Yes, they bought too much house for their current worth and household income.Quote:
Originally Posted by tomder55
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Yes, they bought too much house for their current worth and household income.Quote:
Originally Posted by tomder55
... and were encouraged to do so by government policy.
Andrew Cuomo and Fannie and Freddie - Page 1 - News - New York - Village VoiceQuote:
Perhaps the only domestic issue George Bush and Bill Clinton were in complete agreement about was maximizing home ownership, each trying to lay claim to a record percentage of homeowners, and both describing their efforts as a boon to blacks and Hispanics. HUD, Fannie, and Freddie were their instruments, and, as is now apparent, the more unsavory the means, the greater the growth.
I guess you think your fellow americans are stupid. I guess that explains why advertising is so effective in your country.
right back at you
Canada's coming housing bust - Nov. 12, 2010Quote:
But perhaps the greatest issue looming over Canada's fortunes is its housing market, which has, despite a brief blip, continued to drive higher through the world's economic snow bank due to easy credit, low interest rates and encouraging government tax breaks.
Believers in the Canadian miracle say the country's housing market is not likely to have much of a correction at all, and certainly not the sort of housing swoon seen in the United States or Europe. One reason is that most mortgages were written by one of Canada's six major banks, all of which have existed under tighter regulations than their brethren in the U.S. Another is that sub-prime mortgages were never in vogue. At the height of the American property bubble in 2006, sub-prime mortgages accounted for only 5% of the mortgages taken out in Canada, compared with 25% of those obtained in the United States. Roubini Global Economics says the chance of a "U.S.-style housing bust is unlikely given sound fundamentals of the Canadian financial system and mortgage lending."
But the Canadian housing market is showing signs of strain. Driven by an overhang of supply and by recent government efforts to tighten lending standards, housing starts in October were down 9.2% compared with September, and down more than 12% in urban areas. Also, housing prices have begun to level off after a decade of scaling ever-greater heights. Over the last ten years, housing prices have increased more than 95% nationwide.
Lower housing prices could hit Canadians fairly hard. Housing accounts for more than 20% of Canada's GDP, and its employment gains have been fueled by continued spending in the construction industry, which is one of Canada's largest and fastest growing employment sectors. In October, while the number of workers in Canada's massive service sector declined by 33,000, construction added 21,000 jobs.
There may also be less wiggle-room for Canadian homeowners than many perceive. Canadian banks didn't slice and dice millions of sub-prime mortgages, but they still offered - and continue to offer -- pretty generous terms. Edward Jones wrote in a recent note to clients that the mortgage credit in Canada increased more than 10% a year from 2006 to 2008, more than double the rate of growth from 1997 to 2001. Edward Jones added that "credit is currently more easily available than it was prior to the recent recession."
Canadians easily obtained mortgages with only 5% down and payments running out 35 years. More than 65% of Canadian mortgages are fixed for five years (and now face more stringent renewal terms and likely higher interest payments). But variable rate mortgages offered in Canada were at least as creative as those doled out in the US, with banks allowing terms as short as six months. Unlike in the US, people who default on mortgages in Canada don't just lose their houses, they risk other assets as well.
A fast or unexpected rise in interest rates (Canada was the first G7 country to begin moving them higher following the recession) could leave Canadians with little cushion. Last year the IMF noted that, by some measures, Canadians were paying a larger percentage of their income for housing than Americans did prior to the housing bust.
That level hasn't improved. Recent government data shows that the average Canadian with a two-story home spends almost 50% of his household income on mortgage servicing, with the average is closer to 70% in red-hot markets like Vancouver. "By and large the affordability situation remains within a safe range in Canada; however there are local markets where the share of household income taken up by homeownership costs is at worrisome levels," the Royal Bank of Canada wrote in September, adding that the situation in Vancouver raises "a red flag."
One red flag doesn't make a trend. But it should prick up the ears of investors still hoping for fortune in Klondike country. As the long-time Canada bull James Grant noted in July, "the track of Vancouver housing prices matters far beyond the province of British Columbia," adding that, perhaps, the best place for investors to park their money was in "a country in which a housing bubble has already popped, rather than one -- Canada, for instance -- in which it is just beginning to deflate."
Hello again,
Right winger Michelle Bachman either doesn't know how taxes are levied in this great country of ours, or she's a liar.. I'm going to opt for being a ditz.
When asked on Good Morning America why she supported tax cuts for the wealthy but not extending unemployment benefits, Bachmann said that Americans don't understand who the "wealthiest" are.
“These are people who are carpet layers who maybe employ two or three other guys. Or a plumber maybe himself and his brother and it's $250,000 in gross sales for the business. They're the ones that are looking at massive tax increases,” she said.
She's WRONG, WRONG, WRONG, and even WRONGER than that. Let me explain...
Small businessmen are taxed on the PROFITS of their small business - NOT on the gross sales... Once this mythical plumber deducts the cost of doing business, as ALL small businessmen do on their schedule C, he'll be lucky to have PROFITS of $50,000. So, he's just an ordinary schmoe. His taxes won't be raised if we let the tax cuts for the wealthy expire...
How come a sitting US Congresswoman is SOOOOO ignorant of tax law??
excon
And ignorant of what small businesses make, pay out, and how they balance their books.Quote:
Originally Posted by excon
Can't defend that statement . I do know of business people who puff up their gross sales as if they were some great achievement . The problem is that their margins are garbage... so I ask them if they like working for nothing .
SmartCo Foods announced today they were closing their five Colorado stores today .That means that 500 more people will be joining the ranks of the unemployed .
Imagine how many more businesses like this ,teetering on the brink ,will make the call to shut down if there is a Reid /Pelosi /Obama tax increase at the end of the year .
Hello again, tom:Quote:
Originally Posted by tomder55
It's a painful time for all... Imagine how hard your children and grandchildren will have to work to pay BACK the $700 BILLION we'll have to borrow to plug the hole in the budget, that extending the tax cuts for the wealthiest amongst us will surly do...
On balance, it's better for the country NOT to increase its debt right now. Or it IS. I can't tell WHERE your righty's come down on THAT issue.
excon
Oh it's going to take a lot of pain all right if we continue down this path. All you need to do is look to Europe to see our future if we continue this endless entitlement mentality. What ? The Europeans aren't taxing their people enough ?
I'm saying you cannot tax your way out of this mess. You tax ,you hit the bottom line and your tax revenues stall . I'm still waiting for someone to show me the time when taxing in an economic slowdown fixed the economy .
Hello again, tom:Quote:
Originally Posted by tomder55
It's a Mexican standoff.. You still haven't told me WHY it's GOOD to add $700 BILLION to the deficit during an economic slow down.
excon
Wasn't my idea. It was Bush's TARP and the President's various Keynesian attempts that added the additional debt. I know that solution has never succeeded either.Quote:
You still haven't told me WHY it's GOOD to add $700 BILLION to the deficit during an economic slow down.
But you aren't saying if we don't increase taxes that we'll be adding to the deficit . That is silly . The tax rates have been in place for 8 years... now couching a tax increase in the language of "letting tax cuts expire "doesn't let those off the hook that say they aren't raising taxes. It's silly ;it's like saying... there was no tax cut... it was letting the Clintoon tax increases expire.
Here's a reality check... you cannot possible tax the top 2% enough to do what you want to do even if you confiscated all their money.
Hello again, tom:
So, while we're standing off, I thought I would show how WRONG Michelle Bachman is from another angle...
Let's talk about her mythical plumber who's taxes are going to be affected by the proposed increase... IF, on his schedule C, he winds up with $250,000 of net profit, his business most likely had gross sales of over $2.5 MILLION. This ISN'T a couple of guys sweating it out every day installing carpet... No it's not. It's not even close... He's got LOTS of plumbers on the payroll. He owns LOTS of trucks. He probably owns a BIG building or two. He employs LOTS of people. He's a small business, and a DAMN successful one if he can take home a quarter of a mil every year. His personal car is owned by his business. His wife's car is owned by the business. He could afford an airplane, owned by the business, of course... If he has a boat, that too, could be owned by the business... All of the above stuff is perfectly LEGAL, of course..
And, after ALL those expenses were paid for by his business, he STILL has $250,000 of pocket money every year... That's over $20,000 EVERY MONTH. This is a guy who is a FAR CRY from the poor working schlub that Michelle Bachman is lying about. THIS is a guy, who can afford to have his taxes raised BACK to where they were before George W. Bush. THIS is a wealthy guy.
excon
Or he could be someone who was laid off and is now working as an independent contractor . Yes he does double time and perhaps barely eeks out that $250,000 . But he lives in liberal North East and he pays a fortune in local taxes along with this now bumped up Federal rate that is just short of 40% ;along with his FICA... oh yeah ,and he pays for his families insurance.
He has 2 maybe 3 kids or more . In the North East he may have a mortgage that he is managing to pay on a mothly basis ;but he bought it when the market peaked and he was working for another employer who went belly up. He cannot sell the home because it is underwater for about half the price he purchased it for . But he continues to slog along working those 80 hr weeks .
I submit to you he is not rich and is being unfairly targeted .
Geeze... if your going to have a millionaire's penalty at least target millionaires.
Hello again, tom:Quote:
Originally Posted by tomder55
That's EXACTLY what I'm saying... Only I'm not spinning it... Here's how it is. The tax cuts were temporary. They're going to expire, by law this year. Budgets were made based upon that law - budgets that anticipated $700 BILLION of revenue WHEN the tax cuts expired...
If they DON'T expire, we're going to have $700 billion LESS than we budgeted for. That means we're going to have to BORROW $700 BILLION to cover the expenses that are already in place... If we let them expire, then we don't have to ADD to the deficit.
I'm not going to split hairs about it being a tax increase, or not.
excon
Yea I agree the Dems made a budget based on the fact that they would soak the rich and many other faulty assumptions like $700 billion in asphalt would fix the economy ;or taking ownership of GM would be a money maker. Or that Obamacare would be a bargain .Quote:
. Budgets were made based upon that law - budgets that anticipated $700 BILLION of revenue WHEN the tax cuts expired...
I guarantee the government revenues will be well short of the forecast if they do this because the rich will not be making as much money ,and the unemployed will not be paying any taxes but instead will continue to tap into the unemployment stimulus (Pelosi's words ) .
Hello again, tom:Quote:
Originally Posted by tomder55
You don't have to worry. They'll cave. They won't even argue the great argument I just argued. They'll lay down instead... That's WHY they lost. They ain't got no balls. They suck. In the final analysis, like the Republicans, they're slaves to corporate money too..
excon
PS> I think I mentioned Russ Fiengold making a presidential run under a 3rd party banner. You told me I was all wet... I heard a rumor today that he was going to do exactly THAT.
I didn't say you was all wet. I said I hope you are right. The more primary challenges to the President the better ( I don't think he'd do an independent run but it is possible he could represent a fringe left that amazingly thinks the President isn't "progressive " enough)
I think it's more likely he makes a run for Herb Kohl's Senate seat.
Interesting that the $700 billion number you keep bringing up is almost identical to the amt of currency the Fed is planning on adding to the market with it's crazy QE2 .
Back in 2008 the Fed lent zombies a Trillion and they purchased Treasuries at 3% and then sold them back to the Fed...
Now the die is cast for a repeat performance. Zombies kept alive by Voodoo monetary policy.
Building the house of cards into a highrise... and the taxpayer is told that if they don't open their wallet to Robin Hood some more the house of cards will collapse .
This is a very risky policy that threats not only the US but the rest of the world. We have already been through a period of inflation which is unprecedented. We don't need another to satisfy the averice of the US. Pay the price of your foolishness and leave the rest of us alone.Quote:
Originally Posted by tomder55
Indeed we are putting the world economy at risk. But then again did the EU give a rat's a$$ about the world economy as they forever expanded their entitlement states ? I thought the world wanted the US to follow their lead.
That's a little backwards isn't Tom after all they were creating a united states of Europe, following your lead and in any case their currency was appreciating against yours significantly while they were doing this. Everyone pays for idiocy sooner or later and your own experts are predicting a meltdown of 50% in the value of your currency, that should restore your competition in the export markets but you also have to learn to pay yourself less so what price wages at $2.50 an hour, you are so efficient you should be able to compete with china on that. I think you will find tax an easier pill to swallowQuote:
Originally Posted by tomder55
Please ; they taxed themselves to the max ,awarded themselves sweetheart nanny state cradle to grave entitlements... did not even put sufficient resources into the common defense so they could spend more on their socialist ideas... and still are watching one nation after the other go down in economic ruin.
All their finance ministers talk about today are rolling back the entitlement system ,and are begging our President to not make the same mistakes.
Yes Tom they taxed and spent, some of it very unwisely because they didn't support long term individual productivity and they will have to maintain high taxes. I don't blame Europe for not wanting to put money into defence when the US wanted to do it for them, after all Europe has had enough of war. As I said sooner or later you pay for idiocy. So a longer working life not a shorter one, but maintain the unit of production. The European entitlements are generous to a fault but if it is paid for by taxation that's not wrong. What's wrong is where people try to get it for nothingQuote:
Originally Posted by tomder55
The idea that tax cuts for the rich is good for the economy is a shibboleth that just won't go away. Repeat something often enough and it begins to acquire, sadly, a patina of truth.Quote:
Originally Posted by excon
It didn't work for Reagan or Bush 1, in fact it backfired disastrously, yet we are presented with this nonsense constantly by the right-wing.
Extending unemployment is a far better stimulus than tax cuts for the rich.
Now I thought that was what they had been doing, many more now draw unemployment than did before. Stimulus is needed to get industries going not just give existing industries more demand, the unemployed spend money on basic necessities so nothing new is added. What you need are programs to build roads and bridges, do major repair projects, sell more equipment overseas all of the industries that employ large numbers, it is wages that give stimulus not benefitsQuote:
Originally Posted by Athos
Reagan tax cuts brought us 20 years of prosperity .
Prosperity for whom?Quote:
Originally Posted by tomder55
The rich prospered while everybody else lost ground or trod water.
Why do you shill for the rich? They don't give a damn about you.
Because I never got a job from a poor person . Because I hike in land donated to the public by some greedy rich guy. Because I go the museums in NY that have greedy rich guy patrons names on the top list of donors . Because I go to theaters that have rich guy patrons . Because rich people set up foundations that donate the vast majority of their wealth to charity .
Why do you want to penalize success ? Suppose you pulled yourself up and became successful only to be vilified and targeted for your success ? I'd wonder if it was worth the effort . I could make effectively less money and not hire those handful of workers and still lead a comfortable existence skating my way through life. Those workers that I don't hire ? Why would I give a damn about them ?(your words )
Hello again, tom:Quote:
Originally Posted by tomder55
From my perspective, I don't want to PUNISH success. I LOVE success. I just want them to pay their fair share. Warren Buffet is fine with paying more. Bill Gates is too. They don't seem to feel punished.
Besides, borrowing $700 billion, that yours and my grandchildren will PAY for, to give the richest amongst us a tax break, strikes me as fanciful.
excon
I'm not overly concerned about Gates and Buffett . They have set themselves up nicely that they never have to pay the taxes they promote. Besides they are in rare air . You could take all their money and never get the country out of the hole it's in ;nor will you unless you drastically reduce expeditures or tax the hell out of the middle class.
My concern is with the people who create the vast majority of the jobs ;not the Gates of the world ,but the business owner I profiled . They are already getting hammered to a point that some of them have made the decision I just described.
I talked to the guy who does my chimney . In his day he made a good living hired a half dozen or so construction crew to clean and install chimneys. He has laid off his entire crew ;reduced his hours ,customers etc. It is not worth it to him to bust his butt for that last buck anymore because the benefits to doing it are not there . He talked about the fact that he now has the leisure time he never had before when he was thinking of expansion ;and his income level has not dropped all that much . He tells me under the threat of increased taxation and paying the costs associated with being an employer he really has not lost much .
This the question, do you want higher tax rates or higher tax revenue? I guarantee when you raise taxes on the rich they're going to change their behavior accordingly, then who will be bearing the burden of supplying tax revenue?
For example, John Kerry and his yacht.
Hello again, tom:Quote:
Originally Posted by tomder55
Yeah, you and Michelle Bachman think these guys taxes are going up.. They AIN'T... They're NOT the wealthy. They're not even close. You're not telling me, are you, that the guy doing your chimney is NETTING at LEAST a quarter MILLION a year?? Nahhh... You're not saying that. He doesn't, and with his full compliment of workers, he never did and never will.. He's just your ordinary schlub feeling the effects of the recession. His taxes will NOT go up.
excon
He is not a shlub . He ran a major company that serviced 2 counties in the NYC suburbs. The only recession effect is that fewer people are getting new chimneys .
I doubt if $250,000 is big bucks in the Seattle area either... I know it isn't in the NYC area. It can hardly be classified as "rich " despite the fact that it falls in the upper tier of income.
Your example of a cleaning/installation chimney company doesn't make sense.Quote:
Originally Posted by tomder55
This is not a "major" company by any definition. With six employees (or even just one - himself), he is nowhere near the income level that would be affected, (as posted above). Even more strange is his decision to lay off the crew "in anticipation of the tax increase". The guy is either a very bad businessman or doesn't understand taxes.
I understand you're trying to present arguments against letting the tax cuts expire, but such a weak argument as this one doesn't help your position one iota.
On a previous reply, you indicated that the rich have done many things for you - philanthropy; like museums, theaters, nice places to hike, and charitable foundations. It's hard to respond with a straight face to such nonsense; you have a right to your beliefs.
To the degree the rich provide jobs, I agree that's a good thing but let's not overstate it. Giving the rich more money in tax breaks is not the job stimulus you think. Job creation is the result of many more important factors than simply increasing the wealth of the already wealthy.
The CBO (non-partisan Congressional Budget Office) estimates the cost of not letting the tax cuts expire to be roughly one trillion dollars added to the deficit over the next decade with no corresponding reduction in services. It also suggests that extending unemployment is a far better help to the economy than continuing these tax cuts.
I happen to agree that $250,000 these days is hardly "rich". But it's equally true that a $30-40 tax cost for every incremental net profit increase of $1,000 is hardly enough to, say, close down a business. Who would turn down $960 profit for a cost of doing business of $40?
It seems some people are stupid enough to let tax drive their business. Yes, it is difficult to swallow a cut in take home pay, but that just demonstrates someone isn't working hard enough at getting the right advice, probably too tuned to poverty and how much they loose in tax, to realise you have to spend a buck to make a buck. This is all emotive nonsense, more of the why should I pay for someoneelse thinking that typifies laisse faire capitalismQuote:
Originally Posted by Athos
I'm hearing the same things from local business and it is being published by the heads of major corporations . Yeah I get it... they are all a bunch of "stupid" people .
You think business don't plan around what their tax liability will be ? Dude !
Tax uncertainty frustrates financial planners | detnews.com | The Detroit News
The ChamberPost: Chamber to Congress: End Uncertainty, Don?t Raise Taxes
New Video Series Highlights How Government Uncertainty Plagues Business - MarketWatchQuote:
"Small business owners do not have it easy, even in good economic times. They've certainly been put to the test during the last two years. Unfortunately, Washington only made matters worse--imposing mandates businesses can't interpret and threatening to raise taxes to make up for years of overspending. Entrepreneurs face an uncertain future--they simply can't afford what government is currently dishing out," said Karen Kerrigan, President & CEO of the SBE Council.
Tim Ryan: Investors Need Tax Certainty
Permanent tax relief best for all - SalemNews.net | News, Sports, Jobs, Ohio, Community Information - The Salem News
BTW I am unimpressed with a CBO report that doesn't recognize that the Dems did a Keynes on steroids stimulus and informs us that we aren't collecting enough revenue in a recession to pay for it. I thought the whole rational for Keynesian policies was deficit spending . I can point to examples where supply side tax cuts have stimulated the economy and can't think of one instance where Keynesian pump priming has helped .
Hello again, tom:Quote:
Originally Posted by tomder55
How about WWII? We went waaaaay in the red on that one - but it worked out OK. It ended the depression and set us on a course of prosperity the likes of which has NEVER been seen before or after.
excon
Sure did... all competing economies were bombed out of existence for a decade . Funding an existential war effort can hardly be called Keynesian pump priming ;nor was it's intended to bring us out of the depression.
But FDRs decade long Keyesian efforts did have the effect of prolonging a bad recession. Not only that... but to top it off ;he went on a hissy fit against the rich ,charged them punitive taxes and prolonged it further .
We are right back to were we began... so I'll again link to this Amity Shlaes op-ed in the Washinton Compost :
Quote:
Taxation is an obvious area the Obama administration ought to reconsider. Income taxes, the dividend tax and capital gains taxes are all set to rise as the Bush tax cuts expire. The Obama administration portrays these increases as necessary for budgetary and social reasons. A society in which the wealthy pay their share, the message goes, has a stronger economy. The administration and congressional Democrats are also striving to ensure that businesses pony up.
Amity Shlaes - Obama threatens to follow in FDR's economic misstepsQuote:
Roosevelt, too, pursued the dual purposes of revenue and social good. In 1935 he signed legislation known as the "soak the rich" law. FDR, more radical than Obama in his class hostility, spoke explicitly of the need for "very high taxes." Roosevelt's tax trap was the undistributed-profits tax, which hit businesses that chose not to disgorge their cash as dividends or wages. The idea was to goad companies into action.
The outcome was not what the New Dealers envisioned. Horrified by what they perceived as an existential threat, businesses stopped buying equipment and postponed expansion. They hired lawyers to find ways around the undistributed-profits tax. In May 1938, after months of unemployment rates in the high teens, the Democratic Congress cut back the detested tax.
Ex you old national socialist you, war is good for business is it? It certainly solves the unemployment crisis. Next thing you will be doing is promoting Hitler on the basis it is good for business, Bush did it for Saddam, but Obama hasn't clicked yet, Ahamadjihad just doesn't do it for himQuote:
Originally Posted by excon
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