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How the Wealthiest Americans Enrich Themselves at Government Expense

Discussion in 'Political Discussion' started by weswelker#83, Jan 23, 2008.

  1. weswelker#83

    weswelker#83 Rookie

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    "It is ok to Get rich by working harder and smarter....But don't get rich by getting the government to pass a law that sticks goverments hand in my pocket ,takes money out of it and gives it to you.That 's not right ."
    It is very crucial for people to understand....The government is taking from those with less to give to those with more..."



    David Cay Johnston of THE NEW YORK TIMES. He's won the Pulitzer Prize and the George Polk Award and many other accolades over his forty years as a journalist.




    Video PBS interview:
    http://www.pbs.org/moyers/journal/01182008/watch.html






    An example of this is the recent mortgage fiasco. Unscrupulous lenders sold high-risk mortgages and made huge short-terms profits (which they kept for themselves). When the bubble inevitably burst, the lenders who had outstanding mortgages lost a lot of money, but they were bailed out by the Fed injection of capital into the market. So in this way, the risk is socialized, in that the public purse gets stuck with the bill for failure, while private enterprise keeps the profits. Its like blackjack, except that when you win, you keep your winning, but when you lose the casino gives you your money back. The logical outcome of this is that you'll keep playing high-risk games because there is no real risk to you. We're guaranteed another bubble because the big financial institutions know that the government will not let them go bankrupt.

    What I don't understand is why they call this a feature of capitalism.
    Last edited: Jan 23, 2008
  2. Stokes

    Stokes Rookie

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    I would like to see the government demand responsibility on both sides, from irresponsible lenders and irresponsible borrowers. I guess the argument against letting the companies sink would be the destructive impact on the economy. If they bring the whole economy down it will harm people who weren't involved in the crisis. For that reason there is a public interest in bailing them out. Of course there's no public interest in then allowing them huge executive bonuses etc. if they have to be bailed out.
  3. Real World

    Real World Moderator Staff Member

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    Let the market collapse. It's called a correction, and it's also called accountability. I don't feel an ounce of pity for some moron who makes $30k, and took out a 10%, $300,000, 3 year ARM, no money down mortgage. Sorry, but your stupidity is not my problem. I don't want to give them a penny of my money, since I pay my own mortgage as it is, and I especially don't want a single red cent going to the arse wipe greedy MF'ing company that agreed to loan $300k at 10% on a nomoney down, 3 year ARM, to a moron making $30k a year. I don't care who "might" get affected that wasn't involved, and who loses money, so long as it isn't my hard earned, stolen at gun point, tax money. Only when people are held accountable will people be responsible. What happens when you let these people and companies go under, is that people take notice, and adjust accordingly. Investors will learn which companies run a tight ship, and companies will learn to keep one is they want an investors money. Lenders will learn to give smarter loans, and borrowers will learn to stay within their means. It truly isn't that complicated. A free market, or the freest possible market, is best. It's self correcting, and self-disciplinary. Is that even english? Self-disciplinary? :eek:
  4. Stokes

    Stokes Rookie

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    Its close enough to English to make sense to me! I agree with you, I was just presenting the reason why some would argue against letting lending institutions collapse. I'm still renting because I refused to take on just that kind of loan. My wife was saying "but my friends are getting houses with no money down and they make less than you, we should get a house!" but I refused. Now some of her friends are in the sh!t, and I've got a great "I told you so" or "Yeah, but..." that I'm hanging onto for a time when I really need it.:D
  5. Harry Boy

    Harry Boy Look Up, It's Amazing PatsFans.com Supporter

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    Why does everybody blame the "stupid borrower" doesn't the "scumbag greedy lender" paly a role in all this.

    Without the "greedy lender" the "stupid borrower" wouldn't be able to borrow.

    maybe Hillary's Village will be able to provide mortgages for the "stupid borrowers"
    then the "stupid borrowers" won't have "to borrow" from the "greedy lender" :rocker:
    Last edited: Jan 24, 2008
  6. STFarmy

    STFarmy Rookie

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    You're Harry, but the awful lenders are taking hits from their greed too. Look at the Countrywide. I feel bad for the people that they bilked, but if you're buying a house you have to research stuff like that. ARMs are just bad, bad policy.
    Last edited: Jan 24, 2008
  7. Real World

    Real World Moderator Staff Member

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    OH, I always tend to quote when I respond so I wasn't really directing my words to anyone specifically. I need to click reply more as opposed to quote.

    As for what you said, the part I bolded is EXACTLY the logic my own friends used. They acted on emotion, and not sense, and they screwed themselves for it. They'll all make their payments and keep their houses, but they WORK for it, and all left 6+ figures on the table. I hate to say I told you so, but in this case, they all admit they wished they listened. Keep renting Stokes, I'm not sure where you live, but the RE market hasn't bottomed out yet. See, there is obviously a lot of bad to this, but there is also a lot of good. People who couldn't otherwise afford there own place, but were sensible, will now be able to buy a home now. It goes back to what Alexander Hamilton said "money is best kept in the hands of those who know how to use it". It's not that the rich get richer, its that the smarter do. You don't need an education to be smart, nor rich, you simply need sense.
  8. Real World

    Real World Moderator Staff Member

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    I think the lenders are absolute scum sucking POS MF'ers. I'd like to put them all in jail, but it does take two to tango. This is why I am so opposed to any form of government bailout. Let the companies go under, period. When you do that, they will learn to police themsleves.
  9. STFarmy

    STFarmy Rookie

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    Look out, statements like this will rouse the class warfare folks.
  10. Stokes

    Stokes Rookie

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    I didn't think you were talking about me RW, I was just recounting my own experience because for once I was right! Hooray for me!

    Yeah, we're going to keep renting for a while yet, though it is frustrating to be essentially throwing that money away every month.
  11. Real World

    Real World Moderator Staff Member

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    Well, you're really not since you can deduct it from your taxes like mortgage interest. I'm not entirely sure what the return, or regs are regarding that, since I've only owned and have never rented. In the end, you're simply investing that rental money by waiting. My bud paid $296k for his Town House here in Chelsea. Nice place as it was only a couple of years old, but a dumb move overall. He's probably lost 30% of the value at least. He went no money down, no interest, and is dying to get out. He's an attorney too, so you'd think he'd be brighter. Anyhow, he wishes he had rented.
  12. jack

    jack Rookie

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    Does this count?


    Cheney's Halliburton stock options rose 3,281% last year, senator finds



    An analysis released by a Democratic senator found that Vice President Dick Cheney's Halliburton stock options have risen 3,281 percent in the last year....

    Sen. Frank Lautenberg (D-NJ) asserts that Cheney's options -- worth $241,498 a year ago -- are now valued at more than $8 million. The former CEO of the oil and gas services juggernaut, Cheney has pledged to give proceeds to charity.

    The above graph released by Sen. Frank Lautenberg (D-NJ) charts the value of the Vice President's holdings in Halliburton in the past year.




    “Halliburton has already raked in more than $20 billion from the Bush-Cheney Administration for work in Iraq, and they were awarded some of the first Katrina contracts," Lautenberg said in a statement. "It is unseemly for the Vice President to continue to benefit from this company at the same time his Administration funnels billions of dollars to it. The Vice President should sever his financial ties to Halliburton once and for all.”

    Cheney continues to hold 433,333 Halliburton stock options. The company has been criticized by auditors for its handling of a no-bid contact in Iraq. Auditors found the firm marked up meal prices for troops and inflated gas prices in a deal with a Kuwaiti supplier. The company built the American prison at Guantanamo Bay.

    The Vice President has sought to stem criticism by signing an agreement to donate the after-tax profits from these stock options to charities of his choice, and his lawyer has said he will not take any tax deduction for the donations.

    However, the Congressional Research Service (CRS) concluded in Sept. 2003 that holding stock options while in elective office does constitute a “financial interest” regardless of whether the holder of the options will donate proceeds to charities. CRS also found that receiving deferred compensation is a financial interest.

    Cheney told "Meet the Press" in 2003 that he didn't have any financial ties to the firm.

    “Since I left Halliburton to become George Bush's vice president, I've severed all my ties with the company, gotten rid of all my financial interest," the Vice President said. "I have no financial interest in Halliburton of any kind and haven't had, now, for over three years.”

    Cheney continues to received a deferred salary from the company. According to financial disclosure forms, he was paid $205,298 in 2001; $262,392 in 2002; $278,437 in 2003; and $294,852 in 2004.
  13. Stokes

    Stokes Rookie

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    I don't think that is true, at least for Federal returns, so we just take the standard deduction. If anyone knows otherwise though, let me know!!! I doubt it though since I take my stuff to a tax accountant, and I'm assuming he'd tell us if we could (friend of the family that does it).
  14. sdaniels7114

    sdaniels7114 Rookie

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    The hole in any 'free market' philosophy towards handling the housing problem is that it didn't just come up all by itself. Laws regarding mortgages, credit and bankruptcy were changed and those changes led to this mess. The market didn't just tumble over this cliff all by itself. It was pushed. If the government should choose to not do anything to help ease this, perhaps at the very least they could undo the changes in the laws that led to this in the first place.
  15. wistahpatsfan

    wistahpatsfan Rookie

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    #75 Jersey

    Don't buy now! Annual rent for a property is averaging about 3% of the value of that property. The owner is paying 6% interest per year. Until that ratio evens out, you should keep renting. Many economists are predicting that this will stay out of whack for 5 to 6 years. You should only buy if you are positive that the property is way underpriced. I own but I have owned since 1993, so....
  16. Real World

    Real World Moderator Staff Member

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    I know you can in Massaschussetts, but you're right about the fed.
  17. Real World

    Real World Moderator Staff Member

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    So what was the problem in the late 80's to early 90's? Who was at fault then? The problem has little to do with laws, and lots to do about economics. It's a complicated mixture of economic expansion, record low interest rates, and the availability of capital, combined with unethical, or unintelligent lending & moronic borrowers. It's not as simple as the government changing a law, and all of a sudden housing prices quadrupled, and people turned into instant idiots. Housing prices have steadily rose since the late 90's, in conjunction with interest rates dropping.
  18. Harry Boy

    Harry Boy Look Up, It's Amazing PatsFans.com Supporter

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    Never Mention Anything Bad About The Nineties

    Our Bill Was President Then


    :bricks:
  19. Real World

    Real World Moderator Staff Member

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    My job is real estate related. I don't sell property, but I rent, lease & build it. You're absolutely correct Wistah. Right now, a smart move, if people are willing to do it, would be to buy a multifamily. Move into a unit, and rent out the other two. You'd save a bundle on your monthly costs, and you'd be able to write off expenses too boot. In 3-6 years, you'd have one of two things, equity to borrow against for a new home, with the added benefit of 3 units of income property, or you'd have some profit from a sale, to put toward the dream home. Of course, lots of people aren't willing to do that, cuz they want the dream home first.
  20. STFarmy

    STFarmy Rookie

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    State taxes??? What are those?

    I shouldn't poke fun though, the Dems in NH are expanding the budget (thought our Governor just put a potential freeze on it yesterday I believe).

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