As have I. Would you rather that the private owner not have the rental at all so that the tenant has no house to pay the owner's mortgage of?

I guess your wisdom is lost on me...

danivon wrote:But private rentals are really just a matter of someone else paying the mortgage for the owner.

No it's not quite like that. I've seen many middle class people take a risk on rental properties and lose their shirts, thus wiping out much of their retirement savings. It ought not be cast as some simple matter of the rich people exploiting the poor. When the economy crashed it was often renters that gained the upper hand in terms of flexibility while home owners were left in a lurch often upside down on multiple mortgages.

Now I see many people renting even though they could easily buy, just because they like the flexibility of renting.

Doctor Fate wrote:I'm not sure you're right. Look who says the CRA had no bearing on the crisis--Sheila Bair, who was knee-deep in it, Krugman, who has never seen a non-military government program he didn't love, and others who are mostly liberal.

Here the Heartland Institute saying it was not the CRA's fault. The Heartland Institute is not a liberal organization.

I don't know what words you are putting into my mouth now, Brad.

Essentially, private rental is based on the landlord being able to buy a house to rent out. And on a renter being able to rent it. I'm not saying that this should not happen, but for the renter it's dead money.

I was talking about the theory of the 'property owning democracy', which would be based upon expanding the owner-occupier sector at the expense of the public and private rented sectors. For those on the right, getting public housing reduced would seem to be preferable (no?). This was a mainstay of UK Conservative policy during the 1970s and 1980s, and was so successful and popular (despite a property bubble in the late 80s exploding all over the early 90s) that Labour pretty much adopted it - or ceased doing anything to reverse the trends.

However, I look at the trends. In the past 15 years, the number of occupied privately owned properties has risen (by about 10%). The number of occupied rented homes has risen (by about 5%). But the number of public housing homes has fallen (by about 15%).

So, the private rented sector has grown since the last major revision to the CRA, and the public rented sector has fallen.

I imparted no preference, so much as to say that this was what policymakers wanted.

Neal - Like Brad, you impart morality and preference into what I said. I described what happens without going into whether one side is good or bad.

Just because you have the prior expectation of disagreeing with me, doesn't mean you should automatically assume where that disagreement lies before it arises. Perhaps it won't?

Archduke Russell John wrote:

Doctor Fate wrote:I'm not sure you're right. Look who says the CRA had no bearing on the crisis--Sheila Bair, who was knee-deep in it, Krugman, who has never seen a non-military government program he didn't love, and others who are mostly liberal.

Here the Heartland Institute saying it was not the CRA's fault. The Heartland Institute is not a liberal organization.

I like you, Archduke. You punch right through Steve's by-association rubbish.

Some budget statistics...

Ratio of gov't outlays to receipts, from THIS pdf:

1945: 2.05
1950: 1.31
1955: 1.04
1960: 1.00
1965: 1.01
1970: 1.01
1975: 1.19
1980: 1.14
1985: 1.29
1990: 1.21
1995: 1.12
2000: 0.88
2005: 1.15
2011: 1.76*

I post this because I think it's possible that the rate of the current hole-digging is tough to comprehend. Sometimes, when analyzing a complex issue, an obvious data point is somehow overlooked but turns out to be an eye-opener. When looking at a budget, it would seem to make sense to compare intake to outflow, and the ratio of the two is not dependent upon inflation or GDP measures or anything else like that - it's a simple measure of what we usually call "fiscal restraint". Do you spend more than you take in? A tiny bit more or a lot more?

What the heck... I'll make a graph.


The best way to interpret this is to look just within the red zone and compare the rightmost line to the others insofar as they stick up into where we're "in the red". I include the full ratio and the black ("in the black") zone since in '00 there was a surplus and for the sake of graphic fairness. Interpreted as I think this data should be, you ought to be shocked by the height of that last line. Bear in mind that we've been debating fiscal conservatism and the dangers of deficits for a long time, and the current volume of the debate is no greater than it was decades ago, yet the hole-digging we're doing makes even 1985 seem an impossible target to achieve. We were HOWLING about the deficit in 1985!

*The final line is from THIS White House pdf.

EDIT: I chose 2011 because it was the worst year. I guess everyone is projecting that this year and all the years hereafter won't be as bad - if their plan is adopted. I think since we've yet to see any heroic efforts completed it's wise to assume that bad will remain bad.

Doctor Fate wrote:

rickyp wrote:But again, you speculated that the increased tax rate had an impact without any evidence...

Rubbish. Taxes went up. The things (persons in this case) went down. If sales are taxed, sales are reduced. If gasoline is taxed, gasoline consumption is reduced.

It's a general principle: tax policy influences behavior. Look at it another way: if the home mortgage interest deduction were eliminated, would housing values be affected?

Duh.

Same principle, different category.

There's actually good data on this. The IRS geocodes all tax returns and produces reports on state-to-state and county-to-county migration patterns every year.

So from 2006 - 2007: 86,090 returns moved out of MD.
From 2007-2008 86,516 returns moved out of MD, an increase of 426.

The average Adjusted Gross Income of returns that moved out of state in 2006-2007 was $57,258. The average Adjusted Gross Income for the returns that moved out in 2007-2008 was $56,463.

So out-migrants when up slightly, the average income of those out-migrants went down slightly.

Drilling down, migration to NY, NJ, VA, and DC went up significantly. Migration to PA, NC, GA, FL and DE went down significantly. In short, according to actual data, there doesn't appear to be any evidence to support the contention that this tax increase made an impact on one year migration rates in MD. Long-term it might, but taxes are just a cost of doing business that's weighed against other costs of doing business, like increased commutes, quality of life, ties to the community, etc.

Have fun with data at: http://www.irs.gov/taxstats/article/0,,id=212683,00.html

I have never heard of the "Property owning Democracy" movement, hence imparted the theories to your own. Apologies...

danivon wrote:

Archduke Russell John wrote:

Doctor Fate wrote:I'm not sure you're right. Look who says the CRA had no bearing on the crisis--Sheila Bair, who was knee-deep in it, Krugman, who has never seen a non-military government program he didn't love, and others who are mostly liberal.

Here the Heartland Institute saying it was not the CRA's fault. The Heartland Institute is not a liberal organization.

I like you, Archduke. You punch right through Steve's by-association rubbish.

Yes, but reading the article, surely something you did, Danivon, does not quite yield the clear result you seek:

CRA defenders often misrepresent that argument by changing the topic to subprime lending. They assert that only a small portion of subprime originations stem from CRA loans, that these loans have performed similarly to non-CRA loans and that therefore the CRA cannot possibly be blamed. Such claims, however, miss the fundamental point: Though small in volume, the CRA mandate is large in precedent because it required lenders to make loans based on government fiats, not sound underwriting.

Where Miller and I do agree is that the CRA did not cause this crisis by itself. Instead, blame should be accurately directed at Fannie and Freddie and their thirst for weaker underwriting to help meet their federally mandated “affordable housing” goals.

This dangerous trend began in 1992, when Congress required government-sponsored enterprises to purchase CRA loans as part of their affordable housing mandate. As these goals increased over time, the GSEs were forced to seek out even riskier loans to purchase. Then, in 1995, the Department of Housing and Urban Development permitted Fannie and Freddie to purchase subprime securities.

This distortion has had seismic consequences as market participants, wrongly believing GSE-touched loans were sanctioned by the government and therefore safe, began to rely on a government mandate as a substitute for their own due diligence. As a result, subprime and near-prime loans — the very kinds of loans that Miller now deems “predatory” and wishes to regulate out of existence — skyrocketed from 9 percent of securitized mortgages in 2001 to 40 percent in 2006.

In other words, what I said was right. I never said the CRA was THE cause. I said it was a cause--and that it was the snowball that got the avalanche rolling. I don't think anything in the article rebuts what I said.

geo

In short, according to actual data, there doesn't appear to be any evidence to support the contention that this tax increase made an impact on one year migration rates in MD.

thanks.

rickyp wrote:geo

In short, according to actual data, there doesn't appear to be any evidence to support the contention that this tax increase made an impact on one year migration rates in MD.

thanks.

Sorry, I know Geo probably studies such things for a living, but this tells us little, if anything.

For example, it is as easy to speculate (as Ricky did in the beginning of this) that people simply looked harder for loopholes, took less risk, or put their money in a mattress rather than pay the millionaire's tax. Simply looking at migration doesn't answer what impact, if any, the tax had on financial behavior and/or revenues.

Doctor Fate wrote:

rickyp wrote:geo

In short, according to actual data, there doesn't appear to be any evidence to support the contention that this tax increase made an impact on one year migration rates in MD.

thanks.

Sorry, I know Geo probably studies such things for a living, but this tells us little, if anything.

For example, it is as easy to speculate (as Ricky did in the beginning of this) that people simply looked harder for loopholes, took less risk, or put their money in a mattress rather than pay the millionaire's tax. Simply looking at migration doesn't answer what impact, if any, the tax had on financial behavior and/or revenues.

Your comment "taxes went up, persons went down" suggested to me you meant people moved, hence the migration data. But you're right, people have other strategies they can use to avoid taxes. Moving, however, is probably the most effective for state and local taxes.

I will say that looking at 2008 and drawing any conclusions using that year as a base year will probably yield misleading results considering the financial crisis impacted so many households very significantly.

danivon wrote:Essentially, private rental is based on the landlord being able to buy a house to rent out. And on a renter being able to rent it. I'm not saying that this should not happen, but for the renter it's dead money.

Still not the case. I'm of the opinion at least in the US that renters are in the more favorable position in terms of economic advantage at the moment. There's risks involved with real estate and each party makes what they think is in their best interest, they may win or they may lose as a result.

Presently in the US we've heard endless commentary about how dangerous interest only loans are and how people were taken advantage of with them. However again it's not that simple. A 5 year ARM interest only mortgage could have a lot of advantage. If you take a home that you can afford on a standard 30 year fixed interest rate loan, and convert it to a 5 ARM interest only loan you can during those 5 years with the exact same payment pay double on principal what you would have on the fixed rate. The advantages are significant with the interest only loans. You have much more flexibility, you pay double principal with same payment, and if you wind up in unforeseen financial trouble you can more easily make your payment. Now if you consider that people move on average every 7 years than it even makes all the more sense to use the interest only loan model. Now obviously there are many pitfalls with them, and I'm not going into that here as it's oft repeated in the media. I just use it as an example of how the prevailing common sense isn't always quite what it's portrayed. Rent money isn't always dead money. It can wind up being financially advantageous.

geojanes wrote:[I will say that looking at 2008 and drawing any conclusions using that year as a base year will probably yield misleading results considering the financial crisis impacted so many households very significantly.

I agree with this sentiment which is why I cited the Boston College survey done for New Jersey. It covered a 10 year period and showed that wealthy person net out migiration increased as NJ's taxes increased causing a net loss of wealth in the state.