False. CRA required banks and S&L's that took federal deposit insurance to make serious efforts consistent with sound business practices to lend into the communities they took deposits from rather than ruling such potential borrowers out from the get-go on the simple basis of their mailing address, Can you point to even one example of that? Can you cite the text within CRA that imposes such fines and revocations? No, you can't do either one. Failure to maintain a favorable CRA rating resulted in delayed federal action on requests for approval of acqusitions and plans for interstate banking operations that had then only recently become legal. Because CRA ratings became public information, a bad one could also be a source of negative publicity. LOL. The GSE's purchased only conforming loans. Of course, nearly half of all new CRA borrowers qualified at prime terms, so those would have been okay to purchase. The loans that actually failed and created the credit crisis that ultimately resulted in the collapse of asset markets and the disastrous downward spiral of the Great Bush Recession were typically written between 2002 and 2006 by private mortgage brokers into subprime and other credit markets with high-cost/high-profit terms for immediate securitization and sale into secondary markets through the private label shops that had been hastily set up by Wall Street for that very purpose. GSE share of market shrank from above 70% early in the decade to below 25% late in 2006 as the cowboy capitalists moved in to push paper of worse and worse overall quality. They were an important beginning of the problem. As predicted by opponents of Bush's idiotic plans, tax cuts for the rich resulted in almost no new economic activity and that failure is what led the Fed to step into the breech, promising to maintain interest rates first lowered in response to 9/11 at near-zero levels until economic activity picked up. This did not sit well with institutional investors who suddenly became interested in normally staid mortage markets with their traditions of safety and suddenly very attractive yields. Wall Street was quick to capitlaize, hooking up with private mortgage brokers such as Countrywide, Ameriquset, and New Century Financial to create a major new source of mortgage-backed securities to pump product into the now hot secondary markets. Huge profits and bonuses resulted, but keeping the game going required a constant stream of new mortgages to slice and dice, and that stream could not be maintained without progressively sacrificing traditional underwriting standards. So they could either sell garbage paper destined to fail into the secondary markets, or they could stop reaping such huge profits and bonuses. Guess which path they chose.
I continue to wonder at how the Democrats referred to the tax cuts as being for the wealthy when they were passed but allowing them to expire is a tax increase for the middle class. They are playing both sides in their arguments and are hypocrits in doing so. In reality with trillion dollar deficits the tax cuts should expire and should have been repealed by the Bush adminstration when it started running deficits that lead to doubling of the national debt. The expiration of the tax cuts is not enough to balance the budget and Congress also needs to cut federal expendatures by almost 1 trillion per year (not over ten years) and then need to do so starting in 2012.
By the way in a more general sense, Obama has not advocated having all of the Bush tax cuts expire. He has stated that he will not under any circumstances permit those to the top 2% or so of taxpayers to continue beyond 2012, and that even if he is forced to let all of the tax cuts expire in order that those on the top 2% do, he will accept that cost.
Why would this guy need to raise taxes when he already dished out trillions of dollars? What does this president need a quadrillion to jump start this economy? The guy is from freaking Harvard apparently, I think we would have been better off if we had Joe the plumber running this country the last 2-3 years.
The tax cuts as passed certainly favored the rich and that disparity has only broadened over time. As much as 50% of the continuing benefits today go to the top 1% of earners. Allowing ALL of the tax cuts to expire -- something Obama has not proposed -- would constitute a tax increase on the middle class because even the tiny benefits that they do retain at this point would go away. Keep in mind that the number of 1040 filers not owing any net tax more than doubled on Bush's watch. Some of those people would end up paying something again if all of the tax cuts expired. Right-wingers of course incessantly clamor for these free-loaders to have some "skin in the game", but they at the same time oppose having the tax cuts expire. Right-winers are typically not very clever or consistent in their views. Bush was not Reagan. Reagan may have been an idiot, but not such a big one as to have missed the need to reverse his original tax cut policies and dump all of that supply-side nonsense. It wasn't enough of course, but his six consecutive years of tax increases did at least keep matters from getting worse yet in light of his increasing federal spending by better than 8% per year. But Bush only heard what Grover Norquist was telling him. Stay the course, complete the mission. There's a complete idiot for you, that Bush... As you've misspelled the word now several dozen times, perhaps it's time that someone show you the kindness of pointing out that it's actually "expenditures", not "expendatures". You're welcome. There is certainly a need for further revenue measures beyond letting the top Tax Cuts for the Rich expire, and just as certainly there is no possible way to cut nearly 30% of total annual spending from a budget that contains less than 15% in discretionary spending to begin with. Pipedream demands are not an answer to the problem. People will have to recognize the simple fact that there is no possible way for world-class amenities, low taxes, and no deficits to exist all at the same time. Let's be a little more realistic. Pick two out of three and let's see where we can go from there.
If you dont give Commies, Free Stuff, theyll riot, and burn everything down. Commie see, Commie do...
Thank you for the correction. This is something that I would address as people often refer to "entitlements v discretionary" spending. By definition an entitlement is a "A government program that guarantees and provides benefits to a particular group" under the current laws. http://education.yahoo.com/reference/dictionary/entry/entitlement Currently we have several forms of entitlements the most notable being Social Security/Medicare which are funded by dedicated FICA/Payroll taxes. So far to date the FICA/Payroll taxes have collected more revenue than these "entitlements" have spent. We also have slightly more than $500 billion being spent on "entitlements" that are funded from general tax revenues which includes food stamps, aid to families with dependent children and even federal unemployment benefits. Key to this is the fact that they are "entitlements" based upon current law and that status can be stripped from them by a simple vote of Congress. Even Social Security and Medicare could be terminated tomorrow by a simple vote by Congress. So it is true that 30% of spending cannot be made based upon only that which is discretionary. That means that "entitlements" are going to have to be addressed as well. We also have to acknowledge that federal expendatures are divided into two categories. We have Social Security/Medicare which are funded specifically by FICA/Payroll taxes and then general expendatures that are funded by general taxation. Currently these "entitlements" are in the black but are rapidly headed for the red as expendatures are rapidly depleting the Trust Fund. This certainly needs to be addressed. Then we have general expendatures that include, as noted, about $500 billion/yr in entitlements as well as the obligations related to the national debt (paying interest on the debt and redeeming Treasury securities held by the SS Trust Fund) as well as providing for the defense of our nation, currently pushing $700 billion/yr, as well as all other forms of spending. Two different tax bases with two completely different expendature accounts. In both cases where "entitlements" exist they need to be addressed for us to reach a balanced budget. The Entitlements will have to be changed. We also need to understand that letting the Bush tax cuts for the wealthy expire isn't going to do much related to the deficits being generated by general taxation and expendatures and they do absolutely nothing for Social Security and Medicare. What is more worrying is that since all current deficits are related exclusively to general taxation (Social Security/Medicare actually having already collected enough in FICA/Payroll taxes to cover all expenses for a couple more years) that the deficits actually equal ALL of current general taxation. We would have to cut expeduatures in 1/2 because we're spending twice as much as general revenues will support to achieve a balanced budget.
Which hasn't been heeded. The word is misspelled all seven times it appears in the rest of this post, the balance of which I will have to respond to later as I find the time.
Banks were strong-armed into making questionable loans in low income areas under the threat of regulatory retaliation. History documents this. Do some research Federal regulatory agencies were tasked with ensuring banks' compliance with CRA. A failed report would cost the bank its ability to open new branches and operate within the banking community. CRA is an evolving entity, not a static one. Conforming is an ever evolving term. In it's initial form it was rather benevolent. But it's ever evolving iterations resulted in an ever increasing RESULTS oriented entity that saw regulators coercing lenders to lower lending standards, lowering LTV, lowering down payments, creation of adjustable rate mortgages, etc. in order to comply. Again, it's the government pushing for politically correct results, and when they got them they didn't care that the situation was by then spiraling out of control, but they didn't care. And by the way, Bush attempted on several occasions to reign in Fanny and Freddy, but was blocked by you Democrats. You are so quick to blame the resulting mess on the Republicans, when the whole mess was orchestrated over decades by Democrats and their minions. So don't give me that line of BS. Democrats created the industry, created the obscene profit taking and were fine with it as long as they were the recipient of the fruits of that effort. When it all came crashing down, suddenly it's the bad bankers and bad wall street and bad Republicans. Just because CRA loans did not constitute the majority of the bad loans, CRA created a market for subprime loans via the CRA bonds which banks could buy, which would allow them to meet certain CRA requirements. So your argument on this issue is specious. CRA was the vehicle used by Democrats to force lenders to lend to unqualified buyers. The resulting mess today demonstrates that.
Wiki is not always a reliable source, but reading this: http://en.wikipedia.org/wiki/Community_Reinvestment_Act Only a ideologically blinded fool would not be able to see the enormous pressure placed on banks to make bad loans in bad areas. And both Dems and Repubs can be blamed equally for the shambles of "unintended consequences" the well meaning but horribly naive and business stupid politicians wreaked on the banking industry and the housing industry. And there have been no "fixes" because none of the politicians, either party, will admit, THEY were the root cause.
http://www.telegraph.co.uk/news/ukn...-grammar-school-girl-is-accused-of-theft.html Her parents, Robert and Lindsay Johnson, live in a large detached farmhouse in Orpington in Kent. They bought the house, which has extensive grounds and a tennis court, in 2006. Before moving there they sold their previous house, 10 miles away near Greenwich, for £930,000. Mr Johnson is a successful businessman, with directorships in several companies. The couple run Avongate, a direct marketing company. Mr Johnson was also a director in a company that took over the Daily Sport and Sunday Sport newspapers in 2007. Some commie LOL
In one sense I must disagree. While Congress did provide the means for the loans individual greed and stupidity created the ulitmate problem. There was a belief that no matter how high real estate prices went that they would always continue to go up. Certainly the promotion of "no qualifying loans" with zero down provided the means but it was still the choice of the individual as to the amount of debt they could afford. We saw individuals buying homes that were clearly outside of what they could afford. The individuals entered into the contract believing that they could always sell the house for more than they paid for it because of the escallating real estate prices. They sought to make a profit on the purchase as opposed to purchasing it exclusively as a place to live that they could afford. Always remember that even with stricter loan criteria a bank will base the amount of the loan on the maximum amount that the person could afford and not based upon what the individual can actually afford. I've bought numerous homes and the bank has always provided a pre-approval for at least double of what I could comfortably afford. They base their pre-approval on my debt to income ratio and not on my personal budget. During the government promoted housing boom individuals were literally buying homes at the maximum amount the bank would allow. Additionally they did so using ARM's without ever considering how much the maximum payment would be. They were only concerned with how much it cost at the lowest rate because if the rate went up they would sell for a profit and they were real estate speculators as opposed to being ligitimate home owners. This all created "over-production" in the housing market as everyone was jumping onboard the real estate speculation boom. Eventually so many extra homes were built that there was no longer any new demand and prices first stopped rising and then collapsed as there were somewhere between 2.5-3 million excess homes. Prices that had been driven up by real estate speculation dropped down to what market demand would allow them to sell for. With excess homes the value has actually dropped below what the average value is because the demand simply isn't there right now. It will take about two more years before "supply and demand" equalize. There is little the government can do about the problem that they helped create but the government is not solely to blame. Individuals that were sucked into real estate speculation are also to blame. On a minor positive note I will say that the government has been stuck with hundreds of thousands of homes and the government is selling them for about 50 cents on the dollar. I happen to be purchasing a HUD owned property that last sold for $330K and I'm buying it for less than half of that. It is a good time to buy today and individuals buying these low cost homes is what will eventually lead us out of the recession.
That is a flat-out lie. You can sit here and jibber-jabber for weeks or months, but you will never once come up with any law, policy, rule, regulation, or court decision mandating that anyone anywhere lend to unqualified borrowers. The stick that Clinton put behind CRA (it had never had one before) was delayed federal action on proposed mergers and acquisitions and on the then brand new opportuntiy to open interstate branches. Your claim was that "Failure to make these loans resulted in fines and revocation of banking licences." That too was a flat-out lie, as your inability to provide anything but a shabby cover-uip for your flustered retreat from the claim only goes to show. Sheesh! The law requires that efforts be made to meet the credit needs of the communities one takes deposits from. As these programs were geared up, it became mutually beneficial to recognize that the fact that loans were indeed (and at last) being made would suffice to indicate that efforts to lend had indeed been adequately engaged in. Another flat-out lie. Find one example of any regulator doing any such coercion. There are none. Not a single one. As you will also never report, CRA lending quickly revealed (to the surprise of some) that a large and profitable pool of potential borrowers was to be found in these formerly red-lined LMI communities. Half of all CRA borrowers were qualifying at prime terms. Nearly all the rest at Alt-A. CRA loan portfolios built up were performing better than industry averages. Policymakers (not regulators) encouraged the lending community at large to take note and use their skills and technical savvy to bring these long underserved communities into the mainstream. No, that never happened either. There were bipartisan attempts in Congress to craft the sort of GSE reform legislation that everyone agreed was needed given rapidly changing real estate and credit markets, but those were all shot down by Bush. Every single proposal put forward by the adminstration itself had one purpose and one purpose only: to carve market share out of the GSE's and turn it over to Wall Street. This was just another crude privatization scheme and nothing more. Republicans held Congress and the reins of every committee in it from January 1995 on. They held the White House from January 2001 on. Repeal of Glass-Steagall was a long-time Republican dream project that they finally twisted Clinton's arm enough to sign. Ditto with the CFMA deregulating OTC derivatives and creating the Enron Loophole. Democrats were pushing none of that, but as bad as these right-wing ideas were, they served only to set a stage. The tragic drama that would eventually unfold required actors. The star players began showing up on Januray 20, 2001. CRA loans did not comprise ANY of the problem loans, just as mortgages held by illegal immigrants were among the very last submarkets to go down. Subprime lending has been legal and enaged in since 1980. Where prime borrowers must be rated as a class, subprime borrowers may be rated as individuals. This introduced risk-based credit pricing with points, fees, and interest rates being tinkered with at the margins to balance out imperfections against a perfect (prime) credit rating. This is how subprime lending is made profitable. For years, subprime markets and red-lined LMI communities had been abused by the finance companies (Household, Beneficial, etc) who, having no competition from traditional lenders, simply functioned in the long-term as pay-day lenders would in the short-term. CRA and the Asian and Russion financial crises would end up wiping a big chuck of the finance industry off the map, and with Bush immediately relaxing enforcement of CRA, a vacuum in these markets arose into which rushed the various unregulated private brokers mentioned earlier. With secondary mortgage markets heating up after frozen low interest rates tried to rescue failed tax cuts for the rich, these brokers and Wall Street's newly built private label securitization shops teamed up to start pushing billions of dollars worth of MBS's into secondary markets. Huge bonuses and profits resulted, but soon enough, the pool of new borrowers who could meet underwriting standards started to dry up. The brokers and Wall Street didn't care. They simply ignored underwriting standards and kept writing and selling loans they knew full well would never hold up. The Fed and other regulators had the power to check and derail this process. They never used it. They just sat by let it all go right off the cliff. CRA had nothing to do with any of it. Your trash-talk is so totally lame. You can't back up any of it. You don't know the history of the matter or any relevant aspect of it.
Try reading this (which is the actual text of the law that you are now seeing for the first time in your life)... It is the purpose of this chapter to require each appropriate Federal financial supervisory agency to use its authority when examining financial institutions, to encourage such institutions to help meet the credit needs of the local communities in which they are chartered consistent with the safe and sound operation of such institutions. ...and then tell us where the "enormous pressure" to make "bad loans in bad areas" is found.
As always, the dummies that don't know how to make money will suffer and the smart money WILL make even more money. Yes It is the time to buy housing IF you have to money to do it with. It is not the time to go into debt for a house.
Debt isn't the problem. Excessive debt is. By way of example a person paying $900/mo rent that can afford to purchase a $150K home with 20% down where their monthly loan payment would be less than rent is better off financially so long as they have no other debt. Of course it is up to each individual to evaluate their own personal finances when deciding to purchase a home. They have to be able to afford it.
OK, I should have said 'excessive debt.' I buy EVERYTHING on credit every month. I've been cashless for years. I haven't had the $100 dollar bill behind my license for 20 or more years. So I do debt every month, but I also pay off every credit card every month, so I don't think of it as debt, just convenience.
I wouldn't consider that as debt at all because it is merely the payment method choosen for purchases. The money is in the bank. What we did have was an average debt of 134% of annual income and that was not covered by money in the bank. That has been reduced since the recession into the 120% range as many with high debt rations have either defaulted on home loans they couldn't afford (reflected foreclosures) eliminating that debt or by paying down their personal debt. While I don't have an actual article to refer to I believe that economists are generally opposed to average personal debt above about 75% of annual income as they often cite that number. As I've mentioned previously the current recession is being driven by two fundamental factors. First is the high average personal debt which prevents consumption as Americans attempt to bring their personal debt under control. Dollars that would be used for consumption are being spent to reduce debt which reflects prior consumption. Basically we're paying off prior consumption. The next factor is the excess number of homes estimated to be over 2 million homes that were produced based upon increased personal debt previously. They were not only built based upon demand but they were also way over-priced based upon that demand being driven by easy credit. Those homes must be consumed and they will be over the next few years. Once they are consumed then we'll see new home construction come back. Until then there are literally millions of Americans out of work as the market demand for new homes does not exist when so many low cost vacant homes are on the market. These are the drivers behind the recession and high unemployment today. The government can do nothing to address these problems which is why all of the "jobs bills" are a joke. They attack a symptom and not the problem.
Those tax cuts amounted to approx $70 billion dollars a year for a total of $560 Billion dollars or $280 Billion dollars LESS then the Stimulus Bill which wasn't spread out over 8 years. So if the Bush tax cuts were responsible for the mess we're in, then the Obama stimulus spending spree just killed the country for good.
You are what is called 100% WRONG. The tax cuts on the rich reduced the rate from 39.6% to 35%. You are welcome to look that up. Every other bracket below that top bracket got a reduction in rate GREATER than the one the rich got. The rich got an 11.6% reduction. The lowest rate was reduced from 15% to 10%, You may also look that up. That is a 33% reduction. In actual dollars, the "rich" saved $70 billion per year. The 'all others,' middle class and lower, saved $300 billion per year. I might also point out that FY 2007, the last Fiscal Year before Democrats took control of both Houses of congress, the revenue of the Federal Government was $2,568 TRILLION. that is the most money our Federal Govt ever took in. you might also note that the tax cuts WERE in effect then and we were able to have a deficit of $161 billion dollars, and that IS BAD. Now Federal revenue hovers below $2.2 TRILLION and the tax cuts have not changed. Only the economy has. And the Federal revenue is down only $395 billion, yet deficits are AVERAGING $1.5 trillion UNDER DEMOCRAT "LEADERSHIP." Revenue down 15% and deficits UP by 10 TIMES. The problem is NOT the tax cuts [that were extended by odrama in Dec. 2010], the PROBLEM is absolutely insane reckless spending by odrama and the Democratic Party.
Bad math is worse than no math at all. For a person with an income of $1.5 million (the average income in the top 1%), that paltry 11.6% tax reduction comes to a free $69,000. The whopping 33% cut for the person making $15,000 would be $750. But the reality was far worse than that. Between 2000 and 2006, the income of the top 1% increased by $476 billion (33%). Their taxes paid increased by $40 billion (11%). The effective tax rate paid by these very wealthy Amricans on all their brand new income was about 8.5%. What did YOU pay last year? The budget legislation for FY2007 was passed by Democrats, the last of it on February 14, 2007. Republicans had never gotten around to it in 2006. They knew they were about to get clobbered at the polls and just kind of lost their taste for it. Revenues increase every year if you do absolutely nothing. And we'd have been much, much better off had Bush adopted THAT approach. Here are projected revenues from the January 2001 CBO budget analysis. Next to them are actual revenues, and then the shortfall that Bush's idiotic polices produced... ......Projected...Actual...Shortfall 2001....2,135.....1,991.......-144 <<< Bush tax cuts 2002....2,236.....1,853.......-383 2003....2,343.....1,782.......-561 <<< More Bush tax cuts 2004....2,453.....1,880.......-573 2005....2,570.....2,154.......-416 2006....2,689.....2,407.......-282 2007....2,816.....2,568.......-248 2008....2,955.....2,524.......-431 <<< Great Bush Recession 2009....3,107.....2,105.....-1,002 2010....3,271.....2,163.....-1,108 2011....3,447.....2,335*....-1,112* * Estimated from ten months data. Total Revenues Lost Since 2001: $6.26 trillion. Revenues for FY2011 are unlikely to exceed those that had been projected for FY2003. We have a revenue problem in this country, not a spending problem.
