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Archive for February 11th, 2009

Economics 101

There appears to be a sort of ripple effect happening in the economy.    

There are a lot of people in the area who have been laid off from their jobs, without warning.   Suddenly, they cannot pay their mortgages and insurance and utilities.   The remodeling job that they started eight months ago suddenly loses priority in their list of bills to pay.   So the guy who made the cabinets for their new kitchen and installed them two months ago has not been paid for his work.   The homeowners would pay him if their bank would just let them refinance their mortgage, but this has become quite difficult since they were laid off at the boat factory.

So the cabinet maker doesn’t have enough money to pay his own bills.   He paid up front for the wood he made into the cabinets.  The last thing he has in line to pay in his own bills happens to be the rent for the house he is living in.   The landlords are happy that there is someone living in the big house, keeping the utilities paid and the place warm.    An empty house can deteriorate awfully fast.    And there don’t seem to be people lining up in the streets waiting to rent houses.

But the landlords have to pay for insurance and for the mortgage on that house, which is coming out of their monthly income.    Suddenly, the flow of funds dries up and they start looking at all aspects of their life and deciding what they will do without in order to make ends meet.   

We are the landlords, and I haven’t started looking at the dog and seeing curry yet.  There are quite a number of people around here who have had to take their pets to the pound because they simply can’t afford to feed them.   We aren’t there yet, but the wolf is at the end of the block, making his way from door to door on his way here.

Thank goodness we have the mortgage on this place all paid up.

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