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Old 03-09-2010, 01:57 PM
 
8,468 posts, read 13,661,598 times
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Quote:
Originally Posted by Flat2MT View Post
So the everyone-deserves-to-own-their-own-home (even though you don't have the wherewithall) policy under the Clinton administration doesn't count as the government interfering with the free market system?
First of all, I don't know why you're raising the issue of government interference when the issue during the last 10 years is that the government wasn't involved enough. But since you bring up The Community Reinvestment Act, let's talk about that. The CRA was enacted to reduce redlining, the practice of discriminating against people who live in poor neighborhoods. Whether you receive a loan should be based on your ability to repay the loan, not on where you live. It's no surprise that conservatives have seized on the CRA. They want the public to blame the collapse of the housing market on poor minorities who got loans they didn't deserve. And enough conservatives buy into it because they're already biased to think "brown people" are irresponsible and just looking for government handouts. Now, if you truly believe in free markets, then you'll probably say that the government has no business telling banks who they should lend money to. The only problem with that is the bank's deposits are insured by the federal government. You can't have it both ways, telling the government to get lost while simultaneously benefiting from its assistance.

Quote:
Originally Posted by Flat2MT View Post
If we can't trust the banking industry to self-regulate, then when they get in over their heads, why does the govt bail them (and others) out?
Big boys rules should have applied - I'd rather have a couple of years of pain than 30+ years.
Because if you let the banks go under, the entire economy goes with it. Businesses would have no one to borrow from. That means if they want to hire more people, invest in factories, equipment, etc., they can't. Same thing with individuals. If they can't borrow, then no one would ever be able to buy a house or a car or go to college. A healthy financial sector is vital to the overall economy. The problem I have with the bailout is there were no conditions attached. What both Bush and Obama should've said to the banks was, "we'll save you guys, but things have to change. You can't gamble with your customers' deposits, you can't create financial instruments like credit default swaps and sell them off-market where no one can properly assess their value, and none of you can remain too big to fail. If a bank gets to the point where its failure would post systemic risk to the financial system, then it's too big." I'm not surprised that Hank Paulson didn't say this since he's a Goldman Sachs guy. And I guess I shouldn't be surprised that Tim Geithner didn't either given his pro-Wall Street leanings.
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Old 03-09-2010, 03:26 PM
 
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
6,958 posts, read 19,198,209 times
Reputation: 6383
Quote:
Originally Posted by aneftp View Post
Actually this happens to the vast majority of people already. It's called the AMT (Alternative Min. Tax).
According to the CBO, "For most of its existence, the AMT has played a minor role in the tax system, accounting for less than 2 percent of individual income tax revenues (or 1 percent of total revenues) and affecting less than 1 percent of taxpayers in any year before 2000. Since then, the tax would have reached more and more taxpayers (because, unlike the parameters of the regular income tax, those of the AMT are not indexed for inflation), but lawmakers have intervened each year to slow that expansion. In addition, a series of reductions in the regular income tax enacted starting in 2001 would have caused even more returns to be subject to the AMT were it not for the series of temporary adjustments (often called “patches”) that lawmakers
made to the alternative tax.

The most recent AMT patch expired at the end of calendar year 2009. Without further adjustments, the impact of the AMT will expand quickly this year and continue to expand in subsequent years, becoming a more significant source of future revenues. As the reach of the AMT grows under current law, many taxpayers will face a fundamentally altered tax structure. If nothing is changed this year, one in six taxpayers will be affected by the AMT."

Full document here: cbo.gov/ftpdocs/108xx/doc10800/01-15-AMT_Brief.pdf
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Old 03-09-2010, 05:53 PM
 
Location: Charlotte, NC
2,193 posts, read 4,546,867 times
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I don't think it's such a horrible idea. I don't think it'll work though as the 3rd parties still have to approve these short sales and I don't think a thousand bucks will do it.
The concept is to get rid of the mountain of debt that people will never be able to pay off. Eventually even if they stick it out for years, will still be underwater. Why not just let this bleed from the system now, then having a Japan style deflation.

While I understand this rewards bad behavior, it does the rest of society no good for foreclosures/short sales to continue for decades. I'd rather have this bad debt removed from the system as quickly as possible and homes to return to normal levels as quickly as possible.

This will also help future (and recent) home buyers. Because people who are bought homes in 2009 and now, are probably under water now. These people god forbid need to sell in the next couple years, we again have a new round of short sales/foreclosures. How does this benefit society?
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Old 03-09-2010, 08:08 PM
 
Location: Northern Virginia
274 posts, read 598,607 times
Reputation: 99
whoa, I like ... for many reasons I just am too tired to enumerate.

Quote:
Originally Posted by DennyCrane View Post
It's always funny to listen to the right-wingers. They go on and on about how great the free market is, how the government should stay out of it, and how the market regulates itself just fine. You'd think a group of people who have so much faith in capitalism would understand the dangers of massive economic shocks. Let's say the government suspends its "socialist" policies. All the people who can't afford to keep there homes go into foreclosure. The market gets flooded with more homes, dragging down the value of everyone else's home. The last thing people would want to do is go out and spend. Businesses see this sudden and widespread drop in demand and respond by cutting back on production and cutting costs even further. In other words, more layoffs. So now you have even more people out of work, more people who can't afford to pay their mortgages, and the cycle repeats. But hey, it's just simple economics, right? Letting the economy spiral into a tailspin, that's better than letting "ultra liberal socialists" try to minimize the damage. Pretty scary how people who believe so strongly in capitalism don't understand the concept of economic shocks.
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Old 03-10-2010, 08:05 AM
 
8,468 posts, read 13,661,598 times
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One other point I'd like to make. Throughout this and similar threads, the people with homes who aren't underwater or in danger of being foreclosed on argue that they should not have to pay for the mistakes of other homeowners. I can certainly understand that. I feel that way every time I look at my rising health insurance premiums and wonder why I'm paying for all the people who don't take care of themselves. But if all of your neighbors' homes go into foreclosure, the value of your home will plummet. So no matter what, you'll be impacted even though you did nothing wrong. Is that fair? Of course not. But that's the reality of owning a home. So if you're one of those people who thinks you won't feel the pain just because you weren't one of those people who got in over his head, think again. You will. And if nothing's done to slow the rise in foreclosures, not only will you see the value of your home continue to deteriorate, you may even lose your job, all because the dropoff in demand caused your employer to go under.
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Old 03-10-2010, 12:20 PM
 
355 posts, read 1,308,795 times
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Quote:
Originally Posted by DennyCrane View Post
Because if you let the banks go under, the entire economy goes with it. Businesses would have no one to borrow from. That means if they want to hire more people, invest in factories, equipment, etc., they can't. Same thing with individuals. If they can't borrow, then no one would ever be able to buy a house or a car or go to college. A healthy financial sector is vital to the overall economy. The problem I have with the bailout is there were no conditions attached. What both Bush and Obama should've said to the banks was, "we'll save you guys, but things have to change. You can't gamble with your customers' deposits, you can't create financial instruments like credit default swaps and sell them off-market where no one can properly assess their value, and none of you can remain too big to fail. If a bank gets to the point where its failure would post systemic risk to the financial system, then it's too big." I'm not surprised that Hank Paulson didn't say this since he's a Goldman Sachs guy. And I guess I shouldn't be surprised that Tim Geithner didn't either given his pro-Wall Street leanings.
That is absolutely not true. Other financial institutions, wealthy individuals, etc. would step in to take the place of failed institutions. Banks and lenders that didn't loan recklessly, credit unions etc. would thrive and pick up the slack. The economy/world etc. would not end overnight.

People wouldn't be able to buy homes/cars/go to college? Ridiculous. They might just have to LEARN TO BE PATIENT and SAVE, LIKE THEIR FOREFATHERS DID. Save up and pay cash for purchases - WHAT A RADICAL CONCEPT!!! No more instant gratification thanks to the wonders of loose credit/personal debt.

It should be surivival of the fittest and a far more lassez faire, true capitalist economy.
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Old 03-10-2010, 12:27 PM
 
29,988 posts, read 37,254,002 times
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Makes me want to re-fi the home I've paid off just to profit from a short sale. Idiots run the country. The USA has become the country that rewards the irresponsible.
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Old 03-11-2010, 10:17 AM
 
8,468 posts, read 13,661,598 times
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Quote:
Originally Posted by Delron View Post
That is absolutely not true. Other financial institutions, wealthy individuals, etc. would step in to take the place of failed institutions. Banks and lenders that didn't loan recklessly, credit unions etc. would thrive and pick up the slack. The economy/world etc. would not end overnight.

People wouldn't be able to buy homes/cars/go to college? Ridiculous. They might just have to LEARN TO BE PATIENT and SAVE, LIKE THEIR FOREFATHERS DID. Save up and pay cash for purchases - WHAT A RADICAL CONCEPT!!! No more instant gratification thanks to the wonders of loose credit/personal debt.

It should be surivival of the fittest and a far more lassez faire, true capitalist economy.
If you truly believed in pure capitalism, then you wouldn't want the government to enforce quality standards on the food you eat. You'd expect everyone to just take their chances. Same with the banks. You wouldn't want the government to insure your deposits. Good luck finding people willing to put their money into any bank if they know it's not insured. And if no one wants to put their money into a bank, well they're go the banks.

What's ridiculous is your unrealistic expectation that people just save for a car, home, college, etc. What world do you live in? People save. If I want to buy clothes, a new TV, food, or furniture, I save up and buy those things only when I have the money. I don't take out loans for that stuff. But suppose I make 50K a year and I need to buy a 3-bedroom home for my family. The house costs 300K. If I had no taxes, owned my car, didn't set aside money for retirement or college tuition for my kids, it would still take 6 years to save enough. Now add all that back in and it'd probably take 15 years. Now imagine every American doing the same thing. Despite what Glen Beck and Rush have told you, not every American who got in over his head was an irresponsible deadbeat looking for government handouts. I have no debt and save one third of my after-tax income. I also don't spend a lot. But it would take me years and years to save up enough to buy a house on my own. But if you truly believe that people ought to save and not borrow, then why not extend that philosophy to businesses as well? Let's see how long a business lasts if they can never borrow and have to save up.
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Old 03-11-2010, 11:58 AM
 
355 posts, read 1,308,795 times
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Quote:
Originally Posted by DennyCrane View Post
What's ridiculous is your unrealistic expectation that people just save for a car, home, college, etc. What world do you live in? People save. If I want to buy clothes, a new TV, food, or furniture, I save up and buy those things only when I have the money. I don't take out loans for that stuff. But suppose I make 50K a year and I need to buy a 3-bedroom home for my family. The house costs 300K. If I had no taxes, owned my car, didn't set aside money for retirement or college tuition for my kids, it would still take 6 years to save enough. Now add all that back in and it'd probably take 15 years. Now imagine every American doing the same thing. Despite what Glen Beck and Rush have told you, not every American who got in over his head was an irresponsible deadbeat looking for government handouts. I have no debt and save one third of my after-tax income. I also don't spend a lot. But it would take me years and years to save up enough to buy a house on my own. But if you truly believe that people ought to save and not borrow, then why not extend that philosophy to businesses as well? Let's see how long a business lasts if they can never borrow and have to save up.
Unrealistic expectations? Yes, unrealistic for the average American debt slave. I often forget what the average modern day American amounts to. Anyone crying about this either lives far beyond their means and thus has the accompanying debt burden, or feel they deserve more than they are worth and amount to. If the 50K income can't get you the home of your dreams, then LOWER YOUR EXPECTATIONS. Or perhaps in the next life the average and below average should strive to be more than mediocre if they expect an above average lifestyle.

If you make the median US household income of 50K, then you really have no business looking at a 300K house assuming you don't have some enormous nest egg/savings/etc. for a larger downpayment. Not to mention, the median home price is what, under 200K now? So what the hell is a 50K income person doing looking at a 300K home, besides trying to live outside of their means. It sounds like just another case of the flawed entitlement mentality that is rampant in the US and has been for the past couple of decades. "I need to get mine" and keep up with the Joneses, without earning it.

Awwww, it would take you years and years to save up, how tragic. Like many intelligent, fiscally prudent and hard working people do (despite the concept being so out of style) - just as previous generations did. How cruel and unusual. 15 years! Maybe even 20! What a travesty. You're an American! You should be entitled to a McMansion and a couple brand new 50K cars of your choosing, on somebody's dime as long as it's not yours, right?

Plenty of businesses grow and even thrive without borrowing and heavy debt burdens.
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Old 03-12-2010, 10:49 AM
 
8,468 posts, read 13,661,598 times
Reputation: 7538
Quote:
Originally Posted by Delron View Post
Unrealistic expectations? Yes, unrealistic for the average American debt slave. I often forget what the average modern day American amounts to. Anyone crying about this either lives far beyond their means and thus has the accompanying debt burden, or feel they deserve more than they are worth and amount to. If the 50K income can't get you the home of your dreams, then LOWER YOUR EXPECTATIONS. Or perhaps in the next life the average and below average should strive to be more than mediocre if they expect an above average lifestyle.

If you make the median US household income of 50K, then you really have no business looking at a 300K house assuming you don't have some enormous nest egg/savings/etc. for a larger downpayment. Not to mention, the median home price is what, under 200K now? So what the hell is a 50K income person doing looking at a 300K home, besides trying to live outside of their means. It sounds like just another case of the flawed entitlement mentality that is rampant in the US and has been for the past couple of decades. "I need to get mine" and keep up with the Joneses, without earning it.

Awwww, it would take you years and years to save up, how tragic. Like many intelligent, fiscally prudent and hard working people do (despite the concept being so out of style) - just as previous generations did. How cruel and unusual. 15 years! Maybe even 20! What a travesty. You're an American! You should be entitled to a McMansion and a couple brand new 50K cars of your choosing, on somebody's dime as long as it's not yours, right?

Plenty of businesses grow and even thrive without borrowing and heavy debt burdens.
Your problem is that you think all Americans are the same and like most Republicans, you're also stunningly out of touch with the real world. Not all of us are trying to live in a big house, drive a fancy car, or own the latest and greatest electronics gear. Many of us are perfectly content living a modest life with few possessions. But if you think a 300K home is a luxury home, then you obviously haven't been to cities like New York, San Francisco, L.A., DC, or Boston. The median home price may be 200K, but that's because middle-of-nowhere cities pull down the average. And if you think businesses can grow and thrive without borrowing, then you really have been living in a cave. Look at any multinational corporations. Do you think they got to where they are without having to borrow? Good grief.
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