I'm sure there's a million reasons this wouldn't work (not that it'd ever get a chance but.......................
What if instead of the 840 BILLION (and counting, many in the treasury/banking industry say it will to 3 TRILLION before we're done) we are using to bail out the financial industry in America (and abroad) because of bad home. car and credit card loans. How 'bout the feds send EVERY LEGAL U.S. CITIZEN a check for 1 MILLION DOLLARS, with the stipulation you MUST use it to pay off your mortage balance (if it's over a million you must use a portion of your dependents check, if you have any) and the balance MUST be used to pay off credit card and auto loans. I know, you say it will lead to "hyper inflation" (at least thats what the banks will tell you) and if you consider that the banks make 90% of their money (interest) on the "front end" of loans, so on 99% of the outstanding loans, they've already made their proffit, and all the $ it would put in their portfolios to loan again to hapless consumers. Think about it, for probably less than what the true cost will be, we "bail out" homeowners, banks and the stock market by injecting capital in the BOTTOM of the equation rather than the top. Dont'cha think that would give the economy a kick in the pants? Just daydreaming, but whadaya think?
-Rocky-
__________________
ROCKYMT
Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows not victory nor defeat."
I think simple mathematics won't allow that to happen! Let's say we only gave $1,000,000 to our favorite 100,000,000 Americans. How much money is that?
George Bush has been willing to spend our tax money on every idea that's crossed his desk, but even he might understand we don't have that kind of money to throw around.
One thing that immediately struck me as a solution, but has never been discussed that I know about is to make it more desirable to continue to pay on your upside-down home. This would greatly enhance the value of these marginal loans and thus remove the cash crunch issue so many banks are having.
Currently you can deduct 100% of your mortgage interest on your taxes. What if you could claim a tax deduction on 66% and a tax credit on the other 33%? Or as an alternative, perhaps you could claim a tax credit for the interest up to 5% of your adjusted gross income? Give this to everyone though up to a certain income level where it is phased out, perhaps $150k for a single, $300k jointly.
What this would do is make it advantageous to work harder to continue to pay your mortgage. Basically an incentive for personal repsonsibility.
For example, a family whose adjusted gross is $100k could claim a $5k tax credit. Let's say they have a $250k mortgage and the payment is $1500/month (interest would be about $13k/year on a new loan). That $5k credit would be a little over $400/month to help pay their mortgage the next year. That might be the difference between keeping and losing a house.
This of course would reduce revenue by a considerable amount. Some cuts in spending would be inevitable. The question is whether it would be better to keep people in their homes, even if they are struggling, or provide services for them when they are homeless. Which is more expensive?
Location: Los Angeles, CA, USA, Los Angeles, CA, USA
Posts: 1,743
Quote:
Originally Posted by sburns2421
The question is whether it would be better to keep people in their homes, even if they are struggling, or provide services for them when they are homeless. Which is more expensive?
What happened to you guys? I thought Republicans are against a government safety net...
I guess that goes out the window when it’s your ass out on the street.
Having people put out of their homes is bad for the economy as well as for society. Without a vested interest in their home/neighborhood/schools the inevetable result is bad for EVERYONE. Home OWNERS (as opposed to tennants) will spend more on their home, keep it in better shape (spending more $ on local goods and services) and take a more active part in the direction their community moves. I don't think anyone is avvocating "bailing out" anyone, more of a "hand up" rather than a "hand out". Although there is a percentage of current homeowners who had NO BUSINESS getting a loan of any type.......
-Rocky-
__________________
ROCKYMT
Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows not victory nor defeat."
I'm sure there's a million reasons this wouldn't work (not that it'd ever get a chance but.......................
What if instead of the 840 BILLION (and counting, many in the treasury/banking industry say it will to 3 TRILLION before we're done) we are using to bail out the financial industry in America (and abroad) because of bad home. car and credit card loans. How 'bout the feds send EVERY LEGAL U.S. CITIZEN a check for 1 MILLION DOLLARS, with the stipulation you MUST use it to pay off your mortage balance (if it's over a million you must use a portion of your dependents check, if you have any) and the balance MUST be used to pay off credit card and auto loans. I know, you say it will lead to "hyper inflation" (at least thats what the banks will tell you) and if you consider that the banks make 90% of their money (interest) on the "front end" of loans, so on 99% of the outstanding loans, they've already made their proffit, and all the $ it would put in their portfolios to loan again to hapless consumers. Think about it, for probably less than what the true cost will be, we "bail out" homeowners, banks and the stock market by injecting capital in the BOTTOM of the equation rather than the top. Dont'cha think that would give the economy a kick in the pants? Just daydreaming, but whadaya think?
-Rocky-
Where would that leave the responsible people who didn't get a loan they couldn't afford and buy a house that was way overpriced?
With a shitload of discretionary income to by cool toys.....
-Rocky-
__________________
ROCKYMT
Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows not victory nor defeat."
What happened to you guys? I thought Republicans are against a government safety net...
I guess that goes out the window when it’s your ass out on the street.
I usually vote Republican, but that doesn't make me one. I would like to think that I support what is best for the country as whole most of the time.
I personally will be fine during this difficult time. My job, and my wife's job, are relatively recession-proof. This is an issue that affects families supporting both parties and most income levels. IMO, better to remove the source of the crisis than bail out the banks which will only do it again within the next 15 years or so.
But I thought the whole meltdown was only Fannie and Freddie??? If you believe that only first time home buyers are the cause of this credit crisis, you are retarded! Oh and I have a lovely Bridge I would like to sell you!!!
__________________
"Your out of your element Donnie"
But I thought the whole meltdown was only Fannie and Freddie??? If you believe that only first time home buyers are the cause of this credit crisis, you are retarded! Oh and I have a lovely Bridge I would like to sell you!!!
Really? Where does this "lovely bridge" go to?
Quote:
I usually vote Republican, but that doesn't make me one.
Really, If people getting home loans(mandated by democrat legislation) who had no possible way to pay them back(including up to 5 million illegals) didn't cause this, what did???
Matthew
Quote:
Originally Posted by dabyabby
But I thought the whole meltdown was only Fannie and Freddie??? If you believe that only first time home buyers are the cause of this credit crisis, you are retarded! Oh and I have a lovely Bridge I would like to sell you!!!
Really, If people getting home loans(mandated by democrat legislation) who had no possible way to pay them back(including up to 5 million illegals) didn't cause this, what did???
Matthew
+1,000,000!
Gee ya think you could follow the line to Bill (puke!) Clinton, Barney (fag) Frank, and all the other top 20 recipiants of $ from Fannie & Freddie (Hussein, Biden Billary, Pelosi etc) Don't take my word for it LOOK UP THE FACTS!
-Rocky-
__________________
ROCKYMT
Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows not victory nor defeat."
Location: Los Angeles, CA, USA, Los Angeles, CA, USA
Posts: 1,743
Quote:
Originally Posted by mtmansl
Really, If people getting home loans(mandated by democrat legislation) who had no possible way to pay them back(including up to 5 million illegals) didn't cause this, what did???
Matthew
I'm sorry, I understand the anger but this really is getting ridiculous. Banks were forced to make bad loans by the government and then Fanny and Freddie bought them from the banks, freeing them up to make more bad loans and that’s what caused this? There might be an ACORN of truth to this, but I think I’m going to call bullshit.
You are talking about the CRA (Community Reinvestment Act) right? That’s what caused the whole mess we are in? I thought the CRA only pertains to depository institutions (http://www.federalreserve.gov/dcca/cra/) and where does it say these banks are required to make bad loans?
A lot of the bad loans were made by non-CRA covered institutions (i.e. investment banks), anyone remember Bear Stearns? What part of the CRA forced them to leverage 35 to 1? Bear Stearns bought and re-packaged and sold packaged crap loans(and some good ones as well), that in no way is the blame of the government, after all they de-regulated the market in 2000 which means that in this case you can blame the free market for this fiasco… you can also blame greed if you are so inclined. How about Lehman Bros, what part of the CRA mandated borrowing billions in short term debt to buy commercial real estate? How about AIG and their brilliant investments in Credit-Default-Swaps what democrat legislation mandated that?
+1,000,000!
Gee ya think you could follow the line to Bill (puke!) Clinton, Barney (fag) Frank, and all the other top 20 recipiants of $ from Fannie & Freddie (Hussein, Biden Billary, Pelosi etc) Don't take my word for it LOOK UP THE FACTS!
-Rocky-
With a shitload of discretionary income to by cool toys.....
-Rocky-
And still unable to afford a house without an unsustainable loan, because the market would still be artificially inflated -- which, BTW, would just "pop" even harder later, causing an even worse recession than now. Also, the hyperinflation caused by all that $$$ released into our system would quickly make my discretionary income worthless. I know you doubt its reality but just look at what's going on in Zimbabwe right now or click on the link above to see other historical occurrences. The more our government stays out of this right now the better. Hell, the Dept of Housing and Urban Development's pushing of their "house the poor" utopia is a huge part of the reason we're in this mess in the first place.
I'm sorry, I understand the anger but this really is getting ridiculous. Banks were forced to make bad loans by the government and then Fanny and Freddie bought them from the banks, freeing them up to make more bad loans and that’s what caused this? There might be an ACORN of truth to this, but I think I’m going to call bullshit.
You are talking about the CRA (Community Reinvestment Act) right? That’s what caused the whole mess we are in? I thought the CRA only pertains to depository institutions (http://www.federalreserve.gov/dcca/cra/) and where does it say these banks are required to make bad loans?
A lot of the bad loans were made by non-CRA covered institutions (i.e. investment banks), anyone remember Bear Stearns? What part of the CRA forced them to leverage 35 to 1? Bear Stearns bought and re-packaged and sold packaged crap loans(and some good ones as well), that in no way is the blame of the government, after all they de-regulated the market in 2000 which means that in this case you can blame the free market for this fiasco… you can also blame greed if you are so inclined. How about Lehman Bros, what part of the CRA mandated borrowing billions in short term debt to buy commercial real estate? How about AIG and their brilliant investments in Credit-Default-Swaps what democrat legislation mandated that?
Actually, the blame lies with HUD. They've been the regulators of Freddie and Fannie since 1992 and they pushed a "house the poor" agenda in 1999 that encouraged Freddie and Fannie to go after subprime loans. Soon after, they started buying up a great majority of the subprime securities in the stock market, creating an artificially high demand and spiking their prices. Once that happened everyone else started jumping on the bubble bandwagon. This is a perfect example of detached-from-reality utopian idealism resulting in hell-on-earth chaos and mayhem.
BTW, for those denying that the Dem's, namely, the Clinton administration, weren't the ones pulling the strings behind this mandate, here's a NY Times article from almost exactly 9 years ago. Read and learn. I'm sure our current results were not their intentions but incompetence / ignorance, be it deliberate or not, is no excuse for bad policy.
Location: Los Angeles, CA, USA, Los Angeles, CA, USA
Posts: 1,743
Quote:
Originally Posted by Mashuri
Actually, the blame lies with HUD. They've been the regulators of Freddie and Fannie since 1992 and they pushed a "house the poor" agenda in 1999 that encouraged Freddie and Fannie to go after subprime loans. Soon after, they started buying up a great majority of the subprime securities in the stock market, creating an artificially high demand and spiking their prices. Once that happened everyone else started jumping on the bubble bandwagon. This is a perfect example of detached-from-reality utopian idealism resulting in hell-on-earth chaos and mayhem.
Well...I'll call BBQ on you! It's more complicated than that and so is the Market dynamic .
For example, Wall Street had recently jumped into the market for risky mortgages. Firms like Bear Stearns, Lehman Brothers and Goldman Sachs had started bundling home loans and selling them to investors — bypassing Fannie and dealing with Countrywide directly.
“You’re becoming irrelevant,” Mr. Mozilo told [Fannie CEO] Mr. Mudd, according to two people with knowledge of the meeting who requested anonymity because the talks were confidential. In the previous year, Fannie had already lost 56 percent of its loan-reselling business to Wall Street and other competitors.
“You need us more than we need you,” Mr. Mozilo said, “and if you don’t take these loans, you’ll find you can lose much more.”
A Novel Idea To Solve The Meltdown...
If you believe that only first time home buyers are the cause of this credit crisis
Oh and I have a lovely Bridge I would like to sell you!!!
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