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I don't know why this Fannie and Freddie myth persists. Fannie and Freddie do not originate mortgage loans.
They bought $2.4 trillion worth of high-risk loans at the direction of HUD, their regulator. They then bundled and sold those loans as MBS to investors, misrepresenting them as "prime." They were not. That's why the Federal Reserve had to create $2 trillion in QE to buy Fannie and Freddie MBS. $1.775 trillion of that remains unpaid. It'll just roll off the Federal Reserve's H.4.1 as it matures, paid or not, and the Federal Reserve doesn't care because they did not incur debt to create that $2 trillion in new money.
So, we needed a $1.4 trillion stimulus because the economy was doing so well.......
It reminds me of 2004 when the housing market was over-heating, and Bush & Fed decided to throw more fuel in the fire as opposed to doing the right thing. The rest is history.
Doesn't address what I said at all. Obama borrowed money to destroy capital and give money to companies that went bankrupt.
Huge waste.
Obama is in the past, thankfully. Let's not waste time talking about an anti-American president that tried to break our country to institute globalism (destruction of who we are as a people and a country) and get back to the confidence being restored under the Trump presidency!
If they weren't subprime, why are $1.77 trillion worth of them still not paid off and why are tens of thousands of those 5+ years in default on their mortgages still living in their homes for free?
Also, note that the Federal Reserve didn't buy $2 trillion worth of MBS issued by the private sector. Those were all MBS issued by Fannie and Freddie.
They bought $2.4 trillion worth of high-risk loans at the direction of HUD, their regulator. They then bundled and sold those loans as MBS to investors, misrepresenting them as "prime." They were not. That's why the Federal Reserve had to create $2 trillion in QE to buy Fannie and Freddie MBS. $1.775 trillion of that remains unpaid. It'll just roll off the Federal Reserve's H.4.1 as it matures, paid or not, and the Federal Reserve doesn't care because they did not incur debt to create that $2 trillion in new money.
So to be clear, 100% of the fault for the mortgage crisis lies with Fannie Mae and Democrats, even though Fannie Mae did not originate the loans, did not underwrite the loans, and actually held a tiny amount of subprime loans in 05-06? Not to mention the fact that defaults in prime mortgages--the supposedly responsible borrowers--reached record highs.
You need to learn to eschew simple, partisan explanations for everything.
So to be clear, 100% of the fault for the mortgage crisis lies with Fannie Mae and Democrats, even though Fannie Mae did not originate the loans, did not underwrite the loans, and actually held a tiny amount of subprime loans in 05-06? Not to mention the fact that defaults in prime mortgages--the supposedly responsible borrowers--reached record highs.
Did you not read the Cuomo press release for which I posted the link? Fannie and Freddie were told to buy $2.4 trillion worth of high-risk loans by its regulator, HUD.
I'll let an economist explain to you why all a progressive tax system does is incentivize the government to implement policies that exacerbate income/wealth inequality:
That's what's inherently wrong with a progressive tax system such as we have here in the US; it distorts and exacerbates inequality by necessity in order to maximize tax revenue. The Europeans and Scandinavians have figured that out, and therefore rely most heavily on regressive taxes such as VAT and MUCH flatter income tax brackets (e.g., a middle class income is in the highest income tax bracket right there along with the top 1%). (Link to info posted above.)
Why let an economist explain it? Why can't you explain it?
A tax regime can become more regressive by raising taxes on the middle class, not simply lowering taxes on the wealthy. Some Scandinavian countries have more regressive tax regimes (they are still progressive) than the U.S. because everyone pays higher taxes. I would agree that the U.S. needs to become more "regressive" in that sense.
Why let an economist explain it? Why can't you explain it?
Because it's not just my opinion. It's a well-known fact of economics. So... why not let an economist explain it?
Quote:
A tax regime can become more regressive by raising taxes on the middle class, not simply lowering taxes on the wealthy. Some Scandinavian countries have more regressive tax regimes (they are still progressive) than the U.S. because everyone pays higher taxes.
You didn't read the research. They depend most heavily on a VAT tax, that rich and poor alike pay, for their tax revenue.
And, no they are NOT "still progressive." That's the point of the scatter plot chart. There's a zero point between progressive and regressive, and positive and negative values reflecting the degree of either progressivity or regressivity. It's along the x-axis. To be able to read and comprehend the chart, one must first understand that the independent variable (the variable that isn't influenced by anything) is on the x-axis, and the dependent variable (the one that is affected by the independent variable) is plotted on the y-axis.
Did you not read the Cuomo press release for which I posted the link? Fannie and Freddie were told to buy $2.4 trillion worth of high-risk loans by its regulator, HUD.
Where in your link does it say that Fannie and Freddie were purchasing "high risk" loans? Here's what the press release says:
Quote:
Housing and Urban Development Secretary Andrew Cuomo today announced a policy to require the nation's two largest housing finance companies to buy $2.4 trillion in mortgages over the next 10 years to provide affordable housing for about 28.1 million low- and moderate-income families.
You are obviously reading this as "Fannie and Freddie will buy $2.4 trillion in subprime loans." Let's put on our thinking caps for a second. What is the value of loans purchased by Fannie and Freddie in any given year? An even better question is what the total value of subprime mortgages issued between 2000 and 2007 is?
Those are important questions to answer. If Fannie and Freddie are only buying $250 billion worth of mortgages each year, then there's no way that the press release could mean that they are buying $240 billion worth of subprime loans each year. I think you need to ascertain certain facts in order to put the release in context.
Because it's not just my opinion. It's a well-known fact of economics. So... why not let an economist explain it?
You didn't read the research. They depend most heavily on a VAT tax, that rich and poor alike pay, for their tax revenue.
And, no they are NOT "still progressive." That's the point of the scatter plot chart. There's a zero point between progressive and regressive, and positive and negative values reflecting the degree of either progressivity or regressivity. It's along the x-axis. To be able to read and comprehend the chart, one must first understand that the independent variable (the variable that isn't influenced by anything) is on the x-axis, and the dependent variable (the one that is affected by the independent variable) is plotted on the y-axis.
We've already been this through before when you completely misunderstood the difference between regressive and progressive taxation. Sweden still has a progressive system of taxation, i.e., wealthier income earners pay a larger percentage of their income in taxes than poorer income earners. However, it is nonetheless a more regressive system of taxation than what exists here in the U.S. because marginal tax rates are higher across the board.
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