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K.Bullock
02-23-2009, 11:02 AM
http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F9582 60


Paragraph three is interesting:


Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.



''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''


The New York Times from 2003:The Bush Admin tried to take steps to avert crisis and were opposed by...

http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B 63&sec=&spon=&pagewanted=print


''The regulator has not only been outmanned, it has been outlobbied,'' said Representative Richard H. Baker, the Louisiana Republican who has proposed legislation similar to the administration proposal and who leads a subcommittee that oversees the companies. ''Being underfunded does not explain how a glowing report of Freddie's operations was released only hours before the managerial upheaval that followed. This is not world-class regulatory work.''

Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.


This is why it is ironic to see the Democrats claiming to drive the fire truck to a fire they set and then turning around and blaming it on the Bush Administration.

Mike Noel
02-24-2009, 08:46 AM
The silence from our left leaning friends is deafening........:rolleyes:

road kill
02-24-2009, 08:48 AM
Wait till you hear all the WHINING tonight!!

Hoosier
02-24-2009, 08:50 AM
The silence from our left leaning friends is deafening........:rolleyes:

Lets give em something to talk about.
http://www.nytimes.com/2009/02/24/washington/24gaza.html?_r=1&ref=middleeast

Obami administration to give Gaza $900 million

badbullgator
02-24-2009, 08:58 AM
You know just when you think it cannot get worse.....
Why are we giving money to these people and is it part of that pork bailout?

road kill
02-24-2009, 08:59 AM
You know just when you think it cannot get worse.....
Why are we giving money to these people and is it part of that pork bailout?

Because it FEELS so good!!:D

Mike Noel
02-24-2009, 09:12 AM
Lets give em something to talk about.
http://www.nytimes.com/2009/02/24/washington/24gaza.html?_r=1&ref=middleeast

Obami administration to give Gaza $900 million

My point is when it comes to mistakes made by republicans there is a huge outcry from the lefties.....when a democrat makes a mistake the response by the left is "we need to move forward and not dwell on the past".

K.Bullock
02-24-2009, 09:15 AM
You know just when you think it cannot get worse.....
Why are we giving money to these people and is it part of that pork bailout?

What is scary is it not even been two months into what appears to be "Comrade" Obama's Admin...:mad:

Marx also believed that the end of the capitalist system would be implosive and violent. I have a day mare of Obama kicking back, highlighting his way through Marx in the Lincoln bedroom.

Bob Gutermuth
02-24-2009, 09:49 AM
Why are we giving money to a foreign country anyhow, much less an enemy of our staunch ally Israel? 2012 cannot come soon enough to get this bolshevik out of office.

road kill
02-24-2009, 10:08 AM
Why are we giving money to a foreign country anyhow, much less an enemy of our staunch ally Israel? 2012 cannot come soon enough to get this bolshevik out of office.


So you must not even know about the $200+ million to Africa for ....uh....shall we say.....Birth Control?? (after conception)

Bob Gutermuth
02-24-2009, 10:23 AM
Pregnancy there or anywhere else is none of the business of the US govt. Comrade Obama spends money like a drunken sailor on liberty.

Hoosier
02-24-2009, 10:25 AM
So you must not even know about the $200+ million to Africa for ....uh....shall we say.....Birth Control?? (after conception)

I have always been anti-abortion, but I'm starting to think paying for abortions and birth control in places like Africa is money well spent. Just think if we had been funding abortions in Kenya 40 to 50 years ago this whole mess might have been avoided.

K.Bullock
02-24-2009, 10:27 AM
My point is when it comes to mistakes made by republicans there is a huge outcry from the lefties.....when a democrat makes a mistake the response by the left is "we need to move forward and not dwell on the past".

they believe that if they make mistakes it is because they were trying to so the right things so, that is different than when Republicans make mistakes...republicans are unethical in their book.

http://pajamasmedia.com/instapundit/70715/


One woman's response from her congressman Rep.Jerry McNerney(D-Pleasanton) Ca



I also asked how a congress that was very critical of republican ethics and vowed “change” could justify letting Rangel, Dodd, and Murtha keep their committee chairmanships with their obvious ethical issues. His response was that Republican’s ethics were worse because of their “unjustified aggressive war”.

This is just my small example of the anger and frustration of people in liberal Northern California.

Hoosier
02-24-2009, 10:31 AM
I would say we sent a clear message to Israel on where we stand as far as there national security goes. I believe they will now take the Iranian situation into their own hands, and take out the nuclear facilities themselves. I hope this doesn't trigger something a lot bigger in the middle east.

Matt McKenzie
02-24-2009, 12:55 PM
Pregnancy there or anywhere else is none of the business of the US govt. Comrade Obama spends money like a drunken sailor on liberty.

Having spent a large portion of my life a drunken Sailor on liberty, I find that comparison highly offensive and an insult to all drunken Sailors everywhere.

YardleyLabs
02-24-2009, 02:53 PM
The silence from our left leaning friends is deafening........:rolleyes:
Interestingly, the entire conservative talking points agenda has been to:
Attribute the econmic collapse to the collapse of the subprime market.
Attribute the subprime market problems to the 1990's when Clinton was President.
Fannie Mae and Freddie Mac caused the collapse
Private banks and securities firms were pushed into investing in risky mortgage backed instruments by Congressional Democrats determined to make homeowners out of irresponsible minorities.It makes for a nice, ideologically satisfying story, but has little to do with anything that actually happened. Subprime mortgages are not new and rapid increases in default rates for these mortgages happened in each of the prior downturns in the real estate market in the 80's and 90's. The actual number of such mortgages remained a small fraction of the overall market until 2002/2003 when the number began to skyrocket.

http://graphics8.nytimes.com/images/2006/12/06/business/1206-biz-webMORTGAGEjmp.gif
That growth actually started while Congress was controlled by Republicans and Bush was in the White House.

What changed? Several things. Until 2001/2002, the risk of the subprime market was obvious to all. Delinquencies had always been high and were headed higher, rising from 8-12% between 2000 and 2003. Several factors changed. Interest rates plummeted from 9% in January 2001 to 4% two years later. This stimulated massive mortgage refinancing and refinancings, not first time buyers, were the primary recipients of subprime mortgages. The derivatives market developed new instruments to make absorption of the risk associated with these mortgages more palatable with a mix of mortgage backed securities and, more importantly, default swaps that appeared to provide a hedge against a new upturn in defaults.

Easy money plus dropping rates contributed directly to the boom in housing prices. Many pointed out the risk of a bubble. Greenspan led the chorus against those people warning of a possible bust. He stated that there had never been a nationwide real market collapse and he didn't expect to see one now. He resisted any move toward implementing new regulations or even toward using the regulatory power under the existing law to curb speculation. While he believed, and said publicly, that risk was being underpriced, he felt it was up to the free market to price that risk appropriately, not regulators. He apologized for this in 2008, indicating that he had overestimated the intelligence of the market and the regulators should have intervened earlier.

Many factors contributed to the mortgage problems, and there is enough blame for everyone. I would place the private mortgage financing market at the top of the list and Federal regulators not far behind. The astronomical profits that financers were making in the market paid for some heavy duty lobbying that went far beyond what was being done by Fannie/Freddie. Fannie Mae and Freddie Mac were up there, but they were also fairly active in pointing out that too many risks were being taken by the private market without consideration of the effects of a future downturn. This risk was increased by the fact that 50% of subprime mortgages were adjustable as compared with only 18% of standard mortgages. Fannie Mae and Freddie Mac both spread their risk in part by selling off the riskiest fraction of their portfolios. This was done very openly and the private financing markets believed they had priced the risk appropriately. Sadly, the rating agencies agreed. Both were wrong.

Should the housing bubble have been obvious? Yes, as is apparent in the graph below from mid-2007.

http://graphics8.nytimes.com//images/blogs/krugman/27graph1.gif

Why didn't the administration intervene to try to curb the growth of this bubble? Because the housing boom was the primary engine behind the economic recovery during the first Bush term -- not tax cuts. Increased housing prices allowed consumers to maintain and expand personal spending by tapping into the new wealth created by the boom in prices. Home equity loans became the new credit cards, fueling economic growth through consumer debt. Turn off the boom, turn off the spigot on growth.

In mid-2005, Paul Krugman of the NYT wrote:

"Meanwhile, the U.S. economy has become deeply dependent on the housing bubble. The economic recovery since 2001 has been disappointing in many ways, but it wouldn't have happened at all without soaring spending on residential construction, plus a surge in consumer spending largely based on mortgage refinancing. Did I mention that the personal savings rate has fallen to zero?Now we're starting to hear a hissing sound, as the air begins to leak out of the bubble. And everyone - not just those who own Zoned Zone real estate - should be worried." (http://www.nytimes.com/2005/08/08/opinion/08krugman.html)

4-5 years of wild-assed speculation in housing fueled the economic boom heralded by the administration as proof of the effectiveness of it tax cutting and deregulatory posture. That same growth fueled the bust as it became more and more apparent that the emperor was stark naked. In 2004 and 2005, more than 20% of all mortgages issued were in the subprime market, and 50% of those had variable rates soon to be reset as the Fed began to increase rates to curb inflation. And the problem continued to grow until the first banks began to close down.

T. Mac
02-24-2009, 06:17 PM
Lets give em something to talk about.
http://www.nytimes.com/2009/02/24/washington/24gaza.html?_r=1&ref=middleeast

Obami administration to give Gaza $900 million


Divide by the 1.5M population in Gaza and you get ... more than the US Social Security recipients will be getting uder the stimulus plan.

K.Bullock
02-25-2009, 07:06 AM
Interestingly, the entire conservative talking points agenda has been to:
Attribute the econmic collapse to the collapse of the subprime market.
Attribute the subprime market problems to the 1990's when Clinton was President
* I actually believe it began with Carter.


Fannie Mae and Freddie Mac caused the collapse
Private banks and securities firms were pushed into investing in risky mortgage backed instruments by Congressional Democrats determined to make homeowners out of irresponsible minorities.It makes for a nice, ideologically satisfying story, but has little to do with anything that actually happened. Subprime mortgages are not new and rapid increases in default rates for these mortgages happened in each of the prior downturns in the real estate market in the 80's and 90's. The actual number of such mortgages remained a small fraction of the overall market until 2002/2003 when the number began to skyrocket.

http://graphics8.nytimes.com/images/2006/12/06/business/1206-biz-webMORTGAGEjmp.gif
That growth actually started while Congress was controlled by Republicans and Bush was in the White House.

What changed? Several things. Until 2001/2002, the risk of the subprime market was obvious to all. Delinquencies had always been high and were headed higher, rising from 8-12% between 2000 and 2003. Several factors changed. Interest rates plummeted from 9% in January 2001 to 4% two years later. This stimulated massive mortgage refinancing and refinancings, not first time buyers, were the primary recipients of subprime mortgages. The derivatives market developed new instruments to make absorption of the risk associated with these mortgages more palatable with a mix of mortgage backed securities and, more importantly, default swaps that appeared to provide a hedge against a new upturn in defaults.

Easy money plus dropping rates contributed directly to the boom in housing prices. Many pointed out the risk of a bubble. Greenspan led the chorus against those people warning of a possible bust. He stated that there had never been a nationwide real market collapse and he didn't expect to see one now. He resisted any move toward implementing new regulations or even toward using the regulatory power under the existing law to curb speculation. While he believed, and said publicly, that risk was being underpriced, he felt it was up to the free market to price that risk appropriately, not regulators. He apologized for this in 2008, indicating that he had overestimated the intelligence of the market and the regulators should have intervened earlier.

Many factors contributed to the mortgage problems, and there is enough blame for everyone. I would place the private mortgage financing market at the top of the list and Federal regulators not far behind. The astronomical profits that financers were making in the market paid for some heavy duty lobbying that went far beyond what was being done by Fannie/Freddie. Fannie Mae and Freddie Mac were up there, but they were also fairly active in pointing out that too many risks were being taken by the private market without consideration of the effects of a future downturn. This risk was increased by the fact that 50% of subprime mortgages were adjustable as compared with only 18% of standard mortgages. Fannie Mae and Freddie Mac both spread their risk in part by selling off the riskiest fraction of their portfolios. This was done very openly and the private financing markets believed they had priced the risk appropriately. Sadly, the rating agencies agreed. Both were wrong.

Should the housing bubble have been obvious? Yes, as is apparent in the graph below from mid-2007.

http://graphics8.nytimes.com//images/blogs/krugman/27graph1.gif

Why didn't the administration intervene to try to curb the growth of this bubble? Because the housing boom was the primary engine behind the economic recovery during the first Bush term -- not tax cuts. Increased housing prices allowed consumers to maintain and expand personal spending by tapping into the new wealth created by the boom in prices. Home equity loans became the new credit cards, fueling economic growth through consumer debt. Turn off the boom, turn off the spigot on growth.

In mid-2005, Paul Krugman of the NYT wrote:

"Meanwhile, the U.S. economy has become deeply dependent on the housing bubble. The economic recovery since 2001 has been disappointing in many ways, but it wouldn't have happened at all without soaring spending on residential construction, plus a surge in consumer spending largely based on mortgage refinancing. Did I mention that the personal savings rate has fallen to zero?Now we're starting to hear a hissing sound, as the air begins to leak out of the bubble. And everyone - not just those who own Zoned Zone real estate - should be worried." (http://www.nytimes.com/2005/08/08/opinion/08krugman.html)

4-5 years of wild-assed speculation in housing fueled the economic boom heralded by the administration as proof of the effectiveness of it tax cutting and deregulatory posture. That same growth fueled the bust as it became more and more apparent that the emperor was stark naked. In 2004 and 2005, more than 20% of all mortgages issued were in the subprime market, and 50% of those had variable rates soon to be reset as the Fed began to increase rates to curb inflation. And the problem continued to grow until the first banks began to close down.


Would you agree with this statement made by Obama last night

http://www.realclearpolitics.com/video/2009/02/obama_inherited_debt.html


To be honest there may be more context, I believe Obama to be so unethical that I cannot stand to listen to him. Poor excuse for not watching the entire speech I know, but it is the truth

It seems to me that Greenspan didn't have any problem taking responsibility for his actions, the dems act like they were not even on the planet .

YardleyLabs
02-25-2009, 08:59 AM
* I actually believe it began with Carter.



Would you agree with this statement made by Obama last night

http://www.realclearpolitics.com/video/2009/02/obama_inherited_debt.html


To be honest there may be more context, I believe Obama to be so unethical that I cannot stand to listen to him. Poor excuse for not watching the entire speech I know, but it is the truth

It seems to me that Greenspan didn't have any problem taking responsibility for his actions, the dems act like they were not even on the planet .

When Clinton took over the White House, the national debt was about $4.3 trillion. When he left it was about $5.7 trillion, and actually had gone down relative to GDP. When Bush took over, it was about $5.7 trillion and when he left it was over $10.5 trillion (we won't know the actual number for a while, but it was over $10 trillion before the bank bailout). Virtually all of this deficit growth is attributable to the budgets submitted by Bush, not to the relatively small changes in budgeted spending levels adopted by Congress after the Democrats gained control. In fact, the rate of growth in the deficit actually slowed down when the Democrats took control of Congress. It was higher when Republicans controlled Congress. When Bush took over there was an annual budget surplus. This was turned into a massive deficit caused by unfunded tax cuts, massive unfunded increases in defense spending, and an economy wrecked by profligacy both in government and in the private sector.

I think the word inherited describes it kindly.

As I noted in another thread, neither party has histoprically done well when it has had control of both the White House and Congress. From that history, Democrats are now in a position to mess things up royally. For the sake of all of us, I hope they do not. If they do, they will lose control of Congress in 2010 and, if nothing else, the sharing of power may mitigate the damage.

Unfortunately, Republicans remain completely uncommitted to actually balancing the budget; they only object to the fact that the deficits being incurred in the stimuls act come from increased spending rather than lowered taxes. Once the economy begins to stabilize, the budget must be balanced. This will require a mix of massive spending cuts and substantial tax increases. There is no way to undo the deficits created under Bush without both.

K.Bullock
02-25-2009, 09:23 AM
When Clinton took over the White House, the national debt was about $4.3 trillion. When he left it was about $5.7 trillion, and actually had gone down relative to GDP. When Bush took over, it was about $5.7 trillion and when he left it was over $10.5 trillion (we won't know the actual number for a while, but it was over $10 trillion before the bank bailout). Virtually all of this deficit growth is attributable to the budgets submitted by Bush, not to the relatively small changes in budgeted spending levels adopted by Congress after the Democrats gained control. In fact, the rate of growth in the deficit actually slowed down when the Democrats took control of Congress. It was higher when Republicans controlled Congress. When Bush took over there was an annual budget surplus. This was turned into a massive deficit caused by unfunded tax cuts, massive unfunded increases in defense spending, and an economy wrecked by profligacy both in government and in the private sector.

I think the word inherited describes it kindly.

As I noted in another thread, neither party has histoprically done well when it has had control of both the White House and Congress. From that history, Democrats are now in a position to mess things up royally. For the sake of all of us, I hope they do not. If they do, they will lose control of Congress in 2010 and, if nothing else, the sharing of power may mitigate the damage.

Unfortunately, Republicans remain completely uncommitted to actually balancing the budget; they only object to the fact that the deficits being incurred in the stimuls act come from increased spending rather than lowered taxes. Once the economy begins to stabilize, the budget must be balanced. This will require a mix of massive spending cuts and substantial tax increases. There is no way to undo the deficits created under Bush without both.


Spending cuts? How about just not giving away billions in entitlements and spending billions on what amounts to awarding special interests with our tax dollars?

Has raising taxes ever worked when the nation was in an economic crisis? Why would it work now when in 1937 it did nothing but deepen the depression?

Don't the dems/marxists already plan on letting the Bush tax cuts expire next year? So... spend friggin trillions, raise taxes, then let let tax cuts expire. Then when everyone is bringing their groceries home in a goat cart they can pin bumper stickers on their rear ends about how if "Bush hadn't been in office I would be driving". Ar least we will have gotten rid of the "evil" rich people.

I cannot believe what we are willing to accept in the name of party politics. Sheeple is too nice a word for this.

YardleyLabs
02-25-2009, 09:46 AM
Spending cuts? How about just not giving away billions in entitlements and spending billions on what amounts to awarding special interests with our tax dollars?

Has raising taxes ever worked when the nation was in an economic crisis? Why would it work now when in 1937 it did nothing but deepen the depression?

Don't the dems/marxists already plan on letting the Bush tax cuts expire next year? So... spend friggin trillions, raise taxes, then let let tax cuts expire. Then when everyone is bringing their groceries home in a goat cart they can pin bumper stickers on their rear ends about how if "Bush hadn't been in office I would be driving". Ar least we will have gotten rid of the "evil" rich people.

I cannot believe what we are willing to accept in the name of party politics. Sheeple is too nice a word for this.

My comment on eliminating the deficit was linked to stabilizing the economy. For now, a deficit is unfortunately what we need. The problem with Bush was that he continued massive deficit creating policies while the economy was growing rapidly and basically said deficits don't matter. They do matter and were a major factor in our collapse. Entitlements are a form of spending. It would be hard to reduce spending without reducing entitlements. However, that will not be enough. The biggest entitlement program we have is Social Security and that has been running at a surplus for years. That surplus has been drained off to finance operating budget deficits.

Marvin S
02-25-2009, 10:40 AM
Once the economy begins to stabilize, the budget must be balanced. This will require a mix of massive spending cuts and substantial tax increases. There is no way to undo the deficits created under Bush without both.

You usually have something you believe supports your statements, I would like to see what you have for the quoted statement.

BTW, GW is no longer POTUS & I believe the lefty's supported much of his spending which real R's were not happy with. I believe we have all stated that on the various threads.

YardleyLabs
02-25-2009, 06:37 PM
Originally Posted by YardleyLabs http://www.retrievertraining.net/forums/images/buttons/viewpost.gif (http://www.retrievertraining.net/forums/showthread.php?p=406315#post406315)
Once the economy begins to stabilize, the budget must be balanced. This will require a mix of massive spending cuts and substantial tax increases. There is no way to undo the deficits created under Bush without both.You usually have something you believe supports your statements, I would like to see what you have for the quoted statement.

BTW, GW is no longer POTUS & I believe the lefty's supported much of his spending which real R's were not happy with. I believe we have all stated that on the various threads.

OK. There are two basic statements in my comment:
Once the economy is stabilized, the budget must be balanaced.
The deficit is too big to balance with out a mix of spending cuts and tax increases.With respect to the first, it is a matter of basic economics. In a stable economy -- meaning one that is growing at a steady pace sufficient to support population growth without significant inflation -- deficits have the effect of adding to the money supply creating stimulation that will add to inflationary pressures. In addition, the debt created to finance the deficit competes in the credit markets with efforts to raise capital to support private production, increasing the costs of capital. As debt is purchased off-shore, as has been the case with the U.S., we concentrate more and more effective leverage over our economy into foreign hands.

When the economy is stagnant and productive resources are underused, deficits can help stimulate growth and restart the economy. When the economy is growing faster than our productive resources, government surpluses can help reduce capital in the economy and slow growth to curb inflationary pressures.

Under Keynesian economics, fiscal policy -- meaning the manipulation of deficits and surpluses -- was the primary tool for controlling inflation and growth. The genius of Milton Friedman lay in his understanding of the importance of monetary policy in achieving these same objectives with greater finesse. However, monetary policy cannot help outside of a relatively normal range of variation in economic activity. Thus, we now have target rates for interest pegged at 0-0.25% and an economy that still requires more stimulation. We can't go lower unless we pay people to take our money.

To help combat the recession following the Internet bubble collapse in 2000/2001, the Fed reduced interest rates dramatically, helping to stimulate growth at a time when the budget was in surplus. However, the rapid and massive shift to deficit financing by the government created inflationary pressures that were addressed through substantial devaluation of the dollar in a manner that undermined foreign investor confidence and to moves by the Fed to increase interest rates by eliminating their accommodating policies. Of course, the increases in interest rates triggered resets on variable rate mortgages and contributed to the real estate collapse. All of these were direct consequences of the deficit.

With respect to the question of whether the deficit is too great to close without a mix of both tax and spending changes, our current deficit is now somewhere between $500-$1,000 billion -- we don't know for sure because of the size and uncertainty of the various bailout actions. Assuming that when the economy stabilizes we are looking at a "hard" deficit of $400-600 billion, I cannot conceive of a way to meet that with only spending cuts unless we are willing to accept actions at the level of eliminating the defense department. The deficit originated with unfunded tax cuts that were back-weighted so that the biggest dollar cuts happened in the later years, combined with a war that was never included in the budget. The projections of the future deficit by the Bush administration never incorporated the costs of making the tax cuts permanent. To do so would add several hundred billion dollars per year of new deficits.

How big will the deficit be by the time the economy stabilizes? I suspect somewhere around $11.5 - $12.5 trillion, or more than 80% of GDP, a level not seen since Truman was President, as compared with 60% under Clinton. The big question, however, is who will buy that debt? I do not believe we can count on China to keep carrying our load. As a consequence, we will face a tremendous risk of inflation that will act as a de facto tax on all of us. For that reason, actions need to be taken to reduce the deficit as quickly as possible even at the risk of slowing the recovery. That too argues for a mix of tax and spending strategies.

Marvin S
02-26-2009, 12:36 PM
Jeff, I had hoped that you would give me a period in time when the statements you made were actually applied - words mean little to me, Deeds & numbers do.


OK. There are two basic statements in my comment:

Once the economy is stabilized, the budget must be balanced.It is difficult to stabilize an economy when there are constant pressures created to unbalance that stability. When large numbers of feel good programs which would be considered Non value added continue to be placed into existence it will never happen. Sort of a disorganized chaos.




The deficit is too big to balance with out a mix of spending cuts and tax increases.The deficit & debt in existence today will continue to exist as the incentive to excel is not written into the above statement. I believe spending could be contained by:

1) Eliminating all programs which create a disincentive to be self sufficient.

2) Eliminate all programs in which the Federal government should not be involved. Some examples - The Farm Bill, The Dept. of Education, the Dept. of Housing, Are just some.

3) Privatize functions such as all airports, & I am sure there are other candidates, just haven't looked that hard.

4) Does it not bother you that 3 of the first 6 kids of the octuplets breeder are on Medicare. Does that indicate a program out of control?

As for taxes, scrap the AMT, eliminate the deals, institute a FLAT TAX & forget about raising taxes. Just make sure that everyone pays them including some very illustrious members of your own party.

That would work - you have to understand the Risk Reward ratio needs to be properly balanced so those who take the risk receive the proper reward. 39.6% for taking no risk vs. 60.4 % for taking all the risk is not a proper balance.

& beyond that, I do not believe someone should be able to die & avoid estate taxes, I believe all gains should be taxed at the Capital Gains in effect at the time, but also believe Capital Gains should never be above 15% in any income bracket, nor below 5%.