It's Not Only Moral To Help Your Neighbor, It's Smart

From one of the interesting links that Pamsm posted:

“86% of American adults identified as Christians in 1990 and 76% in 2008”.

“Based on their stated beliefs rather than their religious identification in 2008, 70% of Americans believe in a personal God, roughly 12% of Americans are atheist (no God) or agnostic (unknowable or unsure), and another 12% are deistic (a higher power but no personal God)”.

“The challenge to Christianity in the U.S. does not come from other religions but rather from a rejection of all forms of organized religion”.

“The only group that grew in every U.S. state since the 2001 survey was people saying they had "no" religion; the survey says this group is now 15 percent of the population. Silk said this group is likely responsible for the shrinking percentage of Christians in the United States”.

Slightly off topic - a couple of interesting stories in today's WaPo:

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/08/AR2009030801967.html?hpid=topnews

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/09/AR2009030901458.html?hpid=topnews?hpid=artslot

Tim/Comment,

Raising the tax rate on those in the 35% bracket is to accomplish one of two things: increase the flow of funds into the federal government or as a matter of public policy.

*If* raising the tax rate, under President Obama, is necessary to offset $15 billion being newly spent to bring broadband to rural areas, I would vote for leaving the tax rate as is and finding another revenue stream to support the broadband initiative.

Globalone

What do you think money is? You do not seem to know. Do think that government has any role at all in the valuation of money? Or is it just a "natural" result of Capitalism?

The Answer to present crisis is : Islamic Economic System: 1. Interest free economy. 2. No income tax 3. 2.5% annual tax on accomulated wealth, tobe spend on the poors.

Try to guage the economic slavery and mental distress which everyone of you have to expreience due to present lending system by financial institutions - who make you slim to become fat themselves.

Globalone,

You: “How about we leave tax rates unchanged and eliminate SPENDING instead”.

JUSTACOMMENT: “Sounds like you are proposing two solutions, but I´m not sure for what problems.”

You: “Tax rates were lowered for *everybody* - not just the rich. I believe Bush's tax cuts also moved almost 50% of the population into the "I'm not paying any taxes" bracket.”

I´m still wondering what is the problem you expect to solve. We don´t know what problem actually solved Bush but we do know that the rich became ultra more rich, even if 40% of the income earners paid no taxes (not 50% and not population as you posted). As you should know, lowering or not lowering taxes is a fiscal measure that should produce targeted results. By saying how about we leave the taxes unchanged, what exactly is the problem you expect the country is going to solve?

You also dismiss voters as irrational -obviously you probably are not a voter or you are a notable exception.

Then you go to dismiss the people for not having a clue, which make one think that you are not part of the people or you are part of the very few in this country that are well informed. Yea, it is like saying don´t pay attention to we the people.

Global, we know you are a very busy person with a life outside these discussions in the blog, but please don´t let us wondering what problem you want to solve with not changing the tax rates.

Globalone,

You answered other points from my post but not that one, and it is an important one. It is illuminating.

What is the negative effect of a slight tax increase on rich people.
Or are you one of these who does not characterize $250,000 per year for one person as "rich"?

What is the negative effect of a slight tax increase on someone making more than $250,000 per year? What might they have to give up? When you start to answer this question, the argument sounds really pathetic.

Globalone,
If 40% pay no taxes, that must mean that 40% (or close to it) are below the poverty level. Something to be proud of, eh?

You might find this interesting:
http://www.askquestions.org/articles/taxes/

Fredneck,

"These folks scream “socialism” (they don't know what it means, though), as soon as somebody wants to install an ever so slight responsibility towards one's fellow humans"

What did *I* say that makes you believe that?

Globalone,

Sorry, but the Heritage Foundation, being a conservative group, is not reliable. Only figures from the IRS or other government group can be considered. I do appreciate your efforts, but let's both try to get neutral info when possible.

Arminius,

I was able to dig up the following information from the Heritage Foundation website.

* In 2000, the top 60 percent of taxpayers paid 100 percent of all income taxes. The bottom 40 percent collectively paid no income taxes.

* from 2000 to 2004, the share of all individual income taxes paid by the bottom 40 per­cent dropped from zero percent to –4 percent, mean­ing that the average family in those quintiles received a subsidy from the IRS.

Globalone,

"I believe Bush's tax cuts also moved almost 50% of the population into the "I'm not paying any taxes" bracket."

I'd love to see a reference to that. Sounds like a pontification of His Holiness, the Supreme Illustrious Potentate of All Conservatives, Rushbo(PBUH).

Timmy,

"Then I asked Globalone to explain how this tax increase will affect those in the top 5% income bracket? He could not answer"

FYI: I'm not trolling the "On Faith" boards 24 hours/day. I have a life outside these discussions, thanks.

Justacomment,

"The first solution you propose is to leave tax rates unchanged. This is a good solution for the ultra rich people to get super ultra mega rich"

That's not a response. Tax rates were lowered for *everybody* - not just the rich. I believe Bush's tax cuts also moved almost 50% of the population into the "I'm not paying any taxes" bracket.

"the voters sided with the solution of changing to fairer tax rates"

Please. Voters side with the solution that lowers *their* taxes. As I've mentioned before, when it comes to raising taxes or implementing new ones, people act irrationally. Voters will b*tch and moan about their schools, roads, and bridges and then turn around and veto any tax increase to cover the costs.

"The polls indicate that in spite that the economic recession is worst than though, the great majority still is with the new administration on the stimulus and the proposed budget"

Are you serious? There is no chance, *None*, that most people have a clue as to what is contained in the stimulus package. Sure, they might know the items that will directly affect them and they can probably regurgitate whatever Senora Pelosi or Sean Hannity tell them, but that's it.

Timmy says:
"I want to know how it will affect their lives?"

Maybe Paris Hilton will have to hire a cheaper publicist...?

The conservative party line seems to be that it would "disincentivize" the wealthy, who would then fail to start new businesses, which could employ people.

Never mind that under the current plan, they would just go back to the tax rate they paid under Clinton, when business was booming. I didn't see any of them packing up and shipping out in those days.

Hoover used the same word - "disincentivize" - when he refused any aid for millions out of work. As though they wouldn't have tried as hard to find a job if someone had given them a few dollars to eat on.

This is why they called the tent cities that they lived in "Hoovervilles."

All aid was denied for the remainder of Hoover's presidency, which is why the people loved Roosevelt so much that they voted him in three times.

Globalone says to me, it's easy for people to suggest a tax that does not effect them.

Then I asked Globalone to explain how this tax increase will affect those in the top 5% income bracket?

He could not answer.

My suggestions were things like, one less fur coat, putting off the reno on the 4th home on the cape, or slowing the growth rate on their luxury automobile collection?

I want to know how it will affect their lives?
I want Globalone to answer.
Because answering this question might open his eyes to reality.

Of course the alternative to raising taxes would be for the CEO's of these companies to take less grotesque salaries and pay their employees a little more money so they can afford proper homes and food and health care.

Globalone and his ilk remind me of the guy who smokes in bed, burns down his and his neighbors’ houses, and when somebody gives him a new house, albeit a little smaller, the first thing he does is smoke in bed, claiming it to be is “unalienable, constitutional” right.

I am almost surprised that Pamsm tries to discuss seriously with somebody obviously struck with an incurable learning inhibition. These folks scream “socialism” (they don't know what it means, though), as soon as somebody wants to install an ever so slight responsibility towards one's fellow humans. The cream on this mentality cake is the “Christian” claim, for laughing out loud. In their limited grasp of reality, they don’t even realize that their own well-being depends to a high degree on the well-being of their neighbors, of their society!

The mere mention that they live in a “soci”ety provokes already the “socialist” knee jerk reaction. They would be nothing without all the benefits their society offers them, the society they think they can afford to scorn. You don’t live on the globe alone (sorry, couldn’t resist)!

Globalone, you wrote:

“How about we leave tax rates unchanged and eliminate SPENDING instead”.

Sounds like you are proposing two solutions, but I´m not sure for what problems.

The first solution you propose is to leave tax rates unchanged. This is a good solution for the ultra rich people to get super ultra mega rich. MaCain could not sell this solution, the voters sided with the solution of changing to fairer tax rates. The polls indicate that in spite that the economic recession is worst than though, the great majority still is with the new administration on the stimulus and the proposed budget.

The second solution you propose is to eliminate spending. An important part of the stimulus plan is precisely to increase selected expending items that make a lot of sense or are insignificant within the global picture. Read Pamsm and Arminius comments on this. But the plan also calls for reducing costs, for example in health care, military, tax breaks for the rich and others.

To me it doesn´t look like a 30 seconds solution.

Globalone,
I can’t speak to all of the items on your list without research, but the ones I know about sure seem like legitimate expenditures to me, and they aren’t pork, they’re actual budget items:

1) Pell grants are for higher education for people who can’t otherwise afford it, and the amounts are adjusted according to need. Bush cut the funds for Pell grants. How is contributing to an educated populace bad?

2) I believe this is part of the stimulus.

3) I don’t know anything about this one.

4) The idea is to encourage people to weatherize their homes to save energy. How is this bad?

5) Improving the information superhighway. No different from stringing telephone wire a century ago.

6) This is about digitizing medical records – this will save a great deal of money and time over the long haul, and will make us all safer.

7) Not sure what “extra” means, but we do have to have a census.

8) The government is co-opting the airwaves that have long carried analog signals for its own use. It’s only fair that people be helped to make the switch.

9) You want to see the Smithsonian close its doors?? What a dreadful loss that would be!

10) Improving IT can only help the FSA do its job more efficiently. Again, how is this bad?

Personally, I’d much rather see the super rich part with some of their pocket change (especially since so many pay nothing because of creative accountants and tax loopholes) than to give up any of these things.

Arminius,

So to hear about your situation. You must be one of those that if luck bites them in the ass it's poor luck.

But, then again, at least SS helps a little bit. I am trying for retirement at age 56. Will basically be making about 15 % of what I earned in the job market. What a joke. If you ever come to Montana, check for the Wal-Mart gretter named Gaby.

Good luck to you!

Globalone,

Your list of earmarks, just under $48B, is chump change in the general picture. Sure, most of them are generally useless. But earmarks are a fixture of American politics, since members of Congress are supposed to get $$$ for their constituents. Unfortunately, it has, in the past 8 years, increased by a factor of 4 or so and is out of control - can we all say 'Neocons'?. Yes, they must be reigned in, but they are not a major factor when we are talking about trillions.

Hi, Gaby,

I, too, was road kill on the job highway. The only thing that saved me was turning 65 and getting social security. Bankruptcy and foreclosure also helped, although painful. But things are still difficult.

I wish the best for you - gute gluck - is that sorta Deutch? Been a long time...

Jed,

"We are not sticking it to them; it just happens that they are the only ones who can solve the problem"

That would be true if we were given 30 seconds to come up with a solution. Fortunately, we have more time than that.

How about we leave tax rates unchanged and eliminate SPENDING instead:

(1) $17.1 billion for "increase in Pell grant to $5,350 in 2009 and $5,550 in 2010"

(2) $14.2 billion for "one time payments of $250 for retirees, disabled people, SSI recipients, railroad retirees, and disabled veterans"

(3) $5.1 billion for "bonus depreciation of property" for businesses.

(4) $5.0 billion for "Home weatherization grants to low and middle-income families"

(5) $2.5 billion for "broadband grants to rural communities"

(6) $2.0 billion for "extra money for Office of the National Coordinator for Health Information Technology"

(7) $1.0 billion for "extra money for Census"

(8) $0.6 billion for "coupons, education, and consumer support for digital to analog converter box program"

(9) $75 million for the "Smithsonian Institution"

(10) $50 million for "salaries for staff to modernize IT system at Farm Service Agency"

Hi Arminius,

Glad to see you are still around. I once again am Gaby (albeit Gaby1). Been around as Nevermore53 on a different computer.

I have become another American casualty in the job market. No longer working at this time, but hoping to score something up eventually.

Anyone want to hire a 56-year old German (naturalized American) with an accent and lots of ideas????

Hope all is well with you my friend!

Gaby

PAMSM:

I wish I could be as optimistic as you are. Yes, our tax laws are a quagmire, but my honest opinion is that if we where to throw out the old and start new, it would get worse, not better.

Unfortunately, I have barely any trust left when it comes to our legislators. The trash that has surrounded them in the last 10 years, if not longer, has left me totally disillusioned.

Between the sexual dalliances, the lawmakers bought out by lobbyist, the illegal immigrant housekeepers and nannies, the tax evasions, the bring the pork home mentality, and the outright lying to the public has left me at a loss for words.

Is it just me, or do others feel the same? I vote, bacause it is my duty as a citizen, not because I am convinced to vote for the best candidate, but rather to mitigate the lesser of two evils.

It appears that most European countries don't have the same distrust and misgivings about their politicians. What is wrong with the American system at this time??

To be honest, I have never seen more deceptiveness in politics than in America. It appears that the minute our elected officials, now matter how sincere and honest they appear in their respective states, get to the sump of Washington DC, they lose all perspective and just become one of "them".

By the way, I live in Montana, but am a native of Germany and lived and worked in several overseas countries and states within the US. Including the District.

Regarding the flat tax of 15%, I did a bit of research. The cutoff point for tax year 2008 is, for a single person, taxable income of 36,500 - exactly 15%. So if this 15% flat tax is made law, all below that level - most of America - get screwed, and everybody above it - the better off, the well off, and the rich - get a free ride. And a majority of income taxes are now paid by those with higher income. Therefore revenue would take a thundering loss. The 15% flat tax benefits the rich, and screws the common guy. No wonder republicans love it.

Gaby,
If I were sure that they were in fact flouting the laws, it would tick me off, too. But our tax code is so ridiculously complicated that even the IRS doesn't stand by its own advice to people struggling to fill out their forms.

I can't be certain that these weren't honest mistakes.

I don't think that a non-progressive flat tax is the answer, but I think we could do worse than throwing out the entire code and building a new (and much simpler) one from scratch.

PAMSM:

you wrote:

"Money is power."

That may be so, but turn it around and say "Power is Money!"

How many of our beloved senators and congressmen have considered themselves aboe the very laws that they like to hold others responsible for??? Just think of the the few who had their nominations withdrawn by the Obama camp.

In all honesty, that disturbs me more than the rich not paying their fair share. If I am rich because I have no morals, and screw the system for every dime I can get, that is one thing.

If I am a lawmaker and flout the very laws that I have enacted that is another.

OK, I am swerving from the suject, but it is something that really ticks me off.

The flat tax, the church and the poor in medieval times:

The Lifestyle of Medieval Peasants (http://www.historylearningsite.co.uk/medieval_peasants.htm)

“The one thing the peasant had to do in Medieval England was to pay out money in taxes or rent. He had to pay rent for his land to his lord; he had to pay a tax to the church called a tithe. This was a tax on all of the farm produce he had produced in that year. A tithe was 10% of the value of what he had farmed. This may not seem a lot but it could make or break a peasant’s family. A peasant could pay in cash or in kind – seeds, equipment etc. Either ways, tithes were a deeply unpopular tax. The church collected so much produce from this tax, that it had to be stored in huge tithe barns. Some of these barns can still be seen today. There is a very large one in Maidstone, Kent, which now has a collection of carriages in it.

Peasants also had to work for free on church land. This was highly inconvenient as this time could have been used by the peasant to work on their own land. However, the power of the church was such that no-one dared break this rule as they had been taught from a very early age that God would see their sins and punish them.”

This one might be even more telling - financila satisfaction by country:
http://www.nationmaster.com/graph/lif_fin_sat-lifestyle-financial-satisfaction

Note that with the exception of the US, the countries on this list have high taxes and lots of social programs.

CCNL, see what can happen in many cases for the low income families using your flat tax:

A single parent with one son in middle school and one of college age makes $25,000: after paying a 15% flat tax and a rent of $600 they will be left with $390 a month per person in the household to pay for the rest of life necessities (health care, college, transportation, etc).

A similar single parent that makes a million: after paying the 15% flat tax and a mortgage of $5,000 a month they will have $21,944 a month per person in the household to pay for the rest of life necessities (luxuries?).

If still you think the flat tax is fair, it is your opinion, but my opinion and the opinion of the sensible majority of voters will tend to agree that the one million dollar parents can contribute more to fix our current nation problem.

WestTexan2008,
There is no censorship except for certain offensive words. It is more likely that your post was too long (length is limited).

You can get around this by breaking your post into parts and sending them separately.

Happiness by country:
http://www.nationmaster.com/graph/lif_hap_net-lifestyle-happiness-net

Globalone says:
"First, isn't the decrease for 95% of taxpayers being paid for with an increase to the other 5%?"

Partly. So? The rich have been making the laws to favor themselves for many years. Money is power. Time was when the head of company made about 40 times the wages of his average employee. Now he makes about 400 times that amount. Call it a correction.

GLOBALONE: "Second, giving refundable tax credits to people who don't pay any tax to begin with is not a tax decrease - it's called expanding welfare. (People in government might be too cowardly to use the correct terminology, but it is what it is.)"

Maybe I'm wrong, but I haven't heard of any plan to pay people who currently pay no taxes. Obama's plan is primarily aimed at helping the middle class.

Ms. Jacoby,

Thank you. By putting me on your "I must censor her comments" list, you have made my day.

I hope you'll read my last post - don't post it, just read it - and in all candor, I hope that you will go back to your piece and strengthen its original premise.

Should you find yourself in West Texas, let me extend the invitation to come sit on a Critical Thinking class or two. Most of my students are 20-somethings who are not afraid to challenge you, but yours is an opinion that they should hear.

I bid you good day and good luck.

CCNL,
You choose a small range for your example. Someone earning $15,000 would pay $2,250 under your 15% flat tax.

Someone earning $300 million would pay $45 mil.

Who do you think would be hurt more by the amount he paid?

WestTexan2008,

Who are you talking to?

I tell you that no current plan says *anything* about paying off anyone's mortgages or credit cards or paying CEO bonuses, nor has such a thing been proposed by anyone, and you reply with an argument about whether people really borrow from their parents to make the downpayment on their first home. (For the record, I borrowed it from my grandparents.)

Nothing in Susan's essay (whether or not you agree with any of it) ever implied the things you claimed (mortgage, cards, bonuses).

Susan Jacoby

Thanks to Jed Rothwell for pointing out that I never said that loans from parents were the primary means of raising money for down payments in America. My point was precisely that this means is much more common among the more affluent members of the middle class and the wealthy. It is an unearned advantage, you might say. It is, however a much more common practice than can be measured, because many real estate brokers encourage first-time buyers to conceal the fact that the down payment came from a family loan. Also, many first-time buyers who don't borrow money from their parents need parents as
co-signers of their loans. Neither my parents nor my grandparents were "rich," but they both came from a tradition in which parents helped their children if they were able to do so. My grandparents were among the millions of Americans who lost their homes in the Depression, and that made them even happier when they were able to lend my parents a small amount of money for a down payment in 1956. Decent people who've been through hard times react by wanting to help others. Selfish people react by wanting everyone else to have the same hard time. And by the way, I know that if my grandparents were alive today, they would be in favor of helping out people who are losing their homes not because they were greedy but because they've lost their jobs.

To CCNL, just let me add Timmy to the list of those who have given good explanation of why the concept behind Obama’s tax plan is fair. It is difficult to explain it more clearly.

What we need now is all the best republican, democrat and independent neurons to make it work.

CCNL, you wrote:
“Like I said, the flat tax works well in Pennsylvania and our kids are as well educated as those in any other state and we are not imploding the Chinese economy. Hmmm, and 15% of $50,000 is $7,500, of $100,000 is $15,000 and of $1,000,000 is $150,000. To me that is fair…”

That is you opinion and you have the right to have one. But the majority already gave its opinion voting for Obama plan. Susan, Jedrothwell, Pam et all have explained why the concept behind this plan is fairer. Some implementation details can be challenged, and in fact still are under discussion. But the voters already took a position.

Next time try to convince more than the 50% of the country to go with you.

Globalone,

Part two.

YOU: "I'm not rich by any stretch of the imagination, but sticking it to people who are because we want some free money is abhorrent"

Here we agree. That would be abhorrent But this is not what is happening.
No one is "sticking it" to anyone. We are, as a society, making a calculated decision to ask the grotesquely rich among us to chip in a little more of their millions to fix the mess caused by the actions of their fellow richies. And it's not because poor people "want free money". It is because our financial system, run by wall street and the banks, the richest people in the world, is failing and not sustainable.

I currently live in Canada, but I have been back and forth between here and the US for that past ten years or so. If I was currently living in the US I would be one who would be getting hit with a slight tax increase. And I would not begrudge it one bit. I have all of the comforts and necessities of life covered without a worry, and I can even afford certain luxuries in life that were, not too long ago in our history, reserved for only the super elite and Royal classes. What the hell do I have to complain about with a little tax increase when my fellow citizens are starving and losing their homes? Nothing. I'm just curious who the selfish greedy gluttons are who are complaining about being asked to kick in a few more dollars to shore up the economy that allowed them to become so comfortable and wealthy in the first place?

I find all of your characterizations on this situation to be either naive, or irresponsibly misleading.

No one is being asked to pay more taxes who will suffer a decrease in their comfort and ability to cover their necessities. They are only being asked for a pittance that will, at the very worst, decrease their luxury level by an insignificant smidgen.

What is "abhorrent" is the whining about it.

Globalone,

With regards to Scandinavian countries being happy healthy societies with low per capita crime rates, this comes from information I have read over the years of debating atheist/theist positions. Broader social safety nets also correlate with more atheistic societies. And yes there is a little personal experience involved in my statement, being from Canada. Canada is far less religious, slightly more socialistic, happier than Americans statistically, and has a far lower crime rate per capita.

YOU: "First, isn't the decrease for 95% of taxpayers being paid for with an increase to the other 5%?

Yes. Who on earth would have a problem with that? Those 5% are grotesquely rich and got that way because the system allowed them to, and continues to allow them to continue to be grotesquely rich, in spite of a slight increase in their taxes. Why should they complain? Why should you?

YOU: "Second, giving refundable tax credits to people who don't pay any tax to begin with is not a tax decrease - it's called expanding welfare"

And how many Americans does this apply to under the current plan?
And those to whom is does apply, are the poorest people in the country.
Are you against welfare?
Even rich people should not be against welfare. They don't want to be tripping over homeless peasants on the way home to their mansions.

YOU: "And as an aside, I find it unbelievably self-centered to discard a tax increase on "others" because it won't have any effect on "us"

No one is discarding it. This is your characterization only, and not reality. These decisions are not taken lightly and are scrutinized in every instance. And when you say that this tax increase will have an an "effect" on the those who will be hit by it, how so? Can you tell me the negative effect raising the taxes on grotesquely rich people will have on them? Are you lamenting the one less fur coat they will be able to afford now? Maybe they might have to put off those plans to renovate their 4th summer home on the cape? Maybe they will have to slow down the growth rate on their luxury car collection?

If Warren Buffet doesn't mind a tax increase, why should any other rich person? Warren Buffet just lost 50% of his wealth, and he's still in favor of raising his own taxes.

Like I said, the flat tax works well in Pennsylvania and our kids are as well educated as those in any other state and we are not imploding the Chinese economy.

Hmmm, and 15% of $50,000 is $7,500, of $100,000 is $15,000 and of $1,000,000 is $150,000. To me that is fair and it gives one the incentive for working harder and/or making wiser investments and/or being frugal. No one should get a free ride when it comes to taxes.

CCNL wrote:

"A flat tax with no deductions for charitable contributions or home interest payments is the better choice?? Works well in Pennsylvania!!!!

And we could cut the IRS staff by 75% and eliminate tax lawyers and tax "prep" firms."

You are confusing the effects of a flat tax with the effects of a simplified tax.

A simple graduated tax would reduce IRS staff. For example, we might charge 0%, 20% or 30% income, for income levels of $25,000, $100,000 or $200,000 and above, with no loopholes. This would reduce IRS staff as much as a flat tax of, say, 25% for all income levels would.

You could have a ruthlessly graduated tax, charging 10% to anyone below $100,000 and 90% for any income above this, with with no exceptions and no loopholes. You could make it very simple, with only a single page to report income. This would nearly eliminate the IRS. I think everyone agrees it would be immoral. In my opinion, a flat tax is equally immoral. Taking 25% of both rich and poor people's income is as bad as talking 90% of a wealthy person's income.

I think we should take somewhat more from wealthy people because they do not suffer as much when we take their money. They do not need the money as much. Luxury is less important than necessity. How much more we take is debatable.

If you favor a very simple flat tax then perhaps you should consider a sure-fire way to implement it: print money. Inflation takes from everyone at the same rate, including people on fixed incomes who make barely enough to survive. It taxes the Chinese and other foreigners who have lent us money. It does not require an IRS or any reporting. It effectively reduces the national debt. How about it? Do you see anything wrong with burdening the whole of society equally? Morally, it works the same as a flat tax. It was Lenin's favorite method of collecting taxes, since it had the added benefit (from his point of view) that it destroyed the middle class in particular, preventing them from getting an education, for example. The flat tax would also have this effect.

Helping our neighbor does not include preparing

the next injection of illicit drugs.

The big bad mean ole world does not owe you

a thing.

Wise up and then grow up.

WestTexan2008 wrote:

"In her third paragraph, she tells her story - she received help from her parents to buy her apartment, so did many of her circle of friends, and so she assumes that was the primary way (she calls it the real "American Way") to get a house."

She never said this is the primary way. It is widespread among upper middle class and wealthy people, but they are not the majority.

"In one of her responses she claims that (only) government, vice charity, through more taxation is big enough to carry out her call for egalitarian justice. There are two assumptions there: first, the obvious, that only government can do what she says needs to be done - as opposed to charity doing it. Since she defines what 'needs to be done' in her opinion piece, I guess that is a fair assumption. But her second assumption in this is that it is worth doing her way in the first place - and that is where she has failed."

The second assumption follows from the first. A person who thinks it needs to be done also thinks it is worth doing, and taxation is the only method.

Egalitarian justice is one way of describing it (a valid way), but I would say that we are talking about enlightened self-interest and commonsense measures. I do not wish to live in a third-world country or the kind of cruel, low tech society the U.S. in 1900. I prefer massive, expensive, big technology, such as highways, airplanes, the Internet, advanced medical care and so on. This massive infrastructure was developed by the government and mostly paid for by the government. It requires large numbers of highly educated people to operate. If we only educate the children of the wealthy, that will not be enough.

If you want to live in a high-tech society you have to pay high taxes. If you think a low tech society is more to your liking, I suggest you go live in one. One or two days should cure you of that notion.

“She asserts that it is a well-known axiom that people give to charities that serve them - essentially saying that they are self-serving. She cites no reference for this. Your local homeless shelter and some common sense seem to refute this assumption as well.”

On the contrary, a homeless shelter serves the needs of middle class and wealthy people by keeping homeless people off the streets and out of sight, which preserves property values. Try establishing a homeless shelter in a middle-class neighborhood and you will see what I mean. (I know some people who did that.) Shelters do not serve poor people well, and many poor people avoid shelters for this reason. Shelters are crime ridden and far from the jobs and services that homeless people need to survive.

globalone wrote:

"I'm not rich by any stretch of the imagination, but sticking it to people who are because we want some free money is abhorrent."

I do not see it that way, and neither does Obama. We are not sticking it to them; it just happens that they are the only ones who can solve the problem. If we take money from poor and middle class people, that will not act as a stimulus. It will be a zero-sum transaction. We need to take it from rich people because they normally do not spend their money. If rich people spent every dollar they made, and grew no wealthier year by year, then taking money from them would not be a stimulus.

For the past decade we have stimulated the economy with money we took from the Chinese and from future generations, but I doubt the Chinese would give us any more.

A flat tax with no deductions for charitable contributions or home interest payments is the better choice?? Works well in Pennsylvania!!!!

And we could cut the IRS staff by 75% and eliminate tax lawyers and tax "prep" firms.

PAMSM,

Rather than split hairs over English syntax, I will call my comment an assumption - a 'reasonable assumption' given the lines I highlighted, the rest of her piece and the fact that others, notably JedrothWell1, seem to have read it the same way. Many posters here have, in turn, challenged many of her assumptions and biases and nobody - especially the author - has backed up those assumption and prejudices with anything close to verifiable fact or even informed opinion.

Let me give you several examples:

1. In her third paragraph, she tells her story - she received help from her parents to buy her apartment, so did many of her circle of friends, and so she assumes that was the primary way (she calls it the real "American Way") to get a house. Upon what does she base that assumption? Can she cite a report or study that delineates the percent of home buyers who got grants from their parents? Given the rest of her piece and the class-warfare rhetorical tone, it is a huge assumption - essentially, the fulcrum of her opinion piece.

2. Given her first assumption, bloggers respond with several 'pull-themselves-up-by-their-bootstaps' stories which she dismisses out of hand, concluding that they are tightwads. Had she cited some study or report that concluded "Right-wing Christians are cheap" she might have had a point, but she does not. Again, an unfounded assumption on her part.

3. In one of her responses she claims that (only) government, vice charity, through more taxation is big enough to carry out her call for egalitarian justice. There are two assumptions there: first, the obvious, that only government can do what she says needs to be done - as opposed to charity doing it. Since she defines what 'needs to be done' in her opinion piece, I guess that is a fair assumption. But her second assumption in this is that it is worth doing her way in the first place - and that is where she has failed.

4. She asserts that it is a well-known axiom that people give to charities that serve them - essentially saying that they are self-serving. She cites no reference for this. Your local homeless shelter and some common sense seem to refute this assumption as well.

There are several other unfounded or un-cited assumptions that she makes, but I belabor the point - I would assert that her entire piece is simply assumption wrapped in opinion.

CCNL wrote:

"But and it is a BIG BUT, if Buffet is in the 17% income tax bracket, it is because he makes huge charitable contributions."

No, it is because his income is from capital gains, which are taxed at 15%. As Buffet himself says, his secretary pays taxes at a higher rate than he does. He considers this deeply unfair, and so do I.

People on Wall Street who make hundreds of millions of dollars a year investing other people's money pay 15% income taxes because they are not working on salary but for capital gains. Supposedly this is to reward risk takers but the folks on Wall Street who do this risk other people's money, not their own.

People who risk losing money are rewarded with tax rates half as much as the rest of us. People who risk life and limb, such as policemen, construction workers and soldiers, get nothing.

CCNL wrote:

"But and it is a BIG BUT, if Buffet is in the 17% income tax bracket, it is because he makes huge charitable contributions."

No, it is because his income is from capital gains, which are taxed at 15%. As Buffet himself says, his secretary pays taxes at a higher rate than he does. He considers this deeply unfair, and so do I.

People on Wall Street who make hundreds of millions of dollars a year investing other people's money pay 15% income taxes because they are not working on salary but for capital gains. Supposedly this is to reward risk takers but the folks on Wall Street who do this risk other people's money, not their own.

People who risk losing money are rewarded with tax rates half as much as the rest of us. People who risk life and limb, such as policemen, construction workers and soldiers, get nothing.

Timmy,

"My point was that democratic societies with higher taxes and broader social safety nets are by and large, happier and healthier, with lower crime rates"

I have to admit that I am completely in the dark on the validity of this statement. Is there any sort of numerical evidence to support this or is it more to do with personal experiences?

"And as Pam keeps pointing out, the current plan is to decrease the personal income tax for 95% of Americans. All of you who are complaining are going to be getting a discount on your taxes under the new plan. You will not be paying for anyone's mistakes. That is a fallacy"

First, isn't the decrease for 95% of taxpayers being paid for with an increase to the other 5%? Second, giving refundable tax credits to people who don't pay any tax to begin with is not a tax decrease - it's called expanding welfare. (People in government might be too cowardly to use the correct terminology, but it is what it is.)

And as an aside, I find it unbelievably self-centered to discard a tax increase on "others" because it won't have any effect on "us". I'm not rich by any stretch of the imagination, but sticking it to people who are because we want some free money is abhorrent.

But and it is a BIG BUT, if Buffet is in the 17% income tax bracket, it is because he makes huge charitable contributions. e.g. Note his billions donated to the Gates Foundation.

Jedrothwell1:

You wrote: "HERE is the tough question, though. What about someone who was living in an $800,000 house he could not afford, and today is living in a homeless shelter? What if that person is entirely responsible for his predicament? Do we help him, or not? I know four or five people like that.

That is a tough call. I say help him, but only enough to get him off the street and back onto his feet in the kind of lifestyle a person making $20,000 a year enjoys. That is, one step away from homelessness.

People living in houses they could afford a few years ago who are presently out of work also deserve some help, in my opinion."

To lose an $800,000 home and living in a homeless shelter is enough punishment. I couldn't even fathom that. Yes, people who have sunk that low, even by their own poor judgment, also deserve help. That does not mean to get them back into their $800,000 home, but I agree with you!

People who still have assets, and in many cases not just a few, and are now jobless need to consider to sell off some of those assets to make it over the hard times. Tough call? You bet! We become accustomed to a cetain lifestyle and it is very, very hard to make necessary cuts. Trust me, I know whereof I speak, just having lost my lucrative job as well.

I guess my big concern is with our elelcted leaders who have been found out to be tax scofflaws, or those citizens who still have plenty (at least more than I have or ever will have) and try to soak the rest of us suckers to maintain their upper middle class standards.

Or think of the CEOs who ran companies into the ground, think nothing of pocketing a $10 to 20,000 salary a month and goad their Board of Director to give them million dollar bonuses every year. Much of the money which disappears into overseas bank account and not a dime is paid in taxes.

Am I their keeper too???

Not too long ago, I read that Warren Buffet, a very rich man disclosed that under the US tax law there are so many llopholes for the rich that all he pays is a 17% tax rate. Even he thought that is obscene.

$250,000 a year is more than a nice chunk of change. With this salary, one can have all of the comforts and necessities of life taken care of without a worry in the world, as well as many of the luxuries and bonuses that were at one time reserved only for the royal and super elite. And that's for one person. Most households have two incomes.

By most people's standards, $250,000 per year for a single person makes you rich. It doesn't make you Donald Trump. But it makes you rich. Rich to most people is exactly what I described above. Having all of the comforts and necessities of life taken care of without a worry, as well as being able to afford many of the luxuries and bonuses that were at one time reserved only for the royal and super elite. Fancy meals, boats, massages, vacations etc.

That's rich. Beyond that are varying degrees of grotesquely rich.

Rich people generally worked hard to get their and deserve to be rich. But I don't see why anyone needs to be grotesquely rich. It's a nice fantasy. Until you realize that such a position can only come on the backs of the unfortunate.

Nobody wants to sop anyone from working hard and getting rich. We don't even want to stop people from getting grotesquely rich. But if you do, you need to give a larger chuck of such riches back to the society that allowed you to get that way. And this does not take away from you incentive to get grotesquely rich because even after those nasty taxes, you're still grotesquely rich.

Globalone,

My point was that democratic societies with higher taxes and broader social safety nets are by and large, happier and healthier, with lower crime rates.

And that most people (republicans or not) who complain about the taxes here could not name a country with lower taxes that they would like to live in.

And as Pam keeps pointing out, the current plan is to decrease the personal income tax for 95% of Americans. All of you who are complaining are going to be getting a discount on your taxes under the new plan. You will not be paying for anyone's mistakes. That is a fallacy.

WestTexan2008 says:
"I don’t think it’s an assumption; I got the idea from the first two lines of Ms. Jacoby's opinion piece..."

Those lines say nothing about paying off people's mortgages and/or credit cards, nor about paying CEO bonuses; and no one has ever proposed doing those things.

Then you said:
"I also think it is a logical conclusion, giving the tone of the rest of her piece."

There's your assumption. She never said it, and it is not part of any plan.

Gaby1 gets back to the original question:

"In tough times, do those of us who handled our finances responsibly have a moral obligation to bail out those of us who didn't? Are we our brother's keeper economically?"

And responds:

"I am not opposed to paying more taxes to help those less fortunate, including universal health care, affodable housing, basic living necessities, etc. . . . What I am opposed to, however, is paying higher taxes for people who live well above their means and have no problems taking other peoples' money to maintain they lavish lifestyle."

I think everyone agrees. No one intends to maintain someone else's lavish lifestyle, although some of the TARP funds did that -- by accident, we hope.

The Obama administration says emphatically that it will not help people who purchased houses they could not afford. People who could once afford $800,000 houses but cannot afford them now should also be excluded from any help. I hope that is the administration's policy.

HERE is the tough question, though. What about someone who was living in an $800,000 house he could not afford, and today is living in a homeless shelter? What if that person is entirely responsible for his predicament? Do we help him, or not? I know four or five people like that.

That is a tough call. I say help him, but only enough to get him off the street and back onto his feet in the kind of lifestyle a person making $20,000 a year enjoys. That is, one step away from homelessness.

People living in houses they could afford a few years ago who are presently out of work also deserve some help, in my opinion.

Reading over the many comments, I think a lot of us have lost focus on what the question was originally:

"In tough times, do those of us who handled our finances responsibly have a moral obligation to bail out those of us who didn't? Are we our brother's keeper economically?"

I my opinion that question has nothing to do with taxation per se, but rather with moral question whether or not we are supposed to bail out those who have no concept of fiscal responsibility. WE are not talking about folks who can't afford health insurance or other basic necessities like food, heat, or air conditioning (yes, my ultra conservative co-posters, there are locations in our country where air conditioning is a necessity. Try living in Yuma, Arizona for a summer without it.)

I am not opposed to paying more taxes to help those less fortunate, including universal health care, affodable housing, basic living necessities, etc. (my husband and I are by no means well off, we own a moderate home in a moderate neighborhood, drive older model cars, rarely go out to dinner, movie, etc., but we are comforable with what we have), what I am opposed to, however, is paying higher taxes for people who live well above their means and have no problems taking other peoples' money to maintain they lavish lifestyle.

If you can't affort the $500,000 mansion you though you had to have then either sell it or work a few more jobs. If the cars had to be a Lexus, Hummer, Acura, Mercedes, or a BMW, sell them and drive a Subaru, Volkswagon or Kia. If the boat or jetski is a little over the top, go swimming instead.

Do you really need to go to Jackson Hole, WY or Vail, CO every winter to go skiing? Try the back country, just as pleasurable and not as expensive.

Please understand that I do not begrudge people their good fortune, if they have the money to enjoy all those luxuries, more power to them. But those, who just want to keep up with the Joneses and who don't have the money to do so, please come back down to earth and live within your means.

Reading over the many comments, I think a lot of us have lost focus on what the question was originally:

"In tough times, do those of us who handled our finances responsibly have a moral obligation to bail out those of us who didn't? Are we our brother's keeper economically?"

I my opinion that question has nothing to do with taxation per se, but rather with moral question whether or not we are supposed to bail out those who have no concept of fiscal responsibility. WE are not talking about folks who can't afford health insurance or other basic necessities like food, heat, or air conditioning (yes, my ultra conservative co-posters, there are locations in our country where air conditioning is a necessity. Try living in Yuma, Arizona for a summer without it.)

I am not opposed to paying more taxes to help those less fortunate, including universal health care, affodable housing, basic living necessities, etc. (my husband and I are by no means well off, we own a moderate home in a moderate neighborhood, drive older model cars, rarely go out to dinner, movie, etc., but we are comforable with what we have), what I am opposed to, however, is paying higher taxes for people who live well above their means and have no problems taking other peoples' money to maintain they lavish lifestyle.

If you can't affort the $500,000 mansion you though you had to have then either sell it or work a few more jobs. If the cars had to be a Lexus, Hummer, Acura, Mercedes, or a BMW, sell them and drive a Subaru, Volkswagon or Kia. If the boat or jetski is a little over the top, go swimming instead.

Do you really need to go to Jackson Hole, WY or Vail, CO every winter to go skiing? Try the back country, just as pleasurable and not as expensive.

Please understand that I do not begrudge people their good fortune, if they have the money to enjoy all those luxuries, more power to them. But those, who just want to keep up with the Joneses and who don't have the money to do so, please come back down to earth and live within your means.

DanielintheLionsDen wrote:

"The government sets out its programs and then seeks to fund them with taxes. People vote periodically for government officials and their programs, and the whole system just trundles along like that."

Exactly right! And people who don't like this and don't want to pay taxes should vote for Republicans or Libertarians. Republicans promise to borrow the money from the Chinese and our children (a.k.a. "tax cuts") and Libertarians say they will cut government spending. I prefer Obama's approach which is to tax society as much as it costs, especially wealthy people.

If you are old enough to vote, you get to pick the government. What it does and how much it spends is your responsibility. Some people say that democracy is a sham and we do not really get to pick who is in charge. They should try living in Russia. Obama demonstrated that a few million highly motivated supporters can raise ten times more money than all the power brokers combined, and they can win elections.

People who do not vote have no right to complain about the government. This is like going to a sushi restaurant and telling the chef to decide the meal ("omakase"), and then complaining about what he selects and how much he charges.

(The Japanese government is run entirely by the "omakase" method, by the way, with a dormant electorate which does, nevertheless, complain. The most popular politician in Japan is Obama.)

Government taxation and government programs are not charity and are not intended to take the place of Christian charity.

That governments should seek to help the people over whom they rule is a modern secularist and democratic notion about promoting the general welfare. It has nothing to do with forcing people to be charitible "against their will.'

It has to do with the modern function and operation of government. The government sets out its programs and then seeks to fund them with taxes. People vote periodically for government officials and their programs, and the whole system just trundles along like that.

Christianity is personal. A government cannot be Christian. That is mixing "apples and oranges" to cite an old cliche.

This is the system we operate under. If Christians want to be charitible, then no one is stopping them. But to put up so many arguments against taxation and the government, framed in Christian terms, is absurd, and only draws more accusaions of "hypocrisy" on them.

WestTexan2008 wrote:

"I don’t think paying defaulted mortgages and credit card balances or CEO bonuses is a core service of any governmental agency."

No one in the Obama administration plans to do that. Unfortunately, since money is fungible, TARP funds were -- in effect -- used for CEO bonuses under the Bush administration. We hope that does not happen again. I doubt the law allows it, but it would be nice to force managers to to return some of the bonus money. The CEO of Merrill Lynch who spent $1.2 million on decor and antique toilets gave back the money, but that was in response to public pressure, not a legal obligation. I suppose he is young enough that he hopes to get another job someday.

Some banks that accepted TARP funds are still paying dividends, which is unconscionable and should be declared against the law immediately. Until they pay back every dollar with interest, they should send all profits to the taxpayers.

Everyone loathes the bailout, for good reason. But you should all remember that the TARP funds are loans -- not gifts. The banks and insurance companies accepting the money are paying high interest and if they survive in business they will have to return every dollar. In the case of AIG, the government has taken most of the stock of the company, reducing shareholder value to zero. (It would be zero in any case because the company would have gone bankrupt months ago without the bailout.)

In my opinion, the government should seize all of the stock of companies bailed out by TARP, and also GM and Chrysler. The stockholders should get nothing. Management, obviously, should be fired without severance pay. In a sane business environment this would have been done months ago. Temporary nationalization is called for. If the companies survive, the government can sell the stock on Wall Street in a year or two and recover some of the TARP money, and perhaps make a profit. The taxpayers' interests must be protected first and foremost.

Note that I own some stock in AIG, which is a dead loss.

All of the proposals I have seen to help homeowners would also be loans. When the economy recovers, the government will get the money back. Note that in past bailouts such as the Chrysler bailout of 1979, and all of the Japanese bank bailouts of the 1990s, the U.S. and Japanese governments not only got the money back, they made a profit. The notion that a "bailout" means handing out free money to wealthy people is completely mistaken.

Pam,

If you read Ukba's post again, and slower, you might have a different take. I don't think he believes that crap, I think he was raising a question about it. And it is crap - take this from a Christian.

Susan,

You rightfully said: “The idea that charity is better than taxation because charity is "voluntary" is highly comical, because while charity truly is a virtue, thousands of years of human history have shown that the virtue isn't widespread enough to feed, clothe, house, and educate an entire society.”

I would like to add that not all charity is necessarily a virtue. People also give to charities just to obtain tax deductions.

Timmy,

I liked your irony: "We don't want to lose all of these tax hating republicans..." Reading it I tried to think when was the last time that we heard about hordes of refugees escaping from the hell of the high taxation countries like Sweden.

PAMSM,

I don’t think it’s an assumption; I got the idea from the first two lines of Ms. Jacoby's opinion piece in which she stated:

"This is a great question, at a time when we are hearing a constant drumbeat (mainly, though not exclusively, from the political right) that "bailing out" people who "didn't play by the rules" is "rewarding bad behavior." We are told that people who "deliberately" bought houses they knew they couldn't afford don't deserve any help."

I also think it is a logical conclusion, giving the tone of the rest of her piece.

Globalone says:
"Pushing back on tax increases is NOT a Republican issue. We just tend, I guess, to be more vocal about it. Democrats tend to use it as the easy answer to solve everything."

What kind of sense does this make? First you say Democrats are equally against higher taxes, then you say they love them. You follow with:

"I wouldn't be surprised if one of the Democratic platforms read, 'The answer is raise taxes - what's the question?'"

Amazing, then, isn't it, that our Democratic president and congress are *lowering* taxes for 95% of Americans?

WestTexan2008,

You accuse Susan of making assumptions, and then you write:
"I don’t think paying defaulted mortgages and credit card balances or CEO bonuses is a core service of any governmental agency."

Who on earth has even suggested any of those things? Those seem like *huge* assumptions on your part.

Timmy,

"We don't want to lose all of these tax hating republicans..."

I suggest you google state tax legislation in the last few years and see how many states the voters approved raising current taxes or generating new ones. Unless you're willing to concede that every state in the union is predominantly Republican, your underlying assertion is an exaggeration.

I live in Virginia, and I know for a fact that the multitude of tax hikes that have been proposed have all been shot down. Except for one. A hotel tax increase that Virginians readily approved because they will most likely never be affected.

Pushing back on tax increases is NOT a Republican issue. We just tend, I guess, to be more vocal about it. Democrats tend to use it as the easy answer to solve everything.

I wouldn't be surprised if one of the Democratic platforms read, "The answer is raise taxes - what's the question?"

The hard is what makes it good.

UKBA,
It’s been a long time since I’ve read anything in this forum that has dropped my jaw like your post did.

UKBA: “Material blessings and success is a sign of God’s favor upon the believers. Poverty then is a ploy and part of suffering God uses to show man the consequences of sinning against him.”

This is manifestly not true (I should be living in the gutter, for instance, and I’m actually quite comfortable, relatively speaking) and is against all of the teaching of the gospels. There are huge numbers of very devout and pious people who are dirt poor.

I suspect this notion is fostered by the televangelists and mega-church ministers who live high, wide, and handsome on the donations of their easily duped flocks.

UKBA: “The United States is prosperous because it is a Christian country and the Africans are poor because they are heathens and don’t believe that Jesus is lord and that he died for their sins”

Oh, of course! Nothing at all to do with unequal natural resources and disease exposure!
Please read “Guns, Germs, and Steel” by Jared Diamond.

It also might interest you to know that the vast majority of sub-Saharan Africa is Christian. Northern, and some of Eastern, Africa are Muslim. Overall, about 45% of the continent’s population is Christian, 40% Muslim, the rest divided among African traditional religions and Hindus. So tell me again why the Christian countries are so poor…?

UKBA: “Through the ministry of the gospel, the world is to see our good works and give glory to God. The supposed good works of social programs give glory to a secular government and none to Him.”

So the idea is to see who gets to reap the “glory,” and nothing to do with actually feeding the starving? That is just so sick…

I’ve always known that faith-based charities were more about trolling for souls than actually doing good, but this is too cynical even for me to comprehend.

UKBA: “Imagine the impact we could have if we could give more money to the church while the world observed our practical love and ministry towards the poor.”

So if the “world” couldn’t observe it, it wouldn’t be worth doing?

You make me want to throw up.

Ms. Jacoby,

Your last post had several assumptions that I need to challenge as less-than-factual or logical.

Your suggestion that people give charitably primarily to those services that they use may apply to art museums and the occasional library, but your comment suggests that orphanages, homeless shelters, Sudanese refugees, and the American Red Cross are largely supported by orphans, the homeless, refugees or hurricane victims. Rather, those folks are served by people giving graciously with no possibility of ‘repayment.’

I have not read a single post that says that we should not have government or taxes. What I have read is an objection to government increasing taxes to ‘spend out of the recession’ and particularly to bailing out those who have acted irresponsibly. Comparing that to paying for public schools is not a fair or logical comparison. Paying local property taxes to support local public education through childhood is a reasonable requirement of the government because we, as a nation, have determined that education of children is a core service of local government. I don’t think paying defaulted mortgages and credit card balances or CEO bonuses is a core service of any governmental agency.

We do need to be careful though with our tax policy. We don't want to lose all of these tax hating republicans to one of those better countries where taxes are lower. There's just so many to choose from, they might just all leave if we don't stop trying to take their hard earned money away. ;)

"I like to pay taxes. With them I buy civilization."
- Oliver Wendell Holmes

Susan Jacoby wrote:

"Just how many childless people would provide voluntary "charity" to support public schools? Every year, I read dozens of letters to the editor from people who think that schools should be paid for by parents, not non-parents. It's idiotic, of course . . ."

It is especially idiotic when the people writing those letters have no children of their own. Who do they think will be supporting them in their old age? Other people's children!

Social Security is a tax on young people to support retired old people. A childless person who lives 20 years after retirement gets more tax money than she ever paid in school taxes and FICA. If she had not paid school taxes, the people supporting her would be uneducated and destitute.

Susan Jacoby

The idea that charity is better than taxation because charity is "voluntary" is highly comical, because while charity truly is a virtue, thousands of years of human history have shown that the virtue isn't widespread enough to feed, clothe, house, and educate an entire society. Of course Ayn Rand conservatives prefer charity to taxation, precisely because they don't want to be forced to give away a dime. Furthermore, it's a well-known axiom among philanthropic fund-raisers that people tend to give "charitably" largely to those services that they themselves use. Just how many childless people would provide voluntary "charity" to support public schools? Every year, I read dozens of letters to the editor from people who think that schools should be paid for by parents, not non-parents. It's idiotic, of course, given that education is a basic requirement for a functioning society. But these people wouldn't spend a dime on schools if they had their way. That's why we need government and taxes.

jedrothwell1 Author Profile Page:

I wrote:

"But we cannot force people who make $100 million a year to help them. Many of those wealthy people would not pay a single dollar in taxes if they were not forced to."

I'm lookin' at you, Rush Limbaugh.

Good one!

I wrote:

"But we cannot force people who make $100 million a year to help them. Many of those wealthy people would not pay a single dollar in taxes if they were not forced to."

I'm lookin' at you, Rush Limbaugh.

Cross posting may be verboten here, but I worked HARD on the response copied below, and it addresses comments made here to the effect that only charity freely given should be used to alleviate suffering, and it is immoral to use taxes for that purpose. That has to be one of the strangest notions in the history of government, because governments since ancient times have used tax money to help the poor, and both the Declaration of Independence and the Constitution talk about ensuring "life" and "general welfare" along with liberty and so on. A starving or desperately impoverished person is not ensured of life or welfare, so obviously the government has a responsibility to help.

Anyway . . .

J. Reynolds wrote:

"This charity is best when it is private and not coerced."

What if that charity does not suffice? What is second best? Do you think it is better to take taxes from people and feed the poor, or should we let the poor starve?

This column evades the issue.

Yes, we all agree that taxes are bad in some ways. The question is: Are they worse than the alternative?

If we do not have "the right to force other people to help" as you claim, then by that same rule poor people do not have the right to live. They may starve or die of easily cured diseases, or live in tents. Their children may go without schooling or vaccinations. But we cannot force people who make $100 million a year to help them. Many of those wealthy people would not pay a single dollar in taxes if they were not forced to. Many rich people gave nothing to charity before income taxes were instituted, and many evade taxes today. Are you really willing to trust in their good will to avoid catastrophic suffering and the collapse of the economy?

This is not Christian, nor is it reasonable or practical.

It's true. Europe ain't so bad.

And the Scandinavians are some of the happiest societies on earth. I don't think that Scandinavians see themselves as anything less than self determined. I've met a lot of people from Sweden, and I always ask them about the taxes there. I seldom hear complaints. They usually go on about all of the benefits of their social system when asked about the tax situation.

There is no blockade for any Scandinavian who is seeking to make a better life for themselves than the next guy, by working harder than the next guy. Self determination still applies.

CalSailor wrote:

"My dad . . . (at 87) does not realize is that American society, and his experience, as a white male Christian, is so heavily skewed in his favor that he doesn't see the skewing."

That's a shame. But many white people of that generation were liberal and open minded because of their experiences in the Great Depression, the New Deal and WWII. People's political opinions tend to be set in their youth and they do not change much. My father was older than yours. He was an adult, working in the 1930s. He used to tell me: "The difference between you and a bum on the street is as thin as a piece of paper. You or anyone can find yourself flat broke and in the gutter anytime."

It is a myth that people become more conservative as they grow older. What you see is a wave of liberalism -- a whole generation -- followed by a wave of conservatism. When my mother was in a nursing home in Maryland in the 1990s, she said to me: "Look around at this place. It is filled with retired New Dealers. Who do you think is going to be here when you're this old? Reaganites!" I gagged at the thought.

Globalone:

You don't like Europe? WTF? I live in France 5 months per year, and there's no lack of freedom here. Greater freedom of speech. Greater freedom of religion. What are you talking about? There's almost no poverty, everyone has access to health care, the trains run at 240 mph, half the non-military satellites in the world go up on French rockets. What are you talking about?

The moderator asks:
Once again, I pose the queston: why are so many Americans reluctant to own up to class privileges and class advantages? This idea that we all "made it on our own" and therefore owe nothing to anyone is pure American dreaming, in the worst sense of that dreamy word.

Taxing success? It's a great idea to help more Americans become successful. From the bitter sound of some of these comments, you would think that success is a zero-sum game--that any help my neighbor gets somehow diminishes me.

Susan:

As a pastor of a mixed racial parish in the Washington DC area, I found it a real eye-opening experience. Part of the reasons, I suspect, for your question, is that the society in which the majority finds itself is so weighted toward them in so many details they don't even realize HOW much they benefit! My dad, to use one example, gets lots of mailings from the religious right, about how "Christianity" and "Our nation's values" are "under attack" by the "anti-religious" groups...you know the stuff. What he (at 87) does not realize is that American society, and his experience, as a white male Christian, is so heavily skewed in his favor that he doesn't see the skewing. He goes along, and his expectations are so supported in every little thing that he just accepts them as the "right" (ie, corrrect) way life is supposed to be. He has never that I know of, really tried to understand, say, school prayer, from the prospect of a young immigrant child of another culture and religion, for whom school prayer is a minefield. (Who writes the prayer? Does the student for the day who leads it say whatever he/she wants? For first graders, it is going to be a mixture of, I think: Now I lay me down to sleep (or some table blessing)...Hail Mary...and Hear o Israel...and that's only from the Judeo Christian side. And what about other students?)

Malcolm Gladwells "The Outliers" makes a point that the Bill Gateses, etc, of the world benefit hugely from the societies in which they live. What if Bill Gates lived in Zambia? We would not be having this discussion in this manner!! Bill, to his credit, realizes this more than most, and it is one of the reasons he is trying to give away/ give back his fortune.

Those at the bottom of the heap economically live in a constant state of fear that one sick day, one extra rainy day when they cannot work outside (few work inside, except to clean) means even the slender life line will fray beyond hope. No wonder their health tends to be bad, and they tend to die young. Most of us cannot even begin to ennumerate all the benefits we've gotten from society.

onofrio ,

I’m sorry that I was not clearer in my point. As you state: “..judgemental (sic) hardline anti-federal individualism masquerading as "tough love" is not THE DEFINITIVE Christian response to this calamity.”

I don’t think that those she criticizes would see it that way at all. I suspect they would see it as determining the better or best use of funds for helping others – their ‘distrust’ of government coming from previous government failure to handle ‘their’ money in a way they deem responsible. This ebbs and flows depending on who’s in power and who’s complaining. Liberals had a legitimate right to complain that their tax money was used for tax rebates in the previous administration. In the same way, these Christians have the right to complain about what they perceive as a mis-use of their tax dollars.

But Ms. Jacoby also misses a key aspect to these Christians: It removes the aspect of free-will giving. It is no act of charity to pay taxes. Part of the act of Christian giving is determining how God would have you use that which He has entrusted to you. What you call ‘tough love’, they might call ‘giving help to people who need it more.’ Saturday Night Live even picked up on this theme with a recent skit.

As to ‘judgmental’, nearly every comment on this forum is judgmental – yours and mine included. That is the very nature of having an opinion. Who is to say that one judgmentalism is more legit than another?

The point is that theirs is one response and for Ms. Jacoby or any of us to determine that it is not a ‘proper’ Christian response smacks of elitism and control.

Liberal left and "Rednecked" right continue to debate in worthless text. The USA taxpayers rule the area of being keepers for our brothers and sisters:

Again: e.g. Medicare, Medicaid, Social Security to include SSI, Unemployment Benefits, Grants to States, Bailouts, Foreign Aid, Homeland Security, Global Security, Low Cost Student Loans, Medical Research Grants, No Child Left Behind Programs and Faith-based Intiatives.

www.bls.gov/emp/empmacro08.htm

http://georgewbush-whitehouse.archives.gov/omb/budget/fy2008/hist.html

What is so “Christian” about my wonderful Pharisean feeling, when seeing a poor wretch in the dust, maybe with cancer, that I am chosen by “god”, while the poor sick guy deserves his fate for lack of “grit and determination”? Jesus, in case he ever lived, was a socialist by every halfway serious definition.

Globalone and his fellow "Christians" represent a mostly GOP egotism on a kindergarten level, uninformed, not thinking beyond the end of their nose. Otherwise it would dawn to them that the present disaster stems exactly from this lack of empathy, self-righteousness, unlimited greed, multiplied by the complete ignorance of social interdependent processes. I am European, health insured like everybody else, of course, with a strong feeling and persuasion of accountability and self-determination over my own life. (Ridiculously uninformed to bad-mouth health insurance as “lack of self-determination”!) Don’t these people ever read anything on a subject before they gripe about it? In our contracts, we can, of course, modify the degree of “luxury” in the event we need our health insurance.

Another strange fact striking me is the success of the noise those Rush’s make about the taxation of those 5% of people making more than $ 250.000. The brainwashed Christian right wingers, even if they profit (!) from the tax reform, scream about "socialism". They don’t know what they are talking about. Their “belief” completely blurs their perception.

I am not a bit surprised by the idea that some Christians are against helping the poor especially against any government involvement.

Some Christians see prosperity as a reward from God and poverty as sin and consequently a judgment form God. Material blessings and success is a sign of God’s favor upon the believers. Poverty then is a ploy and part of suffering God uses to show man the consequences of sinning against him. And unbelief is definitely a sin. The United States is prosperous because it is a Christian country and the Africans are poor because they are heathens and don’t believe that Jesus is lord and that he died for their sins. The idea is very simple.

Government also should not be in the business of helping the poor; that responsibility belongs solely to the Church.

Here is a representative view by a Christian writer of what I am talking about:

“Scripture does not teach that government should help the poor. God appeals to the world through the church. Through the ministry of the gospel, the world is to see our good works and give glory to God. The supposed good works of social programs give glory to a secular government and none to Him.

What is a biblical response to poverty? The poor need mercy, which should come through the church. We are to minister the gospel to the world along with acts of mercy. Our acts should be voluntary as a sign of love rather than compulsory through taxes or inferred guilt. God's special grace comes through the gospel and we must proclaim it.

Social programs hinder our ministry. We cannot compete financially if the government takes 40% of our income and distributes it apart from God. How many of the 5,000 would have come to Jesus if loaves and fishes had been delivered to their door by Rome?

Imagine the impact we could have if we could give more money to the church while the world observed our practical love and ministry towards the poor. I would rather see the gospel advance through a strong church that helps the poor than have government programs send people comfortably to hell. The Bible teaches the poor are actually more prone to faith. How do they profit if they gain a steady welfare check but lose their eternal souls?”

Is there some truth to this line of thinking in Christian theology or is it a wrongheaded approach to the problem of poverty?

Some Christians, Mormans and Muslims have beat their chests on this thread about how charitable they are. In reality, the USA taxpayer far exceeds their support of country and global needs. e.g. Medicare, Medicaid, Social Security to include SSI, Unemployment Benefits, Grants to States, Bailouts, Foreign Aid, Homeland Security, Global Security, Low Cost Student Loans, Medical Research Grants, No Child Left Behind Programs and Faith-based Intiatives.

www.bls.gov/emp/empmacro08.htm

http://georgewbush-whitehouse.archives.gov/omb/budget/fy2008/hist.html

Globalone

What is so terrible about having an open heart to your fellow man? How would that hurt you?

"Grit and Determination." It sounds like the national motto of Cuba; it sounds Communistic.

Drab, humorless, colorless people who gripe, gripe, gripe about everything and who actually seem jealous of downtrodden and suffering people, this is the face of conservatism, and it is not a very pretty sight.

Susan is right about the Conservative Christian ethos that places the accumulation of money and wealth above all else, and that looks with scorn on the poor and suffering of the world, and even blames them for their misfortune, and is without empathy, compassion, or love, except in words only.

No Christian has given a proper answer to her question. They have merely replied in snide bitterness, sarcasm, and spitefullness. As long as vocal Christians persist in this misanthropic attitude, I do not believe them when they talk about love.

I just don't!

Obama’s plan for the 95% of the country that make less than $250,000, that is, me and most of the posters in this blog:

You will pay same or less taxes to accommodate your neighbors’ misfortune! Yes, you will get money for helping others without you moving a finger.

The funding to accommodate your neighbors’ misfortune will come in the long term from letting to expire after 2010 the tax cuts for the small portion of Americans that make more than a quarter million, cost cutting (military and health care for example) and other fiscal strategies.

"People who go broke in a big way never miss any meals. It is the poor jerk who is shy a half slug who must tighten his belt."
- Lazarus Long

WestTexan2008,

Susan J's comment was about posts from professing Christians who dogmatically overrule Jesus' obvious bias toward the marginalised. In its place they idolise prideful self-reliance, suspicion of "big" government, and militant moral rigorism as essential Christian virtues.

Such "Christians" have been conspicuously vocal on this thread, though there have been dissenting/alternative Christian views from the likes of Karen and Arminius.

It's clear that judgemental hardline anti-federal individualism masquerading as "tough love" is not THE DEFINITIVE Christian response to this calamity.

Susan,

"... absolute refusal of so many of these right-wing Christians (who doubtless consider themselves good Christians) to acknowledge any ethical responsibility for the welfare of others"

Wow. Welcome to the forum Ms. Uber Ego.

But maybe you're right. I've always wanted to live in Europe and that's exactly where we're heading. Hello social welfare and goodbye self-determination. All the principles that this country was founded on. LOL.

As an aside, I'm assuming that I am not being included in your self-righteous ranting. Given the fact that I made it abundantly clear in my earlier post that "we should be in the business of helping those who can't help themselves."

Here is another Christian voice in support of compassion, helping others and not being so quick to judge.
Unless one is quite rich, we are all one illness or lost job away from falling on hard times. I work in health care and I see it all the time.

There are plenty of people who have done plenty of bad stuff in the past few years. The rich people on Wall Street made mistakes in the billions but because they have so much money, they will ride it out. The people who overbought, or fell prey to predatory lending or outright scams, or have lost their jobs and health insurance do not have millions to ride this out.

So what are we Christians to do? As I have said before, Jesus did not ask people why they were poor, or homeless, or sick. He ministered to all and commanded us to do the same. Remember "love your neighbor as yourself"? And my neighbor is any fellow human being. No other specifications given.

However, I would like to add a caveat in response to Ms Jacoby's last post. Your are painting an overly negative picture of theologically conservative Christians. I attend a Bible Church where I am every day amazed at the continuous generosity of the members towards each other and toward the community surrounding the church. People are helped because they need it, no other qualifications required. I recently found out from a window at our church that chuch members paid off her entire mortgage a few years ago after her husband suddenly died leaving him with several small children at home. We provide free ESL classes, food pantry, health fairs, blood drives etc. because we express our faith in love.

So there are generous believers and non-believers, and there are judgemental scrooges in both groups as well.

For a quick example, look at the diametrically opposed opinions from Chuck Colson and Cal Thomas in response to this week's questions. Colson says: of course we help, Jesus commanded us to. Thomas says: let people learn a lesson and pull themselves up on their own.

TRUEHEADING, March 5, 2009 3:10 AM

"I am not paying more in taxes to accommodate my neighbors’ misfortune."

"Quit relying on the “Nanny State” and accept every outcome in your life as an omen from God. For one reason or another this happened to you and it’s your responsibility to handle the struggle."

So, according to this hawker of stockade-morality, God is a Social Darwinist...

If you’re hit by the fallout from ducat-rutting

Gekko-fed ruin of the cashed-up classes,

it’s just an omen of Godly tut-tutting,

a dose of tough love for your sorry a-ses.

By Hell you deserve it, and don't dare complain,

for states that are Nannied are destined for fire.

Repent on your kneecaps and cherish your pain,

for it proves that God loves you with rapturous ire.

Ms. Jacoby,
In response to your last posting in which you stated,"What continues to fascinate me about these posts is the absolute refusal of so many of these right-wing Christians (who doubtless consider themselves good Christians) to acknowledge any ethical responsibility for the welfare of others."

That it is unfair (and rather snotty) characterization. I believe what they object is compelled 'charity' through government taxation rather than allowing it to be an act of spirituality. 'You ain't giving it if the government is taking it.'

It is also an unfair characterization, in the larger sense, to suggest that they don't care for others. One need only look at all of the hospitals with 'Saint' or a denomination in the name to know that Christians have been involved in the welfare of others. Go into any major city and see who is feeding the poor and homeless. Just because they do not want to do your pet project in the way you want them to do it doesn't mean they are not compassionate toward others.

I'd like to offer a Christian viewpoint that differs from the one generally presented here, and the one used as a common label by non-believers.

I am a liberal Christian. Progressive. Not conservative. Not evangelical. My group - Episcopal - does a lot of charity work without demanding prayer. We do not evangelize, proselytize, condemn people to hell. We try to walk the walk, not talk the talk. We do not think we are better than others. We welcome all. We don't do politics in church, and if a priest or guest preacher dared to deliver a fire-and-brimstone sermon, he'd be booed out of the building. We have a gay bishop, and lots of women priests. We are not alone - except for our gay bishop - and many other mainstream Christians of other denominations are similar. And, very important, our beliefs are rooted in the Gospels, in the words of Jesus - not in the old testament.

You don't hear much about us, except for the homosexual thing which has sundered the American Episcopal Church. Only about 5% have left, so we are doing fine. Anyway, the ones you hear about are the ones making loud conservative noises, here and elsewhere. The ones who make sweeping judgments, the ones who think they have all the answers. I disagree with them all.

So please don't make generalizations about Christians. It's almost like calling all Muslims terrorists.

As I've said before:
We're all God's children, can't you see?
It's not us and them, it's WE and WE.

Susan, like you I wonder why self described conservatives and christians seem to lack any empathy for their fellows. I'm not sure it isn't hard wired into us to varying degrees or nurtured in at a very early age. But I'd like to ask those who express so little compassion for others; How do you see the Golden Rule? Is the way you treat others really the way you would want to be treated?
An interesting idea I've heard recently is that self professed "christians" are really protestants, not followers of Christ so much as the Old Testament. Proto-Christians so to speak.

Pamsm wrote:

"Social Darwinism, too, was a gilded age fatcat philosophy, and a complete misunderstanding of Darwin's explanation of natural selection. Again, much more a conservative doctrine than a liberal one."

That's true. But what I meant to say was that in some cases atheism is associated with educated, non-liberal, me-first thinking, which is opposed to compassion.

I meant that education tends to push people toward both liberalism and atheism, but there are plenty of exceptions: well-educated, conservative atheists. The Republican party is presently allied with religion, and I suspect this causes many conservatives to pay lip service to religion even though they are actually agnostics or atheists, or indifferent to religion.

The same kind of hypocrisy is becoming more common among Democrats. In the last two elections, some Obama Democrats worked to form an alliance with left-wing churches -- with some success. They wanted to peel off religious voters. I suspect that some of these people spout religious doctrine which they do not actually believe. I am sure that Obama himself is sincerely religious. No one can fake it that well, and he is not good at faking emotions. I can see through him when he pretends to like Hillary Clinton, for example.

80% of the American population are Christian.

Based on the teachings of Jesus, there would be no need for a government bailout of any kind if the Christians in this country truly lived by the example of Jesus.

When the right wing Christians (an oxymoron) complain about the need for a government bailout, they don't seem to realize that it wouldn't be necessary if they were being true Christians to their neighbors. But because they are not, the government needs to step in this case or the country will implode.

One bone to pick though, Jed. Ayn Rand was an atheist, but her economic views are much more those of the conservatives. She was very Gordon Gekko.

The conservative Alan Greenspan is a big A.R. fan and considers himself an Objectivist. Unless, of course, he's now seen the error of his ways.

Social Darwinism, too, was a gilded age fatcat philosophy, and a complete misunderstanding of Darwin's explanation of natural selection. Again, much more a conservative doctrine than a liberal one.

I agree with you completely, Jed. I was speaking of end results, rather than delving into their root causes, but I think you nailed it.

Good post from Susan, too, just before yours.

Globalone says:
"Find any post of mine on this thread and see if I lay all the blame on one party or another."

OK. How about this one? Viz:

"Sure, I lean more to the party of bad ideas than the party of no ideas whatsoever"

Nuff said. But you go on:

"But I'm also open to other opinions *even if I still don't agree with them at the end of the discussion*." [Emphasis mine]

Yeah, that's a true open mind. Then you say:

"You, on the other hand, wear blinders, as evidenced by your continued pushback on the notion that the Clinton administration has no share of the responsibility of our current situation."

Oh, Clinton bears responsibility. He signed the omnibus spending bill that contained Phil Gramm's little bombshell.

It was inserted at the eleventh hour, and it was a case of pass it, or let the lights go out in Washington. It was just a couple of weeks before the end of his presidency. Maybe he didn't know it was in there. Maybe he knew, but didn't realize its implications. Maybe he knew and was fine with it. Maybe he thought it was a good idea. I don't know. Whatever - he signed it.

My "push back" has been against your assertion that just by willing something he could make it happen, absent any legislation.

He's not that much of a god.

Pamsm wrote:

"I've always thought that atheists were far more merciful, compassionate, and - yes - moral, than most Christians. I'm seeing that amply demonstrated here."

I doubt this is true. I am an atheist, and I would like to think this is true, but I doubt it. European nations with a larger percent of atheists than the U.S. are not outstandingly more merciful or compassionate than the U.S. Dawkins made the case that states with a large number of atheists tend to be wealthier and perhaps somewhat more compassionate, but I think the connection is tenuous.

I think it is more likely that educated people tend to be both atheist and also liberal and wealthy. Liberal democrats espouse an FDR-style compassion based on enlightened self-interest. Of course many of them are religious, such as Obama and FDR himself.

In other words, I think atheism and liberal compassion may have common causes but one is not the cause of the other. They are both rooted in education.

Educated people also tend to have a stronger grasp of science, and this correlates with atheism. (Again, this is not an absolute rule, but only a correlation, or trend.)

There are well-known counter-trends, such as social Darwinism and Ayn Rand style capitalism, which I think leans toward atheism and is anything but merciful.

Susan Jacoby

What continues to fascinate me about these posts is the absolute refusal of so many of these right-wing Christians (who doubtless consider themselves good Christians) to acknowledge any ethical responsibility for the welfare of others. They'd better hope that what they say they believe--that Jesus will come to judge the living and the dead--isn't really true. Because the Jesus of the Gospels certainly had a good deal of sympathy for people who hadn't always behaved "responsibly."

This absolutely has nothing to do with faith in the supernatural, but it has everything to do (for believers and nonbelievers) with a sense of ethical connection to other human beings. Oh, but I forget. These people regard taxation as "punishment" for the success they believe they achieved all on their own.

Pam,

" And how are my views any more partisan or stereotyped than Globalone's..."

Puh-leeze. Find any post of mine on this thread and see if I lay all the blame on one party or another. Sure, I lean more to the party of bad ideas than the party of no ideas whatsoever, but that's to be expected. But I'm also open to other opinions even if I still don't agree with them at the end of the discussion.

You, on the other hand, wear blinders, as evidenced by your continued pushback on the notion that the Clinton administration has no share of the responsibility of our current situation.

"Are there no prisons? Are there no workhouses?"

Is this really what we want to go back to?

Pam, you said,
"I've always thought that atheists were far more merciful, compassionate, and - yes - moral, than most Christians. I'm seeing that amply demonstrated here."

I must agree - and I am Christian.

Bobmoses says:
"Yay, a partisan liberal atheist bashing right wingers for not sharing her views on taxing and spending.

What does this have to do with faith? If the Post feels that liberals don't get enough opportunity to espouse their partisan and stereotyped views..."

"Bashing"?? How am I bashing them any more than they are me? And how are my views any more partisan or stereotyped than Globalone's or Armstrong001's? Or yours (obvious since it's full of conservative catch-phrases)?

What does it have to do with faith? Well, seems to me there's something in the bible about loving one's neighbor as oneself, and a great deal about helping the poor.

Oddly enough (or not), it's the religionists who seem to be against this. I've always thought that atheists were far more merciful, compassionate, and - yes - moral, than most Christians. I'm seeing that amply demonstrated here.

http://www.authentichappiness.sas.upenn.edu/Default.aspx

Scroll down and check out the grit survey. It's interesting to see how they define and measure it, if nothing else.

In the meantime, there was an interesting discussion session earlier today regarding who should qualify for assistance, and where to start looking.

Somehow, I do not think that trying to save people from utter and complete disaster encourages bad behaviour.

That is an extreme mischaracterization that I hear alot.

Some people will actually die, without some kind of assistance, because they don't have this so-called "grit and determination."

Without banks, there is no value to money. As hard as it is to believe, that is a fact.

If we do not pay out our tax dollars to shore up the banks, and assure that they continue to operate in the business of "borrowing and lending," then all the money that we save will not be worth anything. This "tax" which so many people seem to hate is part of the cost of living in a complex Capitalist society. It is part of the necessary upkeep of the system. This is just a fact of life; this is how it is; hysterical resentment expressed towards taxes and towards the government is not helpful.

People want to believe that their money has intrinsic value, that the value is a part of the paper bills, like the green ink, or the picture or the President. But that is not where the value comes from. The value in the money is an intangible quality, that it is psychologically linked to financial instiutions which cause this money to exist in the first place, and which give it value by borrowing it and lending it, as tokens of economic wealth.

When banks stop borrowing and lending, or if the banks just all disappear, then all of your accumulated paper money as well as electronic bank credits will simply become worthless.

We live in a complex society. You cannot live in isolation from this society and still expect to reap the benifits of it. If anyone wants to live in a cabin in the "Piney Woods" they are welcome to, but such a way of life could not sustain the vast population of the United States.

If a person has managed not to stumble, is that person better than his neighbor, who has stumbled? This is a mysterious sort of misantrhopy in all of this, and it is especially mystifying because this misanthropy seems to a part of the Christian ethos, or at least, the Conservative Christian ethos. The hpocrisy is so transparently clear, yet they don't seem to get it.

Helping people out in their time of need and showing empathy and kindness is not a waste of time; it is not bleeding-heart-lefty-liberal-communist-socialism; it is not the ruination of mankind or of the economy. And helping

It is just having an open heart.

Some people are just misanthropic, perhaps, and others are not. And whatever religion a person believes in, or none at all, has got nothing to do with loving ones neighbor with an open heart.

Both sides are right.

We need to provide a social safety net for those who fall between the cracks, for our own sake as well as theirs.

We also need to safeguard incentivisation by making sure that irresponsible behavior is not rewarded, and responsible behavior is not punished.

Both sides are right!

Partisanship is what you are all really arguing about.

Stop fighting. The answer is in the middle.

"

Yay, a partisan conservative religious nut bashing left wingers for not sharing his views on taxing and spending.

What does this have to do with faith? If you are capable of stringing a few brain cells together for a moment, you might realize that 'On Faith' means 'About/Concerning Faith', which means that all views are welcome. You know, First Amendment stuff. Oh dear, I forgot... your idol, Rush Bimbo, doesn't believe in that for liberals....

All I can say to those who are saying that people who lost their homes deserve what they get is that karma is a b*tch. I hope that you are never in the position where you have to choose between paying the mortgage and keeping the heat or electricity on. Or have your kids eat ketchup sandwiches because you can't afford anything else to feed them.

For those of you who feel that this country was founded on rugged individualism and doing things yourself, I guess you don't drive on roads, or rely on the police or fire departments to keep you safe? Because all of these things are paid for by the government with your taxes. I'd rather pay to keep people in their homes than continue paying for the war in Iraq, or Gitmo, or nuclear weapons, or whatever. If you feel that strongly about it, stop posting on the Internet and contact your representatives in Congress.

Yay, a partisan liberal atheist bashing right wingers for not sharing her views on taxing and spending.

What does this have to do with faith? If the Post feels that liberals don't get enough opportunity to espouse their partisan and stereotyped views, then fine, create a blog for them. Just don't call it "OnFaith".

Sorry for the double post - it said it didn't go through.

Globalone says:
"True, the WORST part of the plan, as deemed by the author, was never implemented.

But the STRATEGY WAS and we can see its dire consequences around us today."

Well that's pretty nebulous. If the plan didn't pass, in what way was the "strategy" implemented?

Presidents don't get to just say "this is what I want", there has to be actual legislation.

Globalone says:
"True, the WORST part of the plan, as deemed by the author, was never implemented.

But the STRATEGY WAS and we can see its dire consequences around us today."

Well that's pretty nebulous. If the plan didn't pass, in what way was the "strategy" implemented?

Presidents don't get to just say "this is what I want", there has to be actual legislation.

Armstrong001 says:
"Bull. Who better to gauge the economy than those trying to make money off of it? Optomism in the stock market reflects what the economy is doing."

Bull, yourself. People were happily investing in Enron stock when the company didn't have a financial leg to stand on. When Ken Lay told them that the company was doing fine, they all believed him.

The stock market is a reflection of mood and depends on sheer guesswork. It's a gambling game, just as the CDSs were.

The depression was over by 1941 thanks to the military putting people to work and the need for the manufacture of armaments, but the stock market didn't even reach post-crash 1929 levels again until the early fifties. A generation of people stayed away from it because of lack of confidence.

Ms. Jacoby's experience was quite typical for the times. In the 1960's after my father retired from the Navy and got a job at the Library of Congress, he encountered many increasingly creative sets of roadblocks to buying a house. It was only through the help of a fellow veteran that he was able to buy in Montgomery County. That fellow veteran had been set up in business by his in-laws and they helped him buy the Chevy Chase house he still lives in. The aid my father recieved from a white veteran allowed him to build equity few Blacks were able to amass, especially since all the lenders were trying to stear him to P.G.

Pam,

True, the WORST part of the plan, as deemed by the author, was never implemented.

But the STRATEGY WAS and we can see its dire consequences around us today.

I never said that the Clinton administration was solely responsible for this disaster. I merely pointed out that he played a role in it. As did Senator Gramm, Vice President Biden, etc.

RIF.

Skowronek :

"Armstrong,

If the banks do not wish to take the money that the federal government is willing to provide, with its attendant provisos, they are free to decline and run their business as they see fit. If they take the money, they accept the rules that come with it."

If banks make a deal with the devil, they have to expect some strings attached. However, many banks are being coerced to take bailout money too. How does a bank that acted prudently and cautiously respond when reckless banks become subsidized by the government? The government in effect makes it ok to take huge risks to try to get those huge profits because now there is no consequence for bad behavior. So to compete, the prudent bank now has to take more risks, and agree to be subsidized by the government as well so that they can effectively compete.

"Now, were any of the lenders subject to some sort of cap on the number of "creative" loans they wrote? You know, like some lenders won't loan you money to buy a condo if __% of the units are rented out; or they charge you a higher interest rate to do so. I certainly don't know."

I don't know if there were caps on certain types of loans or not. I do know that there are only a handfull of banks (albeit large ones) that are in this mess. Many local banks and credit unions never got into these kinds of loans and are doing just fine. The idea of not lending for purchase of a condo where the majority of tennants are renting goes back to risk avoidance or mitigation.

I will not, however, condone government stepping in and forcing banks to submit. These are private contracts between two parties. Government has not place interferring with that.

Armstrong,

If the banks do not wish to take the money that the federal government is willing to provide, with its attendant provisos, they are free to decline and run their business as they see fit. If they take the money, they accept the rules that come with it.

Now, were any of the lenders subject to some sort of cap on the number of "creative" loans they wrote? You know, like some lenders won't loan you money to buy a condo if __% of the units are rented out; or they charge you a higher interest rate to do so. I certainly don't know.

Armstrong:

Your libertarian nonsense has no foundation. The idea that govt intervention extended the Depression has been thoroughly debunked thousands of times. The libertarian obsession with this idea has no basis in economics or even rational thought.

Our current problems are the direct result of deregulation. Oh, greed was the primary motivator, but, prior to Bush 2, liquidity and reserves, etc were regulated. When that went away (2001), the door was open for CDOs, CDSs and other bogus instruments. Waiting will not correct this economic disaster nor would it have fixed the Depression.

Susan Jacoby

Can you tell what is the reason that those values have diminshed in which you were helped by your partents and they by their partents as you have mentioned in your present article.
Present day econimical system has snatched from us peace of mind and liberty. We are slaves to the greedy profit-seekers, those money lenders
who suck the blood through vicious interest system.

But as we imagine our self extra smart and modern in out thoughts therefore we do not like the religiions.
If the west could rise above its pride and prejudice and honestly explore other civilizations to find solutions to their problems, might be they can succeed in finding a relief.
Islam offers a expliotation free economic system where there is no interest on lended money and no income tax but a levy of 2.5% annually to be given to, on all accumulated wealth to the poor of the society.

Globalone:

Yes, Clinton raised the target as did FDR, Truman, Eisenhour and Nixon. If you wish to argue that there might be a tipping point, I might agree, but my objection to your post was based on you blaming Clinton for something that was not remotely connected to him.

Ms. Jacoby,

Your argument appears to be, "we must step beyond our own narrow perceived class interests and help those who are in economic trouble because it's actually good for us and our slice of the economy, too. And it's a nice thing to do." Several thoughts:

1. It is strange that you are in the economic position that you currently occupy because of the largess of your parents (and your friends, as well) and simply assume that is how most Americans bought a house. Do you have some data to support that or is it a gut feeling?

2. Your solution doesn't really address class distinction, it merely moves it a little. Your suggestion has the upper middle class help the lower middle class or upper poor (those who attempted to buy a house, but found that they couldn't in actuality). The really poor (those who couldn't attempt to buy a house) are not addressed.

3. To take your argument to its logical end, shouldn't we be 'sharing' our tax money with the poor of Mexico, Haiti, Zimbabwe and Burma - they can't afford a house, either?

4. Why does this need to occur through the government - an organization that is not noted for efficient use of money?

Just some thoughts.

NO!!! NO!!! NO!!!

I am not paying more in taxes to accommodate my neighbors’ misfortune. It's hard enough for someone who already pays enough in taxes to want to pay more. If the mortgage company wants to be generous and allow the home owner to renegotiate their mortgage payment or allow them a grace period then so be it. However, it is not my responsibility to pay for someone else’s bad fortune.

I sympathies with anyone who has gone through this downturn in the economic market but where does it say in the United States Constitution that the Federal Government has the right to tax my income to offset the misfortune of others. A little hint… it doesn’t allow the Federal Government such powers. Now if our Federal Government wants to create a Constitutional Amendment that guarantees such charity then so be it but as it stand this is not what our country’s Constitution allows.

This is not what our country was founded on and I will not allow such acts go unheeded. Our country was founded on every citizen taking care of themselves and if they had the ability then they helped their neighbor. It was not built on the mandate that we automatically help everyone.

Quit relying on the “Nanny State” and accept every outcome in your life as an omen from God. For one reason or another this happened to you and it’s your responsibility to handle the struggle.

Morality, and certainly charity, cannot be expressed with other peoples' money.

Pamsm :
"Are you suggesting that banks only charge the Fed rate? Or do they include a percentage on top of that?"

The Fed sets the federal funds rate that banks charge each other for overnight loans of federal funds, and the discount rate that member banks pay for overnight loans directly from the Fed.

Banks use this to set their prime rate, usually 2 or 3 points above the Federal funds rate."

So, don't you think that maybe that 2 or 3 points has some kind of link to risk? Banks don't just say "well, 2 points is fair", or "three points will be about right". It's established based on how much risk they are exposed to. Increase risk (government meddling) and you'll see interest rates rise.

Pamsm :
Jeeze, Armstrong001, you are so blinded by political partisanship that you can't see past the end of your nose. You say:

"The stock market is a reflection on the economy, and the economy did just fine in the mid eighties, and mid 2000's without Trillion dollar bailouts."

The stock market doesn't necessarily reflect the health of the economy - it just reflects the optimism (often completely unfounded) of the traders. That's why it lagged behind the economic recovery after the GD - people were spooked."

Bull. Who better to gauge the economy than those trying to make money off of it? Optomism in the stock market reflects what the economy is doing.

"The economy did better in the nineties, which you conveniently leave out, than either the eighties or the 2000s; and the 2000s only *appeared* to be good economically because of the inflated housing market. The bubble that has now burst."

I mentioned the 80's and 2000's because those were the last two corrections in the stock market. If you want to draw political conclusions about that be my guest. Are you telling me that the only reason the market went up to 14,000 from 8,000 in four years is the housing market? Then the so-called great economy of the 1990's was due to the dot com bubble that burst in 2001.

"The trillion-dollar bailouts are only necessary in a major crisis - *which we have now*!"

Trillion dollar bailouts are NEVER necessary. Every time the market drops, it goes back up. How many times does this have to happen before you figure it out? Government PROLONGS misery by extending the time it takes for recovery. It is not the answer, and never has been.

"Are you suggesting that banks only charge the Fed rate? Or do they include a percentage on top of that?"

The Fed sets the federal funds rate that banks charge each other for overnight loans of federal funds, and the discount rate that member banks pay for overnight loans directly from the Fed.

Banks use this to set their prime rate, usually 2 or 3 points above the Federal funds rate.

Jeeze, Armstrong001, you are so blinded by political partisanship that you can't see past the end of your nose. You say:

"The stock market is a reflection on the economy, and the economy did just fine in the mid eighties, and mid 2000's without Trillion dollar bailouts."

The stock market doesn't necessarily reflect the health of the economy - it just reflects the optimism (often completely unfounded) of the traders. That's why it lagged behind the economic recovery after the GD - people were spooked.

The economy did better in the nineties, which you conveniently leave out, than either the eighties or the 2000s; and the 2000s only *appeared* to be good economically because of the inflated housing market. The bubble that has now burst.

The trillion-dollar bailouts are only necessary in a major crisis - *which we have now*!

Arminius :

"H. Hoover's policies of no spending and little intervention were making things worse. When FDR began spending and propping up the banks, the downward spiral slowed and then stopped. Recovery took years. And in 1937 FDR tried to revert to Hoover's policies, and the economy took a downturn. What FDR accomplished was not so much a miracle of recovery, as stopping the plunge. He also gave America hope. The republican policies of today give hope only to the rich."

Recovery took years because government intervened. You cannot micromanage a whole economy and have any hope of "managing" it at all. There are just too many variables to account for. But FDR tried that, and extended the misery for many years. Destroying crops to artificially inflate food prices didn't help those who couldn't afford food.

The crash was going to happen one way or another. Hoover wasn't going to be able to raise the floor of the crash one way or the other. The market had to correct. All government intervention does is slow the crash down so that it takes longer to hit bottom. Then it also slows the recovery. Which would you rather have, a quick, painful crash followed by a rapid recovery? Or a slow, painful crash followed by a slow, painful recovery?

"Nobody forced people to take bad loans. If I market a piece of garbage, and someone buys it, am I responsible for their decision?"

I'm wondering if it wasn't simply garbage, it was fraudulent or illegal.

Enough from me. I've officially turned into a pumpkin. 5 a.m. comes early.

"There were roughly 2 million “extra” houses built between 2001 and 2006; to return to equilibrium, home building must remain under 1.5 million per year for several years. The adjustment does not occur all at once (home building going to zero) because the extra houses are not distributed equally in all states and cities. A family looking for a new house in Pittsburgh is not affected by the hundreds (or thousands) of extra homes in Miami or San Diego."

http://understandingthemarket.com/?p=18

2 million homes X ~$200,000/home= $400 billion worth of builder loans that could not be repaid!!!

And add to that loans used to build the new excess condos, office buildings and apartments and we have approximately the $700 billion bank bailout funding!!!

And now we the US taxpayers own 2 million empty homes, etc.!!!! and partially or have controlling interest in five plus banks who made these bad loans!!!!

Armstrong001:
""The percent interest the bank charges is not just pulled out of thin air."

No, it comes from the Fed."

Are you suggesting that banks only charge the Fed rate? Or do they include a percentage on top of that?

Skowronek :

"It's late, so I imagine you are probably skimming the posts, plus I may have been unclear.

I was not trying to suggest that I wasn't planning on repaying my loan (I am, I'm also ponying up extra money towards the principal). I was trying to make the point that if everyone made the minimum payment and never paid extra, the lenders would realize in the neighborhood of 3X the money they risked. Banks don't actually want to own homes, they'd rather have money. I don't blame them. Empty homes cost them now and in the future. I was positing that if lenders were open to renegotiating with current home owners, they may not realize as much profit, but they would not have to deal with empty homes and no money coming in at all."

I understand exactly what you are trying to say. The banks aren't getting 3 times the money they invest, the people who lend the banks money are getting most of that interest. The bank probably doesn't see much of that at all. If the lenders decide that taking less money is better than empty homes, great. Let them make the deal. Government doesn't need to be involved. The banks aren't going to stop negotiating just to spite borrowers. They want to stay in business too.

"If you have the time and interest, I think you'll see that we're not in complete disagreement with one another. We're probably not in lock-step either, though.

I think points 5, 6, 8, 9? and 11 are particularly salient then and now. For that, I hold those who marketed and made the loans responsible. I doubt anyone else will (as in, jail time for fraud/greed/stupidity [take your pick])."

Nobody forced people to take bad loans. If I market a piece of garbage, and someone buys it, am I responsible for their decision?

Susan:

Well said.

>> I doubt that if my brother and I had ever
>> become seriously ill in our adult lives, our
>> parents would have let us go bankrupt while
>> struggling to pay our medical bills.

Exactly that happened when my husband was dying of cancer.

My mother and stepfather were critical in that particularly ugly morally-superior American way. I still remember my mother shrieking at me to sell my little pearl earrings and my plain gold wedding ring... and how DARE I have any 'luxury', like Internet service. I was working one job. My stepfather demanded that I work two jobs, even though I was pregnant and was sick at the time and unable to afford either health care or health insurance (due to pre-existing conditions). Then they went swanning off on another cruise, their third that year.

Family values... huh.

They returned to discover that I had made good use of that Internet connection: I had found a position in Europe, and the kids and I were now half a world away.

The help that they claimed would make me 'weak', in their twisted American logic actually made me strong. All I needed was health care, and not even very much of that. Eight years later I own two houses, and a farm. We are well, and I am a financially secure taxpayer.

My parents are quite old now, and not at all well. They call to natter on about THEIR problems, the 'Donut Hole', co-pays, and how poor and miserable they are now. And there is no help for them. They have lost most of their investments.

I have politely suggested that they get jobs, the same advice they offered when I was desperate. They will get as much help from me as I got from them.

My older children, remembering the criticism and selfishness, want nothing to do with their grandparents, and the younger ones don't care.

By comparison, I will never forget the kindness and generosity of my British boss and my French neighbours, the strangers who made us welcome. In every way the experience was, and continues to be, far different than the US.

And yes, their system was smart, as well as moral. Smart because last year I paid over 100K Euros in taxes. My children have no intention of leaving, and they too will grow up to contribute to their society both through their work and through the taxes they pay.

>> sbegat wrote:
>> No, I believe that charity begins at home.
>> I am educated, my children are educated, and
>> we all work to make a living. Those are
>> my "contributions."

That is complete rubbish, as you will discover when you or one of your kids gets cancer, or is hit by an uninsured drunk driver, or you have a grandchild with cerebral palsy or some other birth defect and they or you lose your health insurance. I am educated and my education didn't help me at all, at least not while I lived in the US.

Pamsm :

The stock market - not the whole economy. And without the spending, there would have been no recovery.

The stock market is a reflection on the economy, and the economy did just fine in the mid eighties, and mid 2000's without Trillion dollar bailouts.

H. Hoover's policies of no spending and little intervention were making things worse. When FDR began spending and propping up the banks, the downward spiral slowed and then stopped. Recovery took years. And in 1937 FDR tried to revert to Hoover's policies, and the economy took a downturn. What FDR accomplished was not so much a miracle of recovery, as stopping the plunge. He also gave America hope. The republican policies of today give hope only to the rich.

Armstrong001:
"The percent interest the bank charges is not just pulled out of thin air."

No, it comes from the Fed.

Armstrong,

It's late, so I imagine you are probably skimming the posts, plus I may have been unclear.

I was not trying to suggest that I wasn't planning on repaying my loan (I am, I'm also ponying up extra money towards the principal). I was trying to make the point that if everyone made the minimum payment and never paid extra, the lenders would realize in the neighborhood of 3X the money they risked. Banks don't actually want to own homes, they'd rather have money. I don't blame them. Empty homes cost them now and in the future. I was positing that if lenders were open to renegotiating with current home owners, they may not realize as much profit, but they would not have to deal with empty homes and no money coming in at all.

If you have the time and interest, I think you'll see that we're not in complete disagreement with one another. We're probably not in lock-step either, though.

I think points 5, 6, 8, 9? and 11 are particularly salient then and now. For that, I hold those who marketed and made the loans responsible. I doubt anyone else will (as in, jail time for fraud/greed/stupidity [take your pick]).

http://en.wikipedia.org/wiki/Savings_and_loan_crisis

Armstrong001:
"You make my point even better than I do. After all of the spending FDR put out there over ten years, plus WWII, the economy STILL didn't recover until after government spending slowed down."

The stock market - not the whole economy. And without the spending, there would have been no recovery.

Skowronek :

"Using my own mortgage as an example, IF I repaid it without paying an extra cent towards the principal, I will have paid 3X the value of my home. No bank is repaid over a period of years for the principal amount only. So if banks opt to refinance with the current homeowners for a home's current market value, they'll still make a profit. A smaller profit, but a profit nonetheless. In most cases it would still be more than 100K in interest that the bank/mortgage company gets to pocket.

Kind of a 'bird in the hand is better than bird in a bush' scenario."

I have never said that a bank and a borrower shouldn't try to figure out an equitable way to resolve their problems. In fact, I hope banks and borrowers can come to an agreement that satisfies both sides. That is for those parties to decide.

I will not, however, condone government stepping in and forcing banks to submit. These are private contracts between two parties. Government has not place interferring with that.

How do you think banks get their money to lend? The get it from people loaning them money. If they don't get a certain percentage profit on that money when they in turn loan it to borrowers, then the people who end up getting the shaft are those who loaned the bank the money in the first place.

The percent interest the bank charges is not just pulled out of thin air. It is a calculated amount reflecting the amount of risk the banks sees in lending people money. If Big Brother decides to come in and change legal contracts without consent, what do you think happens to the risk the banks see? They have no idea when the next contract is going to be summarily modified by the government, so they have to plan for that. The only way to make that risk worth while is to raise interest rates. Either that, or stop lending money.

Gaby1 says:
"I should not be required to pay my hard earned money for other peoples stupidity!"

Gaby, do you earn more than $250K? If not, then you are getting a *reduction* in taxes - you are not being asked to pay more.

If you want to help, then *spend* that extra money. And try to remember that we're all in this together, no matter who's to blame. The thing now is to prevent a complete collapse.

"Even the Great Depression (which you people are so quick to link this to) only lasted 10 years, and it only lasted that long BECAUSE of increased government intervention."

The stock market hit bottom in 1932 - it took it *25* years to get back to where it was *after* the 1929 crash.

One of the main things that enabled recovery was - yes - *government borrowing and spending* to finance WWII.

You make my point even better than I do. After all of the spending FDR put out there over ten years, plus WWII, the economy STILL didn't recover until after government spending slowed down. Do you really want to commit to 25 years of Trillion dollar recovery bills on top of Trilion dollar budgets?

Skowronek :

""So, if a bank lends $200k and now will only see a return of $150k, who eats that lost $50k?"

Looking at my mortgage (fixed, 30 year), if I never paid an extra dime toward the principal, the mortgage company/bank would be paid approximately 3X as much money as I originally borrowed thanks to the interest. So it's kind of disingenuous to say the bank that refinanced a home for less money wouldn't still turn a profit. They may make a smaller profit though. They take that same gamble (smaller profit) every time they loan someone money--what if the mortgage gets paid off in a year, or in any length of time less than the the full term?"

You signed a contract. The bank RISKED it's money on you betting that you will faithfully repay that loan. It accepted the risk (through your mortgage CONTRACT) based on a certain return to make it worthwhile to take that risk. Would you be willing to allow the bank to increase it's rate if it thought you were more of a risk after you signed your contract? No, of course not. So why are you willing to dictate new terms to them? The number of people who pay off their loan after only a year is the exception that proves the rule. Sure, many people pay off early, but that is also built in to how much interest the bank charges to ensure that they make enough to make it worthwhile. Don't like it? Save up and buy with cash.

"So if lenders did agree to refinance some homes for their current value, and the homeowner is able to make the payments, the banks would get more money than they do in a foreclosure."

If the lender and debtor mutually agree to amend their contract in a way that satisfies both parties, GREAT! Then the government has no reason to stick its nose into the situation. My problem is when government FORCES the banks to renegotiate. It is a private contract between two parties. The government has NO say in that kind of matter.

Skowronek :

""So, if a bank lends $200k and now will only see a return of $150k, who eats that lost $50k?"

Looking at my mortgage (fixed, 30 year), if I never paid an extra dime toward the principal, the mortgage company/bank would be paid approximately 3X as much money as I originally borrowed thanks to the interest. So it's kind of disingenuous to say the bank that refinanced a home for less money wouldn't still turn a profit. They may make a smaller profit though. They take that same gamble (smaller profit) every time they loan someone money--what if the mortgage gets paid off in a year, or in any length of time less than the the full term?"

You signed a contract. The bank RISKED it's money on you betting that you will faithfully repay that loan. It accepted the risk (through your mortgage CONTRACT) based on a certain return to make it worthwhile to take that risk. Would you be willing to allow the bank to increase it's rate if it thought you were more of a risk after you signed your contract? No, of course not. So why are you willing to dictate new terms to them? The number of people who pay off their loan after only a year is the exception that proves the rule. Sure, many people pay off early, but that is also built in to how much interest the bank charges to ensure that they make enough to make it worthwhile. Don't like it? Save up and buy with cash.

"So if lenders did agree to refinance some homes for their current value, and the homeowner is able to make the payments, the banks would get more money than they do in a foreclosure."

If the lender and debtor mutually agree to amend their contract in a way that satisfies both parties, GREAT! Then the government has no reason to stick its nose into the situation. My problem is when government FORCES the banks to renegotiate. It is a private contract between two parties. The government has NO say in that kind of matter.

Sorry, Susan, this time you have lost me. I generally respect and agree with you, but your analogy is simply wrong this time around.

I am 56, not that far away from 63, my parents nor my husband's parents were in any financial situation where they could have lend us a down payment for out first home which we didn't acquire until I was 41 years old.

I remember well that the realtors and mortgage companies told us we would qualify for at least a $180,000 loan even on the limited income we made. At the time, that would have amounted to a mortgage payment of a little over $1,500. With a net income of just under $3,000 that would have eaten more than half of what we made.

Fortunately, I was smarter than taking the banking industry by their word and told them that $800 was the very most I could afford to pay in mortgage.

So what I am trying to tell you is that, no I have no problem paying taxes for the truly poor and downtrodden, but I have most certainly problems paying extra taxes for those who do not have the smarts to know that they can not afford a $1,500 payment when they make less than a net income of $3,000 a month.

I should not be required to pay my hard earned money for other peoples stupidity!

"Even the Great Depression (which you people are so quick to link this to) only lasted 10 years, and it only lasted that long BECAUSE of increased government intervention."

The stock market hit bottom in 1932 - it took it *25* years to get back to where it was *after* the 1929 crash.

One of the main things that enabled recovery was - yes - *government borrowing and spending* to finance WWII.

"So, if a bank lends $200k and now will only see a return of $150k, who eats that lost $50k?"

Using my own mortgage as an example, IF I repaid it without paying an extra cent towards the principal, I will have paid 3X the value of my home. No bank is repaid over a period of years for the principal amount only. So if banks opt to refinance with the current homeowners for a home's current market value, they'll still make a profit. A smaller profit, but a profit nonetheless. In most cases it would still be more than 100K in interest that the bank/mortgage company gets to pocket.

Kind of a 'bird in the hand is better than bird in a bush' scenario.

But, Globalone, as you say yourself, the plan never gained approval.

The Commodity Futures Modernization Act *did* pass, though.

The "G" team - Greenspan and Gramm - laid us low.

http://www.wowowow.com/post/greenspan-shrugged-did-ayn-rand-cause-our-financial-crisis-128286
http://www.motherjones.com/politics/2008/05/foreclosure-phil

ivri5768 :

"Sir or Madame, I fail to see the logic in your post. The banks became "profitable" by giving mortages to high risk borrowers and by combining with brokerage houses. This occurred because the government absented itself from oversight."

Banks become profitable by NOT losing money. Lending money to people who probably won't pay it back is bad business. If some chose to do it, they are playing with fire and will eventually (and rightfully) get burned. Government never absented itself from oversight. They were right there pushing these bad loans. Barney Frank (among others) were on record several times stating that they did not believe the industry was under-regulated. It wasn't until bad things started happening, and a Republican scapegoat could be found, that all of the sudden there wasn't enough regulation.

"The government gave them the opportunity, indeed, encouraged them, paved the way for them to make what we must agree were not "sound business decisions," and either closed their eyes, lost or disregarded warning signs all over, and legislated on their behalf. We are now left with what the "sound" business deciders decided."

You aren't giving the gov't the credit they deserve. They not only encouraged this, they FORCED it. These decisions were not made in a free market. They were made under coersion of a heavy handed government, which you are now so ready to give more power to.

"What do you suggest we do? We skip the bailout and let AIG, etc., go under? And, then, what? Assuming the world survives and we are back in our feet in fifteen or twenty years, should we continue to leave the banks, unregulated, to do as they please, and have government make it as easy as possible for them to go as far as possible on that path?"

Yes, let AIG go under. If they don't survive, another company will take its place. That's what a free market does - business springs up where there is a demand. You are getting pretty apocalyptic about this. Really? The world surviving? Are you serious? Even the Great Depression (which you people are so quick to link this to) only lasted 10 years, and it only lasted that long BECAUSE of increased government intervention. It seems as if Obama is willing to make the same mistakes FDR did. Maybe then we can accurately compare the two.

Yes. Let banks "do as they please". They are private industry. People loan them money. If the people don't like how they lend, they can take their money to another bank and deposit there. Free market works when the government gets out of the way, not when the government controls things.

Helping someone is a laudable thing, but how one goes about it makes an even bigger difference. Charity done improperly can make things worse, not better. Let's always remember that although we can take responsibility for offering help, we cannot take responsibility for anyone's success.

Athena:

""There is no shame when people go bankrupt or lose their homes."

Obviously, this has never happened to you, or you would know better. Please go down to the local homeless shelter and say this to the face of a parent who has had to pull their kids out of school and are living in a shelter because they lost their homes. I hope that you never have to face what I faced, or have your wages garnished, or have your boss come in and lay off the entire department one day. Maybe then, you'll have an ounce of compassion for people who are in the same situation through no fault of their own. "

I hope I never get laid off either. Thank God I've never had to declair bankruptcy or go to a homeless shelter. But I still say there is no shame in that if you did nothing to bring it on yourself.

The only shame I would feel is to leech of of others to stay in a home I could no longer afford.

Pamsm,

The following is from Joseph R. Mason, who is a finance professor at Drexel University’s LeBow College of Business, a senior fellow at the University of Pennsylvania’s Wharton School, and a consultant at Criterion Economics.

The Clinton-era document - “The National Homeownership Strategy: Partners in the American Dream” — was hiding in plain sight on the website of the Department of Housing & Urban Development until last year, when according to Mason it was removed (probably because the housing bust made it seem embarrassing to the department). Credit Joshua Rosner of Graham Fisher & Co. with saving a copy of it before it was expunged.

The National Homeownership Strategy began in 1994 when Clinton directed HUD Secretary Henry Cisneros to come up with a plan, and Cisneros convened what HUD called a "historic meeting" of private and public housing-industry organizations in August 1994. The group eventually produced a plan, the one that argues for creative measures to promote homeownership.

The very worst idea in the plan, which fortunately never gained approval, was to let first-time homebuyers freely tap their IRA and 401(k) retirement-savings plans with no penalty to scrounge up a downpayment. That, HUD estimated, would have "benefited" 600,000 families in the first five years.

Plenty of other ideas in the plan did become reality, though. Knowing what we know now about the housing bust, the earnest language in the document seems faintly ridiculous. Here's an excerpt. Read it closely and you can see the seeds of disaster being planted:

For many potential homebuyers, the lack of cash available to accumulate the required downpayment and closing costs is the major impediment to purchasing a home. Other households do not have sufficient available income to to make the monthly payments on mortgages financed at market interest rates for standard loan terms. Financing strategies, fueled by the creativity and resources of the private and public sectors, should address both of these financial barriers to homeownership.

Note the praise for "creativity." That kind of creativity in stretching boundaries we could use less of. "It strikes me as reckless to promote home sales to individuals in such constrained financial predicaments.

I can't even believe some of the comments on this thread. There are a lot of really clueless people.

Please reread DITLD's posts and try to pay attention.

Sure, we can say it's tough love, and let the chips fall where they may. The home buyers made their own beds, and now they need to lie in them, right?

You want to keep your own money, and not bail out any of the bad decision-makers, right?

Well, let's just see how that would work. First, with no bailouts for banks, there's no credit. No bank trusts another to pay it's loans, and they don't trust anyone else, either. So, frozen credit.

Your credit card companies will refuse further credit, even though you have a sterling record. They'll raise the rate on your outstanding balance. This is already happening. Cash only.

Companies can't buy inventory (and no one has credit to buy it anyway), and they can't meet payroll. This means first layoffs, and eventually companies going belly-up. One by one, they'll fall - small ones, and then large ones. Maybe the one you work for.

Farmers can't get the loans they need to buy the seed for next season's crops, so their land will lie fallow. They can't buy animal feed, so they sell the animals they can, and put down the rest. This will cause a food shortage, the trucking companies that haul it will go under, then the grocery stores. Unemployment will soar. It was 25% during the Great Depression.

If you decide you want the government to jump in after all, you might find it's too late - as other countries lose faith in our economy, they'll refuse to loan more, and may raise interest rates on, or even call in early, what we already owe.

If you have ten or more acres and can grow vegetables and keep some chickens, pigs, a cow and a horse, you might get by. That's if marauding bunches of starving people don't come and steal it from you.

We don't need to help banks and people out of sympathy alone - we need to do it out of self interest.

"So, if a bank lends $200k and now will only see a return of $150k, who eats that lost $50k?"

Looking at my mortgage (fixed, 30 year), if I never paid an extra dime toward the principal, the mortgage company/bank would be paid approximately 3X as much money as I originally borrowed thanks to the interest. So it's kind of disingenuous to say the bank that refinanced a home for less money wouldn't still turn a profit. They may make a smaller profit though. They take that same gamble (smaller profit) every time they loan someone money--what if the mortgage gets paid off in a year, or in any length of time less than the the full term?

Not saying it happens often, now or ever, but it does happen. Every so often someone wins at Powerball.

So if lenders did agree to refinance some homes for their current value, and the homeowner is able to make the payments, the banks would get more money than they do in a foreclosure.

Often in these conversations I notice that people forget that the Government IS the people and they talk about it as though it were some foreign entity. We all have our own personal views on these matters, as we should. But where it comes to matters that affect others, we need to rely on some sort of" view of the collective". And that's government.

Government is not "The Man".
Government is us.

Government policy generally reflects the will of the people.
Unfortunately the US is a country that is ideologically split down the middle so the majority opinion is often a slim favorite. Hence the bickering. It seems clear to me in such a case that the true majority opinion is in the middle.

The right wing is correct about some things and incorrect about others.
The left wing is correct about some things and incorrect about other.

But why is the country split so decisively down the middle? I think that most people are centrist by nature but find themselves getting wrapped up in the fight over their pet issue and then attach themselves fully to the ideology of the political party that supports that particular issue.

My guess is that if we could find a political system that could somehow eliminate political parties, and have all independent candidates, that we would get most things right.

In the current 2 party system, there is far too much of this "find a reason to disagree with them" BS going on. OMG the time wasted on finding a reason to disagree with the other team.

Could there be a way to eliminate political parties?
If there is, I think the answer lies somewhere in the internet. Digital democracy can eliminate so much waste, and it will.

Let's find a way to get rid of political parties. Here's the slogan:

You gotta fight, for your right, to not party! ;)

Rubytues63---The homeowners were just as greedy as the CEO's. Nobody was forced to buy above their means. It is the stockholders who have not been served well by the CEO's. Stockholders have been taken to the cleaners. Those who are in debt for what they could do without can look in the mirror for whom to blame, for why they are in drowing in debt. Live on credit, die by credit. Who but an idiot listens to financial adviors telling one to buy big? It in their financial interest to tell people they can afford more than they actually can. If one is not smart enough to know that, one is not smart enough to own a home of any size. There is no right to home ownership. People drowning in debt because they bought and speculated on home prices going up forever deserve no pity tears. They deserve to lose their homes and pitch a tent in America's streets. The only reason I am for bailing out these leeches is to stabilize the financial markets. Those who are bailed out by the taxpayer should be mandated to do REAL community service work. Much of their material possessions should be confiscated by the government and sold at auction. They do not own the goods. The taxpayer who will be bailing out these fools own the goods. Let's not forget the credit card debt for everything and the auto loans. Bailouts for all that, too. Millions of Americans cannot handle money. Millions of Americans were stupid enough to think that credit is a way of life. Millions of Americans should pay the price.

I am glad I sold out of all financial holdings in early 2007. I read those subprime mortgages would wreck havoc on the economy and the financial markets when a huge wave of subprime mortgages were to be reset in mid-2007. The borrowers only got riskier after that. Only fools live the way these people have. If they do not make restitution to society, the rest of us should buy everything in sight, not pay and tell the U.S. government, "Here, you pay for all of it."

America on credit must end now and forever.

You hit up your parents for down payment money when you were 36 years old?? I don't think that as common an aspect of middle-class to upper middle-class America as you seem to think it is. I'm from an upper middle class background. I paid my own way thru college via loans and menial jobs. That was never my parent's responsibility and ditto for downpayment on a house. The same was true of my parent's relationship to their parents. That doesn't seem an unusual experience to me. The thought of asking my parents for a loan at age 36 is mind-boggling.

We blame homeowners who dreamed too big, but where is the blame for the banks whose greed led them to make these volumes of bad loans? Yet, as a society, we bail out the banks and scold the homeowners for their greed. Let’s get straight exactly who the bastards are!

The CEOs, many of them at the helm of failing companies, lay off workers and ship jobs overseas while defending their eight and nine digit personal incomes. Are the homeowners to blame for this?

The mortgage industry makes loans they know are bad, takes their cut right off the top, bundles the bad loans and sells them off in the form of junk bonds as quickly as they can to eliminate their risk. Are the homeowners to blame for this?

The government knows bad loans are being made. Whistle-blowers’ throats are going raw trying to sound the warning, but what the heck, everybody’s so happy making their ungodly piles of money that regulators sit, fat and happy, with their thumbs wrist-deep up their rear-ends. Are the homeowners to blame for this?

Oh how the mighty have fallen: Poor, poor CEOs can’t make more than a half-mil anymore, while their workers dumpster-dive, trying to live on unemployment. Bailout money pours into the accounts of the unfortunate, mislead banks and mortgage companies while homeowners, greedy or not, are tossed into fire of foreclosure. And government becomes the hero – they’re going to save everybody and the American way of life to boot. Put a cape on Obama-man. He’s going to save us all.

Bailouts without major reforms are a waste of time and money. Stop paying CEOs in stock. If a company isn’t making enough money to pay their leaders in cash then the leaders don’t deserve their hundreds-of-millions. Prevent mortgage lenders from selling their ill-conceived loans before the ink is dry - force them to accept a degree of risk for their ravenous greed. And for goodness sake, unless you are willing to help every homeowner in need, let some of these corporate monoliths fall and fall loudly. Make an example out of somebody besides a guy trying to keep his house!

Well over a trillion dollars spent so far, most of it still sitting in Citibank’s vaults, while we push families into the streets for buying big like every financial advisor since 1985 told them to do. These are the same bastards that told them to put every extra cent into their 401K retirement accounts that aren’t worth the price of dirt anymore.

Save the homeowner. They are the only ones who deserve any degree of sympathy for this fiasco.

The notion that class distinctions have anything to do with the present problems is utter nonsense, as is the notion that we have any sort of duty to prop up someone who has purchased a home with a mortgage loan he had no realistic hope of repaying. Continuing to prop up artificially inflated home prices by preventing foreclosure on defaulted mortgages hurts plenty of people, particularly young families who, in a time of realistic valuations of real estate, would be able to afford to own a home. Getting the homes back into the market at reasonable prices is the first step to recovery and the restoration of opportunity for deserving, hard-working families. We owe it to those families NOT to subsidize another person's extravagant spending.

Armstrong

I do not think you understand anything that I say. The little pieces of paper that you call money may indeed belong to you, and you may indeed do anything you want with these little pieces of paper. But the economic value that these pieces of paper represent does not belong to you, not entirely. This value is linked into a vast and complex economic system of banking and finance which you do not control.

Maybe I have it wrong, but I was under the impression that the housing bubble, collapse, and loss of presumed value has damaged the banking system, perhaps, mortally. And if the banks fail, then your money will no longer be linked to economic value. You will have a mattress full of worthless paper.

I have no reason to believe stability will automaticaly be restored to an unstable situation. Maybe it will, or maybe not.

If people were greedy, so what? That is what we are all taught in America is the basis for Capitalism. People did what they thought they should do and what they thought was reasonable and right and best.

It is necessary and imperative for the government to intervene to protect and sustain our system of banking and finance. Unless of course, you are willing to let the whole thing come crashing down, and replace it with something entirely different at some time in the future.

Some people think that would be a good idea. But it would be pretty wrenching and at my age, I am not in the mood for anything so "revolutionary."

Yes-I would help families who lost their homes, but 80% percent of the people who lost their homes in the DC area illegal allies they had no business buying these 500K homes, when they do have the money. I feel bad the kids, even in Spanish you should know what 500K home is. Also, these illegal alliens destroyed these homes when they got kick out. We should help them.

Athena4:

Good post! Thanks. I personally know of two hospitalizations and three suicides, all of and by people who by no stretch could be considered losers. No doubt, there have been more "casualties," and not-very-collateral damage.
Hail to unregulated capitalism.

TROLL ALERT:

CCNL Mosquito is a shill for the Muslim Brotherhood, the Bharatiya Janata Party BJP, the B'nai Brith, and the Knights of Columbus.He's the only land mass inhabitant whose membership application was (disrespectfully) denied by AARP.
(Foo Mulligan, a former Fiji Islander, houseboating on the Pacific since 1996 was also refused by AARP.)Vladimir Putin, the Pentagon, the Saudi Sex Police, WQXR, and the entire Public Broadcasting System deny that they now know or have ever known CCNL.Code breakers working for Queen Elizabeth and Raul Castro reveal that he secretly communes at the Church of Clancy, Nussbaum, and Luigi (CCNL).One need not say more, but...

CCNL is deluded, disfunctional, and extremely dangerous.If you see his posts, take no action yourself.Scroll past as quickly as possibly, and springle virtual libations on your screen.

Good luck!

Here's a story on some of these "losers". Take a good look at what you are advocating.

http://www.msnbc.msn.com/id/26776283

In hard times, tent cities rise across the country
Since foreclosure mess, homeless advocates report rise in encampments

RENO, Nev. - A few tents cropped up hard by the railroad tracks, pitched by men left with nowhere to go once the emergency winter shelter closed for the summer.

Then others appeared — people who had lost their jobs to the ailing economy, or newcomers who had moved to Reno for work and discovered no one was hiring.

Within weeks, more than 150 people were living in tents big and small, barely a foot apart in a patch of dirt slated to be a parking lot for a campus of shelters Reno is building for its homeless population. Like many other cities, Reno has found itself with a "tent city" — an encampment of people who had nowhere else to go.

From Seattle to Athens, Ga., homeless advocacy groups and city agencies are reporting the most visible rise in homeless encampments in a generation.

Nearly 61 percent of local and state homeless coalitions say they've experienced a rise in homelessness since the foreclosure crisis began in 2007, according to a report by the National Coalition for the Homeless. The group says the problem has worsened since the report's release in April, with foreclosures mounting, gas and food prices rising and the job market tightening.

"It's clear that poverty and homelessness have increased," said Michael Stoops, acting executive director of the coalition. "The economy is in chaos, we're in an unofficial recession and Americans are worried, from the homeless to the middle class, about their future."

Armstrong001
OF COURSE government played a role. They got too involved. A bank's self interest is to stay profitable. To stay profitable they have to make sound business decisions. To do that, they have to choose carefully who they decide to lend to. When the government takes that choice away, how can you blame the business for failing?

And people want that same government that played a huge role in getting us to this point to be the ones to fix the problem? The definition of insanity is doing the same thing over and over and expecting a different result. It seems to me that maybe several people here have a touch of insanity.
---------------
Sir or Madame, I fail to see the logic in your post. The banks became "profitable" by giving mortages to high risk borrowers and by combining with brokerage houses. This occurred because the government absented itself from oversight.

The government gave them the opportunity, indeed, encouraged them, paved the way for them to make what we must agree were not "sound business decisions," and either closed their eyes, lost or disregarded warning signs all over, and legislated on their behalf. We are now left with what the "sound" business deciders decided.

What do you suggest we do? We skip the bailout and let AIG, etc., go under? And, then, what? Assuming the world survives and we are back in our feet in fifteen or twenty years, should we continue to leave the banks, unregulated, to do as they please, and have government make it as easy as possible for them to go as far as possible on that path?

As sympathetic as I am with people who are losing their homes due to unemployment, illness or other problems beyond their control, the fact is, they can no longer afford those homes and they should make other arrangements. We can't prop up everybody in every circumstances, and there is nothing wrong with renting. My husband is being terminated at the end of July and unless he can find another job, we'll probably lose our home. I'm already looking at rental prices in the area and making sure we have enough for deposit and first and last month's rent. I hate the idea of losing my home, but that's economic reality. If we have freedom to succeed, by corollary we must be free to fail as well.

And Susan, being taxed is not 'extending a helping hand.' It's having your hand ripped out of your pocket by force. The Bible calls us to help the poor, but it does not say that help must come through government. I would submit that passively paying taxes does NOT fulfill the Biblical mandate to charity. As people of faith, we should be active in our giving. I am the best judge of how my hard earned money should be spent, not government.

No, I believe that charity begins at home.
I am educated, my children are educated, and we all work to make a living. Those are my "contributions."
These accomplishments did not happen with no effort. If the "underprivileged" people choose not to learn to read and write, then they can not expect to have the same life as those who work to teach their children. If we keep "helping" people who choose to remain ignorant, we will increase ignorance.
Public school teachers do what they can, but if the parents don't encourage reading, then the children will be disadvantaged for their entire life. To change that cycle, these people need to NOT be bailed out.

"There is no shame when people go bankrupt or lose their homes."

Obviously, this has never happened to you, or you would know better. Please go down to the local homeless shelter and say this to the face of a parent who has had to pull their kids out of school and are living in a shelter because they lost their homes. I hope that you never have to face what I faced, or have your wages garnished, or have your boss come in and lay off the entire department one day. Maybe then, you'll have an ounce of compassion for people who are in the same situation through no fault of their own.

I'm by no means rich. I'm in my fifties and have never owned a house because it's always been beyond my means. But I don't feel like my neighbor, via taxes, is obligated to help me buy a house. Similarly, I don't feel in the least bit obligated to help my neighbor, via taxes, buy a house. I don't think Bill Gates or Warren Buffett owes me a house, either.

Lots of people bought houses because they are stupid and greedy. They thought the real estate bubble was going to keep expanding, prices would never stop rising, and everyone would get rich selling houses to each other. Now this transparently absurd theory is in tatters, and these idiots are all crying, poor me.

If Susan Jacoby feels so guilty about taking money from her parents, why'd she do it? Why didn't she take the money and give it to poor people? For that matter, why doesn't she sell everything she's got and give it to poor people? It's her guilt, not mine.

What's so galling is not so much the idea that in general, people ought to lend a helping hand to others who, through no fault of their own, are needy. What's galling is the notion that the government is going to take away my money and spend the money how *it* sees fit, according to *its* moral values. But government is just people -- venal, greedy, lazy, power-mad people like everyone else. What makes government better qualified to decide how to spend my money than I am? What gives it the *right*?

ivri5768 :

OF COURSE government played a role. They got too involved. A bank's self interest is to stay profitable. To stay profitable they have to make sound business decisions. To do that, they have to choose carefully who they decide to lend to. When the government takes that choice away, how can you blame the business for failing?

And people want that same government that played a huge role in getting us to this point to be the ones to fix the problem? The definition of insanity is doing the same thing over and over and expecting a different result. It seems to me that maybe several people here have a touch of insanity.

jedrothwell1

"It is your problem because if too many people go into foreclosure at the same time, we will fall into another Great Depression and it will destroy you, me, and everyone. Back then, the fools lost all their money right away, and the smart people lost all their money a few years later."

As I have said before, there have been housing bubbles before, there have been recessions before, and government didn't have to come to the rescue. Funny you should mention the Great Depression, because it was so "great" for so long because government couldn't help but be involved with everything. Again, I said it in a previous post: The average recession lasts 16-18 months. Just get it over with and let the market work its way back. It happened in the 80's, it happend in 2002. It can happen again. Government doesn't HAVE to be our savior, thank you very much.

"We can't help everyone facing foreclosure, but if we do not help anyone the problem may spin out of control."

So, you're in favor of stretching the problem out for years before we get to the bottom of the market, instead of letting things go down on their own, and recovering quicker? The economy is going to drop either way. But one way promises to be over in two years, while the other one promises to last ten, like the Great Depression.

"Capitalism is essential, but pure Lassez-faire economics "work" only in the same sense that letting people starve to death cures poverty. The devil take the hindmost is not a civilized response. And in extreme cases it imposes no obligation on the hindmost to refrain from hanging and looting."

Devil takes the hindmost is the only way to weed out bad companies, bad lenders, bad borrowers. When there is no penalty, where is the moderation in risk taking? If you know that Big Brother is going to swoop down and save you when you screw up, what's to stop you from going ahead and committing to more than you can afford?

"If your position becomes dire enough then we will have to help you as well. Sympathy is proportional to the severity of your problems and the extent to which you are not responsible for them."

Everyone is responsible for the choices THEY make. You decided to buy a home. That was YOUR decision, nobody elses. I decided to buy a home as well. That was MY choice, and I have to live with the consequences. Should people be able to reduce their automobile loans to reflect the new values of their cars as well? Maybe the government should forgive all credit card debt? People make decisions. It's the great part about being free. You are free to pursue your happiness, and you are free to make mistakes. And I am free to not pay for them.

its their fault they bought houses they couldnt afford. let em go down the tubes. the problem is, what about all the americans who pay/paid their mortgages on time every month? the people who did what they were asked to do instead of making stupid decisions that sent our economy in a freefall. what about them? maybe we should all just not pay our mortgages and let obama's welfare state save us...

Well, well, well, Farnaz aka Observer12 aka Observer31 aka Yael1 aka ivri5678 aka Billy8 has come full circle.

Considering the use of aliases as being disruptive and oozing of dishonesty, I personally will be skipping her commentaries.

What some of you don't seem to realize is that this is not just a normal, ho-hum recession. We are perilously close to a complete meltdown of the US economy (and pulling others down with us).

While I would normally be receptive to letting those who made bad decisions (particularly the Wall St. fatcats who played fast and loose with everyone's money) take their lumps, to do so in this case might mean the complete collapse of our total economic/banking system.

Soooo...government deficit spending? Normally I'm against it, but *not now*. People spending when they should be saving? Normally against it, but *not now*.

Armstrong001:

From my last post:
Government didn't play a role? Didn't say no problem putting banks and brokerage houses together? Could you explain, please? And AIG?

Addendum:
Do you know what AIG is? They insure and reinsure? They insure insurerers. They include everything from American Home Assurance Company to Commerce and Industry.

Globalone,
You talk about Clinton's "policy" of greater homeownership being a cause of the current crisi, but a policy is nothing more than a wish until it's made into some kind of law. Would you mind telling us what Clinton law you think caused this?

I think that you've gotten your Republican talking points mixed up, and that you’re really talking about the Community Reinvestment Act from the Carter administration.

But that has been in place since 1977 without causing wild speculation or sub-prime mortgages. And it does say that its provisions should be applied “…consistent with the safe and sound operation of such institutions” (the mortgage lenders).

In fact, about half of the sub-prime loans were made by independent mortgage companies, which were exempted from the provisions of CRA.

The real cause was greed, pure and simple – aided by deregulation (Phil Gramm Dec., 2000 - jammed into a must-pass omnibus spending bill) of the derivatives called Credit Default Swaps.

Mortgage companies used to actually check an applicant’s credit history, income, and other financial obligations before they’d issue a loan, and require a substantial downpayment; but since this regulation was overturned, the risk was taken out of the equation – they could sell mortgages to Wall Street investment banks, which bundled them into Collateralized Debt Obligations (CDOs), and sold them to investors. They then went to insurers to get protection for those investors via CDSs – even though the insurers (like AIG) didn’t have the cash to actually cover them.

The mortgage companies, since they had no actual skin in the game, but were paid by the numbers of mortgages they generated, rather than the value of same, went all out to suck people into buying houses, promising them infinitely rising housing values and the ability to always lower their payments by refinancing as values rose.

Out-of-control speculation resulted, sending housing prices into the stratosphere – where the average first-time buyer couldn’t hope to get in – and then the bubble burst.

Armstrong001:

Government didn't play a role? Didn't say no problem putting banks and brokerage houses together? Could you explain, please? And AIG?

armstrong001 asks:

"I am not in denial. I realize that there are many people who are facing tough times and could go into forclosure. But how is that my problem?"

It is your problem because if too many people go into foreclosure at the same time, we will fall into another Great Depression and it will destroy you, me, and everyone. Back then, the fools lost all their money right away, and the smart people lost all their money a few years later.

We can't help everyone facing foreclosure, but if we do not help anyone the problem may spin out of control.

Capitalism is essential, but pure Lassez-faire economics "work" only in the same sense that letting people starve to death cures poverty. The devil take the hindmost is not a civilized response. And in extreme cases it imposes no obligation on the hindmost to refrain from hanging and looting.

"I've got my own issues to worry about, my own bills to pay without worrying about someone elses bills. Where's your sympathy for MY position?"

If your position becomes dire enough then we will have to help you as well. Sympathy is proportional to the severity of your problems and the extent to which you are not responsible for them.

Armstrong001:

No point in repeating Farnaz's post. Point is government has to be involved big time. Re-regulation is the key. Also, both government and the bailed out banks, mega-corporations need to be publically accountable on a monthly basis. We need to know exactly how they are all working to get all of us out of the crisis.If we include the people who stand to lose their homes, regardless of why, we'll all be a lot better off in the long run. You, me, John and Jane Doe, everybody, except maybe the guys with the eighteen million dollar bonuses.

Since this is an international crisis, we're not only talking about our bailed out banks and megas, but England's, Germany's, etc.

Gladerunner - I appreciate your point of view. It's best to take the moral highground when you have the chance.

I've long had an avid dislike of Limbaugh, Michael Savage, Ann Coulter, and their kindred - among other notable high paid dissemblers and hate mongers spawned by media moguls of a certain persuasion. BTW, these are the collective masters of the low brow comment - could you even find a democrat in their league?

The deeper problem we see here is the complete lack of an objective, principled, and otherwise journalistically free media (we've really all come to love the color yellow as a leavening for the daily news). Hard to imagine all of that changing overnite with a new administration.

Truth in reporting, all that unnecessary stuff has been dispensed with - now replaced by totally partison media near-monopolies, driven by the likes of Rupert Murdock and his ilk. Of course Limbaugh has a public forum!

On another note, long live the WPA and similar Roosevelt-era public works programs. Public projects of various kinds from that period in our history are still with us today. With the condition of our infrastructure, we could sorely use a resurrection of similar collaborative state/federal make-work ideas.

Anyway, giving Limbaugh even a momentary place of political prominenece in his dispute with the head of the RNC, who was almost immediately obliged to kiss his unholy rump in public as an act of atonement to the right, is sort of disgusting. But you said it, that's the kind of people they are.

Indeed, his devoted listeners do hang on his every word - best not to alienate Rush, the mighty cloven-hooved one.

His notority and clout with the righties is no joke - the GOP wouldn't want them bolting for those whacko libertarians the next time around, now would they?

But I suppose you're correct - if the dems manage to pull our collective butts out of fire over the next few years, they'll have earned themselves an extended run in D.C.

That's a load of bull. The government FORCED lenders to lend money to people normally viewed as too high a risk and it caught up to them. From a NY Times article dated September 30, 1999 states,

"Fannie Mae...has been under increasing pressure from teh Clinton Administration to expand mortgage loans among low and moderate income people...

"'Fannie Mae has expanded home ownership for millions of families by reducing down payment requirements,' said Franklin D. Raines, Fannie mae's chairman and CEO. 'Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.'

'In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's."

Government pressured companies to make bad loans, then stand back and blame the lenders when people don't make their payments. Yeah, de-regulation really played a part in that.

Ivri5768:

Hello! Just a few words since I don't want to distract from the discussion. I read your posts on the last thread, and thanx, but I assure you you have more than enough brain cells of your own! You are welcome to be me, if you'd like, but I wouldn't recommend it!

I think you're right about the larger issues. The bigger players are always the problem. Always. I don't know how many times I pointed out that Poulson made a fortune and waited a good long while to pull the plug on AIG. Did you know that?

Anyway, my family didn't have much to begin with and now have less. Not catastrophically because we didn't have enough to sponsor a major financial "event."

I remember our chatting once or twice. I'll be back and blogging, but not for awhile, only because time is of the essence for me right now. I thank God I have this grant to work on, that no plugs are being pulled We've already saved lives, with our nonfaith based plan.

I've enjoyed your posts, enjoyed the debate. I have to run.

Farnaz :>

Hello, Farnaz :)

The Tom Joads...:0

Armstrong001

If revaluing a home is such a good idea, let the banks do it themselves. There is no law against banks renegotiating contracts with the homeowner. Government doesn't need to be involved.
_____________________
It was a specious government withdrawal, known as de-regulation that brought the banks and brokerage houses together, wrought these obviously absurd mortgages, etc. De-regulation. The whole economy is being effected.

WE can't look at this as Joe Smith who was an excellent risk, and John Jones a poor one now need our handouts. Joe and John lost their jobs. Hundreds of thousands of jobs have been lost, and people who pre-deregulation would have gotten credit can't. COMPANIES, i.e., employers can't get credit. Why? AIG, Bank of Scotland, BOA, Countrywide (still reverberating), Lloyd's, etc. Bank of Scotland pushed Europe over the brink.
__________________
We need re-regulation, big time. It could get as it did under Nixon (a Republican, btw.) to wage and price controls. I'm sure it won't, but we'd better look around. Japanese inverters lost billions from Lehman Bros., which we didn't bail out. World wide, Armstrong001, 1929 almost, with Tom Joads on the road unless we do something.

Something like corporate accountability. It's the corporate bail-outs that interest me, the banking bailouts. How is my money being spent. It trickled down all right. We all got badly burnt, and most, like me, weren't even in the fire.

Re-regulation.

ivri5768

So what, prey tell, happens when the government "revalues" a home? It reduces the principal owed by the homeowner, correct? So, if a bank lends $200k and now will only see a return of $150k, who eats that lost $50k? Investors who put money in the banks. And if the principal is lower, that in turn lowers the monthly payments on the house, does it not? Who benefits? The homeowner. A handout by any other name smells as rotten.

If revaluing a home is such a good idea, let the banks do it themselves. There is no law against banks renegotiating contracts with the homeowner. Government doesn't need to be involved.

JIMMf

Yes, he is creating public jobs.What I don't understand is the precise nature of the aid to homeowners. Some of it, if I'm not mistaken, will involve revaluing of the homes, not a matter of giving "handouts," as some might call them.

It would be good if we could expand this discussion to include the various elements, governmental, banking, etc., that will be involved in trying to help property owners remain in their dwellings, i.e., the "macro-initiatives" involved. This isn't a simple question of cash handouts.

I am not in denial. I realize that there are many people who are facing tough times and could go into forclosure. But how is that my problem? I've got my own issues to worry about, my own bills to pay without worrying about someone elses bills. Where's your sympathy for MY position?

There have been housing bubbles before. People have lost their houses before. The stock market has been as low as it is before. In 2001/2002 it was almost as low as it is now. Did we need a huge bailout then? NO! If the government would REDUCE programs, slash the budget, and provide MEANINGFUL tax cuts (not $13 a week or whatever nonsense it is) then people could work ther OWN way out of trouble. People do not have to be as dependant on Big Brother as you may think (or wish?). I guarantee that if I had a few thousand dollars extra back, I would be in a much better position than I am now.

There is no shame when people go bankrupt or lose their homes. Bad things happen to good people. There IS shame (or at least should be) to demand from others so that you can maintain what is untennable. Forclosure is not the end of the world. Sure, it'll be tough to buy a new home for a few years. But why is renting such a bad thing?

My money may have no intrinsic value, BUT IT IS MINE. Should I decide to stuff it in a mattress, who are you to deny my right to do with MY PROPERTY as I wish? Perhaps I should be forced to open my home to those who have lost theirs, because its value is linked to the system as well. It must not really be mine to use as I see fit. Perhaps you should be forced to open your home as well. That would be "fair", wouldn't it?

Again, I ask if the government should reimburse everyone for their stock losses as well. Stock value has dropped just as much if not more than home values. Wouldn't it be nice if everyone got their money back? While we're in this magical world where everyone gets what they want, do you perhaps have other wishes that should be granted?

The system needs to be flushed out. This will happen quickly (if the government will get out of the way), or it will happen slowly. Either way, the market is going to go down. The question is how quick of a cycle do you want?

The average recession lasts something like 16-18 months. Obama and his people are talking about recovery in two years with their plan. By their own admission, their recovery is going to take longer than it really has to. Which side is being compassionate? The side that wants to see this over as quickly as possible, or the side that wants to "slow the fall" and in the process delay recovery. I for one would rather rip the bandage off quickly rather than slowly pull it.

maryannevans2 wrote:

"I am in health care, and let me tell you, I have seen many people who are really hurting for the crime of getting cancer and losing their jobs and insurance."

Amen. I am not in health care but I have seen this too.

"Obviously there are very many people to blame for the current economic crisis, but there are also many innocent people who were doing the best they could given the information available to them. Unfortunately, it is not going to be possible to weed out all the undeserving people."

Right, but we do not have to weed them all out. The goal is to weed out as many as possible without also accidentally eliminating lots of deserving people.

As long as we can move ahead without bankrupting the nation or rewarding too many scoundrels, we should move ahead. We must take action to help innocent people even though this will also help a few scoundrels. Commonsense standards can be used to filter out most of the scoundrels and fools. That is, the people Obama referred to as "speculators or that neighbor down the street who bought a house he could never hope to afford." Yes, we can identify such people. It isn't rocket science. Find out how much the person earns and was earning at the time of purchase. Estimate how much he or she is likely to earn if the economy recovers.

Look at it this way. The system used to work pretty well. Loan officers at banks used to do a good job denying loans to such people. They were governed by regulations and common sense. We know how to do this right. The banks can start doing it right again, and so can government agents and regulators disbursing emergency funds to help families. It does not have to end in an orgy of corruption and free money.

Gladerunner said:

"I am not a Christian, I am an atheist, sorry to disappoint.. oh, and I’m not a Republican either."

Well, you could have fooled me. But the gist of my comments still apply.

Some people are misanthropic, and cold towards their fellow man. Why? I am not sure.

When you see people suffering, and in the midst of financial collapes and ruin, why be jealous of a helping hand extended to them? People like that are no one to be jealous of.

This is a mystery to me, which you still have not explained.

To answer your questions - no, my husband and I did not get a "bailout", but we would have welcomed one. What we did do was filing Chapter 13 under the old BK rules, which were tightened up at the behest of the Credit Card companies. We didn't "over-buy" our house. Yeah, we bought up from what we had been living in, which was a condo. But it certainly wasn't a McMansion. And we had a fixed-rate mortgage, too. We also kept a 6-month "rainy day" fund, which doesn't work so well when one wage earner is out for 10 months. AT that time, the mortgage company WAS eager to own our home, because they could have gotten good money for it. Nowadays, not so much.

I'm not saying that people aren't cheating the system. They are. I have a friend who works at at one of these places that calls people to get them to pay up. She says that 90% of them are people who have lost their jobs, savings, or had a catastrophic illness. Then there are others who are just gaming the system. If homeowners are to be bailed out, they should produce good documentation as to why they should get the money, not just get a handout.

As to higher taxes, I'd rather see my taxes going towards keeping people in their homes than bailing out CEOs who are flying around in their private jets and having spa retreats on the public dime. Or companies like KBR, who are literally KILLING soldiers because of their crappy wiring of shower facilities in Iraq.

Armstrong

You are in denial. You seem to think that some scofflaw family down the block has mismanaged their finances and should get no sympathy.

But millions of people are loosing their homes. If you have zero empathy and human compassion, then I would think you would at least fear for the collapse of the financial system.

As I said in a previous post, YOUR money has no intrinsic value; its value is linked to the economic system in complicated interconnectedness. You can put all your money in your mattress, but that will not protect its value, once the whole system comes crashing down.

You want to pay higher taxes to help out those poor people who got in over their heads? Be my guest. The IRS has no rules keeping you from sending in a few thousand dollars extra. Many of us don't want it.

Buying a home is a risk, just like any other investment. Sure, some people bought houses within their means at the time, and then lost jobs, etc. How exactly does that mean that other people have to take up the slack? Are you in favor of the government reimbursing everyone for the 40% loss in their stock value as well?

People don't have a "right" to stay in a particular home. If they can't live up to their contract, they need to move somewhere that they can afford. It's not my nor anyone else's responsibility to ensure a person can stay in a house they can't pay for.

Regarding charity, I would much rather keep my money and give to charities directly than let the government get their hands on it. How many layers of beaurocracy does the money have to filter through before it even gets to the end user? And what wasteful, misguided, or downright idiotic program will it go through? I cannot believe how people are willing to give their money to the government to distribute as THEY see fit, rather than donate it to whatever programs the individual believes in.

Forced charity isn't charity. It's theft for the benefit of others.

gladerunner,

I'll calm down here, sorry for the outbursts, anger solves nothing.

Rush L. is important because a lot of people listen to him and act accordingly. The pen is mightier than the sword, and all that. Look at the political power the leaders of the religious right had over the Republicans in the elections of 2000 and 2004, and none of them held political office. This is important - if Rush energizes, say, a large block of people in a conservative state, the representatives and senators of that state will listen and may vote to suit these people. It really is important.

"At least we would be getting something for the money instead pushing the narcotic (public welfare) that keeps the pushers (liberal Democrats) in office."

Public Welfare? You might read a news article or two and note that most of this money is going for the rescue of large corporations. And Obama is trying to limit the corporate welfare that was institutionalized by the republicans - he is re-establishing the regulations gutted by the Shrub & Co. The shelving of those regulations is largely recognized as one of the causes of the current crisis.

Danielinthelionsden: I am not a Christian, I am an atheist, sorry to disappoint.. oh, and I’m not a Republican either.

“we could allow the economic recession to run its course and see where it takes us.”
We’ve done it before, many times.

“Why shouldn't we try to diagnose the problem and then seek to fix it”
I’m all for that….. is it happening yet? Where’s the diagnosis? Who’s doing the troubleshooting? Was the few trillion dollars we’ve spent the last few weeks spent part of this troubleshooting or was it some sort of cross-our-fingers and throw tons of money up in the air to see if that fixes anything approach?

ARMINIUS:
“But the rest of the world heard it”
All I asked is for you to show me, I can’t seem to find it. … I don’t watch Fox news so I have to ask you to source this report.

“The robots are the ones drooling over your unofficial talking head leader's rants.”
(Yawning) I’m not a republican.. He’s neither the official nor unofficial anything to me… and frankly the few times I have listened to his program his ‘drooling’ minions came off sounding a lot more articulate, level headed and intelligent than your screeds today… I don’t know you, you my be a decent , intelligent person.. but you only seem shallow, hateful and bitter from your posts.. Please feel free to prove me wrong.

“We liberals are trying to fix things. Sure, we will make mistakes, but at least we are doing something.”
What mistakes have you made so far? Please do tell…….

And if you are just trying to fix things, why are you bothering even paying Limbaugh the least of attention? He’s not the crisis, he’s not the problem… He’s part of the losing minority party. He’s got nothing to do with the challenges ahead for Mr. Obama’s administration. You guys have a significant majority all the way up and down capitol hill, what are you waiting for? You don’t need the republicans, you’ve got everything just like you wanted it.. just get on with it and leave the ugly, partisan bickering and hateful character assassinations behind.. you won already!

ivri5768:

Are you saying that Obama should be restructuring welfare into WORKFARE programs like FDR?

At least we would be getting something for the money instead pushing the narcotic (public welfare) that keeps the pushers (liberal Democrats) in office.

JIMMF

“To dole out relief (public welfare)in this way is to administer a narcotic, a subtle destroyer of the human spirit. It is inimical to the dictates of sound policy. It is a violation of the traditions of America.” Franklin D. Roosevelt

Now, since we're not being disingenuous, perhaps, we should compare FDR's reforms with Obama's, taking into account, of course, the vast changes that Late Capitalism has wrought. We might want to think about the notion of more government jobs. What would FDR, he who pushed the WPA say?

Or, do you think he'd be putting people on the streets, telling them to pack up their belongings, take I-90 with all the other Tom Joads, and go...where?

It is absolute corruption of a government system when politicians can buy votes with taxpayer money.

When voters elect the politician who promises the most gifts from the public treasury, we are in a degenerating state.

Are there any liberals out there that have the brains to acknowledge that fact.

“To dole out relief (public welfare)in this way is to administer a narcotic, a subtle destroyer of the human spirit. It is inimical to the dictates of sound policy. It is a violation of the traditions of America.” Franklin D. Roosevelt

Gladerunner.

“When the Trailer Trash of the Tundra works up an audience of rednecks to the point where they are calling for Obama's death”
State your source…

My source? Good God, man, don't you ever pay attention to the news? Oh, yeah, I forgot... Fox probably didn't play that. But the rest of the world heard it. I would advise you to creep out of your cave of ignorance and see the slime-bag mess that the neocons have made of America.

Robots? Liberals are droids? The robots are the ones drooling over your unofficial talking head leader's rants. We liberals are trying to fix things. Sure, we will make mistakes, but at least we are doing something.

Yes Gladerunner and Globealone, and all the other "Christians," we could allow the economic recession to run its course and see where it takes us. We could show "tough love" to all the unemployed and to all the people who are losing their homes. We could allow the banks to fail. We could just let it all happen.

But why should we do that? Why shouldn't we try to diagnose the problem and then seek to fix it? We have brains, why shouldn't we use them? When people are sick, we try to help them, even when it seems helpless; we don't show them "tough love;" we show them kind love.

That phrase "grit and determination" is a little weird, as though suffering is good, and if we don't make people endure their suffering, then they might never get to experience any. I've got news for Globealone: suffering is a big part of life in good times and in bad, and I see little reason to gloat over anyone's suffering.

And what about the people who don't have "grit and determination" but would just die? Is that good? Is that what you wish? Everyone is not as hard as nails.

There is in this Conservative-Republican-Limbaugh"Christianism" some sort of basic misanthropic grudge against ones fellow man, which does not seem easily understandable or explainable. It is sort of a childish selfish brattiness.

(I am not meaning to be insulting, I am just trying to face up to the awful truth).

On Rush Limbaugh

Rahm Emanuel is correct; the Republicans "elected" him to be their ideologue, to represent the intellectual discourse of the Republican Party. They did it, and they're going to have to live with it.

FDR was also called a socialist, a communist, and worse; he had his Martin, Barton, and Fish in Congress, and a host of Limbaugh types outside. Just might be that Obama's in what some of us non-Limbaugh types would call pretty good presidential company.

Susan,

Who gave us this quote?:
“To dole out relief (public welfare) in this way is to administer a narcotic, a subtle destroyer of the human spirit. It is inimical to the dictates of sound policy. It is a violation of the traditions of America.”

Posted on March 4, 2009 12:38

"Skowronek :
The whole reminds me of the S&L debacle, but bigger and nastier"

EXACTLY. And did Keating go to jail?

What troubles me in some of these posts is the failure to recognize that there were culprits in this, the biggest among them AIG, major banks I've mentioned and others. While we're talking about "bailing out" they're getting eighteen million dollar bonuses with our "bailouts."

This isn't Small Town, USA-let's help,Joe cuz his barn burned down. Where is the accountablitiy? Where are all the eighteen million dollar bonuses that you and I are paying for? THAT's MONEY THAT COULD BE USED TO HELP LOTS AND LOTS OF NEIGHBORS. PROVIDE HEALTH CARE.

Where are the published New York Times reports on each companies use of OUR MONEY ON A MONTHLY BASIS? HOW ARE WE PLANNING TO RE-REGULATE?

When all the different Beowulfs start fighting each other, the dragons keep going their own way, the fallen warriors stay on the ground, and others soon join them.

We are in the midst of a social, economic, and politic crises, not primarily a problem of character involving some individuals.

I'm an atheist, oppose organized religion with every bone in my body, but the Bible does teach us to fight oppression, recognize it for the evil that it is, and fight it.

Arminus:
“When the Trailer Trash of the Tundra works up an audience of rednecks to the point where they are calling for Obama's death”
State your source…. This argument is lame and old…. If I recall correctly there was one recording of one person, not even a member of the audience that was recorded saying something to that effect.. if you have other information, please let me know.

“Where Rush Bimbo calls for Obama's failure, which, given the crisis, means the failure of America, dooming it to second-class status? Just to win an election?”
Check your facts again… Rush said he was against Obama’s plans and policy proposals as they seemed to be too much like socialism, so he hoped indeed that Mr. Obama failed getting them passed. And just because someone opposes specific Obama polices and proposals does NOT mean that they hope ‘America will fail’…. Don’t be so childish and naïve. It is quite possible that Mr. Obama’s plans will not do very much to stimulate the economy at all. that’s not just me, or Limbaugh saying that. Many economists and other smart people agree.

Rush Bimbo? What is it with you children and your lame name-calling?

“Rush Bimbo is not an elected official, but he wields vast power over the great unwashed of the Republicans, who have no plan, want no plan, just want to hate, and listen to every twisted word of that talking head as though it were holy writ”
Wow, there’s a heaping pile of hate there… First he wields no ‘power’ whatsoever. He may wield influence, but he has no power. He can’t vote on legislation, get anyone arrested, or even get a decent parking place at the capitol, he can’t even wage war… like Mr. Obama can..
The republicans do have plans.. you just don’t like them… dare I say, you want them, the republicans to fail? Didn’t you want Bush to fail?
Limbaugh and the entire GOP lost the last two elections.. apparently your concern over the fragility and impact of the souls of the great GOP unwashed is overstated. They didn’t win, you did… You guys are about the sorest winners I’ve ever come across….

BTW, over the last few days I visited several sites and seen remarks very, very much like yours, mean, hateful and specifically anti-limbaugh s… who’s feeding you robots marching orders and talking points?

It never ceases to amaze me how uninformed and the lack of a general grasp of issues that the majority of Susan Jacoby's readers/responders have.

Thats it, no ideological spin or insults. People need to be informed and not just give talking points based on ideology. Both Republicans and Democrats are guilty of getting us in our current situation (lack of morality, etc.).

For the record, I'll chip in with my 'Been there, done that' story.

Even after some bad monetary decisions, and one period of unemployment, it still looked like I could keep my house. But then two things happened: first, divorce, which cut the money available by 1/3; then, unemployment again. And since I was 64 at the time, the chance of getting a job that could pay the mortgage were worse than the chances of winning the lottery. So foreclosure and bankruptcy soon followed. But I decided that I would survive anyway, and never looked back. I'm still having problems, but there is hope, And yes, by damn, I can really identify with those whose condition is worse. At least I am still healthy, and have a survivable income, social security. Could be worse. I wish I had the money to help others, must be something I can do.

Susan Jacoby

Athena, thanks at last for a comment from someone who has been through exactly what I was talking about in my essay. What's truly revealing, I think, is that people who've been through real trouble themselves tend to be much more aware that the troubles of others are not necessarily the result of laziness or even poor judgment. And the reason taxation is the only way to help on a large scale is precisely because private charity, whether motivated by religion or secular altruism, is insufficient. All of this talk about opposition to taxation as being some form of "principle" is utter trash. It's about wanting to keep every dollar for yourself, even if you have plenty left to live on in quite grand fashion after paying taxes.

Haven't any of these Scrooges ever needed or been granted a second chance?

gladerunner,

'Politics as usual'? No way. When the Trailer Trash of the Tundra works up an audience of rednecks to the point where they are calling for Obama's death? Where Rush Bimbo calls for Obama's failure, which, given the crisis, means the failure of America, dooming it to second-class status? Just to win an election? No, this is not usual. Goldwater is not just turning over in his grave, he's redlined the tachometer.

Rush Bimbo is not an elected official, but he wields vast power over the great unwashed of the Republicans, who have no plan, want no plan, just want to hate, and listen to every twisted word of that talking head as though it were holy writ. Where are the real, true conservatives? Where are they? Where is the honor they once had? The Newt, an incredibly smart man, has none of it - he's all slash and burn politics, no compromise, just destroy the opposition.

Athena,

"Whatever you did for one of these least brothers of mine, you did for me."

There really are a few of us Christians who try to follow that, who try to live by the Gospels and not by the OT, and know and respect that Jesus is a liberal.

"Looking at the table above, you can see that more than 1.5 million houses were build every year from 2001 until 2006 (in 2007, total annual home construction was almost exactly 1.5 million). These numbers imply that there were roughly 2 million “extra” houses built between 2001 and 2006; to return to equilibrium, home building must remain under 1.5 million per year for several years. The adjustment does not occur all at once (home building going to zero) because the extra houses are not distributed equally in all states and cities. A family looking for a new house in Pittsburgh is not affected by the hundreds (or thousands) of extra homes in Miami or San Diego."

http://understandingthemarket.com/?p=18

2 million homes X ~$200,000/home= $400 billion dollars worth of builder loans that could not be repaid???

And now we the US taxpayers own 2 million empty homes??? and at least five banks who made these bad loans???

Persiflage:
“The GOP is fast becoming a national embarrassment - how can that be good for the country?”

Who is it embarrassing? It’s American politics… We have senators tap dancing in restrooms, Governors selling congressional appointments, Governors in prison, Presidential appointees evading the very taxes they are about to enforce, Presidents ‘getting busy’ with the help in the white house..…… What’s so embarrassing about a talk show host having a disagreement, over tactics with the head of the GOP? I just don’t get the funny/embarrassment.

“but this is low brow political theater run amuck”

I still don’t get it…. But then you add these gems:

“pandering to this overblown fatso”

“more savoir-faire than the porcine, flush-faced Limbaugh”

That’s high-brow? Look at yourself…. Playground – level name calling? You are of legal age aren’t you?

“We all thought we were done with lunacy in government”

Need I remind you Rush is not part of the government. He has been elected to nothing. He has nary a single vote in either house of congress, he can not veto anything. He cannot institute a single policy. He’s a voice on the radio that no one is required to listen to. Sure he’s popular among people that like that particular sort of thing… But he’s no real threat to the dems… why do they get in such a lather? And why all of the sudden?

"I truly feel that we should help our neighbors in this time of crisis. Besides, preventing foreclosures helps other homeowners, because a foreclosure reduces the property values in the entire neighborhood."

Athena,

I think I understand where you're coming from. What I'm trying to point out is that the property values a) may well have been overstated b) only apply if you're trying to sell your home c) apply if you need to tap into your home's equity (I think).

I don't see that insisting that a home is worth more than anyone wishes to pay for it is worthwhile. Banks don't want to own homes, not really. Perhaps what will happen is that the banks will permit people to refinance their homes at their current valuation, maybe at a lower interest rate. Thus preventing people from abandoning the properties (and the attendant problems of vacant properties), and opening up the possibility of more people buying now, who couldn't afford to do so one year ago. Younger couples, perhaps. Or older people who hopefully paid off one home and wish to move into a smaller and less costly home? I suspect that many of us will have some new neighbours. Probably within the year.

*crosses fingers*

I know there are plenty of people who are in it up to their necks, due to forces outside their own control. I wish those who came up with some of these crazy lending schemes, hadn't. And could be held accountable for their part in this mess.

Clear as mud.

Athena,

"I was in that situation myself back in 2002-03, and was forced to declare Chapter 13. It was a long haul, but we got back on our feet"

--- And did you accomplish any of this with the help of a stimulus package? Did the government arbitrarily step in and lower you mortgage payment to an amount you could afford?

--- I'm guessing that you exhausted all possible remedies and then, through grit and determination, made your way back from what looked like an abyss.

Gladerunner - thanks for your comments. The GOP is fast becoming a national embarrassment - how can that be good for the country?

Sure we all need a good laugh about now, but this is low brow political theater run amuck.....and generating more polarization than ever.

While glamorizing Limbaugh even further than is typical of the Fox Network newsworld, what pandering to this overblown fatso says to the world at large is something along the lines of: "This is the best we've got and we really love this guy. Since he speaks for us, he is accurately reflecting the values and ideology of the Republican party. Rush is the man, like it or stick it", as R himself might be inclined to say.

Even Newt Gingrich had more savoir-faire than the porcine, flush-faced Limbaugh.

We all thought we were done with lunacy in government, now here it again, all dressed up as the unholy & rotund court jester of the Right - complete with the requisite mean streak.

We've all been there and done that - time to move on, is it not?!

Yes, there are a lot of people out there who were flipping houses, buying more house than they could afford, buying without a down payment, etc. But there are many, many more people who bought houses, were paying their mortgages and doing just fine until they were laid off, or had a catastrophic illness, or their investments that they were living off of went into the crapper. These people aren't "losers" or "abusing the system" or "irresponsible". They're just struggling to make ends meet. I was in that situation myself back in 2002-03, and was forced to declare Chapter 13. It was a long haul, but we got back on our feet.

I truly feel that we should help our neighbors in this time of crisis. Besides, preventing foreclosures helps other homeowners, because a foreclosure reduces the property values in the entire neighborhood.

I love how the "Christians" on this board are screaming about how we can't help these people. Didn't someone say "whatsoever you do to the least of my brothers, that you do unto me?" I guess he was just a long-haired hippie librul.

The answer always lies in the middle. Everything in moderation.

Are we our brothers keeper? I think so. I believe in that philosophy.

But does that mean that we give our brother a complete safety net and never let him fail? I don't think so. We need to care for him in his worst times of need, but we also need to show him tough love and let him fail sometimes when he needs to learn a lesson. That's how I treat my brother, and I think that's how we should treat each other.

The current situation is a difficult one and it calls for neither right or left wing solutions but a centrist solution. Should we provide a safety net for those who fall on tough times? Yes. Should we also be wary of rewarding irresponsible behavior? Yes, not just for our own sake but for the sake of the person we are rewarding.

I've seen immigrants come to this country with nothing but the clothes on their back, barely able to speak english, no family no friends as a support mechanism, and still managed to climb their way through hard work into the middle class or even into self made millionaires. Such a thing is truly possible in America it happens every day. This would be one reason to look at the current system as not being unfair in the slightest. Anyone can make it with hard work. That is the beauty of America.

So yes, I am a believer in my taxes going to help my fellow man in need.
But no I am not in favor of my taxes going to some lazy irresponsible slob who is that way because he knows that his country's social safety net is always there to bail him out. We have to find a balance.

I am grateful that there is a democratic party who is always looking out for those who are truly in need.
And I am grateful that there is a republican party that is always on the watchdog alert for government becoming a dupe for those who will take advantage of the tax dollars lifted from harder working Americans.

Both sides are right, it's all about finding the right balance between the two. I am my brothers keeper. And I am also his administrator of tough love. I will allow my brother to suffer a little from time to time, if I think that he needs to learn a lesson. But I will never let him go completely under. As Susan says, this is in my own best interest. Non of us want to be surrounded by a bunch of poor people.

Give a man a fish, feed him for a day.
Teach a man to fish, feed him for a lifetime.

I agree whole-heartedly with part of this essay and disagree with the rest. Having wealth passed down from the previous generation is a big help that most do not have. And many people did think they could their homes. And I also agree that people are obligated to help their fellow mankind. However, whether people should be forced to be "good" through taxation is up for debate. I also question whether saving individual homes is the sort of good we should be trying to achieve. This will keep people who are trying to make slightly wiser decisions out of a home by keeping housing prices artificially inflated. "Good" is different to different people. We should definitely make sure people are fed and sheltered during the transition. I also do not think it was fair to point out one crooked preacher and try to blame religion in general for the crazy notions of a few. While it is true that there are still preachers who equate wealth with wisdom and righteousness and poverty with folly, that is not the whole teaching of the Scriptures. There is much to say about oppression and injustice and the need to extend ourselves on behalf of our brethren. But Susan tends to take the anti-religion stance, so I shouldn't be surprised.

Globaone

The economic system exists to serve the needs of human beings, who seek ways to buy and sell, save, and exploit the wealth of the world for their own benifit.

You seem to indicate that people exist to serve an ecomomic system. And if they get crushed up in the cogs and gears, well, that is just too bad for them; the system must keep going.

That is a pretty sad view of the world, if you ask me.

I have given a great deal of thought to all the many aspects of life, to which we attach great importance, but which in reality, do not exist at all, except inside of our own heads.

I have thought of money like this for a very long time. I first started to wonder about the value of money, when I saw a blind cashier who took money and made change, and had no way of knowing what denominaiton bill he was holding unless you told him, and then he had to trust that you were telling the truth.

This concept, that money has no instrinsic value, seems almost incomprehensible to many people. They are so attached to the notion that paper dollars are almost holy things that they crave and lust after; they cannot wrap their minds around the deeper meaning of money.

Money is just a marker, a place holder, a credit, a token that represents economic value. All the money in the world could disappear tomorrow, and all of the electronic bank credits could all be zeroed out tomorrow. But all of the economic wealth in the world would remain unchanged, all still intact, as real as the day before. The only difference would be inside the minds of men, who would all of a sudden not have any clear or easy access for their claims to economic value. But, it would all in time, rework itself out.

I am not trying to minimize the importance of money; it is important; and I am not trying to blame people for being greedy when they fixate and lust after little pieces of paper; they are trained to react to money like that, like Pavlov's dogs.

I have lost equity in my home, too. And I have lost alot of money in mutual funds, too. I was counting on this money for the future. Philosophical as I try to be about it all, it still hurts to think that I had alot of money, and then to realize that I do not.

But I know that this is not happening just to me; it is happening to everyone. This thought keeps my spirits up. That is what I try to tell people, who seem pretty devastated by it all, and even experiencing a kind of grief over their financial losses.

The world is difficult and life is unpredictable. This was always true; we just forgot it for awhile.

The whole reminds me of the S&L debacle, but bigger and nastier. Does anyone else remember when Chevy Chase Bank was Chevy Chase S&L? Did anyone who really fueled that economic disaster ever pay for it? I mean, directly? Was there jail time meted out? I don't remember, I simply remember my parents looking pole-axed at times while watching the news.

I may not be making much sense, or even sounding marginally thoughtful today, as I'm home fighting strep. 102 degree fevers aren't conducive to rational thought, go figure.

Susan,

Thank you for your reply. I apologize if I did not address your post correctly.

My comments were not intended to offer praise or congratulations. They are simply a reminder that the characteristics exhibited by the first settlers still prove to be more than appropriate today. What safety net was offered to them? None. Did they survive? Did they lay the foundation for what would become the greatest country in the world?

We have become a country of zero responsibility and zero accountability. We have completely lost sight of an important philosophy, "treat everyone fairly but not equal."

I would never want to turn my back on someone who is suffering from immense hardships, and to be honest, I don't think anyone is suggesting otherwise.

But I don't consider the loss of a job to be a catastrophic hardship. I don't consider an increase in an ARM to be undue hardship. Not to be flippant, but the hard is what makes it good.

We should be in the business of helping those who can't help themselves. We should NOT be in the business of making people whole because they have experienced hardships. Grit and determination. Grit and determination.

persiflage"Kissing the Limbaugh behind is most unbecoming, not to say undignified, in the halls of Congress and elsewhere in GOP fantasy land"

So you're offering advice to the republican party, how generous of you. Seriously what do you care who republicans listen to or choose for leadership. Would you ever support the republican party anyhow? It seems to me that your best interest would be served if the GOP made huge mistakes, chose poor leaders and wrapped their destiny around a raving blowhard lunatic.....and subsequently LOST future elections... so exactly why are you dissing them about apparently doing that exact thing?
Dems currently have The White House and significant majorities in both houses of congress. They can do anything they put their minds to without the need for more than a couple of GOP votes... So don't blame the Republicans for blocking the way.. they don't have the power the votes or the will to stop you or cause you to fail ... Only the Democrats themselves can do that.

DILTD - good insights Daniel. I wonder if someone could inform the GOP that Rush Limbaugh is part of the problem, rather than part of the solution.

They might really have to consider someone else as the new leader/spokesperson for what used to be a valid political party, having now completed a very long downward trajectory to semi-permanent status as a parody, if not an outright political paradox - of what used to be 50% of our former two party political system.

Kissing the Limbaugh behind is most unbecoming, not to say undignified, in the halls of Congress and elsewhere in GOP fantasy land. This is not helping one's neighbor or otherwise inspiring confidence - much less helping to get the nation's monumental difficulties under control.

This whole business of equating Obama with 'socialism' is beyond absurd, but about what you'd expect from a syndicated right wing - who ever said conspiracy? Not me........

Thanks again, Daniel.

"Flickinger blames the mall industry crisis on a combination of factors, from overbuilding by developers to overspending by consumers. Last year, he said, it came home to roost.

"After 25 years of overspending and 25 years of overbuilding, retail went into the tank," he said."

http://www.scrippsnews.com/node/41364

Susan Jacoby : "Taxing success? It's a great idea to help more Americans become successful"

So what you are trying to say is "From each according to his ability, to each according to his need".

Do I have that about right?

Daniel,

"Blame it all on Clinton" will not fly.

Which is why, in my post, I used the term "in part".

DMZ1,

The target home ownership % pre-Clinton, I believe, was 60%. Under President Clinton, the policy that was championed was an increase of that percentage to over 70% - something unheard of previously.

If those facts are incorrect in any way, please let me know. Thanks.

I believe that the disruption in the housing markeet is the basis for all the ecomonic dislocation and for the increasing insolvency of the banking system. In contrast to what Globalone believes, I think that there were several economic dysfunctions going on at once, that first resulted in so many foreclosures, then in the collapse of the housing bubble, then in upside-down mortgages, and so on, and so fourth, snow-balling to the present situation.

"Blame it all on Clinton" will not fly. I believe that people may have collectively acted unwisely, and made poor decisions, in hindsite. But at the time, each acted, individually, accoridng to the rules of Capitalism which seemed to be operating properly as they have for a long time.

I do not think that individuals made this happen by deliberate premeditaion, but that everyone acted in their own self-interest, according to the rules of Capitalism, and all are just as suprised at the unforseen carnage, and probably many people would wish to go back a couple of years and do things differently.

It is just seems to be the nature of the human beast to be jealous, even of people who are threatened with complete collapse and loss, and always to want more than their neighbors.

Globalone:

That post has to set some kind of record for being the most pathetic right wing drivel of the year. Stimulating and encouraging widespread home ownership has been basic policy of EVERY American President since at least FDR. The strongest advocate for the idea that 'everyone should own their own home' was Ronald Reagan not Bill Clinton.

Under Clinton, CDOs, CDSs and NINA loans did not exist, and the number of subprime mortgages was miniscule. Bush changed the rules, gutted the regulations and the rest is history.

Learn before you spew.

People think of money as little paper bills; one's with pictures of George Wahshington; five's with pictures of Abraham Lincoln; and all the others. They think of these little pieces of paper as things of value, of rock-solid value, that they seek to accumulate; even when they don't actually see the money or handle the money, they still picture it in this way; when they think of their full bank accounts or stock portfolioes, they think of suitcases of these little peices of paper with pictures of Presidents.

But all this is an illusion, utter and complete. Money is more like the ocean, a vast, VAST medium. For us to survive, we need only a few cups to drink a day. So we think of water as cups, or at most as gallons. But it is fact, a vast incomprehensible medium.

That is how I think of money, not as tiny units each of great and immutable importance, but rather as a vast incomprehensible medium. The little units of money, which we come to crave and lust after, have no value in themselves, but stand for ecomomic value. The value in money is in how it relates to economic value, and how the whole system of interlocking financial interests assigns value and calibrates value. Money is just credit, just book-markers for economic value; money represents our claim to economic value.

My point is not that money is not important. My point is that wealth does not simply "vanish" over night. The disappearance of home equity value and of stock values is the disapperance of imaginary wealth, something that never existed, and never would be realized. It is just difficult for people to accept this, that the "system" has gone so wrong, has miscalibrated the value of so much.

My point is that if people want to maintain the value in the money that they have left, the economic system that gives value to the money must be sustained and repaired. Even if you put your cold cash in a matress, its value can still disappear, if economic value that it represents goes down the drain.

Susan Jacoby

Gloablone, your post is a perfect example of what I'm talking about. You're congratulating yourself for having worked part-time all through college (so did I, so did millions of Americans) as if that is yet another example of your playing by rules that others haven't played by. Having a safety net is what being middle-class is all about.

And as far as not having taken "handouts" from parents, I'll bet if you knew anything about the real circumstances of your friends--because Americans deliberately don't talk about money with one another--you would find that an astonishing number of them did in fact borrow money from their parents, or inherited it. There is no shame in that, but it's nothing to be proud of either. It's simply a fact of life: some people are born with a safety net, and others aren't.

"I have friends who grew up with substantially more or less than I did, but each one has been defined not by the handouts given to him from his parents, but by the sacrifice and grit to which he applied himself."

What he said. Add to that not squandering (every) opportunity that came along, whether through luck or pluck. I know I screwed up along the way, but not so often that it became a habit.

Susan,

At first blush, I would contend that the "class advantages" you speak about go more towards difficulty than fairness.

The housing problem stems, in part, from President Clinton's absurd "policy" that everyone should own a home. This policy wrongly sent the message that everyone was entitled to home ownership and that, regardless of circumstances, you should have the same mansion as your friend or neighbor down the street.

I grew up in a family of seven in what most people would call a middle class family ($100k family household income). I attended public school and took the bus like anyone else. My parents did not pay for college so I went to a community college for two years. I transferred to a local University and graduated with a degree in Accounting. During my entire college career, I was working part-time during school hours and full-time over the summer and winter breaks.

I rented an apartment during my community college days and lived on campus at the University. After graduation, I rented an apartment until my wife and I could afford a townhouse. Once we had forged successful business careers, we were able to sell our townhouse and purchase a single family home.

The point is that my parents financial situation game me no tangible advantage other than a safety net should my situation ever become dire. I have friends who grew up with substantially more or less than I did, but each one has been defined not by the handouts given to him from his parents, but by the sacrifice and grit to which he applied himself.

Susan Jacoby wrote:

"Taxing success? It's a great idea to help more Americans become successful. "

Doesn't that suggest spending the collected revenue on education, rather than gilding the platinum parachutes of those who marketed loans that were...designed to fail? I mean, if everyone knew that the magic of compound interest could be used for good when saving for retirement, or for evil (credit cards, ARMs, balloon mortgages and pre-payment penalties), then maybe, just maybe we wouldn't BE in quite such a big mess now. Maybe that's wishful thinking on my part.

I'd also like to point out that many people seem to have forgotten that many realtors earn their money through commissions, and that it's in THEIR best interest to persuade you to buy a more expensive property. Of course they seem nice! They are nice...but that doesn't stop anyone from looking out for their own interests.

I think those who designed and marketed these schemes are the ones who should pay the highest price. But they are the least likely to do so. Which is why I compared them to the same robber barons who built that pleasure lake that killed so many downstream. None of them faced jail time. None of them even had to pony up any money for their indirect involvement in the debacle. Sound familiar?

As I mentioned, I'm sorry that people around me bought overpriced, overvalued new homes. I opted to buy an older home, with more land, for a great deal less money. My gains were on paper (until the property taxes hit, naturally), so the real estate market gyrations haven't hurt me. I'm not looking to sell or buy.

I'm rambling, sorry. Not enough sleep isn't helping my thought processes.

Many people are getting caught up in the whirlpool and I think that's horrible. I just wish that there were some way to shake the money out of those who I feel stole it from so many others. I don't see how that will happen though.

A Capitalist economy is an organic construct, that is not easy to understand. When it works well, it hums in mysterious synchronization, rythm, and equlibrium. But then, when something goes wrong, it goes all lop-sided and and out of kilter, like a jet engine that has exploded in midflight. Even if the plane crashes and alot of people get killed, life goes on for others. But it is better to try and avoid that. Why would anyone wish for the plane to crash, instead of fixing it in midflight, or at least getting to a safe-landing?

ivri5768:

BofA made some bad decisions, but wring subprime mortgages or NINA loans wasn't done there. CDOs and CDSs were their downfall.

Compassion is something we don't fully understand. The word itself carries more meaning than most of us realize.

I wrote more about it here: http://www.christiantwopointoh.com/church/evangelism/broken-heart

Matt
Christian2.0

Susan Jacoby

It interests me that, with a few very exceptions, no one has addressed what was the main point of my post: "the rules" favor people who were fortunate enough to have been born into families able to help them out. I wasn't suggesting that it's morally wrong to go to the Bank of Mom and Dad for a down payment--only that it's an option not available to everyone. In similar fashion, I doubt that if my brother and I had ever become seriously ill in our adult lives, our parents would have let us go bankrupt while struggling to pay our medical bills. Once again, I pose the queston: why are so many Americans reluctant to own up to class privileges and class advantages? This idea that we all "made it on our own" and therefore owe nothing to anyone is pure American dreaming, in the worst sense of that dreamy word.
Taxing success? It's a great idea to help more Americans become successful. From the bitter sound of some of these comments, you would think that success is a zero-sum game--that any help my neighbor gets somehow diminishes me.

"Monday, February 9, 2009

Florida leads nation in home overbuilding

Tampa Bay Business Journal

"A bleak market for housing starts in Tampa Bay does little to help Florida’s already poor standing compared to the rest of the nation. A new report from Metrostudy declares the state the most overbuilt.

Finished vacant housing inventory in Central Florida sits at 9.2 months, while South Florida leads with 12.6 months of finished inventory, according to Metrostudy. The Naples-Fort Myers area is not far behind with 10 months of inventory, all well ahead of the 1.5 to 2.5 months of inventory the research group considers normal in a healthy market.

In fact, only two metropolitan areas can say they have normal inventory: San Antonio, Texas, and Baltimore.

Because of the high inventory levels, Metrostudy predicts that home production will decline further this year after being scaled back in 2008.

“The cutbacks thus far have been in response to high inventories and low consumer demand, and those trends will remain in place through most of this year,” said Brad Hunter, Metrostudy’s chief economist and national director of consulting, in a release. “Absorption of the standing vacant inventory is key to finding a price bottom.”

The number of starts nationally is expected to fall to nearly half the 2008 level, amounting to 483,000 total starts. It’s a decline steeper than many housing economists have predicted.

“Some forecasts have been unrealistically high,” Hunter said.

Tampa had 932 single-family housing starts in the fourth quarter of 2008, according to Metrostudy, a drop of nearly 33 percent compared to 2007, marking the first time in 23 years that the Tampa Bay market had fewer than 100 housing starts.

The previous low, 1,041 starts, was reported during the first quarter of 1991."

Danielinthelionsden,

Dan-de-Lion, thou gentlest of souls,

I must respectfully dissent:

was ducat-rutting stuff-crazed holes

that felled the decent firmament.

And here is something else to think about. It has been said by many people that in the stock market and in home equity, the econmy has lost trillions of dolloars of wealth, meaning that wealth has simply "vanished." But this is not true. This is an illusion.

Money stands for economic value. But money itself has no value; the value is in what money stands for. After the stock market has gone down down down, and after housing prices have gone down down down, there is no more or less wealth in the world. This is only an accounting adjustment.

The banking, finance, and marketing systems became dysfunctional and allowed the expansion of prices that made people think they had access to ecomonic value, which they did not really have. this is "imaginary wealth." Now the system is "adjusting."

If you make systematic errors in balancing your check book, and then one day, you notioce the errors and make correctons, and you find that your bank balance is reduced by one-half, does that mean you have lost half of your wealth? No it does not. It means that the illusuory impression about you financial situation has been corrected.

Banks are nothing to hate. They provide the medium of money and financial exchange, which enables wealth to be created. But money itself is not wealth. The rick is to make the generation and existence of money to represent ecomonic value as closely as possible.

This is the great" failure. This, I suppose is what is called a "bubble" when the money assigned value to wealth gets ahead of the actual wealth that t iis supposed to represent.

CCNL said that we are over-built and that we neeed to put people to work tearing down houses. But that is not true. We need all the houses we can get to house the ever-increasing population.

The collapsing housing market, and the dissappearance of home equity is disastrous for some. But for others, it means that they can afford a home. Young people, coming up out of high school and college, young marrieds with new families, can now all of a sudden afford to buy a house. For them it is wonderful.

I make all of these observastions to show that it is hard for me to find and cast blame for this catatrophe, which I never imagined could happen. Nobody has done this on purpose. And the greed of individuals is no more or less now than it has ever been.

Many things happen to us, which we cannot forsee or control. I have absolutely no anger towards anyone over this. (This is probably because my parents picked me up and comforted me alot when I was a baby.) I just wish that so many of the mean-spirited and vengeful people that I hear everyday could get a grip and look upon the suffering of their fellow man with a little more compassion.

What is money? What is wealth?

When Congress approved the $800 billion "TARP" under Bush, (Toxic Assets Recovery .... ?) to help the banks, I heard people say angrily that the money should have been divided up among the American people and checks send out, and it would be money better spent.

HOWEVER,

... money, such as we know it, exists and has meaning only because banks cause it to exist. If the banking system goes under, how will we cash our checks? Not only will we not be able to cash our checks, even our paper money will devolve to its true value, which is nothing. To vent spitefulness at banks is not helpful. The banks are the mechanism that enables a medium of economic accounting and exchange. They are benign businesses, whose inventory is MONEY. Now that their inventories are low, they have a hard time doing business. But we should not wish them to fail. What would we do then?

DanielintheLionsDen,

"Oh for crying out loud! How mean can people be? I suppose an ounce of compassion and good feeling would kill the average person."

OK. They can be Mean. Or Kind... but I like your metaphor. I would change it a bit. Not the average person. Most ARE good, ( my illusion, maybe, but.. my belief). So... an ounce of kindness would kill a 'conservative'... :-) .

(not the environmental type. they would litigate till the End Days about Who Gets the Ounce. :-) )....

I live in a rich, upper middle class, area and people here are notoriously for claiming not to be rich yet are so pompous.

I have a friends that's dad is a local politic and lawyer. He recently went through tough times his idea of tough times are when he can't buy 4 new big screen TV's one year, he buys 4 new big screen TV's every year. And voted aganst a bill to continue to bus workers from the city, I live in one of the most segregated cities in the US, so even if a black person wants a job they can't get to it. He's a republican.

People should remember that it's not only high-risk property owners who're going under. It's people who were low to moderate risk who've lost their jobs and to whom nobody, not Mom, Pop, or Uncle Rex gave anything. Among the newly jobless are also people who rent and are also equally desperate. As for Madoff, what he did was deplorable and he belongs in jail as the criminal that he is, but he has nothing to do with this crisis. AIG, the Bank of Scotland, Lloyd's of London (those two pushed Europe over the edge), Citygoup, BOA, etc., are guilty of worldwide disaster. We need to know their names, why some of them aren't in jail, when the golden toilet bowl is going to be cashed in and the bucks given back to us. Same goes for the eighteen million dollar bonuses, humongous pensions, etc., etc. Obama publicly lecturing these guys is nice, but it doesn't pay the bills, doesn't help Joe Smith with his kid's tuition.

Madoff harmed primarily Jewish schools, philanthropic organizations,nearly crippling some of them, costing students' scholarships, people with money they wanted to "grow" so that they could become philanthropists. He's a crook, but Joe Smith needs to know the names of the AIG, Lloyd's, Bank of Scotland, BOA, Citygroup thugs who put him where he is,took his job,maybe his dwelling, jeopardized his kids' futures while growing fat.And while he may be one of the Joe Smith's who have committed suicide or have been hospitalized with breakdowns, those same thugs are getting fatter. Then there's Mary Jones, the single mom, who also just lost her job. These folks need to know the names of the thugs that stole from them, and I need to know their names too. Interesting article a couple of days ago right here in WaPo on Bank of Scotland and Lloyd's. Names, some names.

And when we get those names, we need those names to stay in the newspapers,not fade away behind corportate signs like AIG, Lloyd's, BOA, etc. People did real bad things to the rest of us, real people with real names signed papers, got rich and are getting richer. We do have some more jail space, and so does Europe. Not too much shopping for gold toilet bowls, private jets, in prison, I grant you.

I agree on extending a helping hand by paying higher taxes, yes. But the main problem remains. How can we stop it from happening again? Does the State need to be more involved? If so, up to what point?

Daniel, be compassionate but shouldn’t there be consequences for those who didn’t play by the rules?

We ants of the West have been feeding greedily
on the scraps of some fat, fat cats as they gorge,
and heaping our ants' nest assets up
sub-table, as though the boards above
held Plenty in endless Pleroma
for a ceaseless day.
But the feast that sucked the very stars
of their silver flounders - flaccid felines
yowling empty, some even four paws up
among the crumbling anthills.
Now the late great Golden Ducat sets
and the West with all its insect mounds
and cats deceasing, pawns itself to the East,
where hungry dragons belch the evening
carbon dark.
And even the carefullest ants,
that hoarded well and knew
the feast would end, are fat-cat-crushed.

And just the other day, a space rock
kissed our sphere, mere planet-widths away
while Jeezeus slept.

Where are singing Pythons now?

maryannevans2,

I am in health care too, and I second what you say. I'll also add to it. I have patients calling me for free medciation samples all the time. And these are working people either with no health insurance or older patients on Medicare who fell in the "donut hole" before the end of the year and could no longer afford their insulin.

Yes, some people have acted foolishly. But, IMO, nothing that the average homeowner did even remotely compares to what the crooks on Wall Street have done. The shmuck who bought a house he could not afford it by lying about his income, ended up loosing his house, his credit rating, and any hope of owning a house again for many years. But the thieves on Wall Street have stolen billions from all of us. Yet they still live in their mansions and it is highly unlikely that they will ever return a penny of their undeserved bonuses. But somehow, we alwaus blame the little guy... Madoff is arguing that he should be able to keep his multimillion dollar appartment and $63 million in his bank account because they are "unrelated" to the fraud accusations. He is still out on bail, busy trying to hide his jewelry and his stolen money. How many bank robbers do we hear about being left out on bail after being caught red-handed? If anyone wants proof of what Ms Jacoby is talking about, there it is for all to see.

I am all for responsibility and living within your means. That is what I have always done. But as Christian, am I supposed to ask people about the circumstances of their poverty and hunger before I help them? I don't remember Jesus telling us to take care only of the poor that had behaved responsibly.

Susan,

"I'm speaking in this personal vein, which I rarely do in this column, because I can't understand people who are unwilling to acknowledge the importance of access to resources that many Americans don't have."

You do have a point about this, even though I had none of the advantages you describe. I had working poor parents, and the road to the middle class for me was through a good state university. In those days they were financially accessible, and you could pay a few hundred dollars a semester for tuition from a job that that would hold body an soul together. Of course, I was a poor as a church mouse and worked like a slave. But I was able to work my way through, and then to work my way up. I could have never done it in today's world of high tuition brought to us by the Reagan Revolution. I view this as a major societal failing. I just don't see how kids today can get the kind of chance I got back then. I would happily pay higher taxes to lower tuition so they can work their way up, too.

Still, we too got stuck with a mortgage that had an "exploding" escalator clause, starting at 7% and going up to 13%. We were house-poor for several years, and were underwater for years after acquiring our house, but no one forgave our principal amount. We had to just hang in and paid until the market righted itself seven years later.

Still I think we should be willing to guarantee the amounts by which people are underwater, so that they can refinance down out of the "exploding loans" that were often provided under false pretenses. This would allow many to pay for their house at a fair rate, but not let them out of obligations that they willingly undertook.

Obama tarred with the Socialism brush? Well that puts him in good presidential company, IMO, FDR's for one. And look who's doing the tarring.

DITLD:

"Oh for crying out loud! How mean can people be?"

Pretty mean, I guess, but I think for some, it's complicated. Some just can't see that people can be hit and hit hard through no fault of their own. Don't want to believe that but for the grace of Whatever, it could've happened to them.Maybe they're not so mean, just scared, so scared they don't even know it.

Many people are going under because, plain and simple they lost their jobs because, equally plain and equally simple, a disaster due to deregulation, or better put, anti-regulation struck them down. Do I think I should bail them out to the extent that I can? Yes.

Now, how subsidizing humongous pensions, eighteen million dollar bonuses for some of the same execs that caused "my neighbor's" downfall benefits him/her I don't get. And, exactly, why I'm assisting with payment for a golden toilet bowl escapes me.(My now jobless neighbor probably makes do with silver.)

Yes, we need a national discussion on class, a nuanced one. Many people in their forties and fifties, let alone younger, got no financial help from anyone, made it on their own.They had no reason to anticipate a world wide depression.These people may not have come from money, even middle middle class money, but became middle class through their own efforts.They have no jobs, may have kids in college, and find themselves without prospects. They aren't the bad guys here, now are they?

Could we find some villains at Citygroup, AIG, Lloyds of London, Bank of America, Bank of Scotland....Hmmmm

It's the fire-breathing dragons that worry me, the one's who will always live in their golden mansions with many rooms, each with its own golden toilet.

Many people appear to subscribe to a "just world" philosophy in which nothing bad ever happens to people who don't deserve it. I am in health care, and let me tell you, I have seen many people who are really hurting for the crime of getting cancer and losing their jobs and insurance. Others who are still employed are terrified to take a few days off to care for a dying spouse or parent because they may not be viewed as indispensable and they fear they will be laid off in the next round. Obviously there are very many people to blame for the current economic crisis, but there are also many innocent people who were doing the best they could given the information available to them. Unfortunately, it is not going to be possible to weed out all the undeserving people. Also, out of pure self interest, we should realize that if the economy continues to collapse, many more jobs and homes will be lost and the recovery will take longer; for people nearing retirement age it will never come at all-it's too late to make up what's been lost.

Daniel ITLD,

Sadly, right you are, no compassion. Jesus wept.

Oh for crying out loud! How mean can people be? I suppose an ounce of compassion and good feeling would kill the average person.

What is happening in the economy right now is quite different. People knew they were buying what they could not afford. Millions of Americans went into debt due to their own greed. They should suffer the ramifications of their actions. Who takes out ARMS? What about the flippers of homes, who bought with the crazy idea that home prices would never fall. They idiots brought the mess on themselves. Nobody was forced to amass and live on nothing but credit.

(corrected copy)

Thanks to big, corporate builders and low interest rates provided by the federal government to keep employment up, too many shopping centers, office buildings, corporate centers, homes, condos and apartments were built. It was obvious to all but no one stopped it. We are now faced with glut of said structures. Oversupply leads to price reductions and reduced value of current said structures resulting in owners being saddled with homes they overmortgaged and now cannot afford or sell.

The Federal (i.e. we the taxpayers) government should no longer support builders and buyers with low interest loans but should now support the elimination of older portions of said buildings i.e. put people to work tearing down structures not building new ones. This includes tearing down New Orleans and surrounding parishes which will continue to cost taxpayers billions in humanitarian/reconstruction costs with every visit from Katrina- type hurricanes. Living below sea level is simply too risky for taxpayers to continue to support. Ditto for the rest of the hurricane regions of the USA.

As the keeper of my sisters and brothers, this I support. Add to this my support for creating green jobs i.e. more hydroelectric dams, more nuclear power plants, more wind/solar/wave farms especially off the coasts to include off the coast of Massachusetts where Senator Kennedy and his ilk have previously prevented because it would affect their ocean view from their many coastal properties.

Thanks to big, corporate builders and low interest rates provided by the federal government to keep employment up, too many shopping centers, office buildings, corporate centers, homes, condos and apartments were built. It was obvious to all but no one stopped it. We are now faced with glut of said structures. Oversupply leads to price reductions and reduced value of current said structures resulting owners being saddled with homes they overmortgaged and now cannot afford or sell.

The Federal (i.e. we the taxpayers) government should no longer support builders and buyers with low interest loans but should now support the elimination of older portions of said buildings i.e. put people to work tearing down structures not building new ones. This includes tearing down New Orleans and surrounding parishes which will continue to cost taxpayers billions in humanitarian/reconstruction costs with every visit from Katrina- type hurricanes. Living below sea level is simply too risky for taxpayers to continue to support. Ditto for the rest of the hurricane regions of the USA.

As the keeper of my sisters and brothers, this I support. Add to this my support for creating green jobs i.e. more hydroelectric dams, more nuclear power plants, more wind/solar/wave farms especially off the coasts to include off the coast of Massachusetts where Senator Kennedy and his ilk have previously prevented because it would effect their ocean view from their many coastal properties.

A lot of people knowingly overextended themselves. How else can you explain gambling on ARMs? And re-financing over and over again, in order to raid the equity on their homes?

But I think there are others who also share the blame, probably most of it. Those who did the lending and trading of (mostly) worthless paper profits. Those who loaned money to people who clearly didn't have enough money for a down payment, or enough employment history to prove they had a fighting chance of repaying the money. If your family won't loan you money as a down payment on a house, perhaps you people should've re-thought the issue.

It's the economic equivalent of the Jonestown Flood. I suspect those who first artificially inflated values and then caused the economic landslide are going to suffer the same sort of legal wrath of the people who participated in the series of arrogant mistakes that killed over 1200 of the less well-off. None. None of them went to jail, none of them suffered any financial losses, none of them had to actually see what they did.

I don't relish seeing homes sitting vacant for stretches of time. But people were going bonkers there for too long. It's a house, not the Taj Majal. It's not realistic or likely that they'll always rise in value exponentially, nor is your salary.

As it is, I'm going to have new neighbours, eventually. They won't be paying over 600K for their homes. They may have slightly bigger families (as in 5+ people in a 3000+ square foot home, it may even include a grandparent or two), but I don't think we'll be any the worse for it. Eventually. But in the meantime, it's hard.

And I do not see why I have to pay for the corporate jets, the bonuses or the fancy vacations of people who FVCKED UP and directly provoked this boom/bust. I want to see them forking over their ill-gotten goods and clapped in leg irons. Pigs will sooner glow green and fly in V-formation, of course.