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Old 09-26-2008, 04:15 PM   #21
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bye bye WaMu
check out their website. https://www.wamu.com

welcome to jp morgan chase!
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Old 09-26-2008, 04:16 PM   #22
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check out their website. https://www.wamu.com

welcome to jp morgan chase!

Fantastic

It wasnt like that this morning when I checked my accounts.
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Old 09-26-2008, 04:34 PM   #23
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Bet my interest rate on my card is going change now.
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Old 09-26-2008, 05:20 PM   #24
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While I would not choose for there to be a bailout, and while it does move us that much more closer to socialism, IMO both are inevitable.

We have a free-market, sure, but we all want stability. And I don't think it will be that bad for us in the long-run. Most of that 'bad debt' is from housing foreclosures, therefore that debt is secure to a degree. What sucks is the waiting for everything to stabilize.

I think the market will be fine and back to where it was in no more than 3 years. Ups and downs are inevitable, the way that you respond to either is what makes or breaks you.
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Old 09-26-2008, 06:08 PM   #25
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Here's my favorite part from the Treasury’s Financial-Bailout Proposal to Congress

Sec. 8. Review.

"Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

How much better can it get than that?
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Old 09-26-2008, 06:45 PM   #26
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What some of the Nation's top Economists think about it:
http://freakonomics.blogs.nytimes.co...n-the-bailout/

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Quote:
As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:

1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries “systemic risk.” The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.

2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.

3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America’s dynamic and innovative private-capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.

For these reasons, we ask Congress not to rush, to hold appropriate hearings, to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.
I'm not totally for or against the proposed bailout.

Chris
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Old 09-26-2008, 07:15 PM   #27
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I don't see that as a real solution. When you look at the difference in monthly payment on a 30 year vs 15 it's not that much. Stretch it to 40 and you might see a $200 difference on an average mortgage. Saving $200 a month but paying an extra $240,000 over the course of the loan to do it? No way. Even at a good interest rate, a $200K mortgage will already cost you $600K if you go for the whole 30 years.
Stein while the point you make about the 15 vs 30 year mortgage is true, one of the things that helps that is that 15 year mortgages tend to have only a 0.5% lower interest rate that make it seem unreasonable to go for that when you can extend the loan for twice as long with only that 0.5% rate hike. That is just plain and simple cheap money. The net present value of the extra that you pay in the long run rarely justifys going with a 15 year mortgage over a 30 year.

Now if the opposite is true and you can extend the mortgage AND get a lower rate, then you will start to see dramatic differences. The total that you wuold pay for a 200,000 house at 6.5% for 30 years is 455,090, and the total you would pay for a $200,000 house at 5.5% for 40 years is 494,880. The difference would only be a total amount paid of a little less than $40,000. Of course those are nominal numbers and haven't been discounted, but the NPV of the payments with ONLY inflation (at an assumed average of 3%) taken out would be like this:

$200,000: NPV PMT Year 1 $1264, 10 $940, 20 $700, 30 $520

$200,000: NPV PMT Year 1 $1031, 10 $767, 20 $570, 30 $424, 40 $316

And that is with only inflation taken as percentage in the NPV calculation. there are all kinds of other things that need to be taken into concideration that are very hard to give nominal values to like the opportunity cost of using the excess money to be able to invest in other things that yeild a higher return than what you are paying in the mortgage.

Honestly, if i could borrow money and pay it back 40 years from now at only 2.5 times what it is worth in todays dollar i would do it in a heartbeat.
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Old 09-26-2008, 07:35 PM   #28
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WaMu took it in the shorts BECAUSE for the last 2 weeks people were drawing out their savings at a phenominal rate. I would venture to say that many other banks are experiencing the same thing - it will make them all sink like they have been torpedoed by some kind of nuke.

As far as the buy out - I personally am against it. Right now they are talking $700 Billion, truth may be more like 5 TRILLION before all is said and done, or at least that's the number that is floating around today.

If they do nothing, let the market establish itself out, it will still be a big-time mess, liquidity WILL dry up, those that hold bad crap will die - - BUT - - the good news is that it will take about a year to re-establish the market and be back up to some kind of a reasonable par. That concept is actually based on past history and does bear merit.

If they do the bailout as planned, we will not see the light of day financially in this country for a much longer timeperiod.

While this WILL hurt a lot of people, it will actually hurt those at the top of the $$$'s much more than those at the bottom, so the upper middle class down will have a much less effect on them in the overall if they let the chips fall where they belong.

I totally disagree with giving Paulson a blank check with no accountability and no regulation/management oversight. Just a year ago, hell - just a couple weeks ago Paulson was telling everyone that things were just fine. If he is so damn good at economics, why did he not see this coming? Fact is, he did see it coming, that's where the outline for the bailout came and he has admitted he'd been woeking on it 'just in case' things turned for the worse. I cry BS regarding his explinations, he knew damn well.

We need to go back to the laws that we had before de-regulation in 1999. Those laws were written explicitly after the depression/stock crash of 1929 to prevent it from happening again the way it did then. All this is today is an instant replay of '29, depression to follow just like it did then, bailout happened then too, and it gave a greater rise to the length/period that the depression took place.

AND BY THE WAY - I am a self-employed person, I have been investing in what was considered to be very safe places for most of my life. My entire pension is at risk either way, in fact, it probably will go down the crapper. My feeling here is that if my life savings is endangered (except for the few accounts that the FDIC will cover via their insurance) then ALL THE BASTARDS WHO MANIPULATED THEIR COMPANIES AND THEIR INVESTORS FOR PERSONAL GAINS/WEALTH need to go down too. Bullshit to letting them off the hook and take off with bonuses that truly were not earned by exercising good management practices. They should ALL be held accountable, prosecuted where it applies to what they have done. Smack of all the same **** as ENRON.
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Old 09-26-2008, 09:31 PM   #29
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care to cite your sources on any of that? stop making things up.

...

the real truth about the solution to the problem is that there's no way to predict what will actually work. anyone who claims otherwise is lying to themselves and you.
I have nothing to make up. He wants to raise taxes on people whos collective income is over $250,000.00. If you and your spouce make 125k/year GROSS income and live in say, New York City you're far from rich. Kansas on the other hand you're middle class. Look at the cost of living in NYC, a LOFT apartment can be over 2000$ a month depending on where you're at!

And tell me why just because someone makes > 250k a year they should have to pay a HIGHER percentage than someone who makes 25k/year? They shouldn't.

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http://www.realclearmarkets.com/arti...lan_impac.html Citation for my above statment of Couple income tax.

To understand what’s at stake it’s important to consider not just how much money people earn, but how much in income taxes they now pay. We seem to have lost sight of how drastically this differs for households in different brackets. Simply put, at $250,000 in taxable annual income, a married couple filing taxes jointly would now pay about $62,000 in federal income taxes. By contrast, a couple earning $50,000 a year, which is about the median income in the U.S., would pay $6,750 in taxes. Although the $250,000 couple is in the 33 percent tax bracket (meaning every additional $1 in taxable income they would earn is taxed at 33 percent), the couple is actually paying about 25 percent of their total taxable income to the feds. At the same time, the median income couple pays about 13.5 percent of their income in taxes. In actual dollars, this translates into slightly less than 10 dollars in taxes from the higher income couple for every one collected from the median income family.

Now Barack Obama and people who think like him would look at these numbers and argue that, after paying income taxes, the $250,000 family still has about $188,000 left to spend on other things (including paying other federal, state and local taxes, housing, food, etc.), while the $50,000 family has about $43,250 left. That’s too much of an imbalance so let’s raise taxes on the higher income family to finance cuts for middle income earners and programs that provide lower income families with assistance, says Obama. He calls this his attempt to create "a sense of balance fairness in our tax code." He personalizes it by adding that, "It is time for folks like me who make more than $250,000 to pay our fair share."


Thinking back to my history books that classified as Redistribution of wealth, aka, Socialism. I could be wrong here, but thats how it feels to my touch.

http://www.heritage.org/research/Taxes/wm1973.cfm
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How the Obama Tax Plan Compares to Other Countries

Senator Obama's new tax rate would give the United States one of the highest tax rates among developed countries. Currently only six of the top 30 industrial nations have a tax rate for all levels of government combined of over 55 percent. Under this tax plan, the United States would join this group and have a higher top rate than such high-tax nations as Sweden and Denmark. The top marginal rate would exceed 60 percent with the inclusion of state and local taxes, which means that only Hungary would exceed Senator Obama's new proposed top tax rate.

The costs in economic terms of such high taxes are real. For example, of the six countries with higher tax rates than 55 percent, the average unemployment rate is 7.35 percent (see chart). This figure includes Denmark, which appears to have a very low unemployment rate of 3.9 percent. However, Denmark spends over 5 percent of its GDP on unemployment programs and benefits, thereby increasing its unemployment rate.[1]

A Return to the Bad Old Days

Historically, Senator Obama's tax rate would be the highest individual tax rate since the Jimmy Carter days. Tax shelters and tax avoidance strategies were common when the top marginal rate was 70 percent or higher. This new top tax rate will again encourage these gimmicks, reducing investment and economic growth as resources are squandered in an attempt to avoid punitive taxation.

Many individuals will attempt to transfer their compensation from wages to capital gains, since capital gains would only be taxed at 25 percent, or less than half of the top rate on wages. This would put a great deal of pressure on a company to do anything it could to make its stock quickly increase in value. Other individuals would try to incorporate so they could pay business taxes instead of having to pay taxes on their wages. Again, these resources would be diverted away from more productive uses and slow the economy.
http://www.politico.com/news/stories/0708/11670.html
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The Obama campaign maintains that the number of small-business owners is what’s important. Economists know what matters is the tax rate that’s applied to the bulk of small-business income. Make no mistake about it: Obama’s plan to raise taxes on households making more than $250,000 will raise taxes on most small-business profits in America.

...

What type of tax rate are we talking about? Currently, S corporations face a top tax rate of 35 percent, while sole proprietors and general partners face a tax rate of 37.9 percent (since they’re responsible for paying both income tax and the Medicare component of the payroll tax).

Under Obama’s plan to let the scheduled 2011 tax rate hikes occur, and his plan to raise the self-employment tax on those making more than $250,000, the S corporation rate would rise from 35 percent to 39.6 percent. The sole proprietor and partner rate would rise from 37.9 percent all the way up to a staggering 50.3 percent. Many Democrats in Congress have proposed making all small businesses (including S corporations) pay this 50-plus percent rate. A small business tax rate that high would be the highest marginal rate faced by them in nearly a quarter-century.
That right there, is bad for MY family and OUR business. REAL REAL bad.

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Originally Posted by y8s
the govts initial idea was to pull from the biggest reservoir of income they could find--the taxpayers. if you start repealing the huge moneymaker taxes (cap gains, corp), then it really will fall to the individuals. I'm a lot more sensitive to losing my own shirt than worrying what happens to, say, ExxonMobil.
I can't agree more with that, however.

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check out their website. https://www.wamu.com

welcome to jp morgan chase!
****!!!!!

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Old 09-26-2008, 11:21 PM   #30
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I have an apartment. My wife and I would like a house. We live in MD where the housing prices are insane.

What does the bail-out-plan mean to us?

****-all, it doesn't matter. We will have to pay for the stupidity of others one way or another, and we still won't be able to afford a house.

elesjuan: your family needs a better accountant, or a new business plan. If the sole proprietor is taking a quarter-mil from the family business every year, it's not really a 'family' business, more like a 'I need more diesel because my yacht only gets 26 gallons to the mile' business.
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Old 09-27-2008, 07:11 AM   #31
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\there are all kinds of other things that need to be taken into concideration that are very hard to give nominal values to like the opportunity cost of using the excess money to be able to invest in other things that yeild a higher return than what you are paying in the mortgage.

Honestly, if i could borrow money and pay it back 40 years from now at only 2.5 times what it is worth in todays dollar i would do it in a heartbeat.


I hear people regularly talking, sometimes bragging, about paying off their houses a la Dave Ramsey as being a good idea. Well, yes and no. It is a simple, stable plan, but you lose out on an opportunity to make significantly more money.

With my house financed on a 30 year fixed at 5.38% I would rather take the money I would use to pay off the house early and invest it. A 6% return for example is not hard to get over a long investment period, especially now with the market being low and poised for some good long term gains. 10% is a reasonable expected return in the market over 20-25 years. My plan is to pay off the cheap money loans last, and put my money to work in simple investments like mutual funds. I am more interested in maxing out my 403b contribution than paying off my house. Take my student loan for example that is locked in at 3% (thanks to Clinton); considering inflation that is practically free money. It would be dumb to pay that off early when I could be investing the money instead.

Sorry, back on topic...

I also agree with the idea of not just blaming this on Wall Street. There are a lot of Americans that bought too much house using an ARM without thinking about the long-term consequences. Sure there were some aggressive, even unethical sales tactics on the part of the mortgage brokers, but ultimately, it is up to us to understand and verify the details and consequences of the decision before signing the mortgage paperwork. Not doing so results in potentially irresponsible and destructive impulse buying on a massive scale. Or, leads to foolish investment risks (like over-leveraged house flipping) where when things go just a little wrong then the flipper's margin is in big trouble.

I turned down a lot of pushy ARM offers that were way more than what I wanted because I did my homework and I knew the risks. It is a good thing too. With the steep rise in gas prices, and my and my wifes long commute, the budget margin came in handy.

And, WTF was going on with the no proof of income, low to no money down home loans? Only a short-sighted get my money up front loan broker and a house-flipper would think that is a good idea. Holy crap... Talk about a predictably dangerous situation, there is one right there.

I hope our leaders come to a good decision soon that keeps the economy going, but do so responsibly. We do not want to end up being panicked into agreeing to a financial version of the Patriot Act. Accountability, responsibility, and authority need to be visible and controllable within normal constitutional processes, and not bypassed in the name of national financial security. All we need are the financial version of the WMDs, and some more panic and we'll be repeating some very current, very bad decisions.

But, to make us all feel safer, maybe we could start picking up some of the suspected bad actors in Wall Street and the Mortgage Banks and throw them into Guantanamo Bay as economic enemy combatants

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Old 09-27-2008, 09:58 AM   #32
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Thinking back to my history books that classified as Redistribution of wealth, aka, Socialism. I could be wrong here, but thats how it feels to my touch.
See here's the thing... a gallon of gas is, say $4.00. That's the same for a guy who makes 250k or a guy who makes 25k. same with food... same with utility costs.

if you look at it that way, the poor are paying a significantly higher percentage of their salary for the bare necessities.

Say you drive 10,000 miles a year which at $4/gallon is like $1600 a year. That's like a month of pay to someone making 25k.

So yeah in a sense it's socialist to subsidize the people who have to pay so much to live, but it's also pretty facist to let them die in the streets (whether their poverty is their fault or not). In other words, the elite propped up by the bodies of the lower class.
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Old 09-27-2008, 10:36 AM   #33
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So yeah in a sense it's socialist to subsidize the people who have to pay so much to live, but it's also pretty facist to let them die in the streets (whether their poverty is their fault or not). In other words, the elite propped up by the bodies of the lower class.
But the problem that lies within that is where do you draw the line? Regardless of what the other person is making in total income, if you are subsidizing thier expenses at the expense of someone who is judged as making more than enough money to survive, you are taking a socialistic standpoint. I am not saying that the country would become a socialistic society like cuba if obama takes over, but he really is taking from the rich to better the poor.

I personally will be heavily punished by Obama's tax plan and i am not some greedy CEO from a large corporation that is making hundreds of millions of dollars. I am just a simple small business owner that has found a great niche and the demand is very high. I truely feel that his tax plan will take away some of the motivation for people like me to work that much harder to get just a little more business.

I have always been, and more than likely, will always be a republican, because i feel that you should only get what you have directly earned through your own work. Now that being said, i know that there are times that anyone would be down on their luck and will need assistance for a short while. To lower the taxes for the lower class while rasing the tax for the upper class will only allow the people in the lower class to become more comfortable at where they are and give them less motiovation to work harder to move up, and unjustly punish those who have worked to move up. By no means am i a proponent of a flat tax, but this vast difference between the tax brackets is insane.
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Old 09-27-2008, 01:24 PM   #34
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This let's help out everybody mentality needs to stop. Some of us have worked very hard to get to where we are.

Look at the housing situation, it's just a mess. I see these people buying homes in my neighborhood and you can tell from day one that they won't be there for long. They all seem to say the same thing though, the government will take care of me. Looks like that might be the case this time, but it shouldn't be. Anybody that got in over their head buying a house has nobody to blame but themselves. They deserve to lose their homes. I guarantee they won't make that mistake again.

Wanting to help out those living in poverty should be a personal decision. I don't need the government taking my money to help people out that are too stupid to help themselves. If I want to help them I will do it in my own way.

The fundamental of this problem are simple, Americans are lazy and no longer want to work for what they get. Take everything from me today, let me start all over with absolutely nothing and I will be back on top in 5 years. These people have the same opportunities as the rest of us and could do the same but they don't. Instead, it seems that they sit home breeding and complaining about how it's not their fault. Those that are living in poverty should really look at their own lives and make some changes.
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Old 09-27-2008, 01:51 PM   #35
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This let's help out everybody mentality needs to stop. Some of us have worked very hard to get to where we are.

Look at the housing situation, it's just a mess. I see these people buying homes in my neighborhood and you can tell from day one that they won't be there for long. They all seem to say the same thing though, the government will take care of me. Looks like that might be the case this time, but it shouldn't be. Anybody that got in over their head buying a house has nobody to blame but themselves. They deserve to lose their homes. I guarantee they won't make that mistake again.

Wanting to help out those living in poverty should be a personal decision. I don't need the government taking my money to help people out that are too stupid to help themselves. If I want to help them I will do it in my own way.

The fundamental of this problem are simple, Americans are lazy and no longer want to work for what they get. Take everything from me today, let me start all over with absolutely nothing and I will be back on top in 5 years. These people have the same opportunities as the rest of us and could do the same but they don't. Instead, it seems that they sit home breeding and complaining about how it's not their fault. Those that are living in poverty should really look at their own lives and make some changes.
+1. There's enough hand holding going on already. People should have to be responsible for their actions. What I highlighted in red is my belief as well. People make their own decisions. If they want a better life, they have to work for it. If they think the world owes them something, they will remain in poverty.
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Old 09-27-2008, 02:23 PM   #36
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The problem today is education. There are too many people that don't know enough about how to run their own lives, but they want to tell other people how they should run thiers. By no means am i saying that the problem lies in the school system when i say education. Well some does but that is a whole different topic. What i am saying is that, as a society, we have let ourselves become crippled by becoming overly reliant on others to make things happen for us and haven't taken the time to educate ourselves on how to make things for ourselves. The values that we have today are a sad comparison of what they were 50 years ago, hell even 25. We don't need to hurt those that have made educated decisions to help those who have not. It is time that people as a whole learn to help themselves, and that is the best thing we could do to educate them. Don't make them want an education, make them need one.
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Old 09-27-2008, 02:30 PM   #37
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Originally Posted by oilstain View Post

elesjuan: your family needs a better accountant, or a new business plan. If the sole proprietor is taking a quarter-mil from the family business every year, it's not really a 'family' business, more like a 'I need more diesel because my yacht only gets 26 gallons to the mile' business.

$250,000 a year makes them yacht owners?!? It makes them upper middle class! two fiddy a year is a nice comfortable amount of money but you aren't setting the world on fire. It's low end upper class in some area's of the country but middle class in the high rent, primarily coastal area's of the country. Sounds like a ton of money until you buy a house or condo in Manhattan, LA, San Diego, Seattle, etc. There are area's where a 1500' ranch house is nearly a million.

Far from Yacht owners. Nice pleasure boat, but not yacht.

One big reason for the problems now are all the households making 50-60K a year but living like 250K. All my employees over the last several years, making hourly wages, drove nicer cars than me! I had one guy with a whole house full of furniture from the rent-to-own ripoff places. With bad credit he bought a newer suburban that he then spent $2200 on for 20's and lowpro's. Another $800 to do an HID conversion. After 6 months here he quit. Not long after I started getting the garnishment notices.

Lower to lower middle income people seem to think they have to have it all to be happy. New cars, nice house, expensive furniture, etc. All that stuff is nice to have, but it won't make you any happier. That happiness by spending crap is the big American lie that society has bought into. That's a big part of the current problem.

I guarantee our current generation is no happier with all our stuff than the two previous generations that worked hard and spent reasonably. Of course children didn't run the household and were disciplined too, but that's another story.
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Old 09-27-2008, 02:32 PM   #38
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Education is part of it, lack of personal responsibility a bigger part, greed another, envy another.

Education on how to manage your life needs to come from home too.
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Old 09-27-2008, 02:52 PM   #39
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Education is part of it, lack of personal responsibility a bigger part, greed another, envy another.

Education on how to manage your life needs to come from home too.
Agreed. That is the angle that i was getting at, in that people need to taught to have personal responsibility in thier education about life in general. Yes it SHOULD come from home, but that in itself is making this worse and worse. People are growing up and seeing their parents spend money like they do and think that it is alright to do the same. People i went to school with racked up $20,000 in credit card debt while making $7/hr part time, but that is how their parents do it. They just pay the minimum every month.

I used to worry about how much money people will have in retirement and why they don't save more. Now i am looking at the same people and worrying about how much debt they will be carrying into thier retirement years, forcing them to continue to work, and will probably never be able to retire.
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Old 09-27-2008, 04:05 PM   #40
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Originally Posted by oilstain View Post
elesjuan: your family needs a better accountant, or a new business plan. If the sole proprietor is taking a quarter-mil from the family business every year, it's not really a 'family' business, more like a 'I need more diesel because my yacht only gets 26 gallons to the mile' business.
See what you made me do? Now my accountant is jobless and homeless!

Cueball answered your reply with what I would have, so no need from me.
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