What do you think about Obamas Plan to stop foreclosures?

[tenmagnet_IHB]

The gov’t is doing their absolute best to prop up everything from companies to homes.

I don’t think they will succeed.

Unfortunately, it’s at the taxpayers expense.

 

[theBigD_IHB]

If they try and stop foreclosures, won't prices still come down since people buying now need high credit scores and $ to buy homes? The same problem of not being able to afford payments are still there.

 

[skek_IHB]

.

 

[Anonymous_IHB]

Don't discount the government's ability to muck up the market, trojanman. This type of policy may have the effect of propping up prices and or slowing the rate of decline -- at least at the margins. That may help some individual homeowners stay in their houses (and if they are legitimate hard-luck cases and not irresponsible bubble buyers or worse, I'm glad they will receive help). But it will also reward some irresponsible and undeserving folks -- moral hazard. And many, many more people will be hurt because artificial price supports will kill the real estate market for years.

For the market to be healthy, there have to be buyers and sellers. If real estate prices are sustained at artificially high levels, there will be no buyers -- either they won't be able to obtain financing, or they will refuse to buy because they (or the banks) are aware that the prices are artificially high. If there are no buyers, those who want to stay in their homes will be OK, but those who need to sell for family, personal or other reasons, will not be able to do so. Either no sale will occur, or a sale will occur at a true market price and the government's price supports will be undermined anyway. At best, the policy will be ineffective. At worse, it will reward irresponsible buyers at the expense of renters and responsible buyers and sellers. Sounds like a winner to me!

Yeah, I was PO'd when McCain announced this plan. I'm PO'd, but not surprised, that Obama is going this route.

I think you are overestimating the govts abilities here.

I think of it like triage - it's like an unstoppable hurricane is coming ashore with 2 hours notice and they can't do a thing about it. All they can do is try and minimize the damage, and help people where they can. But its still going to be a complete mess, an the repair bill is going to be very expensive.

 

[jbenko_IHB]

I wrote about 4 paragraphs as to why this won't solve anything and why the systems NEEDS to collapse for our benefit. But I realize that too many people like to read about peachy things and don't want to think about the bad. So I took it out.

But just an FYI, think real hard as to why the government is doing these bailouts, allowing banks to hide what they truly have on their books, and not being transparent on how they are using your moeny. You think it's because they care about the people? Think about the word..."self-preservation" and draw your own conclusions.

 

[jbenko_IHB]

I think you are overestimating the govts abilities here.

I think of it like triage - it's like an unstoppable hurricane is coming ashore with 2 hours notice and they can't do a thing about it. All they can do is try and minimize the damage, and help people where they can. But its still going to be a complete mess, an the repair bill is going to be very expensive.

Try this instead. You took out a car loan, home loan, then maxed your credit card. Opened another credit card to transfer the balances with no payments for a year. Now you maxed out your old credit card again. Since banks have no restrictions, you went to them and said you need a loan. They give it to you and now you're using it to pay your previous debts with new debt.

What most of you seem to fail to understand is that you can't solve the problem by throwing money at it that you don't have.

So yes, by throwing money at the problem will cushion the blow but you can't have it both ways.

So why again do you believe that the government can solve our problem by maxing out a maxed credit card? Oh yeah, cause they are different, they can print money and you can't. But we know what that leads to.

<off record> I'm in a mood for some Chipotle.

 

[Oscar_IHB]

Heartless bastards, the lot of you.

 

[Anonymous_IHB]

I think you are overestimating the govts abilities here.

I think of it like triage - it's like an unstoppable hurricane is coming ashore with 2 hours notice and they can't do a thing about it. All they can do is try and minimize the damage, and help people where they can. But its still going to be a complete mess, an the repair bill is going to be very expensive.

Try this instead. You took out a car loan, home loan, then maxed your credit card. Opened another credit card to transfer the balances with no payments for a year. Now you maxed out your old credit card again. Since banks have no restrictions, you went to them and said you need a loan. They give it to you and now you're using it to pay your previous debts with new debt.

What most of you seem to fail to understand is that you can't solve the problem by throwing money at it that you don't have.

So yes, by throwing money at the problem will cushion the blow but you can't have it both ways.

So why again do you believe that the government can solve our problem by maxing out a maxed credit card? Oh yeah, cause they are different, they can print money and you can't. But we know what that leads to.

<off record> I'm in a mood for some Chipotle.

Actually, in my initial example awgee objected to, they saved money. Also, what makes you think if the govt does nothing, it will be cheaper? Both Roubini & Geithner argue otherwise. And it makes sense. Govt income = taxrevenue and a messed up economy makes for a lot less revenue. And if the whole economy gets really messed up - ie. do nothing and let all the banks fail and unemployment shoot up to 25% like in the Great Depression, then the govt still has to fork out for unemployment insurance, welfare, food stamps, more police to control all the increased crime, covering all the bank depositors of the failed banks, medicare for people who get hurt or sick from living in their car or a tent, etc etc).

The intervention isn't just the humane thing to do - it's the smart thing to do as well, and will be cheaper in the end.

 

[jbenko_IHB]

Ok. So intervene. Just get the worthless shit out of the stimulus package and I'll be happy. Nobody in their right mind can look at the bill and logically say ahh..ok this makes sense. Hell, half of congress appearantly didn't even read the bill before they signed it. Especially, since there were last minute changes.

http://images.despair.com/products/demotivators/government.jpg

 

[Anonymous_IHB]

I thought reducing the principal was part of the plan.

Summers Says Obama Mortgage Plan to Focus on Reducing Payments

http://www.bloomberg.com/apps/news?pid=20601087&sid=arSdh7FPSTGM&refer=home

 

[awgee_IHB]

If there is a family that is steadily employed, but has a bad rate (ex. 12% or something) and underwater on their mortgage so cannot refi, and perhaps has had their income drop some due to cutbacks leading to fewer hours at work, you could argue it makes some sense to let them refi (ex. say at 7%) so they can afford their payments. Even if there is a govt subsidy - hey, govt is on the hook anyhow to pay as if lender forecloses, govt then has to eventually recapitalize the lender at an even greater cost. Sounds like the plan is aimed at people who are headed for foreclosure anyhow, so you could argue it is just cheaper this way for the taxpayer.

Right and wrong are more important than either political or financial expediency.

What are your assumptions to prove that the case above is wrong? Which values are you measuring it against?

Stealing from others, government subsidization, is wrong.

 

[Anonymous_IHB]

If there is a family that is steadily employed, but has a bad rate (ex. 12% or something) and underwater on their mortgage so cannot refi, and perhaps has had their income drop some due to cutbacks leading to fewer hours at work, you could argue it makes some sense to let them refi (ex. say at 7%) so they can afford their payments. Even if there is a govt subsidy - hey, govt is on the hook anyhow to pay as if lender forecloses, govt then has to eventually recapitalize the lender at an even greater cost. Sounds like the plan is aimed at people who are headed for foreclosure anyhow, so you could argue it is just cheaper this way for the taxpayer.

Right and wrong are more important than either political or financial expediency.

What are your assumptions to prove that the case above is wrong? Which values are you measuring it against?

Stealing from others, government subsidization, is wrong.

So, someone who makes so little, they pay virtually no tax, who then takes out a library book at govt expense to run the library and always returns the books on time and so pays no late fees, is wrong then, it's like theft?

 

[awgee_IHB]

I think you are overestimating the govts abilities here.

I think of it like triage - it's like an unstoppable hurricane is coming ashore with 2 hours notice and they can't do a thing about it. All they can do is try and minimize the damage, and help people where they can. But its still going to be a complete mess, an the repair bill is going to be very expensive.

Try this instead. You took out a car loan, home loan, then maxed your credit card. Opened another credit card to transfer the balances with no payments for a year. Now you maxed out your old credit card again. Since banks have no restrictions, you went to them and said you need a loan. They give it to you and now you're using it to pay your previous debts with new debt.

What most of you seem to fail to understand is that you can't solve the problem by throwing money at it that you don't have.

So yes, by throwing money at the problem will cushion the blow but you can't have it both ways.

So why again do you believe that the government can solve our problem by maxing out a maxed credit card? Oh yeah, cause they are different, they can print money and you can't. But we know what that leads to.

<off record> I'm in a mood for some Chipotle.

Actually, in my initial example awgee objected to, they saved money. Also, what makes you think if the govt does nothing, it will be cheaper? Both Roubini & Geithner argue otherwise. And it makes sense. Govt income = taxrevenue and a messed up economy makes for a lot less revenue. And if the whole economy gets really messed up - ie. do nothing and let all the banks fail and unemployment shoot up to 25% like in the Great Depression, then the govt still has to fork out for unemployment insurance, welfare, food stamps, more police to control all the increased crime, covering all the bank depositors of the failed banks, medicare for people who get hurt or sick from living in their car or a tent, etc etc).

The intervention isn't just the humane thing to do - it's the smart thing to do as well, and will be cheaper in the end.

"do nothing and let all the banks fail and unemployment shoot up to 25% like in the Great Depression"

OK! All of you. You really need to read historical fact and stop repeating high school pablum. Hoover used government intervention like crazy.

 

[awgee_IHB]

If there is a family that is steadily employed, but has a bad rate (ex. 12% or something) and underwater on their mortgage so cannot refi, and perhaps has had their income drop some due to cutbacks leading to fewer hours at work, you could argue it makes some sense to let them refi (ex. say at 7%) so they can afford their payments. Even if there is a govt subsidy - hey, govt is on the hook anyhow to pay as if lender forecloses, govt then has to eventually recapitalize the lender at an even greater cost. Sounds like the plan is aimed at people who are headed for foreclosure anyhow, so you could argue it is just cheaper this way for the taxpayer.

Right and wrong are more important than either political or financial expediency.

What are your assumptions to prove that the case above is wrong? Which values are you measuring it against?

Stealing from others, government subsidization, is wrong.

So, someone who makes so little, they pay virtually no tax, who then takes out a library book at govt expense to run the library and always returns the books on time and so pays no late fees, is wrong then, it's like theft?

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

A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned - this is the sum of good government. - Thomas Jefferson

 

[Oscar_IHB]

Actually, in my initial example awgee objected to, they saved money. Also, what makes you think if the govt does nothing, it will be cheaper? Both Roubini & Geithner argue otherwise. And it makes sense. Govt income = taxrevenue and a messed up economy makes for a lot less revenue. And if the whole economy gets really messed up - ie. do nothing and let all the banks fail and unemployment shoot up to 25% like in the Great Depression, then the govt still has to fork out for unemployment insurance, welfare, food stamps, more police to control all the increased crime, covering all the bank depositors of the failed banks, medicare for people who get hurt or sick from living in their car or a tent, etc etc).

The intervention isn't just the humane thing to do - it's the smart thing to do as well, and will be cheaper in the end.

Try to follow this: Politicians are being told that there will be no end to this recession/depression until house prices bottom out, so their kneejerk reaction is to try to artificially put a floor under housing. What they aren't being told is that the reason a housing bottom will end the crisis is because the lousy MBS (and derivitives based on them) will stop losing value and the banks holding them will finally be able to stop writing losses against them. This specific politicial solution takes money out of the pockets of *those* people over there and gives it to *these* people over here who can't pay back loans that they never should have taken in the first place in the idiotic hope that this will somehow magically turn the housing market around and allow the MBS to suddenly become worth enough to make the banks solvent, and thereby saving the economy. The problem is that setting an artificial bottom by subsidizing underwater homeowners only prolongs the conditions that created the crisis, with no way to resolve them. Sure, it keeps people in their house but it also prevents them from leaving it, and prevents housing from being affordable again. Additionally, as long as the banks are able to hide their losses, they have no incentive to get off the government payroll, sucking even more tax dollars away from other, more beneficial, uses.

As for the cost of doing nothing... I'll wager that we could cover the cost of unemployment benfits, food stamps, welfare for children, FDIC payouts, Medicare, and extra police until the dust settles and the economy recovers for far less than we will pay for this program, the stimulus bill, and both halves of the TARP combined. We'd avoid becoming an economically retarded nation as well.

 

[Anonymous_IHB]

If there is a family that is steadily employed, but has a bad rate (ex. 12% or something) and underwater on their mortgage so cannot refi, and perhaps has had their income drop some due to cutbacks leading to fewer hours at work, you could argue it makes some sense to let them refi (ex. say at 7%) so they can afford their payments. Even if there is a govt subsidy - hey, govt is on the hook anyhow to pay as if lender forecloses, govt then has to eventually recapitalize the lender at an even greater cost. Sounds like the plan is aimed at people who are headed for foreclosure anyhow, so you could argue it is just cheaper this way for the taxpayer.

Right and wrong are more important than either political or financial expediency.

What are your assumptions to prove that the case above is wrong? Which values are you measuring it against?

Stealing from others, government subsidization, is wrong.

So, someone who makes so little, they pay virtually no tax, who then takes out a library book at govt expense to run the library and always returns the books on time and so pays no late fees, is wrong then, it's like theft?

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

A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned - this is the sum of good government. - Thomas Jefferson

Wow. Well then, I hope you live by your creed then and leave behind more created wealth (and by that, I mean actual physical or intellectual things than you consumed in your lifetime), rather than just shuffling money around, which creates nothing and benefits no one.

 

[awgee_IHB]

If there is a family that is steadily employed, but has a bad rate (ex. 12% or something) and underwater on their mortgage so cannot refi, and perhaps has had their income drop some due to cutbacks leading to fewer hours at work, you could argue it makes some sense to let them refi (ex. say at 7%) so they can afford their payments. Even if there is a govt subsidy - hey, govt is on the hook anyhow to pay as if lender forecloses, govt then has to eventually recapitalize the lender at an even greater cost. Sounds like the plan is aimed at people who are headed for foreclosure anyhow, so you could argue it is just cheaper this way for the taxpayer.

Right and wrong are more important than either political or financial expediency.

What are your assumptions to prove that the case above is wrong? Which values are you measuring it against?

Stealing from others, government subsidization, is wrong.

So, someone who makes so little, they pay virtually no tax, who then takes out a library book at govt expense to run the library and always returns the books on time and so pays no late fees, is wrong then, it's like theft?

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

A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned - this is the sum of good government. - Thomas Jefferson

Poverty often deprives a Man of all Spirit and Virtue; 'Tis hard for an empty Bag to stand up-right.

[1758 B. Franklin Poor Richard's Almanack (Introduction)]

And did he use this excellent observation as the basis for the idea that government should steal from one person in order to give to another? Or was he explaining that it is incumbent upon persons of character to help their fellow man?

 

[Anonymous_IHB]

If there is a family that is steadily employed, but has a bad rate (ex. 12% or something) and underwater on their mortgage so cannot refi, and perhaps has had their income drop some due to cutbacks leading to fewer hours at work, you could argue it makes some sense to let them refi (ex. say at 7%) so they can afford their payments. Even if there is a govt subsidy - hey, govt is on the hook anyhow to pay as if lender forecloses, govt then has to eventually recapitalize the lender at an even greater cost. Sounds like the plan is aimed at people who are headed for foreclosure anyhow, so you could argue it is just cheaper this way for the taxpayer.

Right and wrong are more important than either political or financial expediency.

What are your assumptions to prove that the case above is wrong? Which values are you measuring it against?

Stealing from others, government subsidization, is wrong.

So, someone who makes so little, they pay virtually no tax, who then takes out a library book at govt expense to run the library and always returns the books on time and so pays no late fees, is wrong then, it's like theft?

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

A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned - this is the sum of good government. - Thomas Jefferson

Poverty often deprives a Man of all Spirit and Virtue; 'Tis hard for an empty Bag to stand up-right.

[1758 B. Franklin Poor Richard's Almanack (Introduction)]

And did he use this excellent observation as the basis for the idea that government should steal from one person in order to give to another? Or was he explaining that it is incumbent upon persons of character to help their fellow man?

Uh, since you don't like the idea of your taxes paying for library books for people who can't afford books ... you are on shaky moral ground there.

 

[ukyo116_IHB]

Seeing as how Obama is getting his way and is getting a free pass for everything...

Lets assume the foreclosure plan passes. Loans are modified and people get to stay in their homes. Someone is on the losing end of this transaction (lets forget the financially responsible and savers for a second). The investor who put money into these mortgages thinking that they'd receive a decent interest rate payment just got notified that they will be receiving a smaller percent, since everyone's payments got modified... not good. As an investor, I would feel very wary of investing in these types of securities, knowing full well that the government can swoop in and modify the terms of my agreement. Maybe I was counting on this fixed income to fund some venture or whatever, but now my money is tied up in a longer period of time, and I'm receiving it at a slower pace. As such, I would be demanding higher interest rates in future funding of United States debt. In fact, I would take my money elsewhere since the government can do whatever the hell they want and get away with it.

Taking the time machine back 5 years ago if I had foreseen the government intervention on the terms of my loan, there is no way I would have lent out my money in the first place.

I can't imagine the foreign community that invests in our debt is thrilled with this announcement.

 

[awgee_IHB]

If there is a family that is steadily employed, but has a bad rate (ex. 12% or something) and underwater on their mortgage so cannot refi, and perhaps has had their income drop some due to cutbacks leading to fewer hours at work, you could argue it makes some sense to let them refi (ex. say at 7%) so they can afford their payments. Even if there is a govt subsidy - hey, govt is on the hook anyhow to pay as if lender forecloses, govt then has to eventually recapitalize the lender at an even greater cost. Sounds like the plan is aimed at people who are headed for foreclosure anyhow, so you could argue it is just cheaper this way for the taxpayer.

Right and wrong are more important than either political or financial expediency.

What are your assumptions to prove that the case above is wrong? Which values are you measuring it against?

Stealing from others, government subsidization, is wrong.

So, someone who makes so little, they pay virtually no tax, who then takes out a library book at govt expense to run the library and always returns the books on time and so pays no late fees, is wrong then, it's like theft?

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

A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned - this is the sum of good government. - Thomas Jefferson

Poverty often deprives a Man of all Spirit and Virtue; 'Tis hard for an empty Bag to stand up-right.

[1758 B. Franklin Poor Richard's Almanack (Introduction)]

And did he use this excellent observation as the basis for the idea that government should steal from one person in order to give to another? Or was he explaining that it is incumbent upon persons of character to help their fellow man?

Uh, since you don't like the idea of your taxes paying for library books for people who can't afford books ... you are on shaky moral ground there.

How so? By the way, do you know who started most of the public libraries in this country?