Obama's Tax Plan and the Law of Unintended Consequences

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  1. Quote Originally Posted by mmorpheuss View Post
    According to your graph, the dramatic dip back to pre 1970 levels happened before Bush Jr. was ever sworn into office.

    So the rise would apparently have been nurtured during the 12 straight years of Reagan/Bush Sr.
    I don't think you can attribute welfare rates to a president. The program was empowered through LBJs Great Society in the late 60s, however, you can see from the graph that it really took off in the early 70s after he left. You'll see there's approximately 25 years between 1970 and 1996, where 5% of the American population is on welfare.

    5%. That's a huge number of people. That IS an inner city culture. I'd say that 25 years is more than enough time to engender values in a segment of the population, and if they're getting free money, that value is not working, its that the government is responsible for your subsistence.

    I'm not saying this is the only cause of class mobility being lost in the United States, but 5% of the poorest people in the country, losing the values of family, work, and independence certainly didn't help matters.


  2. Quote Originally Posted by RobInKuwait View Post
    I don't think you can attribute welfare rates to a president. The program was empowered through LBJs Great Society in the late 60s, however, you can see from the graph that it really took off in the early 70s after he left. You'll see there's approximately 25 years between 1970 and 1996, where 5% of the American population is on welfare.

    5%. That's a huge number of people. That IS an inner city culture. I'd say that 25 years is more than enough time to engender values in a segment of the population, and if they're getting free money, that value is not working, its that the government is responsible for your subsistence.

    I'm not saying this is the only cause of class mobility being lost in the United States, but 5% of the poorest people in the country, losing the values of family, work, and independence certainly didn't help matters.

    Of course you can attribute this to administrative policies.
    Either the implementations empower individuals to wean themselves of dependence or they don't. In between those two distinct opposites the pendulum is definitely swung one way or the other.
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  3. Quote Originally Posted by EasyEJL View Post
    I'll agree that he did some good, HIPAA and NAFTA being good examples, but i'm not sure he didn't do more harm than good. The current financial crisis is largely his fault, the 2001 internet advertising recession was parially his fault, and in many ways 9/11 could be viewed as his fault for not taking action earlier when he had opportunity to. There were a number of prior Al-queda attacks previously including one on the world trade center that weren't followed up on as they should have been, as Clinton was busy trying to entirely dissassemble our military. So i'm not sure that overall his policies were a net positive for us long term. However, I'd gladly take bill clinton again over obama.
    Well, let us not elaborate too much, lest we appear bias. Clinton's administration did not pull the trigger - so to speak - on al-Queda when they had that chance, however: They handed their intelligence to the Bush Administration on a silver platter.

    9/11 was the result of a lack of foresight and arrogant foreign policy approach by Bush and his advisors - really, a misinterpretation of secret intelligence that so characterized that particular administration as a whole.

    In terms of Military, I believe that is simply factually incorrect: In 1999 Clinton called for a 110-billion increase in Military spending over six years; disassemble - or even attempt to disassemble - the Military he did not. While this is a common misconception about the Clinton administration it is simple factually inaccurate. And, in fact, Republicans at the time lauded that particular portion of the Clinton Act (though disliked others, naturally).

    Finally, in respects to the current financial crisis, Clinton's introduction of several pieces of legislation that 'encouraged' large, government-backed Insurance Firms (such as Freddie Mac) to aggressively loan did in fact contribute here. However, I find it quite ironic that as such a proponent of free-markets, rational self-interest, and a 'pick yourself up by your bootstraps mentality', you readily abandon the aforementioned viewpoints in this scenario; apparently, in your eyes, former President Clinton forced individuals to take on mortgages they could not afford!

  4. Quote Originally Posted by Mulletsoldier View Post

    In terms of Military, I believe that is simply factually incorrect: In 1999 Clinton called for a 110-billion increase in Military spending over six years; disassemble - or even attempt to disassemble - the Military he did not. While this is a common misconception about the Clinton administration it is simple factually inaccurate. And, in fact, Republicans at the time lauded that particular portion of the Clinton Act (though disliked others, naturally).
    But this was after his major decreases that funded the large majority of the increased in spending on welfare and education. He cut military spending by a large % his first term. His second term was mainly a fix of some his worst mistakes of his first term....but thats also consistent with most two term Presidents.


    ...plus much of this arguemtn is based on the premise the President actually does have a major impact on the economy. Looking back thorugh history, they rarely have a major effect. There was nothing Clinton did during his terms that had a major impact on the economy (during that time) and as you can see most economic problems/fixes have a pretty long delay in terms of effects.
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  5. Quote Originally Posted by Mulletsoldier View Post
    Well, let us not elaborate too much, lest we appear bias. Clinton's administration did not pull the trigger - so to speak - on al-Queda when they had that chance, however: They handed their intelligence to the Bush Administration on a silver platter.

    9/11 was the result of a lack of foresight and arrogant foreign policy approach by Bush and his advisors - really, a misinterpretation of secret intelligence that so characterized that particular administration as a whole.

    In terms of Military, I believe that is simply factually incorrect: In 1999 Clinton called for a 110-billion increase in Military spending over six years; disassemble - or even attempt to disassemble - the Military he did not. While this is a common misconception about the Clinton administration it is simple factually inaccurate. And, in fact, Republicans at the time lauded that particular portion of the Clinton Act (though disliked others, naturally).

    Finally, in respects to the current financial crisis, Clinton's introduction of several pieces of legislation that 'encouraged' large, government-backed Insurance Firms (such as Freddie Mac) to aggressively loan did in fact contribute here. However, I find it quite ironic that as such a proponent of free-markets, rational self-interest, and a 'pick yourself up by your bootstraps mentality', you readily abandon the aforementioned viewpoints in this scenario; apparently, in your eyes, former President Clinton forced individuals to take on mortgages they could not afford!


    And you can get your focus dirt right here folks!


  6. ...and lets not forget that a good amount of the surplus created in the first 2 years was a result of the first Bush's tax increases....an increase that got him booted out of office.


    "Read my Lips, No New Taxes".


    Economies don't ebb and flow within 4 year time periods.
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  7. Never enough
    EasyEJL's Avatar

    Quote Originally Posted by Mulletsoldier View Post
    apparently, in your eyes, former President Clinton forced individuals to take on mortgages they could not afford!
    Well the CRA forced the banks to write loans to unqualified individuals. Part of the reason the people were unqualified for loans of the size of mortgage loans was because they showed no history of responsible credit use. So although Clinton (and that is showing my partisanship as the republican led congress is also to blame) didn't force individuals to take the loans, he did force the banks to write the loans to them which they previously wouldn't do. My feeling is that the bailout shouldn't have happened, at best the government should have given a special exemption for allowing banks to write off double their actual loss on forclosures if they were all complete by say 12/31/2008 and flushed all this out of the system. The problem hasn't solely been the foreclosues themselves, but its the length of time they have been dragging on, and the slow nature of the sales. The banks are not enjoying the losses they have to take, so they are slow on sales, slow to lower prices which is extending the length of time this will go on.

    I feel that anyone who bought a house they can't afford should be foreclosed on. Its not a case of "people loosing their homes" as for the most part its not like they have been in the home more than a few years. Its no different than someone making 40k a year somehow managing to get financing approved for a Maserati, and realizes they can't make the $1500 a month payment - it gets repossessed.


    And as far as dissasembling the military, as a percentage of GDP our spending on military went down significantly. So although there was an increase that wasn't keeping up with GDP.
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  8. Quote Originally Posted by Kruger View Post
    But this was after his major decreases that funded the large majority of the increased in spending on welfare and education. He cut military spending by a large % his first term. His second term was mainly a fix of some his worst mistakes of his first term....but thats also consistent with most two term Presidents.
    True, I suppose I should have clarified: In aggregate terms, Clinton did not deconstruct the Military.

    ...plus much of this arguemtn is based on the premise the President actually does have a major impact on the economy. Looking back thorugh history, they rarely have a major effect. There was nothing Clinton did during his terms that had a major impact on the economy (during that time) and as you can see most economic problems/fixes have a pretty long delay in terms of effects.
    The next President will have less substantial impact on the direction of the economy than many Presidents of TNCs, and Supra-nationals; the economy, in some respects, is a 'behind-the-scenes' affair, while being presented in large parts as being driven by spontaneous order.

    That being said, the lack of regulation on Freddie Mac and Fannie Mae during his administration directly precipitated the current mortgage crisis. Lending Institutions do not make a profit on Maverick tactics; they stay afloat by making investments they will receive a return on. Lending to whomever is not a market-driven choice, but somewhat the result of Government action.

  9. Quote Originally Posted by Mulletsoldier View Post
    True, I suppose I should have clarified: In aggregate terms, Clinton did not deconstruct the Military.
    In his first 4 years he certainly "gutted it". Tax increases and cuts in miltiary spending created his surplus that so many people like to talk about. That's about the bulk of the Clinton economic policy in terms of balancing the budget. Much of the later numbers are inlfated due to the internet boom.


    That being said, the lack of regulation on Freddie Mac and Fannie Mae during his administration directly precipitated the current mortgage crisis.
    Which is similar to asking Wall Street to regulate Wall Street....

    The sad part is the people who created this mess are creating the fix for it and most people simply have no idea that its occurring.

    Lending Institutions do not make a profit on Maverick tactics; they stay afloat by making investments they will receive a return on. Lending to whomever is not a market-driven choice, but somewhat the result of Government action.

    I'm speechless. Mullet actually repeating what I've been stating for months!!

    ...but in a historical perspective, this was a perfect storm that happens very rarely.
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  10. Never enough
    EasyEJL's Avatar

    Quote Originally Posted by EasyEJL View Post

    And as far as dissasembling the military, as a percentage of GDP our spending on military went down significantly. So although there was an increase that wasn't keeping up with GDP.
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  11. Quote Originally Posted by EasyEJL View Post

    I feel that anyone who bought a house they can't afford should be foreclosed on. Its not a case of "people loosing their homes" as for the most part its not like they have been in the home more than a few years. Its no different than someone making 40k a year somehow managing to get financing approved for a Maserati, and realizes they can't make the $1500 a month payment - it gets repossessed.

    The difference is the Maserati doesn't have an effect on the value of your neighbors car.

    Foreclosures kill surrounding property values.
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  12. Quote Originally Posted by Kruger View Post
    In his first 4 years he certainly "gutted it". Tax increases and cuts in miltiary spending created his surplus that so many people like to talk about. That's about the bulk of the Clinton economic policy in terms of balancing the budget. Much of the later numbers are inlfated due to the internet boom.
    First four years, most definitely! However, as you said, in his later term this trend was in large part rectified.

    Which is similar to asking Wall Street to regulate Wall Street....

    The sad part is the people who created this mess are creating the fix for it and most people simply have no idea that its occurring.
    Very unfortunate, indeed. Wall Street has more blame in this than either the populous, or any administration, however; we must always remain aware to all factors that may precipitate an event. Greed + Government encouragement for unsound loans + an 'American Ideal' of home ownership = current situation.


    I'm speechless. Mullet actually repeating what I've been stating for months!!

    ...but in a historical perspective, this was a perfect storm that happens very rarely.
    One must speak the truth where it is needed! While I am by no means a free-market propagator, banks are the business of making profit vis-a-vis exchanging values; they are not going to habitually exchange high-value investments with low-value returns without some type of external encouragement. Interest Rates are all well-and-fine as profit mechanisms, but they do not serve a function without the initial loan being payed back in full!
  13. Never enough
    EasyEJL's Avatar

    Quote Originally Posted by Kruger View Post
    The difference is the Maserati doesn't have an effect on the value of your neighbors car.

    Foreclosures kill surrounding property values.
    True, but most of the property values over the last x years have been unrealistically inflated, so this is all part of a necessary correction.
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  14. Quote Originally Posted by EasyEJL View Post
    True, but most of the property values over the last x years have been unrealistically inflated, so this is all part of a necessary correction.

    Not necessarily. The majority of the value increase was 2002-2005. Many of these values now are dropping to pre 2000 values. You are seeing a half decade of home buyers get screwed....because of a 2-4% default rate.
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  15. Quote Originally Posted by Mulletsoldier View Post
    First four years, most definitely! However, as you said, in his later term this trend was in large part rectified.
    Wasn't even close. It was minimal at best.


    Very unfortunate, indeed. Wall Street has more blame in this than either the populous, or any administration, however; we must always remain aware to all factors that may precipitate an event. Greed + Government encouragement for unsound loans + an 'American Ideal' of home ownership = current situation.
    It was more government led to greed exploiting it. The ideology behind this wasn't greed. It was a push to be more fair all the way back to Carter. Liberal policies almost always have "good intentions" but often contrast reality.


    One must speak the truth where it is needed! While I am by no means a free-market propagator, banks are the business of making profit vis-a-vis exchanging values; they are not going to habitually exchange high-value investments with low-value returns without some type of external encouragement.
    In short, fines.
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  16. Never enough
    EasyEJL's Avatar

    Quote Originally Posted by Kruger View Post
    It was more government led to greed exploiting it. The ideology behind this wasn't greed. It was a push to be more fair all the way back to Carter. Liberal policies almost always have "good intentions" but often contrast reality.
    there is no fairness in injecting socialism into one of the core areas of capitalism - lending + credit.... The entire purpose of the CRA was in theory to avoid discriminatory lending yet the only evidence of discriminatory lending was a single faulty study done which showed low income blacks as disproportionately being denied loans. When the study was reviewed and credit scores were counted as part of the study, there were no signs of discrimination.
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  17. Quote Originally Posted by Kruger View Post
    It was more government led to greed exploiting it. The ideology behind this wasn't greed. It was a push to be more fair all the way back to Carter. Liberal policies almost always have "good intentions" but often contrast reality.
    Well, this is exactly what I stated, lol.

    The encouragement for shaky loans was government-backed, due to the ideology that each American should own a home. This drive, as you have stated, extended far back prior to Clinton. The greed aspect was the private sector capitalizing (some would say, rightfully so) on this foolish government initiative.

    Almost every governmental body in the 'free world' operates under the assumption that their policies are 'good intentions'; the absurdity of how each position is disconnected from reality is ubiquitous as well. Assuming one position or the other is more connected with reality is an act of bias, rather than objectivity.
  18. Never enough
    EasyEJL's Avatar

    Quote Originally Posted by Mulletsoldier View Post
    Assuming one position or the other is more connected with reality is an act of bias, rather than objectivity.
    True, in a political choice between two candidates you are making the choice of "Do I want to get fcked in the ear, or do I want to get fcked in the eye", its not pretty either way.
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  19. Quote Originally Posted by EasyEJL View Post
    True, in a political choice between two candidates you are making the choice of "Do I want to get fcked in the ear, or do I want to get fcked in the eye", its not pretty either way.
    LMAO.

    Very eloquently and accurately put it; could not have said it better myself!

  20. Quote Originally Posted by Kruger View Post
    Not necessarily. The majority of the value increase was 2002-2005. Many of these values now are dropping to pre 2000 values.
    Not quite.

    I bought my house (1600 sq.ft, 3BR, 2BA, single-floor) in June, 2000. By 2006, the street value went up from 140K to 170k. 5 years before, my sister had sold a house in the same neighborhood for slightly more than half what I paid for mine: 75k. She bought it around '88, when this was "a neighborhood in recovery", for roughly 38k.

    Right now, the much-larger house next to me (5BR, 3BA, 3 floors, in-law suite) has been on the market for months, and they're trying to get 195k. The 'value' of my house now is somewhere between 95k & 120k - at best, 10k less than I owe on it. At worst, the amount of the cash down-payment my ex-wife stole from me.

  21. As I see it, government policies always defend the status-quo, unless events pressure them to take "remedial action". Unfortunately, such remediation is almost always too hasty, poorly-thought-out (if in fact thought-out at all), and corrupts or abuses the status-quo without either preserving or improving it.

    If you really want to look at the genesis of the current trouble, it's necessary to take a much longer view: the social & economic & political aftermath of the First World War very directly resulted in the Crash of '29 & the Great Depression that followed; the steps taken to fight & win the Second World War, the shifts in US policy & global status that grew therefrom, the resulting radical restructuring of US society & the US economy, and the inevitable political shifts that came about in response - all combined in a thousand ways to bring us to where we are. The past IS prologue, and to wave that fundamental fact aside is to deliberately misunderstand our situation & willfully misconstrue the tides that washed us upon this shore.

    Just as much so, if we ignore the repercussions of the 2 World Wars on nations, ethnic tensions and the entrenched powers, we are at the mercy of whatever fabulist may see a temporary political and/or economic prize to be won by dominating & directing the narrative of "what happened and what it all means". If the only narrative we're familiar with is that of "The Christian West vs. the Godless Communist East", then we'll interpret every fact in that context, whether it makes any sense to do so or not. Likewise with the other dominant narratives, such as "American Exceptionalism vs The Ungrateful Hordes", "Capitalism vs Socialism, Here And Abroad", or even "The Selfless Spread of Democracy vs THe Terrorists Who Hate Us For Our Freedom": they are all points of view, ways of making sense of events, and each with powerful political and economic motivations - NOT solid, empirical, objectively-verified truth.

    The main failing of each of these narratives is NOT that they are advanced by economic and political interests for their own ends: it's that each of these leaves a lot of important events - causes AND effects - out of the equation entirely - and this makes it virtually impossible for a citizenry raised on patriotism and team sports to actually get the important facts & arrange them into a narrative that might actually explain some stuff...and give a better view of how to get where we actually want to go.

    Unintended consequences are the rule not the exception, and they, as much as - or more than - any explicit policy decision, have brought us to our current sorry mess.

    'Course, that's probably just me....
  22. Never enough
    EasyEJL's Avatar

    for some reason, that reminds me of the most recent batman movie, do we get the president we need or the president we deserve?
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  23. Quote Originally Posted by Kruger View Post
    Not necessarily. The majority of the value increase was 2002-2005. Many of these values now are dropping to pre 2000 values. You are seeing a half decade of home buyers get screwed....because of a 2-4% default rate.
    The people who really get screwed are the people that bought in 2006 and early 2007, when the market was peaking.

    Trust me, I know.

  24. well - *and* those who trusted a fracked-up spouse
    (trust me: this one *I* know...)

  25. Quote Originally Posted by EasyEJL View Post
    there is no fairness in injecting socialism into one of the core areas of capitalism - lending + credit....
    Fairness went out the window a long time ago not to mention there have been many instances in which this government has interfered and the results were quite good.


    The entire purpose of the CRA was in theory to avoid discriminatory lending yet the only evidence of discriminatory lending was a single faulty study done which showed low income blacks as disproportionately being denied loans. When the study was reviewed and credit scores were counted as part of the study, there were no signs of discrimination.

    I am fully aware why the CRA was created and the majority of the accusations of discriminatory lending was in the early 90's...20+ years after the CRA was enacted.
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  26. Quote Originally Posted by BodyWizard View Post
    Not quite.

    I bought my house (1600 sq.ft, 3BR, 2BA, single-floor) in June, 2000. By 2006, the street value went up from 140K to 170k. 5 years before, my sister had sold a house in the same neighborhood for slightly more than half what I paid for mine: 75k. She bought it around '88, when this was "a neighborhood in recovery", for roughly 38k.

    Right now, the much-larger house next to me (5BR, 3BA, 3 floors, in-law suite) has been on the market for months, and they're trying to get 195k. The 'value' of my house now is somewhere between 95k & 120k - at best, 10k less than I owe on it. At worst, the amount of the cash down-payment my ex-wife stole from me.

    Yes, quite. The annual percentage increase from 2002-2005 was double and almost triple that of the 90's. In 2004 it was 9.3%

    The majority of the increases in house values, especially in the most hardest hit (Florida, Arizona, Nevada and California) peaked from 2002-2005 and it was in the double digits.

    The average median house price from 2000-2004 jumped 50k. 4 years. It took less half the time then was seen earlier (1990-2000).

    Your price range was the least effected.
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  27. Quote Originally Posted by BodyWizard View Post
    well - *and* those who trusted a fracked-up spouse
    (trust me: this one *I* know...)
    Ouch

  28. Quote Originally Posted by Kruger View Post
    Fairness went out the window a long time ago not to mention there have been many instances in which this government has interfered and the results were quite good.
    When?!

  29. Quote Originally Posted by RobInKuwait View Post
    When?!


    The RTC actually made money during the S&L crisis....and is the basis of the current bailout.
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  30. Quote Originally Posted by Mulletsoldier View Post
    Well, this is exactly what I stated, lol.

    It sounded as if greed preceded government in your statement. (Greed + Government). If that wasn't representing a time frame of events, then you're correct...it would be similar.


    Assuming one position or the other is more connected with reality is an act of bias, rather than objectivity.
    No, its merely an observation that is shared by many.
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