MECHANICAL CONTRACTING | BESCHLOSS | CONTINUED FROMPAGE 44
on employees on both the shop floor and back office support services.
Rental switch continues to gather steam The embryonic switch from home owning to rental,
which I first tapped into last December, is starting to gather steam in all parts of the country. Although this is creating further headaches for the
moribund housing industry, which reported a further drop in construction, sales and pricing last month, it’s proving a bonanza for overall rental demand. The major sea change from home ownership to rental across the broad spectrum of the American population is already signaling shortages of rental units, whether they are high- rise buildings in the major cities or individual housing sites in suburban or rural areas. Even such government-sponsored house-holding
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gimmicks as reverse mortgages are turning out to be much more costly for participants than anticipated, due to interest rates and extraneous costs embedded in these transactions. Although these costs are not borne by the current owner, they greatly diminish the residual value of the home, either as an estate asset or for future liquidation. The measurable percentage of those opting for home
ownership in the foreseeable future has dropped precipitously. The fascination of residential ownership as
the core asset of the bulk of America’s population seems to be decreasing permanently. This is so despite the more favorable tax treatment of mortgage interest
rates and the $500,000 exclusion of capital gains on resale. Residential rental payments receive no tax benefits for the individual taxpayer. It seems that the current ongoing economic fragility
will continue to impact a much greater fiscal prudence on the spending habits of the average American. A savings rate back in the 5% range, where a deficit existed for the past decade, and even back to the mid-nineties, indicates a realization of stormy times ahead. Securing the future has risen to the top of the list of concerns by the vast majority interviewed by responsible poll takers. Much justification for this traumatic impact is the fear
of collapsing, or increasing restrictions on, such programs as Medicaid, Medicare, Social Security and pension benefits. No one is more concerned about the future viability of the American state of affairs than the income tax-paying American, who is eagerly looking forward to having their voices heard in the upcoming presidential election in November 2012.
Biofuels diversion proves globally catastrophic to food prices
With oil and food prices continuing their upward climb,
the administration’s increasing commitment to biofuels, especially ethanol, is proving a catastrophic alternative economically, both in the U.S. and around the world.
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phc june 2011
www.phcnews.com
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