Today’s Mortgage Interest Rates And The Health Of The Economy
Ask anyone you see how the economy is doing and there is a good chance he or she will tell you it’s terrible! At this point in time, it is a fair assessment the economic conditions have softened, but the truth is we are a long way away from a lousy economy.
A lousy economy is usually marked by high unemployment, negative Gross Domestic Product (GDP) and inflation. Inflation means high interest rates. None of these things are occurring in our economy today!
The economy has slowed down
While it is true there is a slowdown and many economists believe we are heading toward a recession, there is no recession now. There hasn’t been a recession since the mild one that started in the final year of the Bill Clinton administration and remained in place until shortly after the George W. Bush tax cut of 2001.
A recession is defined as two consecutive or more quarters of negative growth as reported in the GDP. As of yet we have not had one! So, why is there a common misconception the economy is doing poorly? Well, if you constantly beat people over the head with false statements and half-truths, they will believe you after a while. Why are we getting these false statements and half-truths? Look no further than politics!
Misleading news reporting
Elections are often won on the strength, or should I say the weakness of the economy, because the party who is out of power usually wins the presidency when the economy goes sour. Therefore, the Democrat party with the assistance of their parrots in the media have been berating the economy for the last 7 years. An excellent GDP of 5% or a record low unemployment rate of 4.5% did not stop them.
In short, the fact they weren’t reporting factually didn’t faze them in the least! Their hatred for George W. Bush inspired them enough to abandon all ethics and tell untrue horror stories about the economy every day.
Interest rates, a key indicator
When making a true valuation of economic conditions, how high or low interest rates, especially mortgage rates interest are, play a key roll. The fact is interest rates are excellent right now and though some may argue it may not be all good, it looks as though they are headed still lower, at least for now.
In order to see just where we are within the realm of mortgage interest rates, it would behoove us to take a look at where they have been historically and see if we can gain some perspective by doing so.
In 1971, the rates were just about where they are today, namely in the area of 5.5%. From that point, they increased through the 70’s. While it is true they, or any stock or commodity’s price in its rising stage, never goes straight up, interest rates remained in an upward trend until 1983.
Controlling the price of gas
There were many things that contributed to high interest rates at that time. One of them was the fact price controls were instituted on oil. When price controls are instituted in a supply and demand driven economy, the commodity whose price is being controlled becomes unavailable. Unavailability of oil caused a true hardship for the economy of the U.S. and its citizens for many years while these controls were in place. Until they were lifted the economy suffered.
Anyone who is saying the economy of the last 7 years was bad was either not alive during the late 70’s and early 80’s, they have amnesia or they are running for office in 2008. A case in point is the fact in 1983 interest rates on fixed rate mortgages peaked at around 15%! This was the rate given to people possessing A-1 credit. Others had to pay more. As much as 23%!
Interest rates came down, in large part due to the policies of Ronald Reagan. His free market capitalism based agenda was sorely needed by the economy and it worked well during that period. The interest rates reversed in 1984 and went into a downward trend that has yet to come to an end.
Bill Clinton the free trader, Bill Clinton the protectionist
During the last 3 administrations, Bush-Clinton-Bush many free trade policies were put into place. These policies made the cost of consumer goods and capitol goods cheap and spurred on strong consistent growth during those years.
Bill Clinton was particularly good at drawing up free trade agreements. Now he, Mrs. Clinton and Barak Obama are running against these same agreements. I guess the lust for power transcends all logic.
So, where are the interest rates headed now? Lower, of course! Until we see a real bottom to the market they are still on a downward trend. Certainly, we will see this bottom if the White House changes parties this fall.
Looking for a change?
We have candidates talking about ending Bill Clinton’s NAFTA and GHATT trade agreements. This would be inflationary because, in part computers would probably cost about $15,000 each if they were made in the U.S.A. Wouldn’t that be good for business?
Also, these presidential candidates can’t wait to put price controls on oil! So, look out 15% mortgage rates, here we come again! On top of that they have announced their proposed spending programs and these programs add over $1,000,000,000,000, that’s one trillion dollars to our deficit! All this is really bad, but at least it will be an educational experience because finally a lot of people will find out what a lousy economy truly is!
Ed Lathrop is a successful Real Estate investor. He has developed EzCalculator, a Mortgage Calculator that shows you how to save $100,000 on your mortgage. Come visit this free site at Free Financial Calculator. Also, find out how to get your amortization schedule and use it to save big money at: Amortization Schedules Free. These sites are not owned by any lender, so no one will harass you for visiting!
Current Events Harm The Housing Market
Wow, what a week in the news; Eliot Spitzer, Geraldine Ferraro, Tony Rezko, Jeremiah Wright, and gas prices jumping to record highs.
What impact do these people and events have upon the housing market? Plenty. Experts were surprised this week to learn that the predicted increase in retail sales in February never materialized as retail sales fell .6% percent. What drives the economy? Consumer spending. It appears the higher cost of energy and food is causing the American consumer to pull back on non-essential spending. Something we predicted on January 5th could happen. Well it has happened.
Consumer confidence has been shaken with this sharp rise in gas prices. In my opinion the sleazy political stories about Spitzer and the Democrat Party primary campaign are not exactly confidence boosters. Low consumer confidence combined with eroding disposable incomes will impact home sales. If consumers are pulling back on small purchases, what do you think they are doing about large purchases?
This year is going to impact the economy and your pocketbooks in a hugely negative way unless Americans wake up and take positive actions on two fronts; energy and taxes. In my opinion governments, local, state or federal don’t have a money problem they have a spending problem. We have high costs for energy due to the failure of our government to implement meaningful energy policies, bowing to the desires of the environmental and tourist lobbies.
Although revenues to Illinois have increased at twice the rate of inflation the past five years, senate Democrats are proposing a 2% increase in the income tax, and an increase in corporate taxes that will be passed along to you through higher prices.
On the federal level both Democrat candidates will allow the Bush tax cuts to expire raising taxes on families of four, earning $50,000 a year, by over $2000. Simultaneously both candidates are proposing about one trillion dollars in new programs.
When will people say enough is enough about bloated government, higher taxes, and overspending?
When will the American people say enough is enough as they dig into their pockets paying $3.50 a gallon for gas? When people learn the truth about why gas prices are so high. Share the following five reasons why gas, and energy prices are so high with everyone you know. Please ask them to call their congressmen, senators, and state officials.
Reason number one why gas prices are high; taxes. The people of Illinois should be in complete revolt against their dishonest, dysfunctional government that takes about 40 cents a gallon every time you fill up in motor fuel and sales taxes. That money is intended to maintain, and build transportation infrastructure. Where does the money go? Into nanny state, feel good programs like kids care where 54,000 children have been enrolled, costing taxpayers hundreds of millions of dollars, and half the kids enrolled are from illegal immigrant families.
When will the state realize that by putting the gas tax into infrastructure improvements, where it was supposed to go in the first place, that those improvements would attract new businesses to the state, creating more jobs, so people could work, and accept personal responsibility to pay for their own kids care? The Feds add their motor fuel tax, then Illinois charges sales tax on top of the two motor fuel taxes, triple dipping into your pockets. Reason number one your gas prices are high; taxes.
Reason number two your gas prices are high is due to environmental and tourism lobbyists buying votes of those who write energy laws.
We have billions of barrels of oil in Alaska, the continental states, and offshore. Environmentalists have blocked the drilling of these resources.
Will you feel better the next time you fill your tank because some toad did not lose its habitat, while you have to scrimp at the store to feed your kids? The next time you vacation in Florida or California you can be ecstatic not to see oil derricks miles offshore affecting your view of the horizon. Today you’ll only have to pay $50 per person each plane trip in fuel surcharges.
We need to capture our own resources lying beneath our feet instead of importing oil from dictators and terrorists. The price of oil is the single biggest factor in the price of gasoline.
Reason number three why gas prices are high is the environmentalists have made building refineries all but impossible, and even fight the expansion of existing refineries.
BP is attempting to increase the size of the Wood River refinery by 50%. Environmentalists always show up in larger numbers at hearings and meetings, than do supporters. The squeaky wheel gets the grease.
This is an eight billion dollar proposal that will double production capacity, and create hundreds of good paying jobs. Become involved and attend the hearings and meetings in support of refinery expansion. The application at Wood River is now over a year old. Due to the lack of refining capacity, we now import gasoline, sheer economic madness!
Reason number four why you are paying high energy bills is because environmentalists have blocked the building of nuclear power plants because they say the plants are not safe. The U.S. Navy has powered nuclear submarines since the 1950’s without an accident, and even the French produce 80% of their electrical power from nuclear plants. Time to start getting serious about nuclear energy, let your elected officials know.
Reason number five why energy costs are high is environmentalists blocking the use of clean coal technologies.
The U.S. is the Saudi Arabia of coal deposits. Hundreds of local miners are unemployed. Clean coal technology could add tremendous numbers of jobs for the miners, to power plants employees, and provide a substantial boost in our electrical production capabilities. Environmentalists have blocked these efforts. Time to get serious about clean coal technologies, call your representatives and tell them you believe a miner and his family are more important than toads.
Ladies and gentlemen the well intended environmentalists are the real reason why your gas prices are so high, not the greedy oil companies our main stream media and liberal politicians want to make you believe.
Keep electing liberals and you have no grounds to complain about the cost of gas, because you voted for toads and owls over workers and their families, and it is costing you at the pump. The technology exists to take advantage of our oil, natural gas, and coal reserves in an environmentally safe way.
What does this have to do with real estate? Everything. This election year will determine if we are to become serious about lower taxes, responsible spending, and realistic energy policy.
Allow the politicians to raise your taxes, and to remain dependant upon foreign oil, and the value of your home will plummet, because the majority of folks won’t be able to afford to buy a home. It’s simple; demand falls when families pay more at the pump and the store decreasing their disposable income. Fewer buyers, fewer homes sell, and lower prices.
If there was ever a perfect example of the laws of supply and demand it is the skyrocketing price of food as ethanol producers consume corn meant for the food supply.
Here’s the truth if you elect politicians that want to raise taxes who are in bed with the environmentalists. The average family of four will pay $2000 more in federal income taxes, $1000 more in state income taxes, will pay more for goods and services when Illinois corporations pass along corporate tax increases, will pay $4 to $5 a gallon for gas, will pay hundreds more at the grocery store, and will pay hundreds more to heat and cool their homes.
Ladies and gentlemen elect either Democrat candidate president, and let the state legislators raise the income and corporate taxes, and the average Illinois family won’t be buying any houses. They’ll be lucky to keep the home they have as a result of the unintended consequences of feel good liberal policies and politicians.
Fritz Pfister is a licensed Realtor with RE/MAX Professionals Springfield Illinois.
Fritz is a leader in the local real estate market and hosts a live one hour radio program, now in its’ 13th year.
Fritz’s website is
SpringfieldHome.com
Fritz hosts home buyer and home seller seminars that have been attended by hundreds of consumers.
Fritz provides advice that helps consumers succeed in the sale or purchase of homes.
Hillary & Barack Sweeping Kids Safety Under the Political Rug?
Hillary Clinton’s camp came up with an impressive Internet Safety Guide that no one really knows about. Why isn’t she isn’t talking about it?
Barack Obama lists the topic of Internet safety for our children and families as one of importance in his technology issues section of his official website, while John McCain states, Children are our most valuable asset in his protecting kids from internet pornography and sexual predators section of his official website. So why are none of them discussing Internet safety and education issues, the increase in Internet crimes against kids’, and media literacy efforts on the 2008 campaign trail?
It is safe to say that the motto, Educate Not Regulate, could create lasting, concrete results when it comes to Internet safety and media literacy. For example, the Child Online Protection Act (COPA) was passed by Congress in 1998 in an effort to restrict minors’ access to adult-oriented websites. Now 10 years later, it was recently struck down again by a lower court. Just think about all the money that has been spent litigating this case that instead could have been spent on media literacy and online safety awareness campaigns that would have reached children and families around the world.
Education is a vital part in online child protection efforts. In fact, parental control tools that incorporate education as a key component in product offerings, such as the Children’s Educational Network’s kid safe browsers. They are making big statements in the Internet safety world.
For parents, combating the problem of unwanted online media exposure means they must rely on a mix of technological controls, informal household media rules, and, most importantly, education and media literacy efforts. Pioneers and experts in the Internet safety field, such as CEN Founder/CEO Greg Writer, use a compelling metaphor to explain why education is the most important tool on which parents and policymakers should rely:
Internet safety when thought of in the form of fences around pools, pool alarms, and locks can help protect children from drowning in swimming pools. However, teaching a child to swim and when to avoid pools or other bodies of water, not simply focusing on what is only in our own backyard, is a far safer approach than relying on locks, fences, and alarms to prevent him or her from drowning. Locks, fences and alarms provide substantial benefit. But parents cannot rely exclusively on those devices to keep their children safe from drowning. Furthermore, teaching a child to swim and to exercise good judgment has relevance far a single swimming pool.
Regrettably, we often fail to teach our children how to swim in the new media waters. To rectify this situation, a serious media literacy agenda is needed in America. Government should push media literacy efforts at every level of the education process and they should be talking about it during every phase of their election process. And those efforts should be accompanied by widespread public awareness campaigns to better inform parents about the parental control tools, rating systems, online safety tips, and other media control methods at their disposal.
A good example of an effective awareness campaign is one that began in the early 1980s, when the National Crime Prevention Council (NCPC) developed its popular “McGruff the Crime Dog” campaign to assist law enforcement agencies seeking to deter crime or build awareness about criminal activities. The McGruff campaign, which included the “Take a Bite Out of Crime” motto, offers publications and teaching materials on a variety of topics; programs that can be implemented in communities and schools, local, regional, and national training programs; public service announcements broadcast nationwide starring McGruff the Crime Dog; and support for a national coalition of crime prevention practitioners.
The NCPC reports that “now 25 years after McGruff’s first TV appearance, more than 75 percent of children recognize McGruff and over 4,000 law enforcement agencies own a McGruff suit. CEN is now partnering with NCPC and launching the “McGruff Takes a Bite Out of Internet Crime” via the McGruff Parental Control Browser using CEN Technology.
This same type of effort, as listed above for the McGruff original campaign, needs to be emulated on the Internet safety front. Government officials should seek to incorporate these examples, using Private Label Browsers with their image, as McGruff has done with CEN, if they want to construct a seriousl public awareness campaign about parental controls and online child protection efforts.
If policymakers want to encourage more widespread awareness and adoption of parental control tools and online child safety methods, they will need to expand their current efforts considerably and look at a bill introduced by Rep. Melissa Bean (D-IL) entitled the “Safeguarding America’s Families by Enhancing and Reorganizing New and Efficient Technologies Act of 2006,” or “SAFER NET” Act (H.R. 1008). The measure seeks to better coordinate and expand online safety education and efforts at the federal level by creating a new Office of Internet Safety and Public Awareness at the Federal Trade Commission that is explicitly responsible for improving public awareness and education about Internet safety.
If the legislation she introduced were ever implemented, the new FTC Office of Internet Safety and Public Awareness could co-create plans and materials for other lawmakers and communities. Officials from that office, along with experts such as Greg Writer who can speak out from personal experience and share the importance of the educational aspect of CEN’s technology, might be available to assist lawmakers or even accompany them on speaking tours to discuss parental controls and online child safety.
I say someone needs to light a fire under these candidates and get them talking about an issue they say, except on the campaign trail so far, is important to them.
Greg Writer is the Founder/CEO of Children’s Educational Network, a software company dedicated to empowering parents with tools and information to keep kids safe online. You can get free parental control software at http://www.childrenseducationalnetwork.com