With Liberty and Justice for All!

For Whom?  

For All Teachers with or Without Merit?

 

Modified Monday, March 13, 2011

This is shorter than it is sweet, yet it should serve well enough to demonstrate how  the expendable portion of one’s  income is  under attack  on   more than  just one front …namely, escalating oil and gasoline prices

To this end, discretionary spending threatens to  decline  to a still greater  …becoming under attack  by reasons other than those …solely from rising commodity prices by reason.

And so, when taken into consideration, these various other threats may cause equally extensive reductions to discretionary consumer spending.

None the less,  these additional factors are are and will  cause consumers to take still greater hits to their already dented expendable incomes.

And when taken altogether, their additive impact and rather dubious nature are  what causes me to call into question the justification of  these taxes  validity ….especially in view of the  burdens they represent and their perspectives which are rather lacking in any sense of what is fair and equitable.

Uder these  these economic conditions which we are living, this should be easy to see and understand.

As is, rising commodity prices represent merely one example of several other equally significant forces which threaten to make larger incursion’s into one’s expendable  income further attacking and eroding discretionary consumer spending.

The impact of these forces net affect will, in-turn …threaten to reduce and diminished   what scarce tax revenues  may be realized by city, county and state governments.

As it has been, such badly needed tax revenues have become hard enough to come by as it has been in this down-turn economy.

In this atmosphere, is it any wonder how governmental and political  interests may  turn upside down …self-serving to protect their more institutional leaning and leading interests?

 If this is the case, the public sector stands to become fiscally conflicted and compromised all the more. As such, the question as to who is serving who  begs an answer which may be mute …a diametrically juxtaposed reflection of a starkly contrasting reality which stands contrary to the intentions of service which would otherwise fulfill charter obligatory mandates in the better interests of the private sector?

None the less, this …and the discussion below all but ignore the mounting cost and affects of our government’s reliance upon borrowing. Otherwise, this aspect of the conversation might as well be the fourth (4^th) eight hundred pound gorilla in the room.

Note:   Forgive me; I will explain later, and this fourth (4th) eight hundred pound gorilla in the room will hit you like a ton of bricks.

What I am linking to the mention of commodity prices  here  in the discussion below …threatens to negatively impact the vitality of an otherwise healthy economic recovery which would otherwise be led principally by vigorous consumer spending.

Taken together, the joint rise in what consumers pay for commodity prices and what home owners pay in terms of rising real property tax bills will form a growing greater negative impact in such a way so as to further diminish consumer spending.

And when taken together and added to government sponsored tax schemes these will form still further deadly one-two and three knock-out combination’s flurries which the economy may not be able to withstand.

What I am talking about …when, linked to commodity prices  here …may bring America to her knees.

For a reality check; one needs look no further than to Wisconsin to see what I mean.

So, in like fashion, what I am discussing today, will only serve to highlight the already exasperating affects of  the above commodity-driven affects’ drag  on the economy.

Thus, when and …moreover …such affects are seen with the eyes of one’s understanding …so as to be understood in terms of their impacts additive fashion …the grasp and scope of such threats becomes a more real, clear warning of a the very magnitude of their present dangers.

Taken together these multiple real threats’ synergies pose a significant cumulative extreme real punitive tax which is now …as it has been …currently working to threaten and drag down real recovery.

And as alarming as this process has been, it is continuing and promises only to worsen.

Never the less, these processes have  …pretty much gone undetected and unchecked …right under our very noses.

And without resistance; what then? Do we live under a rock …or something?

Are we going to continue to invite more of the same?

Never the less, or rather; all the more …whether or not these threats are taken separately or aggregately …both, when taken together …have been combining …forming and working together …as  a significantly single larger matter’s impact.

Altogether these double forms of taxation are hikes,  will  …when combined with taxes from all levels of government will escalate still more to essentially raise still greater threats which will erode all the more consumers’ expendable spending and discretionary personal income.

This reduced capacity is and will greatly continue to hamper a badly needed healthy economic recovery.

What a drag it is getting taxed!!!

I do not mean to be so pessimistic, but the cards have already been stacked against those who have pretty much have chosen to ignore the facts at  the …city, county and state-wide levels of government …that is of course …until recently …as can be evidenced by the forces aligning themselves for the real clash in 2012’s upcoming general elections …when the opportunity to cut the head off the three headed dragon will be the consumer’s and the home owner’s only …last …recourse in resolve to   protect and safeguard personal liberty and individual freedoms.

Freedom from tyranny may be a choice to be free from the very form of government which our forefathers ordained.

Yet for all their safeguards and checks and balances, the last line may be in an individual’s right to vote.

Yet, in spite of what appears to be an unwitting conspiracy of three  eight hundred pound gorillas in the room, Americans have been close-lined, blind-sided, unprepared, silent and unwilling to actively engage and take up  the conversation in and upon the various stages …at  more locally oriented  state-wide levels …and; as such, sadly …guided by a less prudent reason whose “WHATEVER” levels of apathy have  more  than  all but idly caused to raise walls of an avoidance which would have …should have …and now need to embrace a more sobering conversation …one whose time is most certainly more than appropriate and way-long over due.

And so, with regard to maintaining an additive and punitive tax-like watchful perspective …consider that …for every dollar that is in the president’s Federal budget …an otherwise healthy, organic economic recovery is being more compromised than ever thanks largely in part …by virtue (?) of that which is largely comprised of borrowed money.

A side note:   In spite of the fact that consumer credit balances have been paid down; this form of spending which is consumer credit driven …is now on the rise again. My point, these rising taxes …coupled with the affects of any wave of significant inflation will further exacerbate these affects so as to further erode consumer spending.

 Such is the net affect of government’s when its own needs cause its  spending habits to overshadow and outgrow its health and ability to manage to deliver its charter goods and service obligations …effectively …efficiently …and primarily in the interests of its citizenry.

Such is the net affect of government’s need to spend.

 Feed me Seymour! Feed me!

Note:    (This is a loose reference to a certain text taken from the movie/play; Little Shop of Horrors …one in which the theme addresses  what happens when an over-celebrated servant becomes Lord.)

That is right,  consumer spending is being compromised; for every dollar in his budget, 40 cents is comprised of borrowed money …and, at some time; if you want to dance …you will have to pay the piper …or the fourth (4th)  eight hundred pound gorilla in the room.  

In simple review, the fact is that  1.64 trillion of the 3.7 trillion dollar budget …is borrowed money.

 You may not realize it, but this will fundamentally translate into higher taxes …first of all, at the federal level; but also …moreover, at the state, county and local levels.

Those in the private sector …more than likely, have realized this all too well from paying their real property taxes.

Higher taxes in a trickle down fashion, will in turn translate to fewer expendable dollars for taxpayers to spend …impacting the amount of revenue available at all levels …especially at local levels where tax revenues fuel U.S. School Districts …from coast to coast.

I can not reiterate my point to remember strongly enough. The fiscal lack of accountability at the federal level …will invariably impact states, counties and local cities still all the more …higher commodity prices and constantly escalating debt load (service requirements) not withstanding.

This effectually will mean that aggregate tax payer discretionary spending will contribute less to GDP, which …in turn …will impact how much tax revenue is generated from a relatively diminished consumer spending. And seeing that GDP is said to make up 70 percent of GDP, any hit which reduces tax payer discretionary spending is more than sure to affect budgets at all levels …also touching state, county and local all the more …leaving less to go into and support these more local communities’ economies.

If this is true, dwindling tax revenues which are threatened to become still more diminished will present an even greater drag on America’s local and state economies at a time when states can least afford any such ill advised unforeseen additional burdens and stresses.

Any Boy Scout knows what it means to “…Be Prepared!!!”

Therefore, ask yourself this fundamental question …when you are voting at the local level; are my local reps truly prepared to do what is needed in terms of performing service to the community in terms of due diligence?

God knows the last thing states need is to become more reliant upon the fed’s purse and apron strings. And this goes doubly for city and county governments.

There are too many manipulative strings attached to state and federal funding as it is …and any one can see this …especially with regard to the squeeze which the cost of education has pinched local and county governments.

This is particularly true as to the cost borne by a greater number of home owners which have been more so affected by and in the wake of …a down turned economy.

Speaking of unplanned consequences; homeowners are …or should already be more than acutely aware of their rising share of the escalating costs of education …those which they have been made to shoulder and bear in recent years …in spite of falling home prices.

Yet, for all the clear data and trends available which reflect falling home prices; local property tax appraisals have risen to stand in stark contrast …depicting a more sobering reality.

There is a widening divide, a chasm whose gap does not speak well of cities and county governments grip on reality.

Furthermore, this …in turn reflects negatively upon the action and direction of city and county governance …a mirror which many states used as a pattern to serve their governance in this manner as well.

Accountability is not measured by smoke and mirrors’ gimmicks. Tricks are for kids silly rabbit!!!

So, I say; some …if not many a city, county and state governments need to straighten up and fly right for the double standard which may apply at the Fed …will needs not cut it on a more local level.

And if what is good for the goose is also …good for the gander; then, definitely; a local double standard can not and will not be long tolerated …especially in atmospheres of continuing …higher tax-related….knee-jerk …asleep-at-the-wheel solutions …the likes of which have impacted and served home owners with a stark slap-in-the-face.

In this regard, commercial property and to a greater extent …homeowners have been given little say-so in the ways and by which means they have been called upon to make  greater sacrifices in order to pay an increased portion of the price to carry the lions’ share of the heightened burdens to fund education.

With federal funding at risk, one can only image; what will be next?

As is, higher appraisals mean a higher property tax …which has been the resultant of clearly unjust practices which lack a more imaginative …more creative spark.

Where is the focus upon growth gone in this picture? There are alternatives …more imaginative if elected government officials actually have the savvy to get out and beat the bush …so to speak.

Sadly, raising appraisals in a down-turn market is …at best a deceit which does no one any service and is a practice whose lack of consideration amounts to little more than simple-minded money grabs whose schemes unquestionably may liken their sharp appraisal hikes to sharp jabs in the eye with a dull stick.

Such as it is, these abrupt shocks have served as a wake up call. And these shocks’ calls serve to issue a demand for a more sober review of way in which this process has horribly taken license to go off-track in respect to its otherwise obligatory accountability to provide a greater due diligence and oversight.

Power corrupts and the absolute power of such an unchecked license is one which has failed to provide honest service in every aspect which would, could and otherwise should point to a more reasonable level of justifiable accountability.

Where is the process of due diligence gone astray? In a higher service and priority to need and or want?

To this I ask; whose needs and whose wants are those receiving the principal consideration …those of the local and county …or of the tax payers?

In consideration of an answer; one needs must not place the cart in front of the horse.

I would tend to believe …that, in the manner and to the degree in which the lack of honest consideration is become manifest …such treatment thereof clearly demonstrates such could, would and should serve with the community with a greater measure of justice …more than a jab in the eye with a sharp stick.

As such, with regard to masters and pets …there are leash laws which apply to dogs and dog owners.

Should the appraisals’ processes need be more closely watched and held to higher levels of accountability …within the same spirit …by some other means which is analogous to a tighter leash law?

I rather believe so …if for no other sake than out of honest accountability!

In a down-turn economy …city and county governments can be allowed to stuff tax coffers and not hide behind claims that they have not raised their mil levies. Such arguments are ludicrous and do not wash in lieu of the facts that …more and more, cities and counties have turned to this means to try and hide the fact that they have been asleep at the wheel in pretty much of in the time leading up to the bust gone burst in the real estate and housing market.

In this contrast; no one ever speaks of a tax receipt balloon bursting …cause we are so preoccupied …looking back at the debt’s balloon which  is blown all the way to an imaginary willing suspension of disbelief …one that precludes an honest discussion of the costs of inflation …inflating the debt …and continuing to believe property values are still a viable means to artificially inflate tax coffers ….pretty much while still being unwilling to come to terms with spending cuts and all dimensions of fiscal responsibility …upon all stages …in and at every level.

And it that is not a denotative illustration of the manifest crap which is holding America totally deceive …well, I do not know what is.

 Such as it is, the rather unscrupulous money-grab practices which have leveraged raised and inflated property appraisals (which have been unleashed all across America) in lunges …at leaps and in bounds …have been practiced in the wake of a time …after repeated and consecutive, back-to-back annual, record levels of mortgage failures.

The overall affect is to place still greater pressure on appraisers to milk still more from less …which is perfectly honest …yes? I rather think not!!!

All of the above’s recurrent pace has done …is to have built …an established atmosphere in which robo-foreclosures have been replaced by mortgage principal forgiveness. (This is a subject for a history lesson in and of itself …if not worth subject matter for another post.)

Never the less, coast to coast, this practice has become so pervasive; it has caused an outcry from property owners …and in October 2010, a federal court justice halted this for a chance to review what was going on in the confusion of this practice’s pace which was picking up steam at the time. In an other regard, this matter is coming to a head …as. state by state budgets run the risk of going broke …Wisconsin not withstanding.

Since this time frame (last October) it has come to light that the electronic mortgage recording system was not adequately designed to record and support the local authorities which are charged with these responsibilities at their local levels. That’s an oversight of due diligence which would preclude and restrict any measure of recourse …if recourse was of any primary interest at all …which we see that it wasn’t at the time the housing bubble was inflating market prices and appraisals quite possibly …to a lesser degree (?). Appraisal resets have historically reverted to sales price in times of boom …were there is less of a need to jab home owners with a sharp stick in the eye.

In the regard and consideration of recourse however, I can’t help but wonder if this matter or those surrounding the recording processes had (and now have) been given any …if at all …any more measure of due consideration for the need to perform due diligence and accountability.

The evidence surrounding the practices used in robo-forclosures would otherwise tend to suggest; one …such is needed and yet lacking …and secondly more than merited, yet may still be in need of review …especially with respect to recourse responsibility and procedure and practice and policies thereof.

Herein, again and moreover …in order to provide heightened measures and levels of mortgage serviceability   ….there needs must be a measure which provides for avenues which would support the payment and return of recording fees to the proper local authorities …so that local authorities would have the luxury and consideration to prove and provide feedback consistent with and to those mortgage holder and servicer-institutions when mortgages get shuffled from one to another and all points in-between …one holder to another so as to provide a mutually shared responsibility …trackable in any and all measures which affect recourse. The lack of this process has all but short-shrifted and shunned issues which affect responsibility and charter obligations to the city and county registrar’s offices in areas in which they operate and conduct business …even when these credit institutions are located halfway around the world …and more so with respect to whom these institutions contract with to perform on a local level.

None the less, the facts speak for themselves. Due diligence has been lacking in city and county governance and the appraisal processes are but one set of manifest operations which rather suggests …city and county officials had been …for the most part, asleep at the wheel …fat dumb and happy in the good times …those years which led up to the burst of the housing bubble.

And when the bubble burst …the financial crisis which ensued left many city and county offices holding the bag wondering what to do to make up their budget’s on-coming unanticipated revenue short falls.

…Shocked and taken off guard in a period of continuing declining home prices …what else could many such affected city and county offices do? Cut employees, projects, services and spending?

Ouch!

The easy way out was …in most cases …the ways and the means city and county officials chose to take …despite nation-wide trends which portrayed the reality that housing prices were falling …and falling   …and falling …forming a double-dip pattern.

Therein, the housing price indexes remain; un-recovered and still slumping.

Yet, for all that the facts would tend to suggest; appraisers across the nation still are wearing rose tinted sunglasses.

Who is being served the more in this regard? The Public Sector? The Private Sector?

One thing is for certain; reality is not being served whatsoever!

In recent months, going back to last October …this fact is more than apparent in view of the fact that …states attorneys generals stepped in to join a federal courts’ decision to stop and review the legality of a number of issues regarding several questionable practices being used by several major banks in their efforts to clear their balance sheet’s decks of non-performing and unsecured or under secured loans.

And as home prices continue to slide and erode these banks’ balance sheets …the courts and states’ attorney’s generals have stepped in only to push for the use of proposals which include the use of …principal forgiveness ….as a means by which banks could modify mortgages of select qualified clients.

Understandably, as these options guidelines have been presented by the courts and states attorney generals …they have been met with a good deal of justifiable reservation by the banks who would otherwise have preferred to continue …otherwise much unimpeded …as it were …had the courts not questioned the banks’ practice in their summary execution of their robo-foreclosures.

What does all this mean?

Bottom line, as long as the public focuses on anything but resolution, the economy …and recovery will continue to be slow …spending high …and taxes will rise …further escalating the need to place more burdens upon the shoulder of the private sector home owners and tax payers all. This is less discretionary and expendable income …which is fewer tax revenues …in a self reinforcing spiraling cycle.

My take, property appraisals should never be allowed to rise more than 2% in any one year. Period!!!

Maybe, such a restriction would cause city and county officials and bureaucrats to hold their budgets to a tighter line of a measured heightened degree of oversight and accountability …rather than the slack of merely laying such dereliction of duty upon the backs and shoulders of their masters …the tax payers.

What is the bottom line?

With fewer dollars …the result of higher federal taxes …the result of borrowing 40 cents on every dollar …is there any injustice in calling for the modification …if not the out right abolition of KPERS …the Kansas state institution which funds State Employee Pensions?

I personally rather think not …at least not without consideration of some formula which governs a measure of consideration for the states ability to maintain KPERS in and under the duress of understandable unavoidable economic interruptions to its sustenance.

In other words there needs to be provisions which provide and allow for overriding and mitigating flexibility in a way which separates and depoliticizes the greatest burden of the tax payer here in Kansas …and thereby avoids such jolts and injustices …by spreading the burden of sacrifice more equally across the public – private spectrum.

Such as could be, such would provide an equitable and amenable agreement to an otherwise heated argument …and provide for an atmosphere of cooperation.

It just makes dollars and cents to eliminate the conflict which stands in opposition to the better interests of what will make the Kansas economy able to survive what is and will be coming over the horizon in view of the fact that Washington …like city and county governance is facing …higher taxes …all the more rather than all the less.

As I see it, we have been paying more for less for too long. What is with sacrifice, if states are not willing to compromise?

Doesn’t it stand to reason that private sector taxpayers (all) should be paying less for more now in view of falling property prices in spite of unjustifiable rising valuations (?)…especially before inflation gets a chance to feed the political power base which has already heavily enjoyed the benefits it has enriched itself with from an over-conflicted public sector’s mind-set of entitlement?

If such stands to reason; why not compromise now …if not but for a time.

Yes, in my mind; teachers’ collective bargaining units need to settle with for less …even if reality is offering an upside down world solution …after all …the private sector is biting the bullet for the time being.

“Come on people now, smile on your brother. Everybody get together …try to love one another right now.”

In the upside down days of crisis, Kansas can ill afford to forget the prudence of moderation …compromise in the value of coming together.

As such, Kansans need to be able to see a vision which sees over the horizon if a balanced approach to fiscal accountability is to allow more than 60 cents of every dollar spent on education locally to reach the classroom.

Therefore, as Kansans, it is paramount that, if we are to share fully in a fruitful vision …we must stand together to shoulder our mutual burdens in equality …with justice for all in order to survive more drastic times which are coming.

So, if for the time being …compromise in sacrifice is not an agreeable end within reach, then …the drastic times which are coming …are those which will become harsher realities tougher to deal with and live through when they come …and they will come …as starker realities than we are living through today.

And so, the time is now here …a wake up call …to make a call for still more drastic measures.

For …at times like these, there is just cause to put an end to the frivolous pursuits which seek to selfishly serve the single-minded interests of a few above the consideration due all.

If compromise is unobtainable …that which seeks and serves to increase the enriched entitlements of …but a select few …that pursuit must be allowed to overshadow the equality of what order has served to sustain the justice of the equality for all.

Otherwise, if teachers want to teach; there should be nothing stopping them from doing a good job.

However, it teachers do not want to …or can not do their jobs …there is a time coming which will serve as a wake up call like none better than a pink slip signed by none other than the like of Donald Trump.

You’re fired!

The ways and the means to hold teachers accountable to perform and prove it …is not tied to the level of entitlement to which some have come to take for granted.

New levels of accountability are coming to establish the ways and means for providing due diligence in the class room.

That’s my appraisal and I believe it is a just call to provide higher levels of accountability and oversight within an institutional system which has served to hide all …all too long behind the curtains of tenure.

“Come on people now, smile on your brother. Everybody get together …try to love one another right now.”

Thank you!

All the best,

Bill

P.S.:

In my next post, I will be looking into an aspect of an issue surrounding some  foreclosures which may qualify for modification rather than foreclosure.

This aspect of foreclosures have been in the news to varying degrees over the last week or so, and have roots which extend as far back as last October when Robo-Foreclosure practices were halted by a single federal judge..

In this regard, and in my research …I discovered a very interesting aspect of the mortgage industry …one which served to enabled the MBS industry to bundle and sell MBS …yet one which has also come back to plague   the major banks efforts to resolve their non-performing mortgage assets …hampering their efforts to move forward with foreclosures in mass …namely unable to effectually use the same electronic recording service which was intended to document mortgages when they were bought and sold …I.E.; when they changed hands.

It seems that this electronic recording system was either not well suited to handle all the recording processes involved in performing the due diligence of the recording processes …or, the procedures and policies which supported the system were overlooked, avoided …or otherwise not properly checked for accuracy in each and every sub sequent new transition.

I don’t know the exact issues’ nuances, but one thing is certain; more than one federal judge and several states’ attorney’s generals have raised questions which have called the system into question as to its validity to legally serve, support and substantiate the validity of the cause for which a bank may claim right to pursue a foreclose.  

Therefore, in this light, the following is an excerpt from my next proposed post:

Re:   Cram Downs …Mortgage Modifications, Principal Write-Downs, Principal Forgiveness, Foreclosures  and Short Sales.

Are the Banks Just About to Throw in the Towel?

Over the last couple of days, there has been no small stir in pursuing a conversation which regards how banks troubled mortgages may and most likely will be handled. At issue is in  regard to how banks may be willing to approach modifications with respect to those who may qualify for PRINCIPAL WRITE-DOWNS.

For more on foreclosure issues regarding principal forgiveness, see some of my Google Search’s return below. I used:   “Refinance Principal Forgiven” as my search parameter.

January 31, 2011       © 2011 by Michael C. Gray, CPA

http://www.realestateinvestingtax.com/shortsale.shtml

James Pethokoukis

Politics and policy from inside Washington

An August Surprise from Obama?

 

http://blogs.reuters.com/james-pethokoukis/2010/08/05/an-august-surprise-from-obama/

Home  |   Change Text Size  |   Contact IRS  |   About IRS  |  

The Mortgage Forgiveness Debt Relief Act and Debt Cancellation

http://www.irs.gov/individuals/article/0,,id=179414,00.html

May 19, 2009 … See Example 2 on page 13 of Publication 4681, Canceled …
www.irs.gov/individuals/article/0,,id=179414,00.html – Cached – Similar

http://www.irs.gov/individuals/article/0,,id=179414,00.html

The Tax Aspects of Short Sales; By Robert D. Grossman, Jr. Esq.

http://www.irsproblems.com/articles/article7.html

Taxes Could Apply to FHA Short Refi Principal Reduction

By Michael Kraus on September 13, 2010

http://www.totalmortgage.com/blog/mortgage-rates/taxes-could-apply-to-fha-short-refi-principal-reduction/6291

Mortgage Forgiveness Debt Relief Act of 2007

http://m.extension.illinois.edu/toughtimes/mortgage_forgiveness_debt_relief_act.cfm?2

So, what else sucks as much …in much the same …and like fashion?

The size and scope of the multiple issues in the answer to this question make for an alarming understanding whose broader view stands much in the same light. That is to say; much is the same ways that commodity prices act as a tax to suck expendable income away from other areas of consumer discretionary spending.

 In other words; the picture of what is conspiring against expendable income …is much larger than merely rising commodity prices.