Wow. Seriously, want to stimulate the economy? How about giving the money to the people. The nation is about to spend enough money to pay off 90% of the home mortgages in America. Want a real stimulus? How about putting some of that money in the hands of the people.
Anyone trying to justify this stimulus, how are you doing it? Really, how are you justifying this spending? I cannot believe the American people elected the current crop of idiots setting out to drive the country deeper into debt. Incredible.
This latest action by the Government underscores one of the inherent problems in our system of leadership. The best and the brightest are not going into public service. They are in the private sector making tons of money, leaving to dolts in Congress, who obviously do not understand basic finances, to run the country. This is not to say that the private sector does not have its share of ineptitude – quite the contrary. But, man, how can you possibly justify this shit?
It reminds me of this scenario: You are outside, shoveling your drive way, and you have a heart attack. You are lying there in your driveway, in dire need of assistance. You call 911. They send a crew from the public works department to re-pave the road in front of your house hoping that this action will “stimulate” you to get up on your own. Nice.
So your stimulus plan is to give money to people that can’t save a penny? Or pay off their mortgages that they could not afford as a reward for making bad decisions? I see a bright future for you in politics.
Are we going to pay off (or at least pay down) my mortgage, too? I bought a house well under “what I could afford” on a 30 year fixed note, and I make a living well into the six figure range. Or do we plan to only give away houses to the couples making $50,000-$75,000 who bought a $900,000 house on an interest only loan and can barely afford to pay that and eat in the same month?
Don’t get me wrong, I’m all in favor of helping people out, but I wonder how this encourages people to make smart fiscal decisions?
pay off their mortgages, severly limit their access to credit and have a required minimum retirement savings deducted from every paycheck.
You are starting to make sense, except the stuff about paying off mortgages. That’s just more welfare:
Nobody qualifies for a home loan until they can put 20% down and their financial statement show they can make the monthly payments.
Credit card lines of credit become based on reality, i.e. you don’t get a 20K spending limit when you are making 40K. Limit the line of credit to 10% or less of net pay check and nobody gets more credit once they reach their limit.
Aside from the fairness issue of rewarding the irresponsible, the biggest problem is that as soon as you write off the mortgage dept the price of houses will sky-rocket to take advantage of all the newly freed up capital. Two years later we are back where we started only with people getting ninja loans (no income, no job, no assets) on 2 million dollar houses (same house as before, just with twice the price tag) with their new 900K of free equity.
Using your logic, If we just stopped funding student loans and giving students pell grants and lottery funds, the cost of college education would drop significantly - by the way, I agree…just thought if it applies to homes shouldn’t it apply to other areas?
Or, instead of always having the “fairness” arguement, and the “well, i was responsible what about me?” arguement, the gov’t could just do nothing, or at a minimum give EVERYONE THAT PAYS TAXES an equal % tax break. There is a substantial welfare system in this country that already exists for those that can’t handle that excess money appropriately.
Why are there no longer consequences to our actions? Is it because we are afraid to keep score in little league now??
The gov’t doesn’t want to actually give responsible people money to help save the economy because those people would actually SAVE IT! What a concept huh? Blow the money on the middle and lower class because they will spend it…like someone said, jetski’s and HD TVs etc…
Politicians are just below hookers in my eyes. At least prostitution is an honest profession…scummy, but honest. Politicians are always buying votes through expanded govt.
I guess an argument could be made that availability of funds drives up the cost of college education, although I’m not sure if we dropped funding it would drop the price in any realistic time frame. The economics of college education are very different from house prices though, as many people will purchase a bigger/more expensive house simply because they can borrow the money to do so. I don’t think many more people would go back for more college education just because they could borrow more money to do so.
I guess an argument could be made that availability of funds drives up the cost of college education, although I’m not sure if we dropped funding it would drop the price in any realistic time frame.
There would be no decrease in price for any school that’s even moderately selective. The reason that public university tuition costs have skyrocketed over the past 30 years isn’t because the schools have gotten extravagant. It’s because per student funding from the state government in almost every state has massively shrunk during that time frame. Endowment and grant funding is often heavily restricted in terms of what it can be used for, so that kind of thing only helps to some degree. The students are left paying the rest.
So your stimulus plan is to give money to people that can’t save a penny? Or pay off their mortgages that they could not afford as a reward for making bad decisions? I see a bright future for you in politics.
Now where did I suggest that? Seriously, where, exactly, did I suggest what you wrote here? That is merely to illustrate exactly how much money we are dealing with and what it could, potentially, do.
Also, where are you getting the following facts: 1) “people that can’t save a penny” and 2) “that they could not afford?” Where are you getting that?
My friend, it seems that you have a very bright future in politics. You create facts to support your position. You will fit right in with the current administration.
Incredible.
My “stimulus” package would include: (1) tax cuts in personal income tax in direct proportion to the amount paid; (2) tax cuts to business across the board; and (3) tax cuts to business that provide health insurance benefits to employees in proportion to the amount provided.
Then, if I really wanted to get crazy: (4) increase deductions for mortgage interest; (5) remove the income caps restricting certain taxpayers from deducting interest paid on student loans; (6) remove the marrage penalty.
THEN: (7) increase the contribution limits for 401(k) plans; (8) remove the income restrictions on ROTH IRA contributions; (9) provide tax credits to employers who match employee 401(k) contributions in proportion to the amount provided by the employer.
I probably would have more money to spend, so: (10) place money in an account to create federally insured, low interest, small business loans; (11) increase federal education grants and student loans; and (12) yeah, maybe take a look at home mortgages.
pay off their mortgages, severly limit their access to credit and have a required minimum retirement savings deducted from every paycheck.
Not bad. There’s a start. No doubt better than what is before Congress right now.
Are we going to pay off (or at least pay down) my mortgage, too? I bought a house well under “what I could afford” on a 30 year fixed note, and I make a living well into the six figure range. Or do we plan to only give away houses to the couples making $50,000-$75,000 who bought a $900,000 house on an interest only loan and can barely afford to pay that and eat in the same month?
Don’t get me wrong, I’m all in favor of helping people out, but I wonder how this encourages people to make smart fiscal decisions?
Once again, I am not suggesting that we pay off mortgages. It is just an interesting analysis of the scope of the money Congress is planning on spending. See my post above for my idea.
But, if this were the plan, then, yes, you would be included. I am in the same boat as you. I am guessing our practice and comp systems are similar. I purchased my home about 5 years ago. I bought a house that cost roughly half the amount for which I was approved and did it on a 30 year fixed, like you. I do not expect to, nor do I need to, be bailed out. But, if I had more disposable income (either through paying off part of my mortgage or increasing my tax deduction for my mortgage interest) I would certainly pump it back into the economy, thus causing a stimulus.
pay off their mortgages, severly limit their access to credit and have a required minimum retirement savings deducted from every paycheck.
You are starting to make sense, except the stuff about paying off mortgages. That’s just more welfare:
Nobody qualifies for a home loan until they can put 20% down and their financial statement show they can make the monthly payments.
Credit card lines of credit become based on reality, i.e. you don’t get a 20K spending limit when you are making 40K. Limit the line of credit to 10% or less of net pay check and nobody gets more credit once they reach their limit.
Now, HERE, I like your thought process. However, not sure I completely agree with #1. I will use myself as an example. As I said in my response to Steve, I purchased a home about 4-5 years ago that cost roughly half the amount for which I was approved. I bought it with an 80/20 loan b/c I did not have 20% to put down. The 80% loan was a 30 year fixed. The 20% was a 15 year fixed w/ a balloon payment. I did this so I could buy the house w/o putting down 20% and without paying PMI. After the first 2 years (it may have been a little longer), I refinanced the entire amount into a 30 year fixed and now have 20% of the value of my home in equity. So, it isn’t always about having 20% to put down. It is really more about only spending the amount you can truly afford.
The promises are composed of about $1 trillion in stimulus packages, around $3 trillion in lending and spending and $5.7 trillion in agreements to provide aid.
Can someone give me an idea what this really is?
Seems the article is talking about “Guarantees” I.E. FDIC kind of stuff and including that as “Spending” by the Fed. If so one would have to compare these numbers to prior numbers in order to get an idea of the “true” increase. I know they increased the FDIC amount to 250K from 100K so one could look at that as an additional “burden”, but still it’s nothing like the stimulus package or TARP.
In short I’m calling BS on the article or at least the way it’s being presented. 9 trillion dollars has not been “Spent” in the traditional way that we are looking at with the stimulus package. If so we would see a HUGE HUGE lump of it somewhere unless someone(s) just up and ran away with it and has an account in Switzerland with a whole bunch of zero’s in it.