Rent Control – Affordable Housing

How The Communist Soviet Union Solved It

Or Did They?

When I arrived in the United States, my city of choice was New York City. I found it incredibly beautiful and exciting. Within two week I found a job in my profession and a small studio in Queens. It was a nice, clean apartment building. I didn’t have any furniture and very little money. The building manager took me down in the cellar, where I found just about everything I needed as a temporary setup for my studio. It only cost me $35. My starting salary was $135 per week and the rent was $126 per month. This was my first experience as a new emigrant with no financial means to star a new life.

The year was 1970. Immediately, I said to myself: What A Great Country America Is!

This was a rent controlled area in Queens and it helped me greatly. I lived there for three years. My rent stayed the same while my salary was getting better. During this time, I found a better job in New Jersey. I commuted for six months driving across George Washington Bridge every day. I would take Throghs Neck Bridge and head up North through Bronx. Along the freeway, I could see these tall, wide apartment buildings totally gutted. No windows and no tenants. I could not make anything of it. I just wandered.

Years later, while visiting New York, I drove by my old building in Queens where I lived. The street was a mess. There were damaged cars parked on the street and the building had several broken windows. The small shops, around the corner were boarded up. It was quite depressing to see the place that gave me a foothold in this country just 10 years earlier. The building was still a rent controlled building. I must have been just lucky in my timing. I certainly wouldn’t have moved there at this time at any price. Even if it was free.

When the Government imposes limits on what the private property owners can do, it is just a matter of time for the property to loose all its value.

Communism, the flag bearer Soviet Union under Stalin had an answer to affordable housing.

When communism took over the huge territory that became known as Soviet Union (11 time zones), had to deal with 200+ languages and 50 plus countries, which they attached without asking for permission.

If you don’t understand the concept of communism, here is a simple answer: Soviet Union Communism was Lenin and Stalin. After Lenin died, it was just Stalin. Just one person, Stalin, had absolute power. He ruled with an iron fist.

Stalin had a major problem in his hands: Integration or rather control of all these nationalities. He solved it by locating trustworthy Russian educated talent in high paying jobs and offered them very affordable housing throughout the country.

In 1968, while working for the airline, I had a job assignment in Tashkent, Uzbekistan in Soviet Union. It was a very large facility performing civil aircraft maintenance. The technical staff of 33 engineers and technicians were from every part of the country except Uzbekistan. There were no natives.

Most of them lived in an apartment complex owned by the factory. This was quite a large complex, only available to the factory employees. There were dozens of ugly four story buildings parallel to each other. The apartment buildings had no elevators and no internal toilets. There were several wooden outhouses between the buildings. I have no idea how the tenants managed. They were certainly affordable, the equivalent of about 30 rubles per month on a salary of 1,200 rubles per month. That is affordable. The factory men’s rooms were open holes, partitioned and no doors. This is your government at work if you let it. This factory was only few hundred miles away from the location were the Soviets launched the Sputnik.

If you think affordability was due to a benevolent government, think again. It had to do with power and population control.

In my next post I will talk about Free Education Under Communism.

Note from the editor

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Computer Security

As a computer/internet user you already know how important the security of your computer is. I am a retired computer designer, had computers in my house for more than 25 years. For most part, I didn’t have to worry much about the safety of my computer, except in the last few years. Presently, I am evaluating and changing my computer security program every six months.

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Better feel safe than sorry.

Social Security Is A Government Handout And Medicare Is Not Free

Social Security Is A Government Handout And Medicare Is Not Free

If you wander how a nationalized government health program would work, take a look at the information below.

Medicare is already a government program and it is not free to you. Besides, the benefits provided are minimal. Try to get into a private insurance plan after you reach the age of 65. You can’t. If you can the cost is bound to be prohibitive.

Everybody is required to pay into Social Security and Medicare. It is mandated and it is based on your income. These are not considered taxes collected by the government and you can’t opt out. If you are self-employed, you must pay for Social Security and Medicare even if your business is losing money.

If you hope that the government will deliver free healthcare to everybody, think again. Here is a simple case of how the government manages Social Security and Medicare benefits.

When I was making ten thousand dollars per month, I would get statements from Social Security Administration stating my SS benefit at retirements. It was $1,400, and then $1,500, and son on. I already knew, there was no way anybody can survive on Social Security. It could not even pay the rent.

This is a true story about my friend Joe (not his real name).

The year was 2001, September 11, at the age of 61 Joe was semi-retired looking for a job. In his spare time, Joe was trading stocks and options. The 9/11 attack, forced the stock exchange to close for a whole week. When it opened, Joe’s options were worthless. He took a sizable loss. It wiped out his trading account. It forced him to pull money from his IRA account while looking for a job, any job. He was desperate enough to get any job, telemarketing, selling cars, etc., while looking for a job in his old profession.

Joe was only one year away for qualifying to collect social security, at the age of 62. Had he waited to be 65, his social security benefit would have been $1,650 per month. Early collection at the age of 62 amounted to $1,400.

Joe applied for Social Security and started collecting his SS checks after he reached the age of 62 ½.

At his age Joe couldn’t find a job in his profession. After spending months, doing telemarketing and other odd jobs that didn’t last, Joe had to take an entry retail job to make ends meet. This job paid $8.50 per hour.

At the age of 65, Joe was automatically enrolled in the Medicare program by the Social Security Administration. Medicare withheld $94.00 per month from Joe’s Social Security check. By now, his monthly check from Social Security was $1,300.

What Joe did not know, was that the Social Security penalizes you if earn more than $11,000 per year while collecting social security. The penalty is 50% of the amount above $11,000, if you are 65 ½ or less. In his retail job Joe earned 16,600 for the year when he was 64. His tax return showed $5,600 above the $11,000 threshold. Fifty percent of that amount equals $2,800.

Shortly after filing his taxes, Joe was notified by Social Security Administration that he was overpaid in the previous year by the amount of $5,600 and owed the US Government $2,800. He either had to pay it back, or two social security checks would be withheld.

Joe tried to mitigate the payment by forfeiting his Medicare premium since he was covered by an insurance program provided by his employer. He found out that Medicare premium is mandatory and had to be paid every month for as long as he was collecting social security. In fact, even if Joe could have afforded to live without the social security checks for two months, he still would have had to pay the $94 premium for the Medicare.

Joe managed to work a payment plan of $150 per month, withheld from his SS monthly check. By now, Joe’s Social Security check amounted to $1,150, until the penalty is paid in full (about 19 months).

Keep in mind, on Joe’s meager job of $16,600 a year, he already paid about $1,500 in taxes, social security and medicare withholdings. The penalty above applies to wages before taxes.

I can vouch for Joe. We worked together for many years. Some years back I sold him my condo. His credit rating was 850. Last time I talked to him, he filed for personal bankruptcy. He is still paying back the penalty. He had to change his retail job because California garnished his wages. He owed slightly over $1,000 in state taxes due to early withdraws from his IRA account.

Learning from Joe’s experience, you can conclude that the Social Security program is anything but “Security”. If you are financially secure and start collecting your benefits at the age of 65 ½, it is a nice addition (some pocket change). The government is not providing for your financial security. You are. The capital gains from investments, even if they are not under IRA, are taxed, but not penalized (50%).

If you run into financial difficulties and are forced to elect early distribution of your benefits, the government immediately reduces your monthly benefit drastically (about 15%). To add insult to the injury, the government only allows you to earn $11,000 (taxable), after which it will apply a penalty of 50% on everything above the $11,000 threshold.

You have contributed to you Social Security all your working life. It is not yours to own. The government changes the rules and there is nothing you can do about it.

Medicare is not free. At the age of 65, Social Security Program enrolls you automatically in the Medicare Program. Medicare requires all social security beneficiaries to pay an insurance premium. It lowers the monthly social security benefit by $100. You can’t opt out from Medicare.

Note from the editor

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Worried about gasoline prices being too high? Get used to it. Oil is priced and traded in Dollars which is 20% devalued against major currencies. Pay for your gasoline by trading foreign currencies. Automatic trading system can make you $100 to $200 per week with as little as $500 trading position. It does it 24 hours a day, 7 days a week while asleep or traveling.

If it doesn’t work for you, there is a 60 day money back satisfaction guaranty and you get to keep the software.

More information at Currency Trading

Computer Security

As a computer/internet user you already know how important the security of your computer is. I am a retired computer designer, had computers in my house for more than 25 years. For most part, I didn’t have to worry much about the safety of my computer, except in the last few years. Presently, I am evaluating and changing my computer security program every six months.

Here is the latest: Netcom3 Internet Security.

Better feel safe than sorry.