patrick.net

My goodness, when will it ever end? Spend, spend, spend, bailout, reward the un-responsible, rinse, repeat.

Why is it that almost every state has a balance budget amendment, yet we can't get federal constitutional amendment for a balanced budget?

A balanced budget requirement sure would put a damper on a lot of the recent shenanigans.

MCM says

A balanced budget requirement sure would put a damper on a lot of the recent shenanigans.

We needed it about 9 years ago. The budget was balanced before Bush took office...

tatupu70 says

We needed it about 9 years ago. The budget was balanced before Bush took office…

Then you support one?

" The administration will propose allowing more mortgages to be refinanced into FHA guarantee programs if the borrower is current on the loan, one of the officials said. The lender would have to cut the amount owed by at least 10 percent to less than the value of the home. The first and second mortgages combined would have to be no more than 115 percent of the home’s value. "

Hell isn't this pretty must 20 to 30% of all outstanding mortgages? I would even attempt to get a modification if they are giving away FREE money! Pretty much every mortgage modification plan I've seen so far doesn't nothing to reduce the original debt. The Bank of America plan they "temporarily forgive 30%" of the outstanding balance, which allows you to get lower payments, since the outstanding principal is less. Which indicates to me at some point your going to have to pay back the temporary forgiveness amount. Other plans they cut the interest rate a few points for a few years and most of them just tack on any money your saving now to the end of the loan making the terms longer.

But is the fed is going to give the banks money to reduce outstanding loan amounts, than it would indicate to me it's money you don't have to pay back, it's FREE money. I'll be watching this plans details very closely, if they are giving away free cash, I'll be first in line. :)

It really does not matter anymore. Mo matter what Government and/or FRS does it can't change one very simple fact: we've got about 20 millions more houses than we can afford. Neither our economy, nor existing natural resources can support that many of them.

By subsidies and currency manipulations they still can steal some more resources from productive parts of our society, but it won't last too long for there are not too much left, and any time they do it they need more.

Quit your Jobs Comrades, and live off the bosom of Obama's milk!

Tenouncetrout says

Quit your Jobs Comrades, and live off the bosom of Obama’s milk!

Why quitting? Many our salaries will come from this milk rather than from productive work we do.

Just got $16K bonus mainly because our management is counting heavily on milking Obama.

Well, sooner or later they will recognize they don't need me anymore, since their income won't come from what I do. OK, they will lay off me. At least they will pay a little bit for this.

michaelsch says

Many our salaries will come from this milk rather than from productive work we do.

One number that has caught my attention is the $6.5T in total government spending this FY.

This may be double-counting some federal transfer payments, but $3.5T for federal is in the pot leaving $2T+ for state & local doesn't seem out of line.

At $50K per yob and $6T as the number, that's 120 million yobs on the government teat either directly or indirectly, the vast majority of the workforce.

Something doesn't make sense. I don't understand where the money is actually going. I can see pallets of FRNs parked in underground bunkers in Iraq still, but that can't be that significant.

If the national economy were a Thunderbirds show, the previous team left the aircraft in this attitude:

http://www.youtube.com/watch?v=dohKKp0EvTs#t=23s

I don't have any particular advice or criticism to Obama as to concrete policies to reverse us out of this situation we were allowed to create 2003-2006. Anybody who says they know what to do is either an ideologue or is talking their book.

We need to create more wealth and consume less wealth. And we also need to understand what wealth really is in the first place.

Valuation is not wealth, for one.

michaelsch says

Just got $16K bonus mainly because our management is counting heavily on milking Obama.

You got a bonus before your company actually registered the profits?? That's a little unusual... Not good business practice--rewarding employees because they hope to be profitable in the future.

We're not out of the woods yet, economically. We still have a giant mess and a possible systemic failure coming down the pike. I don't believe we've entirely side-stepped a depression. Yes, Wall Street may have rebounded but there are no more jobs being created anywhere. I work with people who are on the absolute bottom rung of the socio-economic ladder. They're sinking fast and have no life preservers.

When I started this job about 4ish years ago the people with whom I work (homeless 18-25 year olds who were raised here in the Bay Area) could at least find menial labor jobs at minimum wage if all else failed. Now, government workers who are on furlough and people who used to be "middle management" in corporations have taken these jobs and the people with whom I work who have a very short or non-existent work history have no where they can turn to enter the world of employment.

We are beginning to lose this generation to hopelessness and despair. I don't know that I could have done any better than the young adults with whom I work if I had to face the employment market of 2010. And I was a "go getter" who often had 2 jobs at a time at their age while going to university.

The government has been cutting education and this has caused massive increases in fees and tuition at state schools that do education beyond high school. Meanwhile opportunities to get financial aid have dwindled. Hopefully what was passed in the health care bill will help young adults to afford higher education so that they can build their knowledge base and skills so that we won't lose an entire generation to despair and hopelessness.

The word around here is, "*expletive*! There ain't no jobs and they're taking away school programs. What are we supposed to do?"

And to tell you all the honest truth, I have fewer and fewer answers for them. It's sad and I hope that things can turn around before this generation is entirely written off...

Anyone who claims to know how to turn this ship around is deluding themselves. Letting it crash will bring chaos, starvation, homelessness, and ruin eventually if we keep heading in this direction. The wrong government supports will just prolong the agony. Will our nation survive this thing intact? Time will tell.

“We expect the impact to be minimal,” Hagerman said in an interview today. “We’ve spoken to banks over the past couple of weeks and they’ve said they expect to accelerate their own home mortgage modification programs. We think the success in limiting foreclosures will come from here rather than the government programs.”

I agree. Underwater homeowners are starting to play hardball, as they should, and lenders are starting to do this on their own. There's not much of a need for a push from government.

As for cost to taxpayer, it's likely small, since investors have to eat losses down to 90% LTV, but I'm still not happy about it.

“Banks continue to carry second liens on their books at vastly inflated value,” Rosner said. “If the government reduced their ability to overinflate these assets, the banks would be more willing to engage in principal reductions.”

Indeed. This is the fundamental problem. Banks have no incentive to do the right thing because they are allowed to get away with lying.

Troy says

This may be double-counting some federal transfer payments, but $3.5T for federal is in the pot leaving $2T+ for state & local doesn’t seem out of line.

At $50K per yob and $6T as the number, that’s 120 million yobs on the government teat either directly or indirectly, the vast majority of the workforce.

http://www.usgovernmentspending.com/ breaks it down fairly well.

tatupu70 says

michaelsch says

Just got $16K bonus mainly because our management is counting heavily on milking Obama.

You got a bonus before your company actually registered the profits?? That’s a little unusual… Not good business practice–rewarding employees because they hope to be profitable in the future.

Not a good business? Sure, not.

Well, the bonus was for 2009 profit, but they decided only now, because they were waiting for the Obamacare to pass, to decide how much of the profit they can share. Without that they would have to hold much more. Now, as the result of Health Insurance bill, they could afford bonuses much bigger than we expected.

michaelsch says

Well, the bonus was for 2009 profit, but they decided only now, because they were waiting for the Obamacare to pass, to decide how much of the profit they can share. Without that they would have to hold much more. Now, as the result of Health Insurance bill, they could afford bonuses much bigger than we expected.

I'm still not sure I understand. I'm assuming you must work for some sort of healthcare provider, right? The bonuses were from 2009 profits, but they were expecting to do much worse in 2010 until the health care reform bill passed? Why didn't they think they would be as profitable in 2010 unless the bill passed?

If they didn't expect to do much worse in 2010, why were they going to "hold much more"?

tatupu70 says

michaelsch says

Well, the bonus was for 2009 profit, but they decided only now, because they were waiting for the Obamacare to pass, to decide how much of the profit they can share. Without that they would have to hold much more. Now, as the result of Health Insurance bill, they could afford bonuses much bigger than we expected.

I’m still not sure I understand. I’m assuming you must work for some sort of healthcare provider, right? The bonuses were from 2009 profits, but they were expecting to do much worse in 2010 until the health care reform bill passed? Why didn’t they think they would be as profitable in 2010 unless the bill passed?
If they didn’t expect to do much worse in 2010, why were they going to “hold much more”?

Because they keep loosing members, but now it does not matter, since they hope to make up for this with government money. The profit from 2009 was mainly because they cut services they provide/cover and increased co-payments. Logically it had to accelerate losses in the number of members (insured). But now they don't care too much about it.

tatupu70 says

We needed it about 9 years ago. The budget was balanced before Bush took office…

In reality, the budget was not "balanced" under Clinton, because like all presidents since LBJ, he took SS surplus money, replaced it with worthless IOUs in the amount of $300+ Billion per year and applied it to general fund spending. At no time did Clinton ever have a budget "surplus" in excess of that amount. Furthermore, when computing his 8 years in office, collectively, he increased the national debt by hundreds of billions.

RayAmerica says

In reality, the budget was not “balanced” under Clinton, because like all presidents since LBJ, he took SS surplus money, replaced it with worthless IOUs in the amount of $300+ Billion per year and applied it to general fund spending. At no time did Clinton ever have a budget “surplus” in excess of that amount. Furthermore, when computing his 8 years in office, collectively, he increased the national debt by hundreds of billions.

Agreed--it took him awhile to overcome the mess that was given to him, just as it will take Obama some time to fix the craphole that was left to him by his predecessor. If only those crazy spendaholic republicans would realize they are bankrupting the country, we might get somewhere.

tatupu70 says

RayAmerica says

In reality, the budget was not “balanced” under Clinton, because like all presidents since LBJ, he took SS surplus money, replaced it with worthless IOUs in the amount of $300+ Billion per year and applied it to general fund spending. At no time did Clinton ever have a budget “surplus” in excess of that amount. Furthermore, when computing his 8 years in office, collectively, he increased the national debt by hundreds of billions.

Agreed–it took him awhile to overcome the mess that was given to him, just as it will take Obama some time to fix the craphole that was left to him by his predecessor. If only those crazy spendaholic republicans would realize they are bankrupting the country, we might get somewhere.

By comparison to Obama and the other ass clowns we've had in office over the last 40 years, Clinton was a superstar. We may never have another balanced budget.

tatupu70 says

RayAmerica says

In reality, the budget was not “balanced” under Clinton, because like all presidents since LBJ, he took SS surplus money, replaced it with worthless IOUs in the amount of $300+ Billion per year and applied it to general fund spending. At no time did Clinton ever have a budget “surplus” in excess of that amount. Furthermore, when computing his 8 years in office, collectively, he increased the national debt by hundreds of billions.

Agreed–it took him awhile to overcome the mess that was given to him, just as it will take Obama some time to fix the craphole that was left to him by his predecessor. If only those crazy spendaholic republicans would realize they are bankrupting the country, we might get somewhere.

Don't forget that Newt Gingrich and the Contract with America movement contributed to the "balanced budget" illusion during the Clinton years.

My question is do we sit back and watch the economic collapse or do we actually make attempts to stave off the inevitable?

The administration faced a week of criticism from lawmakers and watchdog groups who say the government hasn’t helped enough homeowners stave off foreclosures. Now you clowns say the administration is doing too much, which is it?

4X says

The administration faced a week of criticism from lawmakers and watchdog groups who say the government hasn’t helped enough homeowners stave off foreclosures

The federal government is constantly asekd to hand out money via special interests' washington mouthpieces, sure. Preventing foreclosures should never be in the federal government's job description. These beggars should have been ignored.

You guys have it all wrong, this has nothing to do with bailing out LOANOWNERS. It is in fact all about bailing out the BANKS, which would be crushed if they really had to take all these houses back as foreclosures.

CBOEtrader says

Preventing foreclosures should never be in the federal government’s job description.

The scale of the overextension that the financial system committed to 2004-2008 is beyond human comprehension.

Net Home Mortgage Lending:
2000 $400B
2001 $500B
2002 $800B
2003 $800B
2004 $966B
2005 $1.1T
2006 $1.0T
2007 $700B

Going with $600B/yr as a sustainable lending level, that's nearly TWO TRILLION in losses cooked into the books.

That's enough losses to wipe out the top 50 banks in the world.

Plus the degree of actual wealth destruction and life disruption caused by foreclosures is colossal.

"I don't have any solution, but I certainly admire the problem."

The last and only time the U.S. Government was completely debt free (1835) was after Andrew Jackson defeated the Bank of the United States, America's central bank at that time. I wonder if there is a connection between the elimination of the central bank and the elimination of the national debt? LOL

Vicente says

You guys have it all wrong, this has nothing to do with bailing out LOANOWNERS. It is in fact all about bailing out the BANKS, which would be crushed if they really had to take all these houses back as foreclosures.

Meaning that the entire banking system would have collapsed?