home

What The Bloggers Think

By Big Tent Democrat, Section Economy
Posted on Fri Feb 27, 2009 at 08:59:35 AM EST
Tags: (all tags)
Share This: Digg! StumbleUpon del.icio.us reddit reddit

National Journal's weekly Washington Insiders and Bloggers Poll asked the following questions:

Do you expect another economic stimulus plan will be necessary in the next year?

How concerned are you that federal economic recovery aid has gone or will go to people and businesses that don't deserve it?

I'll ask the second one here in a poll below.

< Slouching Towards A "Temporary Takeover" Of Citibank | Morganthau To End Tenure As Manhattan DA >

  • The Online Magazine with Liberal coverage of crime-related political and injustice news

  • Contribute To TalkLeft


    • Display: Sort:
    What The Bloggers Think | 54 comments (54 topical)

    Readers Must Login or Create an Account to Comment

    The second question (5.00 / 7) (#2)
    by Steve M on Fri Feb 27, 2009 at 09:22:57 AM EST
    really hearkens back to some of the old welfare debates.

    I think everyone agrees that whenever you have a government program, some number of people are going to receive the benefits even though they're not truly deserving.  Liberals generally figure we should do what we can to eliminate waste and fraud, and past that point, you can't allow the inevitability of a few bad apples to screw up a worthwhile program.

    Whereas for conservatives, the fact that there will be undeserving recipients is proof positive that we shouldn't have the program at all.  Period, the end.  The idea that some people will wrongfully take advantage is just infuriating to them.

    Two different mindsets, that's all.

    The minute the government (5.00 / 2) (#4)
    by Fabian on Fri Feb 27, 2009 at 09:54:26 AM EST
    money becomes available, opportunists of all types will be scrambling to get some.

    There will always be some money that is used in ways it was never intended.  There should always be strings attached and record keeping enforced, even if some people whine about the "burden".  Accountability and transparency are good things.

    Parent

    Accountability (5.00 / 3) (#41)
    by Lil on Fri Feb 27, 2009 at 12:34:22 PM EST
    That's the part I don't get. I work for a non profit, our burdens are strenuous to keep our records and spending in order. We are audited, etc. Sometimes it feels like too much work for the thousands we get, but we do it anyway and rely heavily on local, State and Federal funds. Then I hear about billions unaccounted for in bail out money and do not undertand why there is resistance to making those recipients be ultra transparent. They should be forced to jump through as many, if not more hoops, to prove they are on the up and up, as we do. What am I missing?

    Parent
    Don't see it as part of the old welfare debate (5.00 / 1) (#13)
    by DFLer on Fri Feb 27, 2009 at 10:28:59 AM EST
    I see it as part of the more current Halliburton/KRB/Blackwater...oops, I mean Xe debate re undeserving recipients

    Parent
    That's not a fair representation. (none / 0) (#6)
    by Samuel on Fri Feb 27, 2009 at 10:05:58 AM EST
    The reasoned argument against welfare has been one on the effectiveness of subsidization - supported by empiricism.  

    The "bad apples" argument is used by the right but should not be considered the counter-argument to the welfare debate.    

    Parent

    Okay (none / 0) (#25)
    by Steve M on Fri Feb 27, 2009 at 10:48:45 AM EST
    Your libertarian argument that less than 5% of the people care about is not really what I'm talking about here.

    Parent
    I can understand that. (none / 0) (#35)
    by Samuel on Fri Feb 27, 2009 at 11:32:22 AM EST
    I was just indicating that your representation was by no means comprehensive and omitted a highly evidenced criticism.

    Parent
    Bureacracy (none / 0) (#7)
    by gyrfalcon on Fri Feb 27, 2009 at 10:20:02 AM EST
    Have to balance whether weeding out the "undeserving" is worth the massive bureaucracy and the big slowdown in implementation it takes to do the weeding.

    In the current situation, I say target the $$ as clearly as you can and then don't worry about it.  When the objective is to prime the economic pump, it almost doesn't matter.  Personally, I couldn't care less if some of Santelli's undeserving home owners get relief along with the deserving ones.  Imagine the bureacracy, the paperwork, and the time it would take to, as some have suggested, examine each mortgage holder's finances and make a determination whether or not they "knowingly took on more house than they could afford" to begin with.  Bleeeacchhh.

    The people who whine about "undeserving" recipients are the same ones who go ballistic over the burden of paperwork.


    Parent

    You have a point (none / 0) (#12)
    by Inspector Gadget on Fri Feb 27, 2009 at 10:28:04 AM EST
    However, there should be some simple steps, like requiring the applicants to produce their tax returns for the 3 years prior to purchase, and their credit score at the time of purchase to see if they were at least within the ballpark of qualification.

    People depend on being more trouble than they are worth. Many small business owners get away without paying their employees for hours worked because they know they are too small to be interesting, or worth gov't time. And, they are right...I wasn't even able to write off my loss.

    These cheats add up, and people get hurt.


    Parent

    Love it (5.00 / 1) (#19)
    by gyrfalcon on Fri Feb 27, 2009 at 10:43:31 AM EST
    let's hire vast armies of tax accountants to pore over those three years' worth of tax returns and pronounce judgment, then an army of lawyers to beat back the inevitable appeals.

    Shouldn't take more than 5 or 6 years to get the money out into the economy, eh?

    The vast, vast, vast majority of these people were bamboozled and cheated by immoral mortgage brokers who misrepresented loan terms and everything else about the transaction.

    "You should have known" isn't a useful concept in the current situation.

    Parent

    I tihink there was a confluence of (none / 0) (#53)
    by Anne on Fri Feb 27, 2009 at 06:16:08 PM EST
    the mortgage brokers going hell-bent for leather to make oceans of money on the housing market, abandoning all the old benchmarks for who could and could not afford these mortgages, including all the old verifications that used to be the norm, and people who (1) wanted to get a big check from the equity the market had artifically given them or (2) were first-time buyers who banked on values continuing to go up and planning to re-fi in pretty short order.

    But, here's the thing.  People knew how much income they had - or didn't have.  And regardless of some slimy mortgage broker telling them that yes, they could afford the mortgage, all these potential borrowers needed to do was sit down with a calculator and a list of all their monthly expenses to see the truth of their situation - it ought to have given them really cold feet.

    When you sign on for hundreds of thousands of dollars worth of debt, you don't bite off so much more than you can chew on a gamble that (1) your house will appreciate like it's on steroids, and (2) your income will do the same.  Sure, we probably all stretched a little when we bought our homes, but not like that.

    And when someone is selling you the equivalent of a free lunch, the hairs on the back of your neck ought to be standing on end.  "OK, so, let's say I take the option not to make a payment one month - what does that meam?"  "Tell me what the payment will be if my interest rate re-sets at the maximum it can go."

    There is no question that mortgage brokers broke all the rules and came up with all kinds of products to benefit their own pockets, and some of them ought to be in jail for doing it, but the borrowers have to take some responsibility, too.

    My understanding is that this housing plan will look at the borrowers' financial situation; it won't be as simple as being underwater.  They aren't going to make any effort to help anyone whose total debt is 55% of their income, because they are so over their heads that, help or no, they will be defaulting eventually - and the only way to verify that is to verify the information.

    Parent

    You sound (none / 0) (#28)
    by Steve M on Fri Feb 27, 2009 at 10:56:46 AM EST
    like a very pragmatic Clintonite to me.

    Parent
    I hope that was meant (none / 0) (#36)
    by gyrfalcon on Fri Feb 27, 2009 at 11:35:38 AM EST
    approvingly.  Dunno about the "Clintonite" part particularly, but I'm certainly more interested in what works than anything else.  Maybe that makes me an Obamanite at this point?

    I honestly don't think we have the luxury at this point of fussing about "what's fair" or even about "moral hazard."  It's an emergency.  Let's do what will produce some overall economic results as fast as possible or we won't have a system worth fussing over for many years.

    Parent

    I am just saying (5.00 / 1) (#38)
    by Steve M on Fri Feb 27, 2009 at 11:52:13 AM EST
    that Bill Clinton was the most visible adherent of the "do what works" theory of governance.

    If something sounds like a great liberal idea in theory, but it's too expensive or complicated or time-consuming to implement in the real world, then just forget about it.  I am with you on this.

    Parent

    To Obama's credit (none / 0) (#8)
    by ruffian on Fri Feb 27, 2009 at 10:22:58 AM EST
    it does seem to me that his administration is going farther than most to identify and prevent waste and abuse. I think he knows his reputation will depend on that in the long run. I think it might be the case that Dems are extra-sensitive to these charges that have been thrown at them forever (sometimes with merit), and will do a better job of managing the money than the Republicans did.

    I hope so anyway.

    Parent

    I have to disagree (none / 0) (#48)
    by cal1942 on Fri Feb 27, 2009 at 02:25:50 PM EST
    on this:

    his administration is going farther than most to identify and prevent waste and abuse. I think he knows his reputation will depend on that in the long run

    His reputation in the long and short run will be whether or not the economy recovers, whether or not people get jobs.

    Deficits,waste, etc. are NOT winner political points. When people are out of work or fear being out of work or have had wage cuts they could care less about how it's done only if it's done.  If the economy recovers in a reasonable time frame and suffering is minimized his legacy will be made.

    For the better part of four plus decades Republicans complained interminably about deficits, waste, etc. and lost election after election.  People got results during that period, the standard of living improved more than two fold. The nation became stronger, etc. all the while the GOP guys wearing green visors complained and complained and lost and lost.

    Parent

    I agree, but... (none / 0) (#37)
    by pluege on Fri Feb 27, 2009 at 11:38:01 AM EST
    Whereas for conservatives, the fact that there will be undeserving recipients is proof positive that we shouldn't have the program at all.  Period, the end.  The idea that some people will wrongfully take advantage is just infuriating to them

    I think this a partially true characterization of conservatives, but not all. There is also their racist assumption that all people receiving assistance are minorities and therefore inferior and undeserving of any help. The mere fact of their needing assistance is proof they shouldn't get it.

    Then there is there are the excuses they invent to mask their true reasons for being against assistance (their greed and feelings of superiority). The excuses include:

    • that assistance discourages responsibility and an individuals desire to help themselves
    • under the false precept that conservatives earned all their wealth and advantage without any help, that providing assistance is unjust
    • that government can't do anything right (regardless of all the facts to the contrary. Of course it is true that republican government can't do anything right, so they project that onto all government)


    Parent
    Somewhat different though.... (none / 0) (#42)
    by kdog on Fri Feb 27, 2009 at 12:51:30 PM EST
    than the old debates, which were more about emergency sustenance welfare....I'm not gonna worry about a con-artist double-dipping on food stamps as long as the hungry have access to food, though of course we should do our best to limit any fraud.

    Otoh, I am worried about homeowner relief going to irresponisble McMansion owners...you don't need a 4 bedroom 2 bath to live...and we're not talking about a couple hundred dollars worth of food stamps...we're talking five and six figures.  And don't me started on the corporate welfare.

    Parent

    Eh (5.00 / 1) (#47)
    by Steve M on Fri Feb 27, 2009 at 02:25:29 PM EST
    believe me, there's not much of a debate about whether a starving person can have a crust of bread.  Those old debates were very much about "undeserving" people, otherwise known as "people who just don't want to work."  And do we have any hard evidence that the proverbial McMansion owner is any more of a real issue than Reagan's welfare queen?  I do not, but it's easy to deal in caricatures.

    Parent
    There was that guy... (none / 0) (#49)
    by kdog on Fri Feb 27, 2009 at 02:31:27 PM EST
    in the Daily News begging for Obama's help we discussed.  

    Parent
    Yeah (none / 0) (#50)
    by Steve M on Fri Feb 27, 2009 at 03:22:21 PM EST
    and does he qualify for help under Obama's housing plan?  I suspect neither of us knows.

    Parent
    I don't think Obama knows....n/t (none / 0) (#52)
    by kdog on Fri Feb 27, 2009 at 03:57:16 PM EST


    Parent
    I didn't see it that way (none / 0) (#43)
    by sj on Fri Feb 27, 2009 at 12:59:16 PM EST
    Although I see where you're coming from.  I was never worried about the so-called "welfare queen" (so you can see where I fit in your spectrum).  I am, however, concerned about contributing to a welfare empire.  

    Both of your view points are focussed on the "have-nots" and how they are perceived and what should be done.  I read the poll question with "have-mores" in mind.  

    And yes, I'm concerned that they'll find a way to siphon off the life-blood.  Once again.

    Parent

    I think (5.00 / 1) (#3)
    by TimNCGuy on Fri Feb 27, 2009 at 09:47:44 AM EST
    it would be easy to eliminate the anger many feel over the mortgage bailout.

    All you would have to do is add some sort of payback provision into it.  The govt should put a lien on any mortgage that they help bailout.  They certainly should be able to assign a monetary value to the assistance they are giving to the home buyer.  Just put a lien in that amount on the mortgage.  If the home buyer sells the property (or transfers the property into someone else's name) for a profit in the future, the tax payers get their money back from that profit.

    Everyone is assuming that housing will go back up in the future.  And home buyers who get an assist to keep their homes should not be able to realize a huge gain without paying the taxpayers back.  After all, without the assist from the taxpayers, that future gain would not be possible.

    Provisions like that have been in (none / 0) (#11)
    by ruffian on Fri Feb 27, 2009 at 10:26:45 AM EST
    all the proposals I have seen. Also, isn't the government only into each house for a maximum of about 10k (1k per year for 5 years to both the lender and the borrower?) If you are deeply underwater on your loan, that may be enough to keep you from walking away, but is not enough for any real abuse to occur.

    Parent
    i heard one explanation (none / 0) (#23)
    by TimNCGuy on Fri Feb 27, 2009 at 10:47:35 AM EST
    that said there was no payback provision at all on the mortgage bailout plan.

    The other explanation I heard for one part of the plan is that people will be able to have their mortgage rate lowered for five years down to something along the lines of 2% or even less.  And, at the end of the five years the rate would go back to the current rate available at the time of the bailout.  Say 5.5%.  That sounds like more than $10,000 in value to me.

    If I am in a home that was valued at 800,000 and I had a 500,000 mortgage and the house is now valued at 400,000.  I have a sub prime mortgage with the rate currently at 10% and can't afford to pay it.  I'm now under water and I assistance through a lower rate so I can afford to stay in my home.

    Years from now the home's value rises to 1,200,000.  I sell it and make a HUGE profit because the taxpayers bailed me out.  Should I get to keep all that profit?  Or, pay back the taxpayers?

    The tax payers are eating half the difference with the mortgage company between the lowered rate they enjoy for 5 years and the actual rate.

    The tax payers should get their investment back.

    Parent