Obama/Biden vs. McCain/Palin

[MasterKiller]

So that's $120 billion a year causing a 'mess'. What do you think Obama's $800 billion NEW spending will cause?

I get choked out from time to time. It happens when you train.

1. Obama is going to lower taxes for most Americans
2. Lower taxes increases revenues

What's the problem?

[1bad65]

Your post quoting Ron Paul implied that the Community Reinvestment Act was one of the prime reasons for the current subprime mess. And you said above that you think the CRA "got the ball rolling." bodhitree clearly blamed the CRA. I posted evidence that would contradict that. You implied that what I posted consisted of "op-ed pieces by liberals." Yet when I asked you which were liberal op-eds, you did not answer. Why is that? Are they liberal op-ed pieces? If not, would you care to address the points made in them?

You're not too bad. The others are, quite frankly, ridiculous in how they conduct themselves. Sorry.

Like I said, I think the CRA is what really got the ball rolling on risky lending. Which banks it affects, which ones it doesnt, and how many loans are moot. The point is that the Government has FORCED private sector companies to make risky business decisions. And that is wrong, period. No matter in what quantity. One is too many.

[BoulderDawg]

I was pitched one. I declined. And I'm rich.

Well excuse the hell out of me Rockefeller. It must be hard slumming on this board with all of us working folk.

[1bad65]

Causing? nope.
Helping? Yes.
There was a surplus before the wars remember?

Please rephrase your first two. I'm unsure what you mean.

Clinton massively cut the military and intelligence budgets. After 9/11 anyone with a brain could see that was a pretty stupid thing to do.

[1bad65]

1. Obama is going to lower taxes for most Americans
2. Lower taxes increases revenues

What's the problem?

Ok, fair enough.

First off Obama always says how tax cuts COST money. So he disagrees with your premise.

Lower taxes on those who are employing people, venture capitalists, and entreprenuers are the main way tax cuts raise money brought in. You see, now they have more money to expand or start a new business to employ more people who will in turn pay taxes on their income. Raising taxes on those people dries up venture capital, it lowers the bottom lines, and it makes it harder to expand an existing business. That stymies job creation. It often results in layoffs to offset the new taxes. So their are less people paying income taxes.

[1bad65]

Well excuse the hell out of me Rockefeller. It must be hard slumming on this board with all of us working folk.

I was actually being a smartass. As I make over $35k/yr I am rich according to Bill Clinton.

As Obama will only raise taxes on 'the rich', I'm fairly sure I be re-affirmed as rich if he wins the election and thus raises my taxes. FYI, I make a good bit under $250k/yr.

[Reality_Check]

The rich pay alot in taxes. Too much, IMO. And I'm not by any standards, except Bill Clinton's, as I make more than $35k/yr.

I don't even make $75k a year period!

I was pitched one. I declined. And I'm rich.

This would appear to be contradictory. [Edit - I see you were being tongue in cheek]

[Reality_Check]

You're not too bad. The others are, quite frankly, ridiculous in how they conduct themselves. Sorry.

Like I said, I think the CRA is what really got the ball rolling on risky lending. Which banks it affects, which ones it doesnt, and how many loans are moot. The point is that the Government has FORCED private sector companies to make risky business decisions. And that is wrong, period. No matter in what quantity. One is too many.

I understand you think the CRA got the ball rolling. However, there are no studies to support that assertion. There is no evidence that the CRA forced the banks to make risky business decisions (and please note the CRA only applies to banks, not the entire private sector). As such, your premise would appear to be unsupportable.

[1bad65]

I understand you think the CRA got the ball rolling. However, there are no studies to support that assertion. There is no evidence that the CRA forced the banks to make risky business decisions (and please note the CRA only applies to banks, not the entire private sector). As such, your premise would appear to be unsupportable.

Try reading this:

http://www.nypost.com/seven/02052008...911.htm?page=0

[Reality_Check]

Try reading this:

http://www.nypost.com/seven/02052008...911.htm?page=0

Interesting read. Unfortunately, he does not back up his assertions with evidence. And by evidence, I mean links to actual studies, etc.

[1bad65]

Interesting read. Unfortunately, he does not back up his assertions with evidence. And by evidence, I mean links to actual studies, etc.

I admit it is an op-ed. There are guys who say the CRA was the root and those who say it had little to no bearing on the crisis. Just thought it was a good read.

I'm curious, and you are level-headed: What do you think caused this mess? What solution(s) would you recommend?

[1bad65]

1. Obama is going to lower taxes for most Americans

Are you willing to bet on that?

[Reality_Check]

I admit it is an op-ed. There are guys who say the CRA was the root and those who say it had little to no bearing on the crisis. Just thought it was a good read.

I'm curious, and you are level-headed: What do you think caused this mess? What solution(s) would you recommend?

Please note, I'm not saying that the CRA had no impact. I'm just reserving judgement because I have yet to see hard numbers showing it.

I think with low interest rates, there was plenty of money to "throw around." Lenders had no incentive to not lend money. I agree with you that some people should have used common sense when buying their homes. If a deal seems to good to be true, it probably is. For example, I bought a condo 5 years ago, before this was even a blip on the horizon. I chose a 30 year fixed interest rate. The reason I did so was because I felt rates were going to go up and an ARM would not be in my best interest.

On the other side, I have two friends (both MBAs) who went with adjustable rate mortgages (in 2003 and before). One told me he did so because he had seen studies showing that most people stay in their first home for only 5 years. Since his rate was not due to adjust until the 5th year, it seemed like a good plan. That is until he got married and had a kid. Fortunately, he was able to refinance, though it did cost him. The other one felt it was better for him to have to put less money down, and pay less per month (until the adjustment). That way he could invest the money and use the return to refinance when needed. Unfortunately, the stock market didn't play along. How many people thought in a similar fashion to them?

Yes, many people bought above themselves. Either to live above their means or to flip for a profit. When the real estate market tanked, they were in trouble.

Though, I also think a lot of people without the financial savvy to know better, were taken advantage of by predatory lenders. So, they were talked into ARMs, interest-only loans and whatnot.

Just to give you an example, Coutrywide (since they were mentioned in your link they seemed like a good example to use) had a rate of return between 1982 and 2003 of 23,000% (http://money.cnn.com/magazines/fortu...9151/index.htm). That rate of return was due to their ability to get big gains in their earnings. Since they didn't acquire anything or inject a lot of capital. They made their money by writing mortgages and selling them to investors. They had no real incentive to be a prudent lender, not if they wanted to keep that kind of return going.

It's a huge and complex problem, and I'm not sure anyone truly understands it.

As for a solution, I'm really not sure. It seems that most people view this as a liquidity problem. I don't really agree with that. There is money out there, it's just that no one wants to lend it to anyone else. I think this is due to the fact that no one really knows where the bad assets (for lack of a better term) are. No one is willing to trust the counterparty in a loan, so they are hoarding the funds.

I don't think the $700 billion bailout that failed today was the silver bullet. This is actually a very good read: http://www.rgemonitor.com/roubini-mo...itors_of_banks. If this is accurate, then we have a long way to go before this is resolved.

[BoulderDawg]

Well the US finally found a way to F over the entire world!! I just heard the Australian stock market is shooting down the tubes...so I guess next in line is Japan and who know what tomorrow will bring! Another great legacy of the Bush Admin.

Hey saturday Sarah Palin is going to be in Denver....I can go eat breakfast with her for $2,500....or have a personal meet and great for $25,000! Is there anyone out there that wants to pay my way...of course by that time she may very well be gone. Now that I think about it I believe they will use "Troopergate" as the excuse.

[1bad65]

They made their money by writing mortgages and selling them to investors. They had no real incentive to be a prudent lender, not if they wanted to keep that kind of return going.

Again, it was stupitity that caused this. Those stupid investors paid good money for a bunch of junk.

It's a huge and complex problem, and I'm not sure anyone truly understands it.

It is complex. Did you check out the 'subprime primer' link I posted a few days ago? It's funny as hell, but does give a pretty good idea of how this mess happened.