Who damage the economy?

[katsung47]

Who damage the economy?

When Clinton left the W.H. the Federal benchmark interest rate was 6.5%. In Bush's term, the rate drammatically dropped in 2001. Then to the bottom of 1% in 2003 and 2004. It's the low interest rate that pushes up the economy. You could see the result from income tax revenue chart that the Federal income tax started going up from 2003, 2004, but it also created a big bubble - the housing bubble. That bubble broke out in 2007, (You could see it's the peak of income tax revenue). It also caused the financial crisis next year.(2008)

Real estate industry is an important factor of GDP. The housing bubble is still hurting the economy right now. Even now they low the interest rate to nearly zero, they can't recover the housing industry. (Because of piled up fore-closured houses from that bubble)

It's evident that Bush created the housing bubble that damaged the US economy. That bubble is still there, continuely erode the economy.

Bush's tax cut law and the war he started increased budget deficit that caused debt problem. It's ridiculous to cover up his failed policy by these fallacy.

 

[Mad Scientist]

But who was phone?

 

[Avorysuds]

ANYTHING to make it ok that Obama failed... lol.

Clinton played a part, Bush played a part and Obama has played a part... It's really that fucking simple.

 

[Leweman]

They did? Damn!

[ame=http://www.youtube.com/watch?v=SHhrZgojY1Q&feature=related]The Who - Won't Get Fooled Again - YouTube[/ame]

 

[likeabird03]

By 2003 we were well into the forest, we aren't talking about a bubble that formed over 4 years but probably two decades. Interest rates weren't solely responsible for the appreciation in housing that we experienced - hell, the rates are even lower now and that doesn't seem to be helping home prices very much does it?

The federal reserve started cutting rates a month before Bush took office and the same Federal reserve cut rates from then on, this was in response to the popping of the dot com bubble under Clinton, and an unprecedented terrorist attack.

This goes back to the 1970's when various housing acts were implemented by Carter, Clinton did the same, and yes - even Bush. In fact, Gore could have won the 2000 election and we would likely still be dealing with the mess we are now. Oh and let's not forget the stuff that had been going on with Fannie Mae and Freddie Mac under various administrations.

Liberals seem to oversimplify the mess that we are in now so they can try and pin the whole thing on Bush. It's idiotic.

 

[Brutus]

It's evident that Bush created the housing bubble that damaged the US economy.

that of course is way idiotic and liberal. Fanny Freddie and Federal Reserve were around long before Bush.

Can even a liberal say with a straight face that liberal programs designed to interfere with the Republican free market (Fanny Freddie and Federal Reserve) did not cause crisis?

When a liberal posts he automatically shows the low liberal IQ.

 

[katsung47]

Damage the house (2) (9/18/2011)

Blame others for the mess they had made.

Normally, president and his administration have annual revenue income, like a salary income for a family. He spends it for mortgage and other expenditure. They used to overspend the income, then they borrow the money by issuing bond.

But Bush damaged the house with a leaking roof and big hole on wall. (Housing bubble and financial crisis)

Obama not only has to pay monthly mortgage, but also must change the roof and repair the wall. That repair cost is much more than the normal monthly mortgage. The income remains the same. (salary unchanged or decreased) Expense increase drammatically. (save the firms too big to fall, help the unemployed people, help the drowned home owners....) That become a huge increase of national debt. Who should be responsible for that repair money?

Damage the house is easy. To repair it cost much. Republicans attacked Obama for the mess their own president (Bush) had made.

The fact is Bush inherited a surplus from Clinton, he left a deficit for Obama. Worse, he left a big financial crisis to Obama. Now they accuse Obama because he spend a lot of money to repair the roof. You know, to repair a roof costs more than to pay monthly mortgage.

 

[hortysir]

Can I have a "D", Pat?

 

[PredFan]

Who own da Chiefs?

 

[techieny]

Who damage the economy?

When Clinton left the W.H. the Federal benchmark interest rate was 6.5%. In Bush's term, the rate drammatically dropped in 2001. Then to the bottom of 1% in 2003 and 2004. It's the low interest rate that pushes up the economy. You could see the result from income tax revenue chart that the Federal income tax started going up from 2003, 2004, but it also created a big bubble - the housing bubble. That bubble broke out in 2007, (You could see it's the peak of income tax revenue). It also caused the financial crisis next year.(2008)

Real estate industry is an important factor of GDP. The housing bubble is still hurting the economy right now. Even now they low the interest rate to nearly zero, they can't recover the housing industry. (Because of piled up fore-closured houses from that bubble)

It's evident that Bush created the housing bubble that damaged the US economy. That bubble is still there, continuely erode the economy.

Bush's tax cut law and the war he started increased budget deficit that caused debt problem. It's ridiculous to cover up his failed policy by these fallacy.

[ame=http://www.youtube.com/watch?v=d9-JdubfUCw&feature=fvst]the who - my generation (Smothers Brothers comedy hour) - YouTube[/ame]

 

[katsung47]

3. Bush’s legacy is still hurting economy (10/24/2011)

Some people say that after three years, Obama can’t blame Bush on economy failure any more. But the housing crisis still hurts economy and looks like will continue to damage the economy for several years. The problem he left for this country is huge and long-lasting.

The main expense is to bail out the firms too big to fail, especially the mortgage giant Fannie Mae and Freddy Mac. The program to help unemployed, incentive to promote car sale and house sale, program to help the home owners whose house value now are underwater. Here is the real expense, that's the real hole you try to avoid of. Three years after sub-prime loan crisis, the roof is still leaking. Here is the some recent "leaking" result:

Fannie Mae Posts $8.7 Billion Loss, Requests More Fed Aid

WASHINGTON -- Mortgage buyer Fannie Mae reported a loss of $8.7 billion for the January-March quarter, and asked for an additional $8.5 billion in federal aid.

Fannie Mae Posts $8.7 Billion Loss, Requests More Fed Aid

Fannie Mae, Freddie Mac Seek $3.1 Billion Amid Improved Earnings
QBy Lorraine Woellert - Feb 24, 2011 9:01 PM PT

http://www.bloomberg.com/news/2011-0...-earnings.html

Fannie Mae needs another $5.1 billion in aid as more loans sour
.Date: Friday, August 5, 2011,

http://www.bizjournals.com/washingto...1-billion.html

Bank Of America To Cut 30,000 Jobs As Part Of Restructuring Plan

9/12/11
Bank of America stock was up 2 cents at $7 at midday. The stock has lost half its value this year, largely over problems related to poorly-written mortgages it acquired with its 2008 purchase of Countrywide Financial Corp. The bank faces lawsuits from investors and regulators over the sales of mortgage-backed securities that lost value after the housing boom collapsed.

Bank Of America To Cut 30,000 Jobs As Part Of Restructuring Plan (VIDEO)

Three years after the break-off of the housing bubble, it still hurts economy and causes unemployment.

 

[katsung47]

4. How Bush blew up the Housing bubble.

Here is a Federal bench interest rate in Bush's term.

you can see how the interest rate dropped to the bottom from 6% to 1% in his first year administration. That low interest rate created a housing bubble. Bush boasted in his administration, America developed an ownership society. The fast growing up bubble without any restriction was finally boken up in 2007, caused the financial crisis in next year. It is still hurting the economy and likely will continue for years.

End of the ‘Ownership Society’
Oct 10, 2008

Bush pushed new policies encouraging homeownership, like the "zero-down-payment initiative," More exotic mortgages followed, including ones with no monthly payments for the first two years. Other mortgages required no documentation other than the say-so of the borrower. Absurd though these all were, they paled in comparison to the financial innovations that grew out of the mortgages—derivatives built on other derivatives, packaged and repackaged until no one could identify what they contained and how much they were, in fact, worth.

As we know by now, these instruments have brought the global financial system,

So Much for Bush's 'Ownership Society' - The Daily Beast

One thing else you can see from that interest rate chart. Clinton left his a nice interest rate tool to control the economy. The interest rate was 6%. With that interest rate tool, Bush did push up a economy. But he didn't regulate the economy, loosen the bridle of housing loan for his homeowners' society, that caused today's foreclosure problem. What did he leave for Obama? The Federal interest rate was below 1% which left little space for obama to operate. Without that tool, Obama had to borrow money, or do QE (quantitative easing) to push the economy.

Clinton left for Bush a surplus budget and a nice financial tool. What has Obama got from Bush?

 

[Wiseacre]

2012. New year, same bullshit.

 

[DSGE]

The Fed. They've kept monetary policy passively tight and allowed nominal income to fall below trend.

 

[DSGE]

you can see how the interest rate dropped to the bottom from 6% to 1% in his first year administration. That low interest rate created a housing bubble.

How do you think low interest rates cause bubble?

The Federal interest rate was below 1% which left little space for obama to operate. Without that tool, Obama had to borrow money, or do QE (quantitative easing) to push the economy.

You know it's the Fed that sets the fed funds rate and decides to do QE, not the president?

 

[samjones]

You know it's the Fed that sets the fed funds rate and decides to do QE, not the president?

Yep, and QE was started by a Bush appointee during the Bush administration.

 

[DSGE]

You know it's the Fed that sets the fed funds rate and decides to do QE, not the president?

Yep, and QE was started by a Bush appointee during the Bush administration.

And was continued by an Obama reappointee during the Obama administration. It doesn't really matter who the president is at the time. The Fed is independent.

 

[katsung47]

The tax cut law was proposed and carried out by former President Bush. It is proved being a failed policy. In Bush's eight years term, the national debt raised from 6 trillian to 12 trillian. His tax cut law contributes big in debt increasing. Yet, when Obama wanted to recover the tax rate on rich people, the law makers resisted. It proves they are now working for a little group of rich people not for the majority of Americans.

Here is a confession from Greenspan:

Greenspan admits he got it wrong over Bush's tax cuts
By Michael Gawenda, Herald Correspondent in Washington
March 17, 2005

The chairman of the US Federal Reserve, Alan Greenspan, has admitted he made a mistake in 2001 when he defended President George Bush's tax cuts, which led to the turnaround of a large budget surplus at the end of the Clinton presidency to a budget deficit this year of more than $US400 billion ($506 billion).

Greenspan admits he got it wrong over Bush's tax cuts - World - www.smh.com.au

Yet, when Obama proposed to cancel that tax cut law to save US from debt increasing, he is facing the opposition from the Republican.

 

[katsung47]

Bush increased the national debt not only with his “Tax cut law”, but also with his two Mid-east wars. The war cost is another heavy burden to the US tax payers.

U.S. cost of war at least $3.7 trillion and counting

By Daniel Trotta
NEW YORK | Wed Jun 29, 2011

Reuters) - When President Barack Obama cited cost as a reason to bring troops home from Afghanistan, he referred to a $1 trillion (622 billion pounds) price tag for America's wars.
Staggering as it is, that figure grossly underestimates the total cost of wars in Iraq, Afghanistan and Pakistan to the U.S. Treasury and ignores more imposing costs yet to come, according to a study released on Wednesday.

The final bill will run at least $3.7 trillion and could reach as high as $4.4 trillion, according to the research project "Costs of War" by Brown University's Watson Institute for International Studies. (Home | Costs of War)

U.S. cost of war at least $3.7 trillion and counting | Reuters

 

[waltky]

Buying vs. renting...

Looking Past the Home Price Question
5/06/12 --- Economists are furiously debating whether home prices are "bouncing along the bottom," ready to rebound, or poised for another dip. Millions of prospective homeowners are eagerly awaiting the conclusion. After all, no one wants to invest in a money loser.

But maybe those buyers are focused on the wrong question. Price is not as important as value, two measures that sound the same but aren't. That's among the conclusions in a SmartMoney piece by Jack Hough, who uses home price data back to the 19th Century to show that, once inflation is figured in, home prices don't go up at all over the long term. There are spikes, like the one in the last decade, often followed by price collapses. But on average, home prices rise at the inflation rate. In contrast, some other investments, including stocks, rise considerably faster than inflation to produce real profits. Experts have known for a long time that homes are not especially profitable investments, though it's hard to convince homeowners.

This does not mean, however, that a home is a bad buy. Instead, the home should be viewed as a purchase for consumption, just like shoes, cars and food -- necessities that produce no investment return. The home's value, as opposed to its price, is determined by how well it serves the owner's need for shelter. And that largely depends on the cost of the alternative: rent.

Right now, home prices in many parts of the country are low relative to rent, making buying the better option. This is seen in the "rent yield," figured by dividing annual rent by the sales prices of comparable properties. If you paid $12,000 a year to rent a home worth $120,000, the rent yield would be 10%. Hough points out that even if you adjust for things like taxes and maintenance on the home, the yield in many markets exceeds 5%, not bad then considering bank savings are paying next to nothing.

Trulia.com has a rent-vs-buy index that shows markets where buying makes the most sense. This price-to-rent ratio divides home prices by rents, the inverse of the rent yield index, so the lower the number the better. (Convert it to rent yield by dividing 1 by the price-to-rent ratio.) Trulia's most recent survey found it is cheaper to buy than to rent in 98 of the 100 largest markets. Why has the balance shifted toward renting in so many places? It's a combination of the drop in home prices and the rise in rents due to greater demand from people who cannot buy or don't want to buy.

Buying does not make sense unless you plan to stay in the home for at least five years -- the longer the better. That will provide time for appreciation to cover buying and selling costs like the real estate agent's commission. Finally, if the home is a consumption item and not an investment, it makes sense to buy the cheapest home that serves your needs. Buying a McMansion packed with rooms you rarely use is like buying a dozen eggs and letting half of them spoil.

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