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Old Dec 24, 2012, 02:13 PM   #51
citizenzen
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My belief is that government intervention, with the best of intentions, has driven up the cost of living so much that the poor and middle class have fallen further behind.
I'm agnostic towards your belief.
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Old Dec 24, 2012, 04:18 PM   #52
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I'm agnostic towards your belief.
http://iaconoresearch.com/2012/12/05...s-home-prices/

http://www.usnews.com/opinion/articl...-college-costs

http://www.american.com/archive/2009...althcare-costs

Even if you don't want free market solutions, the intellectually honest opinion would be that government intervention increases costs. If you still believe we need to do it for the greater good despite the higher prices, I respect that opinion. But it's hard to ignore the economic realities.

Even Joe Biden agrees!

http://www.huffingtonpost.com/2012/0...n_1257895.html
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Old Dec 24, 2012, 04:46 PM   #53
citizenzen
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Originally Posted by Dmunjal View Post
Even if you don't want free market solutions, the intellectually honest opinion would be that government intervention increases costs.
Speaking of intellectual honesty, can you explain why your original statement (the one I claimed to be agnostic about), "My belief is that government intervention, with the best of intentions, has driven up the cost of living so much that the poor and middle class have fallen further behind. has now been shortened to simply, "government intervention increases costs"?

That changes things a bit, doesn't it?

Your first link, for example, talks about how the Fed's record reduction in interest rates actually make homes more affordable. That would appear to me to be exactly the opposite of your original statement.

And we've talked about your second link (an opinion piece) before. I work for the California State University system. Student fees and tuition have risen dramatically over the last ten years because of state government cuts in funding. There's a real example of government intervention increasing costs.

And what was the bottom line of Biden's answer, "So you are right, in a pure free-market the college tuition would have to be lower because there would be fewer people going to school, they wouldn't have as much coming in. But the end result is we would probably have -- we go for the better part, half a generation, of going 16th in the world maybe down to 20th in the world."

Tuition would be lower ... and so would the number of college educated members of society. I'll give you a link to look at from the Atlantic Business section ...

Going to College: Not Just a Good Investment, but the Best Investment

If you're advocating to educate fewer Americans, I'd say that's penny-wise and pound-foolish.

Your third link regards market-oriented healthcare solutions vs. Obamacare. On that matter I remain steadfastly agnostic considering that most of Obamacare has not gone into effect and it is impossible to gauge the impact of those policies.
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Old Dec 24, 2012, 05:03 PM   #54
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Originally Posted by citizenzen View Post
Speaking of intellectual honesty, can you explain why your original statement (the one I claimed to be agnostic about), "My belief is that government intervention, with the best of intentions, has driven up the cost of living so much that the poor and middle class have fallen further behind. has now been shortened to simply, "government intervention increases costs"?

That changes things a bit, doesn't it?

Your first link, for example, talks about how the Fed's record reduction in interest rates actually make homes more affordable. That would appear to me to be exactly the opposite of your original statement.

And we've talked about your second link (an opinion piece) before. I work for the California State University system. Student fees and tuition have risen dramatically over the last ten years because of state government cuts in funding. There's a real example of government intervention increasing costs.

And what was the bottom line of Biden's answer, "So you are right, in a pure free-market the college tuition would have to be lower because there would be fewer people going to school, they wouldn't have as much coming in. But the end result is we would probably have -- we go for the better part, half a generation, of going 16th in the world maybe down to 20th in the world."

Tuition would be lower ... and so would the number of college educated members of society. I'll give you a link to look at from the Atlantic Business section ...

Going to College: Not Just a Good Investment, but the Best Investment

If you're advocating to educate fewer Americans, I'd say that's penny-wise and pound-foolish.

Your third link regards market-oriented healthcare solutions vs. Obamacare. On that matter I remain steadfastly agnostic considering that most of Obamacare has not gone into effect and it is impossible to gauge the impact of those policies.
My entire point was that rising costs disproportionately affect the poor and middle class compared to the rich since the basic life expenses take up a larger percentage of their income.

Yes, we do have better access to healthcare, housing, education for the poor with this intervention at a higher cost for all.

But like housing, when the bubble pops, the poor suffer disproportionately more too. Now, only the rich can buy houses and the poor will be forever priced out of the market and be renters for life.

I'm not against the good intentions, but there is a probably a better way than a top down government approach.
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Old Dec 24, 2012, 05:26 PM   #55
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Originally Posted by Dmunjal View Post
http://iaconoresearch.com/2012/12/05...s-home-prices/

http://www.usnews.com/opinion/articl...-college-costs

http://www.american.com/archive/2009...althcare-costs

Even if you don't want free market solutions, the intellectually honest opinion would be that government intervention increases costs. If you still believe we need to do it for the greater good despite the higher prices, I respect that opinion. But it's hard to ignore the economic realities.

Even Joe Biden agrees!

http://www.huffingtonpost.com/2012/0...n_1257895.html

The government builds basically zero houses in the UK, that's why house prices are so low here .
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Old Dec 24, 2012, 05:42 PM   #56
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Now, only the rich can buy houses and the poor will be forever priced out of the market and be renters for life.
How does it make sense that only the rich can buy homes, when as your own link demonstrates that lower interest rates allow for $1,000 monthly mortgages to buy more than it ever has.

That also means that less expensive mortgages cost the buyer less than it ever has. This brings into the market the opportunity for people with lower incomes to afford a home.

That's one thing that lower interest rates incentivize.

Whether the banks are loaning the money is another thing altogether.

But lowering the rates by the Fed is at least partly meant to allow people of middle and lower incomes the opportunity to buy.

Again, that seems to me to be opposite of the point you're trying to make.
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Old Dec 24, 2012, 05:48 PM   #57
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How does it make sense that only the rich can buy homes, when as your own link demonstrates that lower interest rates allow for $1,000 monthly mortgages to buy more than it ever has.

That also means that less expensive mortgages cost the buyer less than it ever has. This brings into the market the opportunity for people with lower incomes to afford a home.

That's one thing that lower interest rates incentivize.

Whether the banks are loaning the money is another thing altogether.

But lowering the rates by the Fed is at least partly meant to allow people of middle and lower incomes the opportunity to buy.

Again, that seems to me to be opposite of the point you're trying to make.
No matter how low rates are, the poor who bought houses at the peak with 0% down and were foreclosed upon don't have decent credit anymore to afford ANY house.

In this market, only the rich are benefiting from these record low interest rates. Exactly the opposite of what was intentioned.
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Old Dec 24, 2012, 05:52 PM   #58
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In this market, only the rich are benefiting from these record low interest rates. Exactly the opposite of what was intentioned.
That can't possibly be true.

First-time buyers of any level are benefitting from the low cost to buy a home.
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Old Dec 24, 2012, 06:10 PM   #59
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That can't possibly be true.

First-time buyers of any level are benefitting from the low cost to buy a home.
Banks won't lend to those without spotless credit and 20% down. This isn't 2005 anymore.
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Old Dec 24, 2012, 06:23 PM   #60
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Banks won't lend to those without spotless credit and 20% down.
In any case, home buyers with middle or low incomes AND spotless credit AND 20% down can buy homes more cheaply because of those low interest rates.

Or as you call it, government interference.
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Old Dec 24, 2012, 07:24 PM   #61
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In any case, home buyers with middle or low incomes AND spotless credit AND 20% down can buy homes more cheaply because of those low interest rates.

Or as you call it, government interference.
Agreed, if there are any left. But these artificial rates end up keeping housing prices artificially higher than they would be otherwise. I'd argue that lower housing prices would be even more beneficial than these low interest rates would be. Government intervention always has unintended consequences.

Last edited by Dmunjal; Dec 24, 2012 at 08:27 PM.
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Old Dec 25, 2012, 07:28 AM   #62
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Banks won't lend to those without spotless credit and 20% down. This isn't 2005 anymore.
Nonsense.

Its still happening every day with Fannie Mae assistance, and these guys are STILL going into foreclosure with their nothing down, low interest, nothing vested home loans.
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Old Dec 25, 2012, 07:42 AM   #63
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Nonsense.

Its still happening every day with Fannie Mae assistance, and these guys are STILL going into foreclosure with their nothing down, low interest, nothing vested home loans.
I would like to see a credible source for that statement as per forum rules, please.
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Old Dec 25, 2012, 01:15 PM   #64
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Nonsense.

Its still happening every day with Fannie Mae assistance, and these guys are STILL going into foreclosure with their nothing down, low interest, nothing vested home loans.
In my experience (Realtors and Mortgage brokers in the family), the only loans like this are not coming from Fannie Mae but the FHA. But even those loans have very strict requirements though they only require 3% down.

http://www.fha.com/fha_loan_requirements.cfm

You still need enough income and good credit.
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Old Dec 25, 2012, 01:46 PM   #65
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In my experience (Realtors and Mortgage brokers in the family), the only loans like this are not coming from Fannie Mae but the FHA. But even those loans have very strict requirements though they only require 3% down.
That's how I bought my home. FHA first-time buyer ... put down about $3,000 with a 30-year adjustable mortgage.

15 years later, I have a spotless payment record and a mortgage that has consistently adjusted down (thank you lousy economy) to 3%. My home is worth at least 2-3 times what I owe on it.

Government "interference" as you put it, change my life and helped to make me financially solvent. I'm sure there are plenty of other people who have similarly been helped.
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Old Dec 25, 2012, 01:55 PM   #66
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That's how I bought my home. FHA first-time buyer ... put down about $3,000 with a 30-year adjustable mortgage.

15 years later, I have a spotless payment record and a mortgage that has consistently adjusted down (thank you lousy economy) to 3%. My home is worth at least 2-3 times what I owe on it.

Government "interference" as you put it, change my life and helped to make me financially solvent. I'm sure there are plenty of other people who have similarly been helped.
You're one of the few smart ones unfortunately. Most got caught up in the hype in 2005 and bought houses they couldn't afford and lost it all.

I know many people in your situation who bought in the past in a normal market but instead of sitting pat, they took money out of their inflated houses and spent it or reinvested it in failed housing investments. And lost it all. They will never be able to buy a house again. At least for 7 years anyway.

Seems like you're advocating for individual responsibility!

Merry Christmas everyone and have a safe New Year.
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Old Dec 26, 2012, 10:34 PM   #67
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I like this analogy of the "fiscal cliff".


http://www.industryweek.com/blog/family-federal-budget

Quote:
Fiscal Cliff Simplified

* U.S. Tax revenue: $2,680,000,000,000

* Fed budget: $3,760,000,000,000

* New debt: $ 1,080,000,000,000

* National debt: $16,066,000,000,000

* Annual sequestration cuts: $ 109,000,000,000

Pretend It’s a Household Budget (remove 8 zeroes)

* Annual family income: $26,800

* Money the family spent: $37,600

* New debt on the credit card: $10,800

* Outstanding balance on the credit card: $160,066

* Total budget cuts so far: $1,090

Possible Solutions:

1) Ask family members to invest in your future

2) Believe that a 2% raise next year will solve everything

3) Apply for more credit cards
It really gives people a feeling for the numbers involved. I think steps 1 and 3 will be part of the "solution".
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Old Dec 27, 2012, 01:43 PM   #68
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I like this analogy of the "fiscal cliff".


http://www.industryweek.com/blog/family-federal-budget



It really gives people a feeling for the numbers involved. I think steps 1 and 3 will be part of the "solution".
Option 4: QE. We cant borrow anymore from other countries with the ten-year below 2%. It also seems we can't agree on more taxes or less spending either.

The Fed is printing EXACTLY 100% of the offered debt from the Treasury now.
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Old Dec 27, 2012, 05:18 PM   #69
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Option 4: QE. We cant borrow anymore from other countries with the ten-year below 2%. It also seems we can't agree on more taxes or less spending either.

The Fed is printing EXACTLY 100% of the offered debt from the Treasury now.
Well that's simply option 3 with yourself being the issuer of the credit card.
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Old Dec 28, 2012, 12:19 AM   #70
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I like this analogy of the "fiscal cliff".


http://www.industryweek.com/blog/family-federal-budget



It really gives people a feeling for the numbers involved. I think steps 1 and 3 will be part of the "solution".
4) Start a counterfeit press. Make you own money!

D'OH, Dmunjal already posted
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Old Dec 28, 2012, 10:40 AM   #71
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Originally Posted by flopticalcube View Post
I like this analogy of the "fiscal cliff".


http://www.industryweek.com/blog/family-federal-budget



It really gives people a feeling for the numbers involved. I think steps 1 and 3 will be part of the "solution".
I think removing all of the zeros is a great idea! Seriously it illustrates the problem very well.
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Old Dec 28, 2012, 12:12 PM   #72
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4) Start a counterfeit press. Make you own money!

D'OH, Dmunjal already posted
They already have one. Its part of option 1 of the solutions where they ask Uncle Ben to simply print some more. Its just more paper backed by nothing more than promises.

The one thing left out of the picture is the $540,000 future liability the family is facing over the next 25-40 years. How they are going to meet those payments is anyones guess. At the same time a couple of the children, like JP and GS, having been playing with derivative fireworks in the basement. There is no fire insurance on the house. Uncle Ben has been providing the matches.
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Old Dec 28, 2012, 01:04 PM   #73
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SNAP already covers food, unemployment insurance doesn't. There are jobs out there. Many employers are complaining that no one wants to take jobs because the unemployment insurance is better.
I know for a fact that this is utter BS. There are not that many jobs out there compared to the numbers of people looking and a number of businesses have put hiring on hold until they see what happens with this fiscal cliff thing.
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Old Dec 28, 2012, 01:32 PM   #74
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SNAP already covers food, unemployment insurance doesn't. There are jobs out there. Many employers are complaining that no one wants to take jobs because the unemployment insurance is better.
minus the fact that it is not. Any one who claims that does not know what they are talking about and just spitting out lies they have heard from the GOP wing nuts. It is not true.

For example I was on unemployment for a while. I was at the max limit for the state. It was less than 50% what I was making in terms of cash. Now if you start adding in the other benefits I was making less than 30% I was making on working. So yeah working generally makes more.

Now yeah I did quit looking for work in the end and took the unemployment money to pay for a little over a year of school and then pull the rest out of savings and then some scholar ships. All in all I drained both my saving, unemployment and then part of my retirement to cover those cost.

Now I was only able to do that because my parents help me by letting me live at home, paid for all my insurance cost and most of my bills. I put my money into school still drained threw it all.

In 2009 the max unemployement in Texas was around $400 a week and maxed out at little over $10k and that money counts as income so yes I had to pay taxes as well. In some ways being laid off early in the year helped me because it pushed my taxable income a hell of a lot lower.
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Old Dec 28, 2012, 05:15 PM   #75
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Obama had a press conference a few minutes ago where he said Reid and McConnell are working on a deal and he's optimistic. Also said that if they can't come to one, he wants an up or down vote on his proposal in the Senate. In other words, the Republicans will have to filibuster a tax cut or pass the bill. Barry's learning.
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