I'm sorry, I must have been so unclear. Steve, I didn't bring up public housing an the wide spread taking of land in the past because I thought it was a good thing. It was terrible, but it happened because people believed that government could fix problems. Again, I was speaking about what the country was like in the past, not what I would like for a future. And my reference to faith and church does not refer to faith in God. I'm trying to express that the ultra-hard core like you have a dogma, you have rules regarding your belief in your political ideology that is kinda like religion, and to people like me, it's creepy, off-putting.

I also apologize for dragging this post way off topic.

geojanes wrote:I'm trying to express that the ultra-hard core like you have a dogma, you have rules regarding your belief in your political ideology that is kinda like religion, and to people like me, it's creepy, off-putting.

I also apologize for dragging this post way off topic.

No problem.

I'm so "ultra-hard core" I voted for someone like Romney? Father of "Romneycare?" Is that all it takes to qualify me as a right-wing ideologue? If that's creepy, well then, you really are part of the "mushy middle," aren't you?

steve

Why didn't MD get more money when they raised taxes?

Here's a thought. The tax on millionaires was instituted in 2008 when an awful lot of people had enormous income declines? I'd guess that the 2,000 fewer millionaires represented people who'd lost their shirts in the market, the home values crash and the recession... And the loss of 2,000 millionares had nothing to do with the advent of the tax. That the loss of revenue from the tax was due to the concurrent recession. And that if the tax hadn't changed there would be even more loss of revenue simply becasue of declining incomes due to the recession.


GEO I think in isolating Steve's obsession with purity in the ideology you've hit on the problem. Because there is a right/left , us/them perspective on all issues, it seems to be impossible to pick and choose the solutions that work from across the palette of political thought . Because purists like Steve want to believe (This is the faith you are alluding to I suspect) that the solutions of the right are always the best answer. That limited government is always the right answer, and that anything outside of that narrow definition must always fail - you can't consider pragmatic solutions.

Health care in the US is beset by this of course. All the evidence around the world proves that a "socialist" solution is both more effective and efficient but because it can be labeled socialist it is simplistically denied credibility by purists like Steve. They tie themselves into knots to rationalize the failure of the current system in the SU versus the success of socialist Norway (for instance).

Because eliminating government is always supposed to create more efficiencies, more effective economies, purists like Steve must consistently ignore the evidence that often it is when government regulation is lessened or co-opted by the private concerns that calamity occurs. He can agree with me that Goldman Sachs executives should be in jail (essentially for fraud) but he can't understand that the reason they aren't is that many of the regulations and enforcement of regulations that would have put them there have been eroded since the 1980s. (We had the argument about Fanny and Freddie and the causes of the crash on the other board Steve. Most of us resolved that Fannie and Freddie were minor contributors. You may have stopped participating in that thread when the use of evidence became standard in the discussion.)

There is, and never will be, the idea of a perfect size or type of government or a perfect corporation for that matter. We keep changing things in order to improve and adapt and evolve towards better outcomes. When people start to have "faith" in things like limited government they have to start ignoring things that demonstrate where limiting government has failed.
In deeply socialist or communist nations the same kind of "faith" occurs in the ability of socialist answers to everything, always working. Try having a conversation with someone in Cuba committed to their system. Its always because the system hasn't achieved purity in its socialism that things aren't working so well.

The ability to compromise, the ability to think beyond one's ideological box, and the ability to challenge mythic belief with evidence are all descriptive of the core of the Republican party in the US right now. The Republican tent is a shrinking tent, because people like you, willing to do those three things are characterized as antiethical to the party.
A two party system, one dominated by extreme views and the other who seem to have abandoned principle for power has shifted the political scope right as you pointed out. But are Americans really shifted right or have they simply been given little choice?
Example: ? In opinion polls, Most Americans support a single payer national health service. Probably because most can look at the facts as presented in other nations and wonder why they can't have the same thing. But this alternative hasn't ever been on the table has it ? Is that because it is easily "labeled" and demonized as a result? And do the majority of people who support the idea in these polls, do they see themselves as "socialists?"
Labels are easy, lazy and counter productive. So is pure ideology

rickyp wrote:steve

Why didn't MD get more money when they raised taxes?

Here's a thought. The tax on millionaires was instituted in 2008 when an awful lot of people had enormous income declines? I'd guess that the 2,000 fewer millionaires represented people who'd lost their shirts in the market, the home values crash and the recession... And the loss of 2,000 millionares had nothing to do with the advent of the tax. That the loss of revenue from the tax was due to the concurrent recession. And that if the tax hadn't changed there would be even more loss of revenue simply becasue of declining incomes due to the recession.

Speculation. I'm not saying you are necessarily wrong, but I'm not taking you as the expert on MD income. The fact is the number went down. You can't establish "why" on a guess.

GEO I think in isolating Steve's obsession with purity in the ideology you've hit on the problem.

When rickyp agrees with you, it is time to reexamine your premise.

Again, what qualifies Romney as "pure" with regard to conservative ideology?

Because eliminating government is always supposed to create more efficiencies, more effective economies, purists like Steve must consistently ignore the evidence that often it is when government regulation is lessened or co-opted by the private concerns that calamity occurs

???

Aren't YOU the one willing to completely ignore the government intervention that led to the real estate meltdown? Aren't YOU the one completely redefining "laissez-faire?"

He can agree with me that Goldman Sachs executives should be in jail (essentially for fraud) but he can't understand that the reason they aren't is that many of the regulations and enforcement of regulations that would have put them there have been eroded since the 1980s.

Pure manure. What would stop Obama/Holder from prosecuting many of them now? How about starting with Paulson? Of course, with all the tax cheats in the Obama Administration, it might be a touchy subject.

(We had the argument about Fanny and Freddie and the causes of the crash on the other board Steve. Most of us resolved that Fannie and Freddie were minor contributors. You may have stopped participating in that thread when the use of evidence became standard in the discussion.)

Let's say Fannie and Freddie were "minor." Where did the idea that loaning money to people who could not afford it was not only a good idea but a mandatory one come from?

Hint: it wasn't "laissez-faire" banking practices.

The ability to compromise, the ability to think beyond one's ideological box, and the ability to challenge mythic belief with evidence are all descriptive of the core of the Republican party in the US right now.

I agree. Sadly, you said exactly the opposite of what you meant.

Who is it that is challenging the status quo and looking toward innovative ideas to fix Medicare? It's not Democrats. They don't care that there are tens of TRILLIONS of dollars of unfunded liabilities. Why is that?

Answer: because they love to demagogue the issue.

Where are the great "thinkers" on the Democratic side? They generally have one process: raise taxes, spend more.

The Republican tent is a shrinking tent, because people like you, willing to do those three things are characterized as antiethical to the party.

It's shrinking so much. How many seats did they just win in the last Congressional election?

If the Democrats keep growing like that, the Republicans could soon dominate both houses of Congress and most of the State houses. Go Democrats!

A two party system, one dominated by extreme views and the other who seem to have abandoned principle for power has shifted the political scope right as you pointed out.

Yes, it's really sad how few Democrats have any principles. Lieberman and Conrad. Webb. A handful in the House. You're right--the Democrats have gone bonkers!

In opinion polls, Most Americans support a single payer national health service.

How many polls is that?

From what I've seen, the healthcare reform that was passed is no more popular now than it was. In some polls, it is very unpopular.

Single payer? Everyone's in favor of that until they realize what it means. If it was so popular, why didn't those "innovative" Democrats do it?

steve

Speculation. I'm not saying you are necessarily wrong, but I'm not taking you as the expert on MD income. The fact is the number went down. You can't establish "why" on a guess.

You offered speculation in the first place. reread what you wrote.
The historical fact, and basic math, is that when the economy goes into recession there is a decline in tax revenues when the tax rates stay the same. That, in Maryland a small increase in the highest tax rate didn't generate additional revenue is given in the quote you pasted. There were fewer people in that higher tax bracket...There isn't much doubt at all ...
But again, you speculated that the increased tax rate had an impact without any evidence...

Steve

Where did the idea that loaning money to people who could not afford it was not only a good idea but a mandatory one come from?

Mostly from people who generated upfront commissions from selling the mortgages but who had no financial interest in the eventual outcome of the mortgage. And, as we discussed ad naueseum in the thread on MBS the mortgage holders thought they could insulate themselves from the risk by packaging the crap and selling it as a financial instrument.
But it was private financial companies that lobbied to have the regulations on mortgages changed. It was they who said they could self police. The smart guys, like Goldman Sachs saw what was coming and started betting against the MBS they were selling. Making billions in that bet. But they still kept selling the crappy MBS, making their commissions on that too.
Once they had the knowledge that the MBS were crap I believe they had both the moral and legal responsibility to inform their clients of what they suspected. (Knew).
That the Obama administration isn't going after the crooks in court is hugely disappointing, yes. But, as usual you're interested in mopping up after a disaster, and I would be more interested in preventing the disaster in the first place or preventing a repeat. Perhaps sending the chariman of Gold to prison for 10 years would be enough to stop many players in the future.
The Savings and Loans disaster should have been enough to teach government that financial industries need strong regulation and enforcement. That you twist yourself in pretzels to find a way to blame government (the small portion of crappy Mortgages that F&F underwrote) rather than the elimination of previous regulations and regulatory oversight and enforcement is to be expected. It can't be in your faith based world view, that elimination of govenrment involvement can ever lead to a bad result.
Sadly, it isn't true. But your demonstration of that belief reinforces my point.

rickyp wrote:The historical fact, and basic math, is that when the economy goes into recession there is a decline in tax revenues when the tax rates stay the same. That, in Maryland a small increase in the highest tax rate didn't generate additional revenue is given in the quote you pasted. There were fewer people in that higher tax bracket...There isn't much doubt at all ..

The problem here Ricky is that you are arguing a fact not proven, i.e. that every area of the country was hit by the recession the same which is not the case. For example, some states like Nevada and Florida saw a double digit % decline in housing values where as other states saw a decline of maybe 4-5%.

ARCHDUKE

The problem here Ricky is that you are arguing a fact not proven, i.e. that every area of the country was hit by the recession the same which is not the case. For example, some states like Nevada and Florida saw a double digit % decline in housing values where as other states saw a decline of maybe 4-5%

Fair enough. How did Maryland do in 2008? Was it a island of prosperity in the recession?
From a contemperous article in the Baltimore Sun I read that defence jobs had cushioned the effect of the recession in the State to an extent. But not completley.
Archduke, how does the quotation Steve selected support the conclusion that Steve is offering?

When Maryland passed a higher tax rate on people earning $1 million a year or more, which took effect in 2008, the number of millionaires living in Maryland fell from nearly 8,000 to fewer than 6,000. Although it had been projected that the additional tax revenue collected from the rich in Maryland would rise by $106 million, instead those revenues fell by $257 million

Well, I would probably say that he is making the same mistake. Arguing a fact not proven. Of course this is assuming the article he linked to did not do the due diligence to confirm the reason for the decline in millionaires. However, without knowing the effect of the recession on Maryland, I can't say what is the cause. Though I don't think it would be wrong to say a loss of 2,000 millionaires is probably a combination of the two.

Of course, we can look to other states. Boston College did a survey of wealth in New Jersey between 1999 and 2008. What it found was the first half of the decade saw a net increase of about $90B due to more wealthy people moving into the state then out. However the second half saw a net decline of about $70B in wealth due to more wealthy people moving out of state then in. The study found this was due to an increase in income and estate taxes in New Jersey in relation to other states. That would seem to prove out Steve's point.

rickyp wrote:But again, you speculated that the increased tax rate had an impact without any evidence...

Rubbish. Taxes went up. The things (persons in this case) went down. If sales are taxed, sales are reduced. If gasoline is taxed, gasoline consumption is reduced.

It's a general principle: tax policy influences behavior. Look at it another way: if the home mortgage interest deduction were eliminated, would housing values be affected?

Duh.

Same principle, different category.

Doctor Fate wrote:Where did the idea that loaning money to people who could not afford it was not only a good idea but a mandatory one come from?

Mostly from people who generated upfront commissions from selling the mortgages but who had no financial interest in the eventual outcome of the mortgage. And, as we discussed ad naueseum in the thread on MBS the mortgage holders thought they could insulate themselves from the risk by packaging the crap and selling it as a financial instrument.

Rubbish. The government, under Bill Clinton, put the pedal to the metal:

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.

Read this entry on the CRA and tell me it was the nasty old banks and not the government that started this debacle. To borrow an oft-used phrase, you are entitled to your opinion, but not to your own facts. History is what it is.

That the Obama administration isn't going after the crooks in court is hugely disappointing, yes.

But, it's not confusing--once you know that in investigating/prosecuting this, they would be pointing the finger at the government. That's something socialists/progressives are loathe to do.

Doctor Fate wrote:Rubbish. The government, under Bill Clinton, put the pedal to the metal:
{snip}
Read this entry on the CRA and tell me it was the nasty old banks and not the government that started this debacle. To borrow an oft-used phrase, you are entitled to your opinion, but not to your own facts. History is what it is.

The problem Steve is that I believe the number show those who got home loans by qualifying through the CRA are not the ones that are defaulted on the loans. Rather, from what I remember reading is that in order to meet the CRA goals demanded by the Clinton Administration banks required a relaxing of some of the regulations in regards to mortgage lending. The problem was that the banks didn't limit the use of the relaxed requirments to only low income families. They started using them across the board in all loans. This is what caused the problem because loans were being made that should not have been.

So the question becomes who bears the greater liability for the causes. The Legislators for not drafting a more narrowly construed bill that would have limited the use of the relaxed requirements or the banks for taking advantage of them

Archduke Russell John wrote:The problem Steve is that I believe the number show those who got home loans by qualifying through the CRA are not the ones that are defaulted on the loans. Rather, from what I remember reading is that in order to meet the CRA goals demanded by the Clinton Administration banks required a relaxing of some of the regulations in regards to mortgage lending. The problem was that the banks didn't limit the use of the relaxed requirments to only low income families. They started using them across the board in all loans. This is what caused the problem because loans were being made that should not have been.

So the question becomes who bears the greater liability for the causes. The Legislators for not drafting a more narrowly construed bill that would have limited the use of the relaxed requirements or the banks for taking advantage of them

I'm not sure you're right. Look who says the CRA had no bearing on the crisis--Sheila Bair, who was knee-deep in it, Krugman, who has never seen a non-military government program he didn't love, and others who are mostly liberal.

What we do know, without a doubt, is as the banks were encouraged to get away from a typical model, the lending guidelines went completely out the window. That was okay--until property values stopped increasing.

Back on topic:

Standard & Poor’s cut its ratings outlook on the U.S. to negative from stable while keeping its triple-A rating on the world’s largest economy.

Relative to its AAA-rated peers, the U.S. has very large budget deficits and rising government indebtedness, and the path to addressing those issues is unclear, S&P analysts said.

“More than two years after the beginning of the recent crisis, U.S. policy makers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures,” said Standard & Poor’s credit analyst Nikola G. Swann.

If a meaningful agreement to address medium- and long-term budgetary challenges isn’t reached and implementation isn’t begun by 2013, it would render the U.S. fiscal profile meaningfully weaker than its AAA-rated peers, analysts said.

Meanwhile, all the President did last week was . . . demagogue. The WaPo is actually kind to him in this rather stinging critique (because it could have been much worse):

“A 70 percent cut in clean energy, a 25 percent cut in education, a 30 percent cut in transportation, cuts in college Pell Grants that will grow to more than $1,000 per year,” Obama said. “That’s the proposal. These aren’t the kinds of cuts you make when you’re trying to get rid of some waste or find extra savings in the budget. These aren’t the kind of cuts that the fiscal commission proposed. These are the kinds of cuts that tell us we can’t afford the America that I believe in and, I think, you believe in.”

Without detailing his exact view of how he would change Medicare, he cast the GOP proposal to convert the program into one in which people get vouchers to buy insurance as a plan that would “end Medicare as we know it.”

“Their vision is less about reducing the deficit than it is about changing the basic social compact in America,” Obama said. He added: “There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. And I don’t think there’s anything courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill.”

The speech was a marked contrast to the “above the fray” approach Obama has taken in the past several months, particularly last week as he seemed to blame Democrats and Republicans equally for the near government shutdown. And it illustrated the major divide between the parties as they to seek to reform entitlements.

Obama not only attacked the GOP proposal but also noted that it was supported by “several of their party’s presidential candidates.” (Actually, most of the potential 2012 GOP candidates have offered measured remarks on the plan, praising the House Republicans for releasing it without declaring support.)

Even as he savaged the GOP proposal, Obama was less than specific about his own. He did not say exactly how he would reform how corporations are taxed, what he would do to achieve a simpler tax system or which defense programs he would cut. On Social Security, he not only didn’t announce a proposal but would not say whether one was likely to be included in the final legislation.

And Obama, who rarely personally interjected himself into the negotiations on the federal budget over the past two weeks, seems prepared to play a similar role on the deficit: He announced that a group of 16 members of Congress and Vice President Biden would negotiate over the legislation, allowing the president to remain out of the day-to-day politicking on the issue.

While attacking GOP ideas, Obama said he wanted to get a deficit reduction plan signed by June, which would be unusually fast considering Congress’s normal place in approving legislation.

But his speech seemed to offer limited room for compromise. He repeatedly called for increasing taxes for people who make more than $250,000 a year to help balance the budget, an idea strongly opposed by many congressional Republicans. He signaled strong opposition to how House Republicans would reform Medicare.

“I believe it paints a vision of our future that is deeply pessimistic,” he said of the GOP plan. “It’s a vision that says if our roads crumble and our bridges collapse, we can’t afford to fix them. If there are bright young Americans who have the drive and the will but not the money to go to college, we can’t afford to send them. ”

They left out his sleazy comments about the GOP wanting to to abandon autistic kids and other demagogic arguments.

Leadership? Not so much.

Frankly, Steve, it's not credible to say that it was just the government. If anything, they were too lax on regulation, allowing banks to become too big to fail, and also allowing them to be both retail and investment banks at the same time. As the Archduke says, the deal to get CRA through was to reduce regulations on the mortgage market.

The government did not force banks to create the bundled CDS instruments, it didn't force ratings agencies to give them AAA stamps despite being made up of a mixture of loans, it didn't force banks to become over-leveraged (beyond the legal limits in some cases), or to assume that liabilities were actually assets. The government didn't force banks to lend to quite the level of sub-prime that they did. Banks did all of those things - competing with each other to do so - because that's where the profits were.

Sure, pressing for banks to open up loans to higher risk customers was in hindsight not the wisest course (but everyone agreed that the 'property owning democracy' was better than people living in public housing, right?), but it was not the only source of the problems. And had the legislators increased regulation, I really can't see you being happy with that at the time, Steve. But the problem is that the alternative is to trust the banks not to screw up. History shows that they will always screw up, if allowed to do so.

Danivon,
Are you saying that anyone not owning their home is in "Public housing"? Surely you have heard of rentals...

Of course I have, Brad. I've lived in all three sectors. The CRA was designed to stop people from being discriminated against if they lived in a low-income area. People used to be unable to get loans due to 'refining'. People from public housing were also discriminated against.

But private rentals are really just a matter of someone else paying the mortgage for the owner.