Community Reinvestment Act

[decraew]

I know many think the Govt is the root of all evil and it's too big and over-regulating but the fact is if the Govt had stepped in and said "you want to buy a house you need 10% down minimum and meet minimum income guidelines and proof of income or no house for you" this housing mess would have stopped dead in it's tracks.

So it's really a lesson to be learned about our economic system and what happens when markets are allowed to self regulate and the resultant boom bust cycles.

Yeah, but regulation of financial markets is Un American !
And dontcha ferget it !!

[gssixgun]

Rather Timely


Are You Kidding Me

[Kantian Pragmatist]

I can totally sympathize with the guy in that video. He, and most of the rest of us, are quite right to feel like we're getting screwed with no lube. The middle two quintiles, of the population by income pay greater than 50% of that income in taxes and government fees, once all state and local taxes and fees are accounted for. The vast majority of small-business owners live in those middle quintiles, and they have it even worse because of mandatory insurance and reporting and safety requirements. The average Republican is right to feel like the government is too big in just this sense: they contribute too much to it and don't get nearly enough in return.

But he's quite wrong to suggest that the problem can't be solved by raising taxes on those who make over $250 thousand a year. First of all, I get the sense that this guy, like way too many American citizens, doesn't know the difference between income and revenue. Many, probably most small businesses have revenue greater than $250 thousand a year. Very very few of them post that much as profit. And that's what income is for a business: profit. It's what you get when you subtract out of your revenue all the money you spent and are continuing to spend on getting that revenue in the first place.

He's also quite wrong to suggest that there's not enough money being made by the wealthiest incomes to plug up the deficit and begin paying down the debt. The wealthiest 6 and a third percent of income makers capture 1/3 of all income generated in the country. The total amount of income generated in the country in 2010 was $14.58 trillion, one third of which is $4.86 trillion. A 50% tax on these 6.36% would generate $2.43 trillion. The total Federal Budget in 2011 (which is bigger than the 2010 budget), excluding Social Security and Medicare, which have their own funding streams and neither of which are currently contributing to the deficit, is $2.038 trillion, a difference of almost $400 billion on the surplus side. And that's without taxing anybody else anything except for their State and local taxes and the payroll taxes that pay for SS and Medicare, which in most states and locales combine to be less than 25% of income.

Economists have been warning for quite some time, since the 70's at least, that the US was going to be entering a period of slower or flat growth. They knew that it was going to be impossible to both maintain a middle class lifestyle for the bulk of the American population as well as the vast fortunes generated by the very wealthiest capitalists and investors. They knew that someone was going to have to take a haircut, and the very wealthiest Americans made damn sure it wasn't going to be them. They bought politicians and dispersed propaganda that enabled them to shift their tax burden onto others (the middle-class, the poor, and the government budgets), while changing the rules to insure that they kept their money or made money no matter what.

You want a fast, easy, and relatively painless way out of our current economic malaise? Have the Feds buy up all the outstanding mortgage, student loan and credit card debt from the banks that currently hold it, forgive that debt, monetize the Federal Debt and raise taxes on the wealthiest 10% to the rates they were at during Eisenhower's administration. Do this at the same time you put in place effective rules and police in the market and the problem is largely solved. The poor people who took out loans they couldn't afford to pay back are victims in this too, because they were told and convinced that they could afford that debt by the people who should have known better: the banks.

[Crotalus]

This video shows that even if you take ALL the money from the rich, it won't be enough.

Excellent Video on the Tax-the-Rich Mentality.flv - YouTube

[Kantian Pragmatist]

I'm not sure what's sadder. That you don't believe simple arithmetic, you can check all the numbers I posted on Wikipedia or the CBO website and do the math yourself, or that you believe such an obvious con. For one thing, his numbers start way too big, because he's including Social Security and Medicare, which, right now, are already paid for. They have their own funding streams. For another thing, he's arbitrarily limiting the pool of tax payers far beyond reason. If anywhere from 40% to 80% of the rest of the country makes less than you do, you're already paying around 30% in Federal taxes alone. Nobody, anywhere, is talking about removing all Federal taxes, and then only imposing taxes on a select few very wealthy people. We're talking about raising taxes on all the very wealthy people, from the average 17%-22% in total effective taxes, (i.e., including state and local taxes) they're paying now to something more like 35%-40%. Federal income taxes, excise taxes and other taxes plus the Social Security surplus which by law has to be loaned to the Federal Budget already add up to a bit more than $1.5 trillion. To plug the deficit, you only need to find an additional $500 billion. Raising taxes on those making more than $250k a year to a mandatory minimum of 30% nearly does it all on its own.

[Kantian Pragmatist]

Congressional approval is certainly not at 90%, but I believe what gugi means is that voters usually support their own Congresscritter and hate everyone else's, or Congress in general. I believe, however, that this upcoming election is one of the first where even the average of the support for one's own Congressperson is below 50%. Support for the Congress in general has been bouncing between 10 and 15% since at least the middle of Bush's second term.

And people are gullible, which is why it's important to have laws and police in place to protect people from being taken advantage of due to the sorts of gullibilities we know about and can protect against. Imagine if the wholesalers of the Gold Dollar razors and Kreigar razors were able to sell their wares in the Vendor's section here, make posts all over the forums about how great their products are, and harass and sue the people who make valid critical posts about their products, even if they never win those suits on the merits. How many people would get scammed into buying trash, and how much would the community be hurt by it if that were allowed, because of newbies who got frustrated and quit, instead of buying more razors from reputable traders, refurbishers and manufacturers, to say nothing of the strop-makers and the soap-makers, or sticking around to provide support for the next generation of newbies?

[hoglahoo]

Imagine if the wholesalers of the Gold Dollar razors and Kreigar razors were able to sell their wares in the Vendor's section here

Ha, I can't believe you thought anyone would fall for that weak analogy. The idea that a bank has to tell me whether I can afford a certain monthly payment is ridiculous, but I won't argue that it isn't in the best interest of a lot of consumers, corporations, and governments. It's just another example of nanny-state reaching another of its many arms out to the poor and ignorant masses. A newcomer to straight razors being ignorant of what razors to avoid is just as normal as knowing how much money one brings in and spends every month. So your analogy, while interesting, fails.

[Kantian Pragmatist]

Yes, I'm sure most people are able to negotiate the pages and pages of highly technical terms and conditions written in the tiniest print possible that make up your average mortgage, or even credit card loans, even when they throw in such variables as adjustable rates and multiple, stacking fees, as well as accurately judge their future earnings for the next 10-30 years, despite the reams of evidence that say they can't. And I'm sure that loan originators who earned a commission on each loan they gave out regardless of its quality weren't doing any sort of pressuring to get people to take out as much credit as they could, and stayed up at nights worrying whether those loans would be repaid, even though they'd already been sold on to the funds that manage American's retirement investments and insure housing loans, while actively covering up how unlikely is was that those loans would be repaid at all.

Nope, the real criminals here are the factory worker who got a second mortgage on his house on the assumption that he'd get a raise, when he got laid off instead, or the 18 year old student who was never taught personal financial management in high school who maxed out his loans in order to concentrate on school and not have to work, but can't find a job when he graduates because he's got no "experience" and this crappy jobs market, or the family who's car breaks down and they put it on the credit card, but they miss a payment due to forgetfulness or the kid needing their braces fixed and are now faced with 25% interest and huge fees, to be paid in full on the next payment or incur even more fees and higher rates of interest. Hey, the banks are just doin' business here. Sounds like something you'd hear Joe Pesci say in Casino.

A newcomer to straight razors being ignorant of what razors to avoid is just as normal as knowing how much money one brings in and spends every month. So your analogy, while interesting, fails.

Except that most people aren't really all that aware of how much money they bring in or spend every month, nor are they very good at judging how much they're going to bring in or spend in the future, when they'll have to be making payments. It's a very human flaw and it's very predictable, and if you're taking the position that we shouldn't protect people from it, then you're insisting that we live in some sort of la-la land that ignores reality. It's the same as the conservative position opposing mandatory safety devices in automobiles, despite the millions of lives they've saved.

[gssixgun]

You want a fast, easy, and relatively painless way out of our current economic malaise? Have the Feds buy up all the outstanding mortgage, student loan and credit card debt from the banks that currently hold it, forgive that debt, monetize the Federal Debt and raise taxes on the wealthiest 10% to the rates they were at during Eisenhower's administration. Do this at the same time you put in place effective rules and police in the market and the problem is largely solved. The poor people who took out loans they couldn't afford to pay back are victims in this too, because they were told and convinced that they could afford that debt by the people who should have known better: the banks.

that is all I can type as I am laughing too hard at that well thought out solution especially the blame the banks part HA !!!!

[hoglahoo]

they were told and convinced that they could afford that debt

It's no wonder we have so many tax-and-spend liberals holding political office considering how many people are as gullible as that