patrick.net

Pat, I dont understand how you are calculating rent of 3% yearly of total home value? In a hard hit area like Jacksonville, houses that are worth 80-90 K in real today dollars are renting for 950 all day which would be closer to 12 percent. At 3-4% for renting it should be 300-400 per month right? And buying that property should be only about 500 a month right?

Hi William,
that 3% is true around me (SF Bay Area) but I can believe it's 12% in Jacksonville.

Sounds like a good investment opportunity in Jacksonville.

Patrick, a couple of points: Libertarians represent freedom better than socialists, who believe in giving up freedom and rights to politicians and bureaucrats. In fact, libertarians are the classical "liberals" (meaning FREE) - I don't know why socialists in America usurped that name.

Secondly, are you sure only conservatives use *FEAR* to control everyone? Don't socialists do that with issues like global warming? So, whether a "fear" is real or just a controlling mechanism seems to depend only on the point of view on a particular topic.

Thanks for the site, Patrick.

Personally, I'm more of a libertarian, but I cringe at labels in general, though I seem to have no problem applying them to others :-) I call myself a socialist just to mess with people.

I don't think a basic level of socialism in security, education, and healthcare means giving up any significant freedom. In fact, it could be argued you are more free without deep worries about those things.

Hey, our entire military is funded by tax money, so it's socialist! Right?

Fear in general is indeed an effective control technique, and I agree that the global warming lobby is trying hard to use it. Rational warnings are one thing, but it is spin when you try to manipulate fear for gain. As in pushing your tax burden onto working people.

Well said, Patrick! I like that freedom bit. I think you've got something with that land tax too! Unfortunately the "Royal Libertarians" won't be with you on that one! They seems to be all in favour of land rorting and speculation, except the few with Georgist inklings. Great site, too, mate!

Cheers,

Bryan Kavanagh

....Hey, our entire military is funded by tax money, so it’s socialist! Right?.....

I'm no socialist. I'm a warrior! And an HP Nonstop Consultant.

http://www.jvolstad.com/pictures.htm

Jim Volstad
Millbrae

"The very rich pay only 15% on the millions they get without working (dividends and capital gains) while you are forced to pay 28% on the little money you actually earned through hard work. "

It was that same rich that pumped some 100Billion into tech companies in the aftermath of the 1989-94 recession that gave Patrick a career and a job in Silicon Valley.

Does anyone think if it wasnt for Wall Street, would California be the 8th largest world economy or still planting lettuce near the Mariani's farms in Cupertino.

As Steve Jobs told John Sckully then President of Pepsi, "Do you want to make sugar water or change the world". And this had been going on for the past 40-50 years due to private capital.

Hey, I'm not opposed to capitalism. I love it.

I just think the current tax system is exactly opposite of fair, with the poorer people paying a greater percentage of their income in taxes.

But there should not be any income tax, really. Only a single tax on land values (not on improvements).

With a single tax on land values, and no tax at all on income, dividends, capital gains, or sales, I think capitalism could really flourish, and be very fair.

Amazing quote I ran across just last night in a biography of Benjamin Disraeli:

But the basic political insight of Young England -- that triumphant middle-class liberalism could only be defeated by an alliance of the upper and lower classes, in the name of traditional English values -- was one that Disraeli took very seriously.

Wow, that was in 1845 or so. So the strategy of using "values" to get the poor to vote for their continued exploitation was in use even then.

I find your views fascinating, and I would like to subscribe to your newsletter.

Here's the newslink subscription page:

http://patrick.net/housing/subscribe.php

Patrick looks a little young in his photo. I can't beleive were taking real estate advice from a 12 year old. You should trust people like me who lick water out of a bowl and chases my tail.

You flatter me! Only 9 years old actually. Must have started the blog when I was 4 or so.

Some dogs are smarter than some people.

Patrick, you're a very smart man. Who says that hackers won't rule the world? Ignore zetabeos, he's using standard conservative talking point #123: "if you increase taxes on the rich, they'll take their money and go home (stop investing in business)."

Nobody is going to stop investing in business because capital gains taxes go up. They were investing before capital gains taxes were decreased.

In any case, I would also dispute the fact that the tech stock bubble did anything but hurt our industry. I personally have been working in IT as a software developer since 1989, long before any Internet bubble. All the bubble did was convince millions of unqualified ITT tech grads that they too could make 6 digit incomes as a web designer (lol). It took about 5 years after the crash for all of those wannabe's that weren't interested in technology at all and weren't qualified to leave the business. But while they were here, they drove all of our salaries down by flooding the market with their resumes, which weren't worth the paper they were printed on.

Good riddance I say. If you want to work in IT, you'll find it's a thankless job. You rarely get congratulated for an all night coding session to track down that one last bug. The only reason to work in IT is if you're a masochist or you truly like technology.

If you want to work in IT, you’ll find it’s a thankless job. You rarely get congratulated for an all night coding session to track down that one last bug. The only reason to work in IT is if you’re a masochist or you truly like technology.

The biggest problem I see in IT in businesses is they see IT as an expense, not as a benefit. Since IT doesn't earn any money for the business, often our budgets are short changed. I would like to see how much it would hit there bottom line if they went back to pen and paper. :-)

In my last job at a casino in IT, a new owner took over the company and they asked me to come up with an IT budget for how many computer's we needed for the year. Since a five year life cycle is pretty much standard, where you replace 1/5 of your equipment so by the 5th year the oldest machines are being replaced, I came up with 60 computers and 10 printers, which was too tight as it was, since the company had over 500 computers. Managements answer? Pick your worst 10. Needless to say I was out of there first chance I got. And this was well before the credit crunch/market crash, I can only imagine how bad things are now.

The biggest problem I see in IT in businesses is they see IT as an expense, not as a benefit. Since IT doesn’t earn any money for the business, often our budgets are short changed. I would like to see how much it would hit there bottom line if they went back to pen and paper.

Absolutely true. IT is just another expense for most businesses, unlike sales who actually generate money. Never mind the fact that the sales guys never do any of the actual work involved in delivering any product, they just sit back and collect a commission check and take clients out to eat. Anyway, I found out it's a good idea to get into an industry like health care that makes money hand over fist, and sells health care IT solutions. There is a lot of money flowing from government into health care IT right now.

It's surprising to me that a casino would be so stingy with their IT. I've heard stories of the amazing amount of money some spend on security...

Hi William,

that 3% is true around me (SF Bay Area) but I can believe it’s 12% in Jacksonville.
Sounds like a good investment opportunity in Jacksonville.

This is actually the norm in most parts of the country now. The bay area is just "special".

My dad finally got back pay for his pension that had been held up for over 2 years a few weeks ago, which came out to around $45000. That's over half of what it would cost him to buy the place he's currently renting for $600 a month. The owner offered to sell it to him for $80k if he can make an all-cash offer.

lyoungblood says

It’s surprising to me that a casino would be so stingy with their IT. I’ve heard stories of the amazing amount of money some spend on security…

Security and Surveillance are different departments in the casino. Where the Money is they spend the cash to install good quality cameras to protect it. But else where good luck. When I first started in the casino 20 years ago, a women was killed in the parking garage. Despite all the "Cameras" you see in the parking garage they didn't have one decent picture of the murderer. Most of the camera were dummy cameras and the others where of such poor quality the video sucked. But try and sneak a dollar bill out of the count room or a casino chip off of a blackjack table, they have you covered from 6 angles with high resolution color cameras.

Test comment from a different incarnation of Patrick.

Another test comment by badraig, to see if Patrick gets an email notification that someone wrote on his wall.

Yes, when someone writes on your wall, you get an email. Unless you choose not to in your profile. Good.

Hello Folks, I love this Site.. I own RealtorSucks.com and I am Trying to Get attention to ObsidianFinanceSucks.com Attorneys are sucking up millions in fees - they are bankruptcy trustees and it is a shocking mess..

Well, Crystal. Self proclaimed Real Estate Whistleblower. Owner of Realtor Sucks.com. I clicked over to your site and was less than impressed, what with the ads for Reservatrol, Bank of America, an IRA site, Foreclosure trainings, multiple realwhores, a RE Broker school, Short Sale Magic (promises I'll make $100k in 12 months or I'll get my money back - I'm sure there's a catch), lisore education, Dex online, Appraisal company, how to pass the RE exam, Seized home auctions, health insurance, ad nauseum.

Instead of trolling here to get attention for your new site, you may want to access a spell checker and learn basic grammar. IMHO, of course.

Interesting. I agree with most of your financial logic. Completely congruent with conservative fiscal policy. I'm a little disappointed with your stereotypical understanding of the conservative viewpoint, however; it's a classic marxist approach, i.e., you view the world completely in economic terms. Justice, morals, ethics are all understood in economic terms.

I actually agree with you about the taxes for the very rich. That's why I believe in the very CONSERVATIVE policies of Steve Forbes and his FLAT TAX. If you were to run the numbers, the flat tax is actually the ethical form of tax (and it would be on SALES, not income: I agree with you on that, as well).

Actually, I think you are a conservative FISCALLY, but a socialist, er, SOCIALLY.

However, you seem to equate "conservatism" with Christianity. This is a mistake. A worldview inspired by Christianity actually applauds your views against forcing moms into the workplace in order to keep families from participating in civic events and voicing our concerns. Policies that place unreasonable taxation on families, the "marriage penalty tax," etc ... are all against a Christian-inspired view, IMHO. Ironically, these policies are all liberal--not conservative--social policies that force mothers into the workplace and keep them from participating in the political process. That is why I agree with the conservative tenent that "a government big enough to give you everything you want is also big enough to take away everything you own." And history shows us that 100% of the time, that is what happens.

Some of your statements are perplexing. You call yourself a ("qualified") liberal, yet you agree with conservative policy that the income tax, as well as Fannie Mae (a liberal F.D.Roosevelt--i.e., "Obama I", invention), should be eliminated. Both are marxist policies created by American liberal administrations over 100 years ago. So I'm confused with your "liberalism." At it's core, it sounds like classic conservatism to me.

Where you are classically "liberal" is your social views: "Liberals say that everyone should be free to live life how they want to, as long as they don’t hurt anyone else. The people dictating the conservative agenda ... manipulate your feelings about patriotism and religion ... [T]hey create fear to control you ... "

Oh my. My thirteen year old son says the same things about me, so I will answer this childish notion (which characterizes most of the liberal opinion) on this level. My 13 year old, too, wants to do "whatever he wants as long as he hurts no one." Since when he is making the rules as to what is right and wrong? Since when is some standard of "hurting" someone even a part of determining what is "good" or "bad?" And if it is a part of it, whose definition of "hurting someone" do we use? Take a rapist: do you not think his definition of what constitutes "hurting someone" differs even a little bit from yours and mine? To gloss over these critical principles of the conservative agenda is destructive. It makes sense to me once your denial, however, of a reality that transcends our own, is taken into account.

I find it comical that conservatives are smeared with this indictment of using "fear" when the current, most liberal administration in U.S. history has done nothing but use fear to get legislation passed that completely socializes our nation, will ultimately remove all privacy and private property, and imposes a "one world government" pre-cursor on Americans.

Anyway, I find, typically, your understanding of conservatism and Christianity to be somewhat immature, uninformed, and elitist (condescending). But that's the world we live in. No offense taken--I completely understand your statements once, again, belief in a reality that transcends our own is removed--then sure, what you say makes perfect sense.

I am reading more of your comments.

Makes sense now. You are a libertarian, which, truly, except for santicy of life issues, is the closest ideology in a political sense that we have to Christianity, IMHO.

Now there's the whole issue about whether you vote your conscience and 'waste' your vote on an unelectable party, or vote Republican because they are the closest morally, economically, and socially to one's belief system.

Dear Patrick:
I enjoy reading the facts you distribute and wish there was a way that I could know for sure that what you say about the rich is true. Don't the highest incomes pay around half the taxes? Where can we get the real truth about that statistic. It seems like its all up for grabs when it comes to that kind of government statistic. Some "facts" state one thing, other "facts" state the opposite. How can we get proof of the real facts?

Hi John,
depends on how you look at it. Tax rates on the rich are actually much lower than the tax rates on you and me. They pay 15% tax on most of their income (cap gains and dividends) while you and I pay 28% or more.

Also, we actually work for our money. Capital gains and dividends are "passive" income. They just sit there and it rolls in, as a rule.

Thanks for the site Patrick. I agree with your approach for the most part, though the labels escape me and seem to bind up everyone else.

I had more hope than was warranted with Obama and still know he was the best choice of the two, but from the moment that the same old shills Larry Summers and T. Geithner lined up for the big econ jobs, it was clear we were heading for more of the same. The insane spending and borrowing of the last administration got our asses in a sling and the new administration is incapable of administering the tough medicine needed to cure what ills.

But no matter how much the government dips its toes in and screws up the housing markets, I believe the drop in home prices is gong to continue for several years still, especially as you go into the mid and high markets. I live in Los Angeles, so a practical mid would have to be around $450K and high over a million. I see those dropping another $25% before it's said and done. I believe the lower end of the market may be at or is close to a bottom since it has become truly affordable. I bought a foreclouse in a "starter" market two months ago. Because I bought the place below market, I don't think that the value is going to drop from where I bought it, because this part of the market has already been buffetted by waves of foreclosures and is very soft

Proportionately, I believe you will now see a rise in mid-level foreclosures, if that's not already happening. When these broke yuppies realize there is no way out of the fix they're in but to say goodbye to whatever equity they had or thought they had and capitulate, then that market will begin to bottom. This will take quite a bit of time and a sea change in psychology as folks leave the land of denial. If you have a good job and your loan is fixed, you can postpone the reality that your house is a black hole sucking up your money for a long time. Others lose a job and are so close to the edge they have to face the music sooner and get foreclosed on. Some of the smart ones realize they've been caught on the wrong side of this mess and do whatever they can do to get out and star over. Still, altogether, years of one by one, we give up.

Hi Patrick-

Great info resource! I have a sneaking suspicion that it is the goal of the government to inflate the living heck out of the dollar so that, magically, all the home owners will no longer be upside down on the homes. Of course, this solution just robs us all blind but ultimately, I don't see any other government action long term.

Of course I have no idea when the hyper-inflation will happen. Just like 2004-05, it was plainly obvious that there was a huge disconnect between average income and average home and average family spending. It did eventually crash but there seemed to be a long time when the music stopped and lots of folks were still dancing.

So, now we see the gov't subsidizing housing, new vehicle purchases, etc. so this tells me that the super-inflation will happen but we don't know when of course. So, I am thinking that buying a home in the next year or so might be prudent since those with cash will be robbed but those with debt will be helped / subsidized if you have a fixed rate mortgage.

Also, long term interest rates have to rise- they must cover: inflation, profit on investment, and risk of default. Once again, at this time, I can't imagine that interest rates come close to covering either inflation or risk, much less all three items listed!!!

So, I continue to fight with myself about buying another home now.

A test of the image upload system...

johnnicinco says

Dear Patrick:
I enjoy reading the facts you distribute and wish there was a way that I could know for sure that what you say about the rich is true. Don’t the highest incomes pay around half the taxes? Where can we get the real truth about that statistic. It seems like its all up for grabs when it comes to that kind of government statistic. Some “facts” state one thing, other “facts” state the opposite. How can we get proof of the real facts?

Patrick omitted a couple of facts in answering. Self employed people pay self employment tax which is equal to your social security tax and the employer's contribution. Technically that is part of your pay as well. In any case, a lower income person pays an additional 15% of their wages for Social Security and Medicare. The 12% for Social Secuirty caps out at about $100,000. Therefore the marginial income above $100,000 is not subject to Social Security and so basically is being taxed at 12% less although, higher rates apply as your income climbs to higher brackets.

The other injustice on working people is that passive income doesn't have self employment tax at all. Capital gains (passive as well, no self employment tax) rates are lower than income taxes so income from passive activity is taxed very lightly. There is no self employment tax for rental income (most cases), interest income, dividends and S corp distributions. In addition you have lower rates for gains like sales of stock long-term, real estate (primary homes have no gains tax in most cases) or other gains such as gold.

We should ideally eliminate ALL income tax, or at least raise the taxable minimum to $35K per year AND set a maximum labor tax of 30% for the highest paid laborers. Every time a tax cut gets discussed in congress, they use a cost/benefit to our deficit utilitarian type of debate to make their decision. What ever happened to right/wrong, or constitutional limits of government? An income tax is a tax on labor, as is the social security/Medicare tax. Taxing labor lowers the resources each employee may use on himself while also raising costs of production greatly lowering the employees' level of net consumption. People mistakenly hold this against the evil corporations, as the government demagogues use the business execs and shareholders as scapegoats. All the while the real culprit, the federal government, gets more resources which they may use to justify their own existence and buy votes.

CBO - BINGO! You hit the nail on the head. Eliminate all income tax. Our country did very well and had virtually no inflation for approx our first 150 years...with NO income tax and sound money.

Good question... what happened to the co0nstitutuonal limits of gov't ? Well, its pretty clear NOW that violating the law (the conaswtitution) has very real conseqwuences. Something politicians never seem to be concerned about.

Yea, lots of people like to denounce corporations and business's. However those are the very entities which provide jobs, pay taxes and many (not all) produce things (unlike gov't which produces nothing).

Correct again...gov't always accuses the greerdy corpotation, greedy business and the greedy buiness man of being the guilty parties - so they can heap on more oppressive laws, rules, regulations, statutes and at times even more taxes. This is MAJOR reason companies and jobs go "off-shore". Its a 100% reaction t0 gov't over regulation. The term frequently used is "UNINTENED CONSEQUENCES," again, something that politicians don't seem to care about. Politicians care only about what there new law looks like to the general public - but are unconcerned about the results of their actions. Who is John Galt?

And correct again...the real culprit is the GOVERNMENT (a single body - two headed beast). Don't get me wrong. I'm in favor of gov't ...you can't run a country without it. It does assist in coordinating necessary services BUT gov't has MUTATED. The SERVENT has become the MASTER, and America is suffering because of it.

And finally CBO -you are correct, the gov't sucks up taxpayer money to justify their existence, and give handouts to dependents in order to buy votes. That reminds me of this very asstute saying. "If you rob Peter to pay Paul, Paul will ALWAYS VOTE FOR YOU."

The solution to our problems is to return to LIMITED Government, follow the law of the land (the Constitution), and restore the countless freedoms we have lost by eliminating the laws which caused the loss of our freedoms in the first place.

Thought for the day: "if we have more laws than other countries - are we truely more free ?" Honest Abe.

P.S. I was going to hit spell check and can't find it - darn I hate when that happens. Just read through all the mistakes - content is what matters.

'BAD SPELLERS OF THE WORLD UNTIE!" Abe

There's a good article written by a Pepperdine econ prof that discusses this idea.

"Greedy-Bastard Economics
by Gary Galles

If your landlord or apartment manager hasn't gotten around to fixing your garbage disposal for weeks, how carefully do you think about why? If you are like many people, you simply blame your landlord or manager, rather than inquiring further.

This is an example of greedy-bastard economics: rather than tracing their understanding of something they dislike back to its ultimate source, people only trace it back until they get to someone they can demonize as a greedy bastard. That is, scapegoats become what Frederic Bastiat called "what is seen," while the real cause remains "what is unseen." Unfortunately, that real cause is frequently the coercive hand of government, moving control of resources to itself, and the blame for the resulting consequences to others.

In the case of rental housing, rent control rather than the "greedy-bastard" landlord may be the real cause. Rent control undermines landlords' incentives to provide the services tenants want, because it denies landlords the ability to receive adequate compensation to make their efforts worthwhile. What landlords are blamed for is in fact one of many predictable, adverse consequences of rent control, including housing shortages, increased discrimination, increased uses of subterfuges to evade the controls (like tying willingness to rent to astronomical key deposits or the simultaneous rental of furniture, parking or other goods), reduced construction, and deterioration of the housing stock.

All these predictable effects follow without landlords being any greedier than anyone else (although rent control might attract greedier people, who are more willing to do what it takes to get around the regulations), which should properly placesthe blame at the feet of the government body that imposed the controls. But instead, government gets to control resources without paying for them, while "greedy-bastard" landlords who would otherwise look for ways to cooperate with renters get the blame.

Rent control is not the only example of the adverse effects of price controls. All price ceilings reduce the quantities traded, wiping out the wealth that would otherwise be created by mutually agreed-upon arrangements. They also increase discrimination (and evasion efforts) by lowering the cost of saying "none for you." And people blame the greedy bastards they deal with directly rather than the greedy bastards in government who are the actual cause and who impose the cost of doing their will on others without compensation.

Price floors such as minimum wage laws, Davis-Bacon "prevailing wage" requirements (which far exceed prevailing wages), and agricultural price supports push allowed prices up instead of down. However, they also increase discrimination (by buyers rather than sellers), and reduce the quantity of mutually agreed arrangements and the wealth they would have created (by making buyers willing to buy less).

All of them increase the costs borne by producers, and therefore by consumers and taxpayers, but place blame on producers rather than the policy makers responsible. And as with all price controls, they make prices, which are the signals of relative scarcity by which social cooperation is maintained, misleading indicators. Market prices are messengers of the effects of government restrictions, but they are not themselves to blame.

Hidden taxes are another mainstay of greedy-bastard economics. They give the government resources and control, but give the blame to those whom people deal with directly. The employer half of Social Security and Medicare is a prime example. Employers must pay 7.65 percent directly to the government, on top of the wages they pay employees.

"Market prices are messengers of the effects of government restrictions, but they are not themselves to blame."But since employers know they must bear those costs, they offer less pay for a given level of employee productivity. The consequence is anger at employers for not paying employees what they are worth, when any such effect is actually the result of compensation being siphoned off by government.

Similar effects are triggered by employer-paid unemployment, worker's compensation insurance, and other nonwage forms of compensation. The resulting government rake-off from employees' total compensation leaves them less to take home, triggering resentment at employers. But government claims credit for all the benefits those dollars finance.

Corporate taxes, which economists particularly object to for the large distortions and costs to society they cause, are another major example of greedy-bastard economics. To the extent that those higher costs result in higher prices, the corporations are demonized for greed, but government gets the resources. Similarly, to the extent these costs lead to reduced wages, workers blame employers, but government gets the resources. In addition, these taxes reduce the after-tax rate of return on corporate investments, reducing the level of those investments, slowing the growth of worker productivity and the income it would generate.

Similarly, taxes imposed on "not me" are ways for government to claim credit for the resulting spending without the blame for the tax burden. America's highly disproportionate, "soak-the-rich" income-tax burdens are the largest and most obvious example. These income taxes not only finance the largest fraction of government spending, but also allow almost two in five households to have negative income taxes, largely because of the refundable Earned Income Tax Credit.

In addition, taking away a great deal of the after-tax incentive for high-skill individuals to bear the risk and put in the effort to find ways to benefit others reduces the value of output supplied. Thus, it acts as a tax on others when the reduced supply of productive services raises prices.

"Not me" taxes include hotel room taxes, which are largely imposed on people from out of state to finance benefits for residents. They also include import tariffs and quotas, dumping restrictions, and other barriers to international trade. By the time the goods reach consumers, their burdens are already included in the price (as with value-added taxes in other countries), and sellers can once again be blamed for the revenues government receives.

Government mandates and regulations, whose estimated burdens exceed $1 trillion a year, also take advantage of greedy-bastard economics. The web of restrictions is vast, running the gamut from Sarbanes-Oxley burdens to low-income housing set aside to qualify for permission to build, yet buyers are only dimly aware of the burdens these rules impose on producers.

But whatever they are called, those regulations give government added control over resources. And, since they act like taxes (an employer doesn't care whether a $100,000 burden of dealing with government is called a tax or a regulation), they raise costs and prices to others, for which suppliers will largely be blamed.

Similarly, government barriers to entry, like licensing regulations, restrict supply and competition, but focus complaints about prices and shoddy performance on those in the industry. Antitrust laws, which often restrict competition in the name of protecting it, are used to demonize efficient firms and practices. Such laws let the government claim credit for consumer protection even as they undermine the competitive process that is the real protection.

Inflation is another page from the same playbook. While it is caused by government expansion in the money supply, those in government can always point fingers at some greedy bastards other than themselves, whether it is businessmen raising prices or workers demanding higher wages in response.

Greedy-bastard economics is also used to separate responsibility from blame for financial bubbles. For instance, the housing and bad-loan bubble was widely blamed (especially by those overseeing government regulations) on greedy loan originators and unregulated markets. This blame was used to promote increased government intervention as a cure.

"Greedy-bastard economics is also used to separate responsibility from blame for financial bubbles."But government's hand was everywhere you looked in any serious attempt to understand the alleged "market failure." The Fed's maintenance of interest rates far below what the level of savings would actually sustain made housing falsely profitable. Allegations of redlining led to implicit government requirements that banks lend to borrowers who didn't meet conventional financial standards, and whom banks knew often couldn't repay their debts.

Under pressure for financial malfeasance and other failings, Fannie Mae and Freddie Mac made it clear that they were in the market for "bad" loans in a big way (well over $1 trillion). Given that their hidden subsidies (particularly implicit government guarantees worth over $2 billion a year and lower capital requirements than the rest of the financial system) had made Fannie and Freddie by far the dominant players in mortgage lending, this declaration told others that bad loans were far safer than they really were. No matter how bad the loans, Fannie and Freddie would take them off your hands. When that implicit guarantee suddenly dissolved, market participants (worldwide, not just in the United States) were suddenly faced with the real risks and far-lower values of these assets.

Even the latest healthcare "reform" reflects greedy-bastard economics. Pundits blame insurance companies for rising healthcare costs, yet ignore the plethora of government mandates and restrictions, not to mention subsidies to subgroups of citizens (e.g., the elderly or poor), which raise the costs to everyone else. Similarly, insurance companies are blamed for excessive administrative costs, even though these are directed largely at dealing with fraud, government impositions, and the supposedly obvious waste of profits.

Having tarred insurance companies with the blame, government now proposes more greedy-bastard economics as the solution. Such policies will further increase costs that can be blamed on insurance companies: Companies won't be able to deny coverage for preexisting conditions, which means they must pool higher cost customers in with lower cost customers, thus requiring higher premiums. They will not be able to control risk by putting annual or lifetime caps on coverage, similarly raising costs that must be borne by all policy holders. They will be required to include certain preventative care with no extra charge, and to limit out-of-pocket costs, which also may maim the private markets for catastrophic coverage.

$20 $14

"Government has no power to eliminate scarcity."In reality, scarcity is the cause of many of the difficult choices individuals face. However, governments prefer to find "greedy-bastard" bogeymen to blame. This allows governments to play as saviors rather than as the parasites causing the problems in order to benefit favored constituencies at others' expense. But government has no power to eliminate scarcity.

Government, beyond its role of defending voluntary arrangements against force and fraud, only makes the effects of scarcity worse. It substitutes decisions by people with worse information and incentives, backed by the power of coercion, for decisions by people with better information and incentives. That is why it is actually government "solutions" that increase the influence of greedy bastards in society. After all, "greedy bastard" is an excellent description of someone who demands power over others without cost or their willing consent; and falsely blames others to gain it."

CBO - BINGO! You hit the nail on the head. Eliminate all income tax. Our country did very well and had virtually no inflation for approx our first 150 years...with NO income tax and sound money.

Good question... what happened to the co0nstitutuonal limits of gov't ? Well, its pretty clear NOW that violating the law (the conaswtitution) has very real conseqwuences. Something politicians never seem to be concerned about.

Yea, lots of people like to denounce corporations and business's. However those are the very entities which provide jobs, pay taxes and many (not all) produce things (unlike gov't which produces nothing).

Correct again...gov't always accuses the greerdy corpotation, greedy business and the greedy buiness man of being the guilty parties - so they can heap on more oppressive laws, rules, regulations, statutes and at times even more taxes. This is MAJOR reason companies and jobs go "off-shore". Its a 100% reaction t0 gov't over regulation. The term frequently used is "UNINTENED CONSEQUENCES," again, something that politicians don't seem to care about. Politicians care only about what there new law looks like to the general public - but are unconcerned about the results of their actions. Who is John Galt?

And correct again...the real culprit is the GOVERNMENT (a single body - two headed beast). Don't get me wrong. I'm in favor of gov't ...you can't run a country without it. It does assist in coordinating necessary services BUT gov't has MUTATED. The SERVENT has become the MASTER, and America is suffering because of it.

And finally CBO -you are correct, the gov't sucks up taxpayer money to justify their existence, and give handouts to dependents in order to buy votes. That reminds me of this very asstute saying. "If you rob Peter to pay Paul, Paul will ALWAYS VOTE FOR YOU."

The solution to our problems is to return to LIMITED Government, follow the law of the land (the Constitution), and restore the countless freedoms we have lost by eliminating the laws which caused the loss of our freedoms in the first place.

Thought for the day: "if we have more laws than other countries - are we truely more free ?" Honest Abe.

That's one function I don't have. Not sure how hard it is to implement, but I'll add it to my to-do list.

just write the comment in word first, then spellcheck, then copy and paste into the forum comment section. writing in word is easier anyways.

Or use Ubuntu.

Auto spellcheck for every and any text field. . . Nice, 'cause I cant spell for my life.

I have Ubuntu Linux on my laptop, and it's great, but that doesn't help the other readers. Mac also seems to spellcheck every text field.

I can't choose the server OS at my ISP. It's some version of Linux, but can't tell which one. Not sure if there's any spellcheck plugin for Wordpress, or maybe I already have it and just need to turn it on somehow.

Yesterday I coodant spel callig stoodint, to day I are won... (my fav)