Saturday, June 15, 2013

NC and money affairs - two interesting articles from the News and Observer

Money is still tight and unemployment for North Carolina and the USA overall is also way too high for any politician to become complacent about the economy. Yesterday, the News and Observer out of Raleigh published two interesting articles that are related to the economic situation we face these days.

The first article deals with a venture that was intended as aiding rural areas in economic development and, hopefully in the long run, reduce unemployment. Rural North Carolina can be pretty poor and overall economically marginalized and lack in employment opportunities for young people. With the clothing mills and tobacco manufacturers closing down and having closed down, a lot of economic opportunity has left rural areas. So one organization, a private nonprofit called the N.C. Rural Economic Development Center calls its mission to help North Carolina’s struggling rural counties. But as the New and Observer indicates, so far millions in taxpayer money has gone into projects that either did little to spur economic growth in the rural areas or went to support projects that really did not need any financial assistance.You can read the whole article and more examples of questionable spending of taxpayer money here.

Two projects that come to mind are the opening of a new Bojangles that was supported with $350,000 in funds, but opened up a short time after the money was allocated. This indicates that the funding for the restaurant was already in place and raises the question why was the money still allocated? Another project are several Walmart stores that were funded to the tune of $6 Million and obviously are owned by Walmart, an organization that does not experience financial troubles to the extent that it needs $6 Million of taxpayer money. In particular the latter project may get many people upset since Walmart has been accused of destroying local economies by destroying competition. Small local stores cannot compete with the superstrong buying power of the national chain and will go under, minimizing the variety of stores available in rural areas and in the end possibly allowing Walmart to dictate prices. So why were so many sums allocated to two projects when money is tight and the benefit for rural areas from these and other projects funded by the N.C. Rural Economic Development Center is questionable at best and could be called misguided.

But the organization itself is not really short on cash either thanks to yours and me truly paying our taxes on time. Currently, the cash balance is $69 million because some projects have not started or others fell through for various reasons (hopefully in some cases the planned recipients were maybe honest and said they did not need money - but who am I fooling). Anyway, I would hope with all the cuts being forecast in education, yet again, that the legislature in Raleigh may just take a tiny peak at this enterprise and decide whether taxpayer money is really well spent when sent the way of N.C. Rural Economic Development Center. I  for one doubt that the money is well allocated with that agency and would hope that some of the money is spend simply feeding children in rural North Carolina over the summer when school lunches are not available or paying for an extra nurse to visit rural residents too ill to travel regularly to hospitals. It is not that hard to come up with ways in which other than salary or product purchases, most of the money would go directly to benefit the rural citizens. And question is, if you have problems putting money on the table, do you really feel that a fast food restaurant will solve your problem or the fact that Walmart saved some money when opening its store in your town will let you sleep easier at night?

The second article in the News and Observer (here) deals with a new kind of rent to own business that is starting to become more popular now - rent your tires rather than buy them outright. I am someone who drives an old Ford, manufactured in 1997, and who actually left one repair shop because of the outright nasty comments that were made when I showed up with my car to have an oil change done (hello Sears, not that popular anymore with consumers in general and maybe now you would just change the oil and not tell me to get rid of my car, which I still drive 4 years after I visited your "customer support store" for the last time. ). So I am not interested in spending a lot of money on my car and simply expect the thing to get me from point A to point B, admittedly with some comfort. I actually had to have my AC fixed, but I did drive two years in the sometimes very hot and humid NC without AC - and was miserable. But my car is not anything fancy and I did not have too many repairs on it - my current car mechanic actually states that it is worthwhile doing regular maintenance because it is still a good car (SEARS- how is that for customer service?).

Anyway, it turns out that many people do not have money to buy tires when needed and so now resort to renting them, similar to the rent to own furniture places. The rent to own businesses function one way, they offer low rental payment because in the end you end up paying 3 or 4-time what the furniture or now tires would cost. I know that people are desperate, but unless you have a punctured tire that cannot be fixed anymore, most people can tell when the tire is wearing out. Start saving and buy a couple of tires at a time. Heck, I still save and will not eat meat for weeks if I have a significant expense coming up. Coupons will be clipped more frequently and simple pasta dishes with some butter and maybe an egg will mean dinner. There are things you can do to save, especially when the alternative is to pay for something three times because you do not have the cash.

While with tires I can see that you need them because most people have to drive to work. The rent to own furniture places were always a puzzle to me. Why do you need to rent to own a large screen TV. I only recently joined the HDTV club, years after others did because I am cheap and will not spend money easily. Same for furniture. Really, I have slept for several years on a mattress and guests were shown the sofa, that was a futon (now recently sold on Craigslist for a nice sum) - really money management is not that difficult. Unless you have really a bunch of unforseen expenses and need a table because you have no other table in the house, no one should need rent to own furniture place to suck money out of their pockets.

I am doing economically well, but in large part because I hate spending money and live in constant fear of being poor again. So vacations, movie rentals etc are not part of the routine. Redbox is only used when there is a free rental; no matter how much I would like to see Lincoln. I will just have to wait and, if necessary, the local library will do for rentals and books. Let me state it again, no one should have to use rent to own furniture places and likely, with some decent money management, no rent to own place, be it furniture or tires, should be able to make a comfortable business with smart consumers around.

Read more here:

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