Housing stimulus

[Walt34]

In my opinion, everyone who is legally qualified for a nickel of this idiotic government largess should take as much as possible.

Logically, reasonably, rationally, I think you're absolutely correct.

But somehow, neither I nor DW could do it, as doing so would go directly against our core values. We actually discussed it, in a facetious manner.

The whole stupid, greedy mess is infuriating to both of us and apparently to many others as well.

 

[FIREd]

Logically, reasonably, rationally, I think you're absolutely correct.

But somehow, neither I nor DW could do it, as doing so would go directly against our core values. We actually discussed it, in a facetious manner.

The whole stupid, greedy mess is infuriating to both of us and apparently to many others as well.

I am the same way. I can't bring myself to sponge off the government. In 2002, when I lost my job, I couldn't even bring myself to claim unemployment benefits. What a sucker!

But that was the point of my earlier post. Those of us who have been responsible and have always taken care of ourselves should continue to behave responsibly and reject government's handouts. It's not because the money is there for the taking that we should grab it "because everyone else is doing it". It's sad to hear responsible people strive to collect government cheese when they can still afford camembert on their own.

 

[Midpack]

Logically, reasonably, rationally, I think you're absolutely correct.

But somehow, neither I nor DW could do it, as doing so would go directly against our core values. We actually discussed it, in a facetious manner.

The whole stupid, greedy mess is infuriating to both of us and apparently to many others as well.

Us to. And to suggest we should all now grab all we can only hastens our collective demise. This is a very sad state of affairs, I still have to look myself in the mirror every day...

 

[Brat]

I agree that the public is ... angry .. that we are in this situation. I venture that many who signed up for crazy mortgages didn't understand what they were getting... few hire an attorney when buying or re-financing a house (that would be a good poll question). One interesting study would be the income and education level of folks with foreclosed mortgages in the last 2 years. The folks in the know were the lenders. Yes, some borrowers knew what they were getting and thought they were smart but their culpability is less than the lenders who were in a position to know.

IMHO direct venom at the lenders.

 

[ERD50]

I think I heard the $1,000 per year loan principal reduction is a payment made directly to the lender by the US govt.

Edit: I found this...

"The program would not only give [loan] servicers $1,000 for each modification, but would give them another $1,000 a year for three years if the borrower stays current."

Obama seeks to aid up to 9 million borrowers - Feb. 18, 2009

Another quote from that article burns me up. Think about what this says:

"In the end, all of us are paying a price for this home mortgage crisis," Obama said. "And all of us will pay an even steeper price if we allow this crisis to deepen -- a crisis which is unraveling homeownership, the middle class, and the American Dream itself. But if we act boldly and swiftly to arrest this downward spiral, every American will benefit."

That is the governmental sponsorship of the death of personal responsibility. ( please read that again, out loud, and let it sink in)

Sine we are "all paying the price" for the results of what some people did, that means it is OK to ask all the people to cover the expenses for those who caused the problem? Not OK with me, let me tell you.

So let's illustrate with an analogy. Let's say I go around vandalizing the neighborhood. Well, that lowers the value of the homes here, and we "all pay the price". So, we should all chip in and fix the damage, because we will all benefit? I suppose so. But no mention of going after the person responsible for the damage?

I suppose they were a victim. They didn't understand that they were lowering home prices with their vandalism. You know, that is such a complex thing to grasp. Almost as complex as the idea that an adjustable rate mortgage is, ummm, adjustable - not fixed.

You know, I think there are a lot more Citizens, especially voting Citizens, that did the right thing than there are people who are "trapped" by a risky mortgage. I think this whole thing is going to backfire on the administration big time (it is already starting). People are getting fed up, they are getting vocal about it, and every time the Administration offers a new plan, the market tanks further. What does that say about confidence in these plans?

Time for plan B, maybe one with the words "personal responsibility" tied to it? Maybe that would instill some confidence and (dare I say it), "hope" in the MAJORITY?

-ERD50

 

[OAG]

I remember reading someplace that BEFORE this Bail Out Mania started something like 43% of the voters did not pay Federal Income Taxes and AFTER this Mania something like 58% will not be paying Federal Income Taxes. If this is true (and I have no reason to doubt it), and you were one of these people, I think the propensity when voting is to vote for someone (regardless of party) that would keep the "status quo". So the "hope" may be coming to the minority quicker than we think.

 

[samclem]

Midpak, FireDreamer, Walt34,
Until very recently I felt as you do, and I still understand and respect the reasoning behind your point of view. But I now think this is, ironically, counterproductive and will lead to more damage. Here's the other side:

- This is not charity. It is entirely different. I would never go to a church, a food bank, or a soup kitchen for a handout. The resources there are for the needy, and they have been (largely) provided by the kindness of people who want to help others. For me to take these resources would be despicable. I donate to charities and support their work.
- The government seized the money for these ill advised expenditures. You have no choice in whether you pay your taxes or not. It is automatic, and it is mandatory. On the other hand, the government has established this pot of resources to be handed out to people based on certain criteria. If an individual meets these criteria, they should apply for the resources. It is what the government wants you to do (like paying your taxes). In fact, the heads of the agencies responsible for handing this money out will be "graded" on how much they can get rid of. Help them get a good grade! We didn't get to say "no" or offer opinions when this plan was being hatched, the people who rushed it through admit they didn't even read it, and it was never posted on the Internet (as President Obama promised to do with all pending legislation). Now here we are--who are we to argue with the wisdom of this wonderful process? Comply now, just as we will do every year when we pay our taxes.
- Taking the resources will not increase the debt owed by future generations one cent. The programs each have a budget, and it will be spent whether you take the money or not.
- It helps assure the resources are put to good use. The underlying reason our economy is on the rocks is because people (of large and small means) mismanaged the resources at their disposal. If you are at the point of FIRE or on the way there, it is safe to say that you know more about the way money works and how to put it to good use than the average bear. You'll make good use of the government resources, husband them well, maybe even invest them so the government can tax it later. You are helping the economy, not continuing the same personal deficit spending that got us into this ditch. Taking the resources is your civic duty.
- Do any of us fail to take tax deductions that would benefit us? Do we send the government a few thousand dollars extra every year? Failing to take this money, which the government wants you to have, is exactly the same. Is it fair to deprive the people who depend on you? If you believe in the power of individuals and private giving, please take the "government" money and give it to a well-run charity--it will be much better spent. If you believe in bigger, fatter government, don't take the money--that way politicians can use it to buy the vote of someone who will become dependent on government handouts--and they'll clamor for more handouts. Your taking of the money helps break the downward cycle.
- It may lead to a quicker end to the madness. You should take the check, and then write the local newspaper and let them know that you have plenty of money of your own but are really enjoying the stuff the government has dropped in your lap courtesy of your neighbors. "Hey, everyone, keep the gifts coming! I'm playing by the rules and you are giving me tons of free stuff! It is great! Please work a few more hours so you can pay more taxes--I need a big screen TV!" This is the surest way to get people mad enough to vote people into office who will stop the downhill spiral to greater collectivism.

Help the country by helping yourself. I am entirely serious.

 

[ERD50]

I remember reading someplace that BEFORE this Bail Out Mania started something like 43% of the voters did not pay Federal Income Taxes and AFTER this Mania something like 58% will not be paying Federal Income Taxes.

Latest stats from IRS go from 1986 to 2005:

http://www.irs.gov/pub/irs-soi/05in05tr.xls

Table 5: Number of Returns, Shares of AGI and Total Income Tax, AGI Floor on Percentiles in Current and Constant Dollars, and Average Tax Rates
Classified by: Selected Descending Cumulative Percentiles of Returns Based on Income Size Using the Definition of AGI for Each Year Tax Years: 1986 - 2005

Scroll down to ROW 154 for the breakdown by top filers. A few "highlights":


1986 Top 10% filers paid 55% of the income tax
2005 Top 10% filers paid 70% of the income tax

1986 Top 25% filers paid 76% of the income tax
2005 Top 25% filers paid 86% of the income tax

1986 Top 50% filers paid 93.5% of the income tax
2005 Top 50% filers paid 96.9% of the income tax

Fairly constant trend throughout the time period. Another way to view this is from the opposite perspective (just a re-hash of the above):

1986 BOTTOM 50% filers paid 6.46% of the income tax
2005 BOTTOM 50% filers paid 3.07% of the income tax

IOW, the bottom 50% of filers are paying less than half as much of their share of income tax as they were in 1986.

Now here's the thing I've been unable to get my head around with these stats. They reflect filers with positive AGI. How many people who pay no taxes don't even file? I dunno. Here's the number of returns though. Seems this is further complicated (surprised?) because now, you can get a credit for filing, right? How does that play into this? Seems we need some negative numbers in there for credits, right?

1986 - 102,087,623
2005 - 132,611,637


And this is all OK because the "rich are getting richer", right? A little, but not so much AFAICT.

The AGI of the top 50% of filers increased by 3.11x in current dollars from 1986 to 2005.
The AGI of ALL filers increased by 2.97x in current dollars from 1986 to 2005.


-ERD50

 

[ERD50]

Picture>1000 words:

The Tax Foundation - Tax Foundation Once Again Refutes Warren Buffett?s Tax Misconceptions

-ERD50

 

[FUEGO]

I am setting a personal goal to extract $30,000 from the government this year and next. I will do whatever is legally allowable to achieve this goal. I figure with enough effort, hard work, and diligence I'll be able to get my fair share. If you don't get yours, well, thanks!

 

[OAG]

I looked at that data at the site too. I wonder how many (have income) but do not have to EVEN file and how they get that number (I doubt it is in there). Wonder how many are "under the table" workers. Guess they get that from the Census but that data is outdated quickly. Nice thing now is, if you pay, you are going to pay more.

 

[Midpack]

Midpak, FireDreamer, Walt34,
- Taking the resources will not increase the debt owed by future generations one cent. The programs each have a budget, and it will be spent whether you take the money or not.

Help the country by helping yourself. I am entirely serious.

If this were true, I would not be upset about our circumstances. Where is all this bailout money ultimately coming from then? Unless I'm mistaken, current and/or future generations will have to bear this debt sooner or later. Please explain...

 

[lets-retire]

If this were true, I would not be upset about our circumstances. Where is all this bailout money ultimately coming from then? Unless I'm mistaken, current and/or future generations will have to bear this debt sooner or later. Please explain...

I think what sam is saying is it doesn't matter if you take the money or not, someone will. All of the money alloted by the law will be spent, whether it goes to you or to someone else.

 

[lets-retire]

I agree that the public is ... angry .. that we are in this situation. I venture that many who signed up for crazy mortgages didn't understand what they were getting... few hire an attorney when buying or re-financing a house (that would be a good poll question). One interesting study would be the income and education level of folks with foreclosed mortgages in the last 2 years. The folks in the know were the lenders. Yes, some borrowers knew what they were getting and thought they were smart but their culpability is less than the lenders who were in a position to know.

IMHO direct venom at the lenders.

I disagree. Mortgages and the housing market have for the most part always been buyer beware. It is not the responsibility of the sales person (originator or realtor) to provide the customer with the best option for them. The sales person's job is to provide the best option for the company and serve the needs of the customer second (at least from a customer's perspective that is how sales people should be viewed). If a sales person looks out for the best interest of the consumer then take it as a gift. Many of the people who took loans that were not suited for them, probably wouldn't have taken those loans, if they followed the first rule of contracts. That is don't sign anything you haven't read. I can't count how many people I've heard say the originator lied to me. If they would have read the paperwork they signed then the originator would not have been able to lie to them. The only other way for the sales people involved to lie to the consumer was to tell them that the value of the property would continue to go up. Using the view I stated earlier about sales people would lead a person to automatically discount the belief that the value would continue to rise and any other statements connected to that position.

IMHO the venom should be directed at the people not smart enough to look after themselves and protect their own financial interests.

 

[samclem]

If this were true, I would not be upset about our circumstances. Where is all this bailout money ultimately coming from then? Unless I'm mistaken, current and/or future generations will have to bear this debt sooner or later. Please explain...

Right, what lets-retire said. Every nickel in that huge spending bill will be given away whether you take the money or not. An individual who doesn't take the money isn't "saving" the taxpayer anything, and he isn't assuring that it goes to a "worthy" recipient. He is just being a chump and helping to keep the government vote-buying scheme in operation.

 

[jug]

In my opinion, everyone who is legally qualified for a nickel of this idiotic government largess should take as much as possible.

There are many people who read this board who have lived responsibly all their lives, bought reasonable houses, paid off their mortgages as soon as they could, and want nothing from the government except to be left alone. .

Keep in mind that those who rule are the most apt to take all they can. Geithner did not pay taxes, Daschle among others.

These elites make the rules us "treadmillers" are to follow. They've never held "real" jobs, nor worried about getting by. So take all you can, it's yours, only suckers live by the "golden rule" of not taking from the government. In reality, those who control the gold, rule. Take it all.

jug

 

[samclem]

I looked at that data at the site too. I wonder how many (have income) but do not have to EVEN file and how they get that number (I doubt it is in there). Wonder how many are "under the table" workers. Guess they get that from the Census but that data is outdated quickly. Nice thing now is, if you pay, you are going to pay more.

And, with the new "refundable tax credits" the IRS will be writing more checks to people who pay zero income tax. It looks like welfare, but I guess it isn't because it is a "refundable tax credit."

 

[deepc]

An individual who doesn't need the money, and doesn't believe it's right to give it away to others, yet takes their "share" has no integrity.

Those of us who are ineligible due to our wealth, savings, hard work, or whatever and who don't change our situation to take the money are not "chumps".

I am a firm believer in karma, those who lived high on the hog and now will be bailed out by all of us will remain losers regardless of what is done, and won't know it. I feel sorry for those who are smarter than them and sell their integrity to take what they deem is their share.

Reminds me of the kids under the pinata fighting for tootsie rolls.

 

[samclem]

I feel sorry for those who are smarter than them and sell their integrity to take what they deem is their share.

The government says what each person gets, what their "share" is. What I "deem isnt important (or the money wouldn't be taken from me in the first place). They write the rules in a particular way for a good reason, I'm sure this is all well thought out. We should play by those rules and help them accomplish the goals of this program (spend all the allotted money)

And how much bad karma accrues to the folks in DC who are taking from those who played by the rules of decency and common sense to give to those who did not?

To anyone waiting for "karma" to even things out, enjoy the wait. I say that "the Gods help those who help themselves." In this case, "helping yourself" is also helping the country. Let me know how that "karma" spends. Meanwhile each of us should do what we can to recapture the resources the government took from us and put these resources to productive use. It is the right thing to do.

 

[deepc]

Well samclem we're gonna have to agree to disagree. Here's another couple Heinlein quotes for you, he's one of my favorites too:

"A competent and self-confident person is incapable of jealousy in anything. Jealousy is invariably a symptom of neurotic insecurity."

"Man is not a rational animal, he is a rationalizing animal."

"Taxes are not levied for the benefit of the taxed."

 

[OAG]

Rick S Responds to WH Press Secretary

Round 3: Santelli's Manifesto: Behind the Shout Heard 'Round the World - General * US * News * Story - CNBC.com

 

[Leonidas]

Has anyone been able to download the document that Gibbs and Santelli were waving around? The front page of both look the same from what I can see on the video, four paragraphs of plain text with a text box at the bottom. There's nothing like that on the white house web site. I found something similar, but it's definitely not the same document. Or it has undergone extensive changes from what Gibbs and Santelli had.
http://www.whitehouse.gov/blog/09/02/20/Gibbs-corrects-the-record/
http://www.treas.gov/initiatives/eesa/homeowner-affordability-plan/ExecutiveSummary.pdf

Edit to add: I found it on the Treasury website here: http://www.treas.gov/initiatives/eesa/homeowner-affordability-plan/FactSheet.pdf

Gibbs was wrong - it was not on the white house website. I found it though a link at FinancialStability.Gov. Hmmm, there is definitely some kind of oxymoronic thing working with that website name!

 

[FIRE'd@51]

I liked Rick Santelli's suggestion that the WH put up a poll on the web site asking Americans what they think of the plan.

 

[Leonidas]

I liked Rick Santelli's suggestion that the WH put up a poll on the web site asking Americans what they think of the plan.

That would be interesting. CNBC had a poll asking who wanted to join in the Chicago Tea Party, but it's gone now. Last time I was able to see it there were 95% in agreement with 90,000 votes.

Okay, I've looked over the two documents I referenced and the one currently available on the white house website seems to be an updated version of the one linked on the treasury site. The changes on the first page seem to be mostly reformatting, but the second page is very different. The second thing I noticed is that the newer version is about 3 1/2 to 4 pages shorter.

When I get a chance I'll see how significant the changes are, but for the moment I've got to hit the grocery for something to throw on the grill tonight.

Taxation is going to be a big issue for the next few years, especially for anyone in retirement.

 

[samclem]

Well samclem we're gonna have to agree to disagree.

Fair enough. As I said, I was firmly in your camp until recently, so I think I understand your reasoning. Just to re-iterate: This isn't (just) about "getting mine", but really what I believe is best for the country.