True American Hero?

[zbarlici]

There is a REASON why the Middle class is dissapearing in the US...

...it is government-enforced

http://ny.metro.us/metro/blog/my_view/e ... 14260.html


..to quote David Cay Johnston, the Pulitzer-winning tax journalist,
"The IRS has slashed audit staff in recent years, to the point where, while it misses only 1 percent of wage earnings (which are withheld by employers), about 30 percent of business and investment income goes illegally untaxed. "

David Cay Johnson


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

[MSimon]

That is the economic fallacy that the rich are stealing from the rest of us and if the government stole the money back most of us would be better off.

FDR tried that and extended a severe recession into a Great Depression.

BTW taking money out of the economy is the last thing you want to do during a recession. Especially in the midst of a liquidity crisis.

The best bet for the Middle and poor class is a growing economy. Punishing the "rich" and business drives investment out of the economy.

"Concentration of wealth is a natural result of concentration of ability, and recurs in history. The rate of concentration varies (other factors being equal) with the economic freedom permitted by morals and the law... democracy, allowing the most liberty, accelerates it. -- Will and Ariel Durant

"Need" now means wanting someone else's money. "Greed" means wanting to keep your own. "Compassion" is when a politician arranges the transfer. - Greg Mankiw

==

So the question is: if the rich are increasing their wealth by a factor of 50X, the middle class by a factor of 5X, and the poor by 2X is that good in comparison to the rich increasing their wealth by 1.5X, the middle class by 1.2X, and the poor by 1.05X over the same time period?

I'd prefer the former over the latter. But then envy is not one of my sins. I have others.

==

Note: Charlie Rangle, Democrat Chairman of the House Ways and Means Committee, has suggested lowering capital gains taxes from 45% to 35%. The man has been studying history. Or else some one wise has been whispering in his ear. And he was listening.

[MSimon]

And Why does Warren Buffett like the "Death Tax"?

He scavenges the companies that can't afford the tax. So he is in cahoots with the government as much or more than any of the other rich.

So how do we stop this mess? Stop government meddling in the economy. The rich can get bills passed that they want. The poor and the middle class get screwed.

==

What I would like to see is more drilling for oil in America. Our government would then get the extraction fees instead of the Saudi Government. That would be a good thing IMO.

[MSimon]

We also have the example of the State of California where companies are leaving the State for lower tax states. With capital as mobile as it is the same thing happens on the national level.

It would be very good for us if we attracted the rich to the USA instead of driving them out.

[zbarlici]

There are loopholes in the tax system, and thats always going to be the case, i guess... what gets me though is that the finances of pretty much everybody in the mid-class gets looked at while it is apparently not so for the upper class.

Msimon, you said

"So how do we stop this mess? Stop government meddling in the economy. The rich can get bills passed that they want. The poor and the middle class get screwed. "


Tell me how the sub-prime crisis in not a result of LAX GOVT REGULATION in the credit market???

[zbarlici]

..and now 95% of the population is stuck with a $700B bill. There are ways of minimising your tax payments, via write-offs etc... ill bet you anything the incometax(whatever it may be from, and i understand theres different taxation on different types of income) is a lot different when we are talking comparison of middle class to upper class. Hence 95% of the population is stuck with a $700B bill

[ravingdave]

There are loopholes in the tax system, and thats always going to be the case, i guess... what gets me though is that the finances of pretty much everybody in the mid-class gets looked at while it is apparently not so for the upper class.

Msimon, you said

"So how do we stop this mess? Stop government meddling in the economy. The rich can get bills passed that they want. The poor and the middle class get screwed. "


Tell me how the sub-prime crisis in not a result of LAX GOVT REGULATION in the credit market???

Good Grief! It is the EXACT opposite. The Sub-Prime crisis is the RESULT of government meddeling in the market.


Carter pushed for the CRA act, CRA collected racial data on home loans.

Clinton used the data from the CRA act to conclude Minorities were being denied loans on the account of their race. Clinton pushed for increasing loans to minorities.

Fannie May and Freddie Mac (Government Sponsored Institutions) pushed Loaners to give mortgages to Weak Credit Minorities with the specific understanding that Fannie May and Freddie Mac would gaurantee those loans backed up by the full faith and credit of the Federal Government.

Loaners saw NO risk, started loaning money to anyone and everyone.

It fueled a housing boom. Everything was fine till gas price hikes put a pinch on everyone's money. Marginal People missed loan payments, rates changed, housing values declined ( the market was overbuilt as a result of these idiotic loans) people's houses were no longer worth what they paid for them.

Fannie May and Freddy Mac ended up being on the hook for billions of bad loans that a FREE market would never have made.


It wasn't caused by the Lack of Government Regulation, it was caused by STUPID Government policy decisions.


I look at history quite a bit, and it appears to me that every major fiasco that hits this country is the result of electing Democrats into the office of the presidency.


David

[MSimon]

There are loopholes in the tax system, and thats always going to be the case, i guess... what gets me though is that the finances of pretty much everybody in the mid-class gets looked at while it is apparently not so for the upper class.

Msimon, you said

"So how do we stop this mess? Stop government meddling in the economy. The rich can get bills passed that they want. The poor and the middle class get screwed. "


Tell me how the sub-prime crisis in not a result of LAX GOVT REGULATION in the credit market???

Since you haven't been following along may I suggest the following search terms in combination:

- CRA Barney Frank
- CRA Chris Dodd
- Fannie Mae Franklin Raines
- Daniel Mudd Congressional Black Caucus Obama Video

And that is just off the top of my head. It wasn't Lax regulation. It was a system designed to force lenders to lend to the uncredit worthy. Jimmy Carter started it. Bill Clinton expanded it. Bush (worst president ever) and McCain (old fool) tried to do something about it but, were stymied by all the Democrats and some Republicans.

And guess what? We have just elected one of the crooks President. Have a look at the Daniel Mudd video - it runs about 5 minutes plus.

I posted lots of this stuff at "Power and Control" look at the topic: "mortgage crisis" on the side bar and click.

What a country -

You my friend are the victim of a scam. The party of the scammers now controls the country. It is to laugh. They will be robbing Americans blind and blaming Bush. I have no assets and am currently living on Social Security. My standard of living will be going up with falling prices while the standard of living of the rest of the country (on average) goes down. Have a nice day.

Note: unemployment next year is expected to rise to at least 9% and some expect a rise to 15%.

If Obama cuts taxes on the rich (in conjunction with Congress) expect the worst to be over in two years with another two to four years of jobless recovery. If they raise taxes on the rich it could last a decade or more.

Note: some of the Bush tax cuts will expire on 1 Jan 2009. Do you think the Obama administration will accept the humiliation of re-enacting them?

This is the biggest political laffer I have seen in my whole life - next to Nixon's wage and price controls. Or the new oil - old oil scam under Carter.

==

Note: I just read ravingdave's comment and he gives the short version. Let me add that the electronics industry has been in recession for almost a year already.

[Aero]

We shouldn't overlook the simple fact that home ownership, being the American Dream, almost everyone will make the mortgage payment if they have the money. People borrowed on the expectation that they could earn more money when the payments went up, or that they could maintain their income to make the fixed payments, or that they could refinance otherwise. Unfortunately, those plans didn't work out due to loss of one of the two family jobs, loss of the primary wage earner's job, the housing bust making refinancing impossible, medical bills without insurance, a simple car accident resulting in additional financial burdens. The list goes on, but it all boils down to a change in the borrower's financial picture resulting in a lack of sufficient money to make ends meet.

Put yourself in the borrower's shoes for a moment. What is the first things you would pay after buying the minimum food that you can get by on? Well, you pay the electric, gas and phone bill. Cut off the cable, discard the cell phones, put off car repairs as long as possible sell everything of value you own, eliminate all other discretionary spending and tap your friends and family. But the mortgage and credit cards cannot be renegotiated until you are deep in trouble... Then you can't refinance because your credit is destroyed. You can't sell and rent because your credit report causes the apartment management to demand a deposit that you can't possibly come up with and the rent is more than the mortgage anyway. Your only hope is to get more money, but you've been trying to do that ever since you started to feel the pinch.

Then of course there are lier loans that you refinance with to pull out all of your equity based on the expectation or hope of more money in the future.

The income doesn't materialize so the house is foreclosed.

[scareduck]

The assertion that legal requirements to lend to underqualified buyers was the principle cause of the current financial collapse simply isn't true. According to a study published Sunday in the Orange County Register,

* Nearly $3 of every $4 in subprime loans made from 2004 through 2007 came from lenders who were exempt from [the 1977 Community Reinvestment Act].
* State-regulated mortgage companies such as Irvine-based New Century Financial made just over half of all subprime loans. These companies, which CRA does not cover, controlled more than 60 percent of the market before 2006, when banks jumped in.
* Another 22 percent came from federally regulated lenders like Countrywide Home Loans and Long Beach Mortgage. These lenders weren't subject to the law, though some were owned by banks that could choose to include them in their CRA reports.
* Among lenders that were subject to the law, many ignored subprime while others couldn't get enough.
* Among those standing on the sidelines: Bank of America, which made no subprime loans in 2004 and 2005; in 2006 and 2007 subprime accounted for just 2 percent of its loan portfolio. Washington Mutual, meanwhile, raised its subprime bet by 20 times to $5.6 billion in 2006 – on top of its already huge exposure through its ownership of Long Beach Mortgage.

Their study is based on a database generated by the Home Mortgage Disclosure Act that has tracked all mortgages written since 2004.

[MSimon]

scareduck,

The deal is that the CRA set the attitudes.

[scareduck]

scareduck,

The deal is that the CRA set the attitudes.

Well, so what? The real problem was non-bank entities taking bad risks with money they didn't have (or at least, wouldn't be responsible for collecting on at the end of the day). There's simply no data backing up the assertion that the CRA or any of its siblings was materially a problem.

[KitemanSA]

scareduck,
The deal is that the CRA set the attitudes.

Well, so what? The real problem was non-bank entities taking bad risks with money they didn't have (or at least, wouldn't be responsible for collecting on at the end of the day). There's simply no data backing up the assertion that the CRA or any of its siblings was materially a problem.

Who bought all the sub-prime mortgages from these "non-bank entities"? They certainly don't hold them; never have (at least in modern times). They bundle and sell them to other entities. Didn't these generally lead back via Fanny and Freddie to FedGov guarentees?

[seedload]

There is a REASON why the Middle class is dissapearing in the US...

...it is government-enforced

http://ny.metro.us/metro/blog/my_view/e ... 14260.html


..to quote David Cay Johnston, the Pulitzer-winning tax journalist,
"The IRS has slashed audit staff in recent years, to the point where, while it misses only 1 percent of wage earnings (which are withheld by employers), about 30 percent of business and investment income goes illegally untaxed. "

David Cay Johnson


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

The United States already has the most progressive tax system in the world. More progressive than Socialist Europe. Obama proposes to make this highly progressive system even more progressive and more Socialist. He has it perfectly backwards.

Raising taxes increases business expenses. Businesses therefore make less money. To compensate, businesses either raise prices or cut other expenses. Raising prices taxes everyone - not businesses. Cutting jobs puts people out of work. The simple fact is that business employ people. You can't make a business employ someone. A business has to have a position that by filling it makes them more money in order to hire someone. As much as we would like to believe that jobs come from the bottom up, the simple fact is that they do not. It is the other way around. Obama wants to raise taxes on businesses, on rich people, and on capital gains. Somehow this will make more jobs. Obama has it perfectly backwards.

There is nothing close to scientific evidence that man made global warming is going to raise temperatures very much at all. All evidence is bogus and unfounded statistically. All models are based on unproven feedbacks that exist in nothing more than a computer memory and some line of logic a programmer wrote. Any action based on theories of global warming that goes to the extent of bankrupting our coal industry, ceasing exploration for current sources of enery and not going after KNOWN nuclear sources of energy is completely unfounded. The idea that the government creating jobs in this area is ridiculous. The idea that government will mandate auto makers to do this and somehow this will make the auto industry do better is really silly. Again, Obama has it perfectly backwards.

The United States was founded on a Constitution that was not intended to tell government how to take care of people but to prevent government from taking away from people. Our founding fathers picked their words very carefully. The Federal Government is intended to "promote" welfare and "secure" liberty. Liberty is secured above all else. Only when you don't tread on liberty can you promote the general welfare. Make not mistake about it, liberty includes property. This is unquestionable in their minds. Know this, our founding fathers were endevoring to protect us FROM GOVERNMENT not the other way around. Obama again has it prefectly backwards.

Being "Progressive" means believing that The Consititution is fundamentally wrong. Obama even says so much. He said "the fundamental flaw" of The Consitution is that it doesn't spell out how government can help the people. He is, in that one statement, telling us that he believes that the founding document of our country is incorrect at a fundamental level because it doesn't make it clear how the Federal government is to go about the business of taking care of people. He doesn't understand that that isn't the business the governement is in. Again, and most profoundly, Obama has it perfectly backwards.

Being taken care of is the exact opposite of liberty!

But, as more and more people depend on being taken care of, there will be an ever increasing large voting block of people who will also have it perfectly backwards.



"I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them." - Thomas Jefferson

"The natural progress of things is for liberty to yield and government to gain ground. " - Thomas Jefferson

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not. " - Thomas Jefferson

"A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine." - Thomas Jefferson

[ravingdave]

The assertion that legal requirements to lend to underqualified buyers was the principle cause of the current financial collapse simply isn't true. According to a study published Sunday in the Orange County Register,

* Nearly $3 of every $4 in subprime loans made from 2004 through 2007 came from lenders who were exempt from [the 1977 Community Reinvestment Act].
* State-regulated mortgage companies such as Irvine-based New Century Financial made just over half of all subprime loans. These companies, which CRA does not cover, controlled more than 60 percent of the market before 2006, when banks jumped in.
* Another 22 percent came from federally regulated lenders like Countrywide Home Loans and Long Beach Mortgage. These lenders weren't subject to the law, though some were owned by banks that could choose to include them in their CRA reports.
* Among lenders that were subject to the law, many ignored subprime while others couldn't get enough.
* Among those standing on the sidelines: Bank of America, which made no subprime loans in 2004 and 2005; in 2006 and 2007 subprime accounted for just 2 percent of its loan portfolio. Washington Mutual, meanwhile, raised its subprime bet by 20 times to $5.6 billion in 2006 – on top of its already huge exposure through its ownership of Long Beach Mortgage.

Their study is based on a database generated by the Home Mortgage Disclosure Act that has tracked all mortgages written since 2004.

Human nature being what it is, people see free money, they start chasing it. The Stock market buble in the 1920s was caused by too much credit and too much greed. As the market went up, people would watch and say WOW !!! I need to get in on that, and they did. That caused the market to go up even more. More people said WOW !!! I need to get in on that and did.. ad infinitum. Easy credit made the process all the more dangerous.

This was also the cause of the Tech Bubble, and the cause of the Housing Bubble. Whether or not 3 out of 4 dollars were not subjected to the Fannie Mae of Freddy Mac requirements directly, they were affected by them none the less.

If other banks are making loans and making profits, people are going to copy whatever they see that's working, even if they will all end up in the ditch eventually.


Our financial system is very rickety. If most people ever figured out how precarious it is, the system would collapse over night.

And why did we go off the gold standard ?


David