Friday, October 1, 2010

Getting Out From Under

Evidently I never posted this one. At least, there are no posts with this title in the New Earth Times archives. And it lacks a proper ending, which implies that I never posted it. To be able to post stuff like this is exactly why I started the "overflow" blog. It looks like I wrote this a year or so ago.

The Economic Crash (which has just barely begun, by the way) has done wonders for my self-confidence. You see, I’ve been expecting the Crash for the past 40 years now. Back in the late 1960s I realized that a crash was the only possible outcome of America’s oligarchic system of capitalistic idiocy. During the 1990s and early 2000s I pretty much lost faith in my vision, but not quite. I realized that the "prosperity" we were experiencing was artificially induced, and that it couldn’t last, but it seemed at the time that it would last forever. The relatively minor Crash we’ve experienced so far has validated what I’ve always known, and gives me confidence to start predicting the future in a serious way. But before I do, I’d like to talk about the steps I’ve taken to get out from under the crash I always knew was coming.

The keystone of my entire strategy is owning my own land, free and clear. In other words, actually owning the land, not merely the mortgage on it. As an adjunct to this, I have avoided all debt and interest payments. In interest payments alone, I’ve saved hundreds of thousands of dollars compared to most of my contemporaries.

I read in a blog somewhere that nobody actually owns their real estate, because the government has a permanent lien on it. This isn’t true, is unnecessarily alarmist anti-government propaganda, and is sour grapes to boot. To be sure, your property can be auctioned away if you are clueless enough not to pay your property taxes for enough years in a row. And of course, we could hypothesize an evil government that would purposely raise property taxes so high that it could confiscate everybody’s real estate. But in the past, present, and realistically foreseeable future, property taxes are a minor part of a landowner’s total annual expenses, and are easily budgeted for.

I have been to several tax auctions in Dona Ana County, and have dealt face-to-face with the tax auction crew that comes down periodically from Santa Fe to auction off tax-delinquent property. These people are anxious not to auction off peoples’ property. If a property owner so much as belches in their direction, they will immediately cancel the auction of that particular parcel and work out the details with the property owner later. I have never seen so much bending over backwards in my life. The reason for this, basically, is that private property rights are a religion in this country. It’s a religion I agree with, and most people agree with, regardless of political persuasion.

If we ever have a government that can confiscate people’s property at will, and the populace hasn’t risen up in revolt, then we will deserve what we get. This is one circumstance where I would stand shoulder-to-shoulder in solidarity with all my neighbors, regardless of political philosophy.

Forty years ago, my thinking went like this: "I’ve got to occupy space on this planet, so why should I have to pay somebody else for the privilege?" I was always a young rebel in that and many other respects. I realized that free-and-clear ownership of my own land was the only way to avoid paying either rent or mortgage payments. (Sure, I could have become a nomad, but that didn’t appeal to me.)

When my employer, New Mexico State University, fired me from my astronomy job because I had put out the campus underground newspaper, the American Civil Liberties Union sued them on my behalf. I had a strong case, and the University offered to settle out-of-court. When I collected my settlement, there was no doubt what I was going to do: I bought land. Paid cash. Owned it outright. But if this option hadn’t been open to me, if I had no choice but to scrape together a down payment and start paying off a mortgage, my highest priority would have been paying that mortgage off as quickly as possible. "Faith" is not my middle name; neither is "Trust." Since I saw a crash coming (though it turned out to be a long way off), I wouldn’t have assumed that I could pay off a mortgage in the usual leisurely way. I would have scrimped and saved and paid it off post-haste.

Also, I’m a cheapskate. To my way of thinking, interest is money down the drain. I hate to waste my hard-earned money that way. I have remained totally debt-free all these years, holding to a pay-as-you-go policy. I started out very poor, making approximately $500 a year (in early 70s dollars). I did without a lot of things. If I didn’t have the money, that was that. I slowly bootstrapped my way up, making two steps forward and one step back. It wasn’t till the mid 90s that I finally accumulated enough savings that they didn’t quickly evaporate. Since then I’ve enjoyed the benefits of wise money management – no debt, no interest payments, and enough savings to even out the ebb and flow of a variable income. I’m able to live comfortably on what by mainstream standards is a very ordinary income.

Of course the economy is crooked. Of course it’s run for the benefit of idiot criminal parasites. Of course Congress is corrupt. Of course most Americans will end up as serfs. Well duh, that’s why I got out from under in the first place! (Though of course if government becomes as authoritarian is it well could, or if law and order breaks down, if gangs of thugs or jack-booted storm troopers roam the streets, all bets are off. All my best-laid plans (and yours) are but a bullet away from termination if the shit ever hits the fan bad enough.)

Despite all the crimes of the corrupt banksters and their government enablers, people need to take a little responsibility for their financial plight. "You made your bed, now lie in it." Sure, there are plenty of people who’ve been bankrupted by medical expenses or other tragedies, and there but for the grace of God go you and I. But all things being equal, one thing we’re witnessing right now is the sifting out of the wise money managers from the poor money managers. The Ants from the Grasshoppers.

Up until now, at least, people have always had a choice: Do I go to Disney World, or do I make an extra house payment? Do I pay down my mortgage, or do I refinance my home so I can put that new swimming pool in the back yard? Do I buy that new car I really don’t absolutely need? Do I put the new wide-screen TV on my credit card? People need to take a good hard look at their behavior, and the consequences thereof. In most cases, we get what we deserve. This is in no way meant to condone the actions of the criminals of high finance who have devastated our economy, but people need to wake up to the fact that we reap what we sow. Cause-effect relationships are real. There’s no such thing as a free lunch. What goes around comes around.

And what if the economy doesn’t tank totally? Well then, you’ve paid off your mortgage, you don’t have that pesky bill to pay every month, and you can take that vacation to Disney World you’ve always dreamed of. Not being an interest slave confers many advantages.

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