Stevens Point Journal from Stevens Point, Wisconsin • 15

Wednesday, February 25, 1981 15 Stevens Point (Wis.) Journal BUSINESS MIRROR How to get enough homes for Americans Mm iliiwi if? i There are other elements also. The typical single-family house now requires as much down as the median-income family earns before taxes in an entire year. That's hard to come up with when inflation exceeds wage increases, when taxes are rising, and when saved money erodes in value. Moreover, housing really doesn't have top priority, as you might think it would. No matter that about 40 million people will reach age 30, or homebuying age, in this decade.

The goal of those who would rebuild America is to channel funds into manufacturing plant and equipment, and in that way reduce inflation by lowering the cost of making goods. Somehow, though, it would seem the housing situation has to be worked out before that can happen. The situation isn't being ignored, as the many innovations in housing design and financing attest. But progress comes slowly on all fronts: in slowing the rise in prices and bringing down interest rates, in rebuilding savings accounts, in obtaining regulatory approval for new-style mortgages, and in gaining acceptance for them. It takes time, but time is relentless.

All those babies born in the boom of the late 1950s and early 1960s, and who are relied upon to get the economy moving, are getting older by the second. They want houses. 4 i f. 7. By JOHN CUNNIFF NEW YORK (AP) If Americans can't put a roof over their heads there may be little point in devising grand plans for improving productivity, reducing inflation or otherwise seeking to tame the savage economy.

But there, are problems in roofing America. It takes lots of money to build and buy houses, and the so-called thrift industry pipeline that funneled money to the housing market is plugged up like an old sink. The reason is inflation and high interest rates, and it works like this With the cost of living outpacing wage increases, many people are unable to save as much as they once did. What money they do save often goes to large commercial banks that can offer high-interest certificates rather than small, local savings institutions, such as savings and loan associations or mutual banks. Commercial banks aren't as dedicated to making mortgages as are thrift institutions.

Seeking a greater return for their dollar, they "invest in more profitable and less regulated ventures than housing. Thrift institutions have been sinking deep into the hole, one reason being that they hold on their books old home mortgage loans on which they collect only 7 percent or even less. They lose money on them. Traditional home mortgage lenders are resolved not to be caught in such a bind again. They are wary of granting long-term fixed-term mortgages.

Instead, they want flexibility, which generally means they seek to give mortgages whose terms vary with changing conditions. Such mortgages now exist, but after 50 years of expecting and getting the traditional mortgage, some young homebuyers are reluctant to test the new mortgages. Some critics say they are wise to resist. The argument of the critics is that flexibile rates mean either of two things: That the monthly payments might rise beyond the earning power of the homeowner; that, as an alternative, the homebuyer would need more years than he or she has remaining to retire the mortgage. The critics of the critics concede the new mortgages aren't as desirable as the old ones.

But, they argue, we must be realistic. If you want a house, this is the only way you or your family will get it. SYNFUEL PLANTS' Liquefaction plants, similar to this one at Catlettsburg, which were receiving millions from federal government programs, are facing cuts by the Reagan administration. Reagan has aimed cutting the $6 billion the Energy Department was expecting to dole out in the next four years to build giant demonstration plants in West Virginia, Kentucky, Alabama, Ohio, Illinois, and Tennessee. (AP photo) Synfuels crash program a wise investment? Accused of failure to pay for cheese MADISON, Wis.

(AP) The treasurer of an Illinois cheese company has been charged with five counts of felony theft for allegedly failing to pay for five shipments of mozzarella cheese from Brillion, Attorney General Bronson C. La Follette said Tuesday. La Follette said Alfred A. LoVerde, 27, treasurer of LoVerde Cheese Co. of Elk Grove Village, was involved in non-payment of $67,000 for cheese from Ruben Laack Cheese Co.

of Brillion. LoVerde was released on his own recognizance after an appearance in an Illinois court Tuesday, La Follette said. Between Sept. 8 and Oct. 8, LoVerde or his representatives received five shipments of cheese from the Calumet County firm and failed to pay, La Follette said.

Reagan can also expect support from environmental groups, which tried in vain last year to block the program because of concerns the plants would do serious harm. "We feel there is great logic in reevaluating in a more rational atmosphere a program that was passed in an energy panic," said Bruce Yeager of the Sierra Club. "There is no need for a crash program." But synfuel supporters say Reagan's cuts will send the wrong message to Arab oil exporting countries. "We can pull back and say it costs too much and maybe we could get by without serious fuel shortages," says Walter Flowers, head of the National Council on Synthetic Fuels Production, a lobbying group. "But that would be foolish.

The amount we are investing is modest compared to our country's needs." demonstration projects won't get through Congress without a fight. Two plants to convert coal into liquid fuel in Morgantown, W.Va., and Newman, enjoy the backing of people like. Democratic Sens. Robert Byrd and WendellFord. But Reagan can expect help.

Senate Energy Committee Chairman John Mc-Clure, R-Idaho, says Carter's synfuels effort has become the government's biggest "pork-barrel program" worse even than spending for water projects. "Not every congressional district can have a dam, but they can all have an energy project of some sort," McClure says. Indeed, the Carter administration did its best to make sure as many congressmen as possible had a stake in the synfuels sweepstakes and in six months handed out $500 million in design funds for 179 projects in 47 states. BOWL BOWL BOWL BOWL BOWL BOWL BOWL BOWL bankers are still hesistant to lend the large amounts of money needed about $2 billion per plant. To get over that hurdle, Congress last year created the Synthetic Fuels giving it $20 billion initially and promising another $68 billion in four years to provide government backing for bank loans.

The Reagan administration, however, wants to scale back current efforts and entirely drop any $68 billion second phase. Just how successful Reagan will be in trimming a program that has enjoyed large support in Congress is another matter. Reagan is already lowering his sights. Budget director David Stockman's initial recommendation to cut the corporation's current budget by about a third was dropped after 34 House members sent a letter warning the president not to mess with a program that enjoys "substantial majorities in Congress." Reagan decided not to touch the $17.5 billion the corporation has to distribute in the form of government subsidies such as loan guarantees. His aides reasoned that taxpayers should be out very little in this program, since the corporation will pay only if such projects go bankrupt or oil prices don't rise fast enough to make the products competitive.

Reagan aimed his ax primarily at about $6 billion the Energy Department was expecting to dole out in the next four years to build giant demonstration plants in West Virginia, Kentucky, Alabama, Ohio, Illinois and Tennessee. Unlike loan subsidies, the government was paying this money directly to big oil companies like Gulf and Conoco, a practice the General Accounting Office warned in a recent report was fraught with poor management, technical problems and potentially huge cost-overruns. But even Reagan's "hit-list" of WEEK END STOCK RED PIN BOWLING Bowl 2 Games Get 1 Game FREE WITH THIS COUPON COUPON GOOD MONDAY FRIDAY NOON 6 P.M. By MARTIN CRUTSINGER WASHINGTON (AP) What a difference a year makes. Twelve months ago Congress and the executive branch were pushing hard for a bill that President Jimmy Carter proclaimed proudly would "dwarf the combined programs that led us to the moon and built our interstate highway system." Now President Reagan is trying to scale the program back so it won't dwarf much of anything.

The subject of this tug of war is the effort to make synthetic liquid and gaseous fuels from America's abundant supplies of coal and shale oil. The relatively old technology, which powered Hitler's tanks during World War II, got new life back in the summer of 1979. when U.S. energy vulnerability was brought home to millions of Americans sitting in gasoline lines. Faced with constituent demands to do something, Carter and Congress came up with what Americans love a mul-tibillion-dollar government crash program complete with goals.

The idea was to have the United States, which now produces no synthetic fuels commercially, set up a network of demonstration projects and subsidized plants which by 1987 would be making the equivalent of 500,000 barrels of oil daily from synfuels, and 2 million barrels by 1992. The 1992 goal would represent one-third of current oil imports. These goals would be accomplished by using some modern technologies which are refinements of processes available in this country as long ago as 1817. In that year the city of Baltimore built a plant which converted coal into synthetic gas to be used for lighting. Other Eastern cities followed suit with their own "gas-house gangs" running plants until the 1940s, when cheap oil and natural gas made them obsolete.

German scientists in World War II developed a process to turn coal to liquid fuel by adding hydrogen under extreme pressure and heat. U.S. scientists have been working to refine these processes. Another promising synfuel lies buried in Western rock deposits known as oil shale, which, can be converted into liquid fuel Industry is confident the new technologies will work and prove competitive in the marketplace. But CO CO CO CO CO I CO -J CQ -I CO Coupon expires April 15, 1981 ADJUSTMENT SALE BASIC DENIMS SMALL FLARE MODEL BASIC CORDS FLARE BOOT CUT VALUES TO $21 .00 fNSLPEB Bus.

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