The headline reads: “Mortgages Eating Up Incomes,” so I expected to find another article about how rising rates on ARMs were consuming more and more of borrowers’ incomes.
According to the article, over a quarter of Michigan residents spend more than 35% of their income on servicing their mortgage debt. I see nothing intrinsically wrong with a mortgage being a substantial portion of your month-to-month expenses. After all, a home is probably the single largest purchase any of us will ever make – until we sell it and move in to a bigger one.
Unfortunately, the Free Press article jumps on the crisis-du-jour, and blames mortgage debt for peoples’ predicaments, but it does so by spotlighting the plight of an early retiree who has a house, and a vacation home:
When Chris Gowman’s employer was sold in 2001, he was offered a $4,000-a-month pension.
The former ANR Pipeline worker took it, but ever since, he’s had to spend half of it to cover the mortgages on his homes in Roseville and Harbor Springs.
“I’m not living the high life by any stretch,” said Gowman, 58, who drives a 1991 Oldsmobile 88.
I’m certain they could’ve found a more sympathetic story than Mr. Gowman, who was able to retire early on a modest pension, and owns two fucking houses. Not living the high life? He hasn’t worked in six years, during which he’s collected close to $300,000. There is probably a genuine crisis brewing out there these days – has been for quite a while, but Mr. Gowman is not a representative case and is deserving of no sympathy.
The article also notes that many people are likely
to have at least one credit card and a car note, householders’ total debt could eat much more of their incomes. That leaves the most cash-strapped at risk of losing their homes, said Pava Leyrer, president of the Lansing-based Michigan Mortgage Brokers Association.
…which, is a lesson to its own: All the consumption spending we’ve been doing for decades, to “stimulate” the economy, has actually put us in the hole? Ever since Keynes, we’ve been told to spend! spend! spend! in order to facilitate the flow of money according to some circular diagram, and that the inevitable multiplier effect of consumption spending will enrichen us all.
Not true, huh?
I agree that the Freep chose a poor example. Harbor Springs? Doesn’t owning a home in that area *define* living the high life?
My penison is only two thirds of his, and I am damn happy to have it…and I pay a significant portion of my health care.
Miller Brewing should do a commercial about this guy — he shouldn’t be allowed to drink Miller beer because he’s too affluent.
I would love to not be able to live the high life while having 4grand a month. Id trade this guy situations in a heartbeat.