H.R. 5029 - Economic Freedom Act of 2010

[MaggieMae]

hear ye, hear ye! the bill also proposes:

8) Sale of all TARP stock/asset warrants within a year of enactment.

the bill also includes a provision to require sale of all tarp stock assets within a year of its action. the problem with this, of course, is that a government sell-off of GM positions, for example, may put the taxed at a loss on the same. it may degrade the stock as well, with sales being mandated, rather than driven by demand, and where the sales affect an increase in supply.

one thing about republican legislation is that it can be read in a jiffy. even in committee, a democratic bill would stretch round the block, only to grow by leaps thereafter.

this one is light in the pants, awaiting some grand 'ol earmark ballast, no doubt.

the bill

Democrats' bills are long because they cross all the t's and dot all the i's, cross-reference everything to avoid loopholes. Yet they're highly criticized for being thorough. Go figure.

Yep, got those t's crossed and i's dotted. Well, except for executive bonuses at bailed out banks.

Senate Approves TARP Executive-Pay Limits Amendment - WSJ.com


Oh, and then there's this one too...

Loophole May Delay Coverage for Some Kids - CBS Evening News - CBS News

As far as bank bonuses, I recall there being all kinds of screeching that the "gubmit" shouldn't be telling banks (and shareholders) how much they can earn. If they had clamped down on bonuses, too, we'd still be hearing about it, but then the bonus issue has become one of those damned-if-you-do/damned-if-you-don't (legislate), hasn't it. Ironically, the big CEO bonuses has resulted in unintentional consequences for those fellas--making sure that "main street" stays mad as hell at Wall Street.

As for the loophole for kids in the health bill, that will be interesting to see insurance companies try to enforce that interpretation. They too will only look like the bad guys in the press.

Is that all?

 

[MaggieMae]

When you put people to WORK--they actually start paying taxes--which reduces the deficit. Unemployed Americans really do not pay income taxes---

This bill is a job creator. But this congress and administration would never go for it. Why? Because they would LOSE control of YOUR money.

"The problem with socialism is that government eventually runs out of other peoples money to spend"--Margaret Thatcher.

"Fool me once, shame on you.....fool me twice, shame on me"

How many times do you think we will fall for this "Cut taxes on the rich to create jobs" bullshit?

We bought the Republican line, we gave them the White House and Congress to show us how their economic theory would work.

The rich kept the money and got richer and sent the jobs overseas

"Today we take a major step toward China's entry into the World Trade Organization and a major step toward answering some of the central challenges of this new century," Clinton said in a bipartisan White House ceremony Tuesday afternoon.

"Trade with China will not only extend our nation's unprecedented economic growth, it offers us a chance to help shape the future of the world's most prosperous nation and to reaffirm our own global leadership for peace and prosperity."

Clinton signs China trade bill, - October 10, 2000


I believe that NAFTA will create 200,000 American jobs in
the first two years of its effect. I believe if you look at the
trends -- and President Bush and I were talking about it this morning
-- starting about the time he was elected president, over one-third of
our economic growth, and in some years over one-half of our net new
jobs came directly from exports. And on average, those export-related
jobs paid much higher than jobs that had no connection to exports.


I believe that NAFTA will create a million jobs in the
first five years of its impact. And I believe that that is many more
jobs than will be lost, as inevitably some will be as always happens
when you open up the mix to a new range of competition.

President Clinton Signing NAFTA


Bill Clinton gave China permanent most favored nation trading status and signed NAFTA into law Sept 14 1993 when Democrats controlled the entire federal government.

Yup, all Clinton's fault. Of course NAFTA was in the works way back to George H.W. Bush's administration, but hey, the Bushies are pure as driven snow. Ironically, Bush's own congress finally had to put the kibosh on his fast-tracking additional trade agreements with every country south of Mexico. China, on the other hand, needs our business as much as we need their credit, so it's a wash.

 

[MaggieMae]

Total strawman argument. No one said the entire blame belongs to Fan/Fred.
The entire blame does belong to the Fed, which kept rates too low too long and made wild lending profitable in the short term.
But Fan/Fred were among the most closely regulated entities in the mortgage business and they failed. So how will more regulation stop anything like this again??

No mortgage bundling caused the crash? Oh, okey-dokey. Whatever you say, genius.

 

[Foxfyre]

Total strawman argument. No one said the entire blame belongs to Fan/Fred.
The entire blame does belong to the Fed, which kept rates too low too long and made wild lending profitable in the short term.
But Fan/Fred were among the most closely regulated entities in the mortgage business and they failed. So how will more regulation stop anything like this again??

Fannie and Freddie were only one component of the whole, but they were part of the process to start the avalanche.

The problem started with a well intentioned bill in the Carter Administration - the CRA - that provided the necessary controls for responsible management of a program to help lower income Americans buy homes. Nobody can argue that home ownership is an important factor in economic stability, better schools, lower crime rates, a better quality of life, etc. But the CRA did not promote making loans to people who had no ability or track record for paying for them.

It took subsequent Congresses and Administrations to use the CRA as an excuse for some unwise deregulation and emphasis that bypassed the built in protections in the CRA and opened the door to government graft, corruption, and irresponsible financial acitivity. And because the economy was booming through much of the Clinton and Bush 43 years, our fearless leaders turned a blind eye to the deveoping housing bubble that had to burst sooner or later and all the wildly speculative and irresponsible packaging of those loans going on in the financial sector. When the whistle was blown--President Bush blew it repeatedly--the GOP was reluctant to upset the positive economic trends. After the Democrats took over, the likes of Barney Frank or Christ Dodd would go on camera to reassure us that all was well and there was no serious problem there.

The housing bubble burst and the whole house of cards built around it came tumbling down.

And here we are.

The Obama administration and current Congress have done absolutely nothing to correct the problems that caused it. They have pointed accusing fingers at everything and everybody except the actual cause and culprits.

We need different people as our elected leaders.

 

[Immanuel]

Where is the Economic Freedom? I see nothing that reduces the deficit, nothing to balance the budget, nothing on responsible spending.

Its just another irresponsible Republican tax cut

You're right. Spending has to stop. Number 6 & 7 will help with that. Congress can balance the budget anytime they want; they just need the balls and the will to make the hard choices.

Stimulating the economy means jobs and that means more tax revenue.

Lowering the corporate tax rate brings foriegn companies to America instead of American companies to foriegn countries.

Rich people don't have to make money. They can sit back and enjoy life with no income at all, so, they don't pay tax at all. Eliminate capitol gains tax and they will invest their fortunes and thus, stimulate our economy.

This bill has it right, first things first, get the economy working.

You bought all that "Tinkle down" crap didn't you?

If you want true economic freedom then balance the freaking budget. No tax cuts without equivalent cuts in spending.

I'd hazard a guess that "Trickle Down" economics is at least as effective as Obama's "Flood the Basement" economics.

I will agree with... well, no, I disagree with your second statement. Economic Freedom will not come with balancing the budget. Economic freedom will come when there is a significant surplus to the budget. In other words, we are paying down the debt.

I'd be for tax increases with freezes to spending or better yet cuts to spending. As for where those cuts should be, I've got my own opinions but there are people who know better than I do and they should be the ones that make those choice rather than I.

Unfortunately cutting expenses won't happen because too many people don't want to cut their "pet projects".

Immie

 

[Immanuel]

hear ye, hear ye! the bill also proposes:

8) Sale of all TARP stock/asset warrants within a year of enactment.

the bill also includes a provision to require sale of all tarp stock assets within a year of its action. the problem with this, of course, is that a government sell-off of GM positions, for example, may put the taxed at a loss on the same. it may degrade the stock as well, with sales being mandated, rather than driven by demand, and where the sales affect an increase in supply.

one thing about republican legislation is that it can be read in a jiffy. even in committee, a democratic bill would stretch round the block, only to grow by leaps thereafter.

this one is light in the pants, awaiting some grand 'ol earmark ballast, no doubt.

the bill

Democrats' bills are long because they cross all the t's and dot all the i's, cross-reference everything to avoid loopholes. Yet they're highly criticized for being thorough. Go figure.

Democrat bills are long because they try to tackle too much at one time.

Immie

 

[Immanuel]

Y'know. If Harry and Nancy can RAHM through a 2,700 plus page bill nobody has read in a short amount of time, there is no reason why some clearly drafted common sense government financial reforms cannot be expedited.

The Real Financial Reform we need is in Government, not Wall Street. If we properly reform government, the ability for Wall Street to be ensured form risk with Taxpayer money will be eliminated (cuz that is the problem with them).

Oh bulloney!

This right here:

common sense

precludes it from passing.

By the way, I wouldn't vote for the bill either. We need spending cuts not tax cuts. I'd rather have my taxes go up and spending come down rather than vice versa even if it could be proven that lower taxes would stimulate the economy because that would be a very slow process.

Immie

 

[Foxfyre]

Y'know. If Harry and Nancy can RAHM through a 2,700 plus page bill nobody has read in a short amount of time, there is no reason why some clearly drafted common sense government financial reforms cannot be expedited.

The Real Financial Reform we need is in Government, not Wall Street. If we properly reform government, the ability for Wall Street to be ensured form risk with Taxpayer money will be eliminated (cuz that is the problem with them).

Oh bulloney!

This right here:

common sense

precludes it from passing.

By the way, I wouldn't vote for the bill either. We need spending cuts not tax cuts. I'd rather have my taxes go up and spending come down rather than vice versa even if it could be proven that lower taxes would stimulate the economy because that would be a very slow process.

Immie

Don't you think Nos 7 & 8 of the summary in the OP would be enough of a good start on spending cuts?

6) Repeal the "stimulus" spending (except for unemployment benefits and the tax cuts).

7) Terminate the TARP program.

We're talking close to a trillian dollars right there.

 

[Immanuel]

Y'know. If Harry and Nancy can RAHM through a 2,700 plus page bill nobody has read in a short amount of time, there is no reason why some clearly drafted common sense government financial reforms cannot be expedited.

The Real Financial Reform we need is in Government, not Wall Street. If we properly reform government, the ability for Wall Street to be ensured form risk with Taxpayer money will be eliminated (cuz that is the problem with them).

Oh bulloney!

This right here:



precludes it from passing.

By the way, I wouldn't vote for the bill either. We need spending cuts not tax cuts. I'd rather have my taxes go up and spending come down rather than vice versa even if it could be proven that lower taxes would stimulate the economy because that would be a very slow process.

Immie

Don't you think Nos 7 & 8 of the summary in the OP would be enough of a good start on spending cuts?

6) Repeal the "stimulus" spending (except for unemployment benefits and the tax cuts).

7) Terminate the TARP program.

We're talking close to a trillian dollars right there.

Might put a dent in it, but not going to happen.

Besides, if you believe what you hear, then TARP is actually making the government money.. of course, I will believe that when I see it coming from an independent auditor rather than out of the lips of a politician or the media.

Immie

 

[The Rabbi]

Total strawman argument. No one said the entire blame belongs to Fan/Fred.
The entire blame does belong to the Fed, which kept rates too low too long and made wild lending profitable in the short term.
But Fan/Fred were among the most closely regulated entities in the mortgage business and they failed. So how will more regulation stop anything like this again??

Fannie and Freddie were only one component of the whole, but they were part of the process to start the avalanche.

The problem started with a well intentioned bill in the Carter Administration - the CRA - that provided the necessary controls for responsible management of a program to help lower income Americans buy homes. Nobody can argue that home ownership is an important factor in economic stability, better schools, lower crime rates, a better quality of life, etc. But the CRA did not promote making loans to people who had no ability or track record for paying for them.

It took subsequent Congresses and Administrations to use the CRA as an excuse for some unwise deregulation and emphasis that bypassed the built in protections in the CRA and opened the door to government graft, corruption, and irresponsible financial acitivity. And because the economy was booming through much of the Clinton and Bush 43 years, our fearless leaders turned a blind eye to the deveoping housing bubble that had to burst sooner or later and all the wildly speculative and irresponsible packaging of those loans going on in the financial sector. When the whistle was blown--President Bush blew it repeatedly--the GOP was reluctant to upset the positive economic trends. After the Democrats took over, the likes of Barney Frank or Christ Dodd would go on camera to reassure us that all was well and there was no serious problem there.

The housing bubble burst and the whole house of cards built around it came tumbling down.

And here we are.

The Obama administration and current Congress have done absolutely nothing to correct the problems that caused it. They have pointed accusing fingers at everything and everybody except the actual cause and culprits.

We need different people as our elected leaders.

Largely the issue was that too low interest rates made lending too profitable. When you run out of qualified customers you re-define qualified to include more people. With rising asset values that sounds like a good strategy because you can always get your money back.
When values start to fall as loans default then you get a crisis like we've just had. Then people complain about credit quality, although previously they had complained that criteria were too tight.
The Obama Administration is simply trying to re-inflate those values by subsidizing home loans. That is pouring kerosene on the fire.
As for being good, there was a study by an economist (I think her PhD thesis) that came to the conclusion that home ownership was largely a negative for working class people as it tied them to an area so they couldn't go elsewhere if they got laid off.

 

[Foxfyre]

Total strawman argument. No one said the entire blame belongs to Fan/Fred.
The entire blame does belong to the Fed, which kept rates too low too long and made wild lending profitable in the short term.
But Fan/Fred were among the most closely regulated entities in the mortgage business and they failed. So how will more regulation stop anything like this again??

Fannie and Freddie were only one component of the whole, but they were part of the process to start the avalanche.

The problem started with a well intentioned bill in the Carter Administration - the CRA - that provided the necessary controls for responsible management of a program to help lower income Americans buy homes. Nobody can argue that home ownership is an important factor in economic stability, better schools, lower crime rates, a better quality of life, etc. But the CRA did not promote making loans to people who had no ability or track record for paying for them.

It took subsequent Congresses and Administrations to use the CRA as an excuse for some unwise deregulation and emphasis that bypassed the built in protections in the CRA and opened the door to government graft, corruption, and irresponsible financial acitivity. And because the economy was booming through much of the Clinton and Bush 43 years, our fearless leaders turned a blind eye to the deveoping housing bubble that had to burst sooner or later and all the wildly speculative and irresponsible packaging of those loans going on in the financial sector. When the whistle was blown--President Bush blew it repeatedly--the GOP was reluctant to upset the positive economic trends. After the Democrats took over, the likes of Barney Frank or Christ Dodd would go on camera to reassure us that all was well and there was no serious problem there.

The housing bubble burst and the whole house of cards built around it came tumbling down.

And here we are.

The Obama administration and current Congress have done absolutely nothing to correct the problems that caused it. They have pointed accusing fingers at everything and everybody except the actual cause and culprits.

We need different people as our elected leaders.

Largely the issue was that too low interest rates made lending too profitable. When you run out of qualified customers you re-define qualified to include more people. With rising asset values that sounds like a good strategy because you can always get your money back.
When values start to fall as loans default then you get a crisis like we've just had. Then people complain about credit quality, although previously they had complained that criteria were too tight.
The Obama Administration is simply trying to re-inflate those values by subsidizing home loans. That is pouring kerosene on the fire.
As for being good, there was a study by an economist (I think her PhD thesis) that came to the conclusion that home ownership was largely a negative for working class people as it tied them to an area so they couldn't go elsewhere if they got laid off.

Spot on except for the thesis discouraging home ownership. That sounds to me like somebody desperate to come up with something new and different to pass muster as a Dissertation.

Every believable economist I've ever read says for sure don't buy a house if you're short term where you are. But for the long haul, home ownership is a highly desirable goal for all the aesthetic reasons--more pleasant surroundings, better schools, lower crime rates, more stable economy--but also responsibly acquired real estate which will almost always increase in value as you build equity should be in everybody's long range portfolio.

Those heavily in debt or on the edge of homelessness paycheck to paycheck of course have no business buying a home, and it was once pretty impossible to get a loan in such circumstances. It was irresponsible of the government to make it possible for them to do so.

 

[The Rabbi]

The thesis was pretty well researched and from what I read in the reviews made an excellent case. Pushing homeownership on working class people is doing them a disservice. This just seems to be the empirical evidence.
Ask all the auto workers in Detroit how it's working out for them.

 

[Foxfyre]

The thesis was pretty well researched and from what I read in the reviews made an excellent case. Pushing homeownership on working class people is doing them a disservice. This just seems to be the empirical evidence.
Ask all the auto workers in Detroit how it's working out for them.

Most of those who make a reasonable down payment and used common sense in price, location, and resale appeal don't get seriously hurt. Our house lost a substantial amount of value and our equity was reduced when the housing bubble burst, but it didn't lose all of it. And in the past, when we were not able to sell immediately when we needed to relocate, we had enough financial cushion to make the extra payments until we could find a buyer. One time we made double house payments for a whole year before a house finally sold. Did that reduce our profit? Sure. Did it create an impossible financial crisis for us? No. And we are definitely working class--probably closer to the bottom than the top.

All the auto workers in Detroit are not tied to their houses. If they have no jobs they will default on their mortgages anyway and will be out of house and home anyway. So what difference does it make if they live there and default or if they go elsewhere and find work and default? We all have to live somewhere and most of us have to either make mortgage payments or pay rent.

Most people are far better off financially because they do own their homes than they would be if they did not. And those who own their homes also enjoy all those aesthetic benefits previously stated, many of which simply won't exist, if we discourage or do away with home ownership as the norm.

 

[The Rabbi]

The study didnt deal with "most people" but with working-class people. They seem to have been sold a bill of goods on this for the most part.

 

[momonkey]

"Fool me once, shame on you.....fool me twice, shame on me"

How many times do you think we will fall for this "Cut taxes on the rich to create jobs" bullshit?

We bought the Republican line, we gave them the White House and Congress to show us how their economic theory would work.

The rich kept the money and got richer and sent the jobs overseas

"Today we take a major step toward China's entry into the World Trade Organization and a major step toward answering some of the central challenges of this new century," Clinton said in a bipartisan White House ceremony Tuesday afternoon.

"Trade with China will not only extend our nation's unprecedented economic growth, it offers us a chance to help shape the future of the world's most prosperous nation and to reaffirm our own global leadership for peace and prosperity."

Clinton signs China trade bill, - October 10, 2000


I believe that NAFTA will create 200,000 American jobs in
the first two years of its effect. I believe if you look at the
trends -- and President Bush and I were talking about it this morning
-- starting about the time he was elected president, over one-third of
our economic growth, and in some years over one-half of our net new
jobs came directly from exports. And on average, those export-related
jobs paid much higher than jobs that had no connection to exports.


I believe that NAFTA will create a million jobs in the
first five years of its impact. And I believe that that is many more
jobs than will be lost, as inevitably some will be as always happens
when you open up the mix to a new range of competition.

President Clinton Signing NAFTA


Bill Clinton gave China permanent most favored nation trading status and signed NAFTA into law Sept 14 1993 when Democrats controlled the entire federal government.

Yup, all Clinton's fault. Of course NAFTA was in the works way back to George H.W. Bush's administration, but hey, the Bushies are pure as driven snow. Ironically, Bush's own congress finally had to put the kibosh on his fast-tracking additional trade agreements with every country south of Mexico. China, on the other hand, needs our business as much as we need their credit, so it's a wash.

Democrats gave us NAFTA.

Democrats were in control of the entire government when Clinton signed it.

 

[Foxfyre]

The study didnt deal with "most people" but with working-class people. They seem to have been sold a bill of goods on this for the most part.

Whatever. As I said, I AM working class people. And my experience as well as that of almost all my friends, relatives, neighbors, and many associates, also all working class people, has been quite different as is the advice of believable economists that I have read. My experience is probably more dramatic than most as we are now living in our 19th house. (We've moved a lot and have never EVER had financial assistance from anybody to unload real estate or obtain new housing.)

There was once we were told on Thursday to report to our new job in a different state on Monday. We managed.

Now you can latch onto the opinion of a college student writing a disseration that flies in the face of all that other evidence if you want to.

But I don't think it is me that is being sold a bill of goods.

 

[MaggieMae]

Total strawman argument. No one said the entire blame belongs to Fan/Fred.
The entire blame does belong to the Fed, which kept rates too low too long and made wild lending profitable in the short term.
But Fan/Fred were among the most closely regulated entities in the mortgage business and they failed. So how will more regulation stop anything like this again??

Fannie and Freddie were only one component of the whole, but they were part of the process to start the avalanche.

The problem started with a well intentioned bill in the Carter Administration - the CRA - that provided the necessary controls for responsible management of a program to help lower income Americans buy homes. Nobody can argue that home ownership is an important factor in economic stability, better schools, lower crime rates, a better quality of life, etc. But the CRA did not promote making loans to people who had no ability or track record for paying for them.

It took subsequent Congresses and Administrations to use the CRA as an excuse for some unwise deregulation and emphasis that bypassed the built in protections in the CRA and opened the door to government graft, corruption, and irresponsible financial acitivity. And because the economy was booming through much of the Clinton and Bush 43 years, our fearless leaders turned a blind eye to the deveoping housing bubble that had to burst sooner or later and all the wildly speculative and irresponsible packaging of those loans going on in the financial sector. When the whistle was blown--President Bush blew it repeatedly--the GOP was reluctant to upset the positive economic trends. After the Democrats took over, the likes of Barney Frank or Christ Dodd would go on camera to reassure us that all was well and there was no serious problem there.

The housing bubble burst and the whole house of cards built around it came tumbling down.

And here we are.

The Obama administration and current Congress have done absolutely nothing to correct the problems that caused it. They have pointed accusing fingers at everything and everybody except the actual cause and culprits.

We need different people as our elected leaders.

You always do quite well with your explanations, until you get to the part where you want to blame everything on Obama and the Democrats, as in your last paragraph and your all-inclusive wording used in your other posts. To say that the OA and current Congress "have done absolutely nothing" is patently absurd. A financial reform bill has already passed the House, and the Senate is finally in full debate over their bill.

But I give up. For anyone truly interested in what is being critiqued against what is actually IN the bill being debated, this is an easy read and you can make up your own minds:

Wall Street's Talking Points, Now Available in Memo Form | The White House

 

[Foxfyre]

Total strawman argument. No one said the entire blame belongs to Fan/Fred.
The entire blame does belong to the Fed, which kept rates too low too long and made wild lending profitable in the short term.
But Fan/Fred were among the most closely regulated entities in the mortgage business and they failed. So how will more regulation stop anything like this again??

Fannie and Freddie were only one component of the whole, but they were part of the process to start the avalanche.

The problem started with a well intentioned bill in the Carter Administration - the CRA - that provided the necessary controls for responsible management of a program to help lower income Americans buy homes. Nobody can argue that home ownership is an important factor in economic stability, better schools, lower crime rates, a better quality of life, etc. But the CRA did not promote making loans to people who had no ability or track record for paying for them.

It took subsequent Congresses and Administrations to use the CRA as an excuse for some unwise deregulation and emphasis that bypassed the built in protections in the CRA and opened the door to government graft, corruption, and irresponsible financial acitivity. And because the economy was booming through much of the Clinton and Bush 43 years, our fearless leaders turned a blind eye to the deveoping housing bubble that had to burst sooner or later and all the wildly speculative and irresponsible packaging of those loans going on in the financial sector. When the whistle was blown--President Bush blew it repeatedly--the GOP was reluctant to upset the positive economic trends. After the Democrats took over, the likes of Barney Frank or Christ Dodd would go on camera to reassure us that all was well and there was no serious problem there.

The housing bubble burst and the whole house of cards built around it came tumbling down.

And here we are.

The Obama administration and current Congress have done absolutely nothing to correct the problems that caused it. They have pointed accusing fingers at everything and everybody except the actual cause and culprits.

We need different people as our elected leaders.

You always do quite well with your explanations, until you get to the part where you want to blame everything on Obama and the Democrats, as in your last paragraph and your all-inclusive wording used in your other posts. To say that the OA and current Congress "have done absolutely nothing" is patently absurd. A financial reform bill has already passed the House, and the Senate is finally in full debate over their bill.

But I give up. For anyone truly interested in what is being critiqued against what is actually IN the bill being debated, this is an easy read and you can make up your own minds:

Wall Street's Talking Points, Now Available in Memo Form | The White House

Perhaps you can show me where your link to a White House propaganda talking points link mentions that the CRA will never again to used as an excuse to encourage, nay even force, Fannie, Freddie, or any lending institution to make unsecured risky loans with little or no down payment to people with no track record of financial accountability or responsibility? Perhaps you can show me where banks and other lending institutions will be prohibited from bundling bad loans with a few good ones to sell to unsuspecting recipients? Perhaps you can show me where anybody will be allowed to risk their depositors money in high risk speculative derivatives/hedge funds? Perhaps you can show me where banks and lending institutions will be held to high standards of accountability and responsibility or their depositors money will be transferred to a responsible institution and their FDIC insurance will be revoked? Perhaps you can show me where TARP money will not be further used to rescue anybody who behaves irresponsibly and nobody will be deemed too big to fail?

I didn't see any of that in your link, but I could have overlooked it.

But those were the problems that brought down the house of cards.

I look forward to elected leaders who will actually address them instead of fixing something else and then boasting that they've solved the problem.

But yeah, you give up Maggie. It's so much easier to put blind faith in people who don't deserve it than it is to admit that they don't have a clue what they are doing or, if they do, they are being deliberately dishonest.

 

[MaggieMae]

Fannie and Freddie were only one component of the whole, but they were part of the process to start the avalanche.

The problem started with a well intentioned bill in the Carter Administration - the CRA - that provided the necessary controls for responsible management of a program to help lower income Americans buy homes. Nobody can argue that home ownership is an important factor in economic stability, better schools, lower crime rates, a better quality of life, etc. But the CRA did not promote making loans to people who had no ability or track record for paying for them.

It took subsequent Congresses and Administrations to use the CRA as an excuse for some unwise deregulation and emphasis that bypassed the built in protections in the CRA and opened the door to government graft, corruption, and irresponsible financial acitivity. And because the economy was booming through much of the Clinton and Bush 43 years, our fearless leaders turned a blind eye to the deveoping housing bubble that had to burst sooner or later and all the wildly speculative and irresponsible packaging of those loans going on in the financial sector. When the whistle was blown--President Bush blew it repeatedly--the GOP was reluctant to upset the positive economic trends. After the Democrats took over, the likes of Barney Frank or Christ Dodd would go on camera to reassure us that all was well and there was no serious problem there.

The housing bubble burst and the whole house of cards built around it came tumbling down.

And here we are.

The Obama administration and current Congress have done absolutely nothing to correct the problems that caused it. They have pointed accusing fingers at everything and everybody except the actual cause and culprits.

We need different people as our elected leaders.

Largely the issue was that too low interest rates made lending too profitable. When you run out of qualified customers you re-define qualified to include more people. With rising asset values that sounds like a good strategy because you can always get your money back.
When values start to fall as loans default then you get a crisis like we've just had. Then people complain about credit quality, although previously they had complained that criteria were too tight.
The Obama Administration is simply trying to re-inflate those values by subsidizing home loans. That is pouring kerosene on the fire.
As for being good, there was a study by an economist (I think her PhD thesis) that came to the conclusion that home ownership was largely a negative for working class people as it tied them to an area so they couldn't go elsewhere if they got laid off.

Spot on except for the thesis discouraging home ownership. That sounds to me like somebody desperate to come up with something new and different to pass muster as a Dissertation.

Every believable economist I've ever read says for sure don't buy a house if you're short term where you are. But for the long haul, home ownership is a highly desirable goal for all the aesthetic reasons--more pleasant surroundings, better schools, lower crime rates, more stable economy--but also responsibly acquired real estate which will almost always increase in value as you build equity should be in everybody's long range portfolio.

Those heavily in debt or on the edge of homelessness paycheck to paycheck of course have no business buying a home, and it was once pretty impossible to get a loan in such circumstances. It was irresponsible of the government to make it possible for them to do so.

Blame the victims of mortgage scams; blame the Feds; blame low interest rates; blame Fannie & Freddie; blame the Democrats; blame Obama; blame ANYBODY but this guy:

Bush seeks to increase minority homeownership
By Thomas A. Fogarty, USA TODAY
01/20/04

In a bid to boost minority homeownership, President Bush will ask Congress for authority to eliminate the down-payment requirement for Federal Housing Administration loans.
In announcing the plan Monday at a home builders show in Las Vegas, Federal Housing Commissioner John Weicher called the proposal the "most significant FHA initiative in more than a decade." It would lead to 150,000 first-time owners annually, he said.

Nothing-down options are available on the private mortgage market, but, in general, they require the borrower to have pristine credit. Bush's proposed change would extend the nothing-down option to borrowers with blemished credit.

The FHA isn't a direct lender, but guarantees loan payments for mortgages on moderately priced owner-occupied property. The FHA guarantee now permits private lenders to finance as much as 97% of the purchase price of a home for millions of low- and middle-income borrowers.

In the proposal soon to be delivered to Congress, Bush would allow the FHA to guarantee loans for the full purchase price of the home, plus down-payment costs. As a practical matter, the FHA would guarantee mortgages as high as 103% of the value of the underlying property.

Weicher says the change is aimed at potential home buyers whose credit excludes them from the private mortgage market. Borrowers would need sufficient income to meet monthly payments. But, he said, the plan would eliminate the single largest impediment to homeownership for millions of households — lack of money for a down payment.

The most recent government figures show a national home ownership rate of 68.4%, the highest ever. But less than half of black and Latino householders own the home in which they live. Bush has a goal of 5.5 million new minority homeowners this decade.

FHA loans carry higher risks of delinquency and foreclosure than do private mortgages, and the proposed change presumably will lead to greater losses to the government than the current program does.

Weicher said the added risk will be offset by higher fees charged to borrowers who opt to make no down payment.

On a $100,000 mortgage with an interest rate of about 6%, the nothing-down borrower could expect closing costs $750 higher than other FHA customers. Monthly house payments would be slightly higher.

Mortgage analyst Keith Gumbinger of financial publishers HSH Associates says the Bush plan "would fill at least a small niche in the mortgage market" — first-time buyers with somewhat impaired credit.

More...
USATODAY.com - Bush seeks to increase minority homeownership

 

[Foxfyre]

Largely the issue was that too low interest rates made lending too profitable. When you run out of qualified customers you re-define qualified to include more people. With rising asset values that sounds like a good strategy because you can always get your money back.
When values start to fall as loans default then you get a crisis like we've just had. Then people complain about credit quality, although previously they had complained that criteria were too tight.
The Obama Administration is simply trying to re-inflate those values by subsidizing home loans. That is pouring kerosene on the fire.
As for being good, there was a study by an economist (I think her PhD thesis) that came to the conclusion that home ownership was largely a negative for working class people as it tied them to an area so they couldn't go elsewhere if they got laid off.

Spot on except for the thesis discouraging home ownership. That sounds to me like somebody desperate to come up with something new and different to pass muster as a Dissertation.

Every believable economist I've ever read says for sure don't buy a house if you're short term where you are. But for the long haul, home ownership is a highly desirable goal for all the aesthetic reasons--more pleasant surroundings, better schools, lower crime rates, more stable economy--but also responsibly acquired real estate which will almost always increase in value as you build equity should be in everybody's long range portfolio.

Those heavily in debt or on the edge of homelessness paycheck to paycheck of course have no business buying a home, and it was once pretty impossible to get a loan in such circumstances. It was irresponsible of the government to make it possible for them to do so.

Blame the victims of mortgage scams; blame the Feds; blame low interest rates; blame Fannie & Freddie; blame the Democrats; blame Obama; blame ANYBODY but this guy:

Bush seeks to increase minority homeownership
By Thomas A. Fogarty, USA TODAY
01/20/04

In a bid to boost minority homeownership, President Bush will ask Congress for authority to eliminate the down-payment requirement for Federal Housing Administration loans.
In announcing the plan Monday at a home builders show in Las Vegas, Federal Housing Commissioner John Weicher called the proposal the "most significant FHA initiative in more than a decade." It would lead to 150,000 first-time owners annually, he said.

Nothing-down options are available on the private mortgage market, but, in general, they require the borrower to have pristine credit. Bush's proposed change would extend the nothing-down option to borrowers with blemished credit.

The FHA isn't a direct lender, but guarantees loan payments for mortgages on moderately priced owner-occupied property. The FHA guarantee now permits private lenders to finance as much as 97% of the purchase price of a home for millions of low- and middle-income borrowers.

In the proposal soon to be delivered to Congress, Bush would allow the FHA to guarantee loans for the full purchase price of the home, plus down-payment costs. As a practical matter, the FHA would guarantee mortgages as high as 103% of the value of the underlying property.

Weicher says the change is aimed at potential home buyers whose credit excludes them from the private mortgage market. Borrowers would need sufficient income to meet monthly payments. But, he said, the plan would eliminate the single largest impediment to homeownership for millions of households — lack of money for a down payment.

The most recent government figures show a national home ownership rate of 68.4%, the highest ever. But less than half of black and Latino householders own the home in which they live. Bush has a goal of 5.5 million new minority homeowners this decade.

FHA loans carry higher risks of delinquency and foreclosure than do private mortgages, and the proposed change presumably will lead to greater losses to the government than the current program does.

Weicher said the added risk will be offset by higher fees charged to borrowers who opt to make no down payment.

On a $100,000 mortgage with an interest rate of about 6%, the nothing-down borrower could expect closing costs $750 higher than other FHA customers. Monthly house payments would be slightly higher.

Mortgage analyst Keith Gumbinger of financial publishers HSH Associates says the Bush plan "would fill at least a small niche in the mortgage market" — first-time buyers with somewhat impaired credit.

More...
USATODAY.com - Bush seeks to increase minority homeownership

All that is very nice and might even be true. Certainly it illustrates some of the reasons of how we got into the current mess and some of the criticisms we conservatives had with the former President.

But what does it have to do with the questions I asked?

President Bush isn't President now. He can't do a damn thing, right or wrong, about anything now.

The current government and the current administration can.

Why aren't they?