KeNo's Housing and Economic Portal: Monday November 29 Housing and Economic stories

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Ireland's young flee abroad as economic meltdown looms - (www.guardian.co.uk) Many young people are seeking to emigrate rather than face a life of hardship as the republic lurches towards financial collapse. Student Niamh Buffini works hard and plays hard. As Ireland's No 1 taekwondo martial arts practitioner – she is rated 12th in the world – her ambitions include winning Olympic gold for Ireland. But by the end of this month her future will have been decided by forces not just beyond her control but seemingly those of her government also. Ireland is on the cusp of insolvency. Some economists argue that it already is. Buffini will soon learn if her fees at the Institute of Technology in Tallaght, south Dublin, have climbed beyond her means. Her father is a self-employed builder, which has recently become a euphemism for "unemployed". "My class size will have dropped by 50% by next year," Buffini said. "Even lecturers took part in the recent student protests over fees because society here is going to be left with very few educated people. My best friends have already left – they're doing bar work in Spain and Australia." Last week was not a good week for Ireland. Speculation about a European Union-backed bailout pushed its borrowing costs to unprecedented heights.

Ron Paul will have Congressional Federal Reserve oversight - (money.cnn.com) Ben Bernanke has had his hands full since his first day on the job as Federal Reserve chairman nearly five years ago. It's about to get even tougher. His harshest critic on Capitol Hill, Rep. Ron Paul of Texas, is about to become one of his overseers. With the Republicans coming to power, Paul, who would like to abolish the Fed and the nation's current monetary system, will become the chairman of the House Subcommittee on Domestic Monetary Policy. If you've never heard of the committee before, you're not alone. But Paul promises you'll be hearing a lot more from it. "It's basically been a committee that's dealt with commemorative coins. I'm going to deal with monetary policy," he said.

What Are The Elites Holding Over Us? - (www.lewrockwell.com) What is it that the elites hold over the average American citizen? Answer: financial literacy. The elite class in America knows the language of finance, banking, currency and economics. Because American schools leave students financially illiterate, even after graduating from college, they cannot properly manage their money and must rely upon the often self-interested misdirection of financial advisors, stock brokers, and bankers. For example, most financial counselors recently advised their clients against withdrawal of funds from their 401(k) tax-deferred accounts, given that there are penalties for early withdrawal. The result: most 401(k) accounts lost 30% or more of their money. Now withdraw your money from those tax-deferred accounts, taking a 10–20% penalty, and you have sliced your retirement fund in half.

Taking Aim at the Mortgage Debt Subsidy - (www.nytimes.com) By proposing to curtail the tax deduction for mortgage interest, the president’s deficit commission is sounding an alarm. The home mortgage deduction is one of the most widely used and expensive tax subsidies. More than 35 million Americans claim it, and the federal government estimates it will cost the Treasury $131 billion in forgone revenue in 2012. Its size, popularity and link to the emotionally charged American notion of homeownership has made it so politically sacrosanct that there are serious doubts whether Congress will even entertain the idea. But by raising the specter of ending one of the most cherished tax breaks, the commission is trying to jar the public into recognizing the magnitude of the nation’s budget deficit and some of the drastic steps that might be needed to close it. Because the mortgage interest is one of a limited number of tax breaks available to middle-income Americans, the commission’s proposal has also rekindled a debate about how much of the pain of deficit reduction should be borne by the middle class.

Jim Grant on a possible return to the gold standard - (www.nytimes.com) BY disclosing a plan to conjure $600 billion to support the sagging economy, the Federal Reserve affirmed the interesting fact that dollars can be conjured. In the digital age, you don’t even need a printing press. This was on Nov. 3. A general uproar ensued, with the dollar exchange rate weakening and the price of gold surging. And when, last Monday, the president of the World Bank suggested, almost diffidently, that there might be a place for gold in today’s international monetary arrangements, you could hear a pin drop. Let the economists gasp: The classical gold standard, the one that was in place from 1880 to 1914, is what the world needs now. In its utility, economy and elegance, there has never been a monetary system like it. It was simplicity itself. National currencies were backed by gold. If you didn’t like the currency you could exchange it for shiny coins (money was “sound” if it rang when dropped on a counter). Borders were open and money was footloose. It went where it was treated well. In gold-standard countries, government budgets were mainly balanced. Central banks had the single public function of exchanging gold for paper or paper for gold. The public decided which it wanted.