It involves you going to Change.org, signing up (it's free, of course), and voting. It's pretty simple. Normally I wouldn't bother everyone but the goals of this plan are very important....briefly, here's a description:
Essentially what happened is Architect Ed Mazria (the dude behind those worldwide climate web casts) went to the Obama transition team and laid a simple idea on the table: what if we give mortgage rate reductions to homeowners if they agree to drastically improve the energy efficiency of their homes? In my opinion, the idea is pretty awesome - it ultimately lowers expenses for homeowners while providing jobs to thousands of people who work on the renovations. Here's the example they cite (it involves numbers but it makes sense so bear with me...)
Say you're a homeowner with a $272,000 mortgage at 5.55%, paying about $1550 a month. You decide you want your mortgage rate to drop to 3%. In order to qualify for the reduction, you have to improve the energy efficiency of your home 75% below code, and it's going to cost you a pretty penny: about $40,000.
Existing tax credits would take care of about $10,000 of that cost. The rest would get tacked on to your existing mortgage, bringing it up to $302,000. That doesn't sound good -- but here's the stroke of brilliance. At a 3% mortgage rate, you're monthly payments still go down. You'd be paying only about $1280 -- saving almost $300 a month on the mortgage alone, plus another $150 in reduced energy costs. The value of your home rises, you have more disposable income, you've given work to someone to do the upgrades for you -- and s/he's now paying federal taxes, and you've reduced your carbon footprint.
This sounds like a great idea. I'd be interested, however, to see what the long-term cost of the additional $30,000 on the mortgage would be, compared to the long-term savings of the interest-rate reduction + home heating cost reduction.
Perhaps this is included on the linked website... I'll go look.
Thanks, wonderK -- I will send this around to my peers!
Ryan, I completely agree, and that's why I question to some degree whether we should continue to incentivize the current paradigm at all, but I'm not sure--I think more suburbs are being retrofitted to become more walkable, and I hope this trend continues. After all, the only thing more wasteful than continuing the paradigm of the last half century's housing stock would be to abandon half a century worth of housing stock, I think.
Existing tax credits would take care of about $10,000 of that cost. The rest would get tacked on to your existing mortgage, bringing it up to $302,000. That doesn't sound good -- but here's the stroke of brilliance. At a 3% mortgage rate, you're monthly payments still go down. You'd be paying only about $1280 -- saving almost $300 a month on the mortgage alone, plus another $150 in reduced energy costs. The value of your home rises, you have more disposable income, you've given work to someone to do the upgrades for you -- and s/he's now paying federal taxes, and you've reduced your carbon footprint.
It sounds like, partly by the federal government (via forgoing some tax income by giving out rebates), partly the banks (in the form of earning less profit per mortgage... unless the extra $30,000 in the life of the mortgage makes it up to them, which is why I'm curious to do the math I mentioned above) and partly the homeowner, although the homeowner's cost might be off-set by lower interest (if the total interest paid truly is lower in the long run) and partly off-set by lower heating costs.
no it's all paid by the federal government (i.e. YOU). i had to laugh, manta, at the idea of banks partly paying for this by earning 'less profit per mortgage'. and the homeowner doesn't pay anything, but they get fancy new home upgrades and pays less in energy costs and mortgage payments (2-4% reduction in your mortgage is huge).
The federal government creates what's called "a mortgage buy-down program." If you are a homeowner, you can bring your mortgage rate down 2 or 3 or 4 points -- with Uncle Sam picking up the difference -- if you improve the energy efficiency of your home. It's an offer you can't refuse, because it means you can save hundreds of dollars on a typical monthly mortgage, plus hundreds more in reduced energy bills -- in perpetuity.
Those savings immediately go in to family coffers and can get spent, stimulating the economy. At the same time, all the demand for energy efficiency upgrades creates millions of jobs. The government recoups its investment in the mortgage buy-down from the income tax collected from the newly employed. And greenhouse gas emissions go down dramatically.
i looked at the pdf and don't see real numbers that this will pay for itself. sure it 'creates' jobs but i just don't see balanced numbers. plus this is creates another money-sucking government bureaucracy - read the fine print 'The 8.445 million jobs created by this Plan does not include the jobs that will be created by the $2 billion investment in compliance training'.
god forbid the government should step in to do some good in this country. guess we should keep paying for halliburton toilets instead.
glad you had a good laugh, free ramos. I'm assuming of course that the banks will be forced to assume the lost profit as a condition of their receiving aid from the government.
Have just read the entire discussion found on the page linked at top. A lesson in argumentation, at the very least, though many important and interesting points were made in the process.
It's too bad that vital issues are so easily politicized (with now-obsolete rationales ?)-- it just makes solutions that much harder to agree upon. And Americans could learn so much at this moment from our European and Asian "neighbors" who have invested in understanding the ins and outs of energy-efficient building -- if our political leaders weren't so thoroughly blinded by "America first, last and only" thinking. . .?
FRaC, I have a hard time understanding how, with $40,000 tacked on to their mortgage, the homeowners, as you say, "aren't paying anything." It seems to me that they pay for everything, in the long run. I also like how you think that creating jobs merits a quotation - as if we don't need any jobs in this country, after having just lost about 2 million of them this year.
To the rest of you who actually understand how much potential this idea has, thanks for voting...I'm going to go forward it to a bunch of other people now.
Existing tax credits would take care of about $10,000 of that cost. The rest would get tacked on to your existing mortgage, bringing it up to $302,000. That doesn't sound good -- but here's the stroke of brilliance. At a 3% mortgage rate, you're monthly payments still go down. You'd be paying only about $1280 -- saving almost $300 a month on the mortgage alone, plus another $150 in reduced energy costs.
so your loan amount goes up, but by cutting the interest rate 2.5% (in this example) you pay less each month. it doesn't matter that $40,000 is 'tacked on' when uncle sam immediately untacks it and then some.
am i missing something here? homeowners are getting a lot of something for less than nothing (in the example they get paid $450 a month to do this).
i was reading some of the comments at change.org and david sasson has made this statement a couple of times:
The plan does not call for dropping mortgage rates to 3%. It calls for the government to act as a financing arm for homeowners who want to drop their rate to 3% (for example). In order to qualify, the homeowner must make his/her home 75% more energy efficient than code. In the mass, such action would LOWER the cost of energy for everyone, because there would be less demand, thanks to more efficient homes.
it could have the exact opposite effect, that the cost of energy would go up.
a little over a year ago here in long beach, the city enacted strict water rules because of the drought. you could only water your lawn monday, thursday, and saturday before 6 a.m. or after 6 p.m. and couldn't wash off your driveway or sidewalk. i have no problem with this, and most of long beach obediently followed the new water regulations.
after a year of the new rules, the city sent a letter to us informing us that they were raising the water rates. they thanked the residents for reducing water consumption 10% and said hey! you guys are doing a great job!
then they wrote, 'you know, since you are using less water (thank you, thank you so much!) that also means we are selling less water. we're going to have to raise our rates to compensate for the reduced amount of revenue we bring in.'
less demand RAISED the cost of water for everyone.
although the numbers should be scrutinized, i like this plan because it is incentive-based and not a mandate (that would suggest big gov).
the longer view is that the cost of mortgage buy downs is offset by reduced defecit spending on energy and foreign oil, which has many hidden cost (the iraq war being one of them), and is not just about price and $/barrel.
this plan is an investment by the gov., not a bailout.
some other good stuff on that site. i'd recommend everyone who signs up cruise around for a while and find some things with which you agree - and vote!
it's pretty great to see so many people thinking about what can make us better and stepping up with proposals. sure, there are some cockamamie ones, but that's part of it.
FRAC - Why is it a bad thing that "homeowners aren't paying for anything"? That is kind of the incentive aspect, right? The way it is now, only the most hardcore tree hugger will do anything to renovate their house to use less energy. As much as I want to save the environment and all that, I wouldn't normally shell out 40K for home improvement for the sake of using less energy.
And lets not downplay the creation of new jobs. That is one of the ways it can pay for itself. We will have a higher # of productive tax payers. Instead of receiving unemployment, welfare, or whatever, one would be productive and getting paid by the homeowners not the government. In a way, the workers are the ones getting that 40K, not the homeowners.
I don't think anyone can know now exactly how the numbers will work out in the end, but there is definitely a possibility that it could "pay for itself" even if partially. "Paying for itself" would actually be very difficult to measure simply or accurately, no matter how many scenarios one can work out.
As for the rise in price with lower demand, it should be noted that public services can be different from regular economic market's formula of Supply vs. demand. For one, there is a captive market which changes a the rules a little bit. If they indeed raised the rates due to low demand, it is because it is a captive market and they can do that - but it doesn't make it right.
And the ultimate goal is what, to spend less $ on energy? No, 2030's goal is ultimately to use less energy with reasonable ways to accomplish that.
So, what if I don't own a home? Why should my tax money subsidize some homeowner's increased debt and/or value to their house? This is complete bullshit. Why don't the homnowner just approach the people in the apartment buildings and ask them for money?
your tax dollars are financing all sorts of things you probably don't completely agree with or benefit from. the fundamental idea behind a representative democracy is that not all legislation will benefit you personally, but is enacted for the common good of the people (that whole "we, the people" bit).
i think it's an intriguing idea. as dot stated, i like that it's incentives based rather than mandated. the only problem i have with it is i believe these websites are fairly impotent to deliver real action or "change" (there were 388 votes recorded last i checked). oh well, makes for good conversation.
While I'm all for converting our existing building stock to higher energy efficient I'm always skeptical of gov't "rebate" programs. I can see this becoming rife with corruption, especially when you involve banks and contractors. (Two groups I trust just slightly more than politicians.)
People will naturally do these upgrades if it's personally cost effective to do so. The very fact that a gov't incentive of lowering interest rates is needed means that over the term of the mortgage that $40k probably never will be recovered in energy savings.
Why not instead talk about a massive increase in the federal gasoline tax? Why not a pledge that no gov't dollars go towards further expansion of our federal and state highway systems? Why not heavy consumption taxes on natural gas, heating oil and electricity?
Basic premise is that if the cost of energy is high people will have an economic reason to make these changes on their own. Additionally it will promote higher density, transit oriented development and become a dis-incentive for suburban sprawl. I'd argue that this revenue stream should be used to eliminate federal income taxes since I favor consumption taxes over regressive income taxes, but I also would be open to using this tax stream for rail based transit and expansion of non-carbon based energy as well.
The Constitution is not about mob mentality, it has specifically been written to protect individual rights (that whole "Bill of Rights" bit). Local governments and individuals should decide how to spend their money, not the Federal Government. If Obama really wants to stimulate the economy, why not propose accross the board tax cuts? Put more money back in people's pockets and they can spend it how they choose. Creating more debt is just delaying the inevitable payback.
the bill of rights has nothing to do with the form and structure of our democracy. whether you want to call "we, the people" a "mob mentality" is your prerogative.
[i]If Obama really wants to stimulate the economy, why not propose accross the board tax cuts? Put more money back in people's pockets and they can spend it how they choose.[i]
we've tried that idea for the last eight years, and it hasn't worked out too great. i think it may be time for some new ideas.
We have not tried that for the last eight years. Bush spent more money on bailouts and wars than any President in history. We the people is not mob mentality. Stimulus this and bailout that is mob mentality.
A representative democracy is based on majority rule not necessarily the common good. What was I told yesterday?"Generalizations are dangerous". Well having a federal government decide how the economy of the entire nation is going to be run is a huge and inefficient generalization. The stucture of this democracy is created so that each and every individual can have his voice heard. Right now Obama has 54% of that mojority and everyone thinks they are going to get a free lunch. Just wait til next year, everyone will want steak instead of soup.
For the record... I own two homes. While this proposal could potentially benefit me in the short term, I don't think increasing our debt at this point in time is the correct course of action. That is what got us here during the last eight years so I don't see how this is representative of any new idea.
It's easy for me to think that this is a good idea - I'm of the opinion that reducing carbon emissions, access to renewable energy, and energy efficiency in buildings are THE single most important problem that we face in this country. And this idea basically dangles a golden egg in front of homeowners - it puts the responsibility of making a single building, which a homeowner has complete control over, into their own hands, and rewards them for doing so.
That said, if you don't think that energy efficiency or reducing carbon emissions are important, I guess I could understand how you could dilute what is a brilliant idea with arguments about taxes or how prices of utilities are going to go up or accuse it of being some tax scheme. I can't even fathom how anyone could argue that this would negatively impact our tax structure or increase our debt, when, again, the homeowner takes on the burden of the costs and still reduces their monthly payment by reducing their interest rate. Seriously, can you people not read? Or did you just skip over the details of the incentive to continue making your tired, obstructionist, 20th-century arguments about a 21st-century plan to innovate within the confines of a capitalist system that came close to collapsing this year? People who stand stubbornly in the way of progress and constructive problem-solving when our nation is facing dire problems such as it is absolutely perplex me.
Just a little historical side note... the Constitution wasn't written to protect the right of the individual, it was in fact created as a group governance contract. Some of the states (particularly Rhode Island) wouldn't ratify it unless a Bill of Rights was added, and voila, the protection of individual rights was tacked on (with a lot of heated debate, I might add).
WK: I can't even fathom how anyone could argue that this would negatively impact our tax structure or increase our debt, when, again, the homeowner takes on the burden of the costs and still reduces their monthly payment by reducing their interest rate. Seriously, can you people not read?
again, i have to ask if i am missing something here. as i understand it, it increases our national debt because the government takes over paying that 2-4% reduction in your mortgage rate. the homeowner is not taking on the 'burden of the costs', the federal government is.
from the proposal: The federal government creates what's called "a mortgage buy-down program." If you are a homeowner, you can bring your mortgage rate down 2 or 3 or 4 points -- with Uncle Sam picking up the difference -- if you improve the energy efficiency of your home.
I have less of a problem with this program if it is taken from existing tax coffers. My biggest problem is that an additional 7 trillion dollars is going to be spent in the form of a stimulus package of which this program may be a part of.
My biggest concern is the fact that government has no idea how to manage sums of money this large and there will be lots of corruption and mismanagment of these funds. Why give the government more power? Can they really dictate a quality of life for you better than yourself?
DubK - Capitalism is built on a boom and bust cycle. The system would have survived just fine without government intervention. Our nation is facing dire problems because of the amount of credit we have pulled not because of Capitalism. I think finding a more sustainable method of living on this planet is necessary for the future of the human race, but the earth will survive with or without us. Even a nuclear holocaust would not kill the earth. Give it a million years and I bet life in one form or another would be just as plentiful. And thanks for your opinion. Freedom is about letting people make choices for themselves, even if they are bad ones.
Thanks for the side note manta. I am well aware that the Bill of Rights was not part of the original Constitution, hence the "Amendments". As an American I personally identify with the Declaration of Independence, the Bill of Rights and Preamble of the Constitution when defining what I feel are core values of our society and they all tell me freedom from totalitarian or socialist regime.
Happy New Year to you all. I am thankful I live in a country where the debate of such topics is openly allowed and encouraged.
you know, 90% of the time i'm probably more left than right, but i'm going to back up frac on this one - this smells bad the more you read the fine print. here's why...
first, this will do nothing to address the primary problems we're going to face in the short and medium terms, namely that there is a broad based collapse in the demand for durable goods (and, thus, the attendant services). nothing in this suggests that it will create a broad based response (or stimulus) of spending again (and, really, we can't go back to the levels we were at 2 years ago no matter what we'd all like).
second, what constitutes getting your house to 75% more efficient than code? is this supposed to stimulate more growth in solar or other active technologies? or is it going to provide a ton of new revenue for window manufacturers and icynene (about the only two things i think you can do for less 40K, on a typically sized home - maybe you can throw in a tankless water heater or more efficient furnace, but probably not after you do all the retrofit work). who is going to do the energy modeling in the before/after? what are their fees and do they get subsidized in this refi? what happens if, as a homeowner, you lay out all this money to do the modeling up front, only to find out its really going to cost 100K to get your home to 75% below code, and then you realize that, even with a refi at 3%, you can't absorb any more debt than the 40K? you've now outlaid 3 grand for the modeling and end up with nothing.
i'd rather take the money and make our public structures more efficient - we all benefit from that, rather than the more upwardly mobile and affluent who can participate in a program like this. stimulates the same sectors of industry but is a better long term PUBLIC investment.
i also wondered what the heck "75% more efficient than code" actually means. that part of the proposal needs some refinement.
laru, while i agree that action needs to be taken to increase efficiency in public buildings, this proposal is specifically addressed towards residential structures. public buildings versus residential buildings are two different issues and both need to be addressed. i find the proposal intriguing as it allows homeowners the opportunity to maintain and improve existing buildings (what could be more green?!) rather than simply imposing green regulation on new construction (the more common approach). i don't disagree that this proposal is targeted at the middle and upper-middle class, but frankly, these are the people that are most likely to make an investment in their homes to increase their home's longevity. in my hometown of detroit which is obviously an extreme example, i see this playing out in two ways: people who make this investment extend the structure's lifespan by twenty to thirty years; those that don't eventually see their homes fall into disrepair and ultimate demolition - in my view, not a bad way of seeing out the turn over of building stock.
I have the same questions as Iaru: what measures comprise the "75% more efficient than code?" I'm glad to be a team player, but there's also a quality of life question - because I'm not liking the color and quality of light with these fluorescent lights (I know there are warmer colors - not the same as incandescent, and be aware that full spectrum fluorescents cost 4x the amount of regular fluorescent - if you have seasonal affective disorder) and the hum sounds like a swarm of crickets about 300 yards away ...and it's winter. Feng shui not good.
I also wonder what the trade-offs are. If we're saving energy using active solar for instance, how much energy goes in to making the solar cell? What's the solar cell lifespan and the waste footprint; is it toxic? There's mercury in those fluorescent light bulbs by the way. Are we just deferring energy consumption from our households and concentrating it at factories that make solar cells and/or low-emissivity glass (etc.)? How much waste will be generated retrofitting houses?
I know we can't drag our heels over this but we can't afford to be reactionary either. I feel we need to think less in terms of capitalist brutishness of profit and the bottom line and saving money and more in terms of sharing information and creating coordinated, networked efforts - a bit of a paradigm shift for a proprietary ("intellectual property"), profit-driven society.
Maybe I just don't understand how mortgages work. This is entirely possible since I don't have one.
On a totally unrelated note, but as long as stiletta mentioned it, we need to seriously enact a program for recycling light bulbs, especially fluorescent ones. That mercury is baaaad....just ask Jeremy Piven.
As an American I personally identify with the Declaration of Independence, the Bill of Rights and Preamble of the Constitution when defining what I feel are core values of our society and they all tell me freedom from totalitarian or socialist regime.
wardun, If you had ever read any of these documents, you would know that not only do they mention neither socialism or capitalism, but that both of these concepts did not exsit then in nearly the same capacity as they do today. Furthermore, like every other western country, you live in a hybrid socialist-capitalist system. The Constitution has very little to say about economics, and it really does not dictate how economics should be handled or under what system the economy should operate. Furthemore, the framers understood that the document was intended to be a flexible, evolving foundation so that it would grow with the country, while still rooting it in the same basic structure, but that it was experimental and intended to be reformed as needed. Most importantly, when conservatives or radical capitalists cry out about how the government has no role in determining our economic structure, incentivizing policies that benefit the common good, or even mandating such things, I wonder if they have any idea of how things have ever been done in this country. There is no such thing as free-market capitalism, and there never has been. We have a car-dominated, fossil-fuel-dependent infrastrcture now because in the 1950s the government enacted policies to incentivize, enable and in some cases mandate the predominance of the automobile and suburban home in place of mass transit and cities. It's difficult to take you seriously when your contributions are based so little in factual history. I disagree with FRaC's policy point-of-view on this one, but I understand where he's coming from and what his concerns are, and I believe that we can all discuss them with a mutual understanding (as is largely happening here), but when you equate capitalism with democracy, and confused representative democracy with total majority rule, the very foundation of your argument is invalidated. Then you drop a nugget like this just to make the point:
Even a nuclear holocaust would not kill the earth. Give it a million years and I bet life in one form or another would be just as plentiful. And thanks for your opinion. Freedom is about letting people make choices for themselves, even if they are bad ones.
Government exists as a social contract to enable society, as a whole, and the individual as a member, to advance and benefit in ways otherwise impossible. The result of your radical idea of freedom is not a nuclear armaggedon, but would be of humans never advancing beyond a primitive state. As with all pack animals, humans develop a social contract to benefit the whole, to ensure that good choices are made, and we call that government.
ja - i'd still argue that if we're going to drop 1T as a nation (or how many ever billion), it needs to go towards projects which benefit the widest amount of people. the people who benefit the most under this plan are those who have sterling credit, equity in their homes, and an ability to qualify for the added debt. if you or i fix up our homes, no one else benefits (beyond the construction workers and inspectors, but let's assume they would be put to work on public projects as well). if we invest in improved schools, libraries, community centers, etc., we all have an equal opportunity in reaping the ultimate benefits.
i don't mind pushing to help restructure mortgages or construction financing to help privilege green construction - it's something we've been working on for years. but i don't think we should give a relative few homeowners what amounts to a huge giveaway, solely because they already own their homes. this plan wouldn't slow down the mortgage defaults, nor would it provide enough cash into the right sectors.
Jan 2, 09 2:05 pm ·
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Can I ask a favor?
Can I ask you guys to vote for this?
The 2030 Stimulus Plan
It involves you going to Change.org, signing up (it's free, of course), and voting. It's pretty simple. Normally I wouldn't bother everyone but the goals of this plan are very important....briefly, here's a description:
Essentially what happened is Architect Ed Mazria (the dude behind those worldwide climate web casts) went to the Obama transition team and laid a simple idea on the table: what if we give mortgage rate reductions to homeowners if they agree to drastically improve the energy efficiency of their homes? In my opinion, the idea is pretty awesome - it ultimately lowers expenses for homeowners while providing jobs to thousands of people who work on the renovations. Here's the example they cite (it involves numbers but it makes sense so bear with me...)
Say you're a homeowner with a $272,000 mortgage at 5.55%, paying about $1550 a month. You decide you want your mortgage rate to drop to 3%. In order to qualify for the reduction, you have to improve the energy efficiency of your home 75% below code, and it's going to cost you a pretty penny: about $40,000.
Existing tax credits would take care of about $10,000 of that cost. The rest would get tacked on to your existing mortgage, bringing it up to $302,000. That doesn't sound good -- but here's the stroke of brilliance. At a 3% mortgage rate, you're monthly payments still go down. You'd be paying only about $1280 -- saving almost $300 a month on the mortgage alone, plus another $150 in reduced energy costs. The value of your home rises, you have more disposable income, you've given work to someone to do the upgrades for you -- and s/he's now paying federal taxes, and you've reduced your carbon footprint.
Additional information can be found here: Transition Team Weighing Blockbuster Housing and Stimulus Proposal
So, if you don't mind signing up for the Obama Change machine (which is cool in and of itself), please vote!
I will vote as soon as I can join. Hmm, maybe it is blocked at work. I think I will submit an idea as well!
done.
done as well.
also done. thanks for the tip
the environment would be improved more if we gave incentives to get people to move into multi-unit dwellings and walkable communities!
This sounds like a great idea. I'd be interested, however, to see what the long-term cost of the additional $30,000 on the mortgage would be, compared to the long-term savings of the interest-rate reduction + home heating cost reduction.
Perhaps this is included on the linked website... I'll go look.
Thanks, wonderK -- I will send this around to my peers!
Ryan, I completely agree, and that's why I question to some degree whether we should continue to incentivize the current paradigm at all, but I'm not sure--I think more suburbs are being retrofitted to become more walkable, and I hope this trend continues. After all, the only thing more wasteful than continuing the paradigm of the last half century's housing stock would be to abandon half a century worth of housing stock, I think.
I once worked with a firm involved with a couple of project with ED....I will vote for it.
The first project was a girl scout retreat in the high country of Wyoming. The second was an elementary school in Rock Springs Wyoming.
I believe there both still saving energy in an energy rich state.
who's paying for this?
It sounds like, partly by the federal government (via forgoing some tax income by giving out rebates), partly the banks (in the form of earning less profit per mortgage... unless the extra $30,000 in the life of the mortgage makes it up to them, which is why I'm curious to do the math I mentioned above) and partly the homeowner, although the homeowner's cost might be off-set by lower interest (if the total interest paid truly is lower in the long run) and partly off-set by lower heating costs.
no it's all paid by the federal government (i.e. YOU). i had to laugh, manta, at the idea of banks partly paying for this by earning 'less profit per mortgage'. and the homeowner doesn't pay anything, but they get fancy new home upgrades and pays less in energy costs and mortgage payments (2-4% reduction in your mortgage is huge).
The federal government creates what's called "a mortgage buy-down program." If you are a homeowner, you can bring your mortgage rate down 2 or 3 or 4 points -- with Uncle Sam picking up the difference -- if you improve the energy efficiency of your home. It's an offer you can't refuse, because it means you can save hundreds of dollars on a typical monthly mortgage, plus hundreds more in reduced energy bills -- in perpetuity.
Those savings immediately go in to family coffers and can get spent, stimulating the economy. At the same time, all the demand for energy efficiency upgrades creates millions of jobs. The government recoups its investment in the mortgage buy-down from the income tax collected from the newly employed. And greenhouse gas emissions go down dramatically.
i looked at the pdf and don't see real numbers that this will pay for itself. sure it 'creates' jobs but i just don't see balanced numbers. plus this is creates another money-sucking government bureaucracy - read the fine print 'The 8.445 million jobs created by this Plan does not include the jobs that will be created by the $2 billion investment in compliance training'.
this is bad, bad, stuff.
god forbid the government should step in to do some good in this country. guess we should keep paying for halliburton toilets instead.
glad you had a good laugh, free ramos. I'm assuming of course that the banks will be forced to assume the lost profit as a condition of their receiving aid from the government.
Have just read the entire discussion found on the page linked at top. A lesson in argumentation, at the very least, though many important and interesting points were made in the process.
It's too bad that vital issues are so easily politicized (with now-obsolete rationales ?)-- it just makes solutions that much harder to agree upon. And Americans could learn so much at this moment from our European and Asian "neighbors" who have invested in understanding the ins and outs of energy-efficient building -- if our political leaders weren't so thoroughly blinded by "America first, last and only" thinking. . .?
FRaC, I have a hard time understanding how, with $40,000 tacked on to their mortgage, the homeowners, as you say, "aren't paying anything." It seems to me that they pay for everything, in the long run. I also like how you think that creating jobs merits a quotation - as if we don't need any jobs in this country, after having just lost about 2 million of them this year.
To the rest of you who actually understand how much potential this idea has, thanks for voting...I'm going to go forward it to a bunch of other people now.
here's how the homeowners aren't paying anything:
Existing tax credits would take care of about $10,000 of that cost. The rest would get tacked on to your existing mortgage, bringing it up to $302,000. That doesn't sound good -- but here's the stroke of brilliance. At a 3% mortgage rate, you're monthly payments still go down. You'd be paying only about $1280 -- saving almost $300 a month on the mortgage alone, plus another $150 in reduced energy costs.
so your loan amount goes up, but by cutting the interest rate 2.5% (in this example) you pay less each month. it doesn't matter that $40,000 is 'tacked on' when uncle sam immediately untacks it and then some.
am i missing something here? homeowners are getting a lot of something for less than nothing (in the example they get paid $450 a month to do this).
stroke of brilliance indeed.
i was reading some of the comments at change.org and david sasson has made this statement a couple of times:
The plan does not call for dropping mortgage rates to 3%. It calls for the government to act as a financing arm for homeowners who want to drop their rate to 3% (for example). In order to qualify, the homeowner must make his/her home 75% more energy efficient than code. In the mass, such action would LOWER the cost of energy for everyone, because there would be less demand, thanks to more efficient homes.
it could have the exact opposite effect, that the cost of energy would go up.
a little over a year ago here in long beach, the city enacted strict water rules because of the drought. you could only water your lawn monday, thursday, and saturday before 6 a.m. or after 6 p.m. and couldn't wash off your driveway or sidewalk. i have no problem with this, and most of long beach obediently followed the new water regulations.
after a year of the new rules, the city sent a letter to us informing us that they were raising the water rates. they thanked the residents for reducing water consumption 10% and said hey! you guys are doing a great job!
then they wrote, 'you know, since you are using less water (thank you, thank you so much!) that also means we are selling less water. we're going to have to raise our rates to compensate for the reduced amount of revenue we bring in.'
less demand RAISED the cost of water for everyone.
although the numbers should be scrutinized, i like this plan because it is incentive-based and not a mandate (that would suggest big gov).
the longer view is that the cost of mortgage buy downs is offset by reduced defecit spending on energy and foreign oil, which has many hidden cost (the iraq war being one of them), and is not just about price and $/barrel.
this plan is an investment by the gov., not a bailout.
some other good stuff on that site. i'd recommend everyone who signs up cruise around for a while and find some things with which you agree - and vote!
it's pretty great to see so many people thinking about what can make us better and stepping up with proposals. sure, there are some cockamamie ones, but that's part of it.
thanks, wk.
FRAC - Why is it a bad thing that "homeowners aren't paying for anything"? That is kind of the incentive aspect, right? The way it is now, only the most hardcore tree hugger will do anything to renovate their house to use less energy. As much as I want to save the environment and all that, I wouldn't normally shell out 40K for home improvement for the sake of using less energy.
And lets not downplay the creation of new jobs. That is one of the ways it can pay for itself. We will have a higher # of productive tax payers. Instead of receiving unemployment, welfare, or whatever, one would be productive and getting paid by the homeowners not the government. In a way, the workers are the ones getting that 40K, not the homeowners.
I don't think anyone can know now exactly how the numbers will work out in the end, but there is definitely a possibility that it could "pay for itself" even if partially. "Paying for itself" would actually be very difficult to measure simply or accurately, no matter how many scenarios one can work out.
As for the rise in price with lower demand, it should be noted that public services can be different from regular economic market's formula of Supply vs. demand. For one, there is a captive market which changes a the rules a little bit. If they indeed raised the rates due to low demand, it is because it is a captive market and they can do that - but it doesn't make it right.
And the ultimate goal is what, to spend less $ on energy? No, 2030's goal is ultimately to use less energy with reasonable ways to accomplish that.
So, what if I don't own a home? Why should my tax money subsidize some homeowner's increased debt and/or value to their house? This is complete bullshit. Why don't the homnowner just approach the people in the apartment buildings and ask them for money?
your tax dollars are financing all sorts of things you probably don't completely agree with or benefit from. the fundamental idea behind a representative democracy is that not all legislation will benefit you personally, but is enacted for the common good of the people (that whole "we, the people" bit).
i think it's an intriguing idea. as dot stated, i like that it's incentives based rather than mandated. the only problem i have with it is i believe these websites are fairly impotent to deliver real action or "change" (there were 388 votes recorded last i checked). oh well, makes for good conversation.
While I'm all for converting our existing building stock to higher energy efficient I'm always skeptical of gov't "rebate" programs. I can see this becoming rife with corruption, especially when you involve banks and contractors. (Two groups I trust just slightly more than politicians.)
People will naturally do these upgrades if it's personally cost effective to do so. The very fact that a gov't incentive of lowering interest rates is needed means that over the term of the mortgage that $40k probably never will be recovered in energy savings.
Why not instead talk about a massive increase in the federal gasoline tax? Why not a pledge that no gov't dollars go towards further expansion of our federal and state highway systems? Why not heavy consumption taxes on natural gas, heating oil and electricity?
Basic premise is that if the cost of energy is high people will have an economic reason to make these changes on their own. Additionally it will promote higher density, transit oriented development and become a dis-incentive for suburban sprawl. I'd argue that this revenue stream should be used to eliminate federal income taxes since I favor consumption taxes over regressive income taxes, but I also would be open to using this tax stream for rail based transit and expansion of non-carbon based energy as well.
The Constitution is not about mob mentality, it has specifically been written to protect individual rights (that whole "Bill of Rights" bit). Local governments and individuals should decide how to spend their money, not the Federal Government. If Obama really wants to stimulate the economy, why not propose accross the board tax cuts? Put more money back in people's pockets and they can spend it how they choose. Creating more debt is just delaying the inevitable payback.
the bill of rights has nothing to do with the form and structure of our democracy. whether you want to call "we, the people" a "mob mentality" is your prerogative.
[i]If Obama really wants to stimulate the economy, why not propose accross the board tax cuts? Put more money back in people's pockets and they can spend it how they choose.[i]
we've tried that idea for the last eight years, and it hasn't worked out too great. i think it may be time for some new ideas.
We have not tried that for the last eight years. Bush spent more money on bailouts and wars than any President in history. We the people is not mob mentality. Stimulus this and bailout that is mob mentality.
A representative democracy is based on majority rule not necessarily the common good. What was I told yesterday?"Generalizations are dangerous". Well having a federal government decide how the economy of the entire nation is going to be run is a huge and inefficient generalization. The stucture of this democracy is created so that each and every individual can have his voice heard. Right now Obama has 54% of that mojority and everyone thinks they are going to get a free lunch. Just wait til next year, everyone will want steak instead of soup.
For the record... I own two homes. While this proposal could potentially benefit me in the short term, I don't think increasing our debt at this point in time is the correct course of action. That is what got us here during the last eight years so I don't see how this is representative of any new idea.
It's easy for me to think that this is a good idea - I'm of the opinion that reducing carbon emissions, access to renewable energy, and energy efficiency in buildings are THE single most important problem that we face in this country. And this idea basically dangles a golden egg in front of homeowners - it puts the responsibility of making a single building, which a homeowner has complete control over, into their own hands, and rewards them for doing so.
That said, if you don't think that energy efficiency or reducing carbon emissions are important, I guess I could understand how you could dilute what is a brilliant idea with arguments about taxes or how prices of utilities are going to go up or accuse it of being some tax scheme. I can't even fathom how anyone could argue that this would negatively impact our tax structure or increase our debt, when, again, the homeowner takes on the burden of the costs and still reduces their monthly payment by reducing their interest rate. Seriously, can you people not read? Or did you just skip over the details of the incentive to continue making your tired, obstructionist, 20th-century arguments about a 21st-century plan to innovate within the confines of a capitalist system that came close to collapsing this year? People who stand stubbornly in the way of progress and constructive problem-solving when our nation is facing dire problems such as it is absolutely perplex me.
Thank goodness the adults are in charge now.
Just a little historical side note... the Constitution wasn't written to protect the right of the individual, it was in fact created as a group governance contract. Some of the states (particularly Rhode Island) wouldn't ratify it unless a Bill of Rights was added, and voila, the protection of individual rights was tacked on (with a lot of heated debate, I might add).
WK: I can't even fathom how anyone could argue that this would negatively impact our tax structure or increase our debt, when, again, the homeowner takes on the burden of the costs and still reduces their monthly payment by reducing their interest rate. Seriously, can you people not read?
again, i have to ask if i am missing something here. as i understand it, it increases our national debt because the government takes over paying that 2-4% reduction in your mortgage rate. the homeowner is not taking on the 'burden of the costs', the federal government is.
from the proposal: The federal government creates what's called "a mortgage buy-down program." If you are a homeowner, you can bring your mortgage rate down 2 or 3 or 4 points -- with Uncle Sam picking up the difference -- if you improve the energy efficiency of your home.
I have less of a problem with this program if it is taken from existing tax coffers. My biggest problem is that an additional 7 trillion dollars is going to be spent in the form of a stimulus package of which this program may be a part of.
My biggest concern is the fact that government has no idea how to manage sums of money this large and there will be lots of corruption and mismanagment of these funds. Why give the government more power? Can they really dictate a quality of life for you better than yourself?
Officials: tracking bailout money is difficult
DubK - Capitalism is built on a boom and bust cycle. The system would have survived just fine without government intervention. Our nation is facing dire problems because of the amount of credit we have pulled not because of Capitalism. I think finding a more sustainable method of living on this planet is necessary for the future of the human race, but the earth will survive with or without us. Even a nuclear holocaust would not kill the earth. Give it a million years and I bet life in one form or another would be just as plentiful. And thanks for your opinion. Freedom is about letting people make choices for themselves, even if they are bad ones.
Thanks for the side note manta. I am well aware that the Bill of Rights was not part of the original Constitution, hence the "Amendments". As an American I personally identify with the Declaration of Independence, the Bill of Rights and Preamble of the Constitution when defining what I feel are core values of our society and they all tell me freedom from totalitarian or socialist regime.
Happy New Year to you all. I am thankful I live in a country where the debate of such topics is openly allowed and encouraged.
is an intriguing idea...
you know, 90% of the time i'm probably more left than right, but i'm going to back up frac on this one - this smells bad the more you read the fine print. here's why...
first, this will do nothing to address the primary problems we're going to face in the short and medium terms, namely that there is a broad based collapse in the demand for durable goods (and, thus, the attendant services). nothing in this suggests that it will create a broad based response (or stimulus) of spending again (and, really, we can't go back to the levels we were at 2 years ago no matter what we'd all like).
second, what constitutes getting your house to 75% more efficient than code? is this supposed to stimulate more growth in solar or other active technologies? or is it going to provide a ton of new revenue for window manufacturers and icynene (about the only two things i think you can do for less 40K, on a typically sized home - maybe you can throw in a tankless water heater or more efficient furnace, but probably not after you do all the retrofit work). who is going to do the energy modeling in the before/after? what are their fees and do they get subsidized in this refi? what happens if, as a homeowner, you lay out all this money to do the modeling up front, only to find out its really going to cost 100K to get your home to 75% below code, and then you realize that, even with a refi at 3%, you can't absorb any more debt than the 40K? you've now outlaid 3 grand for the modeling and end up with nothing.
i'd rather take the money and make our public structures more efficient - we all benefit from that, rather than the more upwardly mobile and affluent who can participate in a program like this. stimulates the same sectors of industry but is a better long term PUBLIC investment.
i also wondered what the heck "75% more efficient than code" actually means. that part of the proposal needs some refinement.
laru, while i agree that action needs to be taken to increase efficiency in public buildings, this proposal is specifically addressed towards residential structures. public buildings versus residential buildings are two different issues and both need to be addressed. i find the proposal intriguing as it allows homeowners the opportunity to maintain and improve existing buildings (what could be more green?!) rather than simply imposing green regulation on new construction (the more common approach). i don't disagree that this proposal is targeted at the middle and upper-middle class, but frankly, these are the people that are most likely to make an investment in their homes to increase their home's longevity. in my hometown of detroit which is obviously an extreme example, i see this playing out in two ways: people who make this investment extend the structure's lifespan by twenty to thirty years; those that don't eventually see their homes fall into disrepair and ultimate demolition - in my view, not a bad way of seeing out the turn over of building stock.
I have the same questions as Iaru: what measures comprise the "75% more efficient than code?" I'm glad to be a team player, but there's also a quality of life question - because I'm not liking the color and quality of light with these fluorescent lights (I know there are warmer colors - not the same as incandescent, and be aware that full spectrum fluorescents cost 4x the amount of regular fluorescent - if you have seasonal affective disorder) and the hum sounds like a swarm of crickets about 300 yards away ...and it's winter. Feng shui not good.
I also wonder what the trade-offs are. If we're saving energy using active solar for instance, how much energy goes in to making the solar cell? What's the solar cell lifespan and the waste footprint; is it toxic? There's mercury in those fluorescent light bulbs by the way. Are we just deferring energy consumption from our households and concentrating it at factories that make solar cells and/or low-emissivity glass (etc.)? How much waste will be generated retrofitting houses?
I know we can't drag our heels over this but we can't afford to be reactionary either. I feel we need to think less in terms of capitalist brutishness of profit and the bottom line and saving money and more in terms of sharing information and creating coordinated, networked efforts - a bit of a paradigm shift for a proprietary ("intellectual property"), profit-driven society.
Maybe I just don't understand how mortgages work. This is entirely possible since I don't have one.
On a totally unrelated note, but as long as stiletta mentioned it, we need to seriously enact a program for recycling light bulbs, especially fluorescent ones. That mercury is baaaad....just ask Jeremy Piven.
wardun, If you had ever read any of these documents, you would know that not only do they mention neither socialism or capitalism, but that both of these concepts did not exsit then in nearly the same capacity as they do today. Furthermore, like every other western country, you live in a hybrid socialist-capitalist system. The Constitution has very little to say about economics, and it really does not dictate how economics should be handled or under what system the economy should operate. Furthemore, the framers understood that the document was intended to be a flexible, evolving foundation so that it would grow with the country, while still rooting it in the same basic structure, but that it was experimental and intended to be reformed as needed. Most importantly, when conservatives or radical capitalists cry out about how the government has no role in determining our economic structure, incentivizing policies that benefit the common good, or even mandating such things, I wonder if they have any idea of how things have ever been done in this country. There is no such thing as free-market capitalism, and there never has been. We have a car-dominated, fossil-fuel-dependent infrastrcture now because in the 1950s the government enacted policies to incentivize, enable and in some cases mandate the predominance of the automobile and suburban home in place of mass transit and cities. It's difficult to take you seriously when your contributions are based so little in factual history. I disagree with FRaC's policy point-of-view on this one, but I understand where he's coming from and what his concerns are, and I believe that we can all discuss them with a mutual understanding (as is largely happening here), but when you equate capitalism with democracy, and confused representative democracy with total majority rule, the very foundation of your argument is invalidated. Then you drop a nugget like this just to make the point:
Even a nuclear holocaust would not kill the earth. Give it a million years and I bet life in one form or another would be just as plentiful. And thanks for your opinion. Freedom is about letting people make choices for themselves, even if they are bad ones.
Government exists as a social contract to enable society, as a whole, and the individual as a member, to advance and benefit in ways otherwise impossible. The result of your radical idea of freedom is not a nuclear armaggedon, but would be of humans never advancing beyond a primitive state. As with all pack animals, humans develop a social contract to benefit the whole, to ensure that good choices are made, and we call that government.
ja - i'd still argue that if we're going to drop 1T as a nation (or how many ever billion), it needs to go towards projects which benefit the widest amount of people. the people who benefit the most under this plan are those who have sterling credit, equity in their homes, and an ability to qualify for the added debt. if you or i fix up our homes, no one else benefits (beyond the construction workers and inspectors, but let's assume they would be put to work on public projects as well). if we invest in improved schools, libraries, community centers, etc., we all have an equal opportunity in reaping the ultimate benefits.
i don't mind pushing to help restructure mortgages or construction financing to help privilege green construction - it's something we've been working on for years. but i don't think we should give a relative few homeowners what amounts to a huge giveaway, solely because they already own their homes. this plan wouldn't slow down the mortgage defaults, nor would it provide enough cash into the right sectors.
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