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Last night I watched a piece done by John Stossel called "Freeloaders." Very good. I would recommend it, and to those who have a bias against Fox News, it tackles corporate tax breaks, freeloading by the rich, and other sacred cows. The message is how we can easily reduce our federal budget if we hold people accountable and responsible, and if we stop giving taxpayer money away like candy to people who should not be receiving it.
While I don't say that people on unemployment are "freeloaders," one of the points that I made (and got jumped on for it) and the point that Stossel makes in his piece, is that people make choices to do things like build homes in flood prone areas, then they expect the gov't to bail them out. We have become a nation that is no longer responsible for our choices...good and bad...but instead just a nation of victims to be bailed out by a deep pockets gov't. Some people saved nothing while going into huge debt. Do we owe them limitless unemployment benefits?
I don't see how all that equates to the unemployment dilemma we are facing. Are you suggesting that the unemployed made poor choices? This economic downturn is the result of the housing bubble. Now before you accuse these homeowners don't forget that Wall Street and the government through Fannie Mae and Freddy Mac enabled this. Wall Street, Banks, and even GM and Chrysler got bailouts. No one is suggesting limitless unemployment benefits. What you seem to be suggesting is cutting people off in a weak economy. Unemployment benefits buys people time till the economy, hopefully, recovers. No one is making a living off of it.
I don't see how all that equates to the unemployment dilemma we are facing. Are you suggesting that the unemployed made poor choices?
As it relates to the endless extension of unemployment benefits, and as I commented on previously in this thread....SOME people did make poor choices.
They didn't save, took out too much debt, bought homes with little or nothing down at adjustable or high rates of interest. Some people didn't prepare themselves at all for the rainy day, and now it's pouring.
So as not to disturb some of you....that doesn't mean everyone is in that bucket, and there are obviously some people who did all the right things and still got caught up in the downturn. The question at hand is still HOW LONG does the state take care of these folks? 1 year? 2 years? 5 years? 10 years?
Quote:
Originally Posted by MathmanMathman
This economic downturn is the result of the housing bubble. Now before you accuse these homeowners don't forget that Wall Street and the government through Fannie Mae and Freddy Mac enabled this. Wall Street, Banks, and even GM and Chrysler got bailouts. No one is suggesting limitless unemployment benefits. What you seem to be suggesting is cutting people off in a weak economy. Unemployment benefits buys people time till the economy, hopefully, recovers. No one is making a living off of it.
The downturn isn't the result of the housing bubble, but the housing bubble caused it to be much worse than it might have been, and the resulting fallout and panic has been worse than it needed to be.
I totally and completely reject the notion that banks or financial entities forced anyone to do anything. When you buy a home, you know what you can afford. You understand what you're getting and how much it costs. Banks may have looked the other way at bad loans, but individuals signed up for those bad loans and bear most the responsibility for their own choices.
As it relates to the endless extension of unemployment benefits, and as I commented on previously in this thread....SOME people did make poor choices.
They didn't save, took out too much debt, bought homes with little or nothing down at adjustable or high rates of interest. Some people didn't prepare themselves at all for the rainy day, and now it's pouring.
So as not to disturb some of you....that doesn't mean everyone is in that bucket, and there are obviously some people who did all the right things and still got caught up in the downturn. The question at hand is still HOW LONG does the state take care of these folks? 1 year? 2 years? 5 years? 10 years?
The downturn isn't the result of the housing bubble, but the housing bubble caused it to be much worse than it might have been, and the resulting fallout and panic has been worse than it needed to be.
I totally and completely reject the notion that banks or financial entities forced anyone to do anything. When you buy a home, you know what you can afford. You understand what you're getting and how much it costs. Banks may have looked the other way at bad loans, but individuals signed up for those bad loans and bear most the responsibility for their own choices.
Except that sub-prime loans were only 6-8% of the loans. They did not cause the financial crisis. Instead its the easy way for people to blame and point the finger "oh poor people/people with bad credit destroyed everything" which could not be further from the truth. The banks sold this toxic debt to investors. The banks over levered themselves at every turn. THen they get bailed out and saved.
I agree that people should not have signed up for some of these loans but banks sure as hell should not have offered them.
1. No proof of income?
2. Interest only?
3. Future income?
4. 0 down, like its a damn car?
Lenders should be ashamed of themselves.
Do you really don't understand the GA economy? The GA economy grew so fast in the 2000s (we were one of the fastest growing states, we had many cities and counties in the top ten) because OF HOUSING. We even have Home Depot HQ here. HOUSING drove GA's economy. Well since housing has plummeted, GA's economy has plummeted compared to other states who might not have grown like we did but now have no fallen like we have. Housing continues to struggle and GA seemingly continues to rely on it to get us out of this rut instead of realizing we need something else to create job growth.
It is preposterous to blame the 6-8% of people who have little or no net worth and not direct the blame at the banks and financial institutions that own ALL the wealth and ALL the power.
We had a false economy, fake numbers, no auditing, no regulation, a free for all. Now that things are back to REAL LEVELS it seems like suffering but this is the REAL economy. GA thus needs to find ways to create jobs outside of the housing market, which won't rebound for maybe a decade.
Randy, I don't think you and I substantially disagree. I never said that "oh poor people/people with bad credit destroyed everything" nor did I say that banks were totally blameless.
I think the recession we had was coming no matter what happened with real estate, but the Lehman shock and the resulting bringing to the surface of the so-called "toxic debt" was definitely a catalyst in turning a recession into an almost depression. Much of the economy is based on consumer spending, and the lack of confidence, combined with rapidly escalating unemployment, had a rapid and overstated impact on GDP.
When you look at the rapid unemployment in Q1 CY2009, it was a gut reaction by many companies who didn't want to get caught with their pants down. No one knew if the bus was going over the cliff or not, and they were preparing. The trouble was it came close to be a self-fulfilling prophecy.
What has really hurt the housing market is the new trend where people just decide they prefer by choice to walk away from their obligations, instead of honoring them. I'm not talking about people who are forced into foreclosure, but rather those who mail the keys back and walk away as a strategic move. To me, while it may be legal in many cases, it's disgusting and shows how our society has changed. Folks like me who didn't buy over our heads and are current on our mortgage end up paying the cost, both through higher lending costs and via increased taxes to pay for gov't bailout programs.
Last night I watched a piece done by John Stossel called "Freeloaders." Very good. I would recommend it, and to those who have a bias against Fox News, it tackles corporate tax breaks, freeloading by the rich, and other sacred cows. The message is how we can easily reduce our federal budget if we hold people accountable and responsible, and if we stop giving taxpayer money away like candy to people who should not be receiving it.
While I don't say that people on unemployment are "freeloaders," one of the points that I made (and got jumped on for it) and the point that Stossel makes in his piece, is that people make choices to do things like build homes in flood prone areas, then they expect the gov't to bail them out. We have become a nation that is no longer responsible for our choices...good and bad...but instead just a nation of victims to be bailed out by a deep pockets gov't. Some people saved nothing while going into huge debt. Do we owe them limitless unemployment benefits?
See this is what I'm not understanding. Maybe I got the notion of Unemployment INSURANCE wrong. As far as I know it's not an entitlement program, it's INSURANCE, that workers and their employers pay into. I know for myself I started working when I was fourteen, thus far I've never collected unemployment. So you're saying that it's okay for me to pay premiums for 30 years, but be limited in the length of time I can collect on it? That doesn't sound like insurance to me. If I'm disabled my disability insurance pays as long as I'm disabled. I'm not sure why unemployment INSURANCE should do otherwise.
^They are different types of insurance. UI only collects enough in premiums to cover people for a specific period of time. Disability insurance driven through SSI requires that you are permanently disabled and is a relatively small payment. There are medical verifications in place before you can go on permanent disability and deadline for temporary disability. There are serious issues w/ moral hazard w/ UI as w/ any insurance. If you make the support too high, people will just work the minimum and wait to get laid off. If you pay too long, people are disincentivized from finding new jobs.
I pay for health insurance every year that I don't really use and that's going to pay for somebody else's triple bypass as well as the insurance exec's new Benz. Insurance is imperfect b/c human nature is greedy and even if you don't think a $1k/wk check would keep you on UI for longer than the bare minimum, someone else would consider that worthy of a decade long sabbatical if allowed.
See this is what I'm not understanding. Maybe I got the notion of Unemployment INSURANCE wrong. As far as I know it's not an entitlement program, it's INSURANCE, that workers and their employers pay into. I know for myself I started working when I was fourteen, thus far I've never collected unemployment. So you're saying that it's okay for me to pay premiums for 30 years, but be limited in the length of time I can collect on it? That doesn't sound like insurance to me. If I'm disabled my disability insurance pays as long as I'm disabled. I'm not sure why unemployment INSURANCE should do otherwise.
I think it's because the government acts as the insurance company. They calculate what the employers are required to pay in (the "premiums") based on what will have to be paid out to claimants. The problem, as I understand it, is that they did not take in nearly enough to pay all the people making claims (and did not anticipate they'd be paying them for years).
Obviously, there's an underwriting issue there. You could fault the state by saying they should have anticipated huge numbers of people being on unemployment for a long time and should have therefore collected more money from employers. However, as always, there's a balancing problem. Many employers have themselves gone under. Even among those who managed to stay in business, things have often been very tight. That's especially true with small businesses. And if you raise unemployment taxes too high, that directly impacts the cost per employee and may deter hiring.
Unemployment funds have also been hit in the way 401k's and other investments have been clobbered. They either didn't grow or grow fast enough to keep up with claims. A number of states borrowed from the federal government or used stimulus funds to make up the gap, but that money isn't there anymore. In fact, the federal government is putting pressure on the states to pay back what they borrowed.
Randy, I don't think you and I substantially disagree. I never said that "oh poor people/people with bad credit destroyed everything" nor did I say that banks were totally blameless.
I think the recession we had was coming no matter what happened with real estate, but the Lehman shock and the resulting bringing to the surface of the so-called "toxic debt" was definitely a catalyst in turning a recession into an almost depression. Much of the economy is based on consumer spending, and the lack of confidence, combined with rapidly escalating unemployment, had a rapid and overstated impact on GDP.
When you look at the rapid unemployment in Q1 CY2009, it was a gut reaction by many companies who didn't want to get caught with their pants down. No one knew if the bus was going over the cliff or not, and they were preparing. The trouble was it came close to be a self-fulfilling prophecy.
What has really hurt the housing market is the new trend where people just decide they prefer by choice to walk away from their obligations, instead of honoring them. I'm not talking about people who are forced into foreclosure, but rather those who mail the keys back and walk away as a strategic move. To me, while it may be legal in many cases, it's disgusting and shows how our society has changed. Folks like me who didn't buy over our heads and are current on our mortgage end up paying the cost, both through higher lending costs and via increased taxes to pay for gov't bailout programs.
Gotcha.
Quote:
Originally Posted by RoslynHolcomb
See this is what I'm not understanding. Maybe I got the notion of Unemployment INSURANCE wrong. As far as I know it's not an entitlement program, it's INSURANCE, that workers and their employers pay into. I know for myself I started working when I was fourteen, thus far I've never collected unemployment. So you're saying that it's okay for me to pay premiums for 30 years, but be limited in the length of time I can collect on it? That doesn't sound like insurance to me. If I'm disabled my disability insurance pays as long as I'm disabled. I'm not sure why unemployment INSURANCE should do otherwise.
Sad that I kind of agree with this. It seems perfectly legal and okay for the govt to collect all this money and also social security etc and spend as it wishes. SS should not be in the general fund, it should be completely separate.
What about people or companies that pass/end and they never collected any insurance? They don't get a refund! The money is kept.
People need help. While there will always be those that abuse the system there are many that legitimately need help and cannot find work.
If anything I would like to see the govt maybe give businesses bonuses for hiring workers and minimizing layoffs instead of paying unemployment.
What about people or companies that pass/end and they never collected any insurance?
I don't think companies have the option to pass on paying unemployment insurance.
There's another huge hole in the system that gets almost no attention. Self-employed people and independent contractors don't get any unemployment benefits at all. They constitute about 25% or more of workers, and a higher percentage of them have disabilities as well. So they are really up the creek without a paddle.
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