On procedural obstruction
 

Yglesias:

Re: My God, you are an idiot.
 

Questions about that New Yorker story on the bin Laden raid.

More fun with charts
 

This time on debt. This interactive chart is worth a look. Comparatively, the U.S. doesn't look so bad.

Then there is also this:
http://media.economist.com/sites/def...730_WOC181.gif

Re: More fun with charts
 

Goddamn the Swiss are boring.

Hi Hank!
 

Daniel Davies:

Ouch.

Re: More fun with charts
 

Tops in household debt to GDP though.

Re: My God, you are an idiot.
 

I don't think it's a good idea given the RE market.

Re: Hi Hank!
 

he should dump Biden and pick up Nader. Protect his flank.

Re: More fun with charts
 

So if you compare tax rates increasing by 4.6% on current income (as in, Bush tax cuts expiring) or total invested assets declining in value by over 11% (as in the "Boehner Slide"), I would guess most of the people on these boards have lost enough in the Boehner Slide to have funded several years of increased taxes.

Re: My God, you are an idiot.
 

So you really don't want to phase out deductions. Or at least not one of the biggest, most distortive ones.

Re: More fun with charts
 

I ain't retiring yet, or soon, so I tend to view any and all stock market slides as buying opportunities, but I take your point.

Re: My God, you are an idiot.
 

I think it would be foolish to kill RE pricing in this environment. If we get back to par I'm open to looking at the affects, but ultimately, I don't think it's practical. But that is not the only deduction out there.

Re: More fun with charts
 

I bought today.

Re: My God, you are an idiot.
 

I think it can probably be capped or phased out for higher incomes, and thus made less regressive, without having too much impact on housing prices now.

Granted, that's class warfare and all.

Re: My God, you are an idiot.
 

Huh? People buy homes based on tax dollars. This would kill real estate.

Re: My God, you are an idiot.
 

adder just means for rich people. nothing we do to them can hurt anything.

Re: My God, you are an idiot.
 

Yup

Re: My God, you are an idiot.
 

What is par? The years before the recession were a bubble -- where "should" we be now?

Re: My God, you are an idiot.
 

I'm sorry but that's ridiculous. The last thing we need is to make the tax code more complicated. And doing this will be yet another plum for the rural parts of the country, where housing is cheap and where an income of $100k (or whatever) means something different than in New York, San Francisco, etc. Unless, of course, you index the cap based on region or zip code or.... ugh.

Beyond that, eliminating the mortgage deduction is not regressive. To the contrary, the deduction itself is regressive -- poor and middle income people, particularly people who make enough to pay income tax (hi, Hank!) but too little to buy a home where they live, get roundly fucked on this.

It should be phased out, either by gradually lowering the amount that is deductible or by allowing a deduction of a %% of interest. The idea that was floating around for awhile, of eliminating it and using that plus other fixes to support reduced tax rates overall, is the right idea.

Re: My God, you are an idiot.
 

Par = height of the market. It was a bubble then. At some point in the next 5-10 years, we will probably be back to those values.

Re: My God, you are an idiot.
 

As will most people that buy homes, regardless of bracket. I assume you have a mortgage? If so, I assume like any rational person, when you were figuring out what you could afford you factored in the mortgage deduction. If you take that away, it won't just be the poor that will be fucked. And if I'm right, guess what happens to prices? They will tumble even further, the market will be down-streamed, and rentals will go through the roof.

Re: My God, you are an idiot.
 

An additional 10-20% off if you follow Shiller.

(I do not follow him. His data blends FL, AZ, NV and inland CA into the mix, outliers without which the market is not as bad as stated. Frankly, I think those RE markets should be removed from all data and considered "superfund" markets, to borrow the only term that seems to fit.)

Re: My God, you are an idiot.
 

I don't want to shit on this discussion, but you all realize the deduction repeal discussed is only on million plus primaries and second homes, right? I want to live in whatever neighborhood these folks are poor.

Re: My God, you are an idiot.
 

Isn't the mortgage interest deduction already capped at $1 million, and phaseout starting at $166,000 or so of AGI? http://www.financialsamurai.com/2011...come-phaseout/

Re: My God, you are an idiot.
 

Yea, that is what is being discussed in Congress. We were talking about ideas in an article I posted.

Re: My God, you are an idiot.
 

Yeah, that's what I said.

Yeah, that's what I said.

Re: My God, you are an idiot.
 

Yeah, and someday my Webvan stock will be worth a lot too.

Re: My God, you are an idiot.
 

As to the second point, no. You said the cap/phase-out should be income-related, I said it should relate to the amount of interest you pay. Your version would treat two people making $250k living in very different housing markets (or having very different homes, or mortgages, or payments remaining, etc.) exactly the same. Mine wouldn't.


As to this first point, ok. I looked at your post again and it's hard to tell -- it seemed like you were saying that eliminating the deduction would be regressive, because you were suggesting to make it less so by having caps and phase-ins.

Re: My God, you are an idiot.
 

It'll have a negative effect, which can be ameliorated by phasing it in (and by other things, such as a change in tax rates). How severe the effect is unclear.

When I figured out what I could afford, yes, I factored in the mortgage deduction. Over time, the amount of that deduction has shrunk, as the proportion of interest to principal in my monthly payments has changed. Also, my tax rates have fallen, so I have more post-tax money on the same income, and the impact of the deduction is somewhat smaller (and at least some proposals have coupled eliminating the deduction with reducing rates).

I'm not convinced that it'd be better to wait until the market has been rising (or bubbling) for a few years, along with interest rates. Seems like people will be more over-extended then. If the deduction had been eliminated in 2007, what would've happened? If it were eliminated now ("now" being 2012 at the earliest, in reality) -- but with that change in the tax code not taking effect for two years, and then phased in over the next three years -- I don't see the consequences being so dramatic

Beyond that, if you believe that the mortgage interest deduction has skewed the market, how else do you correct that?

Re: My God, you are an idiot.
 

http://www.csmonitor.com/USA/2011/08...a-public-alert

Why shouldn't i worry that USDA didn't move on this? I thought one benefit of Obama was he would make sure the wheels of government turned. Ty, please tell me why this isn't a mistake? maybe W laid the seeds?

Re: My God, you are an idiot.
 

i bought my house when I still was able to get deductions, no matter the type. Now if I didn't have a write off for interest I'd still keep the house.

In fact the practice of my peers remortgaging (not now but over the past few decades) so they never really own their homes might make less sense, but guess what? It should make less sense. the deduction was to encourage home ownership, but it seems like people moved to never owning the homes.

Re: My God, you are an idiot.
 

Indeed. And now I am baffled. What level are they planning to cap?

Re: My God, you are an idiot.
 

We'll need a level of inflation that'll make gas $10.00 a gallon to get back to those levels in 5 years.

Re: My God, you are an idiot.
 

So, I saw a story today that, as a result of the market tanking 5%,home mortgage interest rates plummeted. I looked. It appears that I can refi to another 7/1 Arm at 3.0%. Roughly $1,800 in fees. But it drops my monthly from my already stupid low refi from last year at 4.0% by $300 a month.

i.e. it looks to me like the loan costs and fees are covered and paid in 6 months of lower payments. What am I missing? I get that my interest deduction will go down, but that is only by my marginal rate. I've done this enough times - from $2350 a month to what would be $1700 - for a loan larger than my original loan by factor of 1.4. ( I borrow as much as they will let me against my equity, to minimize my risk against earthquake.) And I invest that money in Plated's Picks. I feel stupid paying another $2K to refi less than a year ago, but the math looks right to me? Am I missing something? Hep me, hep me!

ETA - i should take out all the equity I can in a home equity line - if i think i can get better than a 3% -tax adjusted to approx. 2.2%. Tank, market, tank. Give me the best buying opportunity since 6,500. I missed the absolute bottom, but some of y'all will remember when i posted about me buying in the 8,500 range. Money is made by taking risk. I am hoping that a risk opportunity is going to present itself again. (It helps, though, being sanguine when a 20% of one's portfolio is short).

Re: My God, you are an idiot.
 

I get so many solicitations from MY bank to refi that I wonder if the new mortgage contracts have some sort of clause that allow it to change a fixed rate to 18% if market conditions permit.

OAN, evidently my firm's 401k is one of the few investments still with Madoff's firm, and then only in funds rated from "underperform" to "Sell, Mortimer, sell." Through thick and thin it has always gone down by more than I put in.

I have a very modest balance (dwarfed by a rollover I invested independently when I quit for a week several years ago) and was thinking about borrowing against the whole lot to buy some decently underpriced equities.

Re: My God, you are an idiot.
 

Depends on the market. Those that are down 30% may never come back. Those in historically valuable RE markets will be back sooner.

Re: My God, you are an idiot.
 

I heard earlier this week that there was a salmonella outbreak in several states that had left one person dead in California, but that they couldn't figure out what the source was. That would be a problem.

eta: USDA has always been a prime example of regulatory capture. It would be great if Obama could fix that problem.

Re: My God, you are an idiot.
 

It's renting money to buy the house instead of renting the house.

Re: My God, you are an idiot.
 

Math is math, brother. You don't need me to answer this question. The risk's all in Plated having a bad run. And from what you've written about his picks, that sounds unlikely.

Re: My God, you are an idiot.
 

Location, location, location, of course. But there's a little more to it this time around. The consumer's snakebit (20% down on residential r/e? Why not just burn my money?)... And tapped out (20% down? How the hell can I afford that?)* And the banks are reluctant to touch the sector. Regulators have them over a barrel on losses in the market, and risk is almost impossible to assess. Today's excellent credit risk can be laid off tomorrow.

I don't see a whiplash back to peak bubble values for a decade.

*Yes, yes, I know, the FHA is doing most loans these days at 3 1/2, with FICO low as 600.