BLESSED ARE THE RICH
Rachel Maddow quotes the nonpartisan Congressional Budget Office: helping the jobless by extending their unemployment benefits is at the top of the list of effective ways to stimulate the economy; helping the best off by extending their tax cuts is at the bottom of the list.
This clip has it all. In case you have no TV or your TiVo misfired last night, check it out.
The Republicans are absolutely determined to borrow the money from the Chinese or whoever will lend it to us to extend the tax cuts on income above $250,000. They claim it’s simply to help “small business” – “the job creators” – but as has been noted over and over, that’s just a crock. (If you disagree, please click and scroll down to items #1-#5 under Mitch McConnell.)
PAY OFF YOUR MORTGAGE?
Christian Svendsgaard: “Can you discuss the pluses and minuses of paying down your mortgage now? Even after the tax break, I get a higher return by paying off my mortgage than I can from a lot of other possible investments.”
☞ It’s never a terrible idea to pay down debt (especially adjustable rate debt). But if you have a long-term fixed-rate mortgage on a home that you think you’ll be in for a long time, then I’d think twice. Say you’re paying a rate now that works out to 3.25% after tax. Paying off the mortgage gives you a risk-free, tax-free 3.25% “return” on your money. Not bad these days. Plus, you have the psychic satisfaction and sleep aid of knowing you own your home free and clear. Those are the pros. The con is that you are letting the lender off what might be a 28-year hook (if it’s a 30-year fixed-rate mortgage you took out two years ago). That’s a nice hook from your point of view. You can pay off the mortgage any time you want, but the lender has to keep lending to you at this ridiculously low rate even if, years from now, inflation roars back and people would kill for a low-rate mortgage, you lucky dog, you.
If it’s an adjustable rate mortgage, there’s no hook: the lender just ratchets up your rate. So the only downside in paying it off if you don’t have something better to do with the money is the expense and hassle of remortgaging your home if you ever do find a compelling need for those funds. (Then again, confronting that hassle might make you think through whether the need is really compelling – do you really want to go into debt again? – and possibly avoid something imprudent.)
Likewise, if you’re likely to sell the home in a few years (when you retire, say), the lender won’t be on any hook, either. Mortgages are not portable – you can’t take your terrific low-rate loan and use it to finance your next home. And they’re not assignable – you can’t advertise that your home comes with three recently remodeled bathrooms, two working fireplaces, “and a super-low rate long-term mortgage.”
There’s no right answer, so feel good whatever you decide.
THAT WOULD-BE CHRISTMAS-TREE BOMBER
A reader in Oregon, Professor Emeritus Paul F. deLespinasse, blogs . . .
When I was a student at Willamette University in the 1950s, a political science professor told us that the only way Republicans could win Multnomah Country would be to shut down the Portland telephone system on election day. He thought that Republicans would probably vote anyhow, but Democrats needed to phone people who hadn’t voted and offer to drive them to the polling places.
Since I was a Republican back then I figured out two different ways to shut down the telephone system. I am afraid that one of them, however, was not very practical. It involved hijacking an atomic submarine from the U.S. Navy, running it up the Columbia to Portland, plugging the output from its reactor into the local phone network, and then revving the reactor up to full power and burning out all the telephone circuits.
The other approach, which I won’t disclose for fear someone might actually try it, would have been easy to do. But once I considered the side effects of shutting down the Portland phone network, the idea lost its charm for me, as I think it would for most people. It would have been nice to have the Republicans take Multnomah County. But what about people who couldn’t call the fire department about a house fire? Or those who couldn’t call an ambulance for a heart attack?
Defensible ethical generalizations are hard to come by, but I think there are two such generalizations that apply both to my own case and to Mohamed Osman Mohamud:
First, in a fully civilized world children must be brought up to think concretely about all of the consequences their actions will produce and to evaluate their actions in terms of the Golden Rule (which has analogies in many religions).
Second, no religion can be all good that tolerates any of its members bringing up children to hate people of other races, nationalities, or religions. Islam is not alone in suffering from this imperfection; it has Christian brethren.
Members of an Islamic peace group were handing out leaflets protesting terrorism to the crowd awaiting the Christmas tree lighting in Portland Friday. Ironically, if the bomb had worked, a number of Muslims would have been among the dead and injured, just as a number of Muslim workers were killed when the World Trade Center towers fell.
Clearly, the world is not yet fully civilized. We should avoid reacting to situations like that in Portland in ways that make it even less civilized.
Paul F. deLespinasse is professor emeritus of political science at Adrian College in Michigan.
Quote of the Day
The nicest thing about money is that it never clashes with anything I wear.~A model's remark to Al Rosenstein of Roseweb Frocks
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