Posted on 05/30/2010 6:00:24 AM PDT by GVnana
Beleaguered taxpayers may finally put a stop to the sheer waste of government spending
Back in 2008, when I was fulminating against multiculturalism on a more or less weekly basis, a reader wrote to advise me to lighten up, on the grounds that “we’re rich enough to afford to be stupid.”
Two years later, we’re a lot less rich. In fact, many Western nations are, in any objective sense, insolvent. Hence last week’s column, on the EU’s decision to toss a trillion dollars into the great sucking maw of Greece’s public-sector kleptocracy. It no longer matters whether you’re intellectually in favour of European-style social democracy: simply as a practical matter, it’s unaffordable.
How did the Western world reach this point? Well, as my correspondent put it, we assumed that we were rich enough that we could afford to be stupid. In any advanced society, there will be a certain number of dysfunctional citizens either unable or unwilling to do what is necessary to support themselves and their dependents. What to do about such people? Ignore the problem? Attempt to fix it? The former nags at the liberal guilt complex, while the latter is way too much like hard work: the modern progressive has no urge to emulate those Victorian social reformers who tramped the streets of English provincial cities looking for fallen women to rescue. All he wants to do is ensure that the fallen women don’t fall anywhere near him.
So the easiest “solution” to the problem is to throw public money at it. You know how it is when you’re at the mall and someone rattles a collection box under your nose and you’re not sure where it’s going but it’s probably for Darfur or Rwanda or Hoogivsastan.
(Excerpt) Read more at 2.macleans.ca ...
I confess, I fell prey to this kind of thinking. Back in 2003-2004, when I was a mortgage loan officer for Countrywide Home Loans, I witnessed the torrent of new mortgage product issued by FannieMae and FreddieMac, and I wondered, "Are we so well-off, as a nation, that we can now afford to abandon century-old standards for lending?"
Actually, we weren't that rich then. We just had the delusion of wealth that is created during the short-lived period while we were maxing out our credit cards.
That was an intentional part of the “redistribution” plan of communists and “progressives.” They knew the borrowers would not be able to pay the mortgages. They knew they could use the argument, “we can’t throw people out of their homes” successfully. They knew the country would bail out the borrowers (and the lenders) at the expense of those who are a lot less selfish and who manage their own finances responsibly.
Remember folks, it is no longer “redistribution of wealth.”
They are now taking from those who are just getting by in order to buy votes from the parasite class.
It is now “redistribution of earnings.”
I wonder if I would have qualified for my first home loan had those time-honored standards to ensure risk is shared equitably between lender and lendee had been in place. I certainly would not have been able to gather 20% before home prices went on their precipitous rise.
Of course, those lending practices and the housing bubble are not independent events, and I didn’t overbuy. Despite being out of work for a year, I’m still here and have never missed a payment.
Fiscal prudence is simply something lost on this generation, and it’ll take a 21st century Greek tragedy on our shores to make people understand that the “worst economy since the Great Depression” will involve hardships beyond scaling back from Applebee’s to Mickey D’s.
Once again, Steyn nails it. Sadly, this stupidity is not the exclusive disease of overt liberals. Remember “compassionate conservatism” and “a kinder and gentler nation”?
Perhaps staring national poverty in the face will force us to examine how and why our nation became so wealthy. It was not because of liberalism or any other variety of stupidity. Rather, our wealth as a nation was built on Christian values, hard work, intelligence and a sound constitution.
Excellent title...bkmking for later
Well, Countrywide was making a fortune writing “toilet paper”, so I shorted them in 06, along with WAMU, and several others.
Liberalism is a luxury. In the same way the hippies that protested in the 60s had plenty of jobs to chose from if they really needed to work — times were good. In bad times you worry about your next meal. With the poor it is no longer a life and death struggle in North America as it is in Africa. Your next meals are provided for. But all this is never enough to a liberal, especially a “poor” one. Despite their ipods, cell phones, money cigarettes, beer and cable... they are hard done by. Our culture shows them people like Brad Pitt and they think that they are poor in comparison to Brad and not some native in Africa. And that is such an affront to their pride. Therefore, more entitlements, more money throw at them for being the victims, more tax the evil rich. This attitude is a luxury and will drive the people who give to the poor through their taxes into the poor house.
For years I've said the same about 'natural' and 'organic' foods, I just used the words wealthy instead of rich.
And, from the agricultural standpoint, we still are wealthy enough to spend money stupidly on 'organic' and 'natural' foods.
I hope that doesn't change, as I have friends and relatives making bundles and living high taking easy money from foolish buyers.
Bump
Prior to all the crazy lending, service members and former members had access to VA loans. We didn't have to put down 20% and we paid no PMI.
I'd bet that if someone could gather the figures, the default rate on VA loans has been lower than average. It isn't the loan vehicle that matters as much as the character of the people you're loaning the money to.
I want to know where the hells all this money going?
Somebody has to be on the receiving end. Four, five, six big banks? Who is holding the cash?
The craziness that we're seeing now has been building up for a long time. Somehow we've all had to keep living our lives, and most of us have done it responsibly. As I look back, we also couldn't afford our first house based on traditional standards. It was in 1980 when interest rates were insanely high. With FHA backing, we were able to buy a small house with a reduced down payment and a bargain mortgage rate of 12%. The prevailing rate was around 15%. Thank you, Jimmy Carter - what a joy it was coming out of college during your economy.
Things have been better in many ways since then. We've been in our current house for nearly 17 years now, never had a mortgage rate above 7%, and re-negotiated it downward twice. I haven't forgotten though, how home ownership was made more difficult through the escalation of mortgage rates, and then home prices.
Some of what we faced was demographic, as the bulk of the baby boom immediately preceded us, driving up the price of housing before we were in a position to buy a home. Unfortunately, we'll also experience that on the downside, when demand for family-size homes will be soft when it's our turn to downsize. Sigh. My parents faced worse, since they lived in Europe during the war and lost everything to the communists who came after. Still, one yearns for stability, responsible government, and fairness.
So you went through that TORTURE also...sitting there, month after month, trying to figure out why the hell their stock wouldn’t collapse. If you were like me, you started having self-doubts: Surely I cannot be smarter than the professional investors...they must know something that I don’t (and don’t call me Shirley). But then “the day” finally came, and they were toast. I also was in WAMU, but got cold feet when E-Trade itself started to get wobbly because they had bought into sub-primes. I still made some money on WAMU and others...and wound up buying a nice are.
Thank you Countrywide, for making my dreams come true.
“I want to know where the hells all this money going?
Somebody has to be on the receiving end. Four, five, six big banks? Who is holding the cash?”
I can answer that one. The problem for the banks is that they were given, say (for example, using small numbers), $1M in deposits. They lent it out to people that never had a chance of paying it back, and then who’s property values declined to, say $600k (and really less than $500k, when they bank tries to sell it after it’s been trashed in foreclosure).
But the depositors did not forget about their deposits, and the government insured them. Given the margins that banks operate on, the banks were toast. So any money they get must go towards paying back those depositors. As to lending drying up - that’s simple - the banks will not put any more of their money at risk, at least until they can reasonably health - right now they’re sick as a dog.
Very frustrating, isn't it?
I remember well the time I helped out at my kids' school store at the beginning of the school year. They were in middle school. We were told that some of the youngsters would have vouchers from the guidance department that entitled them to free gym uniforms and school spirit t-shirts. I had just forked over about $50-60 per child to update ours, since the spirit day shirts changed every year, and the athletic department had just updated gym uniforms and insisted everyone replace the old ones. I wouldn't have minded helping out a youngster whose parents were really down on their luck, but it irritated me greatly to see the numbers, attitudes and dress of the kids who showed up with vouchers. For an upper middle class suburb, I was amazed at how many youngsters were considered needy. Nearly all of them had ugly attitudes of entitlement and were frankly rude to the people helping them as well as the other children in line (line? what line . . . ). Most of all, I was outraged at how nearly all of them had more expensive clothing (e.g.designer labels) than my own kids, expensive shoes, and the latest in cell phones and iPods. It made me so mad I could spit.
This year the school budget in our township is going up nearly 13%, mostly because of construction of a new high school. Unfortunately, there's also a chunk of money in there for a diversity program to try to close the "achievement gap". There are a number of township residents who have written scathing letters to the editor about how they fail to understand how it could be the fault of the school district when the kids are offered all the same opportunities to learn. Many thinking and hard working members of our society are getting fed up with dragging this cart full of freeloaders, and we're getting more vocal.
“I’d bet that if someone could gather the figures, the default rate on VA loans has been lower than average. It isn’t the loan vehicle that matters as much as the character of the people you’re loaning the money to. “
It’s both. There are very few people that have enough character to be a slave to a bank for the next 20+ years, which is what millions of people are looking at now in California, Florida, Nevada, Arizona, and some other places. These are people that might make $100k, but are being hit with $400k loans that have ‘adjusted’ to the point where their payments are $5,000 per month - and there is no option to sell the house, since it’s worth, maybe half of the loan value.
No sane person would spend most of his adult life under those conditions, especially if it meant things like depriving their kids of a chance to go to college. Then again, no financially intelligent person would take a loan with terms like that. But then again, no respectable bank would ever make a loan like that. But then again, no reasonable credit rating agency would ever call that loan AAA. But then again, no respectable Wall Street brokerage house would ever buy that loan to package it into a financial instrument. But then again no well-run pension or retirement plan would ever buy a financial instrument with those kinds of loans in them. But then again, no intelligent government would ever insure the loan....
Amazing how many checks we had in the system, and they all failed...and yet no one goes to jail.
Of course their collective defaults, leading to more bail-outs, mean that it's harder for us to send our kids to college and harder for our kids to find work and support a family. My, my, my what a mess. Oh for a bucket of tar and a bag of feathers.
“Of course their collective defaults, leading to more bail-outs, mean that it’s harder for us to send our kids to college and harder for our kids to find work and support a family. My, my, my what a mess. Oh for a bucket of tar and a bag of feathers.”
Of course, but what made our system so good (in the past) was that everyone could think about their own interests, yet at the same time, helping with the collective interests. That is why Capitalism won...at least until we elected this bunch.
Historically, one might say that a society's decision to "do something about the poor" is a harbinger of immediate decline.
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