enter the dragon….

by problembear

when you are writing a script it is imperative that characters are well drawn and understandable to the audience. but that is not enough. if there is no tension or if the opposing characters are not evenly matched it is boring and too predictable and people soon lose interest.

now that payday lenders are finding it difficult to argue that interest rates that average 400%  for our working poor are reasonable they are resorting to their worn out script ….

“but where will the poor credit challenged go without us?”

and their companion piece….  “it will put our employees out of work.”

these be dragons folks. in other words, they are a concoction of imagination by payday lenders to make you think that these concerns are real.

now, i think a little plot twist at the end is very important in fiction, but in real life, these two dragons are mythical. first. i have never seen a law stop anyone from making money. you can’t tell me that 36% interest is not profitable and reasonable. second. many states (19 so far) have enacted similar laws and people still seem to survive just fine without being charged 400% interest. and the employees simply move where the money goes.

the thing about payday loans that is never examined is the ease with which they are taken out. ten minutes and no credit check. why? because at 400% interest the payday lenders are making so much that the few people who slip through their formidable collection net are simply meaningless and statistically irrelevant.

but let me ask one question…. what does it say about a nation that allows this slip-knot of easy money which traps people who cannot easily pay the original loan amount into a cycle of debt in the first place? it says that it is ok to be irresponsible with money. it says go ahead and ruin your credit all you want. it says eat live and be merry for tomorrow you die. it says why be an ant who saves for the winter when you can be a grasshopper who dies at the first sign of frost. payday lending  is simply not a healthy thing for our kids working low-pay jobs and our seniors on social security to turn to. it further impoverishes them to the point that already overly burdened non-profits during this recession must step in and support them.

the arguments of the payday lenders are false. beware the dragon…..it sells people on a false fairy tale of easy money that turns into a fire-breathing dragon in the end.

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  1. cosmicgarden

    Just like the fiction of the family farm being lost to the “death tax.” Just doesn’t happen.

  2. Thomas Kent

    Or the fiction of “double taxation”. (CI-105) Those TV commercials look pretty scary, don’t they!

    Oh, wait. Halloween is just around the corner, isn’t it.

  3. Pogo Possum

    I grew up in farming/ranching country on a 4th generation family ranch, Cosmicgarden. I know many families who lost their family farms as a direct result of the “death tax”.

    I know others who were able to find a bank willing to lend them the money to pay the tax that only delayed the loss. The financial burden of carrying the additional debt resulted in many of my friends losing their farms/ranches several years after the estate were settled due to either foreclosure or forced sales. I assume some economists wouldn’t attribute the “death tax” as the cause of their loss because the force sale/foreclosure didn’t occur at the time of death. That still doesn’t change the reality that the financial burden of borrowing money to pay this tax can often be one of the key factors in some people losing their family lands.

    I know other close friends who were fortunate to pay off the loans needed to pay the “death tax”. However, what some of the statistics don’t tell you is that the added financial burden placed on these families to pay off these loans had other serious effects including difficulty in sending their children to college, very poor life styles, health issues due to the added stress, divorce and in the case of one family I know, suicide.

    My family was “lucky”. My parents found a bank willing to lend them the money in the low interest rate environment of the 1960’s. The amount was so high compared to the real market value of the ranch that my mother often said the government just gave them the first chance to buy the ranch.

    If the death would have occurred 10 years later in the high inflation rates of the 1970’s, they would have been forced to sell. No bank would have loaned them the money and if they had secured a loan, the interest and principal payments would have eventually destroyed them.

    It took 30 years of mental and physical sacrifice by everyone in our family to pay off the loan that was taken out to pay off the “death tax.” And while we saved the family ranch, the stress caused severe health problems that led to the early deaths of both my parents.

    Don’t insult me with your ignorance about the death tax, Cosmicgarden. My family, my close friends and many other hardworking, sacrificing ranch/farm families know much more about it than you.

    • mr benson

      The death tax has got to be ended to protect america’s family farms and ranches. There are always the agribusiness and the developers who will help with that inter-generational estate planning, but the results aren’t good for Montana.

      One of the primary reasons to support open space bonds and the purchasing of development rights is to preserve family farms during the change in generations. The average age of family farmers in the Gallatin is very high and the need for money to preserve the Montana way of life is exigent.

      The highest and best price for the land in the estate is rarely farming. That makes the executor of the estate the executor of the family farm. It happens all the time.

      As for the payday lenders; support for the intiative is draining away. Today the Bozeman Daily Chronicle urged voters to vote “no”. It’s too late; we’ve already voted “yes”.

      • JC

        If you end the “death tax”, what will happen to open space bonds and conservation easements/purchasing of development rights? Take away an incentive for families to place prime properties into public or protected ownerships is not a good thing in my mind.

        As to the highest and best price for farm land, when will people start getting that profit (assesed value) is not always the best indicator of a land’s value.

        here in Missoula we’re winding up to have a huge battle in the next few decades over the value of farmable soils, as some of the best in the valley are on the chopping block. So a state, community or county can place a value on an attribute (soil and producing local crops) that routinely gets ignored as developers move in to create rural subdivisions with their fenced-in blocks of knapweed, or exorbitant 2nd/3rd homes.

  4. death taxes on farms is also directly responsible for funneling many of the family owned smaller farms/ranches into the clutches of big agribusiness cartels. if the death tax is re-enacted if cannot be allowed to apply to farms and ranches if we want safe and affordable local sources of food to remain in the hands of families who care about our nation’s health.

    think the recent egg salmonella scare

  5. Pogo Possum

    Good to see we agree on something, PBear.

  6. cosmicgarden

    Tax planning. Check it out. All the smart millionaires are doing it. Ask about an E S T A T E plan.

    The recent egg salmonella scare was in fact, attributable to a family-run egg farm, headed by habitual violator Jack DeCoster. Blaming that on the estate tax is completely nuts.

  7. “Blaming that on the estate tax is completely nuts.”

    oh really?

    http://www.grist.org/article/food-habitual-violator-jack-decoster-may-secretly-be-largest-US-hen-magnate/

    turns out jack may be one of the biggest operators out there. but what is incontestable is the fact that families will be selling out to big guys like this more and more if we don’t protect our family farms.

    how do you think jack built his empire? by buying out family farmers. now what do you think will happen if we pressure those few family farmers left to sell out with an onerous death tax? remember that most of the family farms are heavily in debt as it is. the value of the estate is tied up in land and land is not exactly a liquid asset these days.

  8. cosmicgarden

    Jack and his buddies are the ones who benefit more than anyone if we do away with the estate tax. Family empires are the ones paying for the lying ads on the radio and tv to convince you that the estate tax is a bad thing. There are so many ways small family farms can structure their business to keep the assets in the family, to benefit their kids—it really isn’t the small farmers being affected–ask any tax practitioner how many small farms they’ve seen lost to the estate tax. It is the big guys, exactly like good ole Jack and other multi-millionaire, billionaires, who are selling you the lie that the estate tax is harmful to small family farms and businesses.
    The evidence is clear. Actual research with actual data (not 30-year-old anecdotal tales) does not show family farms or businesses being lost to the estate tax. The very very few affected are the ultra-mega-rich but they’ve run a campaign over the last decade, paid for a lie repeated so often it becomes believed.
    Lots of propaganda out there–don’t buy it.
    Just think about this–if you stop and look at the scenario you’ve described—mortgages and debt *reduce* the value of the estate, thereby reducing the tax that would be due.
    And there are special provisions for family farms and family businesses. I can point you to the IRS regs if you like.

    • mr benson

      Much of the success of the open space bonds in Gallatin is due to the reality that cosmic garden refuses to acknowledge.

  9. the original post was about payday lenders but pogo possum and cosmic garden have piqued my curiosity here in their opposing views of the death tax. i have several questions about it and would like to invite them both to send me their arguments so i can post them on a separate post – death tax: pro and con. the post will simply be your words and your names will appear as guest bloggers on the post. are either of you interested?

    i think death tax deserves its own post so that we can learn more about it but i must admit that i do not know enough about it to create my own post. pogo and goof and cosmicgarden seem to know quite a bit and i would like them to share what they know. if cosmicgarden has another pro person who would like to contribute we could include goof also (mr benson)

    my immediate questions are: what is the status of the death tax now? who is pushing for it? who is against it? and of course all the pros and cons.

    if interested please send your aguments to my email:

    problembear@vzw.blackberry.net




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