dogdidit
Posts: 315
Joined: Mar. 2008
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| Quote (midwifetoad @ Sep. 25 2008,13:57) | RTC may have been created in 1989, but the damage was done by high interest rates and bad loans made a decade earlier. It takes years for people to default on mortgages when the default is due to creeping payments, and it can take years to foreclose on loans after default.
The costs associated with foreclosure, coupled with huge numbers of properties that had to be liquidated quickly at less than the value of the note, did in the savings and loans.
This cycle will repeat every time government policy makes loans available to vast numbers of people who will be unable to repay them. The current mess is exacerbated by loans made that exceed the market value of the property. This is a fact regardless of who deserves the blame. I suspect there is more than enough to go around. |
Fair E Nuff, but your original post referred to the impact on the federal budget, which became an issue when the RTC was formed and funded in 1989 to take over the failing thrifts: | Quote | | Being a strictly non-partisan kind of guy, I think it is likely that the mortgage bailout will drain every available dollar from the federal budget for several years, effectively rendering presidential policy moot. |
What available dollars? The S&L debacle of the 80s/90s eventually cost the taxpayers somewhere around $125B, and the upfront costs were enough to prompt the Republican president to raise taxes (at a considerable cost to his political career, I might add...but then George Sr always placed service before self-interest, a habit of mind that he failed to instill in his sons). This time around the upfront costs look to be more like ONE TRILLION DOLLARS
and no evidence so far that the Republican president's son has any intention of raising taxes. In fact, he remains dedicated to making permanent the cuts he enacted or are on the way; most importantly, the elimination of the inheritance tax in 2010. Just because our children are to inherit a crushing burden of debt does not mean that his children are. Or John McCain's.
Does he think that we can get there by cutting discretionary funding? Freezing the science budget? Gee, we could whack the financing for NPR; $200M down, $999,800M to go!
Perhaps it's too much to expect a lame duck president to do anything, but his presumptive Republican replacement isn't showing us anything different. Even as he air-drops himself into the bailout fray (though parachute rides ought to be something he avoids), McCain continues to self-identify as a de-regulator and tax-cutter. Not exactly the temperament one needs given that the problem was caused by lack of regulation and oversight, and whose solution will inevitably require new taxes. New taxes were going to be required anyhow, to pay for the unfunded liabilities of Social Security, and Medicare. And the cost of the War in Iran Iraq. Read my lips.
And what are we to make of his poor judgment (the Senate Ethics Committee's words, not mine) he displayed in the last bank crisis? "Good judgment comes from experience, and experience comes from bad judgment"?? Perhaps, but I also believe "past performance is a reliable predictor of future behaviour". I'm just sayin'.
| Quote | | The disastrous economy and high interest rates that made Carter a one-term president were the result of paying for the Vietnam War. Again, it often takes a decade or more for policy decisions to result in a national crisis |
Don't overlook the 1970s oil shock. Or the Teheran embassy hostage crisis (which locked Carter in the WHite House, effectively denying him the ability to campaign). JMHO but had Desert One led to a successful raid (Entebbe-like), Carter would have been re-elected in 1980.
Don't get me wrong, mwt. I'm a registered Republican. I voted for Reagan in 1980. I read Jude Wanniski, and supply-side economics, and A Time For Truth. I am not playing partisan politics here. I am just noting that we are well and truly screwed. The last thing we need is leadership dedicated to screwing us in even further.
Sorry, all, for the huge OT post. Time for a trip to the loo, Lou?
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"Humans carry plants and animals all over the globe, thus introducing them to places they could never have reached on their own. That certainly increases biodiversity." - D'OL
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