise the retirement age), I would rather take that same percentage and invest it in CD's. Not only would I make out better with CD's, BUT it's 100% payout, with no guessing whatsoever, when I retire.

Social Security is nothing more than another tax. Just like disability, medicare, and all those federal and local "fees". Have you ever looked on your cell phone bill? 10 to 15% of it is taxes. You do know that you are still paying the telecomunications tax that was instituted for the Spanish war, over 100 years ago.

Bush spending, Clinton spending. It doesn't matter. Instead of nitpicking between Democrats or Republicans, get them ALL out of office. Prosecute them for crimes against their country, violating the Constitution, execute them, that will send a message to politicians, "If you run for office because you want to manipulate and abuse the USA, you will pay with your life" Only then will you get some real politicians in there.

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Oh, and Darkling. Upon reading your description on how you got your mortgage payments down, and managing your finances, I came to realization that you are creating for yourself a situation for THE GREAT DEPRESSION.

I understand the term "cash flow", however, this is no way of doing it. You can have cash flow while having secure assets. What you have right now, is cash flow, while bleeding your networth at a constant rate, and not only that, if the economy goes for the worse, be it the housing market or inflation, or rise in rates, you will simply be declaring bankruptcy.

Refinancing means starting the clock all over again on your mortgage. It means paying out more interest that you otherwise wouldn't have to pay. Yes, it leaves more cash for you to use now, but it also leaves you spending more money down the line. It's like having a credit card balance that you ALWAYS will be making payments on. Cashflow is not the same as secured assets. Even if you are making $100 dollar a month payments on a mansion, you need to understand, that that mansion is NOT YOURS.

Life like this is good, when everything works. Market goes down, economy goes down, inflation goes up, lose a job, lose a bussiness, whatever, and all of it goes down the drain. I will take a Deed of ownership over lower payments, anyday. Even if that means that I will be making $4,000 a month payments for the next 15 years rather then $2,000 a month for the next 30. All you have to do is calculate the interest over those 15 years difference to realize how much you would save. As for people who say that they can take that $2,000 and invest it to make money. BULL. Banks charge interest that will be higher than what you can get from savings, or CDs or anything else that makes a sure return. Stock market? Good when you make money, bad when you lose it. Better of sticking with higher payments, as every time you make one, that's 7 or 8 percent interest that goes into your pocket, everytime, 100% of the time, as opposed to refinancing for higher cash flow, and planing on a possible return.

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quote:

Originally posted by Soback:

Oh, and Darkling. Upon reading your description on how you got your mortgage payments down, and managing your finances, I came to realization that you are creating for yourself a situation for THE GREAT DEPRESSION.

I understand the term "cash flow", however, this is no way of doing it. ....

One size fits all?

No.

I have a situation where my wife had to stop working for a couple of years because of a medical issue with one of my kids, which basically means that our income has been reduced by 90K a year, so if it means doing this for a bit until she can get back to work after my son is in school, it's not a big deal, I can make up for it then. In the mean time, when I have good months, I send in an extra hundred bucks or so, to apply towards the principal, but at least I have the option of the lower payment, whereas before I didn't. BTW, my "Flexpay" options, include a 15 year payoff option, which is about the same as my old 30 mortgage was, so once my wife starts working again, I'll be using that option.

If I were to sell my house, the profit on my house would be enough to buy a smaller house with about the same payment I have now (if I were to take out a regular mortgage instead of a Negative Am), but in the mean time, I'd have to pay higher taxes then what I'm paying now, plus I'd have to pay taxes on the profits from the house. It just opens up a HUGE can of worms that I don't want to get into. For now this is the best option for me.

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Well, my wife's a Pharmacist, so after 8 years of college, yeah, she pulls down some change. Me, I just got lucky with my businesses. By the way, I define luck as working 60 to 80Hrs a week until business starts paying off:) You guys might notice that many times I'll go months without posting anything here, those are usually the times that I'm putting in my hours.

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You're right. You gotta do what you gotta do, and sometimes you have to do the things you hate to make life better.

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