Taxes that the Liberal can understand

[Myxalplyx]

Originally Posted by TomsSVX

Solution... STOP LIVING BEYOND YOUR MEANS!!

Who in the hell told a single income family make 40k a year that they could afford a $400k home?

Don't drive a $60k car when you make $40k a year

If living within your means dictates that you live in poverty, you need to reassess your income situation and work at doing better.

I can only do this for myself, I can only vote for people who share my beliefs and morals. If the rest of society wants to live foolishly and vote for whomever is giving out the most handouts... What am I to do about it?

Tom

Good point Tom and this makes sense. So, if people were to live within their means, we would not be in the situation that we are in now right? The housing situation which helped put the U.S. economy into a recession I mean.

So who's to blame? The people who took advantage of the loans for houses, purchased high priced cars, overcharging on credit cards and can't pay on them, etc. Or do you blame the institutions that knew these people can not afford the high priced car or house with the loan they got and can't really keep up payments on those said credit cards, loans, etc?

People on both sides are greedy....the borrowers who gain material benefit and the loaners who's making a ton of money off fees, high interest rates, etc. Should we chill and hope this gets better as people on both sides continue to be greedy or allow some institution (The Gov't for example) to put rules in place (Regulation) to stop these practices.? See what I'm getting at.

It's easy to add regulation to companies and such to stop this from happening on both ends but over-regulating would be heading to the Socialist side of things. Heck, people gov't shouldn't get involved at all.

So.....how do we stop people AND the institutions from the greed that puts us in this situation in the first place? Without regulation or interference from the Gov't? In a free market economy, I honestly do not know. More deregulation will make things even worse.

[TomsSVX]

You can place blame on the people who offered the loans or those who said they could do it. When it comes down to it, it is really the buyer's fault for not understanding better what they were getting into. It is high time the people in this country starting taking responsibility for their own actions

Tom

[Subie59]

The buyers in this case were told that if they bought the house with no money down they could turn around and sell it in a couple of years and pocket $100,000 or whatever the house went up in value. And this worked for a number of years. A lot of people paid literally nothing for their homes, paid only interest and in some cases not even that, and sold them for a tidy profit. Problem is, when the housing market crashed, they were left holding homes that were severely overpriced. So they walk away from the debts.
The real problem is that they are allowed to walk away from their debts and leave the problem with the banks.
In Canada you can't walk away as easily, and you would never get the loans if you did not qualify. So there is a need to be more cautious from the get go.
In the US credit WAS too easy to get and debt too easy to walk away from. This was a major reason for the economic meltdown.
The economic meltdown happened on Bush's watch.(not that it was all his fault). Obama's administration has been forced to go to extreme measures to deal with the economic problems they inherited. I'm sure they would prefer not to have to bail out banks, automakers etc. But in case you don't know it, your economy was on the brink of disaster and about to screw up the world economy.
Most would argue Obama had no choice accept do what he did. Similar to Bush when the US was attacked on 9/11 he did what he felt had to do. Not everyone agreed and still don't to this day.

[Myxalplyx]

Originally Posted by TomsSVX

You can place blame on the people who offered the loans or those who said they could do it. When it comes down to it, it is really the buyer's fault for not understanding better what they were getting into. It is high time the people in this country starting taking responsibility for their own actions

Tom

This is the beauty of this country. You can actually go about taking responsibility for your action. Why complain about the other people? If you truly believe these 'other' people are getting over, you can actually be the 'other' people too. It is a win-win situation for you. If you are smart enough and good at business, you can actually become rich or at least wealthy and be those 'other' people. You can do nothing and try to live off of government assistance and be those 'other' people. You can choose!

So what's all the fuss about?

[BoxerFanatic]

Originally Posted by Myxalplyx

This is the beauty of this country. You can actually go about taking responsibility for your action. Why complain about the other people? If you truly believe these 'other' people are getting over, you can actually be the 'other' people too. It is a win-win situation for you. If you are smart enough and good at business, you can actually become rich or at least wealthy and be those 'other' people. You can do nothing and try to live off of government assistance and be those 'other' people. You can choose!

So what's all the fuss about?

So, let me get this straight...

Borrowing more than you can afford to pay back, and not understanding the terms of what happens in that case... is just a relative mistake?

What happened was that ACORN pressured banks from the outside, and the Justice department pressured on the basis of the Community Reinvestment Act, and Fannie/Freddie as government backed corporation "hybrids", offered to foot the bill, and buy the loans...

So the banks, not wanting trouble with ACORN, or the federal government, did it. They made it easy, and took their pound of flesh with balloon payments, and other sub-prime mechanisms.

Then Fannie and Freddie bought up the mortgages, bundled good with bad to try to average out the risk... and re-sold them to investment banks and retirement funds, and everyone else in the open market... as a mortgage-backed security, touting how it was a real-estate based vehicle, and real-estate is a solid investment.

But then people started not paying. And defaulting lead to foreclosure rates increasing.

All of the sudden now, people are out of houses, and out of money... no equity left, and a glut of properties with few or no buyers.

So the over-supply tanked the market price of real estate, so now the houses are worth less than the outstanding balances, which doesn't matter much anyway, because the debts are no longer being serviced at all anyway.

Oh, and gee Fannie and Freddie can't afford to buy out everyone, because the price of their bundled securities went through the floor, as well... and anyone left holding those took a BATH.

Lehman Brothers, AIG insurance invested in those securities, Citibank, Bank of America... all had to mark their mortgage backed securities down to the deflated price of those worthless securities... and it took them all to the cleaners.

Who is going to lend operating capital to them now? Oh, the FED can do it. Just declare yourself a bank, and come to the FED teller window, and get your operating loans... to try to stay afloat.

But where does the FED get the money? they didn't raise revenues by raising interest rates... they were near ZERO. They PRINTED it. right out of thin air.

Now they've destroyed credit ratings, and flooded the market with a glut of cash, and the real people on the ground, still have now-deflated dollars, and some still have taken their bath, or are taking their bath in the lost equity of their homes.

That credit crisis ripped through the economy, as other companies tried to get operating capital, but credit was shut down. so they dialed WAY back, a few companies even to the point of bankruptcy... like GM and Chrysler that were having trouble before, and couldn't withstand the public's demand for cars slowing way down.

So tell me again, how honest people who DON'T game the system should just pull up to the bar, and get theirs, and perpetuate a system that CRASHED because it was unsustainable in the first place.

If the government hadn't pushed for banks to blow their credit by lending to people who did not qualify... this economic crash might have just been a touch-and-go landing and take-off again, when the market automatically corrects itself.

The more screwing around that tries to flout the market, the harder the market reacts to try to restore balance. Equal and opposite reaction, so to speak.

And the fact is, all of this government induced screwing around, and bail outs... has all been financed on future taxable income. Not just the next few years... but the next few GENERATIONS. I don't think the credit debacle was worth that, do you?

[Zandar]

I was thinking about it, and the title to this thread is very misleading. Tom broke down the fundamentals of taxes in a very clear, concise, correct way. This is decidedly not "Taxes that the Liberal can understand." With that said, let me amend your post to be the actual process of taxation that Liberals understand:

1. Taxes. The rich pay them. Really, they're just paying back a small portion of the money they have wrongfully appropriated from the working masses and minorities.

2. Where does the money go? To people who need most. You know, "To each according to his need, from each according to his ability."

3. If the government runs a program, bailout, or stimulus package, and the people doing it have a "D" next to their name, they're just doing the right thing. If you disagree, you're probably just bitter that slavery ended. Racist.

4. Where does the money come from? THE RICH(see pt. 1) or the national debt because George Bush spent too much money buying up Korans to wipe his mouth with after he finished gorging himself on the flesh of dead Palestinian babies.

5. National Debt. This is the measure of how awesome our government is. The higher, the better. Unless Bush makes it higher; then it's stealing from our children's children (especially minority children and the children of same sex parents) to fund worldwide genocide. And oil. And steak, because red meat is gross and closed minded.

[TomsSVX]

Originally Posted by Myxalplyx

This is the beauty of this country. You can actually go about taking responsibility for your action. Why complain about the other people? If you truly believe these 'other' people are getting over, you can actually be the 'other' people too. It is a win-win situation for you. If you are smart enough and good at business, you can actually become rich or at least wealthy and be those 'other' people. You can do nothing and try to live off of government assistance and be those 'other' people. You can choose!

So what's all the fuss about?

Ethics, morals, a sense of being a contributing member of society? I know you are playing devils advocate here

Tom

[Landshark]

Originally Posted by TomsSVX

When it comes down to it, it is really the buyer's fault for not understanding better what they were getting into. It is high time the people in this country starting taking responsibility for their own actions

Tom

this.

we were pre-approved for $400,000 to get a house. some dumb ****s would probably take that loan, buy a house they can't afford, then wonder where things went wrong and try to blame someone else.

YOU CAN"T AFFORD IT.

you wanna flip a house? that is a GAMBLE. do you feel lucky?

[dcarrb]

Originally Posted by Landshark

some dumb ****s would probably take that loan, buy a house they can't afford, then wonder where things went wrong and try to blame someone else.

So in this scenario, who's more stupid, the borrower, or the lender?

My bank sold my mortgage before the ink on the closing papers dried. I'm sure they would have loaned me double. What did they care, when they knew going in they were going to pawn the risk off on someone else?

Yeah, it's foolish to not know one's borrowing limits, but it's reckless for banks to be throwing around money at high risk for only a short-term gain.

dcb

[BoxerFanatic]

Originally Posted by dcarrb

So in this scenario, who's more stupid, the borrower, or the lender?

My bank sold my mortgage before the ink on the closing papers dried. I'm sure they would have loaned me double. What did they care, when they knew going in they were going to pawn the risk off on someone else?

Yeah, it's foolish to not know one's borrowing limits, but it's reckless for banks to be throwing around money at high risk for only a short-term gain.

dcb

Agreed. and Banks are not wearing white hats in all of this.

But there was pressure brought to bear, from community activists, and from government programs for "Affordable housing".

Banks were not just willy-nilly throwing caution to the wind, because prudence is over-rated. Bankers know about risk, and how to try and measure it. There were other forces at play, and they over-rode risk assessment.

[TomsSVX]

Originally Posted by BoxerFanatic

Agreed. and Banks are not wearing white hats in all of this.

But there was pressure brought to bear, from community activists, and from government programs for "Affordable housing".

Banks were not just willy-nilly throwing caution to the wind, because prudence is over-rated. Bankers know about risk, and how to try and measure it. There were other forces at play, and they over-rode risk assessment.

Banks are out to make money. Plain and simple. They don't care how you have to get it... Doesn't change the fact that they own your house until you pay off every dime

Tom

[lhopp77]

All of you finger pointers on the housing loan crisis. Does anyone remember these hearings from earlier when the Republicans tried to get a handle on the problem and the Democrats blocked it??? I bet you don't.

http://www.youtube.com/watch?v=_MGT_cSi7Rs

Lee

[dcarrb]

Okay, for the sake of discussion: It's all the Democrats' fault, for allegedly enabling the unwashed masses to buy houses they could never hope to afford. None of this would have ever happened had the beleaguered, saintly Republicans had their way.

There. This doesn't change the fate that many banks and financial institutions had until recently been on a feeding frenzy that most now admit they knew to be unsustainable. They just couldn't stop engorging themselves while the gettin' was good.

And let me add that I'm just a dumb middle-aged Georgia cracker living in a sagging bungalow in a tired Appalachian mining town, not a likely candidate for any sort of preferential treatment at the behest of left-wing political louts. I've never applied for assistance of any sort and never defaulted on anything.

Wait... I did apply for a modest FEMA loan (not grant, loan) once, in the wake of hurricane Opal in the mid-90s. Declined. (I blame Clinton.)

dcb

[svxthc]

Tom,

Just because banks are out to make money doesn't mean that the entire economy will collapse due to that fact. Obama might like to think so. I agree with the guy with the chopper in his avatar. The government caused all this, and wants to broker the rest of the deal and take their finder's fee. I'm sick of this bull**** which is nothing more than the rape of us and our progeny and their progeny all in the time it took Nancy Pelosi to sit on Obama's lap in the oval office.

[Cam]

We shall all be in debt until the federal reserve is abolished. We need to go back to the gold standard. People don't realize that EVERY dollar circulated is printed by the Federal Reserve, who charges interest on every penny...

WHERE THE **** DOES THIS INTEREST COME FROM IF THE MONEY DOES NOT EXIST YET? AND THE ONLY WAY TO OBTAIN THE MONEY TO PAY THE INTEREST IS TO GET IT FROM THE FEDERAL RESERVE WHO CHARGES MORE INTEREST!?

If every single person in the U.S. payed off their debt then NOBODY would have even a PENNY, and we would all owe interest! Just one more thing the government has screwed up. I am moving out of this country when the opportunity presents itself (have my eyes set on New Zealand).

With all this globalization thats occuring (which is ignorant, IMHO) who knows if New Zealand economy will be worth getting involved in. There was a time when one country would just die out...but now everyone is in bed with someone who is in bed with somebody else. Our poor spending is destroying the WORLDS economy. Not to mention the destruction we are creating in the middle east that we are rebuilding with OUR OWN companies.
The perfect business plan...