- Rep. Tom McClintock (R-California) is slamming the Obama administration for refusing to enforce federal immigration laws, saying our nation is already at the tipping point of disaster from failing to secure our borders and warning that any special refugee status for illegal entrants will result in a fierce response from Congress.
On Thursday, McClintock took to the House floor and delivered a blistering attack on the Obama administration for what he said was its deliberate neglect of its duty to protect our nation's borders.
"If we are not willing to enforce our current laws, there is no reason to believe that any future laws will be enforced. And until we enforce them, we really can't accurately assess what changes may be needed," said McClintock in his floor speech.
In a follow-up interview, McClintock says Obama is abdicating what should be his top priority.
"Border security is the single most important responsibility of the federal government. If it cannot discharge that responsibility, all of its others become meaningless," he said. "They have completely abandoned the responsibility the federal government has to defend our borders. As the chief executive, the president is responsible for that. He is required to take care that the laws be faithfully executed. He's done exactly the opposite."
In his House speech, McClintock also warned that history is littered with nations that failed to protect themselves.
"History is shouting its warning at us: nations that either cannot or will not defend their borders aren't around very long," he said Thursday.
McClintock elaborated on that statement later, saying the U.S. is perilously close to becoming one of those nations.
"I think we're at the tipping point right now. A majority of Americans have awakened to the fact that we face an unprecedented crisis on our southern border. For the first time in American history, that border, as a practical matter, is completely undefended and wide open and is being crossed by thousands and thousands of illegal immigrants," said McClintock.
The congressman says this entire border cris would have been avoided if the Obama administration simply enforced existing laws or even just some of them.
"What we really need to do is enforce is enforce the existing immigration law, which provides for serious sanctions against employers who hire illegal immigrants and completion of the border fence. Also, we've got to deport illegal immigrants who come into contact with law enforcement or who apply illegally for government assistance. Current law provides for their deportation. If we are not willing to deport such illegal immigrants, then our immigration laws become meaningless," said McClintock.
On Friday, the White House announced it was considering granting special refugee status to minors in Honduras because of the country's high crime rate. No decision has been made, but McClintock is outraged at the mere mention of such a policy.
"Think about what they're actually saying. They're saying, 'This wave of illegal immigration is not arriving here fast enough so we want to fly them to America,'. That's what they're saying" said McClintock, noting that such an approach to refugees would quickly lead to a very slippery slope.
"If they're conferred refugee status for simply fearing violence, that makes eligible every person in every part of the world, including the south side of Chicago and most parts of Detroit. Refugee status, by the way, entitles them to welfare benefits and legal residency," he said.
"Hopefully, (Congress) won't have to address that. If we do, I believe that Congress would have no choice but to exercise the full power of the purse and seriously consider other options," said McClintock.
As for the current border emergency, McClintock believes House Republicans are largely in lockstep on what needs to happen next.
"We need to detain all new arrivals rather than releasing them into the general population, expedite deportation hearings, provide unrestricted access for law enforcement to all federal lands at the border. Right now, they're severely restricted over which lands they can even access," said McClintock, who also wants to see the National Guard activated in whatever capacity it is needed to secure the border.
With Democrats controlling the Senate and Obama in the White House, Republicans have their work cut out for them. However, McClintock says conservatives have a crucial ally that just needs to get engaged.
"I think the American people are going to need to weigh in on this," he said. "I think these are all measures the American people recognize are desperately needed and which they would overwhelmingly support. I think if the Senate were to stand in the way of such emergency action, there would be hell to pay."
McClintock says the devastating impact of unchecked illegal immigration is not hypothetical. He says California is living through it right now.
"The impact goes to every part of our social service structure. If we're going to provide free food and clothing and housing and medical care and transportation and legal representation and relocation, the implications are overwhelming. We're already seeing our schools, our hospitals, our courts, our law enforcement, our prisons all being overwhelmed by this flood of illegal immigration. Local and state budgets are being stretched to the max," said McClintock.
Perhaps of even greater concern, he says, is that the current episode on our border could permanently damage the rule of law in this country when it comes to immigration.
"We're also going to watch our legal immigration laws simply become irrelevant. Why would anyone go to all the trouble of obeying our immigration laws when they can reap the same benefits by ignoring them?" said McClintock.
- Hillary Clinton's disastrous book tour has more high-profile Democrats contemplating a run for the White House in 2016. That includes Vice President Joe Biden. In their latest parody, the Capitol Steps bring Clinton and Biden together. Listen as Hillary tries to force Biden out of the race while Biden vows to run.
- When President Franklin D. Roosevelt signed the Social Security Act in 1935, it 19s possible he didn 19t understand the huge effect his social welfare plan would have. In 2014, over 59 million Americans will receive almost $863 billion in Social Security benefits. 9 out of 10 individuals over the age of 65 receive benefits and among those, half of elderly married beneficiaries rely on Social Security for 50% of their income. 47% of single, elderly beneficiaries rely on Social Security for 90% of their income. These numbers are in addition to the disabled workers and dependent family members of deceased workers who also receive benefits.
In a word, Social Security is huge.
Unfortunately, the system is in dire need of repair, and that spells bad news for young people.
Andrew Biggs is a resident scholar at the American Enterprise Institute in Washington, DC, and he 19s also worked as deputy commissioner of the Social Security Administration. When asked if Social Security will be around for millennials, his answer isn 19t reassuring.
"The answer to that is yes and no," he says.
Biggs says that the program isn 19t going anywhere, but what a young person receives will vary.
"The idea that you're not going to get a penny from Social Security, I really think is false. On the other hand, what are the chances I'm going to get everything I've been promised from Social Security? And I think those chances are pretty slim," he says.
If that isn 19t depressing enough, Biggs goes on to say that postponing the problem isn 19t helping anyone either.
"The Sooner you fix it the easier it is. For every year that goes by, we're essentially putting off the problem and so it gets to be harder to solve," says Biggs.
A solution to the problem isn 19t going to come easily, and that shouldn 19t surprise anyone. Economists each seem to have their own ideas of how to create solvency, and they fiercely debate one another over the pros and cons of their plans.
Melissa Favreault is a Senior Fellow in the Urban Institute 19s Income and Benefits Policy Center. She says that even if economists can 19t come to an agreement, though, almost all the proposed solutions include some mix of adjustments on the tax or revenue side, and adjustments to benefits.
"Some of the proposals that are most common are things like lifting the cap on earnings that are taxable for Social Security. There's also some talk about increasing the taxation of benefits, or broadening the base, for example, to include things like health insurance benefits that are currently not taxed for Social Security purposes," she says.
The proposed benefits adjustments are equally varied.
"One that we hear a lot about are things like increasing the full retirement age, or increasing the early retirement age. We also hear about things like reducing the cost of living adjustment. Among proposals that we've seen in a lot of recent plans are adjustments in the rate of growth for benefits," says Favreault.
Though a solution will likely entail a combination of changes, Biggs says the most likely change he sees is the retirement age.
"The retirement age currently is slowly shifting from 65 up to 67. It's something that is not an easy change to make, but I think encouraging people to work longer is really the best way to address these issues," he says.
But some are disappointed with any and all attempts at fixing Social Security. When the system was designed, it was based on a three-legged stool of retirement: private pension benefits, private savings, and Social Security. Many see a decline in private pensions and savings and an increasing reliance on the third leg, Social Security. For young people, this means they should start saving for retirement now. For other advocates, the increasing reliance on Social Security is the beginning of a downward trend, and they want the freedom to take their retirement savings into their own hands 14to privatize the system.
While privatization models of retirement savings have shown huge gains for savings invested in the stock market, Biggs is quick to point out that the biggest issue in privatizing the system is something called 1ctransition cost."
"If you take the money that you're currently paying into Social Security and you put it into a personal account on your own, that's money the system doesn't have to pay out benefits to your grandparents. So during that time, you have to come up with additional money to cover this transition," says Biggs.
It 19s that transition cost, and the fact that the current system needs money flowing in to function, that necessitates a multifaceted, well-thought-out solution to Social Security 19s solvency issues.
For Favreault, the most important thing for young people to understand, is that Social Security requires a group perspective.
"We're kind of all in this together, and we're saying that as a society, we want people of retirement age and people who become disabled, or the children of workers who die before retirement, that they're protected," she says.
Biggs admits that, for a lot of young people, that can be hard to swallow.
"Is it fair to say that a lot of younger folks are kind of getting ripped of? Well, that's kind of what the numbers show. So you want to find some solution that smooths things out and makes the system sustainable, not just in a financial sense, but sustainable in that people feel it's something they can really support," he says.
For a lot of millennials, Social Security is something that they see having little effect on their day-to-day lives. For a solution to the rapidly approaching solvency crisis, though, millennials and other young Americans will have to decide this is an issue they want to fix. Otherwise, they 19ll bear the financial consequences.
- Retired Israeli Brigadier Gen. Elihu Ben-Onn says Israeli Defense Forces have reduced the Hamas rocket arsenal by about 50 percent and he says the military operation will continue until Hamas has no rockets remaining and its tunnel system is eradicated.
"These bloody terrorist had more than 9,000 rockets. We believe we destroyed half of it, that means more than 4,000 rockets. So the mission is not accomplished yet," said Ben-Onn, who is disgusted as the tactics employed by Hamas to maximize civilian casualties.
"They protect themselves with children and women and hospitals and mosques. They believe that if they hide behind them, (Israel) will not go there," he said. "They want them to get the bullets first. They don't fight like soldiers (but) like cowards."
"We still have to go forward in order to stop all of them. They still have thousands of rockets," said Ben-Onn.
In addition to the threat posed by relentless rockets fired from Gaza, Israel is also committed to the arduous task of destroying the elaborate system of tunnels that allows Hamas to slip into Israel underground.
"Israel has to move inside and actually go to all basements, all the shelters, all the underground cities Hamas built under the civilians," said Ben-Onn, who described how the tunnel system works.
"They were dug in the last couple of years. They start in the living room or the kitchen or in the bedroom of the children. They start it from that kitchen down to the ground and then one or two kilometers, all the way to the border," he said.
Ben-Onn admits discovering all the tunnels is a painstaking task.
"It's very complicated. you have to go from house to house, from building to building. You need a lot of information, a lot of intelligence. Of course, when you find those terrorists, it's sad they don't go out and fight. They prefer to be behind human shelters," said Ben-Onn.
Several media reports have explained that Hamas regularly fires rockets and stations known military targets in areas of high civilian populations, such as schools, hospitals and even United Nations relief shelters. However, the majority of international reports simply point to the civilian deaths occurring when those sites are attacked by Israel and those reports lead to growing international cries for a cease-fire.
"Well, we are used to that. Unfortunately, for many years, some international media prefer to take the propaganda point of view of the terrorists. I always explain it as simple as it is. If you have a daylight robbery in a bank and terrorists are holding a hostage with a pistol on their head, if you are a police officer you must shoot him before he kills all the hostages," said Ben-Onn.
The United States government played a key role in two stories connected to the Middle East conflict. On Tuesday, the Federal Aviation Administration announced a halt to all U.S. flights into Tel Aviv. Many European nations and airlines followed suit. The U.S. allowed flights to resume late Wednesday night.
"We were a little bit surprised because British Airways from London didn't stop the flights to Tel Aviv. I'm very glad they decided to cancel this wrong decision," said Ben-Onn, explaining that Bengurion Airport is the most secure in the world and Hamas rockets aren't even a threat to aircraft.
On Sunday, Secretary of State John Kerry was caught on a live television microphone saying he needed to head to the Middle East to broker a truce and he seemed to be mocking the notion that the Israeli military actions were part of a pinpoint operation.
Nonetheless, Ben-Onn believes the Obama administration remains a strong ally of Israel. He's also touched by the outpouring of support from the American people.
"We would like to thank the United States of America, the people. We have thousands of supporters. People are calling my radio station, sending emails, faxes and Facebook (messages). They say, 'We support the state of Israel. We understand your struggle, your efforts," said Ben-Onn.
For those who believe Israel's response to the rocket attacks from Hamas is no proportionate, Ben-Onn suggests Americans consider how they would react if Washington, D.C. were attacked day after day by rockets from a neighboring country.
Ultimately, he says, Israel must defend itself.
"We have an enemy. Our enemy doesn't recognize our right to exist in this area. The enemy is attacking Israel by missiles and rockets, especially our civilians. They are war criminals and we have to protect ourselves," he said.
- Sen. David Vitter (R-Louisiana) is spearheading a legislative approach to address the border crisis, one that he says will result in far more deportations in less time and slam the door shut on the Obama administration's ability to use it's own discretion on enforcing the existing laws.
The plan calls for expediting the deportation process, greatly reducing the grounds for asylum in the U.S. and requiring those in violation of immigration laws to be detained until they are sent home.
The senator also says his bill is far more aggressive than the bipartisan plan sponsored by Sen. John Cornyn (R-Texas) and Rep. Henry Cuellar (D-Texas), which also promises to speed up the processing of those in the country illegally.
"(There are) two main differences. First of all, we raise the standard for anything like an asylum claim. They do not. Secondly, we absolutely ensure that these illegals are detained and not given over to anyone, like family members, until they're deported out of the country, assuming that's appropriate. They do not," said Vitter.
Vitter says his legislation also gives the president far less wiggle room in using the law to advance his political agenda. He says he doesn't trust the administration to enforce the law, so he believes tying its hands through this new legislation would also be an improvement.
"Quite frankly, I don't trust the administration with regard to enforcement in general, and that's why my bill doesn't give them room to maneuver. It doesn't leave much, if anything, to their discretion. That's another big difference between our legislation and some other alternatives out there in Congress, even among Republicans," he said.
What needs to change in our border policy is not particularly complicated, according to Vitter. He says there are certain things that obviously need to change to stem the current tide of people illegally crossing the border and dissuade others from coming in the future.
"We need to detain these illegals and not let them go and not release them into American society but quickly and efficiently deport them to their home countries," said Vitter. "Way too many of these illegals coming in are basically caught and released to family members in the country, many of them illegal. The great majority of those are never heard from again. They're given a court date and a 'pretty please' note to show up in court. Ina great majority of cases, that never happens."
Another headache for Border Patrol officers and other officials dealing with the border surge is the vast number of people issuing rehearsed pleas for asylum. Vitter says the approach to that would change through his bill as well.
"There will be a very, very small percentage who have a real sort of asylum claim. We also strengthened the standard so that people can't just lie their way through that," he said.
"You have to do more than just say a few magic words. Part of the problem now is folks quickly learn what magic words or vague claims they have to make to possibly have that argument. We raise the standard, make it more stringent and meaningful, so that they have to have a lot more detail or documentation about these sorts of issues," said Vitter.
Genuine war refugees and victims of sex trafficking, among others, can still find safe haven in the U.S. under Vitter's plan. However, he says there is a specific standard that must be met to be allowed to stay.
"Is it clear when they go back to their home country that they are going to be in a completely untenable situation. That doesn't mean, 'Are there problems in their home country? Is there poverty in their home country.' Of course, that's been the case forever and it's going to continue to be the case for awhile, unfortunately," said Vitter.
Democrats regularly reject such an approach, arguing that the moral thing to do is help these people, many of them children, who are desperate for a better life. Vitter says the current policy is having exactly the opposite effect of that stated goal.
"Right now we have a policy that causes that humanitarian crisis to grow, to get worse, more minors being put into the hands of more criminal gangs, coyotes, dangerous people who often times who often times abuse these minors. It's not a humanitarian policy if that policy is causing that to continue and to grow," he said.
Within the past few days, Texas officials started to cast doubt on the media narrative that the vast majority of the unaccompanied minors are small children, going so far as to estimate 80-85 percent are teenagers and many of those affiliated with gangs.
Does Vitter believe the media are getting the story right?
"No I don't, because I think they, for the most part, convey the story line that these are all tiny kids. They're not. It's much more of a mixed bag. It depends on what media reporting you look at. I think the more accurate picture is slowly getting out," he said.
That said, the senator insists the government needs to treat everyone with respect.
"We need to treat them all carefully and humanely. The question is what do we do with them. We need to detain them and then quickly deport them. That's what's going to stop this flow from continuing and continuing to grow," said Vitter.
In addition to the impact on the border states, Vitter says this crisis impacts every other state as long as the government is actively handing off illegal immigrants to sponsors here in the U.S. He is aware of 1,200 cases in Louisiana alone since this crisis began.
But what are the political odds and how is the bill being received by lawmakers?
"Great support on Capitol Hill, even greater support in America," said Vitter. "I think it's galvanizing the American people around the common sense notion that we need to do something meaningful in quickly, effectively deporting these folks back to their home country."
However, just as Democratic control of the U.S. Senate stymies the GOP on other issues, Vitter's bill will struggle to reach the floor. Nonetheless, he remains hopeful.
"Harry Reid seems determined to just take up a spending bill that's basically given President Obama a big chunk of money, mostly to house and feed these illegal aliens, not to fix the problem. That isn't going to go anywhere. I hope when that doesn't go anywhere that opens up the debate and we look at real enforcement measures that can make a difference," said Vitter.
- Conflicting federal appeals court decisions might soon bring Obamacare back to the Supreme Court, this time to determine whether patients can receive subsidies through the federal health exchange even though the Affordable Care Act says they are only permitted through state-run exchanges.
On Tuesday, a three-judge panel of the D.C. Circuit Court of Appeals voted 2-1 that the law repeatedly refers to subsidies being available only through state exchanges and, therefore, the law must be interpreted that way. However, the Fourth U.S. Circuit Court of Appeals unanimously ruled that subsidies could come through either the federal or state exchanges.
However, the D.C court is more prominent, and observers say its verdict carries considerable weight.
"This is a hugely important decision. The government has now lost a case that really addresses the heart and soul of what this law is supposed to do," said Grace-Marie Turner, president of the Galen Institute.
"The law specifically says, at least seven times, that the subsidies are only allowed through an exchange established by a state. It was part of Congress' coercion to try to get the states to set up their own exchanges," she said. "The states basically called their bluff and said, 'Nope, we're not doing this.' So when the law says seven times that tax credits for health insurance can only be distributed through an exchange created by a state, the court said, 'The law must mean what it says and we're going to rule that way.' Congratulations to them for upholding the rule of law."
The administration is appealing the decision of the three-judge panel to the full D.C. Circuit, which includes seven Democratic appointees and four selections by GOP presidents. According to Turner, precedent suggests the full, or en banc, court will not be interested in second-guessing three of their colleagues, but she says there is a tinge of politics on the bench that did not exist until recently.
"The judges really respect each other. They don't want to overrule one another, although the Obama administration has been stacking this court with several new appointees. They very likely would have the votes to overrule the three-judge panel, but it would look very, very political and would likely discredit future decisions," said Turner, who says it is vital for one full appeals court to rule in line with the three judges.
"It is consequential, because in order for this to go to the Supreme Court, you would then have to have different rulings in the different appeals courts. There are four similar cases going through the courts. So you'd have to have another court decide the same as the D.C. Circuit Court panel has today for the Supreme Court to heart it. If there are no conflicts in the appeals courts' decisions, then the Supreme Court would less likely take it up," said Turner.
Tuesday's decision in the D.C. Circuit does not force an end to subsidies through the federal exchange while the appeals process plays out. But if the decision is ultimately upheld, the implications are huge.
"About 4.5 million people, who are getting subsidies through the federal exchanges, are not getting them legally. Eighty-seven percent of the people signing up for health insurance in the exchanges are getting subsidies, some of them significant subsidies of $12,000-14,000. Those are not legal in the healthcare.gov website," said Turner.
If the Supreme Court were to declare subsidies obtained through the federal exchange illegal, Turner says it would give great incentive for lawmakers to take a smarter approach to health care reform.
"Congress would then have to go back to the drawing board. I think people that opposed this law all along would actually have more bargaining power now to be able to move to a place where we can actually get subsidies that are structured the right way, not this "mother may I," 159 new government rules and commissions that are basically running our health sector," said Turner.
She says urgent action would be need to help people trapped in a system where they had to buy health insurance but could not get any help in paying a much higher than expected price tag.
"They're not going to leave the millions of people who've been thrown out of their coverage out in the cold. They're going to try to figure out how to come up with a better solution, but one that gives people and doctors choices, not government bureaucrats and politicians," said Turner.
- In an unexpected blow to Obamacare, a federal appeals court has ruled against the federal health care exchange, HealthCare.gov, saying it may be violating the mandates of the Affordable Care Act.
In essence, the court 19s decision attacks the Obama administration for creating a nation-wide system for delivering health care subsidies when the law, known commonly as Obamacare, only allows for subsidies to be distributed in state-based health care marketplaces.
Fox News contributor and author Dr. Ben Carson said that he isn 19t surprised by the court 19s decision.
"This is completely what I've expected, and there will be more revelations as time goes on," he says.
Carson went on to say that he feels this is emblematic of the administration 19s desire to simply take control of the situation and do what they want.
"The Obama administration has been, along with the Internal Revenue Service, saying they could do almost anything they wanted. It states very specifically in the law, the ACA, that subsidies were going to come through the state exchanges. And many of the states decided that they were not going to set up these exchanges. The administration decided to give them subsidies anyway. Well, it doesn't say that. That's not part of the law," says Carson.
Though the decision is almost guaranteed to face an appeal by the administration, it 19s reach is quite expansive. 36 states haven 19t yet set up state-based health care marketplaces. That means Obamacare enrollees in those 36 states may have received subsidies illegally.
Though the court 19s decision is considered a blow against Obamacare, the likelihood of it having any power to fully derail Obamacare is slim.
- The rise of a self-proclaimed Islamic caliphate in parts of Syria and Iraq is already responsible for the eradication of Christianity in the historic city of Mosul, and this could be the first step towards much greater persecution in the weeks and months to come.
Even before the rise of ISIS, Christianity was greatly endangered in Iraq. Open Doors USA listed it as the fourth worst persecutor of Christians in the world earlier in the year.
"Iraq was already a very dangerous place for Christians because of the weakness of the central government and their inability of unwillingness to protect Christian churches and Christians who wanted to choose for themselves what their religious beliefs worse," said Open Doors USA President and CEO Dr. David Curry, who says the latest developments in Iraq are making things exponentially worse.
On July 19, ISIS announced every Christian in Mosul had a choice by noon Saturday to convert to Islam, pay a financially crippling tax or leave with no possessions but the clothes on their backs.
"Since June 10, when ISIS came in and took over...it's been incredibly difficult. Over 3,000 families, just from Mosul, are homeless, are on the run and have had to leave everything and it's really unprecedented in this modern age to have a group call out this kind of segregation of a religious minority and force them out of their homes with impunity. No western government seems to be standing up or protecting these folks," said Curry.
Not surprisingly, the persecution is leading to a significant humanitarian crisis.
"Those that have the resources are heading out of the country entirely. Most of them, of course, don't have the resources to get on a plane and fly out so they're heading north into the Kurdistan regions, where there is more security," said Curry.
Open Doors USA is racing to meet the physical needs of those heading for an uncertain destination.
"Open Doors has set up response to help the refugees. We've got a project that is giving them food, water, tents, whatever we can do to help them stabilize in their homeless condition and try to acclimate them back into society if possible," said Curry.
Curry says those who choose to turn a blind eye to the treatment of Christians in Iraq are making a horrific mistake.
"I think people underestimate how fast this kind of persecution spreads and to our detriment. This sort of persecution in the Middle East could certainly spread to other religious groups, like Jewish minorities, certainly Buddhist minorities. When we let this kind of aggression stand, I think it's a very bad sign for the rest of civilization," said Curry.
"I think you could see problems in Jordan. I think you could see problems in parts of Saudi Arabia and Kuwait. There's still key parts of Iraq. It certainly is a major shift in the Middle East. I think it could get worse," he said.
That's why Curry says western nations need at least to publicly condemn ISIS for this persecution.
"Government need to stand up and send clear messages of support to the Christian minorities, to do what they can to put diplomatic pressure on these groups and to make this very difficult to happen anywhere else and to hopefully turn the tide in the coming weeks," said Curry.
The upheaval of the past 11 years is taking a severe toll on the Christian population in Iraq. Curry says there were a million believers in Iraq in 2003. Now he says some estimates are as low as 300,000.
- By Ryan Brown
The 2008 housing crash is still having a huge effect. During the recession, Americans lost more than a quarter of their net worth. Housing prices dropped 20% and total home equity in the United States dropped $4.2 trillion. All told, losses during the recession totaled $8.3 trillion.
But some of the losses appear to extend beyond mere dollar value and penetrate Americans 19 psyche. In 2011, 53 out of every thousand eligible young adult renters became a homeowner. That 19s 38% lower than the pre-recession 85 per thousand, recorded in 2001.
It shouldn 19t be a surprise, then, that so many young people pause when confronted with the question of whether they should rent or buy. Among an age group where only 43% respond that they are 1cvery satisfied 1d with their current job, researching the question to buy or to rent is a tough situation.
That situation isn 19t made any easier when a lot of experts agree that the best answer is, 1cit depends. 1d
Rick Harris is regional vice president for the National Association of Realtors and the owner and broker of Coldwell Banker Pro West Real Estate in Ashland, Oregon. He agrees that it does depend, but adds that there are a few criteria by which young people can base their decisions.
1cIt depends on some things that you can point out. It depends on a person 19s financial situation and what their goals are. It depends on what kind of credit they have. It depends on where they live, what the market is like where they live, how long they plan to stay there, and really how flexible they want their lifestyle to be, 1d says Harris.
If a young person can 19t give good answers to those questions, Harris says the best thing to do is wait and keep renting. That, in itself, he says, may have some added benefits.
1cRenting gives you great flexibility. You can move for jobs more easily and you can live where you want to. Unless you have a lease you can be out of a rental and move to a different place relatively quickly. Up front it costs less to get into a rental investment and you can call the landlord if the roof leaks. If the paint needs to be redone a landlord will often do that, or if there are plumbing repairs they 19ll often deal with that, 1d he says.
But when a young person is ready to sacrifice some of the flexibility of renting and buy a house, Harris recommends they remember one important fact from the recent housing crisis.
1cUnderstand that real estate is a long-term, not a short-term investment. In the bubble, a lot of people were doing what was essentially day trading in houses. They would buy houses before they were built and flip them. It worked like the stock market works, but the same thing that can happen in the stock market happened in the housing market 14the bubble popped, 1d he says.
As with any complicated issue, however, even when someone is ready to own a home after answering some of the important questions in home-buying, those questions open the door for even more questions. In renting and buying, many of those new questions focus on real estate 19s biggest issue, location, location, location.
Jed Kolko is chief economist and vice president of analytics at Trulia, an online real estate site. He says where you plan on living might help you determine whether to rent or buy.
1cWhen we look across the country and compare a similar unit for rent and for sale, similar-sized units in the same neighborhood, it looks more than a third cheaper to buy than to rent. But that 19s only if you get today 19s low mortgage rates and if you stay put for seven years, 1d says Kolko.
A closer look at the data shows that buying ranges from being just 5% cheaper per month than renting in Honolulu, Hawaii, to being 66% cheaper per month than renting in Detroit, Michigan. Kolko is quick to point out, though, that the length of time you plan on staying in an area is still the most important factor.
1cOne of the most important factors in deciding whether the math makes sense to buy or to rent is how long you 19re going to stay put in a place. People who aren 19t planning to stay put at least five or seven years, might be better off renting, 1d he says.
For young people who plan to stay for seven or more years, have a great job, and want to settle down, though, there are still hurdles they may face, simply because they 19re young.
1cThere are a lot of obstacles right now for young people who might want to buy. The first of course is the down-payment. Qualifying for a mortgage is also a hurdle. And, as student debt is rising, debt might make it harder for some young people to qualify for a mortgage, 1d says Kolko.
To make sure that young people do all the necessary research and get all their facts straight, Kolko recommends they use a rent versus buy calculator to really make sure that the details all point in the direction of renting or buying.
1cA rent versus buy calculator lets you compare for any two units whether buying or renting is going to be the better deal. The calculator lets you put in what your tax bracket is, how long you 19re going to stay in the home, and your location, to get a very personalized calculation of whether it 19s going to be cheaper to rent or to buy, 1d he says.
But using a rent versus buy calculator can leave some questions unanswered. Jared Gerlach is a software developer in Provo, Utah. He says that even after a lot of research, owning his first house came with some surprises.
1cBefore I bought a house, I didn 19t realize all the different things that I would need to do. I have to worry about paying utilities and the mortgage on time, watering the lawn, taking out the trash 14stuff like that, 1d says Gerlach.
Though the decision to rent or buy might seem to be subjective, by using rent versus buy calculators, taking into account the flexibility of their lifestyle, and looking at location, young people can navigate this difficult decision.