Taxes and the Bail Out

corplinx

JREF Kid
corplinx
Joined
Oct 22, 2002
Messages
8,952
Economic slowdown, less tax revenue collected, new government spending...... and both candidates are still pledging to lower taxes.


Beam me up Mr. Speaker.
 
but didn't you hear! The Bail out will actually make money for the tax payers. ;)
 
Magyar said:
but didn't you hear! The Bail out will actually make money for the tax payers. ;)
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Yeah...... we're going to get a bunch of houses that were bought at the top of a housing bubble and make money off them. That's a gnomish business plan.

1. Buy loans for overpriced homes
2. ???
3. Profit!
 
If McCain wins now, we're screwed. He will continue the Bush tax cuts, which favor the people we bailed out. Letting them lapse will put the burden back on the investor class where it belongs. They will have benfitted immediately from the bail out. No reason for the working class to subsidize them.

A Democratic Copngress and President will be in a position to re-regulate the market and keep this from happening again. McCain would just say "Problem solved" and move on, perhaps to kick the door open for some other major sector of the ecconomy to go south.
 
leftysergeant said:
A Democratic Copngress and President will be in a position to re-regulate the market and keep this from happening again.
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You've got to be kidding. Democrats protected Fannie and Freddie when signs of trouble started appearing, and helped STOP regulators from cracking down on both companies. And it was primarily democrats who pushed banks to make bad loans under a progressive agenda to try to increase home ownership among the poor in the first place. It was a well-intentioned but ultimately disastrous attempt at social engineering, further exacerbated by political corruption. It was NOT a free-market melt down OR a case of under-regulation. Freddie and Fannie were set up the way they were with the explicit intention that they NOT act like free-market actors, and the damage caused by the Community Reinvestment Act cannot be laid at the feet of under-regulation.

This was a political failure which the democrats played a central role in causing, and which they refuse to accept any responsibility for. Why you think they will fix a problem that they largely created, when they can't even acknowlege how it was created in the first place, is beyond me.
 
Ziggurat said:
You've got to be kidding. Democrats protected Fannie and Freddie when signs of trouble started appearing, and helped STOP regulators from cracking down on both companies. And it was primarily democrats who pushed banks to make bad loans under a progressive agenda to try to increase home ownership among the poor in the first place. It was a well-intentioned but ultimately disastrous attempt at social engineering, further exacerbated by political corruption. It was NOT a free-market melt down OR a case of under-regulation. Freddie and Fannie were set up the way they were with the explicit intention that they NOT act like free-market actors, and the damage caused by the Community Reinvestment Act cannot be laid at the feet of under-regulation.

This was a political failure which the democrats played a central role in causing, and which they refuse to accept any responsibility for. Why you think they will fix a problem that they largely created, when they can't even acknowlege how it was created in the first place, is beyond me.
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The problem was, only about 3 republicans thought it was a problem. Ignoring the problem was as bad as stonewalling the regulators in my opinion.
 
corplinx said:
Yeah...... we're going to get a bunch of houses that were bought at the top of a housing bubble and make money off them. That's a gnomish business plan.

1. Buy loans for overpriced homes
2. ???
3. Profit!
Click to expand...


Well to be fair it probably will pay a dividend - just not next week.....or the week after.....or the week after....

On the positive side - they could have wasted the taxes on something worse so it is not all bad.
 
corplinx said:
The problem was, only about 3 republicans thought it was a problem. Ignoring the problem was as bad as stonewalling the regulators in my opinion.
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I agree that Republicans are not blameless in this either. But the idea that Democrats will come to the rescue on this issue is simply laughable. It was Democratic social engineering that set the stage for the bad loans and created an incentive for Freddie and Fannie to buy off both parties. I have little doubt that Republicans will try to duck their share of the blame, but at least they're demonstrating that they know the problem is primarily in Washington, not on Wall Street.
 
BenBurch said:
Well, clearly something HAS to give.

We MUST either cut drastically or raise taxes.
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And what's the government record on cutting spending? Bill and Al did some, Newt and Bill slowed the growth of spending.

Even if we don't raise taxes, I really don't see us cutting them further at the moment. Even when Iraq picks up a larger share of their tab we're still in big deficits.

ETA: I guess my question is, which rubes are still buying the giveaways and tax promises of Obama/McCain?
 
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How young do you think a kid has to be before he can't look at two numbers and go "Um, that one is a few hundred billion higher than that one?"

Trick question, they grew up and ran for office.
 
corplinx said:
Economic slowdown, less tax revenue collected, new government spending...... and both candidates are still pledging to lower taxes.


Beam me up Mr. Speaker.
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Maybe they remember what happened to Walter Mondale, who actually said he would raise taxes in the face of a big deficeit.

Maybe if voters actually rewarded straight talk we would get more straight talk. They do not. They reward candidates who tell us that we can have our cake and eat it too.
 
Puppycow said:
Maybe they remember what happened to Walter Mondale, who actually said he would raise taxes in the face of a big deficeit.

Maybe if voters actually rewarded straight talk we would get more straight talk. They do not. They reward candidates who tell us that we can have our cake and eat it too.
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I think the public isn't buying the chicken in every pot either though. I think "we're for low taxes, but times are tough, we can't promise you a tax cut with a straight face but we'll try as hard as we can" would earn some Joe Sixpack common sense street cred.
 
Puppycow said:
Maybe they remember what happened to Walter Mondale, who actually said he would raise taxes in the face of a big deficeit.

Maybe if voters actually rewarded straight talk we would get more straight talk. They do not. They reward candidates who tell us that we can have our cake and eat it too.
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This sums up the problem;

The America of my time line is a laboratory example of what can happen to democracies, what has eventually happened to all perfect democracies throughout all histories. A perfect democracy, a 'warm body' democracy in which every adult may vote and all votes count equally, has no internal feedback for self-correction. It depends solely on the wisdom and self-restraint of citizens… which is opposed by the folly and lack of self-restraint of other citizens. What is supposed to happen in a democracy is that each sovereign citizen will always vote in the public interest for the safety and welfare of all. But what does happen is that he votes his own self-interest as he sees it… which for the majority translates as 'Bread and Circuses.'

'Bread and Circuses' is the cancer of democracy, the fatal disease for which there is no cure. Democracy often works beautifully at first. But once a state extends the franchise to every warm body, be he producer or parasite, that day marks the beginning of the end of the state. For when the plebs discover that they can vote themselves bread and circuses without limit and that the productive members of the body politic cannot stop them, they will do so, until the state bleeds to death, or in its weakened condition the state succumbs to an invader—the barbarians enter Rome.

R.A.Heinlein
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corplinx said:
Yeah...... we're going to get a bunch of houses that were bought at the top of a housing bubble and make money off them. That's a gnomish business plan.

1. Buy loans for overpriced homes
2. ???
3. Profit!
Click to expand...

2. Get an equity-stake in the companies you buy the loans (and other financial assets) from such that if the loans fall in value below what we pay for them, we get preferred stock in the companies to make up the difference and can then take profits from the companies.

(Also, there's a part of the bill that suggests hunt down that money by introducing focused taxes on the companies that were bailed out in a couple years if need be.)

It's still delightfully flawed, but people seem to be letting their biases against bailing out huge corporations (and the fact that Economics isn't always common sensical) make them view the plan as worse than it is.
 
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BenBurch said:
The America of my time line is a laboratory example of what can happen to democracies, what has eventually happened to all perfect democracies throughout all histories. A perfect democracy, a 'warm body' democracy in which every adult may vote and all votes count equally, has no internal feedback for self-correction. It depends solely on the wisdom and self-restraint of citizens… which is opposed by the folly and lack of self-restraint of other citizens. What is supposed to happen in a democracy is that each sovereign citizen will always vote in the public interest for the safety and welfare of all. But what does happen is that he votes his own self-interest as he sees it… which for the majority translates as 'Bread and Circuses.'

'Bread and Circuses' is the cancer of democracy, the fatal disease for which there is no cure. Democracy often works beautifully at first. But once a state extends the franchise to every warm body, be he producer or parasite, that day marks the beginning of the end of the state. For when the plebs discover that they can vote themselves bread and circuses without limit and that the productive members of the body politic cannot stop them, they will do so, until the state bleeds to death, or in its weakened condition the state succumbs to an invader—the barbarians enter Rome.

R.A.Heinlein
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The classical elitist position - Starship Troopers style. The problem is that the evidence that the body politic will do this is sketchy. One observes, for instance, that the state funded bread is about enough to live somewhat uncomfortably on, and the state funded circuses consist of PBS (The NFL, NBA, and MBA all appear to be private institutions and if the stadiums might be publicly funded, one notes that no city has ever lost revenue because of one).

Moreover, one notes time and again that people seem self-sacrificing, both as individuals and as a whole. The least self-sacrificing always appear to be the Randroids who insist that humans are far too selfish and stupid to run things (one might suspect, from their noise:success ratio they're compensating for something).

The limited democracy model of Starship Troopers has never been fairly applied. One may note that every form of limited democracy has voted for things that make the enfranchised more powerful. While the phrase "past trends are no indicator of future trends" is popular, I keep dropping things and they keep falling downward. Those who think that past trends are irrelevant can pray for divine intervention to change their situation - after all, just because it hasn't worked for all of human history...

In a limited democracy, the common good becomes redefined to the good of the enfranchised - which always seems quite acceptable to the ones in power. A monarchy is a democracy with one voter.
 
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