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Left/Right bloggers both worried that stimulus will go to undeserving:

In this week's National Journal poll of leading political bloggers, 76% of Left-leaning bloggers and 100% on the Right are either "somewhat concerned" or "very concerned" that federal stimulus money will go to people who don't deserve it. I was among the very concerned: "Taking money from responsible and prudent homebuyers and renters and giving the money to reckless borrowers and lenders will promote more irresponsible borrowing and lending in the long run."

On the question of whether another stimulus will be necessary later this year, 88% ofthe Left and 40% of the Right thought so. I thought not: "Since the first package was not 'necessary' but will likely be inflationary and economically harmful, it is unlikely that a second round of even more debt could be necessary."

Earlier this week, National Journal published an annotated version of the President's State of the Union speech. Various portions of the text are marked to show where they relate to a campaign promise, mark a break with the Bush administration, etc. There is also highlighting for the reaction of pundits, bloggers, and experts to particular items in the text. I comment on the line: "And we will expand our commitment to charter schools." My view: "Constitutionally, Congress and the president have no business trying to manage local public schools. But as long as the federal government is involved, promoting charter schools is an excellent way to improve public education. More diversity, more choice, more accountability. A win-win-win."

smallrock:
Does that mean that AIG, Citibank, etc. were "the deserving"?
2.27.2009 12:58pm
gab:
"Taking money from responsible and prudent homebuyers and renters and giving the money to reckless borrowers and lenders will promote more irresponsible borrowing and lending in the long run."

That was only a small part of the package. Why focus on that when there is so much else going on?
2.27.2009 1:00pm
Snaphappy:
Right-leaning LOLcats: "DO NOT WANT"
Left-leaning LOLcats: "I CAN HAZ STIMULOLZ?"
2.27.2009 1:17pm
A. Zarkov (mail):
Unfortunately banks are akin to a utility companies that supply vital services like water. Commercial banks and Savings and Loan Associates are regulated, but the shadow banking system consisting of investment banks, broker-dealers, insurance companies and the like are only lightly regulated. This means that like it or not we can't let the system fail, so some form of a bailout is necessary. But I don't see why we can't temporarily nationalize the important banks. We should let the common share holders take a major hit and the bond holders take a haircut. The management should be fired and the government should claw back their past bonuses.

Bailing out homeowners who falsified their applications is another matter. This is so unfair that doing so erodes people's faith in their government.
2.27.2009 1:25pm
Thorley Winston (mail) (www):
In this week's National Journal poll of leading political bloggers, 76% of Left-leaning bloggers and 100% on the Right are either "somewhat concerned" or "very concerned" that federal stimulus money will go to people who don't deserve it.

That's pretty much the whole point of the Generational Theft Act -- a bunch of people want a bunch of stuff but don't want to pay for it so they use the government to take it by force from another group of people. Pretty much by definition the recipients don't "deserve it."
2.27.2009 1:27pm
Thorley Winston (mail) (www):
In this week's National Journal poll of leading political bloggers, 76% of Left-leaning bloggers and 100% on the Right are either "somewhat concerned" or "very concerned" that federal stimulus money will go to people who don't deserve it.

That's pretty much the whole point of the Generational Theft Act -- a bunch of people want a bunch of stuff but don't want to pay for it so they use the government to take it by force from another group of people. Pretty much by definition the recipients don't "deserve it."
2.27.2009 1:27pm
LN (mail):
I hadn't realized that Barack Obama had invented the budget deficit. Being aware of the pattern of debt-to-GDP ratios over the past 30 years, I find this new bug-eyed outrage somewhat disingenuous.
2.27.2009 1:59pm
DiversityHire:
LN, Muzzammil Hassan didn't invent domestic violence, but he's taken it to a new level.
2.27.2009 2:14pm
Steve:
In the early part of this decade, we had an opportunity to be fiscally responsible and make a start on paying down the national debt, but we decided instead to borrow money from the next generation to pay for tax cuts.

Those who weren't motivated by simple greed argued that these tax cuts would stimulate so much growth that the next generation would actually come out ahead as a result.

Regardless of the validity of that argument, we know where we are right now. And some of us believe that if we borrow some money from the next generation to implement valuable programs, we'll stimulate the economy and the next generation will come out ahead of where they would be if we failed to act.

No one can prove that things will work out this way. But the electoral system forced us to share in your faith-based assumptions, and for the time being you must share in ours.
2.27.2009 2:44pm
SeaDrive:
Sometimes helping yourself means helping other people who don't deserve it.

Here's a death penalty analogy. You can oppose the death penalty for reasons that have nothing to do with clemency for the convicted. In fact, you might badly want him/her dead. But you might feel capital punishment too expensive, that it's bad for the society, that it's an unfair moral burden on the executioner.

We have to make the bad loans disappear. Letting all the houses go into foreclosure may be morally sound but it's not the fastest, nor the cheapest, nor the best way out of the morass. So get down off your high horse, and renegotiate some of these mortgages.
2.27.2009 2:47pm
eLocke:
A. Zarkov

"Insurance companies" are "lightly regulated"; in what world?

I don't disagree with your final point, though.
2.27.2009 2:53pm
Blar (mail) (www):
Link is broken - should go to National Journal bloggers poll.

It sounds like some bloggers are expressing concerns about the stimulus bill, others (mostly left-leaners) about the bailout, and others (including Kopel) about the housing relief plan, which makes the summary numbers (100% &76%) not very meaningful.
2.27.2009 2:55pm
Blar (mail) (www):
Also, the comments of the "somewhat concerned" suggest that they should not be grouped in with the "very concerned." They're saying things like "I'm not so concerned that aid will go to those that don't deserve it as I am that aid won't go to those who do." Only 29% on the left are very concerned, vs. 87% on the right.
2.27.2009 3:03pm
wooga:
Actually, SeaDrive, I think that mass foreclosure is the only solution. Just like bankruptcy and band-aids, it is sometimes better to just take the sharp pain in one swift moment than stringing out lots of minor pain for a long time.

There is more than enough money out there among investors to buy the excess inventory of houses. The problem is that the investors are sitting on the sidelines waiting for the bottom to hit. As soon as the bottom hits, the investors will dive back in. They aren't going to go crazy, but they will easily run prices up to a 2000-2002 level before becoming cautious again.

Right now, we are at 2002-2004 levels. Historic income/house rates mean we should be at 2000 levels. So we are going to keep sliding for at least another year. Why not just get the foreclosures done with now?
2.27.2009 3:08pm
wooga:
"We have to make the bad loans disappear... So get down off your high horse, and renegotiate some of these mortgages"

Also, that is totally unrealistic. Take my example. I bought a condo on 100% financing at $360k. It is work less than $170k. But I was totally honest on my loan application, and I can still pay my $360k mortgage. I did not buy beyond my means.

The bank refuses to negotiate with me, since they know I have the money and credit score. The only people they will negotiate with are the dead beats and liars. Those are the people who should not be owning houses in the first place. They were bad loans before, and they will be bad loans in the future. So what is the result? I am going to have to become a dead beat, and stop paying my mortgage, in order to get anywhere. How is that an efficient or rational marketplace?

We need to "reset" the house market, send all the deadbeats back to a life of renting, and let house values drop low enough so honest people can afford them again.
2.27.2009 3:15pm
geokstr:

"Since the first package was not 'necessary' but will likely be inflationary and economically harmful, it is unlikely that a second round of even more debt could be necessary."

Given that the public is only likely to hear from the MSM that either 1) this or that part of Obama's plan has worked tremendously well and/or 2) that those parts that didn't work are all the fault of BusHitler/conservatives/greedy capitalists, why do you think that the Obama won't have all the ammunition he needs to enact more of his plans under the guise of more "stimuli" regardless of whether it necessary or not?

More diversity, more choice, more accountability. A win-win-win."

Except, can you point me to studies that show that "diversity" for the sake of numerical ratios in color and/or gender actually do anything positive? The left's idea of diversity is making any particular group look like the bar scene in Star Wars instead of having a diversity of ideas.
2.27.2009 3:17pm
Sarcastro (www):
I know inflation keeps me up at night right now. The up until recently zero-percent inflation and deflation worries are just inflation lulling us into a false sense of security.]
2.27.2009 3:59pm
darrenm:

But the electoral system forced us to share in your faith-based assumptions, and for the time being you must share in ours.

And of course you never criticized those assumptions.
2.27.2009 4:01pm
darrenm:
Democrats: "We'll use the recession as an excuse to spend tons of taxpayer money now while we have the chance. The next elections almost two years off and the economy will very probably recover before then in spite the 'stimulus'. We can then take credit for the recovery. This will give us the public support to create more 'programs'. People complain about the size of government? They ain't seen nothin' yet."
2.27.2009 4:14pm
A. Zarkov (mail):
eLocke:

"Insurance companies" are "lightly regulated"; in what world?

I definitely stand corrected-- thank you. I'm glad someone reads carefully. What I actually had in mind was Credit Default Swaps which do function as insurance by the lightly regulated shadow banking system. Although even insurance companies like AIG were able to get around regulation with SIVs.
2.27.2009 4:28pm
Randy R. (mail):
"We'll use the recession as an excuse to spend tons of taxpayer money now while we have the chance. The next elections almost two years off and the economy will very probably recover before then in spite the 'stimulus'. We can then take credit for the recovery. This will give us the public support to create more 'programs'. People complain about the size of government? They ain't seen nothin' yet."

That's pretty funny, Darren. Because OUR view during the last eight years went like this:

Republicans: We have a budget surplus, so we will cut taxes for the rich AND have a war for no reason except to make my military-industry buddies really rich, to create a huge budget deficit. then we will use that budget deficit as an excuse to cut the liberal programs we don't like, such as consumer and environmental regulation. By the time anyone figures this out, our eight years will be over with and the problems will belong to someone else.
2.27.2009 4:40pm
Kazinski:
Ln:

Being aware of the pattern of debt-to-GDP ratios over the past 30 years, I find this new bug-eyed outrage somewhat disingenuous.

This should make anyone bug eyed.
2.27.2009 5:22pm
Chem_geek:
wooga:

We need to "reset" the house market, send all the deadbeats back to a life of renting


Yep, none of those people deserves to live in their own house; they should instead forever be marginalized, have nothing of their own, and only live through the sufferance of their betters.
2.27.2009 8:23pm
Desiderius:
Randy R.,

"war for no reason"

Is that an attempted statement of fact?
2.27.2009 9:00pm
RPT (mail):
"Wooga:

We need to "reset" the house market, send all the deadbeats back to a life of renting"

Pottersville in March. Nine months early.
2.27.2009 10:11pm
Jmaie (mail):
Yep, none of those people deserves to live in their own house; they should instead forever be marginalized, have nothing of their own, and only live through the sufferance of their betters.

Can you explain why someone who can't afford to pay the mortgage deserves his own house regardless?
2.27.2009 10:27pm
Jmaie (mail):
Over the past several years the country's level of economic activity and spending habits were based on having two income streams - wages plus the cash we could pull out of our ever-increasing home equity. One of those income streams is gone for good.

The stimulus bill is an attempt to maintain the same level of economic activity using borrowed government funds in lieu of refi cash. Not sustainable.

I'm with Wooga. Home owners' ability to pay the mortgage has nothing to do with the current market value of their house.


Pottersville in March. Nine months early.

You've got it backwards - once house values finally tank, er, stabilize at actual value, Potter's renters will be able to purchase and move out.
2.27.2009 10:53pm
Desiderius:
The money isn't being taken from anyone (yet). It's being borrowed (largely from overly risk-averse Chinese), which means it is ultimately being taken from future generations who have no vote, both directly by sticking them with the bill and indirectly by damaging their credit-worthiness (given likely future inflation).

Taxation without representation. Such things have been known to cause revolutions.
2.28.2009 9:16am
ChrisTS (mail):
Perhaps it is only that I am a muddledheaded liberal, but I do not understand the 'let it all fall out' view. Imagine one has absolutely no concern or compassion for those who have lost their jobs and cannot pay their mortgages, or those whose house values have plummeted below the mortgage rate, or those who really were conned into buying over their heads or taking mortgages they did not understand. Ok, leave all that 'my fellow Americans' sappy stuff aside. Nonetheless, isn't the housing collapse a problem for our economy - a problem for all of us? I did not overbuy, and I have never failed a payment. However, the value of my house has dropped like a stone because of the oversupply of homes on the market.

What's more, those people who have lost their homes are less likely to be buying much of anything, especially on credit they can't get. That is not economically desirable either is it? And, the contractors who could be building new houses or remodeling existing ones are not getting any business, because those of us still in our homes are afraid to invest in them further and unable to buy others.


P.S. Having looked at the data, I think the summary is very misleading. (I realize someone else pointed this out, too.)
2.28.2009 4:45pm
JoeSixpack (mail):
I think the issue is that ChrisTS's and wooga's equally valid points need to somehow be reconciled. Absolutely, the housing collapse is behind the entire economic meltdown and hurts everybody. On the other hand, we need to remember that everybody has been hurt, not just those who have for whatever reason stopped paying their debts. We have to try to find a solution that doesn't disproportionately reward the "victims" who are already in default or who acted irresponsibly at the expense of those who have also lost a lot of money but have acted more responsibly and are still paying their debts.
2.28.2009 5:21pm
Duracomm:
Chemgeek said
Yep, none of those people deserves to live in their own house; they should instead forever be marginalized, have nothing of their own, and only live through the sufferance of their betters.
I don't understand the obsession with home ownership and why everyone thinks it is vastly superior to renting.

This government fueled obsession with home ownership is one of the underlying causes of the current housing debacle.

Buying a house often makes no economic sense for those on all levels of the economic spectrum.

Owning a house can be particularly bad in an economic downturn because it makes it more difficult for people to relocate to areas where the economy and employment situation are better.
3.1.2009 10:06am
Duracomm:
By government fueled I mean things like the tax deduction for mortgage interest.

When they re did tax policy in the 1980s they took away the tax deduction for credit card interest. But the deduction for mortgage interest remained which helped drive the explosion in the amount of the home equity line of credit.

Also, for many people the home interest deduction is often about the only option they have for reducing their tax burden.
3.1.2009 10:32am
A. Zarkov (mail):
One Realtor friend of mine who operates in the affluent San Francisco suburb of Marin County has little sympathy for those who borrowed more than they could afford. She says most of them knowingly falsified their income on their loan applications. Don't you sign your loan application under penalty of perjury? Shouldn't that count for something? After all just because the loan is no doc, that's not a license to lie. But I guess to many people it is.
3.1.2009 12:21pm
ChrisTS (mail):
JoeSixPack:
Well, thanks for the support, but I absolutely refuse to be reconciled with wooga.

A. Zarkov:
Oh yeah? Well, one of my friends in the mortgage industry - well, he was in that industry - says lots of folks selling houses pushed people to buy beyond their means and lots of people pushing mortagages told buyers to falsify their data. Told them, in fact, that 'no one puts down their real worth on these things.'

So, I see your anecdote and I raise.
3.1.2009 4:33pm
Jmaie (mail):
says lots of folks selling houses pushed people to buy beyond their means and lots of people pushing mortagages told buyers to falsify their data. Told them, in fact, that 'no one puts down their real worth on these things.'

'Cause if a broker told you to lie, you just gotta go ahead and do it?

I have taken out four mortgages since 2001 and never been asked to / had it suggested I should / been ordered to falsify any documentation. I'll see you and raise you four anecdotes more.
3.1.2009 11:59pm
Jmaie (mail):
Forgot to end with a :<)
3.2.2009 12:01am
ChrisTS (mail):
Jmaie: That's not four anecdotes; that's one anecdote with four claimed instantiations. :-)

And, no, of course being encouraged to lie does not make it ok. But, I think we forget how .... limited people are when it comes to being smooth talked.

I remember, years back, when my highly-educated spouse told me he had not responded altogether honestly to some question on an insurance form about MJ use. The agent was with us, and I said 'You can't falsify a legal document, you ninny!' The agent smiled indulgently and said, 'Well, no one expects people to respond honestly to that one.' They both thought I was an idiot for insisting on getting something like the truth on the form.

Now, imagine you are a not-so-educated person being urged to take on a giant mortgage for a dream house - one which all agree you absolutely can afford and deserve. All those smmoth folks in suits smiling at you and one another saying things like, 'Well, no one expects people to respond honestly to that one.'
3.2.2009 2:23pm

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