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Wednesday, October 31, 2007

I don't want wealth, couldn't afford it if I did

Having been in the army now for a few years, there is nothing that astonishes me more than people not wanting to build wealth. The military has a program that pay BAH (Basic Allowance for Housing) to almost a million service members. The amount ranges based on your rank, duty station, and dependant status. This BAH, paid to the service member to pay for living costs if they live off post.... reserved normally for service members with families, officers, or high ranking enlisted personnel. The amounts at Ft. Carson would be from around $900 for a new private with a wife per month to over $1500 per month for colonel and above officers. The fact that so many of these people getting this allowance rent versus own homes is unbelievable.

This shows, I believe what would happen if the government paid a similar sum of money to poor people in America. Instead of using it to buy a home and start to build wealth, they would use some of it to pay rent and consume the rest elsewhere. So as we discussed in class, the government could increase the relative income of these poor people by giving them this payment, but it is their "choice" to make it wealth.

I looked for quite a while but could not find any military wide statistics on what percentage of those almost a million service members used their BAH for rent versus owning. So I am using a sample of 33 people in my platoon. I realize this is not a simple random sampling, but I believe it to be fairly consistent with what I have seen throughout my time in the army. And while I will also agree that there may be some characteristics of being in the army that may make those receiving BAH to want to rent versus own a home, in the the long run, I think that it pretty accurately represents the public as a whole and would relate well over to a subsidy program for the poor.

In my platoon of 33, 14 live in the barracks or in on post housing and don't receive BAH. Of the 19 receiving BAH, only 5 own a home. That is almost a 3 to 1 ratio. I will use myself as an example. If married, I would receive over $1000 every month more than a soldier living on base with which to find adequate housing. That is $12000 a year that the army is giving me with the opportunity to invest in my own wealth by paying a mortgage and contributing to my wealth versus paying rent to some other fool and padding his bank account.

The biggest reasons I find why these folks getting BAH don't want to buy a home is that it is too much hassle (pronounced lazy and no initiative) or they would rather find a cheap place to rent and pocket the rest of the money.

So now lets think if the government paid similar payment to the poor....if the figures transferred similarly over between those who rent and those who buy, 3 out of 4 would not take advantage of the money to increase their wealth. And since the two major reasons why soldiers don't buy are semi-laziness and the desire for fast cash..... I'm thinking that it wouldn't be too great of an idea for most people down on their luck.

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