I honestly question the figures that intend to differentiate between "people who were suckered" and "people who made poor decisions and are suffering the consequences" because of COURSE people are going to say it wasn't their fault, the evil loan officer made them do it. How do you prove that one way or the other? And in the end, shouldn't it be caveat emptor?
This is based off of testimony of loan officers.
Letting the buyer beware only works when the buyer has access to accurate information. If you tell someone the a boat is sea worthy, you are responsible if it sinks the first time it is put in the water.
It wasn't just the lenders at fault here either. People buying a house have a responsibility to do the research and figure out if they can truly afford that McMansion they're buying, and if they can't, they need to settle for less. Everybody got greedy, and right now it's biting everyone in the ass.
On a separate note, today's sign of the apocalyspe: certain folks in Congress are pushing for provisions in the "economic stimulus package" that would give "tax breaks" to people who don't pay taxes!
Actually, it has been found that many of those saddled with subprime loans had good enough credit to qualify for normal loans, and that lenders were instructed to use deceptive language when selling adjustable rates. Beyond this, between the time one stops paying and the time the bank has to write it off, the lender inflates the debt with various late fees before selling the loan to a credit buyer.
The people who don't pay taxes are the poorest, and most in need of money. Therefor, giving them money is the best way to make sure it enters the economy.
One good strategy I've read is to repeal the Bush tax cuts, inducing all the rich people to spend their investment windfalls before the taxes are enacted. This worked before the estate tax was put into effect (though I don't know if this was intentional).
1. This is why people need to do their research and not just trust what the lender is telling them. If a deal looks too good to be true, it probably is. An adjustable rate mortgage is exactly that, a mortgage whose rate will change. If you're buying a house when rates are historically low, chances are your ARM is gonna go up in the next few years.
2. I understand that poor people need money, but it's just a bit disingenuous to say you're giving people tax breaks and then give it to people who don't pay taxes. It's not a tax break, it's a government handout.
3. I know soak-the-rich is a popular strategy, but what's to stop them from just moving their windfalls offshore? Or reinvesting them in the market? I understand you're saying it would be a quick way to inject some cash into the economy, but long-term I'd prefer to avoid raising taxes. Also I'm against the estate tax on principle, even though I know it will never apply to me.
nosnibor on
When you're a spy, it's a good idea to give away your trade secrets in a voiceover on a TV show.
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Irond WillWARNING: NO HURTFUL COMMENTS, PLEASE!!!!!Cambridge. MAModeratormod
On a separate note, today's sign of the apocalyspe: certain folks in Congress are pushing for provisions in the "economic stimulus package" that would give "tax breaks" to people who don't pay taxes!
If the point of economic stimulus is to, you know, stimulate the economy then it makes perfect sense to put money in the hands of the people who are
1) most likely to spend it quickly
2) most likely to spend it on necessities
3) yield the highest per-dollar social cost
It bruises the sensitivities of people who buy into the concept of the undeserving poor and middle-class people who want to get theirs, but this has nothing at all to do with fiscal or monetary policy
Tax cuts to the poor implies the poorest people who still pay taxes I think. Though I do agree that tax cuts to the poor and minimum wage increases are the best way to devalue money significantly for the middle class. In other words, tax cuts for the poor makes the middle class poorer and doesn't have as big an effect on super large companies as people would like to think.
When you raise the minimum average income it also makes it harder for the people taking handouts poorer. This means you have to raise the amount of handouts for them to survive. Seems like a bad cycle to me.
It wasn't just the lenders at fault here either. People buying a house have a responsibility to do the research and figure out if they can truly afford that McMansion they're buying, and if they can't, they need to settle for less. Everybody got greedy, and right now it's biting everyone in the ass.
On a separate note, today's sign of the apocalyspe: certain folks in Congress are pushing for provisions in the "economic stimulus package" that would give "tax breaks" to people who don't pay taxes!
Actually, it has been found that many of those saddled with subprime loans had good enough credit to qualify for normal loans, and that lenders were instructed to use deceptive language when selling adjustable rates. Beyond this, between the time one stops paying and the time the bank has to write it off, the lender inflates the debt with various late fees before selling the loan to a credit buyer.
The people who don't pay taxes are the poorest, and most in need of money. Therefor, giving them money is the best way to make sure it enters the economy.
One good strategy I've read is to repeal the Bush tax cuts, inducing all the rich people to spend their investment windfalls before the taxes are enacted. This worked before the estate tax was put into effect (though I don't know if this was intentional).
1. This is why people need to do their research and not just trust what the lender is telling them. If a deal looks too good to be true, it probably is. An adjustable rate mortgage is exactly that, a mortgage whose rate will change. If you're buying a house when rates are historically low, chances are your ARM is gonna go up in the next few years.
2. I understand that poor people need money, but it's just a bit disingenuous to say you're giving people tax breaks and then give it to people who don't pay taxes. It's not a tax break, it's a government handout.
3. I know soak-the-rich is a popular strategy, but what's to stop them from just moving their windfalls offshore? Or reinvesting them in the market? I understand you're saying it would be a quick way to inject some cash into the economy, but long-term I'd prefer to avoid raising taxes. Also I'm against the estate tax on principle, even though I know it will never apply to me.
If you are told that they don't go up by a large degree, you assume they are telling the truth.
They've made a killing on the Bush tax cuts, so why not repeal them? I mean, god forbid we use a strategy that reduces the deficit. And I'm pretty sure moving all your income overseas is called tax evasion (the Bush tax cuts were income tax).
Also I'm against the estate tax on principle, even though I know it will never apply to me.
Oh, I want to hear the justification of this one. Personally, I'd rather NOT create an entrenched monied class.
You've already got one. And moreover, why should the government get a monied person's moneys when said person kicks the bucket? What did the government do to deserve it?
It's a lot more lucrative to offer the guy who sometimes makes late payments a loan at 20% than to offer the guy who never makes late payments a loan at 5%.
Well yeah. The problem that I have is when people irresponsibly borrow more than they can possibly afford, and banks irresponsibly lend more than the borrower can afford, then the government (read: everyone who wasn't a dumbass) has to come along and bail them out so the economy doesn't sink.
Long story short: we are all subsidizing irresponsible idiots.
Tax cuts to the poor implies the poorest people who still pay taxes I think. Though I do agree that tax cuts to the poor and minimum wage increases are the best way to devalue money significantly for the middle class. In other words, tax cuts for the poor makes the middle class poorer and doesn't have as big an effect on super large companies as people would like to think.
When you raise the minimum average income it also makes it harder for the people taking handouts poorer. This means you have to raise the amount of handouts for them to survive. Seems like a bad cycle to me.
Actually, tax cuts for the rich cause much more inflation, as they put money in banks using partial reserve systems, while the poor put money in non-liquid goods, which tends to reduce inflation.
It's a lot more lucrative to offer the guy who sometimes makes late payments a loan at 20% than to offer the guy who never makes late payments a loan at 5%.
Well yeah. The problem that I have is when people irresponsibly borrow more than they can possibly afford, and banks irresponsibly lend more than the borrower can afford, then the government (read: everyone who wasn't a dumbass) has to come along and bail them out so the economy doesn't sink.
Long story short: we are all subsidizing irresponsible idiots.
This really fries my bacon. And I know some of these irresponsible idiots. You know, the kind who take out a second mortgage on their house to buy a new car. An adjustable rate mortgage. That they can't afford. There should be some kind of law that prevents people from doing that unless they agree to indentured servitude until their debt is paid off.
It's a lot more lucrative to offer the guy who sometimes makes late payments a loan at 20% than to offer the guy who never makes late payments a loan at 5%.
Well yeah. The problem that I have is when people irresponsibly borrow more than they can possibly afford, and banks irresponsibly lend more than the borrower can afford, then the government (read: everyone who wasn't a dumbass) has to come along and bail them out so the economy doesn't sink.
Long story short: we are all subsidizing irresponsible idiots.
Somewhat, but in many cases the ones making the loans try to trick responsible people into acting irresponsibly. The credit card company has been trying to trick my parents into paying the minimum for years, going so far as burying the actual balance to make it look like the minimum is the balance.
Also I'm against the estate tax on principle, even though I know it will never apply to me.
Oh, I want to hear the justification of this one. Personally, I'd rather NOT create an entrenched monied class.
I wouldn't call it a justification, more of an explanation of what I personally believe. I'd rather not give the government a huge percentage of what someone has spent their entire lifetime accumulating while also paying taxes during that lifetime. Class warfare should not be official government policy.
Also, it's not just the super-rich who are affected by the estate tax. I've known plenty of folks who had to sell the family business or farm to pay the estate taxes after the patriarch/matriarch died.
nosnibor on
When you're a spy, it's a good idea to give away your trade secrets in a voiceover on a TV show.
Also I'm against the estate tax on principle, even though I know it will never apply to me.
Oh, I want to hear the justification of this one. Personally, I'd rather NOT create an entrenched monied class.
You've already got one. And moreover, why should the government get a monied person's moneys when said person kicks the bucket? What did the government do to deserve it?
Who cares about "deserving"? Tax revenue needs to be raised, and the estate tax is probably the least painful tax out there. What did the scions of a multimillionaire do to "deserve" their largesse?
Irond Will on
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Irond WillWARNING: NO HURTFUL COMMENTS, PLEASE!!!!!Cambridge. MAModeratormod
Also I'm against the estate tax on principle, even though I know it will never apply to me.
Oh, I want to hear the justification of this one. Personally, I'd rather NOT create an entrenched monied class.
I wouldn't call it a justification, more of an explanation of what I personally believe. I'd rather not give the government a huge percentage of what someone has spent their entire lifetime accumulating while also paying taxes during that lifetime. Class warfare should not be official government policy.
Also, it's not just the super-rich who are affected by the estate tax. I've known plenty of folks who had to sell the family business or farm to pay the estate taxes after the patriarch/matriarch died.
They should have hired the most rudimentary of accountants or lawyers then, since the estate tax has explicit and generous provisions for excepting family businesses and farms from the tax.
Also I'm against the estate tax on principle, even though I know it will never apply to me.
Oh, I want to hear the justification of this one. Personally, I'd rather NOT create an entrenched monied class.
I wouldn't call it a justification, more of an explanation of what I personally believe. I'd rather not give the government a huge percentage of what someone has spent their entire lifetime accumulating while also paying taxes during that lifetime. Class warfare should not be official government policy.
Except the tax isn't on them, it's on the person or persons receiving the money. And again, if we allow the rich to accumulate their money, we WILL create an entrenched monied class which will be much worse for our society.
Also, it's not just the super-rich who are affected by the estate tax. I've known plenty of folks who had to sell the family business or farm to pay the estate taxes after the patriarch/matriarch died.
You have? Considering that the opponents of the estate tax have NEVER been able to present such a case publically, got any proof?
It's a lot more lucrative to offer the guy who sometimes makes late payments a loan at 20% than to offer the guy who never makes late payments a loan at 5%.
Well yeah. The problem that I have is when people irresponsibly borrow more than they can possibly afford, and banks irresponsibly lend more than the borrower can afford, then the government (read: everyone who wasn't a dumbass) has to come along and bail them out so the economy doesn't sink.
Long story short: we are all subsidizing irresponsible idiots.
This really fries my bacon. And I know some of these irresponsible idiots. You know, the kind who take out a second mortgage on their house to buy a new car. An adjustable rate mortgage. That they can't afford. There should be some kind of law that prevents people from doing that unless they agree to indentured servitude until their debt is paid off.
ACK!! No no no. Debtors prisons etc? Talk about going backwards.
Our primary debt is to the other countries that lent us this money to start with... you want them to hold the US to those standards? What about all the companies that declare bankruptcy every day? What about the airlines we bail out?
I'd rather see some payroll reductions and more conservative spending in the Gov't than tax breaks for anyone in particular.
This. Very much this. But good luck making it actually happen as long as they can vote for their own pay raises.
Also, I'm not suggesting this at all, but with regard to irresponsible people that Quoth mentioned, one of my economics professors in college was a big fan of bringing back debtors prison. It wouldn't erase the debt, but it might make people think a bit more before taking out a second mortgage to buy a ski-boat.
nosnibor on
When you're a spy, it's a good idea to give away your trade secrets in a voiceover on a TV show.
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Irond WillWARNING: NO HURTFUL COMMENTS, PLEASE!!!!!Cambridge. MAModeratormod
It's a lot more lucrative to offer the guy who sometimes makes late payments a loan at 20% than to offer the guy who never makes late payments a loan at 5%.
Well yeah. The problem that I have is when people irresponsibly borrow more than they can possibly afford, and banks irresponsibly lend more than the borrower can afford, then the government (read: everyone who wasn't a dumbass) has to come along and bail them out so the economy doesn't sink.
Long story short: we are all subsidizing irresponsible idiots.
Somewhat, but in many cases the ones making the loans try to trick responsible people into acting irresponsibly. The credit card company has been trying to trick my parents into paying the minimum for years, going so far as burying the actual balance to make it look like the minimum is the balance.
This is true. The most recent strategy I've heard regarding this is that credit card companies will package their bill in such a way that it looks like junk mail and will be thrown away unopened.
Also I'm against the estate tax on principle, even though I know it will never apply to me.
Oh, I want to hear the justification of this one. Personally, I'd rather NOT create an entrenched monied class.
I wouldn't call it a justification, more of an explanation of what I personally believe. I'd rather not give the government a huge percentage of what someone has spent their entire lifetime accumulating while also paying taxes during that lifetime. Class warfare should not be official government policy.
Except the tax isn't on them, it's on the person or persons receiving the money. And again, if we allow the rich to accumulate their money, we WILL create an entrenched monied class which will be much worse for our society.
Also, it's not just the super-rich who are affected by the estate tax. I've known plenty of folks who had to sell the family business or farm to pay the estate taxes after the patriarch/matriarch died.
You have? Considering that the opponents of the estate tax have NEVER been able to present such a case publically, got any proof?
Beyond this, it prevents all the money from accumulating in one place.
I read a hilarious observation that the banks are now being forced to take subprime loans from Abu Dubai.
It's a lot more lucrative to offer the guy who sometimes makes late payments a loan at 20% than to offer the guy who never makes late payments a loan at 5%.
Well yeah. The problem that I have is when people irresponsibly borrow more than they can possibly afford, and banks irresponsibly lend more than the borrower can afford, then the government (read: everyone who wasn't a dumbass) has to come along and bail them out so the economy doesn't sink.
Long story short: we are all subsidizing irresponsible idiots.
This really fries my bacon. And I know some of these irresponsible idiots. You know, the kind who take out a second mortgage on their house to buy a new car. An adjustable rate mortgage. That they can't afford. There should be some kind of law that prevents people from doing that unless they agree to indentured servitude until their debt is paid off.
ACK!! No no no. Debtors prisons etc? Talk about going backwards.
Our primary debt is to the other countries that lent us this money to start with... you want them to hold the US to those standards? What about all the companies that declare bankruptcy every day? What about the airlines we bail out?
I'm just highly annoyed at a perceived lack of accountability. I know that word is bandied about a lot these days, but it's all lip service. Who is holding the bag when it's all said and done? Who is losing money? Are people being forced to accept responsibility for their actions and pay the price? I don't think they are, and I think that's crap.
[whine]I don't get why I have to be so responsible and careful when other people get to fuck around without any consequences.[/whine]
Also I'm against the estate tax on principle, even though I know it will never apply to me.
Oh, I want to hear the justification of this one. Personally, I'd rather NOT create an entrenched monied class.
I wouldn't call it a justification, more of an explanation of what I personally believe. I'd rather not give the government a huge percentage of what someone has spent their entire lifetime accumulating while also paying taxes during that lifetime. Class warfare should not be official government policy.
Also, it's not just the super-rich who are affected by the estate tax. I've known plenty of folks who had to sell the family business or farm to pay the estate taxes after the patriarch/matriarch died.
Really dude.. why do you believe all this??? I agree about the class warfare thing but if you look at what is happening right now and who is affected and follow the money I could build a case that class warfare HAS been the official policy for the last 7-8 years. I'm no conspiracy theorist and I'm not saying that's the case, just the end result is the same as if it had been.
Dickerdoodle on
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Irond WillWARNING: NO HURTFUL COMMENTS, PLEASE!!!!!Cambridge. MAModeratormod
I'd rather see some payroll reductions and more conservative spending in the Gov't than tax breaks for anyone in particular.
This. Very much this. But good luck making it actually happen as long as they can vote for their own pay raises.
Also, I'm not suggesting this at all, but with regard to irresponsible people that Quoth mentioned, one of my economics professors in college was a big fan of bringing back debtors prison. It wouldn't erase the debt, but it might make people think a bit more before taking out a second mortgage to buy a ski-boat.
The kind of bullshit debt-for-consumer-spending is actively encouraged not only by the credit companies but by the fucking Bush Administration who wants the middle class to spend their way out of economic downturns - never mind that a middle class with overwhelming cascading debt is a really unstable place for a country to be.
It's all about short-term thinking and leveraging long-term stability and growth for short-term profitability. I mean the next generation is gonna get screwed but really fuck those ipod-wearing shmucks. If they wanted not to get screwed they'd vote for their interests the way I vote for mine instead of breathlessly following celebrity news and texting each other.
Irond Will on
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Irond WillWARNING: NO HURTFUL COMMENTS, PLEASE!!!!!Cambridge. MAModeratormod
Really dude.. why do you believe all this??? I agree about the class warfare thing but if you look at what is happening right now and who is affected and follow the money I could build a case that class warfare HAS been the official policy for the last 7-8 years. I'm no conspiracy theorist and I'm not saying that's the case, just the end result is the same as if it had been.
Class warfare is the standard operating procedure of the rich. Ask yourself: is there any legislation that would help the rich and screw the poor that the monied classes don't push for at each and every opportunity?
It's only "class warfare" when the working classes start to fight back.
Also I'm against the estate tax on principle, even though I know it will never apply to me.
Oh, I want to hear the justification of this one. Personally, I'd rather NOT create an entrenched monied class.
I wouldn't call it a justification, more of an explanation of what I personally believe. I'd rather not give the government a huge percentage of what someone has spent their entire lifetime accumulating while also paying taxes during that lifetime. Class warfare should not be official government policy.
Also, it's not just the super-rich who are affected by the estate tax. I've known plenty of folks who had to sell the family business or farm to pay the estate taxes after the patriarch/matriarch died.
Really dude.. why do you believe all this??? I agree about the class warfare thing but if you look at what is happening right now and who is affected and follow the money I could build a case that class warfare HAS been the official policy for the last 7-8 years. I'm no conspiracy theorist and I'm not saying that's the case, just the end result is the same as if it had been.
I'm not sure what you're asking me here. While I am not a Ron Paul nut or an Ayn Rander, I do believe in limited government, and giving extra revenue to the government (ala estate taxes) helps to fund expanded government. Besides, we're getting way off topic with this whole estate tax discussion, and I didn't really want to get into trying to justify my reasons to anyone else. To me, it's just inherently wrong, although I can understand why other people might feel differently.
nosnibor on
When you're a spy, it's a good idea to give away your trade secrets in a voiceover on a TV show.
Really dude.. why do you believe all this??? I agree about the class warfare thing but if you look at what is happening right now and who is affected and follow the money I could build a case that class warfare HAS been the official policy for the last 7-8 years. I'm no conspiracy theorist and I'm not saying that's the case, just the end result is the same as if it had been.
Class warfare is the standard operating procedure of the rich. Ask yourself: is there any legislation that would help the rich and screw the poor that the monied classes don't push for at each and every opportunity?
It's only "class warfare" when the working classes start to fight back.
For one, I disagree in the context of policy.
For another, If only one side declares war and the other side can't or won't fight back it doesn't mean there's no war.
I compare it to Pearl Harbor. Were we at war when Japan attacked or when we declared it and started fighting back?
Well I'm pretty sure big investment banks like Citigroup pay top dollar for their financial analysts. Does anyone really think BofA wanted to take a 5.6 billion write down and destroy their dividend payout? Everyone fucked it up on every level.
This hurts your equity financing and could cause you to take offshore loans but that saddles you with long term obligations offshore and American companies begin skimming the margin. Overall bad for the American Economy.
Tax cuts for these large companies helps stem the tide of offshore debt and ensures a quicker correction than long term debt to an outside source for the average American. It's not about the "trickle down" effect, it's reacting to getting our asses owned by every other nation willing to extend us a loan. That being said, it's not an indefinite that cut I believe in.
I'm against tax cuts for the poor, but I think there are certain situations where tax cuts may be provided and still be beneficial for the American economy.
Examples:
1) huge tax cuts for folks paying their child's tuition (for set 4-5 years per of age/registered student to avoid abuse).
2) A double tax break for pre-tax investments into 401(k) and heavier withdraw penalties to offset abuse. So if you're putting in 3% you get a tax break of an additional 3% (equivalent to pretax income) tax break. <--- for both employees and the companies who match.
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ElJeffeNot actually a mod.Roaming the streets, waving his gun around.Moderator, ClubPAmod
I'm just highly annoyed at a perceived lack of accountability. I know that word is bandied about a lot these days, but it's all lip service. Who is holding the bag when it's all said and done? Who is losing money? Are people being forced to accept responsibility for their actions and pay the price? I don't think they are, and I think that's crap.
If we're still talking housing, it often wasn't about a lack of accountability. Perhaps I'm biased towards sympathy because I was one of the irresponsible idiots, but looking back over my situation I find it hard to feel terribly stupid.
We started by buying a dump of a condo for $120k. This was in 2003, when prices were still skyrocketing, and showed no sign of letting up. We got basically the nicest place we could afford - the cheapest house we felt safe even considering was $180k, which was a lot more than we could qualify for - which happened to be in the ghetto, where we were woken up in the middle of the night by shrieking drunk people and had our property vandalized, but hey, we were accruing equity. With a kid on the way, we desperately need the space.
Two years later, our house had appreciated by $30k, and we opted to sell and try to move into a place where we didn't actually fear for our safety. After the realtors took their bite, we had $20k left. It would've been enough for 10% down on a decent house in 2003, but by then the cheapest house that wasn't a shithole was $300k, and we couldn't even qualify for that with our given credit. We instead paid down most of our debt, and secured another 0-down loan. Interest-only for the first two years, and a fairly steep interest rate, but with housing trends we'd be able to re-fi in a couple years and keep our payments stable.
So we bought a house in ghetto-lite, and all was well for the first year. The second year, things asploded. Our house dropped from a high of $320k to, by now, about $170k. Our payments were scheduled to go up by $600/mo. We tried negotiating with the bank, they told us to piss off. We tried to do a short-sell and eat the loss, which would've left us with an $80k loan on a house we didn't even own anymore, and the bank told us to piss off. So fuck it, we moved out.
Point being, we didn't seek to buy a mansion, we sought to buy something modest and safe. The way trends were going, it was unclear if we'd ever be able to actually buy a house if we didn't act then. We fucked up, but it wasn't due to egregious irresponsibility or wanton stupidity. It was a bad call on our part. Now our credit is fucked for the next decade, and we lost our house. I mean, I'd say we paid the price. I'd say that anyone in our situation who lost their homes have paid the price. We and the bank both fucked up, and we and the bank are both paying for it. Seems fair to me.
ElJeffe on
I submitted an entry to Lego Ideas, and if 10,000 people support me, it'll be turned into an actual Lego set!If you'd like to see and support my submission, follow this link.
Has anyone pointed out that economies for all sense and purposes are cyclical?
This isn't the end of days, it's just going to be a painful period of change.
Utilitarianism FTW. Yes I believe this as well. However, a percentage of the population is going to get burned. The idea is to fix it so that the encroaching chances that you're going to be the one getting burned as that percentage rises. Nobody wants to be in that percentage.
It's a lot more lucrative to offer the guy who sometimes makes late payments a loan at 20% than to offer the guy who never makes late payments a loan at 5%.
Well yeah. The problem that I have is when people irresponsibly borrow more than they can possibly afford, and banks irresponsibly lend more than the borrower can afford, then the government (read: everyone who wasn't a dumbass) has to come along and bail them out so the economy doesn't sink.
Long story short: we are all subsidizing irresponsible idiots.
This really fries my bacon. And I know some of these irresponsible idiots. You know, the kind who take out a second mortgage on their house to buy a new car. An adjustable rate mortgage. That they can't afford. There should be some kind of law that prevents people from doing that unless they agree to indentured servitude until their debt is paid off.
ACK!! No no no. Debtors prisons etc? Talk about going backwards.
Our primary debt is to the other countries that lent us this money to start with... you want them to hold the US to those standards? What about all the companies that declare bankruptcy every day? What about the airlines we bail out?
I'm just highly annoyed at a perceived lack of accountability. I know that word is bandied about a lot these days, but it's all lip service. Who is holding the bag when it's all said and done? Who is losing money? Are people being forced to accept responsibility for their actions and pay the price? I don't think they are, and I think that's crap.
[whine]I don't get why I have to be so responsible and careful when other people get to fuck around without any consequences.[/whine]
Easy enough to say when you can afford to not take a loan.
It's also easier when you aren't fired when the market goes sour, and therefor left without income to pay your interest.
You seem to want to shut down the theater because someone sneaks a free movie every once in a while.
I feel for you ElJeffe. I expand into an ARM in 2 years. I expected to turn over the condo once I finished my degree for at least an equivalent amount of money. Now it's down 30k. I needed the ARM to lock the low fixed initially but I fully planned on a 30 year fixed refinance depending on what interest rates did two years after I bought the place. Right now I'm just looking to not get screwed by the time I hit my ARM.
Fortunately for these rate cuts I think I can get a good deal on a Re-fi. I meet someone this weekend. Although even if I have to pay a half a point more to lock a 30 year fixed I'd do it now because I've got a feeling interest rates will be going up pretty high in the next year and a half.
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Irond WillWARNING: NO HURTFUL COMMENTS, PLEASE!!!!!Cambridge. MAModeratormod
Has anyone pointed out that economies for all sense and purposes are cyclical?
This isn't the end of days, it's just going to be a painful period of change.
It's not really true, though. The British Empire isn't going to magically cycle back, and neither is the Ottoman Empire or the age of colonization or Soviet Union or China's Five Year Plan. Industrialization wasn't a cycle. The 1970s oil crisis wasn't a cycle. The offshoring of manufacturing jobs wasn't part of a cycle. The globalization of ownership wasn't a cycle.
Blandly saying that every economic boom or bust is part of a cycle is missing the point that there are larger economic trends occurring, and that they tend to occur in one direction without cycles. It's not the passing of the seasons.
I don't mean to be apocolyptic here, because I really don't know how all of this is going to shake out - there is some resiliency in a capitalist system, and absent other factors the market tends to head towards equilibrium. But there are also larger trends at work, and our economy has been criminally mismanaged and our assets ridiculously overvalued.
There's a bag that has been growing for decades now and someone is going to be left holding it
I just thought of something. Instead of debtor's prison why not debtor's corporal punishment? Whips are cheaper than chains! I know I'm on the cusp of getting my ass whipped so....maybe not.
There's a bag that has been growing for decades now and someone is going to be left holding it
Isn't money just the idea of value? Technically it could perpetuate so long as it exists within an agreed upon system by those who choose to put value in it. I think the only danger is when enough people decide they're darned happy living in trees. Then again the guy with the chainsaw would probably force you back in line with his values.
Well one interesting tidbit for you guys - various US indexes are up today, driven mostly by Yen sellers. Heavy asian investment in US equities are keeping things afloat...
Has anyone pointed out that economies for all sense and purposes are cyclical?
This isn't the end of days, it's just going to be a painful period of change.
It's not really true, though. The British Empire isn't going to magically cycle back, and neither is the Ottoman Empire or the age of colonization or Soviet Union or China's Five Year Plan. Industrialization wasn't a cycle. The 1970s oil crisis wasn't a cycle. The offshoring of manufacturing jobs wasn't part of a cycle. The globalization of ownership wasn't a cycle.
Blandly saying that every economic boom or bust is part of a cycle is missing the point that there are larger economic trends occurring, and that they tend to occur in one direction without cycles. It's not the passing of the seasons.
I don't mean to be apocolyptic here, because I really don't know how all of this is going to shake out - there is some resiliency in a capitalist system, and absent other factors the market tends to head towards equilibrium. But there are also larger trends at work, and our economy has been criminally mismanaged and our assets ridiculously overvalued.
There's a bag that has been growing for decades now and someone is going to be left holding it
The empires died because of changing political landscapes. Russia was a backwards subsistence cesspool, industrialisation made them competitive, then they went and spent all their money on weapons without a hot war and imploded. Now they're back to a level of stability thanks to exporting mass amounts of natural resources.
The US economy was buoyed in the past by a strong housing market and high consumerism. Both of those two might now come to an end, they might not. But for genuine progress, dependence on them might need to be reconsidered.
Plutocracy on
They fuck you up, your mum and dad.
They may not mean to, but they do.
They fill you with the faults they had
And add some extra, just for you.
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Irond WillWARNING: NO HURTFUL COMMENTS, PLEASE!!!!!Cambridge. MAModeratormod
There's a bag that has been growing for decades now and someone is going to be left holding it
Isn't money just the idea of value? Technically it could perpetuate so long as it exists within an agreed upon system by those who choose to put value in it. I think the only danger is when enough people decide they're darned happy living in trees. Then again the guy with the chainsaw would probably force you back in line with his values.
Well, the basic problem is that while "value" is basically "what someone will pay for it," it's also true that a huge amount of the "value" in our economy is predicated on sheer speculation that other people will continue to speculate contra any concept of actual utility or profitability.
I mean at the end of the day, houses are houses, and have some sort of utility. Not so much with a lot of our more abstract holdings. And value based upon sheer optimistic speculation tends to collapse in a cascading and catastrophic fashion.
There's a bag that has been growing for decades now and someone is going to be left holding it
Isn't money just the idea of value? Technically it could perpetuate so long as it exists within an agreed upon system by those who choose to put value in it. I think the only danger is when enough people decide they're darned happy living in trees. Then again the guy with the chainsaw would probably force you back in line with his values.
Well, the basic problem is that while "value" is basically "what someone will pay for it," it's also true that a huge amount of the "value" in our economy is predicated on sheer speculation that other people will continue to speculate contra any concept of actual utility or profitability.
I mean at the end of the day, houses are houses, and have some sort of utility. Not so much with a lot of our more abstract holdings. And value based upon sheer optimistic speculation tends to collapse in a cascading and catastrophic fashion.
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This is based off of testimony of loan officers.
Letting the buyer beware only works when the buyer has access to accurate information. If you tell someone the a boat is sea worthy, you are responsible if it sinks the first time it is put in the water.
1. This is why people need to do their research and not just trust what the lender is telling them. If a deal looks too good to be true, it probably is. An adjustable rate mortgage is exactly that, a mortgage whose rate will change. If you're buying a house when rates are historically low, chances are your ARM is gonna go up in the next few years.
2. I understand that poor people need money, but it's just a bit disingenuous to say you're giving people tax breaks and then give it to people who don't pay taxes. It's not a tax break, it's a government handout.
3. I know soak-the-rich is a popular strategy, but what's to stop them from just moving their windfalls offshore? Or reinvesting them in the market? I understand you're saying it would be a quick way to inject some cash into the economy, but long-term I'd prefer to avoid raising taxes. Also I'm against the estate tax on principle, even though I know it will never apply to me.
If the point of economic stimulus is to, you know, stimulate the economy then it makes perfect sense to put money in the hands of the people who are
1) most likely to spend it quickly
2) most likely to spend it on necessities
3) yield the highest per-dollar social cost
It bruises the sensitivities of people who buy into the concept of the undeserving poor and middle-class people who want to get theirs, but this has nothing at all to do with fiscal or monetary policy
Oh, I want to hear the justification of this one. Personally, I'd rather NOT create an entrenched monied class.
When you raise the minimum average income it also makes it harder for the people taking handouts poorer. This means you have to raise the amount of handouts for them to survive. Seems like a bad cycle to me.
If you are told that they don't go up by a large degree, you assume they are telling the truth.
They've made a killing on the Bush tax cuts, so why not repeal them? I mean, god forbid we use a strategy that reduces the deficit. And I'm pretty sure moving all your income overseas is called tax evasion (the Bush tax cuts were income tax).
You've already got one. And moreover, why should the government get a monied person's moneys when said person kicks the bucket? What did the government do to deserve it?
Well yeah. The problem that I have is when people irresponsibly borrow more than they can possibly afford, and banks irresponsibly lend more than the borrower can afford, then the government (read: everyone who wasn't a dumbass) has to come along and bail them out so the economy doesn't sink.
Long story short: we are all subsidizing irresponsible idiots.
Actually, tax cuts for the rich cause much more inflation, as they put money in banks using partial reserve systems, while the poor put money in non-liquid goods, which tends to reduce inflation.
This really fries my bacon. And I know some of these irresponsible idiots. You know, the kind who take out a second mortgage on their house to buy a new car. An adjustable rate mortgage. That they can't afford. There should be some kind of law that prevents people from doing that unless they agree to indentured servitude until their debt is paid off.
Somewhat, but in many cases the ones making the loans try to trick responsible people into acting irresponsibly. The credit card company has been trying to trick my parents into paying the minimum for years, going so far as burying the actual balance to make it look like the minimum is the balance.
I wouldn't call it a justification, more of an explanation of what I personally believe. I'd rather not give the government a huge percentage of what someone has spent their entire lifetime accumulating while also paying taxes during that lifetime. Class warfare should not be official government policy.
Also, it's not just the super-rich who are affected by the estate tax. I've known plenty of folks who had to sell the family business or farm to pay the estate taxes after the patriarch/matriarch died.
Summary:
10 cents in Arkansas per person to employ two people.
6 cents in California per person to employ two people.
I'd rather see some payroll reductions and more conservative spending in the Gov't than tax breaks for anyone in particular.
Who cares about "deserving"? Tax revenue needs to be raised, and the estate tax is probably the least painful tax out there. What did the scions of a multimillionaire do to "deserve" their largesse?
They should have hired the most rudimentary of accountants or lawyers then, since the estate tax has explicit and generous provisions for excepting family businesses and farms from the tax.
Except the tax isn't on them, it's on the person or persons receiving the money. And again, if we allow the rich to accumulate their money, we WILL create an entrenched monied class which will be much worse for our society.
You have? Considering that the opponents of the estate tax have NEVER been able to present such a case publically, got any proof?
ACK!! No no no. Debtors prisons etc? Talk about going backwards.
Our primary debt is to the other countries that lent us this money to start with... you want them to hold the US to those standards? What about all the companies that declare bankruptcy every day? What about the airlines we bail out?
This. Very much this. But good luck making it actually happen as long as they can vote for their own pay raises.
Also, I'm not suggesting this at all, but with regard to irresponsible people that Quoth mentioned, one of my economics professors in college was a big fan of bringing back debtors prison. It wouldn't erase the debt, but it might make people think a bit more before taking out a second mortgage to buy a ski-boat.
This is true. The most recent strategy I've heard regarding this is that credit card companies will package their bill in such a way that it looks like junk mail and will be thrown away unopened.
Beyond this, it prevents all the money from accumulating in one place.
I read a hilarious observation that the banks are now being forced to take subprime loans from Abu Dubai.
I'm just highly annoyed at a perceived lack of accountability. I know that word is bandied about a lot these days, but it's all lip service. Who is holding the bag when it's all said and done? Who is losing money? Are people being forced to accept responsibility for their actions and pay the price? I don't think they are, and I think that's crap.
[whine]I don't get why I have to be so responsible and careful when other people get to fuck around without any consequences.[/whine]
Really dude.. why do you believe all this??? I agree about the class warfare thing but if you look at what is happening right now and who is affected and follow the money I could build a case that class warfare HAS been the official policy for the last 7-8 years. I'm no conspiracy theorist and I'm not saying that's the case, just the end result is the same as if it had been.
The kind of bullshit debt-for-consumer-spending is actively encouraged not only by the credit companies but by the fucking Bush Administration who wants the middle class to spend their way out of economic downturns - never mind that a middle class with overwhelming cascading debt is a really unstable place for a country to be.
It's all about short-term thinking and leveraging long-term stability and growth for short-term profitability. I mean the next generation is gonna get screwed but really fuck those ipod-wearing shmucks. If they wanted not to get screwed they'd vote for their interests the way I vote for mine instead of breathlessly following celebrity news and texting each other.
Class warfare is the standard operating procedure of the rich. Ask yourself: is there any legislation that would help the rich and screw the poor that the monied classes don't push for at each and every opportunity?
It's only "class warfare" when the working classes start to fight back.
I'm not sure what you're asking me here. While I am not a Ron Paul nut or an Ayn Rander, I do believe in limited government, and giving extra revenue to the government (ala estate taxes) helps to fund expanded government. Besides, we're getting way off topic with this whole estate tax discussion, and I didn't really want to get into trying to justify my reasons to anyone else. To me, it's just inherently wrong, although I can understand why other people might feel differently.
For one, I disagree in the context of policy.
For another, If only one side declares war and the other side can't or won't fight back it doesn't mean there's no war.
I compare it to Pearl Harbor. Were we at war when Japan attacked or when we declared it and started fighting back?
Just means we haven't reached the bottom yet....
This isn't the end of days, it's just going to be a painful period of change.
They may not mean to, but they do.
They fill you with the faults they had
And add some extra, just for you.
This hurts your equity financing and could cause you to take offshore loans but that saddles you with long term obligations offshore and American companies begin skimming the margin. Overall bad for the American Economy.
Tax cuts for these large companies helps stem the tide of offshore debt and ensures a quicker correction than long term debt to an outside source for the average American. It's not about the "trickle down" effect, it's reacting to getting our asses owned by every other nation willing to extend us a loan. That being said, it's not an indefinite that cut I believe in.
I'm against tax cuts for the poor, but I think there are certain situations where tax cuts may be provided and still be beneficial for the American economy.
Examples:
1) huge tax cuts for folks paying their child's tuition (for set 4-5 years per of age/registered student to avoid abuse).
2) A double tax break for pre-tax investments into 401(k) and heavier withdraw penalties to offset abuse. So if you're putting in 3% you get a tax break of an additional 3% (equivalent to pretax income) tax break. <--- for both employees and the companies who match.
If we're still talking housing, it often wasn't about a lack of accountability. Perhaps I'm biased towards sympathy because I was one of the irresponsible idiots, but looking back over my situation I find it hard to feel terribly stupid.
We started by buying a dump of a condo for $120k. This was in 2003, when prices were still skyrocketing, and showed no sign of letting up. We got basically the nicest place we could afford - the cheapest house we felt safe even considering was $180k, which was a lot more than we could qualify for - which happened to be in the ghetto, where we were woken up in the middle of the night by shrieking drunk people and had our property vandalized, but hey, we were accruing equity. With a kid on the way, we desperately need the space.
Two years later, our house had appreciated by $30k, and we opted to sell and try to move into a place where we didn't actually fear for our safety. After the realtors took their bite, we had $20k left. It would've been enough for 10% down on a decent house in 2003, but by then the cheapest house that wasn't a shithole was $300k, and we couldn't even qualify for that with our given credit. We instead paid down most of our debt, and secured another 0-down loan. Interest-only for the first two years, and a fairly steep interest rate, but with housing trends we'd be able to re-fi in a couple years and keep our payments stable.
So we bought a house in ghetto-lite, and all was well for the first year. The second year, things asploded. Our house dropped from a high of $320k to, by now, about $170k. Our payments were scheduled to go up by $600/mo. We tried negotiating with the bank, they told us to piss off. We tried to do a short-sell and eat the loss, which would've left us with an $80k loan on a house we didn't even own anymore, and the bank told us to piss off. So fuck it, we moved out.
Point being, we didn't seek to buy a mansion, we sought to buy something modest and safe. The way trends were going, it was unclear if we'd ever be able to actually buy a house if we didn't act then. We fucked up, but it wasn't due to egregious irresponsibility or wanton stupidity. It was a bad call on our part. Now our credit is fucked for the next decade, and we lost our house. I mean, I'd say we paid the price. I'd say that anyone in our situation who lost their homes have paid the price. We and the bank both fucked up, and we and the bank are both paying for it. Seems fair to me.
Utilitarianism FTW. Yes I believe this as well. However, a percentage of the population is going to get burned. The idea is to fix it so that the encroaching chances that you're going to be the one getting burned as that percentage rises. Nobody wants to be in that percentage.
Easy enough to say when you can afford to not take a loan.
It's also easier when you aren't fired when the market goes sour, and therefor left without income to pay your interest.
You seem to want to shut down the theater because someone sneaks a free movie every once in a while.
Fortunately for these rate cuts I think I can get a good deal on a Re-fi. I meet someone this weekend. Although even if I have to pay a half a point more to lock a 30 year fixed I'd do it now because I've got a feeling interest rates will be going up pretty high in the next year and a half.
It's not really true, though. The British Empire isn't going to magically cycle back, and neither is the Ottoman Empire or the age of colonization or Soviet Union or China's Five Year Plan. Industrialization wasn't a cycle. The 1970s oil crisis wasn't a cycle. The offshoring of manufacturing jobs wasn't part of a cycle. The globalization of ownership wasn't a cycle.
Blandly saying that every economic boom or bust is part of a cycle is missing the point that there are larger economic trends occurring, and that they tend to occur in one direction without cycles. It's not the passing of the seasons.
I don't mean to be apocolyptic here, because I really don't know how all of this is going to shake out - there is some resiliency in a capitalist system, and absent other factors the market tends to head towards equilibrium. But there are also larger trends at work, and our economy has been criminally mismanaged and our assets ridiculously overvalued.
There's a bag that has been growing for decades now and someone is going to be left holding it
Isn't money just the idea of value? Technically it could perpetuate so long as it exists within an agreed upon system by those who choose to put value in it. I think the only danger is when enough people decide they're darned happy living in trees. Then again the guy with the chainsaw would probably force you back in line with his values.
The empires died because of changing political landscapes. Russia was a backwards subsistence cesspool, industrialisation made them competitive, then they went and spent all their money on weapons without a hot war and imploded. Now they're back to a level of stability thanks to exporting mass amounts of natural resources.
The US economy was buoyed in the past by a strong housing market and high consumerism. Both of those two might now come to an end, they might not. But for genuine progress, dependence on them might need to be reconsidered.
They may not mean to, but they do.
They fill you with the faults they had
And add some extra, just for you.
Well, the basic problem is that while "value" is basically "what someone will pay for it," it's also true that a huge amount of the "value" in our economy is predicated on sheer speculation that other people will continue to speculate contra any concept of actual utility or profitability.
I mean at the end of the day, houses are houses, and have some sort of utility. Not so much with a lot of our more abstract holdings. And value based upon sheer optimistic speculation tends to collapse in a cascading and catastrophic fashion.
Gotta love bubbles!