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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Re expiration of the tax cuts: the *ahem* liberal websites have reached a general consensus: they believe that Obama has been allowing the R’s to hold the middle class hostage for far too long. In their view, it’s time to run out the clock and let the cuts expire on everyone. Then Obama can tell the R’s to either free the hostage or kill the hostage, but either way, he is done with giving in to demands. The moral victory is satisfying enough that many libs are willing to give up those tax cuts, to pay a little more in taxes as long as the rich pay a lot more in taxes. Many more welcome cutting the war machine.
[just reporting the lib perspective]
“…cutting the war machine.”
I hadn’t realized that was even on the Fiscal Cliff table (is it?)…
My impression was that U.S. foreign military actions were ‘off budget’ and hence not part of the fiscal problems we face.
‘not part of the fiscal problems we face’
‘America’s military is astonishingly top heavy, with 945 generals and admirals on active duty as of March 2012. That’s one flag-rank officer for every 1,500 officers and enlisted personnel. With one general for every 1,000 airmen, the Air Force is the worst offender, but the Navy and Army aren’t far behind. For example, the Army has 10 active-duty divisions — and 109 major generals to command them. Between September 2001 and April 2011, the military actually added another 93 generals and admirals to its ranks (including 37 of the three- or four-star variety).’
‘The glut extends to the ranks of full colonel (or, in the Navy, captain). The Air Force has roughly 100 active-duty combat wings — and 3,712 colonels to command them. The Navy has 285 ships — and 3,335 captains to command them. Indeed, today’s Navy has nearly as many admirals (245 as of March 2012) as ships.’
‘In Roman times, a proconsul was a military ruler of imperial territories, a man with privileges as sweeping as his powers. Today’s four-star generals and admirals — there are 38 of them — often have equivalent powers, and the perks to go with them. Executive jets on call. Large retinues. Personal servants. Private chefs.’
‘but don’t spend your time worrying about demobbed generals queuing up for unemployment checks. Clutching their six-figure pensions, most of them would undoubtedly speed through the Pentagon’s golden revolving door onto the corporate boards of, or into consultancies with, various armaments manufacturers and influence peddlers, as 70% of three- and four-star retirees have in fact done in recent years.’
http://www.tomdispatch.com/blog/175622/
There it is right there….Nice post Ben…You want to know who runs our country…Look no farther than that right there…
To be fair, a lot of those Colonels and Generals aren’t in command of combat units, but work in R&D, systems management, maintenance depots, etc.
As I’ve seen first hand, a lot of their experience, skills and training is not transferable to the civilian sector……or if it is, maybe you don’t want it transferred to the civilian sector.
God forbid we run our aerospace programs like Microsoft engineers software.
Sequestration calls for a 10% across the board cut in the military budget — which sounds like a good start until you realize it’s a 10% cut in budget INCREASES, which haven’t even been requested yet.
Nonetheless, I expect a significant downsizing of our military as America’s warring winds down in favor of a more internationalized police-type response to international incidents. I also imagine much of the money saved will be redirected towards weapons research and development, and consolidating the VA medical/benefits system into a nationalized health care and social welfare system.
I vote for for a 10% across the board cut in the military budget — which sounds like a good start. At minimum.
Robin, you already voted. In 2012, 98.5% of the voters chose the no-cuts, borrow-big, spend-spend-spend parties, known as the Republicans and Democrats, aka the left and right wings of the Corporate War Party. It’s about as bad as the elections performed in Soviet Russia.
The Libertarians got about 0.9% of the vote. They and the Constitution Party (about 0.1% of the vote) are the only hope for actually cutting things. At 1% of the vote, they are ignored, politically.
Right Ox who cares if unemployment goes up to 12% we have a lot more taxes coming in to pay for it….good game plan for a lame duck prez. Who cares if his approval rating goes to 10% There is no way anyone will harm him, cause that’s what Biden is there for… his bodyguard.
how did clinton do?
Aside from the commentary about who is holding whom hostage, I agree. Let the “bargain” go into effect. The tax increases won’t be enough to provide for fixing the deficit, and neither will the “CUTS”, but it’s a start.
Without going over the “cliff”, the democrats will do what they have done consistently in the past; offer future “cuts” for current “revenue enhancements”.
Then, as usually, after the republicans give in for being blamed in the press for causing the problems, the democrats will NOT go ahead with cuts, but say, it’s just too draconian. We can’t take away people’s benefits. they count on them. Why would you want us to do this???? you are heartless bastards.
I thought that was what we agreed to. Remember?
You are heartless bastards. The republicans want to starve children and throw grandma out on the street.
On to the next budget, please.
While we’re at it, let’s throw out the word budget and just call it the latest democrat spending plan.
There is no ‘budget’.
“The Republicans want to starve children and throw them into the street.”
Don’t believe me. Believe what they say and do.
Are collusion and price fixing generally illegal under the Sherman Antitrust Act, or does it depend on who is doing it? For instance, are government agencies allowed to use collusion to fix prices, while private firms are not?
What about quasi-government zombies?
Stop the Menendez–Boxer Sideshow: End Fannie Mae and Freddie Mac Now
By David C. John
November 27, 2012
It is time to end Fannie Mae and Freddie Mac. For over four years, Congress has failed to start the process of phasing out the two failed mortgage finance giants and replace them with a private-sector mortgage finance system. Most of the time, opponents used the excuse that housing markets were just too weak to do anything that might delay the housing recovery, leaving both entities to languish under the control of the Federal Housing Finance Agency (FHFA).
Instead, some in Congress and the Obama Administration have focused on a series of generally unsuccessful efforts to enable borrowers whose homes are now worth less than they owe to refinance the loans.[1] Undeterred by the underperformance of these programs, several Senators have decided to try again. Senate Majority Leader Harry Reid (D–NV) is expected to schedule Senate consideration in the lame-duck session of another refinancing bill by Senators Robert Menendez (D–NJ) and Barbara Boxer (D–CA).
As with past efforts, their approach would be a policy mistake. Congress should skip the sideshow and move instead to the main event of ending Fannie Mae and Freddie Mac.
Rationale for Mass Refinancing Is Ending
Driven by housing activists, Congress, and the executive branch, government agencies have focused on encouraging lenders to refinance underwater mortgages since mid-2007. Supporters justified their approach by noting that falling housing prices made it virtually impossible for borrowers to reduce the loans to a point where the worth of their houses would equal the amount that they owed. This has led many homeowners to simply walk away from their obligations, leaving their houses to be repossessed and further lowering property values in the area.
..
The Endgame. That might be a topic of discussion.
The entire “budget” discussions are completely useless.
There is no ‘budget’.
Budgets are for working families that don’t rely on government support for food and housing.
The government hasn’t had any budget in a long time.
To say “deficits don’t matter”, or that we will “grow our way” out of the problem of deficit spending is ludicrous. We are far to indebted and the national economy is more a of dog and pony show in terms of “growth”. It’s government statistical lies with smoke and mirrors.
But, the democrats will never stop spending and based on the last election, the 50/50 line has been passed on people wanting their free cheese. We are the New Japan, but much bigger and a lot dumber. The endgame seems to be endless deficits and continual “money printing” by the FED.
It will result either in the destruction of the currency in a Red Queen Race, or a collapse by exhaustion. No one knows what will happen. We can only speculate. World events will play a role. Politics will play in, too.
But as far as I can see, if the Republicans cannot hold a line and say NO MORE SPENDING, the game will go on, till it can no longer sustain itself.
Many people will siphon off fortunes from the money printing, if they are in a position to stick a straw into the trough of the Banksters honey-pot.
The majority of Americans will be poorer.
I think “democracy” has reached critical masses where the doofus masses will vote for hifalutin-sounding programs that provide something for nothing, a magical trick only attempted by Central Banks around the world.
I vote Depression 2.0. And for those who hate the rich, remember that the most expensive cars (based on current incomes) were built during the 1920’s and 30’s at the height of the depression. The rich were, by contrast, very rich. I expect the same.
ALL Hail Goldman-Sachs!!
Dio, we’ve been in the Second Great Depression (or Third, depending if you count 1873 or 1929 as #1) since 2008. You can’t avoid what’s already struck you.
The expensive brands (Duesenberg, Auburn, Cord, etc) disappeared during the Depression.
Of course, in that Depression, the 1%ers didn’t get bailed out at the expense of the wretched refuse.
LOL, so true.
Twinkies. Gone.
Twinkies. Still being made. In Canada.
Are rising home prices alone enough to signal a housing recovery, even if they are achieved by top-down command-and-control financial engineering rather than due to fundamentals, such as an improving employment situation?
November 30, 2012
Rising home prices signaling ‘recovery’
Charts of the week’s indicators
U.S. home prices rose in September for the sixth straight month, despite seasonal weakness, signaling that the housing market is “in the midst of a recovery,” according to the S&P/Case-Shiller home-price index released this week. The index that looks at 20 cities showed that prices have gained 3% over the past 12 months, echoing other recent positive housing data, such as gains in new construction and existing-home sales. However, despite recent increases, prices are about 30% below peak levels in 2006. And the housing market still faces challenges from shadow inventory, and tight credit standards.
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Will Realtor™ propaganda or economic reality carry the day in the decision whether to include the mortgage interest deduction among fiscal cliff spending reductions?
Ben Hallman
Senior Financial Writer, The Huffington Post
Mortgage Interest Deduction: Not A Tax Break For The Middle Class
Posted: 11/29/2012 4:07 pm
As Washington searches for ways to drum up tax revenues in a bid to avert the fiscal cliff, the interest deduction some homeowners claim on their mortgages may be on the chopping block.
The possibility that this deduction might go away has prompted the sort of dire warnings that might be reserved for news that the American flag will lose its stars and stripes: The housing market, finally recovering from a long decline, will plunge anew as values fall. People won’t buy as many homes. Middle-class families will suffer and despair.
But this view, voiced with the most conviction by lobbyists for home builders and real estate agents, simply isn’t grounded in reality. The deduction helps some middle-class families to a modest degree, but it is mostly a giant giveaway to the wealthy. Moreover, there’s no evidence to suggest home prices would crash or people would suddenly choose renting over buying if it went away.
“It’s time to take a closer look,” said John Taylor, the president of the National Community Reinvestment Coalition, which advocates for low-income borrowers. “This is far and away the government’s largest housing subsidy, and it primarily benefits people who are financially comfortable and some people who are extremely financially comfortable.”
…