Tag Archive | "fiscal policy"
Posted on 18 June 2010. Tags: agencies, american peasants, austrian economic theory, austrian economics, Big Brother, blog economics, blog political, blog politics, blog real estate, blogging political, blogging real estate, bubble real estate, buyer real estate, buying real estate, capital, capital structure, capitalism, conspiracy theory, crash, debt, debt capital, deflation, department housing urban, Department of Housing and Urban Development, depression, diluting currency, dollar, Economics, economics blog, economics blogging, economics real estate, equity, equity capital, Fannie Mae, federal agencies, federal housing administration, federal national mortgage association, federal reserve, federal reserve flow of funds, feudalism, fha, financing real estate, fiscal policy, FNM, Freddie Mac, government, government policy, great recession, holc, homeowner society, homeowners, homeowners loan corporation, homes, housing, housing bubble, housing bubble crash, housing policy, housing politics, housing recession, HUD, hyperinflation, inflation, institutions, interest rates mortgage, liquidity, monetary policy, mortgage, mortgage interest rates, mortgage rates, mortgages, ownership society, peasants, policy, policy housing, political, political blog, political blogging, political policy, Politics, politics blog, property, public institutions, quantitative easing, rates mortgage, Real Estate, real estate blog, real estate blogging, real estate bubble, real estate bubble crash, real estate buyers, real estate buying, real estate economics, real estate financing, real estate policies, real estate policy, real property, Road to Serfdom, serfdom, serfdom road, theory conspiracy, transfer ownership, U.S. dollar, urban housing, USD
The capital structure of US real estate assets has been in a long process of change. By subsidizing real estate and making mortgage debt artificially cheaper than equity capital, the US government has been effectively transferring real estate ownership from individuals to lending institutions and the Federal Reserve. Here’s how this game has been unfolding, and a warning to Americans that they will one day wake up in a country where most people live as feudalistic peasants, beholden to their banking and political overlords. Continue Reading
Posted in Economics, Politics, Real Estate
Posted on 12 June 2010. Tags: barack obama, blog political, blog real estate, california real estate, class warfare, credit cycle, Economics, Fannie Mae, financial system, fiscal policy, FNM, freedom, home prices, homes manhattan beach, housing policies, housing policy, housing prices, HUD, income manhattan beach, inflation, liberty, manhattan beach, manhattan beach homes, manhattan beach income, manhattan beach property, monetary policy, money, mortgage, mortgage deduction, obama, political blog, political economy, Politics, politics blog, politics real estate, prices housing, Real Estate, real estate blog, real estate economics, real estate prices, real estate tax, Rob Viglione, socal real estate, socalrea, socialism, southern california, tax, tax real estate, taxation
The White House is urging Congress to limit, or cut, the once untouchable tax break for mortgage interest. In traditional class warfare parlance, the White House cap on mortgage interest deductions will fall only upon the wealthy. Let’s not drink the Obama Kool-Aid – the effects of this legislative move will impact everyone.
The Obama administration is proposing reducing deductions for homeowners who earn more than $250,000 pear year. Since I’m a southern California Realtor®, I’ll bring up an example from my local market – the South Bay; in particular, Manhattan Beach, CA.

Chart from LA Times Local Neighborhoods.
Manhattan Beach is a wealthy southern California city, nestled along a prime beach-front location. With 38% of Manhattan Beach residents earning over $125,000 per year, we expect this legislative change will materially impact our local market.
When many home buyers calculate the amount of home they can afford, mortgage interest deductions on income factor heavily into capital service capacity, i.e. how much mortgage they can comfortably afford to pay every month. If a high income earner is in the 34% income tax bracket and has a $5,000 per month mortgage, of which, say, roughly $4,000 is comprised of interest payments, the net annual benefit of the tax break is $16,320, or $1,360 per month.
with a simple 5% mortgage rate, the effect of removing the tax break amounts to reducing home values by $326,400, or 34%, the marginal tax rate. These are very simple assumptions; the reality of this legislative change will likely not be as severe. Higher end properties will likely be impacted the most, with falling price levels manifesting in some way throughout the entire housing market.
President Bush attempted to eliminate the mortgage tax break in 2005, but was stopped by Congress. The Obama administration tried this same legislative change with last years budget, but met similar obstacles. Given that the real estate market is in such turmoil, and that so many people gain advantage from perpetuating this tax break, it is unlikely the White House proposal will be accepted by Congress.
What Does The Mortgage Tax Break Mean For The Economy?
There is no free lunch in economics weve all heard that term, right? The same is true for tax breaks, or any legislative market manipulation. Enabling borrowers to write off interest payments from their income tax liability increases incentives to borrow money to buy real estate. This ultimately skews capital structures in that less equity investment is made with purchases relative to debt assumption. Increasing debt levels simultaneously increases prices and risk. In essence, the mortgage tax break causes housing to be over-capitalized, siphoning disproportionate capital resources from other parts of the economy.
Eliminating the tax break makes good economic sense; however, the result will inevitably be a deflation in housing prices. The magnitude of the deflation is uncertain. Given that real estate markets are already on shaky grounds, reducing, or eliminating, policies that support home prices can potentially lead to a market route.
All things considered, it is too bad President Bush was not able to repeal this tax break in 2005. That was probably the best time to moderate an over-heated market, and realign national capital resources in a relatively stable environment. We may have missed that opportunity for some time.
Posted in Investing, Politics, Real Estate
Posted on 03 May 2009. Tags: Afghanistan, Big Brother, Bill of Rights, business, capitalism, class warfare, collectivism, Constitution, consumer prices, definition of socialism, Economics, equality, fascism, federal reserve, fiscal policy, force, free enterprise, free markets, government, iraq, Labor, Marx, monetary policy, money supply, outsource, Politics, power, private property, Randy Herrera, social classes, socialism, Socialist, tax increases, taxes, top 10 reasons, unemployment, violence, war, warfare, what is socialism
After extensive research we’ve concluded that these are the Top 10 Signs you just might be a Socialist:
1. You advocate for equality for all and yet you want to raise taxes on certain social classes.
2. You support the troops but do not support the war and you did not support the war in Iraq but now you support the war in Afghanistan. So
do you want war or not?
3. You believe in bigger Government and yet you advocate for the government not to run your life.
4. You think that we shouldnt outsource labor and yet you complain about the rising cost of consumer goods.
5. You want the Government to take control and regulate all private businesses and yet you work for or own a privately owned business.
6. You want to get paid the same as everybody else, but the average income in the US is probably less than what you are making.
7. You think that the Government should spend more money to stimulate the economy when the Government has no money.
8. You think that the tax increase will not affect you.
9. You sit around and wait for the Government to help you.
10. You blame the economy for putting you in the situation that you are in even though youve been in the same situation for years.
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Posted in Politics
Posted on 21 April 2009. Tags: abuse of power, ACLU, alternative investments, American Civil Liberties Union, AmeriCorps, authoritarian, auto bailout, automakers, bailout, barack obama, Big Brother, bills, bisexual, bond auction, bond sales, bonds, budget deficit, buy apartment building, certification, Chrysler, condors, congress, control the Internet, credit markets, credit speads, Cybersecurity Act of 2009, debt, deflation, democrat, Detroit, dictatorship, eavesdropping, economy, Edward M. Kennedy Serve America Act, expenditures, federal spending, fiscal policy, gay, General Motors, GM, government power, guide to investing, how does government effect markets, income properties, inflation, internet freedom, Investing, iron condor, IT professionals, Jane Harman, Jay Rockefeller, legislation, lesbian, liberals, license, market insurance, monetary policy, monitor, national security, National Security Agency, National Service, nationalization, NSA, obama, Obamanomics, Options, paid volunteers, petition, poker, policy, president, private sector, protect against inflation, protect portfolio, public schools, public sector, public service, Real Estate, regulate, Rob Viglione, Rounders, Savings, school computers, Senate, servitude, shut down, signed into law, slavery, Socialists, spot the sucker, stocks, Ted Kennedy, Tennessee, thugs, trading system, transcripts, transgender, Treasury, unemployment, Web, web sites, West Virginia, wip out life savings, wiretap
Sen. Rockefeller proposes bill that would give government sweeping powers to control, monitor, and regulate the Internet, ACLU demands public schools stop blocking gay web sites on public computers, Rep. Jane Harman calls incriminating NSA wiretap “abuse of power,” National Service legislation signed into law that will cost $6 billion over 5 years by hiring “paid volunteers,” government will need to issue $2.4 trillion in new Treasury securities in 2009 to meet budget shortfalls and bailout program requirements, and U.S. to give another $5.5 billion to automakers… Continue Reading
Posted in Featured, Freedom Under Fire
Posted on 18 April 2009. Tags: Austin, Big Brother, Bill of Rights, boil a frog, checks and balances, Constitution, cut spending, economic growth, federal, fiscal policy, HCR 50, House Consurrent Resolution, legislature, lower regulations, lower taxes, oppressive, petition, Politics, power, private sector, regulations, repressive, restrain, Rob Viglione, Sam Houston, secession, sovereignty, state laws, state legislature, states rights, taxes, tenth amendment, Texas, tyranny, Washington D.C.
4/9/2009 – AUSTIN – Gov. Rick Perry joined state Rep. Brandon Creighton and sponsors of House Concurrent Resolution (HCR) 50 in support of states rights under the 10th Amendment to the U.S. Constitution.
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Highlights from transcript:
I’m here today to offer my unwavering support to the millions of Texans that are tired of Washington D.C. trying to come down here and telling us how to run Texas.
The 10th Amendment was enacted by folks who remembered what it was like to have a very repressive government, to be under the thumb of tyrants and an all powerful government. Unfortunately, the protections it guarantees have melted away over the course of the years.
You’re prob familiar with that old adage of how to boil a frog: You just get him to sit there in that pot and you turn up the heat a little bit by a little bit, before you know it the frog doesn’t realize it, but he’s done.
And since the U.S. constitution has been ratified the federal government has been slowly turning up the heat, and they’ve eroded the notion of states rights.
Texans know best how to govern Texas. We’re proof that good things happen when government lowers taxes, and lowers regulations, it reduces spending and encourages private sector growth.
I happen to believe that the constitution does not empower the federal government to overrule state laws without restraint. I agree with Texas’s 7th governor, Sam Houston, who said “Texas has yet to learn submission to any oppression, come from what source it may.”
I believe the federal government has become oppressive. I believe it has become oppressive in its size, its intrusion in the lives of its citizens, and its interference with the affairs of our state.
Posted in Politics
Posted on 14 April 2009. Tags: ACORN, anti-tax protests, backing bank loans, bailout, balance sheets, banking, banks, Big Brother, big government, bonds, budget, capital, career, CFA, CFA study program, charter, Chartered Financial Analyst, competitive, congress, contraction, Crash Proof, Credit, debt markets, deflation, depression, earning potential, eco-nomics, economic growth, Education, exam, FDIC, federal, Federal Deposit Insurance Corporation, financial crisis, fiscal policy, free choice, green jobs, inflation, labor market, leftists, Level 1, liberty, mandates, monetary policy, money supply, nationwide, No Child Left Behind, Obamanomics, offshore, outsource, peter schiff, Peter Schiff predicts crisis, President Obama, presidential budget, progressive taxes, propaganda, protectionism, public education, recession, Rob Viglione, school vouchers, skepitcal about green jobs, socialism, Spanish study, stipulations, stock market, stress tests, strings attached, TARP, tax policy, taxation, Tea Party, Tim Geithner, toughen standards, Treasury, unemployment, velocity of money
Nationwide anti-tax protests staged for April 15th tax day-rumors abound that leftist group ACORN intends to crash events, Obama administration readying to disclose results of bank stress tests, revisions to No Child Left Behind on the Obama agenda-prepare to see pervasive federal mandates in education, FDIC helps banks raise $300 billion through unregulated channels, Congress looks set to let D.C. school voucher program expire next year-Big Brother not prepared to let parents choose how to educate their own children, Spanish study casts skepticism on economic value of government creating green jobs… Continue Reading
Posted in Featured, Freedom Under Fire
Posted on 05 April 2009. Tags: agriculture, American Recovery and Reinvestment Act, Antarctica, asset bubbles, balance sheet, barack obama, Big Brother, Bill of Rights, bond maturity, bonds, budget deficit, bureaucracy, cap and trade, capital expenditures, capitalism, commodities, congress, Constitution, consumer spending, courts, currency, cut spending, DBA, DBC, debt, deflation, democracy, dependence, diversification, dividends, dollar, DOW, Economics, elections, electricity costs, energy, equities, Fannie Mae, federal reserve, federal spending, financial industry, financial regulations, fiscal policy, fixed rate debt, FNM, FRE, Freddie Mac, free enterprise, free society, GLD, gold, GSG, Health Care, hedge, housing boom, housing bust, housing is a right, inflation, interest rates, international, Investing, irrational exuberance, join a militia, junk loans, labor laws, labor market, laws, leverage, life savings, Medicaid, Medicare, military, militia, monetary policy, money supply, mortgage, nanny state, NASDAQ, national debt, natural gas, oil, police state, Politics, portfolio, portfolio management, precious metals, President Obama, public debt, quantitative easing, question assumptions, Real Estate, regulate carbon emissions, regulations, retained earnings, right to bear arms, Rob Viglione, rolling dice, S&P500, savings rate, second amendment, short stocks, short the market, short-term debt, silver, SLV, social security, socialism, stagflation, stimulus, stock market, subprime debt, TARP, Tim Geithner, TIP, Treasury, treasury inflation protected securities, trust government, union, USD, USO, velocity of money, welfare, WIP, yields
We are moving closer towards a political economy every day. Every dollar borrowed, taxed, printed, and spent by government really comes from the private sector. Trillions of dollars of national resources are being allocated by politicians and bureaucrats towards things they claim will benefit our economy. Congress just passed a $3.6 trillion budget ($1.2 trillion in deficit), and combined the Federal Reserve and Treasury have dumped $13 trillion into the economy in the last 16 months. What we must all ask ourselves right now is whether or not we trust government with our money? Continue Reading
Posted in Economics, Investing, Politics
Posted on 05 April 2009. Tags: Antiarctica, bailouts, barack obama, Big Brother, capitalism, climate, climate control, communism, cruise ships, Cuba, Department of the Treasury, Economics, economy, environmentalism, environmentally responsible, family, federal government, financial restrictions, fiscal policy, fiscal stimulus, government control, international law, island, limit tourism, long range missiles, mandatory limits, missile launch, monetary policy, money supply, North Korea, nuclear weapons, Obama administration, Obamanomics, policy drives markets, political economy, Politics, President Obama, protectionism, punish North Korea, remittance, Rob Viglione, security council, State Department, Tim Geithner, travel restrictions, Treasury Secretary, United Nations, violated international rules, visit relatives, weapons of mass destruction
Treasury Secretary Geithner warns that if you accept government money you must accept government control, Obama tries to force limits on tourism to Antarctica, some travel and financial restrictions with Cuba eased, Obama calls on U.N. Security Council to punish North Korea over missile launch… Continue Reading
Posted in Featured, Freedom Under Fire
Posted on 04 April 2009. Tags: barack obama, Big Brother, bonds, borrow, budget, capitalism, central bank, class warfare, competition, competitive, currency, cut taxes, debt, depression, economic prosperity, Economics, expenditures, fiscal policy, free enterprise, free markets, free trade, globalization, government, government spending, growth, improving productivity, interest rates, John Key, laissez-fair, leftism, limit to what government can do, make country more productive, monetary policy, National, New Zealand, New Zealand dollar, Politics, populism, President Obama, prime minister, print money, productive, prop up growth, recession, redistribution, regulations, resources, Rob Viglione, socialism, spend, stimulus, taxation, taxes, trade, trader, transform the economy, Wall Street Journal, world leader, WSJ
New Zealand Prime Minister John Key speaks a strange language. It’s English, all right, even with an accent, but he is one of the only world leaders who is speaking of relaxing regulations, cutting taxes, spending within budget, and focusing on making his country more productive.
Rather than jumping on the tax, borrow, spend, print, populist bandwagon with nearly every other world leader, John Key’s solution to the tough times is to “use this time to transform the economy to make us stronger so that when the world starts growing again we can be running faster than other countries we compete with.”
Key’s idea is to grow the country out of recession by improving productivity, not simply catering to populist calls for wealth redistribution, stifling regulation, and growth-inhibiting class warfare taxes. He calls attempts to use debt and money printing to “prop up growth” risky, saying that saddling future generations with debt could be counterproductive. He is one of the only politicians who states “There is actually a limit to what governments can do.”
At a time when governments are growing by leaps and bounds, and everyone seems convinced that Big Brother holds the keys to economic prosperity, it is refreshing to see a world leader (actually an ex-currency trader) embrace sound economic principals.
Key admits that New Zealand will not pull the world out of recession; it’s too bad other leaders lack such humility!
Here’s a link to the Wall Street Journal interview with Key.
SPECIAL OFFER
The Federal Reserve is creating tens of trillions of new dollars, debasing our currency, and silently taxing us all through inflation. With tens of trillions in federal budget deficits on the horizon there is nowhere for the US dollar to go, but down.

Refuse to be a victim of this flawed financial system, buy gold and silver NOW!
Posted in Economics, Politics
Posted on 02 April 2009. Tags: Alan Grayson, anti-capitalist, bailouts, barack obama, Britain, budget deficit, capitalism, corporate bonuses, death tax, democrat, Economics, empire, estate tax, executive pay, federal budget, financial crisis, financial regulations, financial regulators, fiscal policy, free enterprise, free trade, freedom, G20, George W. Bush, home prices, house, House of Representatives, housing, Hugo Chavez, Investing, liberty, London, money, president, president bush, President Obama, Real Estate, Rob Viglione, taxpayer money, Tim Geithner, Treasury Department, U.S. empire, UK, united kingdom, Venezuela, violence
Anti-Capitalist protests turn violent in London, Venezuela’s Chavez accuses U.S. of acting like an ‘empire’, House passes bill to allow corporate bonuses, Obama brings back the ‘death tax’, and U.K. home prices rise for first time since 2007… Continue Reading
Posted in Featured, Freedom Under Fire