Who Ensures Liberty and Justice for All

The Lorax spoke for the trees. At the dawn of the American nation, Madison, Hamilton and Jay spoke for the Constitution. In the present age will the Tea Party be the primary voice to define the size, scope and purpose of government?

The purpose of government – national or local – is to promote the general welfare. To this end citizens consent to be taxed. But exactly what does it mean to be a taxpayer? Taxpayers fill treasuries. However, it is citizens that build communities in which people want to live.

The concept of “vending machine government,” where the service one receives is equal to the fee one pays, was long ago dismissed as inadequate for any society that pretends to care for equity and justice. Yet here the debate still rages today. Government is wasteful, fraudulent and abusive. Taxpayers say they want “essential” services, which often only include police, water and sanitation. Is this the path to “a more perfect Union?” Presently the Union has 44 million people (1 in 7 families) living in poverty according to the Census Bureau.

The value of government cannot properly be measured by the number of discrete services a resident receives. Rather, government must be valued for its collective benefit and for its role protecting the rights of the many from the absolute rights of the individual.

Can the nation survive with less government? Of course it can. Fewer services are being delivered at the local level today than was the case just two years ago. In a crisis gaps get filled by volunteers and once risky innovations no longer look so dangerous.

But, it is false to argue that if less government is good, then no government is better. Absent government there is no commitment to civil society, no mutuality of interests and no shared responsibility. The result is the “state of nature,” which Thomas Hobbes so colorfully characterized as “solitary, poor, nasty, brutish and short.”

It is for the good of all that an ambulance arrives five minutes after dialing 911, that water flows from kitchen sinks, that library books are available, that autumn leaves fall from trees in public parks, and that the homeless are not abandoned to the elements in the dead of winter.

Great societies are built at a price. But the price is small when compared to the benefits.

Vacant Properties Compound the Forclosure Disaster

You don’t have to be a policy researcher to know intuitively that mortgage foreclosures and vacant and abandoned properties are a serious threat to the well-being of a neighborhood.  An increase in foreclosed properties in any neighborhood, especially a high concentration of properties in one neighborhood, creates an oversupply of housing stock (including low value distressed properties and short sales) that result in lower prices for nearby properties. This of course has a spillover effect on appraisals, reinforcing the downward pressure on prices. Finally, vacant properties become targets for vandalism, theft or arson. The longer properties sit vacant, the higher the cost to the community at large.

Because the foreclosure process varies from state-to-state, the length of time from a first delinquency notice until the property becomes REO (real estate owned, when title is transferred to the lender at the end of the foreclosure process) can be from a minimum of 40 days up to a year or more. REO properties can languish longer in both weak and strong housing markets because of tighter credit conditions for the average buyer.

The numbers are sobering. There were two million foreclosures in 2009. As many or more predicted by the end of 2010.  The resulting number of potential additions to the inventory of REO properties, according to research by Amherst Mortgage Insight, is estimated at upwards of 7 million properties nationwide.

Local governments are not powerless to prevent this problem. There are strategies that may be implemented in order to prevent properties from abandonment. These include:

  • Vacant property registries
  • Artistic boarding
  • Liens and fines to accompany tougher code enforcement
  • Purchase and resale to occupants or tenants
  • Conversion to rentals
  • Stay Put Notice

For a detailed explanation of these strategies, read the longer article in Nation’s Cities Weekly, NLC’s officials news publication at www.nlc.org.

Belief in Debt Relief?

Should forgiving student loan debt be the next federal bailout to stimulate our nation’s struggling economy?  Robert Applebaum, a New York lawyer and organizer of the aptly-named Facebook movement, “Cancel Student Loan Debt to Stimulate the Economy,” thinks so.  While the title isn’t catchy, the words “cancel” and “debt” used in the same sentence is all many Facebook users, 50% of whom are age 18-34, need to hear to get on board.  A city council member in Albany, New York is on board as well, and in 2009 the council passed a resolution with a 12 to 0 vote urging the federal government to consider forgiving student loans as part of a stimulus package for young people.

Most young people struggle to pay for college, the cost of which is increasing at a staggering rate.  With the reliance on loans, this struggle can extend for a decade or more post-graduation.  While financial relief for a small cohort of low-paid young professionals would be welcome, young college graduates have steeper income curves to look forward to over the course of their careers than any other age group.  Does that make them undeserving?  No.  Does it mean federal money could be better spent in other ways?  Yes – increasing financial aid for those seeking higher education, for example.

A common argument for cancelling student loan debt:  Young people seek out higher education necessary to obtain jobs in the public sector.  They struggle to pay off their debts on their local and state employee salaries, forcing them to leave public service in search of higher paying private sector employment.  By holding people to their debts, they say, the government is forcing a generation of young people eager to work for the good of their communities to sell out in favor of the big corporation.  The Public Service Loan Forgiveness program, which forgives federal student loans after 120 payments for those employed full time by certain public service employers, operates for just this reason.

But the question remains: Would federal educational debt relief actually stimulate the economy?  Many young people are putting off marriage and childbirth until well into their thirties.  They now know that they will have little to no social security to fall back on when they retire.  With an extra few hundred dollars a month in his pockets, a young, single college graduate likely will not run out and buy a house tomorrow.  In that case, is the answer to our country’s economic struggles a generation of recent college graduates with big screen TVs, luxury cars, and designer wardrobes?  Or are young people merely being irresponsibly encouraged to trade their 3% interest education debt for 19% interest credit card debt?

If this movement is to go anywhere, supporters need to get their stories straight.  What is the purpose of this potential stimulus plan?  Is it a bailout for those more deserving that the big banks?  Is it redirecting the career paths of many young college graduates for the good of the community?  Or is it merely a push for young professionals to “Buy! Buy! Buy!”, exacerbating American consumer culture for the alleged good of the economy?