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What we need to do it make it just as expensive to rent as to buy.
Rent at my first apt was nearly $900/mo...it was nice but not THAT nice. After I moved out of there my P&I on my new house was actually $50 less than my rent. It's hard to justify paying an outrageous price for an apt when for roughly the same money you can have a brand spanking new home with double the square footage. This was in Fort Worth, TX btw.
I can't argue against emotions, we all have those. You can look at even socialist societies and still all the wealth is in the hands of the people at the top. In fact 80 years of many different tax policies from 90% tax rates all the way down the line.
Table 4: Percentage of wealth held by the Top 10% of the adult population in various Western countries
Switzerland 71.3%
United States 69.8%
Denmark 65.0%
France 61.0%
.....
Figure 4: Share of wealth held by the Bottom 99% and Top 1% in the United States, 1922-1998.
So basically democrats are using class warfare to get and stay in power. They can't and won't fix the system. They will just have all kinds of goodies built in their hometowns of which most couldn't get tax increases to pay for it themselves. States are not suppose to run into debt. The federal government can run debt like there is no tomorrow.
Hi BigJon3475,
That makes a lot of sense if you don't have all the information. The democrats are not the only one's who engage in class warfare. The republicans point to the leeching of the underclass as the cause of all the problems. Same thing, different direction. The point is all the lower classes in fight while the monopoly capitalists play one off the other. All socialist countries funnel money to the monopoly capital that created them. This includes the United States.
It is blatantly obvious that Obama is open to change that is except for the financial system. Bush was driving and now is taking a nap in the back seat, while Obama took the wheel in the exact same direction. Oh yes, he turned on the windshield wipers so that people can see what they can't comprehend.
I find it interesting that the republican policy of lower taxes is actually the right one and yet it won't go anywhere. Its funny now that they have no power, they got religion. They are now a sponge to soak up all the outrage that thinks they have representation. The Republicans will be glad to lower taxes a bit while they are silent about the Fed's rock bottom interest rates which is a bankster inflation tax which jacked the middle class into the alternative minimum tax. Lower taxes, push everyone into higher tax brackets. Its a shell game.
Wednesday, September 10, 2003
U.S. House of Representatives,
Committee on Financial Services,
Washington, D.C.
Mr. FRANK. I agree, Mr. Secretary, but here is my point. I think Treasury is going to be the big brother here, and if one set of goals is in Treasury and the other set is in HUD, I worry about an institutional disadvantage for the set of goals that are important to me.
Let me, with that, turn to the Secretary of the Treasury, because what I am struck by here is what is not in here; and I am glad it is not in here. We have heard descriptions of the situation regarding GSEs as a great crisis and an imminent threat to financial stability. This does not change the essential relationship of the GSEs legally.
I am not for changing that, but I think we ought to note that this is not a document put forth by people who think that the sky is about to fall or that we are going to have serious damage; and I am struck by that moderate quality.
Let me ask you, Mr. Secretary—and again I appreciate that there is not a lot of rhetoric in here about how terrible these are. I appreciate that you think we should enhance the regulation, but I get the impression that you were talking more about guarding against potential future problems developing, rather than feeling that there is an urgent need to stave off some crisis.
Are we in a crisis now with these entities?
Secretary SNOW. No, that is a fair characterization, Congressman Frank, of our position. We are not putting this proposal before you because of some concern over some imminent danger to the financial system for housing; far from it. Rather what we are saying is, since 1992, or whenever it was that OFHEO was established by statute, over a decade ago, these housing markets have developed.
Mr. FRANK. Getting bigger.
Secretary SNOW. Huge. Hugely. And those entities have grown and become now very large players on the whole financial landscape of the United States. We just feel it is time to——
Mr. FRANK. Good. I think it is important to have that, to make it clear that that is the context.
Let me just close by saying, I look forward to this, and I have given you my skepticism. Housing has been my primary issue, affordable housing has been my prime issue, and I need to be convinced. We haven't done as good a job as we should in enforcing those goals, but I will have to be convinced that they won't be at an institutional disadvantage.
Secretary SNOW. I don't think I will convince you by this, but as I view this institutional arrangement that we are proposing, Secretary Martinez and HUD would have the clear primacy on the question of what is the mission.
Mr. FRANK. And what happens if they don't meet the mission?
Secretary SNOW. If they don't meet the mission, the Secretary is asking for enhanced authority to have disciplinary powers to strengthen his hand in seeing that the entities do meet that.
Mr. FRANK. I just worry that we are going to get them in a situation where the most important question for Fannie Mae and Freddie Mac to answer is who do you like better, your mother or your father?
Secretary SNOW. Well, as Secretary of the Treasury, if this authority comes to Treasury, I would view our responsibility as soundness and safety within the larger parameter of the goals that are given to the GSEs by——
Mr. FRANK. I appreciate that. Ten more seconds. But obviously if we can find some way to write that sort of thing into the law, because personalities change, I would feel maybe a little less skeptical.
This text has been prepared for the Fall 2002 meeting of the Shadow Open Market Committee.
It is common to find that government programs, when spawned from periods of rapid change when economic markets are deemed to be leading to socially undesirable and uncertain outcomes, typically out-live their useful purpose. This is clearly the case with Fannie Mae and
Freddie Mac. These Government Sponsored Enterprises (GSEs) were started when mortgage markets were less liquid, the U.S. banking system was regionalized and substantially less capitalized, financial markets were less developed, and during pushes for more affordable housing.
No one can doubt the benefits that the securitization of mortgages, associated with the rise of Fannie Mae and Freddie Mac as financial institutions, has had in the development and deepening of financial markets in the United States. Nor can one doubt the fundamental importance and necessity of housing in our everyday lives. But the benefits that Fannie Mae and Freddie Mac currently bring to the housing finance market would continue unabated if the perceived “implicit guarantee” that they currently receive were to be removed. Households would still be able to choose among a variety of competitive, financial options to finance their
housing. Savers would be able to benefit from holding mortgage backed securities. Fannie Mae and Freddie Mac would be able to earn profits: though based on their performance, rather than on their government sponsored advantages. And the U.S. taxpayer would remove a large
potential liability from its balance sheet for which it receives no benefit. It’s time to cut the cord.
That's the difficult part about forums, you can never tell when someone is being sarcastic, because there are some people who post this sort of thing SERIOUSLY all of the time.
The problem is that a long time ago homes became a "two income proposition" to purchase. It began when women entered the workplace en masse. So... ta-dah... "market will bear" pricing ensured that the earning power of our women got mortgaged away.
Then along came a loosening of credit that caused a bubble in home prices... wherein everyone borrowed to spend their unrealized, on paper, wealth "gains"... and finally we hit the point were two incomes couldn't pay the inflated price... a correction has occurred.
There's no "fixing it" if fixing it means getting housing prices back up to bubble levels. That'd be like saying they should've propped up tulip bulb prices...
The housing market prices have been out of line with earning power for *decades*. Even at the current deflated prices that's still essentially true. If for no other reason that people have to *mortgage* houses.
The "fix" if there is one, and I don't know how to make it happen, is to make it possible for one person to afford all that is necessary to live well, from the efforts of one person, without credit. And perhaps even a little more, as children aren't capable of being economically productive for a number of years.
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