[clue-talk] The stimulus bill

[Angelo Bertolli]

On Fri, Feb 6, 2009 at 7:01 AM, Nate Duehr <nate at natetech.com> wrote:

>
> On Feb 6, 2009, at 12:04 AM, Angelo Bertolli wrote:
>
>  I've already resigned myself to accept that the only real way out of this
>> problem is to inflate our way out.  It's the most even way to distribute the
>> burden anyway.  I've already got my access card from treasurydirect.govand am saving the money I need to buy those inflation protected securities.
>>  (I expect few things to significantly outpace inflation in the coming
>> years.)
>>
>
> You're assuming those who were fiscally responsible won't want to go kick
> some butts of those who took out loans they KNEW they couldn't afford if
> their payments jumped to the maximum limits their variable rates allowed,
> someday?
>
> There's still an atoning for that if we delay it now and "spread the pain
> around"... like hopefully a return of the socially acceptable ability for
> someone to actually ASK about someone else's finances and pressure in
> society not to spend on things one can't afford?
>
> Nah.. I guess that'll never catch on..


I'm not sure who really knew they couldn't afford their payments.  Maybe
some people could afford their payments, but it was cheaper to buy one of
the falling prices and then default on their original obligation.   On one
hand, I would like strict rules about people who "don't pay their debts,"
being a person who has always been good on my debts.  On the other hand, if
the reality is someone can't pay their debt, then they can't pay.  What kind
of remedy do we have that really helps society?

The way it's supposed to work is the lender is supposed to use things like
credit score (which goes down the tubes if you pull something like this),
income, etc. to decide if they would like to lend that amount of money or
not.  And considering it's their job, I hold them at least slightly more
responsible to know how to make those judgements.  Of course, people who lie
on their applications are completely at fault.  But there are a lot of
people who were mislead and told (by realtors, loan officers, everyone who
makes money off of taking out as big a loan as possible) that it was a good
deal for them and/or a good "investment."

I could go on for a long time about what a horrible "investment" buying a
house is unless you're willing to turn it into a business and rent it out.
I went looked around for a house in 2007, and I found that they're basically
a horrible deal unless you really want to settle down in area and really
want the house.  First thing I found was that there was no one on my side
except me:  everyone else had a monetary interest in me buying the biggest
house I could possibly claim to afford.  I specificially said I didn't want
to spend over $250k, for example, but the realtor thought it was a good idea
if I "kept my options open."  (Of course, their line is always "right now is
the best time to buy a house."  It's always the best time, right?)  Then I
went through the prequalification to see the numbers for a mortgage on a
basis of 300k, even though I hadn't picked a house yet.  Being someone who
actually knows arithmetic, I could tell why they wanted me to get a more
expensive house:  bigger closing costs, and a bigger cut of the deal.  (But
I thought you told me your services were free to me!)

Not only that, but mortgages are like this horrible scam loan.  I'm not in
debt, I have great credit, and I don't need anyone's money or help.  Why on
earth would I ever agree to borrowing money at 6% interest where they front
load the interest so that I essentially pay them their "bonus money" up
front, and own none of the house unless I keep it for a few years?  Seems
like a horrible deal to me.  Of course I'm smart enough to get a 30 year
mortgage and pay at a 20 year rate, but I certainly can't do that at 300k.
And yeah, I know you get to "write it off on your taxes."  That's nice and
all, but the money that I don't pay in taxes I'm just giving in interest to
the bank anyway, so it's like a subsidised scam.

Anyway, sorry about that.  But I really do think the bulk of the guilt is on
the collection of "unregulated banks" who thought it was ok to put loans
that had a 10% chance of being paid back on their books as though they were
assets.



>
>  As they say, the proof is in the pudding.  I think if Obama does well,
>> most people will come around.  Sure there will always be a market (and a
>> profitable one too!) for a certain subsection of the population to demonize
>> the opposing team.
>>
>
> Define "does well".  Which specific Constitutional power will he execute to
> "do well" again?  He's already doing pretty well, judging by the party and
> guest list at the White House.
>
> Oh... you meant if he throws you a few crumbs while living high on the hog
> on 40% of your pay?  LOL!  Of course he will... just enough to keep you from
> rioting, but scared enough to keep voting for his Party.  Politics 101.



Well no one is raising taxes.  I see only tax cuts coming our way.  So I'm
not worried about that.  But I think there are a few measures that we can
make for Obama doing well.  One of the more immediate tells, that we should
be able to make a call on within 6 months to a years, is whether or not he
can bring the Republicans in and compromise enough to get more Republican
support in congress.  That would, at least for me, show that he's doing a
good job.  It's going to be extra hard because the Democrats control
Congress and aren't likely to be that helpful about it.  It would have been
better if we had kept at least a Republican majority in the House.

Angelo
-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://cluedenver.org/pipermail/clue-talk/attachments/20090206/caae201d/attachment-0001.html