Republicans

[Oversoul]

Oversoul: Hmm, I thought generally, most bills were specific to what they're meant for. It may be the more complex ones, like the budget, are just easier to get stuff attached to because since they're so big, no one bothers to read them all the way through

I don't know what the proportions are between bills that are specific and ones that aren't. Maybe it's worse in some places than others. Here in Washington, we have one guy who manages to get initiatives on the ballot all the time that are ostensibly about some innocuous-looking thing and then the full text will be this semantic monster tying a whole bunch of stuff up.

 

[EricBess]

The problem I have with these statements is the one beginning with Lyndon Johnson. That was what, 40 years ago? Yet the "housing crisis" that we're talking about happened in the last 5 or so years (well, 10 years roughly if we're counting the start of the housing "boom" that led to the "bust"). So really, the first 30 years were fine.

We both agree on the effect of the bundling and selling of morgages with no regulation. Lots of people getting greedy, but this is where I say there is more to you. What led to the "housing boom"? Beginning with Johnson, there was a push to make housing affordable for all. Is it a right or a priviledge to own a home? The supply of homes didn't change significantly more than usual, but with government programs and intervention to get more people into homes, the demand increased artificially.

There was a reason these people didn't have homes. They were bad investments, but the government decided to put programs into place to encourage these bad investments. Much of what followed, including the budling, was in part an attempt to try to mitigate the risks involved with these bad investments.

If demand increases while supply stays the same, the natural market forces are for home prices to increase until supply once again matches demand. The artificial boom started more than 10 years ago. It was perhaps in the last 15-20 years that it really started rolling, but it was policies to get people into homes that realistically couldn't afford them that led to the bubble. The crash was inevitable even without the other factors.

Again, that's the fea(sic...fear?), but no real certainty that that's what's going to happen.

And yet we have a lot of evidence of what usually happens when the government gets involved in health care. Canada, Great Britain, many european countries. All have rationing and shortage of health care professionals. I've yet to hear of a country even remotely the size of the US that has any form of government health care that doesn't have serious rationing problems. I understand that there are a few countries where universal care works well, but those I know of are very small countries relatively speaking and/or also have little to no regulation on public health care in addition to the public plans. I think it's more than just a "fear" given the parallels.

 

[Mooseman]

EB: I 'l have to disagree with your assessment on the housing crisis. Many of the foreclosures are not people who can't afford a home, but those that can't afford the home they bought...... many are middle income people. The big problem was that the exotic loans and raising prices lead people to take out mortgages the can't afford, but either refinanced when prices rose or sold at a profit and moved to another house to do the same thing, when the market crashed, those people were not able to keep the merry go round going. Also, appraisers were working with banks and reality companies to over appraise homes and keep the money train (false as it was) going.
The biggest problem was the bundling of mortgages with high ratings that were inflated and the derivatives of those bundles. Although lower income people are part of the problem, they are not a significant portion.

Also, I know quite a few Canadians and they would not give up there health care for anything like ours.... and a few of them have had cancer and joint replacements.... no major complaints.... they just don't expect instant access to health care like we do, unless they want to pay... which they can.
I'm not saying it's the best around, but not the doom and gloom that Fauxnews makes it out to be.......

 

[EricBess]

Mooseman - ultimately, that amounts to the same thing and it doesn't matter which "class" caused the problem. How did they get low income people into housing that they couldn't afford? By introducing new types of mortgages and loans. Historically, the original purpose of these loans was to get more people into homes. However, by introducing those loans with the intent of allowing low-income people to buy houses that they cannot afford, at the same time, it opened the door for people who could afford a house to purchase a larger house than they realistically should have.

This didn't lead to an immediate boom anyway. That takes time, but it did start artificially inflating prices. As that continued, people started realizing that housing prices were continuing to increase artificially and the speculators got involved. People would buy a house with a serious balloon payment that they knew they wouldn't be able to afford, but they didn't care because once the loan came due, they would have enough equity in their home to refinance with a more reasonable loan.

The more this happened, the more the market faciliated it and the faster housing prices rose. But that ultimately wasn't sustainable because it got to the point where there weren't enough buyers to keep things going.

The crash happened much faster than the boom. At first, housing prices continued to rise, but they couldn't rise like they had before because there weren't enough buyers. Some of those loans came due and speculators and home-owners alike weren't able to refinance like they had hoped, so they ended up losing their homes. Once that happened, supply is now going up without a significant increase in demand, so housing prices start dropping. As they drop, the problem is compounded because more and more people are unable to refinance. In many cases, people who were careful about the type of loan they had lost their job or whatever and were in the same boat because they were upside down on their home through no fault of their own, but became part of the spiral.

 

[Mooseman]

EB: remember that the government deregulated the mortgage industry allowing these types of mortgages to be created.... Also, they lowered the ratio of capital to risk and let banks become or buy up investment firms.....

 

[EricBess]

The mortgages were created because the government was pushing for low-income housing. The deregulation allowed them to grow out of control.

 

[Mooseman]

I disagree with the first part, somewhat, but the second part was the cause of the huge bust.......

 

[Spiderman]

Beginning with Johnson, there was a push to make housing affordable for all. Is it a right or a priviledge to own a home? The supply of homes didn't change significantly more than usual, but with government programs and intervention to get more people into homes, the demand increased artificially.

There was a reason these people didn't have homes. They were bad investments, but the government decided to put programs into place to encourage these bad investments. Much of what followed, including the budling, was in part an attempt to try to mitigate the risks involved with these bad investments.

I disagree with most of this, but at this point, without numbers from somewhere, I'm afraid we're just "talking". Supply of homes increased since Johnson's time along with demand, keeping both in a steady rise. I am willing to bet that home ownership numbers did not "spike" upwards pre-Johnson and post-Johnson, only in the last 10 years.

The reason why these people didn't have homes is because lenders were more strict and demanding about who qualified for loans. Why do you think there's several lawsuits now claiming lenders "pushed" people into loans they couldn't afford, especially with blacks and lower middle class? And why it was trumpeted during the boom that these kinds of folks could now afford homes because of the exotic mortgages that were becoming available?

All of this derivative stuff happened in the last 10 years, not 40. Which is why we have the housing boom and crash in the last 10 years, not in the last 40. I'm only three years younger than you but I'm pretty sure there wasn't a housing crash this hard during the last 40 years - heck, not even a housing crash period.

And yet we have a lot of evidence of what usually happens when the government gets involved in health care. Canada, Great Britain, many european countries

But is it comparable? Is the US plan similiar to those countries?

 

[Oversoul]

By the way, last year I found this book on the dust list at work (the list of books at the library that haven't been checking out that we pull off the shelves a librarian to examine and decide whether they should be removed from the collection so that their shelf space can be used for something else).

 

[EricBess]

I disagree with the first part, somewhat, but the second part was the cause of the huge bust.......

Perhaps, but without the first part, would the second part have happened?

The reason why these people didn't have homes is because lenders were more strict and demanding about who qualified for loans. Why do you think there's several lawsuits now claiming lenders "pushed" people into loans they couldn't afford, especially with blacks and lower middle class? And why it was trumpeted during the boom that these kinds of folks could now afford homes because of the exotic mortgages that were becoming available?

I think there are several lawsuits because our society is very litigious and many people don't want to assume accountability for their own actions. There have been some demonstrated cases of "bait and switch", but for the most part, I think a lot of the lawsuits are because people's assumptions about what they were getting didn't pan out and if they can convince a judge that they weren't properly informed, then they don't have to suffer the consequence of a bad or greedy decision.

There certainly have been cases of people being pushed into or misinformed about loans, but if you sign a document without knowing or understanding what it says, then you have to assume some of the responsibility as well. I would be willing to bet that most of these people who are suing knew what they were getting into, but were told they would be able to refinance. Now that they aren't able to, they are angry.

All of this derivative stuff happened in the last 10 years, not 40. Which is why we have the housing boom and crash in the last 10 years, not in the last 40. I'm only three years younger than you but I'm pretty sure there wasn't a housing crash this hard during the last 40 years - heck, not even a housing crash period.

All I'm saying is that the "boom" started when government programs were put into place to get people into housing who couldn't realistically afford it. Other factors play a part, but this is something that has been building for 40 years, not just for 10. If the escalation over time is exponential, then at some point, you would expect it to skyrocket and that's what has happened in the last 10 years.

But is it comparable? Is the US plan similiar to those countries?

I think that is it safe to say that if the US plan leads to a government-subsidized public option, that it is similar enough to draw the comparison.

 

[train]

train might know more about Texas since he lived there for awhile.

As far as I know, TX took health care seriously by not allowing the tons of discount plans, etc. to flood the state to begin with. Plans were monitored by independent audits and insurers negotiated to provide them in lieu of using some of the social remedies available for their employees...

TX spends a couple hundred per capita less than california - but it also doesn't have as many residents as some of the more populous states do on it's health care plans...

There was a competitive advantage. The costs for using some of the state provided plans is relatively inexpensive, and many times, chosen over the private plans by employers. The limits on the care and plans prevent the state from incurring overwhelming costs and they re-visit the laws governing it regularly.

 

[Mooseman]

Interesting chart here on US housing prices in the last 40 years......http://mysite.verizon.net/vzeqrguz/housingbubble/

Intersting info about the Texas government option, (see the part in red)
Apply for coverage through the Texas Health Insurance Pool

If you are unable to obtain coverage through any other source, you can apply to join the Texas Health Insurance Pool (Health Pool). The Health Pool is a program primarily intended for Texans who are unable to obtain insurance from licensed private insurers because of their health condition.

Health Pool coverage is similar to that included in employer-sponsored or private insurance plans. Benefits cover hospital stays, physician services, and prescription drugs. The Health Pool also provides coverage for serious mental illness, subject to calendar year maximums for inpatient and outpatient treatment. The Health Pool does not cover treatment for chemical dependency or drug abuse.

Coverage through the Health Pool can be expensive - premiums are twice the rate charged in the standard market, as required by state law.

Texas also has tort laws that prevent lawsuits.....
Caps on non-economic damages are: $250,000 per occurrence for all physicians; $250,000 per occurrence for a health care institution; and a second $250,000 per occurrence for any other, completely separate, institution.

 

[train]

Coverage through the Health Pool can be expensive - premiums are twice the rate charged in the standard market, as required by state law.

Texas also has tort laws that prevent lawsuits.....
Caps on non-economic damages are: $250,000 per occurrence for all physicians; $250,000 per occurrence for a health care institution; and a second $250,000 per occurrence for any other, completely separate, institution.

Those are some of the reasons the cost is maintained in TX... unfortunately, I believe it can filter out those actually needing care, but not attempting to burden the taxpayers - but it doesn't discriminate otherwise... just provides what others won't in many circumstances...

the Tort laws in turn also limit the cost of health care as there is not extensive abuse of the system, and those costs then passed on through insurance, etc.

 

[Spiderman]

I think there are several lawsuits because our society is very litigious and many people don't want to assume accountability for their own actions. There have been some demonstrated cases of "bait and switch", but for the most part, I think a lot of the lawsuits are because people's assumptions about what they were getting didn't pan out and if they can convince a judge that they weren't properly informed, then they don't have to suffer the consequence of a bad or greedy decision.

There certainly have been cases of people being pushed into or misinformed about loans, but if you sign a document without knowing or understanding what it says, then you have to assume some of the responsibility as well. I would be willing to bet that most of these people who are suing knew what they were getting into, but were told they would be able to refinance. Now that they aren't able to, they are angry.

I certainly don't disagree about taking responsibility for your own actions, but federal and state investigations have shown that in several cases, lending brokers changed the data on the applications *after* the borrower filled it out, thus the borrowers never knew what happened.

All I'm saying is that the "boom" started when government programs were put into place to get people into housing who couldn't realistically afford it.

I guess we gotta disagree on this one, because I haven't seen/read any evidence that prior to 2000, people were being pushed into homes they couldn't afford. Heck, in the 80's alone, interest rates were in the high teens so it's highly doubtful people were getting into homes they couldn't afford.

I think that is it safe to say that if the US plan leads to a government-subsidized public option, that it is similar enough to draw the comparison.

Again, gotta disagree. If the plans aren't the same, then it's comparing apples and oranges - the comparison doesn't have any merit.

 

[EricBess]

I certainly don't disagree about taking responsibility for your own actions, but federal and state investigations have shown that in several cases, lending brokers changed the data on the applications *after* the borrower filled it out, thus the borrowers never knew what happened.

Yes, there were, but how large-spread? I think things like this have a snowball effect. It is shown in a couple of cases (and they certainly should be prosocuted to the full extent), so everyone in a financial bind starts thinking "hey, I could get in on this" and then the courts are inundated with far more cases, most with no real merit.

I guess we gotta disagree on this one, because I haven't seen/read any evidence that prior to 2000, people were being pushed into homes they couldn't afford. Heck, in the 80's alone, interest rates were in the high teens so it's highly doubtful people were getting into homes they couldn't afford.

You seem to be of the opinion that the problem was the real estate agents. The sub-prime loans were available prior to 2000. The fact that the option was available was already an issue, allowing people to get more house than they could afford. The reason you don't hear about it is because the housing market was still inflating fast enough, that they could refinance. If the balloon payments don't kick in for 5-years on the loan, then the people who had the loans prior to 2000 would have been able to refinance up through 2005, which is about when the crash happened. After that, they were unable to refinance, so we start hearing about the problem.

So prior to 2000, people had the ability to get more house than they could afford, but because they were able to reset their loans based on equity, they were okay up intil that was no longer an option.

The "problem" wasn't there before because after 5-years, the increased equity was there and the value of your house was far more than you purchased it for. So it doesn't matter at that point if it was more house than you could realistically afford.

Again, gotta disagree. If the plans aren't the same, then it's comparing apples and oranges - the comparison doesn't have any merit.

I guess this is a case of perspective. I see both as the government intervening by trying to make sure that everyone is taken care of. Certainly a noble cause, but unfortunately without foresight.

Ultimately, I think you are correct that we must just agree to disagree on the causes of the housing problems.

 

[Spiderman]

You seem to be of the opinion that the problem was the real estate agents. The sub-prime loans were available prior to 2000. The fact that the option was available was already an issue, allowing people to get more house than they could afford. The reason you don't hear about it is because the housing market was still inflating fast enough, that they could refinance. If the balloon payments don't kick in for 5-years on the loan, then the people who had the loans prior to 2000 would have been able to refinance up through 2005, which is about when the crash happened. After that, they were unable to refinance, so we start hearing about the problem.

So prior to 2000, people had the ability to get more house than they could afford, but because they were able to reset their loans based on equity, they were okay up intil that was no longer an option.

Subprime loans were available but they weren't a big part of the lending market - they took off in 2000+ when the housing market heated up. Pre-2000, houses were appreciating at a decent rate and no one was getting pushed into loans they couldn't afford (in as large numbers). All of that changed with the advent of repackaging dereviatives and lenders loosening their standards.

 

[train]

(man - I'll see if I can catch back up on this one...)

But - for the record - as we will be first time home buyers soon - I like the market and what has happened recently...

Not that I want any of our members affected negatively... but- you know...

 

[Spiderman]

Get in on that new homebuyer credit!

 

[train]

Well - that's the hopes... but I feel it will get extended again, and the rates will stay fairly low (compared to recent years) for a while... We are building up the down and looking for lender/area at this time...

Real Estate in CA is freaking OUTRAGEOUS when directly compared to po-dunk TX...

 

[Spiderman]

Isn't it good all the way through this fiscal year (to Oct 1, 2010)? Or does it expire earlier than that?