Global Warming Is Not a Crisis?

I listened online to an NPR debate from last March:
http://www.npr.org/templates/story/story.php?storyId=9082151

I can have sympathy from both sides. I dislike the antiaction argument "We can't worry about problems in 100 years while there's suffering now that is neglected", seems insincere at one level even as admit consideration needs to be made on costs.

My apparently always "doomer" perspective is the future will be darker whatever we do now - that the "costs" of change are higher than humanity is willing to pay, so whatever actions we do make will be token efforts AND at worst will just delay a day of reckoning where wer must leave our fossil fuel empire.

For me ending fossil fuel usage must come from the sheer unsustainability of it - as the rest of the world tries to catch up to U.S. consumption, cheaper, easier sources will dry up, and we'll progressively substitute ones with worse environmental effects. There mere fact that sand tars are being strip-mined shows me we're heading for a cliff of failure OR a cliff of destruction or both.

I think the U.S. ought to plan to phase out all fossil fuel usage, and I don't believe any combinations of substitutes can give us what we have now. So we need a combination of reduced usage AND reduced energy demand. BUT even if we found a way - perhaps nuclear power augmented by renewables and lower demand, higher efficiency, we still have to face a world economy. Businesses must find a way to make money, and if energy is cheaper elsewhere, then manufacturing will continue to move to such countries.

I can imagine a day perhaps when people might say NO to burning coal, BUT try telling that to China, as long as they've got goal to burn. Saying NO doesn't work unless there are alternatives. Still, at least I think people may agree coal is bad - China is an uncontrolled health experiment, perhaps intentional for all I know, to reduce their excessive population, BUT cancer and disease are a slow and dirty way to do it, I mean in my imagined evil leaders.

I feel sorry for the scientists in the Global warming debate. Its easier to just collect data and assume others will carry it. I certainly have no will to enter into the political debate, to tell others they ought to stop expecting their children will have SUVs and Jet travel just because they had it.

Is GW a crisis? I can't say so, mainly because it is so slow. And I accept we ultimately don't know what affect we have. Some things improve with science, like being able to treat water to be safe for drinking, but if success means more people and more stress on the environment, I have no hope in the future.

The earth (and life) is only fragile in the sense healing takes longer than destruction, and a reduction of diversity is making the earth more fragile.

$5,000 baby bond?

OH the pandering presidential hopefuls, whatever!

WASHINGTON — Democratic presidential candidate Hillary Rodham Clinton said Friday that every child born in the United States should get a $5,000 "baby bond" from the government to help pay for future costs of college or buying a home. ... "I like the idea of giving every baby born in America a $5,000 account that will grow over time, so that when that young person turns 18 if they have finished high school they will be able to access it to go to college or maybe they will be able to make that downpayment on their first home," she said. (Approximately 4 million babies are born each year in the United States. )
http://www.startribune.com/587/story/1453260.html

Aren't there ENOUGH entitlements? Am I against this $20B/year entitlement? Of course, but I first get caught up wondering how it could be implemented. For one there's have to be some sort of transition, or "backpromises" to those alive now under 18 now for fairness. Then the immigrants will complain their kids need money, and then those who adopt kids from other countries will want their cut too. There's no end!

And where is this money going to be invested? I assume it is a "government bond", SO there's no cost to the program until the payouts come, AND so she's promising money in 18 years which may not even exist, except adding to an already overburdened goverment trying to cover all the unfunded costs of social security and medicare. Perhaps it'll be like bond that is indexed on inflation, even more likely to burst the budget when it comes due.

Why can't I see any good at all in her kind suggestion? (1) I don't believe the money will be available seeing irresponsible goverment spending now and existing future costs that seem unpayable. (2) It is taking money AWAY from those who most need it, giving money EQUALLY now means less money help with college. (3) The more the government does for people, the less altruism comes from citizens. (4) Financial guarantees for children WILL encourage people to have more kids than they would otherwise, even if marginally.

I'm too much a doomer to have any good thoughts about the future. I want to believe in the future and I just see nonsense solutions that do nothing to face the difficulties we'll have coming.

Minneapolis' instant-runoff voting plan may be unconstitutional?

A funny article today in the Star Tribune:
http://www.startribune.com/587/story/1433875.html Minneapolis voters have approved a plan for instant-runoff voting, but the state constitution may not allow it, according to a new attorney general's opinion. The opinion, obtained by the Star Tribune, doesn't explicitly say the Minneapolis system of ranking candidates in order of preference is unconstitutional.
But it concludes that if the closest case to a precedent is followed, instant-runoff voting probably isn't permitted by the state constitution. ... Opponents have threatened a legal challenge, citing a 1915 Minnesota Supreme Court case that struck down a Duluth system that also ranked voters.

The 1915 ruling was against a different rank ballot system called Bucklin which allowed second choice votes to count along with first choice votes, but IRV doesn't allow this. It only counts second choice votes if the first choice is eliminated (just like any runoff process).

If the courts must be involved, I suppose its good to be early, and perhaps a ruling in favor of IRV will reduce the basis for any future rejections of IRV.

The interesting thing for me is, IF something about IRV is found unconstitutional, AND IRV is logically equivalent to a runoff (or top-two primary), then the same unconstitutionality must apply to runoffs or primaries which take candidates off the ballot.

I don't see a constitutional issue with IRV, but there are complaints I take a little more seriously. Specifically, the theoretical possibility that in IRV it is possible to have your candidate LOSE by voting FOR him, and WIN by voting against him. This illogic in election system theory is called nonmonotonicity.

It is possible for the same reason that ANY runoff method allows possible strategic voting. Basically consider a "3-way race". If your favorite is on top, perhaps with 40% support, but needs 50% to win. Then you have two strong rivals, say both around 30% support (being close makes the manipulation possible). Perhaps one rival is "more centrist" and the other is "more extreme" on the opposite political spetrum. You might think your candidate can beat the extreme candidate in the final round, BUT more uncertain against the centrist who will pick up more votes when the extreme candidate is eliminated. SO if a fraction of supporters of your candidate strategically move your votes to the opposite extreme, you can perhaps help the centrist get eliminated.

Interestingly a REAL runoff makes this manipulation easier, and it works in a top-two primary similarly. I can vote in the primary for the opposite extreme, get him into the general election, and then vote my TRUE preference in the general election to beat the weaker competitor.

On the other hand, IRV makes this manipulation more difficult, since you have a rank ballot representing your choices, and you can NOT CHANGE your vote after your stronger rival is beaten. This strategy can still work in IRV more weakly, and only if you trust enough of the centrists supporters will support your favorite second, but the strategy can backfire obviously.

Overall such manipulations are difficult, and require careful analysis of how you expect other voters to act, but I've seen such efforts made, in "party endorsement elections" where delegates vote 10 rounds or more trying to get 60% behind one candidates. Some delegates like to "play" and move their vote around, faking and returning, trying to pretend there's momentum in a direction you like (helping an extremist beat your stronger competitor for instance.) The games happen, whether they actually change anything who knows?

Runoff processes are pretty boring places to play games, and they are mostly a game of dominoes - knowing pretty much the choices will fall in order from the first vote, votes transfering up to stronger candidates in a pretty even and expected way.

The problem I have with IRV is the same problem I have with any runoff process. The hardest to defend aspect of IRV is the "bottom up" elimination, sort of like the endorsement elections, but its just rather arbitrary.

For instance, I've held IRV elections at work for our Halloween constume contests. It is instructive in the difficulties of ties, even if less likely in a larger election. The first round votes were something like this: 5,4,2,1,1,1,1,1,1. There were 17 candidates and 17 voters, so a tough election. Eight voters got zero first rank choices at all, so they are easy to eliminate, but who's next? If we eliminate ALL SIX candidates at the bottom at once, THEY COMBINED have more votes than any other candidate. Possibly ANY of them might be the second choice of all the others, and that one could rise to FIRST (in an unlikely but not impossible result). So it already seems "unfair" from the first step.

If we break the tie "nicely" like picking cards, one at time, ANY of the 6 might rise, and we'll be playing tie-breakers for another 6-7 round of elimination. And it all seems senseless, since it is so unlikely any of them could win.

BUT if EVEN we play mean, and eliminate ALL SIX, then we're keeping one candidate with only 2 votes, and eliminating six candidates, any of who might gain a second vote on a slower elimination, and again it seems unfair.

Now in a larger election (with more voters), there'll be less ties at the bottom BUT it'll be sort of like the "drawing cards", just a few votes difference will be deciding elimination order, and a slightly different order could perhaps help a different candidate rise.

So seeing all this "protectionism" of bottom-up elimination, playing small differences that are not statistically worth anything. (It's just as unlikely that a candidate with 9.9% of the vote will lose in the end as a candidate with 10.1%, so why do we care to say one is worthy and the other is not?)

This line of reasoning to me supports the idea the LESS elimination rounds is better. How many less? Well, turns out that TWO ROUNDS is simplest. The first round everyone gets an honest vote for their favorite. The second round a majority gets to confirm a majority winner among the final two candidates. In fact, that's what we do NOW in the top-two primary!

So my ANTI-IRV position suggests if IRV is implemented, we're better off skipping the statistically arbitrary "bottom up" elimination and go to a top-two elimination, just like we do now with our top-two primary!

AH, but I know top-two isn't wonderful. It is merely "fair" to the top-two candidates who have "earned" the right to compete head-to-head against each other. BUT what about that "extremist" case I started with? What if there's one "sensible center" candidate who gets squeezed out of the runoff while actually being many people's second choice from both sides?

Well I know a solution. I like to say that IRV is "too careful" at the beginning (caring about elimination order on very weak candidates), and "too arbitrary" at the end, failing to seriously consider 3 strong candidates equally.

How do we do that? It's call Condorcet's method. Condorcet was a French mathematician a few hundred years ago. He said a majority preference can be determine by comparing all candidates head-to-head, and if one choice beats all others, a winner is found.

Interestingly the Rank-preference ballot used in IRV can also be used in Condorcet's method. Every pair of candidates can be compared by looking at the order of choices on each ballot.

What's the problem with Condorcet's method? The primary problem is there's a funny possibility of cyclic preferences. Like the rock-paper-scissors game, it's possible that each candidate sometimes wins, sometimes loses. This is rather unlikely sort of collective opinion, but not impossible if candidates group up on different issues, rather than a usually assumed linear spectrum. Anyway, it is a "problem" and when it happens some sort of tie-breaking rule is needed. Some solutions use "win margins" or other such measures. I prefer to say the highest set of mutually defeatable candidates are in a "real tie" and deserve a random method to break it.

There's a second problem with Condorcet, or at least from the point of view of "plurality" that we use now. There's no measure or rewards for voters who "work together" before the election to get the most first choice votes. It is possible "sensible center" candidate might get ZERO first choice voices and MANY second choice votes, and WIN! Some people don't like that possibility, and I'm with them in that I see candidates who don't get first choice votes must not be very well known or SOMETHING against them, so I worry that perhaps they might win MERELY for being somewhat unknown and merely less openly offensive than another.

For that reason, I don't support a pure Condorcet method, but think it can be used at the END of a runoff process, when all the remaining candidates are strong.

For example, I'd support something like this:
1) Hold a plurality election round (one vote per person), and all candidates above 20% PASS, and those below are removed from competition. (Alternately rank ballots could be used and IRV process until all remaining candidates are above 20%.)
2) If no majority candidate is found from round 1, hold a rank preference election among the remaining candidates to determine a pairwise majority winner.
3) If no majority winner is found in round 2, determine the top set of mutually defeatable candidates from that round, and pick winner among them by lot.

The first round forces voters to work together, identify common interests and reduces the set of candidates with a chance to win. Candidates who are polling far below 20% are encouraged to drop out before the election and supporters can move their vote. (Using IRV in the first round does this drop-out process automatically.)

The second round takes all candidates with a significant level of support, and then treats them completely equally. A standard runoff process can only treat TWO candidates equally, while Condorcet (with the 20% rule) means up to 4 candidates will remain for voter consideration.

THIS approach, unlike runoffs TRULY allows more than 2 parties to exist as equals, and breaks the strangle hold of voters that we have now.

Why not just skip round 1 and let EVERYONE compete in the Condorcet election. WELL, our current politics works by voters talking BEFORE the election and this process helps reduce the set of candidates. A pure Condorcet election needs no selection, BUT it does need very devoted voters since they have to make an informed choice among EVERY PAIR of candidates, and between time and lack of information, voters may be overwhelmed.

Now I'm not claiming politics is ready for a Plurality/IRV-Condorcet hybrid election method. I merely say it has the properties I'm looking for in an election.

BUT my hope lies in the fact that a top-two runoff IS the simplest hybrid option. Rather than a 20% rule, it says top-two remain, and that makes the Condorcet round trivial, and no worry about cyclic preferences. AND someday if we want to go beyond TOP-TWO we have Condorcet's solution. And until then, I say top-two is most fair because it rewards candidates now as expected - by those with the most core support.

MY WORSE FEAR on (bottom up) IRV is an election like this:
Round 1: Republican 40%, Centrist 28%, Democrat 22%, Green 10%
Eliminate Green.
Round 2: Republican 40%, Democrat 32%, Centrist 28%
Eliminate Centrist
Round 2: Republican 52%, Democrat 48%
Republican wins.

BUT a top-two result (IRV or in a top-two primary) might be:
Round 1: Republican 40%, Centrist 28%, Democrat 22%, Green 10%
Eliminate Green and Democrat.
Round 2: Centrist 55% Republican 45%

In a case like this the CENTER-LEFT held the majority, but RIGHT wins merely because the Center gets eliminated without getting a chance to compete head-to-head against his two rivals.

Condorcet (or a runoff hybrid) would allow the Centrist his fair shot in the final round.

I'm all for doing a FULL Condorcet comparison R. vs C., R. vs D., C. vs D. AND that is most fair since the majority winner will be clear. AND if there's a crazy cycle, then its a worthy tie, to be broken randomly.

A top-two runoff SOMETIMES might help a center candidate, sometimes NOT, BUT there's no argument that it rewards power squarely on "first choice" votes. It encourages voters who want to win to find common ground before the election, and rewards those who are best at compromising.

A bottom-up Runoff of IRV isn't BAD, but is also isn't fair to voters who worked so hard to compromise early.

So if IRV is implemented and challenged someday AFTER an election, I'm betting it'll be someday when a candidate reaches SECOND in the first round, and is then eliminated by a close third choice without getting an expected shot head-to-head against either rival.

Whenever elimination order changes WHO gets to compete in the final round, there's going to be sore losers. I just don't wanto fight them, and I'll support their cause - voters and candidates are better served with a top-two elimination process in IRV.

The inflation tax?

A worthy inflation perspective at:
http://www.financialsense.com/fsu/editorials/2007/0919.html SEIZING YOUR ASSETS TO COVER RETIREMENT PROMISES: How the Government May Do It

Well, just one part I took in, shows that taxes on appreciated value of an asset sold is computed before inflation and value after inflation. So if I buy something for $100k, and sell it for $200k, I pay taxes on $100k profit, even if inflation has kept the "real" value constant over time.

Mostly I don't greatly care to lament my poor fortune of having money to invest, as many others don't even have that, BUT I admit taxes do affect my decisions. Like I bought a rental property and if I ever sell it, I'll have to pay taxes no only on appreciation, but on a depreciation curve (which reduces value by 1/27.5 per year). Anyway, I consider it more of a "charity" investment than hoping to earn a profit, so if I'm lucky enough, I'll give away its entire value, and avoid taxes if I can!

I guess my RothIRA is a good deal too.

The article focuses on how the government is going to pay for massive entitlements in the future, promised, with no possible funding structure to pay for them. And somehow the government will get our investment values THROUGH inflation.

It is funny how easy scapegoating is. Those on the bottom can complain the rich are sucking up all the wealth - by exploiting the desparation, greed, and imprudence of those on the bottom. Those on the top can complain their gains are always in danger of being stolen by a greedy government.

My peace of mind, if I have any, comes down to a hopelessness, that I can protect wealth - from inflation or government, or whatever threat, so all I can do is be a good steward while I have whatever I have. When it's gone, it's not my responsibility any more. Not much peace, but good enough for me.

Federal reserve - half point rate drop

Bearing in mind I know NOTHING how this crazy world works, I'll accept the opinion that: Lower the federal fund rate causes inflation and devalues the dollar value compared to other currencies.

Best guesses were that the fed would reduce the rate a quarter point, that a half point meant things are worse than expected, and so the half point decision is a CALL to the world that the U.S. Dollar is a bad investment, and the only reason any foreigner would have to invest in our currencies is the reality that every other major currency is also inflating itself away.

So we're going to blow the bubble again and see what we can blow up next to keep our fragile economy humming with corruption and senseless risk. Rather than taking our medicine and taking a few weeks in bed, we've taken drugs that dull the pain so we don't care any more and keep doing the unhealthy things that got is here in the first place.

I have a coworker, a Canadian, still paying off his student loans in Canadian dollars, and grumping daily that his salary keeps dropping in value, compared to his debt.

Imagine your house mortgage was in Canadian dollars, and the U.S. dollar dropped 10% in 3 months, and your debt just went up by 10%. Your $200,000 mortgage is now worth $220,000, OR perhaps your wages were just cut by 10%.

BUT you and I don't see this when the dollar weakens. You and I, at least if you actually OWN savings rather than debt, we don't realize our accounts just dropped 10%.

Crazy stuff, and I won't be scared, since nothing I can do, and I've done all I can. Inflation is coming and we don't see it. The stock market might double in the next 5 years AND the U.S. dollar might be worth 1/4th as much in the same period - happy returns?! Hyperinflation anyone? The only protection the U.S. has is that no one else has found a trusted replacement to the dollar, but they'll be trying.

I think we deserve what we get, and perhaps there is no solution for us but inflation. People don't want to pay taxes, to pay for services received so we borrow and inflate away the costs.

I have to wonder what crazy thing will happen next in this soap opera? Do I want to end now, or shall we dance a few more times before everything of our failure becomes apparent?

2003 all over again

Four years ago I got in hot water with a friend, for failing to be sufficiently sympathetic to her union's strike for clerical workers at the U of MN.

She's happily gone from the University, but once again, the workers are striking, day 14 now. The issue is apparently one of "fairness", principle over reality. Workers want a FULL cost-of-living raise, one apparently approved for by state funding AND given to other U workers, while the U administration apparently have some excuse against this (assuming comparisons to "fair market wages" for similar jobs) and apparently claim they can get by just fine without the workers on strike. The U must figure a 1% difference is too small to keep workers on the picket lines.

My failure in 2003 was to suggest that workers unsatisified by their wages are better off just quitting than sitting around demanding what isn't given freely. Well, I didn't say it so coldly, but not much better. It's my "self-defense" against a cruel world, my ego wants to be above power struggles, BUT easy for me to say when I've never negociated a salary level in my life - just accepted whatever was offered, AND never felt shorted. I've wondered at times, hearing higher salaries from others, whether I could make more, but I'll trade flexibility of a small company over higher income. Plus, I've always earned over twice what I ever needed. So I'm spoiled and a hopeless person to get sympathy from.

I lean towards the same conclusion again for U workers. I think they've probably got it pretty good (compared to other options) OR they'd not stay! The only way to get higher wages is to REDUCE the supply of workers willing to do the work. THEREFORE those who can afford to go elsewhere (and get paid LESS perhaps) can do a favor for those remaining, who will then be in higher demand. Well, so my outrageous theory goes.

The whole power game outrages me still, the idea that workers have to fight for fair wages. I don't like unions either, full of leaders who are more interested in glory than letting their members contribute work as they can. YES YES, I know "Solidarity for fair wages" and all that, but how much here is EGO?! There's no "fair", there's only the reality of supply and demand.

I am outraged that people like me can make good money punching out computer programs, while teachers and others may work much harder, and for less. The system is screwed up. I'll admit that.

Still I guess I figure more that I get paid "too much" than teachers and others get paid too little. I figure things are sliding downhill, and better to spend your energy learning to need less than to fight for more in a shrinking pie.

Easy for me to say, with an unfair share. I'm guilty, and I can only defend myself to say I try not to be corrupted by what I have. I'm not saving for tickets on Spaceship One flights into space, or buying a vacation home in the Bahamas - I'm just trying to get out of debt like everyone else (who is wise), and hope if I lose my job or high income, I'll be better off later for my savings now.

I think the union leaders ought to swallow their pride and say they were wrong. The University wins BECAUSE they are willing to stand on brute economic reality - the workers are already ahead from successes past, and ought to just accept there's no fairness, and 1% ain't worth fighting over.

I'm a bad bad person, but I hate fighting!

Postscript:

My opinions above, however true doesn't solve any of the REAL problems, of workers feeling valued. It's a classic "If you loved me, you'd give me..." ultimatum/test, and once YOU make such a demand, you're setting yourself up for rejection, BUT if you really are valued, THEN what does a less than heartless employer do? Can they do ANYTHING once the strike had started to change the question?

Perhaps we still live in the dark ages, where ruthless, heartless employers exploit workers for pennies just because they can get away with it, and perhaps unions really are the heroes of modern workers who want a "fair offer".

I'm with my friend anyway in heart - labor negociations are POISON to the human soul, and there may be no good answers.

On the other hand, perhaps I'm just as over-sensitive as ANYONE, and WISE people can and do "let go" of conflict, and stop seeing others as the enemy, once the conflict is resolved. Things can heal, but the "victim" has most of the power there. I mean if I hurt you, you need to tell me what I can do to make things better, and I'll try. I'm not going to throw flowers at you until you finally decide to forgive me.

So I wonder, if a 1% additional raise is outside of the workers reach, WHAT do they really want? What will show them they're valued, besides that? If a job is JUST about money, I guess NOTHING. If it's just about power, I guess nothing.

It just sucks for me, and I know I'm blind and dumb in human relations, and my ego stands in the way as much as anyone. I'd rather sit in prison, than have a job where I'm not wanted for anything more than my productivity.

The corruption of home mortgage interest deductions

I've thought about this for a long while, and conclusion not changed, but intensified.

The ability to deduct interest from mortgages from income taxes is so full of tax-unfairness I ought to SCREAM!

I say this from multiple reasons, the but the biggest one is the incentive it creates for people to borrow against their house WHILE others, without a house, can't deduct the interest off their debt payments. SO this basically say "If you have wealth, we'll give you a tax break." while those who don't have wealth, they NOT ONLY have to borrow at a higher rate of interest, but can't reduce their taxes for this "hardship".

I MEAN, why can't a person SAVING for a home, not yet purchased, get a tax break for such prudence? Why FORCE them to JUMP the gun, get into a morgage they can't afford, with Mortgage insurance to boot, and reward this with a tax break.

I can perhaps accept that home ownership is good for everyone, and incentives that help people get into ownership is good, but WHY give this break to people on a second mortgage, or a refinancing of other debt? Again, I know home equity loans are good, they encourage people to invest in their homes.

Besides the unfairness of course is that it encourages people to get further into debt before facing financial reality. It encourages people to buy into homes they ought not to afford. It gives them an out from high-interest credit card debt, opening their credit again for more abuses.

I have to think it is intentional, I mean the "negatives" - First, we can be happy home owners buy into a STAKE into civilization and are less likely to be criminals or "beach bums" or whatever. But second, it opens the whole mortgage industry to convince people to get into more debt then they ought to accept, and THEN become beholden by this debt, creating wealth for those with even more money.

And lastly, what would the world look like if nearly EVERYONE not only owned their own home, but owned it debt-free? It would decrease the amount of money that can be held by the ultra rich, decrease their opportunity to exploit working people for a cut of their living.

And the government ENCOURAGES debt by not taxing it? Is it really so bad? I mean, here I am, paying down my mortgage. No one is forcing me to keep unnecessary debt. A free market means people can enslave themselves to others as they want, right? Who am I to say the government is enabling people to go against their long term best interest?

Well, I'm a poor debater, even against myself. I just recognize this evil, and I name it as such.

I'm better off when I have no mortgage, and I can wisely use Home Equity loans perhaps in the future - to buy energy efficient windows, or whatever investment I deem valuable to my long term future.

It's just hard - I can't imagine arguing seriously to "take away this entitlement". I mean who am I to tell people they don't deserve their cake? And we can all use it wisely or not. OH, but I can't be contented, knowing things could be better if only prudence was chosen. And I dislike systems that reward imprudence. That's my real peave.

Serious insanity

Of course article like this are written as a story, rather than necessarily reality, but it works for me - scares me silly to think people are so desparate!
http://www.reuters.com/article/ousiv/idUSN1141892120070911 Consumers turn to plastic as home loans slow
Consumers are carrying a record $907 billion in credit card debt, and that looks likely to jump now that the housing slump has blunted another popular financing tool -- home equity loans.
Americans cashed out hundreds of billions of dollars in home equity as credit came cheap in a five-year housing boom that ended about 18 months ago.
Now, with the subprime mortgage mess triggering tighter financing terms and home prices falling in some regions, the home-as-ATM trend is slowing, threatening to curb the consumer spending that drives two-thirds of the U.S. economy.
"The home equity spigot has been really shut off over the last nine months or so. With (home price appreciation) stagnating, borrowers have not had the opportunity to refinance as much as they had, or cash out for spending needs," said Joe Astorina, securitization analyst at Barclays Capital.

That financial people actually SEE home equity as a source for consumer spending is insane to me. I mean they can perhaps be objective analysts, just looking at the facts - home appreciation and low mortgage rates and feelings of wealth encourage people to borrow and spend, but I can't understand it.

The closest I can come, when in 2005 I had a car accident, felt bad being out $5000 for not having collision insurance, and then realized my home equity increased by MORE than that in one year, as if a gain canceled my anger at my loss.

Of course the TRAP here I don't understand. I thought most of refinancing in the past was done to pay off high interest credit cards and lower their monthly payments. BUT you'd think such consumers would now realize there's no more good refinancing options, and this time their credit cards won't be paid down by new equity, so you'd think they'd stop.

But credit card companies are getting good interest returns, so they'll keep lending, especially now protected by more difficult bankruptsy requirements.

It just can't end good. I don't understand why people can believe spending money they don't have is an acceptable option - when will they have more to pay it back?

Of course the government does the same thing - it must raise the debt ceiling in October - what a gift to the American people!
http://www.concordcoalition.org/issues/feddebt/doc/070912-debt-limit.pdf

I don't even know how to respond to THAT insanity. If you hold the debt ceiling fixed, then you have to increase taxes or decrease spending. Democrats will fight the first (since social programs are the easiest to cut) and Republicans will fight the second.

As I said, this can't end good.