Recent example of what happens when private companies are allowed to discriminate:

Countrywide Agrees To $335 Million Settlement Over Discriminatory Subprime Loans

In the largest residential fair lending settlement reached in the Justice Department’s history, Bank of America has agreed to provide a $335 million fund to compensate victims of what one top DOJ official called “discrimination with a smile.” DOJ alleged that Countrywide, before it was owned by Bank of America, engaged in a “widespread pattern or practice of discrimination against qualified African-American and Hispanic borrowers” in their mortgage lending practices from 2004 through 2008.

The complaint, filed in the Central District of California on Wednesday, alleges that African-American and Hispanic borrowers “were more than twice as likely to be placed in subprime loans than non-Hispanic White wholesale borrowers who had similar credit qualifications.” Subprime loans carry higher interest rates.

Attorney General Eric Holder stressed at a press conference that the over 200,000 African-American and Hispanic borrowers named in the suit were qualified for the loans.

Get yours cargo container while you can. The collapse of America will start in 2013.
From Business Insider:
A) The Bush tax cuts on those making more than $200k will expire.
B) The Bush tax cuts on those making less than $200k will also expire.
C) The Patch on AMT will expire.
D) The 2% payroll tax holiday will expire for all workers on 12/31/12 (I’m sure the current holiday will be rolled for another year)
E) The 99-week extended unemployment benefits die on 12/31. (The emergency benefits will also be extended for 2012)

F) There will have to be a budget that is approved. Alternatively, a series of continuing resolutions is required to avert a government shutdown. We have not had an approved budget in over 900 days.

G) 2013 is the first year that there will be mandatory caps on discretionary spending. These limits will result in a YoY decline in government spending.

H) The Federal Reserve has promised to keep interest rates at zero into 2013. While it is possible that the Fed could continue the madness for even longer, the reality is that interest rates have nowhere to go but up.

I) By January 2013 it will be painfully evident that the country’s key social programs, Social Security and Medicare will be running in the red at a pace that is far higher than anyone considered possible. The need for dramatic changes in these programs will have to come onto the table. The implications of this will be significant.

J) In 2013 the issues of Fannie, Freddie, FHA and the Federal Home Loan Banks must be addressed. The problems at the housing agencies has festered too long.

K) The country will face another debt ceiling extension. The last time cost us our AAA.

L) At some point in 2012 economic events (Probably Europe) will force the Fed into yet another round of QE. More LSAP and another increase in the Fed’s balance sheet. But when completed the Fed will have fired it’s last bullet. QE-3 will not achieve any better results than QE-1 or 2. The policy will be discredited as it achieves nothing positive and causes inflation. There are no credible options left for the Fed to fight the slowdown that HAS to occur when the effects of A – K are felt.


America looks like Mexico of the 70’s – 90’s. The last election cycle brought us the biggest economic crisis in 70 years. The next election will be no different. Dozens of landmines have been planted. They are timed to go off in 2013. Some may be fixed, others kicked further down the road. However the odds of the country addressing all of the things that have been programmed to explode is, in my opinion, close to zero. One or more of these things is going to trip us up. There are too many big issues to confront.

Don’t Blame Capitalism for Wall Street’s Corruption and Lawlessness:

When Mahatma Gandhi was asked what he thought about Western civilization, he answered:

I think it would be a good idea.

I feel the same way about free market capitalism.

It would be a good idea, but it is not what we have now. Instead, we have either socialism, fascism or a type of looting.

If people want to criticize capitalism and propose an alternative, that is fine . . . but only if they understand what free market capitalism is and acknowledge that America has not practiced free market capitalism for some time.

...

People pointing to the Western economies and saying that capitalism doesn’t work is as incorrect as pointing to Stalin’s murder of millions of innocent people and blaming it on socialism. Without the government’s creation of the too big to fail banks, Fed’s intervention in interest rates and the markets, government-created moral hazard emboldening casino-style speculation, corruption of government officials, creation of a system of government-sponsored rating agencies which had at its core a model of bribery, and other government-induced distortions of the free market, things wouldn’t have gotten nearly as bad.

A. Overly simplistic, and you're confusing to some degree what is Keynesian. A central tenant of Keynesian economics is counter-cyclical budget deficits. When there's a recession, the government should run deficits, and the larger the recession, the larger the corresponding deficit. That's been a non-stop, although admittedly abused, government policy since the Depression. Also, Keynesian economics had components in it for monetary policy as well. Keynes advocated for lower interest rates during times of recession along with increasing the monetary supply. Yes, he did believe that during more severe recessions that monetary measures would not be enough, but he nevertheless advocated for the various monetary policies. These align up with most recessions as far as what the gov't did from the Great Depression on. Just because Keynesian policies disappointed during the 1970's, the ideas were not altogether abandoned ever since. The simple fact of the matter is aside from 2007, there hadn't been a particularly severe recession since the 1970s, so it's reasonable to assume that direct employment wasn't deemed necessary, not that it was seen as bad policy in all cases.

B. It happened to me by the hand of Microsoft. I'm pretty sure they didn't have flunky MBAs. ;-)

C. There are a lot of similar issues involved. My point was only that you can't just tie requirements to it, and that's that. There are a huge myriad of issues that would come hand in hand with stipulations to unemployment. Your idea is still something I'd be onboard with if those devils in the details were addressed. I do see as an example that some people become unemployed because of structural changes to the economy that causes their jobs to never come back. As a case in point, textile factory workers who lose their jobs due to offshoring are suddenly in a position where market forces have no remedy. They lack the skills to get jobs in areas of growth such as more in depth computer skills, and likely lack the financial resources to get the education and training to get said skills because they're unemployed. This is a perfect example in my opinion where the market and free trade fail from time to time, and some force, likely the gov't, needs to step in for the good of everyone. These people would benefit from retraining, so they can get a good job, business owners benefit from increasing numbers of workers who can do the jobs they're needing people to do, and it becomes a win win situation.

D. The last time we tried no deposit insurance, it failed miserably. Banks lent money for people to buy goods and services they couldn't afford, and stocks on the margin. People stuck their money in banks anyway. The only difference is when fear hit the market after the crash, a lot of people, many irrationally, pulled their money from banks, causing a collapse in the banking system, which tanked the entire economy even further.

People lack the time and/or motivation to stay informed on all kinds of issues from local politics, to PTA meetings. I don't see how they could begin to assess what loans their banks were making as far as riskiness. And the typical American when it comes to finances? Yikes! Next to no savings, can't understand how much they should be regularly investing, etc. And it's not just the stupid people. Most Americans don't even know what a mutual fund actually is. How could they possibly make intelligent decisions about the riskiness of their banks' portfolios? I consider myself smarter than the average bear, but even I'd be paralyzed with fear selecting a bank based what little info I could find of their portfolios. Instead, I make sure they're FDIC insured, because that in and of itself entails objective benchmarks to even get that insurance.

And honestly, I don't see many people making decisions about their banks based on rates alone. As a case in point, very few people I know put money in online high yield savings accounts instead of the local credit union, bank, or large megabank, despite the fact that in most cases online savings account providers such as ING Direct pay 2-3 times the interest. I don't believe that's what caused the madness in the banking industry at all. At the very least, there's a massive list of causes well above FDIC insurance, and even if FDIC insurance did play a role in causing the crisis, it also served well in preventing runs on the banks in general that would have compounded the crisis further.

>> ^bmacs27:

@heropsycho
A. Because we've been leaning on monetary policy as our intervention of choice. Direct employment has been called socialism for 30 years. That doesn't suggest a dominant Keynesian ideology. Really it's been this mix of monetarism and supply-side economics which morphed into some mutilated crony-capitalism.
B. I suppose it could happen, but it would take a rough business climate, or some flunky MBAs. In that situation I'd try to increase my business (i.e. make $200,000).
C. That's why we have food stamps. It isn't a perfect solution, but the kid starves if her folks spend the whole check on smokes too. Vices aren't the kind of "demand side" stimulus I'd like to see (one flaw in the Keynesian argument given the current living conditions of the American poor).
D. I really do believe that if the FDIC didn't exist, "the market" would not have allowed deposits to be leveraged by banks investing in exotic financial instruments. Like you said, even the bankers didn't know what the hell they were doing! Without the FDIC people would very quickly ask, "what the hell you doin' with my money?" Rather, since their money is backed by the government they ask, "what sorts of rates are you offering?" It's that pressure from the distorted marketplace that pushed banks into more and more leverage to stay competitive. Those rates were realized by making massively leveraged bets that were only possible by hedging with exotic instruments. Once upon a time people knew their banker. I think that's the best FDIC there could be. There might be some legal patchwork of the Glass-Steagall flavor that might make it work, but chasing down all the unintended consequences would be a challenge. Certainly figuring out how to unwind all the securitized mortgages that already exist makes that sort of policy direction seemingly prohibitive.
F-. Dude, Peter Schiff is a quack.

A. I don't understand how you're arguing we haven't been practicing Keynesian economics since the Great Depression. We've run deficits almost the entire time, lowered interest rates even further during recessions, and enact stimulus when recessions hit in the form of tax rebate checks, income tax cuts to consumers, gov't programs to provide jobs to increase demand, extended unemployment, etc., although we normally do a poor job of running surpluses when we should. But in a nutshell, that is Keynesian economics. And it has worked pretty well overall. Influence of monetarist policies have tamed the Keynesian interventions, but there's little doubt that all the above actions in the last two recessions were born of Keynesian thought.

B. If a business is making $100,000 off your labor, but is paying you $80,000, resulting in a $20,000 profit, why wouldn't they fire you if they could fire someone to do your job for $50,000, resulting in a 250% increase in profit? It does happen. I was the victim of it in 2004.

C. If the devils in the details could be worked out, and that's a big if, I'd be in favor of having stipulations to unemployment benefits. But you got a lot of issues you'd have to deal with. What if the person on unemployment has kids? You're gonna deny them welfare if the kids would starve? Very complicated issue as just one example.

I do think though we need in this age better education to retrain workers for the new jobs that come into the US as jobs get outsourced to other countries.

D. About the FDIC... First off, you're saying that people could check the banks' ability to make too risky of loans, but it's a whole other thing to say FDIC insurance encourages bad lending. It's simply not true. Again, regardless if deposits are insured or not, banks will go under if they make risky loans regardless of deposit insurance for consumers in most cases. Again, bailouts are a whole other issue. As for people checking the banks for bad lending, that's a pipe dream. The general consumer has no clue what are good or bad loans overall, nor the time to monitor the lending practices of banks. Hell, BANKERS didn't understand the crap they got themselves into in the mortgage crisis until it was too late, and they're professionals in the field. It's not a practical solution. On top of all that, the FDIC does in some ways help to ensure baseline qualities of banks. Not every bank can be FDIC insured, and many of the regulations FDIC insist upon make the banks more solvent, etc. So when consumers insist the bank is FDIC insured, they're insuring their deposits as well as guaranteeing a minimal level of integrity in the bank itself.

Lastly, I'm totally down with reasoned dialogue, even from points of view I completely oppose. I'm not slamming this guy because he's a conservative. I'm slamming him because he made ridiculous claims that are obviously factually inaccurate. Ideology shouldn't blind people from obvious fact that don't fit.

>> ^bmacs27:

@heropsycho
I'd disagree with you on a couple of points.

However, I will say once again, Keynesian economics works. We've practiced it since the Great Depression, and it works without a doubt.
First of all, we haven't really practiced Keynesian economics since stagflation during Carter. The decoupling of inflation and growth was very troubling to economists as the Keynesian theory had no explanation for it. In the period between Carter and Obama, we effectively practiced Monetarist economics, or "supply-side" economics. It's that economic policy everyone is railing against even though it was practiced during one of the periods of greatest growth in our history (obviously there are confounds, e.g. the personal computer). The Austrians just don't think that demand focused interventions will work any better than supply focused interventions. There is always a deadweight loss to taxation.

Profit centers do in fact get outsourced, although granted not as often as cost centers. Why would a company not outsource a profit center if it would increase profits in the long run?
Profit centers are most often NOT outsourced. If there is another profit center abroad, you expand, you don't fire the guy that's making you more money than he's costing you.

And prolonging unemployment has also provided an artificial market for goods and services for those who do have jobs. It's not so simple to suggest that extended unemployment is a disincentive to work. It's also providing those who are collecting it who actually can't find another job with income to spend, which props the entire economy up. It's not an either/or; it's both. And there are far more people right now on unemployment who cannot find another job than those holding out for something that pays what they're used to.
I understand the demand side argument. I'm saying, rather than giving them money for nothing, let's give them money to become hirable. It's similar to saying that the money handed to banks should have had conditions attached. When people are begging for money, they ought to accept some stipulations.

Finally, bear in mind that when it comes to finding common ground, and that kind of thing, you cannot find common ground with people who are fundamentally altering obvious fact to suit their views. Schiff made to completely ludicrous claims (child labor was ended by the market, and the FDIC deposit insurance fuels bank speculation). Both claims are preposterous.
I agree with you about child labor, however I'd disagree with you about the FDIC. People should be paying attention to what banks do with their money, and respond to poor decision making with the withdrawal of their deposits. Instead, they just assume it doesn't matter (in terms of risk) where they keep their money and just shop for the highest interest rate. Those higher interest rates are most often fueled by more than traditional lending (as anyone banking in such a manner would lose deposits to higher yields in the distorted marketplace).
Also, I'm Keynesian. I just don't think free market viewpoint you'd read in the Economist, Financial Times, WSJ, or any other reasonably reputable conservative source is being well represented on this website. If we all cheerlead for one team, we'll never substantially challenge our own groupthink.

@heropsycho

I'd disagree with you on a couple of points.


However, I will say once again, Keynesian economics works. We've practiced it since the Great Depression, and it works without a doubt.

First of all, we haven't really practiced Keynesian economics since stagflation during Carter. The decoupling of inflation and growth was very troubling to economists as the Keynesian theory had no explanation for it. In the period between Carter and Obama, we effectively practiced Monetarist economics, or "supply-side" economics. It's that economic policy everyone is railing against even though it was practiced during one of the periods of greatest growth in our history (obviously there are confounds, e.g. the personal computer). The Austrians just don't think that demand focused interventions will work any better than supply focused interventions. There is always a deadweight loss to taxation.


Profit centers do in fact get outsourced, although granted not as often as cost centers. Why would a company not outsource a profit center if it would increase profits in the long run?

Profit centers are most often NOT outsourced. If there is another profit center abroad, you expand, you don't fire the guy that's making you more money than he's costing you.


And prolonging unemployment has also provided an artificial market for goods and services for those who do have jobs. It's not so simple to suggest that extended unemployment is a disincentive to work. It's also providing those who are collecting it who actually can't find another job with income to spend, which props the entire economy up. It's not an either/or; it's both. And there are far more people right now on unemployment who cannot find another job than those holding out for something that pays what they're used to.

I understand the demand side argument. I'm saying, rather than giving them money for nothing, let's give them money to become hirable. It's similar to saying that the money handed to banks should have had conditions attached. When people are begging for money, they ought to accept some stipulations.


Finally, bear in mind that when it comes to finding common ground, and that kind of thing, you cannot find common ground with people who are fundamentally altering obvious fact to suit their views. Schiff made to completely ludicrous claims (child labor was ended by the market, and the FDIC deposit insurance fuels bank speculation). Both claims are preposterous.

I agree with you about child labor, however I'd disagree with you about the FDIC. People should be paying attention to what banks do with their money, and respond to poor decision making with the withdrawal of their deposits. Instead, they just assume it doesn't matter (in terms of risk) where they keep their money and just shop for the highest interest rate. Those higher interest rates are most often fueled by more than traditional lending (as anyone banking in such a manner would lose deposits to higher yields in the distorted marketplace).

Also, I'm Keynesian. I just don't think free market viewpoint you'd read in the Economist, Financial Times, WSJ, or any other reasonably reputable conservative source is being well represented on this website. If we all cheerlead for one team, we'll never substantially challenge our own groupthink.

Yeah, feel free to slap that video in the face of anyone who ever says Peter Schiff is awesome and/or infallible.

The Krugman predictions of stagnation and disinflation were right, crackpot predictions of Weimar/Zimbabwe-style hyperinflation were dead wrong.

I'm a bit curious how Schiff spins his utter fail.

In reply to this comment by dystopianfuturetoday:
Peter Schiff *Failboat.com.org

In reply to this comment by NetRunner:
Definitely one to mark down:

Schiff says we'll have a crash of our economy driven by hyperinflation by the end of the year, or maybe in 2010.

Krugman (who unlike Schiff is a Nobel prize winning economist) also predicted the problem we're having now, and says if we don't do something even bigger than an $800bn stimulus, we're in for a deflationary problem, just like the Great Depression.

Clearly, someone will be proven right, even if disaster ensues.

Flim-flam artists like Schiff should know better, if the problem now is because Greenspan made the interest rate too low in 2002 then the real problem is that our current 0% interest rate will cause a new asset bubble that will collapse, so he should allow for a much longer period of time for it to gestate, like say Obama's second term, 2014 or so.

But that wouldn't get him on the TeeVee machine to throw bricks at Democrats as often.

Peter Schiff *Failboat.com.org

In reply to this comment by NetRunner:
Definitely one to mark down:

Schiff says we'll have a crash of our economy driven by hyperinflation by the end of the year, or maybe in 2010.

Krugman (who unlike Schiff is a Nobel prize winning economist) also predicted the problem we're having now, and says if we don't do something even bigger than an $800bn stimulus, we're in for a deflationary problem, just like the Great Depression.

Clearly, someone will be proven right, even if disaster ensues.

Flim-flam artists like Schiff should know better, if the problem now is because Greenspan made the interest rate too low in 2002 then the real problem is that our current 0% interest rate will cause a new asset bubble that will collapse, so he should allow for a much longer period of time for it to gestate, like say Obama's second term, 2014 or so.

But that wouldn't get him on the TeeVee machine to throw bricks at Democrats as often.

>> ^rougy:

>> ^bcglorf:
Can someone explain the Greek riots to me? I've only followed far enough to have picked up that they are in opposition to the austerity measures being enacted by government? What I've heard sounds like the government spent so much on social services that it went bankrupt, and the protesters are angry that the government is now attempting to cut back it's social services.
I'm not of strong opinion on this like I am in many other situations, but the balance of what I've heard sounds like the anti-austerity protests are so much whining that everyone wants their free money and maybe if we shoot the messenger the economy will recover.

The brunt of it is that Greece is in trouble, and the majority of people who will have to pay for it, or endure "austerity" as the fatcats like to say, had nothing, zero, to do with the trouble.
I've been trying to find out what went wrong there, but I see a lot of smoke and few specifics.
Naturally, any time the blame can be laid on social programs, then that narrative will be most promoted among America's mainstream media.
Frankly I think it was a combination of things, and some of it may have been related to the same CDO swindle that bankrupted Iceland.
But I'm sure you'll agree that if Greece went nuclear, all of their problems would be solved...just like Japan's....

EDIT:
Two words: Goldman Sachs.
Goldman was criticized for its involvement in the 2010 European sovereign debt crisis. Goldman Sachs is reported to have systematically helped the Greek government mask the true facts concerning its national debt between the years 1998 and 2009.[76] In September 2009, Goldman Sachs, among others, created a special credit default swap (CDS) index to cover of high risk of Greece's national debt.[77] The interest-rates of Greek national bonds have soared to a very high level, leading the Greek economy very close to bankruptcy in March and May 2010 and again in June 2011.
(Wikipedia)


Thanks Rougy, that's the kind of starting point I was looking for. I was hoping getting the opinions of few folks on here who'd already researched the matter was a faster place to start than wading through the sea of information out there blindly.

Still sounds as though Sachs role in this was to help the Greek government irresponsibly spend itself into oblivion. I'm still curious, and will have to dig, what that money was spent on. I know even in my country(Canada) our social services are scaled well back from Greece's, and ours are already at the breaking point of what our tax revenues can bear. Added into that is our taxes are generally higher than those in Greece and it seems that Sachs helped them postpone the inevitable, and made it worse. None the less, it also sounds like the population were the recipients or targets of the majority of the money and are now more angry at the slowing of the spending than at the debt load.

Again I'll have to look at it further. As one poster tried to call me out, I am not strongly convicted and convinced my opinion on this is correct or accurate, I have merely expressed without hedging or hiding what I hold to based on what I admit as my limited information and am asking to be proven wrong to speed my process of correcting my opinion should it be based on wrong assumptions. Rougy's pointed a big path I wasn't aware of. Anyone else have some more? Particularly around where Greece's government revenues come from and were they are spent? My perception that most of it is going right back to public services is pretty central to my opinion and I'd love to know if I'm wrong on it.

>> ^bcglorf:

Can someone explain the Greek riots to me? I've only followed far enough to have picked up that they are in opposition to the austerity measures being enacted by government? What I've heard sounds like the government spent so much on social services that it went bankrupt, and the protesters are angry that the government is now attempting to cut back it's social services.
I'm not of strong opinion on this like I am in many other situations, but the balance of what I've heard sounds like the anti-austerity protests are so much whining that everyone wants their free money and maybe if we shoot the messenger the economy will recover.


The brunt of it is that Greece is in trouble, and the majority of people who will have to pay for it, or endure "austerity" as the fatcats like to say, had nothing, zero, to do with the trouble.

I've been trying to find out what went wrong there, but I see a lot of smoke and few specifics.

Naturally, any time the blame can be laid on social programs, then that narrative will be most promoted among America's mainstream media.

Frankly I think it was a combination of things, and some of it may have been related to the same CDO swindle that bankrupted Iceland.

But I'm sure you'll agree that if Greece went nuclear, all of their problems would be solved...just like Japan's....



EDIT:

Two words: Goldman Sachs.

Goldman was criticized for its involvement in the 2010 European sovereign debt crisis. Goldman Sachs is reported to have systematically helped the Greek government mask the true facts concerning its national debt between the years 1998 and 2009.[76] In September 2009, Goldman Sachs, among others, created a special credit default swap (CDS) index to cover of high risk of Greece's national debt.[77] The interest-rates of Greek national bonds have soared to a very high level, leading the Greek economy very close to bankruptcy in March and May 2010 and again in June 2011.

(Wikipedia)

According to this, HARP helps people with a loan to value of over 80%. This means if somebody's house goes down in value, your loan-to-value will actually increase (mortgage/appraised worth of home). Cenk is saying HARP does the opposite of that. Either I'm confused or he is confused.>> ^NetRunner:

And for those who want to read the actual text of the announcement from the FHFA on this change, here you go.
I'm not a lawyer, but I have been reading a lot of this kind of stuff lately (because I'm underwater on my mortgage now too!), and all they're really doing is widening the pool of people who they're going to allow to do refinances by letting people who are less screwed participate.
Here's their response to the "moral hazard" argument I alluded to in my earlier comment:

Are you concerned that eliminating seller and servicer representations and warrants on HARP loans will force the Enterprises to take on additional risk?
We anticipate that the package of improvements being made to HARP will reduce the Enterprises credit risk, bring greater stability to mortgage markets and reduce foreclosure risks – each of which is an important statutory mandate for FHFA.
Nearly all HARP-eligible borrowers have been paying their mortgages for more than three years, and most of those for four or more years. These are seasoned loans made to borrowers who have demonstrated a capacity and commitment to make good on their mortgage obligation through a period of severe economic stress and house price declines.
Reps and warrants protect the Enterprises from losses on defective loans; typically, such defects show up in the first few years of a mortgage and so the value of the reps and warrants decline over time. By refinancing into a lower interest rate and/or shorter term mortgage, these borrowers are recommitting to their mortgage and strengthening their household balance sheet, thereby reducing the credit risk they already pose to the Enterprises. Therefore, FHFA has concluded that eliminating the reps and warrants that may have discouraged industry participants from taking greater advantage of HARP to-date will be good for borrowers, housing markets, and the Enterprises and taxpayers.

And for those who want to read the actual text of the announcement from the FHFA on this change, here you go.

I'm not a lawyer, but I have been reading a lot of this kind of stuff lately (because I'm underwater on my mortgage now too!), and all they're really doing is widening the pool of people who they're going to allow to do refinances by letting people who are less screwed participate.

Here's their response to the "moral hazard" argument I alluded to in my earlier comment:

Are you concerned that eliminating seller and servicer representations and warrants on HARP loans will force the Enterprises to take on additional risk?

We anticipate that the package of improvements being made to HARP will reduce the Enterprises credit risk, bring greater stability to mortgage markets and reduce foreclosure risks – each of which is an important statutory mandate for FHFA.
Nearly all HARP-eligible borrowers have been paying their mortgages for more than three years, and most of those for four or more years. These are seasoned loans made to borrowers who have demonstrated a capacity and commitment to make good on their mortgage obligation through a period of severe economic stress and house price declines.

Reps and warrants protect the Enterprises from losses on defective loans; typically, such defects show up in the first few years of a mortgage and so the value of the reps and warrants decline over time. By refinancing into a lower interest rate and/or shorter term mortgage, these borrowers are recommitting to their mortgage and strengthening their household balance sheet, thereby reducing the credit risk they already pose to the Enterprises. Therefore, FHFA has concluded that eliminating the reps and warrants that may have discouraged industry participants from taking greater advantage of HARP to-date will be good for borrowers, housing markets, and the Enterprises and taxpayers.

>> ^Spacedog79:

I seem to have been downvoted quite hard for that one, I guess people didn't get the point I was trying to make is where do you get that money for government spending? This is the fundamental problem with our current system, it can only come from the government borrowing, thereby ultimately increacing our debt and inevitably leading to bankruptcy. The idea that we can continue to grow ourselves out of this economic hole is ludicrous and has caused enough environmental and social destruction as it is.
The ONLY solution it for government to STOP borrowing and start issuing money in the public interest without debt. Usury as a means of financing a nation must be sent back to the history books where it belongs.
>> ^sigmel:
>> ^Spacedog79:
Was going so well till he hit #4, spend more before paying down the debt? Nice one genius, how do you spend more under the current system without the goverment borrowing it and creating even more debt than they borrowed. Epic Keynesian fail.
Who's paying this guy, and what interest do they have in the debt based money system?

The idea is that you spend money to create growth (like an investment). Say the government spends $50k to fund a project that will create jobs that result in $10k in taxes a year. In five years you break even, and after that you start making money (ie, a good investment).



To be fair, I wasn't one of the ones who downvoted; I was just trying to explain as I understood it. You get the money for government spending by creating more money. Our interest rates on our bonds are very low right now, so there is no immediate inflation concern. This would have the effect of devaluing our money, but that could help us in terms of making our exports more competitive. If you borrow to create growth, then you should be creating enough in order to cover the initial cost and interest in due time.

Considering that we have such high unemployment, then I feel that using growth to get us out of this is very valid. If unemployment were a lot lower, then obviously we wouldn't have much in the way of ability to grow. But considering we need employment and increased tax revenue, I think creating jobs would be a good move to solve both problems. I also think it is possible to do this in a way that isn't detrimental in an environmental or social way.

>> ^conan:

Why is it ok if a guy worth multi millions makes fun of "them" who are "up there". He's one of the 1% himself.


Bill Maher and other entertainers didn't scheme their way to where they are. some entertainers might have slept their way to higher income, but none of them sold bundled mortgages back to the public, fucked your savings account, outsourced your job, or raised your interest rates to 30%

@ajkido said: "By the way, life doesn't have to be that rough. It might not "build one's character" like living in a car, though..."

If people can't pay off their student loans, that means the increased benefits to society of their education were not as high as the increased costs to society of paying for their education. When you make something "pretend free" you distort it's consumption.

Keep in mind that student loans often have interest rates so low they're below the inflation rate, so you're basically being paid to have the loan.

Solution: Everybody who takes out a student loan to go to a 4 year school instead of transferring from a community college is being dumb. Become an advocate of that. Also, don't major in dumb majors.



@ajkido said: "There are countries where students get paid to go to school (even the best universities) and those countries are doing pretty good even in international competition."

Wait, as college-educated people, we know why those countries do well, right? Because those countries are full of White or Asian people. White Americans do better at academics than other White countries, and Asian Americans do better than other Asian countries.