Believe it or not, subprime loans aren't even really to blame for the current situation. Subprime loans make up at most 20% of newly originated home loans and, of that, only about 3-5% are actually in foreclosure.
What turned out to be much more detrimental was the record slashing of federal interest rates, which overstimulated the hosuing market.
This caused a sweeping wave of home loans that were larger than the actual market value of the homes. In other words, 3 bedroom suburbia homes costing 3/4 of a million dollars didn't stay that way forever, yet because of low interest rates, people were paying that much for them.
This led to the frequently heard term we all recognize as "troubled loans." It's not that they're actually defaulted loans; it's that they're extremely high risk due insufficient collateral (i.e. decreased property value) , and are virtually impossible to sell off as derivatives, which is bad news for investment firms.
So, again, this phenomenon would be happening regardless of subprime lending thanks to Alan Greenspan's economically suicidal interest rate cuts.
But, the reason why subprime lending gets more attention is because it's easier to blame "irresponsible homebuyers", and also because nobody wants interest rates to go back up even though it is the right thing to do.
"Data for the whole period from 1948 to 2007, during which Republicans occupied the White House for 34 years and Democrats for 26, show average annual growth of real gross national product of 1.64 percent per capita under Republican presidents versus 2.78 percent under Democrats.
That 1.14-point difference, if maintained for eight years, would yield 9.33 percent more income per person, which is a lot more than almost anyone can expect from a tax cut...
...Over the entire 60-year period, income inequality trended substantially upward under Republican presidents but slightly downward under Democrats, thus accounting for the widening income gaps over all."
I find it amazing that Republicans always trash democratic economic policies as "hurting the economy" when history has proven time and time again that our country is more prosperous under Democratic presidents.
Oh wait, I forgot, Reagan's trickle down economics just take 15 years to trickle down, my bad. :rolleyes:
Ugh, Paulson filled me with confidence on the talk shows.
"We had to do this because we were on the edge of financial collapse. We can't tell you what that is, but just trust us."
The politicans really hurt by this whole buyout are the next two presidential candidates; any agendas they had, from health care to military spending to heavily increased alternative energy initatives or offshore drilling, may be off the table.
Will both sides admit that neither candidate has any real economic experience?
Why then, do you consider your preferred candidate to be better equipped to handle the economic struggles in 2009 and beyond?
Discuss.
Well, experience is good. But, when you don't have experience, insight and education are also good, as are advisers who are seasoned and cream of the crop. Also, the gumption to delve into a problem is important. As of today, we have Obama offering ideas and insights and McCain largely mum on the subject. Maybe he's afraid we'll remember the Keating 5 or something. I think Obama has the will to be broadly educated and to get well-rounded advice. I see McCain as doing what he has been doing in other areas of the campaign...waiting to see what Obama says, and if it's a reasoned suggestion, appropriating it as his own, while somehow managing to insult Obama for having the ideas in the first place.
McCain seems a real follower and really out of touch with the economy. He's out of touch with his own economy...how many places does he own? He's not really sure. How's he going to be in touch with the greater economy? Mostly by seeing what the other guy is saying and then saying, "Me, too," it seems to me.
Will both sides admit that neither candidate has any real economic experience?
Why then, do you consider your preferred candidate to be better equipped to handle the economic struggles in 2009 and beyond?
Discuss.
Just a comment/observation.
Seeing as the presumbaly best and brightest of america's economic people has managed to completely land on their asses, wouldn't it then be kinda good that the candidate "dont have experience"? See where all that experience got all those banks/investment firms...
Peace
Dan
"YOU [humans] NEED TO BELIEVE IN THINGS THAT AREN'T TRUE. HOW ELSE CAN THEY BECOME?" - Death
"Every judgment teeters on the brink of error. To claim absolute knowledge is to become monstrous. Knowledge is an unending adventure at the edge of uncertainty." - Frank Herbert, Dune, 1965
Just a comment/observation.
Seeing as the presumbaly best and brightest of america's economic people has managed to completely land on their asses, wouldn't it then be kinda good that the candidate "dont have experience"? See where all that experience got all those banks/investment firms...
Peace
Dan
It's exactly like the other argument stating "taxes will finish off the economy". Lack of regulations + massive spending + tax cuts probably have a lot to do with what we are witnessing, how can a change in this policy have a negative effect? What has been done in worldwide finance in the recent years has lead us to this point, a little bit of change in the rules would be fine.
In other news 700 billion dollars are being used to save the day, yay. What could have been done with all this money? Let's see, a good idea :
comprehensive social programs to reduce the income gap in western societies, income gap which is also linked to this crisis (number of poor people rising = number of poor people with a shitty loan rises as well). Instead all this money will be used to teach investment banks a lesson : "fuck up all you want, your government is here to save you".
These 700 billion dollars will also need backing by treasure bonds... bought by China. This crisis will cost a lot, including the 1st place in economic superpower to China.
And where do the lower class people get the money? If you say taxes you are wrong. Like they say money doesn’t grow on trees so they tax the rich, so the rich who own all of these business have to shell out more to the feds your pay goes down and in the long run you buy less...the economy sudfferes because nothing changes. If you tax the everyone less, they are more inclined to shell out pay which in turn people buy and the economy moves...remember, we are all cogs in the system.
Also, if you got rich but had to give a lot back to the government what is anyone’s incentive to better themselves?
It's exactly like the other argument stating "taxes will finish off the economy". Lack of regulations + massive spending + tax cuts probably have a lot to do with what we are witnessing, how can a change in this policy have a negative effect? What has been done in worldwide finance in the recent years has lead us to this point, a little bit of change in the rules would be fine.
In other news 700 billion dollars are being used to save the day, yay. What could have been done with all this money? Let's see, a good idea :
comprehensive social programs to reduce the income gap in western societies, income gap which is also linked to this crisis (number of poor people rising = number of poor people with a shitty loan rises as well). Instead all this money will be used to teach investment banks a lesson : "fuck up all you want, your government is here to save you".
These 700 billion dollars will also need backing by treasure bonds... bought by China. This crisis will cost a lot, including the 1st place in economic superpower to China.
Yeah I think that's pretty much done, The US has made some awful decisions over the last century in regards to how it does business and how it operates. Sure it led to the creation of a super power and now that's all but come to an end.
As a person fond of self control, personal responsibility etc... it's remarkably depressing that these assholes have to be so regulated in order to do right. The other thing though, it's just as disheartening we have to regulate the regulators. We have incredibly ineffective financial oversite. All these guys trumpeting "free trade" do not want it in the least. That's the problem. Everybody spends more time working the system than they do at being a good business and doing right.
What we need in the US is a fiscally responsible system.
My Girlfriend said to me..."How many guitars do you need?" and I replied...."How many pairs of shoes do you need?" She got really quiet.
Also, if you got rich but had to give a lot back to the government what is anyone’s incentive to better themselves?
This is a pretty tired argument against an income tax...you're telling me there's someone in the United States making 50,000 a year, who is not taxed maybe 10 (picking numbers out of a hat). He's going to tell himself, "well, I could better myself and start a small business, and I'll end up making 300,000 a year, but if they're going to take 50 grand instead of what they take now, I'll only be making 200,000 more dollars a year as opposed to 250,000. You know, I think I'll just stick to making 40,000 a year." It has no basis in reality, or how people operate.
This is a pretty tired argument against an income tax...you're telling me there's someone in the United States making 50,000 a year, who is not taxed maybe 10 (picking numbers out of a hat). He's going to tell himself, "well, I could better myself and start a small business, and I'll end up making 300,000 a year, but if they're going to take 50 grand instead of what they take now, I'll only be making 200,000 more dollars a year as opposed to 250,000. You know, I think I'll just stick to making 40,000 a year." It has no basis in reality, or how people operate.
That's not really the argument. If you can work for say a bank and get health care and a 401K match and all that and make a pretty good wage that your family can live on or you could run your own business and earn more a year but you have to pay employees, benifits, your own heath care total bill not just what comes out of your check still earn for retirement etc and work all the time... It makes less sense to put in all that effort to make all that money if it bumps you into a higher bracket and half of your efforts are gone.
It makes more sense to have the time and stress level back than to get that money if half of it is going to tax. Taxation is necessary certainly, but too much taxation discourages competition because there is less money to be made. In other words, sure you are your own boss... sure you have your own company, but you have to put up all the capital and put up all the effort but then half of that is just gone. If the percentage is close at the end of the year... why not make close to the same money for less than half of the risk and stress level?
Total Compensation is far larger than actual wage. Work life balance is included. If it's not worth it, people won't make the investment and go to all that effort when they can do very well in the next lowest tax bracket.
My Girlfriend said to me..."How many guitars do you need?" and I replied...."How many pairs of shoes do you need?" She got really quiet.
But that's just really a question for the borderline cases, and heavily depending on exactly how the tax is set and practiced. What you speak of is very much real if there's a huge increase between (few) brackets. If there's gradual increase with several brackets, or the huge hike is just set at a place where that won't be the issue for too many, it doesn't hurt at all that much. And noone runs a business without pricing in taxes, anyway. That'll be the same for all actors.
Peace
Dan
"YOU [humans] NEED TO BELIEVE IN THINGS THAT AREN'T TRUE. HOW ELSE CAN THEY BECOME?" - Death
"Every judgment teeters on the brink of error. To claim absolute knowledge is to become monstrous. Knowledge is an unending adventure at the edge of uncertainty." - Frank Herbert, Dune, 1965
Who already pay almost 50% of this country's income tax. You want to talk about "fairness" then abolish the unconstitutional income tax and move towards the flat tax.
"Middle class tax cuts" is the biggest load of rhetorical BS in the world.
So this life is sacrifice...
6/30/98 Minneapolis, 10/8/00 East Troy (Brrrr!), 6/16/03 St. Paul, 6/27/06 St. Paul
Who already pay almost 50% of this country's income tax. You want to talk about "fairness" then abolish the unconstitutional income tax and move towards the flat tax.
I need help; define a flat tax for me. Is it an identical percentage among all the people in the country? An identical dollar amount?
That's not really the argument. If you can work for say a bank and get health care and a 401K match and all that and make a pretty good wage that your family can live on or you could run your own business and earn more a year but you have to pay employees, benifits, your own heath care total bill not just what comes out of your check still earn for retirement etc and work all the time... It makes less sense to put in all that effort to make all that money if it bumps you into a higher bracket and half of your efforts are gone.
It makes more sense to have the time and stress level back than to get that money if half of it is going to tax. Taxation is necessary certainly, but too much taxation discourages competition because there is less money to be made. In other words, sure you are your own boss... sure you have your own company, but you have to put up all the capital and put up all the effort but then half of that is just gone. If the percentage is close at the end of the year... why not make close to the same money for less than half of the risk and stress level?
Total Compensation is far larger than actual wage. Work life balance is included. If it's not worth it, people won't make the investment and go to all that effort when they can do very well in the next lowest tax bracket.
You make an extremely compelling argument, but you seem to me to be talking about a limited number of people; i.e. (continuing down the road of my imaginary numbers), talking about the person making 246,000 dollars when making about 250 grand would bump him into the next tax bracket. These concerns may be true for those workers, but they would not be true for the taxpayer I mentioned. Pepper made a general statement that buy increasing taxes incentives would always be muffled. I think that's a vast over-generalization. Even if you discount the stimulus packages, improved services, and stimulus to new economic fields that tax increases could help fund, you're still in my mind stuck with the same basic math of someone who, when having the chance to make twice as much money than he is making now (not including tax), he will not take that chance because there is more taxed in the next highest bracket? I think most people are not thinking that way, and will not pass up the opportunity for more income even if higher taxes come saddled with it. Like I said, if we're talking about a worker separated from the next bracket by a grand or two, I could see your point, but since I wasn't meaning to describe that worker, I cannot see that point.
Hm, interesting. I personally don't know considering the size and breadth of America today can sustain itself on so little "income." I understand the calls that we need to drastically cut spending, but I believe there are many things that are essential to the stability and general welfare of our country and its citizens, including social programs that some social and fiscal conservatives probably would not agree with.
Something I've fooled around with is a tax based primarily upon consumption, as in you are not taxed merely by what you earn on an income basis, but on the basis of what you buy. Therefore the billionare with the private jet would be taxed similarily to an income scheme, whereas the single mother making 40 a year will not be taxed as heavily. I think there are alot of flaws (what if it causes people not to invest, what about poorer families? Since they have to buy more by nature the burden will fall more heavily on them). But still, I think the notion of a flat tax is undoable in this day and age.
Hm, interesting. I personally don't know if the size of the nation America is can sustain itself on so little income. I understand the calls that we need to drastically cut spending, but I believe there are many things that are essential to the stability and general welfare of our country and its citizens, including social programs that some social and fiscal conservatives probably would not agree with.
Something I've fooled around with is a tax based primarily upon consumption, as in you are not taxed merely by what you earn on an income basis, but on the basis of what you buy. Therefore the billionare with the private jet would be taxed similarily to an income scheme, whereas the single mother making 40 a year will not be taxed as heavily. I think there are alot of flaws (what if it causes people not to invest, what about poorer families? Since they have to buy more by nature the burden will fall more heavily on them). But still, I think the notion of a flat tax is undoable in this day and age.
Actually, I'm probably more in favor of what you speak of with a consumption tax...it makes no sense to tax people on their ability to make $, it makes perfect sense to tax them on their spending of that money. That way, everyone is paying the same % for everything, but those that spend more end up paying more taxes.
As for your flaws...limit significantly taxes on investments.
As for poor familes buying more, that is only the case if they have a bunch of kids they can't afford, which does happen. But instead of rewarding that behavior through handouts, they'd certainly see the financial side and hopefully alter behaviors over a generation or so.
they'd certainly see the financial side and hopefully alter behaviors over a generation or so.
This is where you lose me. It's not nearly as simple as them being need to be taught a lesson. And when did social programs, including community development, become, as you put it, "a handout?" Cash in the hand is a handout. An after-school center so kids have a place to retreat from the street is not a handout. Putting ceilings on schools in the South Bronx is not a handout. Getting women access to information and different types of birth control in places that have far too little of either is not a handout. And if you have millions of children below the poverty line, I don't think it is wise or moral policy to wait a generation or so, as you put it.
Sorry to be strong on this point, but it's the truth; poverty is not a universal character flaw, and I'll say it again and again. Those who say it is either have never been poor or were and had blinders on during that period of time.
Your reponse also does not solve my point; should I want such social programs in place, where does the money come from under a flat tax system, or is income tax the only equivalent?
You make an extremely compelling argument, but you seem to me to be talking about a limited number of people; i.e. (continuing down the road of my imaginary numbers), talking about the person making 246,000 dollars when making about 250 grand would bump him into the next tax bracket. These concerns may be true for those workers, but they would not be true for the taxpayer I mentioned. Pepper made a general statement that buy increasing taxes incentives would always be muffled. I think that's a vast over-generalization. Even if you discount the stimulus packages, improved services, and stimulus to new economic fields that tax increases could help fund, you're still in my mind stuck with the same basic math of someone who, when having the chance to make twice as much money than he is making now (not including tax), he will not take that chance because there is more taxed in the next highest bracket? I think most people are not thinking that way, and will not pass up the opportunity for more income even if higher taxes come saddled with it. Like I said, if we're talking about a worker separated from the next bracket by a grand or two, I could see your point, but since I wasn't meaning to describe that worker, I cannot see that point.
sure, absolutely, most people who see an opportunity will jump on it without seeing the tax burden but if their burden remains high much like anyone really, if they aren't seeing rewards for thier labor, they aren't as motivated and look for other areas to spend thier time or money capital etc. Most people absolutely are not thinking about thier tax burden, most people think in terms of "take home pay" after their taxes and medical and any savings they might do are already removed. Much of this is due to the convoluted way we pay our taxes and our health care too for that matter. I find any method that has to use dubious deceitful methods to disguise the amount of money taken to be a little disingenuous and I think there are better ways. Our tax code is remarkably complex and there is too much language in it to help this or that special interest group or lobby. I almost feel like if they just collected the accurate amout of tax levied each year that they are supposed too we wouldn't be in such a state, but hey if the SEC did thier job.....ditto.
Nevertheless We absolutely have an overspending underfunded government at this point. Unfortunately the job of the next regime along with congress will be to make unpopluar decisions and reign in spending as well as raising the tax level to something that will adequately fund the government so that the size of debt is decreasing. I'd love to see an amendment that forces the government to pass a balanced budget and then some to pay off the national debt. It's going to be up to us to essentially ignore the political bullshit and support the people that make the right moves to get us back to solvency as a nation.
I really feel like if we had a good solid 8-12 years of focusing on what's wrong internally with our nation and fixing infrastructure it would do a good bit for our economy and the general quality of life for most people.
Ultimately the most important social program of the next decade might simply be teaching Americans personal finance and how not to fuck up thier lives.
My Girlfriend said to me..."How many guitars do you need?" and I replied...."How many pairs of shoes do you need?" She got really quiet.
This is where you lose me. It's not nearly as simple as them being need to be taught a lesson. And when did social programs, including community development, become, as you put it, "a handout?" Cash in the hand is a handout. An after-school center so kids have a place to retreat from the street is not a handout. Putting ceilings on schools in the South Bronx is not a handout. Getting women access to information and different types of birth control in places that have far too little of either is not a handout. And if you have millions of children below the poverty line, I don't think it is wise or moral policy to wait a generation or so, as you put it.
Sorry to be strong on this point, but it's the truth; poverty is not a universal character flaw, and I'll say it again and again. Those who say it is either have never been poor or were and had blinders on during that period of time.
Your reponse also does not solve my point; should I want such social programs in place, where does the money come from under a flat tax system, or is income tax the only equivalent?
It easy to see that the current welfare system does not help people get off welfare. It'd be hard to argue it does, but go ahead and try if you'd like. If it's not a universal character flaw (and I never said it was) and yet generations of the same families remain in poverty and dependent on the same social systems...then what's the problem??? It's either something wrong with the family that they keep passing on, or something wrong with the system, no? My money is on the system being wrong.
Not to mention, I didn't ever say do away with welfare 100% or cut all spending, so your examples are only meant to try a dramatize and make something seem a lot worse than it really is.
Well, under my scenario, we'd have less government spending so you're not going to get all the socail systems we currently have (since I don't think they are working). BUt with a flat tax, you could simply the tax structure significantly, you could remove loopholes in the system easily.
It easy to see that the current welfare system does not help people get off welfare. It'd be hard to argue it does, but go ahead and try if you'd like. If it's not a universal character flaw (and I never said it was) and yet generations of the same families remain in poverty and dependent on the same social systems...then what's the problem??? It's either something wrong with the family that they keep passing on, or something wrong with the system, no? My money is on the system being wrong.
Not to mention, I didn't ever say do away with welfare 100% or cut all spending, so your examples are only meant to try a dramatize and make something seem a lot worse than it really is.
Well, under my scenario, we'd have less government spending so you're not going to get all the socail systems we currently have (since I don't think they are working). BUt with a flat tax, you could simply the tax structure significantly, you could remove loopholes in the system easily.
A lot of people get elected on those loopholes though. The tax code is what it is now on purpose, just like the health care system. Lip service gets paid to it sure, but these guys aren't going to drop their meal ticket are they? Or is this bailout going to change the lobby system around some?
My Girlfriend said to me..."How many guitars do you need?" and I replied...."How many pairs of shoes do you need?" She got really quiet.
It easy to see that the current welfare system does not help people get off welfare. It'd be hard to argue it does, but go ahead and try if you'd like. If it's not a universal character flaw (and I never said it was) and yet generations of the same families remain in poverty and dependent on the same social systems...then what's the problem??? It's either something wrong with the family that they keep passing on, or something wrong with the system, no? My money is on the system being wrong.
Not to mention, I didn't ever say do away with welfare 100% or cut all spending, so your examples are only meant to try a dramatize and make something seem a lot worse than it really is.
Well, under my scenario, we'd have less government spending so you're not going to get all the socail systems we currently have (since I don't think they are working). BUt with a flat tax, you could simply the tax structure significantly, you could remove loopholes in the system easily.
I fail to see how my examples could be construed as being overly dramatic, considering since I started my new job in community development a few weeks ago I've had to consistently deal with all of those issues. There are no ceilings on many of the schools in the South Bronx, for example. I used that example because I saw it for myself this past week.
I'd also ask you if you were backtracking on what you said, or clarify further what you meant; you wrote... "instead of rewarding that behavior through handouts, they'd certainly see the financial side and hopefully alter behaviors over a generation or so." Your words, not mine. With all this talk of rewarding such behavior, I'm failing to see how I was supposed to read that as a critique of the system. It seems pretty clearly going in the opposite direction.
I think before we go further, we would have to define what is meant by welfare. When I think of welfare, I specifically hone in on the "welfare state" system oft-derided by conservatives, where you recieve a cash payment. Having briefly been a recepient of that type of welfare as a child, I can say that it is not a comprehensive approach. The whole "give a man a fish, teach a man to fish" thing. Others define welfare as being something much greater; are all of the examples I mentioned, after-school centers, non-profit organizations, voter registration drives, etc. etc. etc. Are these all welfare as well?
If that is how you define it then I disagree with your premise that welfare helps nobody. These programs are not always incompetent, but sporadically funded. After-schol centers, social programs, etc. that thrived under Clinton lost funding under Bush, because the administration in power had other priorities. And so it has been. Clinton had the right approach to move the nation's governmental social funding away from welfare and towards community development, because that's the only way to sustain growth and prosperity. That's the only way to assure that families will not have to "wait a generation" to achieve their potential. And if this was examined and taken seriously by both the left and the right, if the government committed itself to community development, not to cash in hand but helping neighborhoods develop the tools they need to better themselves, then we would see more significant changes. But this will not occur until the stigman of welfare as a dirty road is removed. Call it whatever you want; I don't call it welfare, I call it improving our country, and it is woefully under-funded, despite what you may say about us being a welfare state. Not all of America is starting from a blank slate on these issues, and I believe wise, expansive and fruitful funding of community development is a wise use of taxpayer dollars.
~I want to realize brotherhood or identity not merely with the beings called human, but I want to realize identity with all life, even with such things as crawl upon earth.~
Mohandas K. Gandhi
~I once had a sparrow alight upon my shoulder for a moment, while I was hoeing in a village garden, and I felt that I was more distinguished by that circumstance than I should have been by any epaulette I could have worn.~
Henry David Thoreau
Hmm... I may be in over my head a little bit, but is it possible that all this talk about the economy about to collapse is just another way to hype up the fear that this administration has made their ultimate weapon for dealing with the American people? Is it quite possible that it is simply another distraction to bring our focus away from the issues that really matter like multiple wars that are sending our 18 year old children to die for greedy corporate lapdogs raping a country for the sole reason of the profit that can be made from the weapons industry?
"In this cause I too am prepared to die. There is no cause for which I am prepared to kill" -Gandhi
I'd also ask you if you were backtracking on what you said, or clarify further what you meant; you wrote... "instead of rewarding that behavior through handouts, they'd certainly see the financial side and hopefully alter behaviors over a generation or so." Your words, not mine. With all this talk of rewarding such behavior, I'm failing to see how I was supposed to read that as a critique of the system. It seems pretty clearly going in the opposite direction.
The current system rewards irresponsible behavior. Why do we give a family on welfare more money if they have another kid? It's enabling...the system is enabling. How about if someone gets a job paying little, they get kicked off welfare entirely...why not reward their work ethic with continued assistance at a level that makes it financially advantageous for the individual to get a job and start working their way back up? No, the system sometimes remves all benefits and make an individual worse off if they take a job. That's not right, the system is enabling poor decisions and irresponsible behavior. It provides a push down and a handout instead of a hand up.
Hmm... I may be in over my head a little bit, but is it possible that all this talk about the economy about to collapse is just another way to hype up the fear that this administration has made their ultimate weapon for dealing with the American people? Is it quite possible that it is simply another distraction to bring our focus away from the issues that really matter like multiple wars that are sending our 18 year old children to die for greedy corporate lapdogs raping a country for the sole reason of the profit that can be made from the weapons industry?
Issues that really matter? I tend to think the Economy is a very important issue. So, I guess my answer to you is, no, it's not possible.
Maybe then the system is simply flawed, and flawed for a good reason too. Probably to keep the upper 1% in the upper 1%. Perhaps the answer lies not in debating a crumbling economy but in creating a new system within the old! Our own system of barter and trade that relies not on unfair rules put in place to give an unfair advantage to those who do not deserve it.
"In this cause I too am prepared to die. There is no cause for which I am prepared to kill" -Gandhi
I think before we go further, we would have to define what is meant by welfare. When I think of welfare, I specifically hone in on the "welfare state" system oft-derided by conservatives, where you recieve a cash payment. Having briefly been a recepient of that type of welfare as a child, I can say that it is not a comprehensive approach. The whole "give a man a fish, teach a man to fish" thing. Others define welfare as being something much greater; are all of the examples I mentioned, after-school centers, non-profit organizations, voter registration drives, etc. etc. etc. Are these all welfare as well?
Some of those are part of the Welfare system in my mind, and they form the better part.
Welfare should be like having to move back in with your parents after you're an adult. It's comfortable and your taken care of, but you still want to get out of the house and earn your own living...you can't make it too comfortable or there is no reason to change.
It seems as if we all can agree that there are many flaws within the system, why not as a fun loving community of Pearl Jam fans rise up to create our own economy? Surely complaining and arguing about a system already in place that doesn't seem to be striving for change is not going to get us anywhere except frustrated, right?
"In this cause I too am prepared to die. There is no cause for which I am prepared to kill" -Gandhi
Comments
What turned out to be much more detrimental was the record slashing of federal interest rates, which overstimulated the hosuing market.
This caused a sweeping wave of home loans that were larger than the actual market value of the homes. In other words, 3 bedroom suburbia homes costing 3/4 of a million dollars didn't stay that way forever, yet because of low interest rates, people were paying that much for them.
This led to the frequently heard term we all recognize as "troubled loans." It's not that they're actually defaulted loans; it's that they're extremely high risk due insufficient collateral (i.e. decreased property value) , and are virtually impossible to sell off as derivatives, which is bad news for investment firms.
So, again, this phenomenon would be happening regardless of subprime lending thanks to Alan Greenspan's economically suicidal interest rate cuts.
But, the reason why subprime lending gets more attention is because it's easier to blame "irresponsible homebuyers", and also because nobody wants interest rates to go back up even though it is the right thing to do.
http://forums.pearljam.com/showthread.php?t=272825
Thanks for posting that! Really interesting read.
I find it amazing that Republicans always trash democratic economic policies as "hurting the economy" when history has proven time and time again that our country is more prosperous under Democratic presidents.
Oh wait, I forgot, Reagan's trickle down economics just take 15 years to trickle down, my bad. :rolleyes:
"We had to do this because we were on the edge of financial collapse. We can't tell you what that is, but just trust us."
The politicans really hurt by this whole buyout are the next two presidential candidates; any agendas they had, from health care to military spending to heavily increased alternative energy initatives or offshore drilling, may be off the table.
Well, experience is good. But, when you don't have experience, insight and education are also good, as are advisers who are seasoned and cream of the crop. Also, the gumption to delve into a problem is important. As of today, we have Obama offering ideas and insights and McCain largely mum on the subject. Maybe he's afraid we'll remember the Keating 5 or something. I think Obama has the will to be broadly educated and to get well-rounded advice. I see McCain as doing what he has been doing in other areas of the campaign...waiting to see what Obama says, and if it's a reasoned suggestion, appropriating it as his own, while somehow managing to insult Obama for having the ideas in the first place.
McCain seems a real follower and really out of touch with the economy. He's out of touch with his own economy...how many places does he own? He's not really sure. How's he going to be in touch with the greater economy? Mostly by seeing what the other guy is saying and then saying, "Me, too," it seems to me.
http://mccainkeatingfive.com/?page_id=19
Seeing as the presumbaly best and brightest of america's economic people has managed to completely land on their asses, wouldn't it then be kinda good that the candidate "dont have experience"? See where all that experience got all those banks/investment firms...
Peace
Dan
"Every judgment teeters on the brink of error. To claim absolute knowledge is to become monstrous. Knowledge is an unending adventure at the edge of uncertainty." - Frank Herbert, Dune, 1965
In other news 700 billion dollars are being used to save the day, yay. What could have been done with all this money? Let's see, a good idea :
comprehensive social programs to reduce the income gap in western societies, income gap which is also linked to this crisis (number of poor people rising = number of poor people with a shitty loan rises as well). Instead all this money will be used to teach investment banks a lesson : "fuck up all you want, your government is here to save you".
These 700 billion dollars will also need backing by treasure bonds... bought by China. This crisis will cost a lot, including the 1st place in economic superpower to China.
huh....?
Yeah I think that's pretty much done, The US has made some awful decisions over the last century in regards to how it does business and how it operates. Sure it led to the creation of a super power and now that's all but come to an end.
As a person fond of self control, personal responsibility etc... it's remarkably depressing that these assholes have to be so regulated in order to do right. The other thing though, it's just as disheartening we have to regulate the regulators. We have incredibly ineffective financial oversite. All these guys trumpeting "free trade" do not want it in the least. That's the problem. Everybody spends more time working the system than they do at being a good business and doing right.
What we need in the US is a fiscally responsible system.
This is a pretty tired argument against an income tax...you're telling me there's someone in the United States making 50,000 a year, who is not taxed maybe 10 (picking numbers out of a hat). He's going to tell himself, "well, I could better myself and start a small business, and I'll end up making 300,000 a year, but if they're going to take 50 grand instead of what they take now, I'll only be making 200,000 more dollars a year as opposed to 250,000. You know, I think I'll just stick to making 40,000 a year." It has no basis in reality, or how people operate.
That's not really the argument. If you can work for say a bank and get health care and a 401K match and all that and make a pretty good wage that your family can live on or you could run your own business and earn more a year but you have to pay employees, benifits, your own heath care total bill not just what comes out of your check still earn for retirement etc and work all the time... It makes less sense to put in all that effort to make all that money if it bumps you into a higher bracket and half of your efforts are gone.
It makes more sense to have the time and stress level back than to get that money if half of it is going to tax. Taxation is necessary certainly, but too much taxation discourages competition because there is less money to be made. In other words, sure you are your own boss... sure you have your own company, but you have to put up all the capital and put up all the effort but then half of that is just gone. If the percentage is close at the end of the year... why not make close to the same money for less than half of the risk and stress level?
Total Compensation is far larger than actual wage. Work life balance is included. If it's not worth it, people won't make the investment and go to all that effort when they can do very well in the next lowest tax bracket.
Peace
Dan
"Every judgment teeters on the brink of error. To claim absolute knowledge is to become monstrous. Knowledge is an unending adventure at the edge of uncertainty." - Frank Herbert, Dune, 1965
Who already pay almost 50% of this country's income tax. You want to talk about "fairness" then abolish the unconstitutional income tax and move towards the flat tax.
"Middle class tax cuts" is the biggest load of rhetorical BS in the world.
6/30/98 Minneapolis, 10/8/00 East Troy (Brrrr!), 6/16/03 St. Paul, 6/27/06 St. Paul
I need help; define a flat tax for me. Is it an identical percentage among all the people in the country? An identical dollar amount?
You make an extremely compelling argument, but you seem to me to be talking about a limited number of people; i.e. (continuing down the road of my imaginary numbers), talking about the person making 246,000 dollars when making about 250 grand would bump him into the next tax bracket. These concerns may be true for those workers, but they would not be true for the taxpayer I mentioned. Pepper made a general statement that buy increasing taxes incentives would always be muffled. I think that's a vast over-generalization. Even if you discount the stimulus packages, improved services, and stimulus to new economic fields that tax increases could help fund, you're still in my mind stuck with the same basic math of someone who, when having the chance to make twice as much money than he is making now (not including tax), he will not take that chance because there is more taxed in the next highest bracket? I think most people are not thinking that way, and will not pass up the opportunity for more income even if higher taxes come saddled with it. Like I said, if we're talking about a worker separated from the next bracket by a grand or two, I could see your point, but since I wasn't meaning to describe that worker, I cannot see that point.
Same % of income tax for everyone...wouldn't be the same amount of $ for everyone.
10,000 (income) * 15% = $1,500 tax
100,000 (income) * 15% = $15,000 tax
Hm, interesting. I personally don't know considering the size and breadth of America today can sustain itself on so little "income." I understand the calls that we need to drastically cut spending, but I believe there are many things that are essential to the stability and general welfare of our country and its citizens, including social programs that some social and fiscal conservatives probably would not agree with.
Something I've fooled around with is a tax based primarily upon consumption, as in you are not taxed merely by what you earn on an income basis, but on the basis of what you buy. Therefore the billionare with the private jet would be taxed similarily to an income scheme, whereas the single mother making 40 a year will not be taxed as heavily. I think there are alot of flaws (what if it causes people not to invest, what about poorer families? Since they have to buy more by nature the burden will fall more heavily on them). But still, I think the notion of a flat tax is undoable in this day and age.
Actually, I'm probably more in favor of what you speak of with a consumption tax...it makes no sense to tax people on their ability to make $, it makes perfect sense to tax them on their spending of that money. That way, everyone is paying the same % for everything, but those that spend more end up paying more taxes.
As for your flaws...limit significantly taxes on investments.
As for poor familes buying more, that is only the case if they have a bunch of kids they can't afford, which does happen. But instead of rewarding that behavior through handouts, they'd certainly see the financial side and hopefully alter behaviors over a generation or so.
This is where you lose me. It's not nearly as simple as them being need to be taught a lesson. And when did social programs, including community development, become, as you put it, "a handout?" Cash in the hand is a handout. An after-school center so kids have a place to retreat from the street is not a handout. Putting ceilings on schools in the South Bronx is not a handout. Getting women access to information and different types of birth control in places that have far too little of either is not a handout. And if you have millions of children below the poverty line, I don't think it is wise or moral policy to wait a generation or so, as you put it.
Sorry to be strong on this point, but it's the truth; poverty is not a universal character flaw, and I'll say it again and again. Those who say it is either have never been poor or were and had blinders on during that period of time.
Your reponse also does not solve my point; should I want such social programs in place, where does the money come from under a flat tax system, or is income tax the only equivalent?
sure, absolutely, most people who see an opportunity will jump on it without seeing the tax burden but if their burden remains high much like anyone really, if they aren't seeing rewards for thier labor, they aren't as motivated and look for other areas to spend thier time or money capital etc. Most people absolutely are not thinking about thier tax burden, most people think in terms of "take home pay" after their taxes and medical and any savings they might do are already removed. Much of this is due to the convoluted way we pay our taxes and our health care too for that matter. I find any method that has to use dubious deceitful methods to disguise the amount of money taken to be a little disingenuous and I think there are better ways. Our tax code is remarkably complex and there is too much language in it to help this or that special interest group or lobby. I almost feel like if they just collected the accurate amout of tax levied each year that they are supposed too we wouldn't be in such a state, but hey if the SEC did thier job.....ditto.
Nevertheless We absolutely have an overspending underfunded government at this point. Unfortunately the job of the next regime along with congress will be to make unpopluar decisions and reign in spending as well as raising the tax level to something that will adequately fund the government so that the size of debt is decreasing. I'd love to see an amendment that forces the government to pass a balanced budget and then some to pay off the national debt. It's going to be up to us to essentially ignore the political bullshit and support the people that make the right moves to get us back to solvency as a nation.
I really feel like if we had a good solid 8-12 years of focusing on what's wrong internally with our nation and fixing infrastructure it would do a good bit for our economy and the general quality of life for most people.
Ultimately the most important social program of the next decade might simply be teaching Americans personal finance and how not to fuck up thier lives.
It easy to see that the current welfare system does not help people get off welfare. It'd be hard to argue it does, but go ahead and try if you'd like. If it's not a universal character flaw (and I never said it was) and yet generations of the same families remain in poverty and dependent on the same social systems...then what's the problem??? It's either something wrong with the family that they keep passing on, or something wrong with the system, no? My money is on the system being wrong.
Not to mention, I didn't ever say do away with welfare 100% or cut all spending, so your examples are only meant to try a dramatize and make something seem a lot worse than it really is.
Well, under my scenario, we'd have less government spending so you're not going to get all the socail systems we currently have (since I don't think they are working). BUt with a flat tax, you could simply the tax structure significantly, you could remove loopholes in the system easily.
A lot of people get elected on those loopholes though. The tax code is what it is now on purpose, just like the health care system. Lip service gets paid to it sure, but these guys aren't going to drop their meal ticket are they? Or is this bailout going to change the lobby system around some?
I fail to see how my examples could be construed as being overly dramatic, considering since I started my new job in community development a few weeks ago I've had to consistently deal with all of those issues. There are no ceilings on many of the schools in the South Bronx, for example. I used that example because I saw it for myself this past week.
I'd also ask you if you were backtracking on what you said, or clarify further what you meant; you wrote... "instead of rewarding that behavior through handouts, they'd certainly see the financial side and hopefully alter behaviors over a generation or so." Your words, not mine. With all this talk of rewarding such behavior, I'm failing to see how I was supposed to read that as a critique of the system. It seems pretty clearly going in the opposite direction.
I think before we go further, we would have to define what is meant by welfare. When I think of welfare, I specifically hone in on the "welfare state" system oft-derided by conservatives, where you recieve a cash payment. Having briefly been a recepient of that type of welfare as a child, I can say that it is not a comprehensive approach. The whole "give a man a fish, teach a man to fish" thing. Others define welfare as being something much greater; are all of the examples I mentioned, after-school centers, non-profit organizations, voter registration drives, etc. etc. etc. Are these all welfare as well?
If that is how you define it then I disagree with your premise that welfare helps nobody. These programs are not always incompetent, but sporadically funded. After-schol centers, social programs, etc. that thrived under Clinton lost funding under Bush, because the administration in power had other priorities. And so it has been. Clinton had the right approach to move the nation's governmental social funding away from welfare and towards community development, because that's the only way to sustain growth and prosperity. That's the only way to assure that families will not have to "wait a generation" to achieve their potential. And if this was examined and taken seriously by both the left and the right, if the government committed itself to community development, not to cash in hand but helping neighborhoods develop the tools they need to better themselves, then we would see more significant changes. But this will not occur until the stigman of welfare as a dirty road is removed. Call it whatever you want; I don't call it welfare, I call it improving our country, and it is woefully under-funded, despite what you may say about us being a welfare state. Not all of America is starting from a blank slate on these issues, and I believe wise, expansive and fruitful funding of community development is a wise use of taxpayer dollars.
Mohandas K. Gandhi
~I once had a sparrow alight upon my shoulder for a moment, while I was hoeing in a village garden, and I felt that I was more distinguished by that circumstance than I should have been by any epaulette I could have worn.~
Henry David Thoreau
Iraq Veterans Against the War
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The current system rewards irresponsible behavior. Why do we give a family on welfare more money if they have another kid? It's enabling...the system is enabling. How about if someone gets a job paying little, they get kicked off welfare entirely...why not reward their work ethic with continued assistance at a level that makes it financially advantageous for the individual to get a job and start working their way back up? No, the system sometimes remves all benefits and make an individual worse off if they take a job. That's not right, the system is enabling poor decisions and irresponsible behavior. It provides a push down and a handout instead of a hand up.
Issues that really matter? I tend to think the Economy is a very important issue. So, I guess my answer to you is, no, it's not possible.
Iraq Veterans Against the War
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Some of those are part of the Welfare system in my mind, and they form the better part.
Welfare should be like having to move back in with your parents after you're an adult. It's comfortable and your taken care of, but you still want to get out of the house and earn your own living...you can't make it too comfortable or there is no reason to change.
Iraq Veterans Against the War
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