Sunday, January 3, 2010

Capitalism's Ramifications

A nice image to start the day.

We have moved around quite a bit in our lives. People ask me why and I really have no answer. After all, I don’t live alone. I don’t make all the choices. Earlier on, I had a family, a spousal unit and children. Later it was just the spousal unit, (same one for over 38 years now), and myself. I guess one reason was that my middle daughter, the one who was having children of her own, was moving around the area as a young family might do to find a better place to rent or more convenience to their jobs. We just followed along to be close to the Grand children and moved closer to where they chose to live.

In 2009, last year, we purchased a home. Before that, we had been renting since 2001. This is the first home we’ve owned in eight years. I used one of the best benefits the department of Veterans Affairs gives out to Veterans, that is, the guaranteed home loan. No money down purchase of a home. I had used this before on other homes I had owned. The rule is, if you pay off the loan, you can use it again. I paid off other home loans when I sold property.

The farm field beyond the border of our back yard

The house is a single family dwelling. It is a ranch style or as they call up here in the North country, a rambler. Living room, kitchen, dining area, bedrooms and bathroom, all on one level. We like the lot our house sits on very much. There is a campus of the University of Wisconsin here in River Falls, and our lot, about a half acre, is attached to the experimental farm of said campus. This particular UW has a large agricultural department.

Morning sun streaming through the pines last Fall.

So, our back yard, beyond the chain link fence, is a farm. The lot itself is surrounded by large mature pine trees. We can’t see neighbors to the sides of our place, just that open view of the fields and trees behind us. The front is a regular neighborhood, just a few blocks to town and a convenience store, grocery, pizzeria, restaurants and other businesses.

A snowy look at the pine trees that line our yard.

The house was built in 1970. Before the first important gas embargo. Before anyone was talking about sustaining the environment. Before the price of fossil fuel for heating and generating electricity, had any importance to the middle class. The furnace in this house has a rating listed on the label as 80%. That was when it was new. Now, 39, no, 40 years later, I can’t imagine what the efficiency rating would be. Other furnaces that I have seen checked that are that old had lost 15 to 20 percent. I was a caretaker up in Ashland and remember the furnace guy coming over and doing such a check on efficiency at a rental house that I was in charge of. I’m guessing that my furnace would be rated at 60 to 65 percent efficient today.

Our neighborhood looking from the front of our home.

So, the government comes up with some plans to stimulate the economy. One of them is to invest in upgrading the heating and cooling plants in residential homes. Homes like mine that are inefficient and wasting energy. This is good for the economy because we are spending money on hard goods like furnaces and air conditioning units, most manufactured here in the USA. This alone would help in an economic recovery.

Other benefits are reduced emissions from the older equipment and cheaper operating costs. In the instance of my furnace, the savings in operation costs would pay for the new equipment in 3-4 years, not to mention the impact on the environment. The government offered $1500.00 tax credit if you replaced an old outdated inefficient furnace and air conditioning system. The manufacturer offered a rebate and the utility companies offered rebate incentives as well.

Looking for a new furnace that is more efficient, like this one.

In my situation, I would have spent $7500.00 for a new furnace, air conditioner and water heater to have them installed. I got two estimates. One was with Sears, a National company. The other was with a local heating and air conditioning contractor. The estimates were very similar and close in price. I was planning on going with the local guy, keeping the money here in the community. Keeping the local guys working. After all, this is the ultimate, in my mind, of how a stimulus plan was to work. Hire local vendors and workmen, spend your money at home. Then, they go out in turn and spend the money they make in town. And so on and so forth.

I'd also save on future heating/cooling bills, get cash back on taxes and rebates, (more money to spend on other things in the community right there), and raise the value of your home by upgrading the physical plant. Oh, and saving the environment. Probably the most important reason of all!

I’ll just go to the bank. The local small town bank where people know me. The bank that gave me the home mortgage to begin with. I don’t have $7500.00 laying around to make a big purchase, I’ll borrow it. Even paying a loan with interest would save money, just from the operational costs.

The bank tells me that I don’t have any equity in my home. I know it is a bad economy, but I don’t have equity enough to buy a new furnace that will save me money and save the environment? “These are bad economic times”, I was told. Hey, did I mention I'm putting the new furnace and air conditioning unit in my house? I'm not borrowing to go to the casino! Funny, they didn’t tell me that when I bought the house last March. I argued, but to no avail. If I were to go to another bank and they checked my credit report, they would see I asked for credit elsewhere and was refused and they could tell me that too many requests were made for credit, so, therefore, no loan for you. Money nazis.

The program for tax credit is good through 2010, December 31st next year. So, I’ll just save money or get a loan later and upgrade. This Winter, I’ll spend the money I could be saving on gas and electrical costs because I didn’t get to upgrade my furnace. Then, in the mail, I get the tax bill. This is what I will have to pay in taxes in 2010. It is based on the value the city says my house is worth. Well, it’s $25,000.00 more than I paid for the house. The same house that has no equity.

Now folks, they can’t have it both ways. They can’t tell me my house is worth less and then tax me on a value that is worth more. I talked with a city councilman I know and asked him about the procedure to lower my tax assessment. There will be a date set up for people to do just that, and it comes up later in the year. But first, I’m gonna go have a little chat with Mr. Banker and show him the tax bill.

By the way, as a good Democrat, I don’t mind paying taxes. Since this country is so great and wonderful, we should be waiting in line to pay them. We have great schools, a wonderful police and fire department, our streets are in good repair and plowed of snow quickly and efficiently and other services that make our community shine. I’ll gladly pay the taxes, but the bank needs to see that worth too. That’s where I’m coming from. You'd think I'd have an edge dealing with a small town bank as opposed to one of the larger corporate entities. That doesn't seem to make any difference so far.

Small town bank.

This will take a while I’m sure. The wheels of banking and government turn slowly, but check back with me in a couple of months and see what happens. I plan on being a squeaky wheel on this one. All I want is to save money each month on utility bills and get some cash from a rebate and stimulus program while I increase the value of my home while helping the environment, all the while, helping the locally owned bank make money on loan interest and keeping local workers and business healthy. Is that so hard to accomplish? I wonder why the economy is bad. Maybe too many rich people getting richer while the thumb of big business, banking for instance, continues to hold us down. It's $7500.00 dollars, less than 1/3 the cost of a new pick up truck. And the furnace won't rust out in five years and lose value like the truck.

Big city bank.

By the way, who is buying those trucks and cars they advertise on TV? Must be the qualified buyers as stated in the small print. I wonder how much those advertisements are adding to the cost of the same trucks and cars for those that aren’t qualified and have to pay higher interest and down payments. Funny, I thought we owned the automakers??!! Strange system this capitalism. Does anyone really know and understand how Communism or Socialism really works and how it is different from the Capitalists? Something to look in to.

Have a great year in 2010. May peace enter your life at some point.


Fran said...

Oh the old bureaucratic red tape run around.
You are right here, though. They can't have it both ways.
I have a friend who appeals their home/property taxes EVERY year! It's like the opposite of selling your home-- where you point out the flaws & problems to get taxes lowered.
So you can try to persuade them, and something you might do is call the news.
Or even the Dept of Vets affairs. Bad advertising for them to be turning down a vet who wants to be energy efficient.

I'm glad you are not going to take no for an answer.

Call Vets Affairs & see if they can get the bank to budge... or find you a lender who will approve the loan.

If not call the local news media-- get this on the 6 o'clock news & I bet some bank will scramble to "meet the need".... making this a public story might be the turning point.

The bottom line is it makes sense.
It improves the value of the house
It stimulates the economy
It helps the environment
It will save money overall

Jeez! No place for common sense in capitalism?

What part don't they understand???

Give 'em hell.... well, I know you will handle this in a dignified manner..... but I support your plan to not take no for an answer.

Fran said...

BY the way..... since you have time, you too might want to appeal your taxes every year that they do the ridiculous inflation.

Find some good books @ the library or search the internets on how to appeal your homeowner's taxes.

I agree-- I don;t mind paying taxes for the good stuff-- public health & safety, schools, roads. etc.

I'd rather pay for schools than jails.

Me said...

Excellent post, my friend.

You really nailed it.

"We The People" have been thrown under the proverbial bus by big business.

Since the day corporations were granted the same rights as PEOPLE, we've been nothing but a $$$ machine for them.

Keep fighting the good fight, Spadoman.

With enough of us joining together in this battle, maybe, just maybe, we can bring logic and compassion back into the equation.


Mel said...

*scratching head*

Yeah. Now make that make sense. No equity, eh?

I'm glad to hear I'm not the only 'dog with a bone' when it comes to double talk. Make me crazy--and I'm not one to just take 'no' for an answer (silly people oughta know that by now!).

I'm happily in my little yellow house on the corner--the one with a pretty good rated furnace, considering it was changed out a few years before I purchased the home. I waited a long time before settling here in this little house--and it's quite the home for us, doable and comfy for just the two of us. I think we plan to grow old here..LOL..or at least old-er.

I love the look of your backyard.... *happy sigh* There's a place to just BE. Pull out the chair, watch the birdies and just....BE. :-)

susan said...

Yes, it's the old rock and a hard place story all over again. I've been reading about a grass roots campaign that's underway convincing people to close their accounts at the big banks and opening new ones at the small local ones. If people did that at least the old style banks might have some money to lend. As it is now, they're under a lot of pressure without the benefits of having open government assistance.

You have a really nice looking back yard and the front looks pretty good too.

Spadoman said...

Thanks for stopping by the Round Circle

Fran... I already have started talking with the city councilman. He will tell me when the time comes to go in front of the board and get the tax bill changed. If for no other reason than that I paid less for the house than they are saying it is worth. I like the idea of the newspaper article. Maybe I'll start with a letter to the editor. I might be able to write that. The Department of Veterans Affairs won't do anything. They have new programs out there to refinance Veterans homes, but in my case, I just bought last March. I have a low interest and probably couldn't do any better.
I know there are other lenders, I just didn't persue that yet. I will when I have to.
Thanks for your input. Hope you have a great New Year.


Hill Gal..., Love to see you here. Like old times. I went back to your blog last night. I'll jump in there one of these days. Thank for stopping by.
Peace to you my friend.

Mel... Doesn't make a lot of sense, does it? Oh well, I've always hated dealing with banks and lawyers. Glad you like the back yard. We love it. I saw a picture of your place, it looks like a cute place. I'm sure in my travels I've driven through so many Iowa towns, I either have seen your place, or one in some town that looks similar. Neat, clean, simple and homey.

Peace, woman.

susan... You make a good point about going to the opcal bank. That's what we've done all these years. Shopped i town, even when Wal Mart was cheaper. We don't eat at the chains, we go to the local diner. The bank, the same. That'
s why I am so confused. I never thought the local bank would turn me down. But maybe you're correct to say they don't have a of of money to lend. We'll see how this one turns out later this year.


Anonymous... Kind words, but who the hell are you?
Peace anyway, to you and all the anonymouses.

Anonymous said...

We're all in the same boat with regard to property taxes. During the late 1990's assessments were very low compared to values (who would complain?)

Today everyone's home is worth less and could ask for a reduced assessment but the overall bill for schools and services still stays the same and you would still be assessed roughly the same amount.

If assessment were truly accurate the number known as the mil rate would increase and that is something no politician wants to admit he/she increased.

We're feeling the inverse of what was happening in the late 1990's. It's kind of an echo effect.


Mike Woolsey

Fran said...

Hey Spado~ How about asking the local utility company? Sometimes they have funding sources as well.

One more thought.... maybe ask to speak w the bank manager. Tell them of the situation & tell them you want to give them one more opportunity to review & approve the loan, before you decide to go public with the information.


Is this the kind of publicity the bank wants?

Bad publicity is most damaging to a business, and if they look at it in this light, they might rethink their decision.

Pissed off locals might decide to not do business with them.

Anyway... try taking it to a higher level.