California Free Press

Off the Top of My Head

Starter Homes Cost More Than $1 Million in 237 American Cities

by John Lawrence

In many US cities a starter home costs more than $1 million making it unaffordable for most young people who make less than $400,000. CBS News reports:

If you put 20% down on your $1 million home, you would need an $800,000 mortgage for the remainder of what you owe on the purchase. In this case, your mortgage payment would be $7,739 per month, inclusive of estimated property taxes and homeowners insurance costs. That amounts to about $92,868 per year in mortgage payments. 

With 0% down, you can expect to pay $9,070 per month inclusive of estimated property taxes and homeowners insurance costs. With less than 20% down, you should also expect to pay for private mortgage insurance (PMI), which would cost about $1,250 per month. That works out to a total of $10,320 per month, or $123,840 in annual mortgage payments. 

Based on these figures, you would need to earn $331,671.43 annually to afford a $1 million home with a 20% down payment if you follow the 28% rule. Or, you would need to earn about $442,285.71 annually to afford the same home with no down payment based on this rule. 

Obviously, only very rich families with parental support can afford to buy a starter home in 237 American cities. So what is the solution? If you're young, move to an American city where the average price of a starter home is around $200,000. Cities like South Bend, Indiana, Cleveland, Ohio, or Topeka, Kansas. Indianapolis, Indiana has cheap starter homes. The median price for a housing unit in Indianapolis is $232,000. However, think twice about cities that are desirable or undesirable due to climate change. I wouldn't buy a house in a city in the south, for instance. Also there are several other factors like what's the job situation. As time goes on, some areas of the country will become virtually uninhabitable due to climate change. In general you have to consider the topography. Are you close to a river or creek that could flood? Are you close to a forest that could burn? Does the area have adequate water resources? What about infrastructure? I wouldn't want to be too close to the ocean as climate change raises ocean levels and shore lines are washed away.

Young people should be given a path to home ownership like returning GIs from World War II. They could buy a house with nothing down. Their mortgages were guaranteed by the government. In exchange for a two year commitment to the American Climate Corps, young people should also be able to buy a house with nothing down. Home ownership is the time proven way to build middle class wealth. Renters will never build wealth. The government should be in the business of creating a strong middle class. This can only be accomplished by encouraging wide spread home ownership, and this has to start with young people getting into homes.

Off the Top of My Head

Mud Slinging and Character Assassination: the Only Things Republicans Know How To Do

by John Lawrence

And then the pundits discuss the mud slinging by the hour. Calling people names. Making up stuff. What's this got to do with the future vision for the country? What I want to hear from Trump and Kamala is their vision for the future of our country. I could care less about what they seem to be all about - destroying their opponent. These are the ethics of a wrestling match - destroy your opponent. Kamala has to get specific about a few policies, namely, the border, taxation and abortion. She needs to co-opt Trump's issues. She needs to call for a tax cut for the middle class while raising taxes on the rich. On the border, she has to call for strengthening the border to the point that it is impregnable while calling for increased legal pathways for immigration and asylum. On the wars she has to demand a cease fire and hostage release in Gaza and a settlement in Ukraine that's basically a compromise instead of an all or nothing approach.

The overriding issue of our times is climate change. Nothing could be clearer than the differences between the two parties on this issue. The Democrats are very environmentally conscious. Republicans couldn't care less about the environment or climate change. All they care about is their plastic straws, gas guzzling vehicles, guns and meat. Don't ask them to change their way of life in order to save the planet for future generations. It's hard to imagine a worse ethical stance. They are against everything that is conducive to making the world a better place. It's the legacy of an ethic of selfishness as promulgated by Ronald Reagan, George W Bush and others including Ayn Rand who wrote The Virtue of Selfishness. The US has a very weak, to the point of nonexistence, communal ethic. Individualism and competition is the fabric of American character. There have been a few exceptions, namely, the Depression and World War II. Even in those cases there were many voices who called for not getting involved and just letting the chips fall where they may.

So Kamala, don't get caught up in the mudslinging, character assassination and name calling or responding to same. Express clearly where you are on the issues and where your policies will take America and the world. Vagueness is the enemy of clarity and decisiveness. Better to ignore Trump and his puerility. I want to see clarity about the border and clarity about taxation. As far as women's reproductive rights, Democrats own that issue. As for the rest, a continuation of Biden's policies in terms of infrastructure, the child tax credit, elder long term care and other aspects of Biden's Build Back Better program are important. Especially, the surge in mental awareness and acceptance of mutual responsibility for climate change and the environment is paramount regardless of Republican insistence on keeping their plastic straws, guns, meat and gas guzzlers. A change in the mentality of Americans has to occur or climate disasters will only get worse until many areas of the US, not to mention the world, will become uninhabitable in the very near future.

Off the Top of My Head

Young People Need a Path to Home Ownership and Hence Wealth Creation

by John Lawrence

Kamala Harris needs to give young people hope that they too can be home owners. This has traditionally been the path to wealth creation for the middle class. When the GIs came back from World War II, they were able to get mortgages with no down payments although black GIs were not able to take advantage of this program due to redlining. This is the key to home ownership for young people today. There has to be a way to get a mortgage with no down payment. What is happening is that economic and  financial forces are driving the cost of home ownership out of sight. Corporations are buying up single family homes and turning them into rentals. With nothing to stop this trend America will become a nation of renters. Renters create wealth for their landlords not for themselves. Right now there is no path to home ownership for young people except if their parents help with the down payment.

The US is becoming a nation of modern day peasants who own no property just as medieval peasants did not. They created wealth for the nobility who were their landlords. Today as home ownership recedes from reality for young people, they are looking forward to living paycheck to paycheck with annual rent increases. Even with target inflation of 2%, rents will continue to rise at least by that amount as young people are saddled not only with student loan debt but car payment debt and credit card debt. They will never get ahead as the corporatization of home ownership results in wealth accumulation for corporations and the rich. Kamala needs to address this problem so that young people have a pathway to home ownership the way returning GIs from World War II did.

President Biden has already set up the American Climate Corps. This is the existential issue of our times. Young people who sign up for a two year stint in the American Climate Corps should get a no down payment pathway to American home ownership. I would like to see Kamala implement this in lieu of making this a perk of joining the military. There are already all sorts of perks for joining the military while hardly any for nonmilitary national service. There should be pathways for young people to succeed without joining the military. Right now you can get a free college education by joining the military. This perpetuates militaristic incentives to get ahead in this country. There are no such pathways for those who want to serve their country without joining the military. There should be. There should be a pathway to wealth creation and incentives for serving America by addressing the most important and impending issue of our time - climate change and environmental justice. We need important programs to put people to work in the environmental area and in return they should get a pathway to home ownership and wealth creation. Otherwise the US will become a neo medieval society with the majority of people enhancing the wealth of the already wealthy and living paycheck to paycheck with most of that paycheck going to paying rent and interest on debt.

Off the Top of My Head

Tax Cuts for the Middlle Class; Tax Hikes on the Rich

by John Lawrence

The two issues Republicans have are tax cuts and border security. Don't cede these issues to Republicans. A majority of Americans want a secure border. This has nothing to do with LEGAL immigration or even with amnesty. Limiting amnesty to those applying for it legally does not require any changes in the law. What it does require is reinforcing the border so no one can get over it illegally. This would then require more resources devoted to reinforcing the border.   In terms of tax cuts, Democrats have to stress tax cuts for the middle class paid for by tax hikes on the rich. Kamala should go right after these issues. She needs to be extremely tough on both of them. Let's face it: Democrats are going to vote for her no matter what. However, at this point in time, most voters are independents. She needs to co-opt Trumplican issues. And don't be too worried about a plan. Does Trump have a plan? No, he just asserts, "I will do this. I will do that." Kamala should take a page out of Trump's book. Just say, "I will do this. I will do that." She doesn't need to spell out HOW she's going to do it in detail. For sure, Trump doesn't.

Now that Joe Biden has dropped out of the race, he doesn't have to do two jobs - being President and campaigning - while Trump just has one - campaigning. That's why Mike Johnson wants Biden to resign: so that Kamala will be saddled with the responsibilities of President instead of devoting full time to campaigning. Democrats know what the Democratic agenda is in terms of providing for and addressing the needs of the middle class and the poor. But she has to address the sweet spot - where the majority of voters are and what the majority of voters are concerned about. Of course the abortion issue resonates well for Democrats and all Americans.

This whole thing about a short campaign season for Kamala is ridiculous. Most countries don't let political campaigns last more than a couple of months by law. In France political campaigns just last a couple of weeks. In Canada the longest political campaign was 74 days. In Australia, the longest political campaign lasted 11 weeks. In Japan campaigning is allowed for 12 days. In countries where campaigns are limited by law, elections aren't controlled by big money interests as they are in the US. The longer the campaign season, the more big money controls elections and politics. In the US, if we don't want the very rich to control elections, not only the campaign period, but also the amount of money spent on political campaigns needs to be controlled.

The US is becoming a neo-medieval society in which the majority have no hope of home ownership, but are destined to work paycheck to paycheck and be renters for life. This means no asset accumulation while their rents increase even with low inflation or target inflation of 2%. 2% target inflation means at least 2% rent increases over the course of a renter's life. In addition to not having any asset accumulation those living paycheck to paycheck are vulnerable to credit card and car payment debt so that they are supporting the banking system with interest payments for their entire life.

Off the Top of My Head

Why Are Democrats Not Hammering on the Trump Tax Cuts Which Need to be Increased for Middle Class and Eliminated for the Rich

by John Lawrence

American voters love tax cuts. That's the main appeal of a Republican administration. Biden has said he won't raise taxes for anyone making less than $400,000. This is not a strong enough statement. He, or whoever eventually is the Democratic nominee, should say that they will lower taxes for anyone making less than $400,000. Most of the Trump tax cuts go to those making over $400,000. CNN reported: "The highest-income households would receive more than 45% of the benefits if the expiring provisions of the 2017 Tax Cuts and Jobs Act are extended, according to an analysis released Monday by the Urban-Brookings Tax Policy Center." Why can't the Democrats see this? The Republicans' only appeal to the middle class are the tax cuts which give them a paltry $1000 or 1.3% of their income off their taxes while the rich households making at least around $450,000 – roughly the top 5% - would see their after-tax income increase by 3.2%. Democrats need to take this issue away from Republicans. Right now their rhetoric around this issue is too weak.

For those in the top 1%, who make at least $1 million, they get a tax cut of about $70,000, on average, in 2027. The top 0.1%, who make at least $5 million, would pocket a tax cut of nearly $280,000, on average, or about 3% of their after-tax income. Also extending the Trump tax cuts would have a big impact on the national debt, raising it by more than $4 trillion over the next 10 years – before interest costs are factored in, according to the Congressional Budget Office. Of course this will give power to Republican claims that the government can't support social security and Medicare any more. There will not be any more money available after supporting a one trillion dollar military budget and paying interest on the national debt.

What is wrong with the Democrats? There is already too much disparity between the very rich and the middle class. We are going back to a medieval society where the rich aristocracy run the political establishment and the middle class are nothing but modern day peasants. The peasants will not be able to build wealth because they won't be able to buy a house which is the main wealth builder for the middle class. They all will be renters for life living paycheck to paycheck. This is the reality for life in America today. People who have even one asset, a house, will get ahead by building wealth. People who are life long renters will only create wealth for their landlords. This is the way it was 500 years ago. Well, at least today, everyone has a cell phone.

Off the Top of My Head

War is Institutionalized; Peace is Not

by John Lawrence

If all you have is a hammer every problem looks like it can be solved by pounding a nail. If all you have is a military-industrial complex, every problem looks as if it can be solved by the threat or application of military power. This has been true for thousands of years, most of which time war was just accepted as a given. Now more elaborate justifications seem to be necessary, but the results are the same. Resources are devoted to war while a pittance is devoted to peace. The US currently spends about a trillion dollars annually on its military-industrial complex while the Peace Corps is allocated next to nothing. Congress has completed its work on a budget for fiscal year 2022, passing a $1.5 trillion spending package. Unfortunately, for a seventh consecutive year, instead of providing new resources to better meet the needs of a changed world, it keeps Peace Corps' baseline funding flat at $410.5 million.  Diplomacy and even common sense take a back seat to war. Take Ukraine, for example. The longer the war goes on, the predictable result is only more destruction of real estate and more lives ruined both physically and emotionally.

President Biden wants to continue the war until there is a "winner", and he is sure that with the provision of US military assets, that winner will be Ukraine. More level headed experts think that the war will only be settled with a partition of Ukraine. To settle the Russo-Ukraine war diplomatically, a number of analysts have suggested that the apparent military stalemate be accepted in a ceasefire agreement in which Ukraine would be partitioned along the current battle lines. If we look at the history of eastern Europe, we see that partitions are not a novelty. The Partitions of Poland were three partitions of the Polish–Lithuanian Commonwealth that took place toward the end of the 18th century and ended the existence of the state, resulting in the elimination of sovereign Poland and Lithuania for 123 years. The partitions were conducted by the Habsburg monarchy, the Kingdom of Prussia, and the Russian Empire, which divided up the Commonwealth lands among themselves progressively in the process of territorial seizures and annexations. Hmmm. Partitions are nothing new and the redrawing of national boundaries is nothing new? So in 2024 the powers that be insist that there will be no redrawing of national boundaries even if it means that a war of attrition will go on indefinitely. I think President Biden has been a great President when it comes to domestic policy, but less so when it comes to perpetuating the wars both in Ukraine and Israel. Without going into detail about Israel, he has not been forceful enough in restraining Israel from destroying Gaza.

America does not need to defund the Department of Defense (War). It just needs to refund a Department of Peace. The United States accounts for nearly 40% of global military spending, and devotes a larger share of its GDP to defense than most other countries. U.S. military spending was greater than the next ten biggest spenders in 2023. Fruitless wars will only continue if revenge is the operative factor. Peace building needs to continue in other parts of the world in spite of wars currently being waged. However, there is always money to fight wars, hardly ever is there money to wage peace. The military and/or the national guard could be used in a more productive way to provide security in those areas where peace builders need protection and even along the border. This would be a productive use of the military. Instead, most military personnel sit idle in 800 military bases around the world only to be deployed in hot wars. Why not use them to provide security in areas where militias are running amok? So I feel that, while military resources are not intelligently utilized, peace building resources hardly exist. The two could be complementary if used wisely.