Posts Tagged ‘House’

Live Analysis of Governor Granholm’s Michigan State of the State Address

February 3, 2009

The Michigan State of the State address is about to begin.  I will be live blogging the event, giving my analysis (so my apologies for any spelling errors – I’ll fix them eventually).

Alright, she’s entering the chamber (I’m not sure if this is the House or Senate – probably House since  it’s bigger).

Oh – my roommate (Democrat) just about made me die of laughter – he said, “Where is she?”  I said, “Right there.”  And he goes, “Oh, I thought that was a dude.”

Alright – she’s making her way up to the podium – about half the room is still clapping – probably the Democrats.  There’s Lt. Governor John Cherry up in his chair.

There’s Senate Majority Leader Mike Bishop (R) and Speaker of the House Andy Dillon (D).

She’s saying welcome and thank you.  She’s welcoming and congratulating the new representatives.

She’s now welcoming Supreme Court Justice Dianne Hathaway, elected this year.  And she’s congratulating the longest serving president of the State Board of Education.

Now thanking the servicemen and women from Michigan as well as the first responders.

We just gave a moment of silence for those who lost their lives defending this country and state overseas.

“I will not sugar-coat the crisis facing this state. … Our auto companies fought for their very existence, and as the bottom fell out of the national economy” Michigan “went from bad to worse.”  She’s absolutely right about that.  “Any honest assessment of our state’s economy must recognize that things are likely to get worse before they get better. … Things will get better … because Michigan citizens are resilient … because our battle plan is focused on the three things that matter most: fighting for more good paying jobs in Michigan, educating and training people to fill those good paying jobs, and protecting out people.”

“This is not time for pet projects or special interests.”

Now talking about Michigan now having “a friend in the White House who now shares our agenda.  I say this based on pragmatism, not upon partisanship.”  BULL CRAP!

She’s talking about him being focused on energy jobs, education, and protecting people.  COME ON Madame Governor, the Republicans are interested in all of those things too!

“We’ve made many tough choices in our budget.”  True, but you could have done a lot more to fix the state, but you didn’t, and that’s why we’re as bad as we are now.

“I have a veto pen, and I will use it. … The President’s economic plan is a one-time opportunity.”  Really?  Because so far, I count THREE bailout bills.  What’s to stop three more?

She’s saying that our problems will be here after the economic stimulus money is gone.  Lt. Governor Cherry will be in charge of downsizing government, reducing number of departments from 18 to 8.

Something about we can’t have “9-5 government in a 24/7 world.”  Good point there – I’ll give her that one.

Her and Cherry are reducing salaries of all elected state officials in Michigan by 10%.  That’s a good move – I COMMEND HER on that, but I don’t really see how she can directly do that.

“Already, I’ve cut more than any other Governor in Michigan.”

She’s saying that a national survey showed that MI has done more to cut spending than other state in the country.  I’d like to see the details of the survey, but if it’s all true, I commend her on that.

She’s cutting funding for the state fair – because it’s not essential to government.  GOOD CALL!

Talking about preserving our wetlands.

Talking about reducing corrections spending.  We’re going to close 3 more facilities in the coming months.  Reinvest in more law enforcement on the street.  More law enforcement is good, but I’m not too keen on closing 3 facilities – that means more criminals on the streets, since our prisons are already TOO FULL!

Funding for roads, bridges, and transit systems – um, we’ve needed that for the past FEW years!

We can focus on jobs when we spend within our means.

We need to diversify, but that doesn’t mean sacrificing our number one industry, the auto industry.  When pundits and ill-informed politicians take cheap shots at the auto industry and its workers, we (she’s saying this) will defend the auto industry.

Talking about the green auto industry being great.

Hundreds of thousands of jobs being lost since 2000.  “These losses have fueled our determination to bring new industry to Michigan.”  Good – we can’t JUST depend on the auto industry anymore.

Talking about film and TV project coming to Michigan after the tax breaks to film companies.

Three major announcements:

  • Wonderstruck Animation Studios – $86 million in Detroit.
  • Stardock Systems (digital gaming) – build in Plymouth
  • Motown Motion Pictures – $54 million in Pontiac (former GM plant)

Motown MP alone will create 3,600 jobs.  That’s great news – especially for the Pontiac area.

“But our success with the film industry is not an isolated example.”  Talking about renewable energy industry – solar panel production companies are building here in Michigan.

Just like the auto industry “it creates all kinds of jobs for all kinds of people.”  And that’s a good thing – I am VERY enthusiastic about renewable energy, as long as it’s not expensively forced on the people.

She’s talking about wind turbines (and wind power is something I have always been really excited about – that  and nuclear power).

Jobs for manufacturers and engineers – for solar panels and electric car batteries.

She’s getting really intense about this.  “The fact that these jobs are in Michigan is no accident.”

We bring them here by beating out other states and countries.

We passed incentives to make sure those batteries are made in Michigan.  Within weeks of passage, GM said that they’d make batteries for the Volt automobile will be made here in Michigan.  5 million electric car batteries to be made a year, creating 14,000 jobs.

She’s saying that we want electric cars researched and designed here as well as all kinds of renewable energy companies.

She set a goal for becoming more dependent on renewable energy.

  • 3 wind turbine manufactures to expand in Michigan.
  • Unisolar to build solar panel factory in Battle Creek.
  • HSC – $1 billion for solar panel expansion
  • Dow-Corning – more solar panels.
  • Great Lakes Turbine to build in Monroe (where my roommate’s from!)

“We all know that  we need more jobs – a lot more.”  I agree with you there.

President Obama has demanded more use of renewable energy.  This will increase jobs in Michigan.

“By 2020, Michigan will reduce our reliance on fossil fuels for generating electricity by 45%. … We’ll do it through increased renewable energy and gains in energy efficiency.”  Sounds like a good idea to me, but I think 45% is high.  I have no problem with it as long as it doesn’t jack up prices.  But if it makes energy unaffordable, don’t do it.

Instead of importing coal, we’ll spend energy money on Michigan wind turbines and solar panels and energy efficiency devices, all installed by Michigan workers.

Ask Legislatures to allow for Michigan homeowners to become entrepreneurs by installing solar panels on roofs and selling money back to power company.  Sounds good to me – it’s giving people the choice to do this, and enables people to eventually make that money back.

Asking utility companies to invest in energy efficient products.  Good.

Unlike the coal we buy right now, the money that we will spend on energy efficiency will create jobs in Michigan.

Create Michigan Energy Corps – creating jobs and turning natural resources into renewable fuels and weatherizing houses.

Saying that we’ll need less coal power  plants here in Michigan.

I’m kinda mad that she hasn’t said anything about more nuclear here in Michigan.

Talking about how she’ll bring new jobs to Michigan – that she’s gone all over the world to get jobs.  Yeah, well you haven’t been too successful so far.  You can go places to bring jobs here, but that doesn’t matter until you bring some here.

Saying she’ll require (I think it was universities) to buy Michigan.  I have a problem with that though, because she wants a tuition freeze in order for universities to get stimulus money.  How can they do that if you FORCE them to buy Michigan-made (more expensive at times).

Saying people should buy Michigan products.  Buy everything from Ford to Faygo.

Talking about the Michigan $4,000 putting college in the reach of all students.  Um, $4,000 really doesn’t do that much.

Michigan will be the first state to replicate the Kalamazoo promise on a large scale.  Something about free education, and I missed the rest.

#2 in the country for well qualified teachers in the classroom.  How are we #2 with the Detroit Public School system?

No Worker Left Behind: Talking about free college tuition – $5,000 per year for 2 years.  Training people for jobs, such as nurses, electricians, computer technicians.  52,000 people.  Helping us to remake Michigan.

Added more resources to the unemployment system – THAT’s what we need – to allow more people to rely on welfare!

Asking universities and colleges to freeze tuition for the next year.  The problem with that is, what if THEY can’t afford it?

Give people 90 days without the fear of foreclosure.  That’s absolutely insane.  If people buy a house that they can’t afford, then they should lose it.

Talking about asking auto insurance companies to freeze rates on auto insurance.  Sure, if they want to, but don’t make it mandatory.

She’s saying we’ll use every administrative tool to ensure that affordable rates are given to consumers.  That should be up to the companies, not the government.

Saying that we shouldn’t strip people of health coverage in order to reduce spending.  We shouldn’t HAVE state sponsored health care!  She’s saying we should protect those whom people of faith often call “the least of these.”  Well, people of faith need to step up and help the poor.  That’s their duty as good Christians (as it is my duty), NOT the governments.  When did Jesus ever say that the government should help the poor?  He didn’t!  He said his followers should – that’s why it makes me angry when people give that as a reason that Jesus would be a Democrat!

And wouldn’t “the least of these” refer to the unborn babies as well?  I don’t see you protecting them, Madame Governor!

“Is it harder to balance the state budget or the budget of a family who went from 2 paychecks to 1?”  Talking about the harships of family being much greater than the hardships of politicians as leaders.

She’s now giving an example of a guy on unemployment who used No Worker Left Behind to go to a university and now he’s working for Dow Corning.

Sorry – my news station just stopped covering it – ABC needed to go back to “regular scheduled programming.”

OK – I’m back.

Talking about hope and strength.  “We together will build a better Michigan.  God bless you all, and God bless the great state of Michigan.”

Tim Skubik is on now – saying that “Doom and Gloom” only got 2 paragraphs.  He’s right – I think she could’ve shown that things are bad more than she did instead of just saying, “This is what we WILL do,” since she’s been saying that for YEARS now.

She never really said exactly how much she wanted to cut out of the government.  I will commend her for some of her pro-energy efficient plans, but I think she may wind up driving up costs at a time that we can’t afford it.  Allowing people to sell back energy from solar panels is a GOOD thing, because it gives individuals the choice to do it, instead of  mandating it.

And now Mike Bishop’s response:

He’s saying that “we all want what’s best for our state.”

“Each one of us has felt the effects of this economy.”

Saying that the Governor wants to use federal funds to fix the state, but a quick infusion of money “will never be the antidote. … You can’t increase spending and debt and somehow hope to resolve a serious budget crisis.”  The Republicans will submit a plan in the next 45 days for instant stimulus – it incentives job providers instead of increasing spending.

The House must pass Senate Bill 1.  Get rid of the 22% business surcharge.

Talking about manufacturing complexes and other companies coming in due to tax cuts, proving that business tax cuts DO work.

The second part of the plan would bring property taxes in line with home values.  Third, a tax credit for purchases of new homes will be created.  This would spur the housing market.  And he’s absolutely right – that was one of the things my parents looked into was the huge jump in taxes we would’ve payed if we moved this past summer.

Review each item in the state budget and find savings – good!

We must “be certain that state resources are used efficiently.”  Absolutely!

Talking about opportunities coming with adversity – leaders need to rise up and “take the reins that will lead us back to prosperity. … Time for us to fix Michigan. … Thank you … God bless you, our families, and our great state of Michigan.”

Alright – I’m off to a meeting – I’ll spell check this and finish my analysis when I get back.

Done Reporting,

Ranting Republican
add to del.icio.us :: Add to Blinkslist :: add to furl :: add to ma.gnolia :: Stumble It! ::

53% of Rescued Homeowners Still Not Paying Mortgages on Time

December 12, 2008

I was watching FOX News the other day, and Neil Cavuto the Great (yes, I’ve now given Cavuto the Republican Ranting honorary title of “the Great”) was discussing a bill before Congress that would help bankrupt homeowners restructure their mortgages.  Cavuto discusses the issue with Wall Street Journal editorialist Steve Moore.  Watch the video, and I’ll discuss it below:

Folks, I’ve been saying this all along: these bailouts will not work.  There is an attitude at the heart of this problem, and that attitude is, “If I can’t pay my mortgage, it’s the bank’s fault for giving me that loan.”

And  the way that this bill was sent through doesn’t help matters either.  If you’re at least 3 months delinquent on your mortgage, you’re eligible for federal help.  Well who doesn’t want free money?  What you have happening is people falling a month or 2 behind in their payments and then just realizing, “If I just keep this up for another month or so, I can get the government to help pay for my mortgage!”

As I’ve said NUMEROUS times before (such as here and here), the majority of the blame in these instances falls on the HOMEOWNERS for trying to buy homes that they can’t afford.  If you can’t afford something don’t buy it.  And if you try to buy it and fail, you should lose that home.  It’s unfair to the mortgage companies to just let you get a free pass and keep your home because you were financially stupid.  Then again, a lot of these people who “can’t afford” these homes actually can.  They would just rather spend their money on other things.  We have so many people wasting money on cable TV and iPods and cell phones when they can’t make a simple mortgage payment.  If you have cable TV and you’re having a hard time making mortgage payments, stop buying cable.  That’ll save you $30+ a month.  The same with cell phones.  Depending on how many family members have cell phones, you could save over $100 a month.  High speed Internet – get rid of the Internet, and if you REALLY need it, get dial-up (it’s like $12/month).

Trust me, a lot of the people who “can’t afford” their homes simply have terrible budget skills.  And it’s not the bank’s fault, and it’s certainly not the government’s job to fix that.

We have to stop this cycle of “helping” homeowners, otherwise, we’re going to have  the government pay for everybody’s houses (except those of us who would be decent enough to refuse government help because we’re committed to paying for what we bought).

These people need to learn to live within their means, and if that means losing their house, then so be it.

Done Ranting,

Ranting Republican
add to del.icio.us :: Add to Blinkslist :: add to furl :: add to ma.gnolia :: Stumble It! ::

McCain Changes His Mind on Mortgage Plan – Now He Wants to “Help” Homeowners

April 11, 2008

Well, in a move that honestly shocked me, John McCain has outlined a Mortgage/Homeowner plan, contrary to earlier statements that he made, saying, “I believe the role of government is to help the truly needy. … Reforms should focus on improving transparency and accountability in our capital markets. … What is not necessary is a multibillion-dollar bailout for big banks and speculators, as Senators Clinton and Obama have proposed”:

Remarks By John McCain On The Economy At Brooklyn Small Business Roundtable

April 10, 2008

ARLINGTON, VA — U.S. Senator John McCain will deliver the following remarks as prepared for delivery at a small business roundtable in Brooklyn, New York, today at 12:45 p.m. EST:
Thank you for joining me here today. It is a real pleasure to be participating in this roundtable with so many accomplished entrepreneurs and small business owners. You represent the engine of economic growth in America. Small business creates the majority of new jobs in America every year — so thank you for your ingenuity, perseverance, and hard work.
For Americans, a good job is the best program for housing, education, clothing, health care and transportation ever devised. A strong, growing economy with good jobs is central to everything we want for America. Today our economy is weakening, and as I travel this country and meet and talk with people, I can see how things are getting tougher for many Americans.

As I see it, individuals and families are feeling real pressure in four major areas. Housing prices are flat or declining and Americans have lost their homes or are in danger of losing them. A credit crunch is making personal loans, student loans, or business loans harder to get. Gas prices and food prices are threatening family budgets. And people are worried about their jobs.

I have a plan of action to get the American economy back on track. My plan is comprised of two parts: First is a tangible, near-term plan to address and relieve some of the serious problems that Americans are facing right now. The second part of the plan is to create the right medium and long-term environment for our economy to rebound and thrive.

Let me discuss the short-term challenges and actions first.

Recently, a sustained period of rising home prices made many home lenders complacent, giving them a false sense of security and causing them to lower their lending standards. They stopped asking basic questions of their borrowers like “can you afford this home? Can you put a reasonable amount of money down?” Lenders ended up violating the basic rule of banking: don’t lend people money who can’t pay it back. Some Americans bought homes they couldn’t afford, betting that rising prices would make it easier to refinance later at more affordable rates. There are 80 million family homes in America and those homeowners are now facing the reality that the bubble has burst and prices go down as well as up.

More generally, credit is drying up and liquidity is now severely limited — and small business and hard-working families find themselves unable to get their usual loans. Business managers have become not only more cautious about hiring, but some have been reducing their workforce. All of this led to a discouraging jobs report last Friday.

As if this were not enough, oil prices and therefore gas prices have been climbing for well over a year. For a long time, companies and businesses absorbed those increases but recently they have had to pass them on to consumers. The reason the price of milk, eggs and all kinds of goods are up so much is, simply, the increased cost of transporting these products to your store. Even the costs of product containers and cartons — often made from petroleum products — have been affected by the rising cost of oil and gas.

So what can we do in the near term?

Let’s start with the housing challenges. There is nothing more important than keeping alive the American dream to own your home, and priority number one is to keep well meaning, deserving home owners who are facing foreclosure in their homes. I am pleased that the Congress is considering bi-partisan reforms to help the mortgage crisis. Bipartisan efforts may not make for great political theater, but they remain the most effective way to address quickly our nation’s problems. Bipartisan efforts are also sometimes less than perfect, and I believe we can improve on the legislation before Congress.

I’ve made my principles in this area clear: Tax breaks for builders, funds to purchase homes in foreclosure, and tax credits that are not targeted to where the need is greatest do not constitute the federal help that is warranted. In some case, lenders and borrowers alike were caught up in the speculative frenzy that has harmed the housing market. And it is not the responsibility of the American public to spare them from the consequences of their own bad judgment. The goal should be to help homeowners who are struggling, and only about $5 billion of the bill addresses their concerns in any way. I believe we can do better.

We can also encourage groups like Neighborworks America and others provide mortgage assistance to homeowners in their communities. And our government can give them the resources to expand their efforts. I also believe that the mortgage lending industry has an obligation to help refinance mortgages. If what I have read about industry-led efforts is true, it appears that a stronger effort could be launched.

I believe a more robust, timely and targeted effort is my HOME plan. It offers every deserving American family or homeowner the opportunity to trade a burdensome mortgage for a manageable loan that reflects the market value of their home. This plan is focused on people. People decide if they need help, they apply for assistance and if approved the government under my HOME Program supports them in getting a new mortgage that they can afford. There will be qualifications which require the home to be a primary residence and the borrower able to afford a new mortgage. We will combine the power of government and the private sector to find immediate solutions for deserving American homeowners.

My plan follows the sound economic principle that when markets decline dramatically, debts must be restructured. It is built on the reality that homeowners should have an equity capital stake in their home. Homeowners would end up with a 30-year mortgage and an equity stake in their home. The new lender would receive a federal guarantee of the mortgage. And the taxpayer gets a benefit if the sale value ever recovers.

The result is a restructured financial arrangement for the homeowner. Over the long term, financial institutions must follow suit, writing off losses, restructuring their balance sheets, and raising more capital.

I am also calling for an immediate DOJ [Department of Justice] task force to aggressively investigate potential criminal wrongdoing in the mortgage lending and securitization industry. If there were individuals or firms that defrauded innocent homeowners or forged loan application documents, then the punishments of the market are not enough, and they must answer for their conduct in a court of law.

Now let me turn to gas and food prices. We need to help everyone who relies on gas to commute or pick up the kids or get to doctors appointments. As President, I promise to pursue a national energy strategy that won’t be another grab bag of handouts and a full employment act for lobbyists. It will promote the diversification and conservation of our energy sources, including a robust expansion of nuclear power, that will in sufficient time break the dominance of oil in our transportation sector.

Right now I think we should stop adding to the Strategic Petroleum Reserve. The SPR is intended to offset the impact of physical disruption of oil supplies. But with oil at over $100 a barrel and an adequate supply in the SPR, it is time to suspend purchases. This will lessen worldwide demand for oil, and if the classic laws of supply and demand hold, we should see a welcome decrease in the price of oil. And I ask every American to consider how you can sacrifice a bit for the common good and cut back where you can on your energy use.

Job security may well be the most pressing problem of these challenging economic times. Right now, jobs are in jeopardy and the government backstop is not up to the task. For over a year, I have been calling for a comprehensive reform to our unemployment insurance and displaced worker programs.

In our current unemployment insurance system, benefits are the same regardless of whether a job is found quickly or slowly. There is no reward for work, or getting to work quickly. Training programs are duplicative, balkanized and inefficient. The Department of Labor alone has over a half-dozen programs under different organizational umbrellas.

I propose that we build a new system so that as women and men work, their taxes help to build up a buffer account against lost earnings. Then, if they are unfortunate enough to lose a job, they will be able to better meet their obligations. There will also be no need to wait for a bureaucrat or obey a timetable. Every day will count and give incentives to get back to work.

If new skills are needed, displaced workers should find quick assistance at a community college using a flexible training account that permits them to pay for training and use some of the leftover to keep their health insurance. They will be able to get the hands-on skills needed by employers in the area and move to a new job. And my plan contains special, targeted assistance for older workers.

We also must make health care portable. The biggest fear people have when they lose their job is losing their health insurance. I have proposed comprehensive reforms that will lead to innovative, portable insurance. But we can start by making sure that workers are eligible for affordable coverage under COBRA.

These short term measures are designed to help people where they face the most challenges right now. I think they could make a significant difference in the everyday lives of many people.

Much work remains to be done on addressing the issues and challenges that will ensure we remain the largest and strongest economy in the world in the future. I believe that in order to accomplish this we must do three things. First, we must invest in the greatest resource we have, the American people. Second, we must reignite and drive a spirit of innovation in America. And third, we must foster growth and economic freedom, which really means low and effective taxes, free trade on a level playing field, small government and a smart, enforceable regulatory and legal framework.

Next week I will outline my longer term vision for American economic growth and power. But let me make it clear that in these challenging times, I am committed to using all the resources of this government and great nation to create opportunity and make sure that every deserving American has a good job and can achieve their American dream.

Frankly, I am VERY disappointed in Senator McCain, although there is somewhat of a silver lining here.  I don’t agree with the plan that the Congress passed.  I think it helps out individuals who made bad decisions and sets a precedent that “the government will bail you out if you screw up,” and, unfortunately, I think that part of Senator McCain’s plan would do the same.  Although I disagree with his point that the government should be bailing people out of this, I will note several parts that I either agreed with or made me more comfortable accepting his plan over Obama’s or Clintons:

  • I like the fact that people would have to prove that they were credit-worthy at the time that they received the loan.  Here’s an excerpt from the Los Angeles Times that explains McCain’s plan a little more:

    McCain’s aides said his home mortgage plan could help 200,000 to 400,000 people and cost $3 billion to $10 billion. That would be far less than the proposals offered by Clinton and Obama, but McCain aides said it would be bigger than the efforts envisioned by the Bush administration.

    The plan would retire old loans that homeowners no longer can pay and replace them with less expensive, 30-year, fixed-rate mortgages that are federally guaranteed. McCain said families would gain “the opportunity to trade a burdensome mortgage for a manageable loan that reflects the market value of their home.”

    In line with his concern about bailing out speculators, McCain’s proposal would apply only to homeowners who took out sub-prime mortgages after 2005 for homes that are their main residence. They would need to have proved they were credit-worthy at the time of the loan.

  • I like the fact that he will have the Department of Justice investigate wrongdoings.  As a hard core law and order conservative, I support finding and prosecuting anybody who breaks the law.
  • I also like a lot of his health care plan, especially encouraging competition between insurance companies and allowing people to get insurance from out of state.

Clinton and Obama also had some comments saying that they didn’t think McCain’s plan did enough, which made me feel somewhat better, since their plans would do WAY too much:

While campaigning in Gary, IN, Obama said, “Just look at the speech he’s giving today about our economy.  I’m glad he’s finally decided to offer a plan.  Better late than never.  But don’t expect any real answers, don’t expect it to actually help struggling families because Senator McCain’s solution to the housing crisis seems a lot like the George Bush solution of sitting by and hoping it passes while families face foreclosure and watch the value of their homes erode.”

Clinton issued a press release, speaking out against McCain’s switch from a laissez-faire approach to a more socialized approach:

Senator McCain is apparently of two minds on the housing crisis and neither seems to know how to steward the economy effectively. Just two weeks ago, Senator McCain said he’d rather do nothing than something about the housing crisis and attacked my plan with tired right-wing talking points.

Today, it looks like he’s proposing a warmed over, half-hearted version of the very plan he criticized, to help families restructure mortgages to save homes and keep housing prices from falling further. Apparently, Senator McCain got the message: letting the phone simply ring and ring is not the way to respond to economic crises. So now he’s changed positions and is finally responding to a housing crisis that has been going on for months, but unfortunately his actions are only half-measures.

This is all part of a pattern.

Senator McCain admitted not knowing enough about economics. He can’t keep his own position on Social Security straight. And now he’s shown himself to be dangerously inconsistent on addressing our nation’s housing crisis.

For eight years, we’ve had a President who didn’t know enough or care enough to do enough on behalf of the middle class. With a credit crisis, a home mortgage crisis, and an economy facing a potentially deep and painful recession, we can’t afford four more years of more of the same.

At a time of economic crisis and uncertainty, Americans need a President with a steady hand and steady positions, not someone whose economic positions are as unpredictable as our troubled economy itself.

So, the fact that those two don’t like the plan DOES make me feel a little easier about it, but I still think it’s a mistake.  People need to accept the consequences of their actions.  The government can’t be there to bail people out all the time – it’s just not what the government is for.

Done Ranting,

Ranting Republican
add to del.icio.us :: Add to Blinkslist :: add to furl :: add to ma.gnolia :: Stumble It! ::

Why the Economic Stimulus Package Was a Terrible Idea

March 21, 2008

Alright, so I was looking around Senator Chuck Hagel’s (R-NE) website to see about his new book, and I stumbled across this press release:

Hagel Statement on Vote Against Senate Economic Stimulus Package
 
February 7th, 2008 – U.S. Senator Chuck Hagel issued the following statement today after voting against the passed United States Senate economic stimulus package:“In the last few years we have overbuilt, overmortgaged, overleveraged and abused credit. The market is now self-correcting.

“This economic stimulus package is wrongheaded, short-sighted and will only drive our country deeper into debt and continue to perpetuate this irresponsible mantra of spend, spend, spend. We are borrowing money that our children are going to have to pay back. Flying over America dropping rebate checks that we can’t cover doesn’t solve anything. This isn’t free money.”  

###

I’ve gotta say – I will always love that man and his politics – I disagree with him on a couple of things things, but he is by far my favorite politician (other than Reagan) – it still saddens me that he’s retiring, but I hope he gets back into it.  I told him on my last visit to D.C. (I should post a picture of that) that if he ever runs for anything, he has my full support.

OK, back to economics:

Here’s the bill that he was referring to: House Resolution 5140: H.R. 5140 Economic Stimulus Act of 2008 – here’s the summary, at least where I have a problem – the tax rebate stuff is fine, but Title II is dangerous:

Title II: Housing GSE and FHA Loan Limits – (Sec. 201) Raises the statutory ceiling on the maximum original principal obligation of a mortgage originated between July 1, 2007, and December 31, 2008, that may be purchased by either the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). Disregards mortgages purchased with the increased ceiling amount for purposes of meeting certain housing goals established under the Housing and Community Development Act of 1992.

Expresses the sense of Congress that Fannie Mae and Freddie Mac should securitize mortgages acquired pursuant to the increased conforming loan limits of this Act if the manner of securitization does not: (1) impose additional costs for mortgages originated, purchased, or securitized under existing limits; or (2) interfere with the goal of adding liquidity to the market.

(Sec. 202) Establishes a temporary loan limit increase for FHA-insured mortgages in specified high-cost areas for which a borrower received credit approval by December 31, 2008.

Grants the Secretary of Housing and Urban Development (HUD) discretionary authority to increase loan limits in 2008 based upon the size and location of residences in particular areas.

Directs the Secretary to publish the median house prices and mortgage principal obligation limits as revised by this Act not later than 30 days after its enactment.

And here’s why it’s dangerous: As Senator Hagel said, “we have … overmortgaged … and abused credit.  And what does this act do?  Raises limits on mortgages dealing with approved credit.  But here’s the problem (as I addressed in this post: https://inkslwc.wordpress.com/2008/03/19/monopoly-electronic-banking-credit-cards-terrible-for-kids/):

  1. People bought overpriced houses.
  2. They couldn’t afford these houses.
  3. Mortgages were given to people who NEVER should’ve been given mortgages, especially for as much as was loaned.
  4. People got adjustable rate mortgages (ARMs), which are normally used for people with bad credit, because it puts more of the risk on the person taking out the mortgage.
    1. The problem was that SO many people took out ARMs and then couldn’t pay.
    2. The banks don’t want to foreclose, because they can’t resell the property because the market is now in a state where most of the houses are overpriced, and too many people are already in financial trouble from previous mortgages.
  5. Another problem is credit – we have people all over using credit cards for whatever they want.  Rule #1 of a credit card: NEVER buy something that you couldn’t pay with cash.  Credit cards are meant for convenience so that you don’t have to carry around a wad of cash or keep all your money in a checking account where you aren’t earning interest, NOT as a secondary source for spending money.  Rule #2: Pay off the balance monthly so you don’t get nailed with interest.
  6. Yet another problem: All this $0 downpayment stuff – sure, it looks good, but that just means that you’re going to have to pay that $500 later PLUS interest!

Americans really need to go and take a simple budget or economics class, because these quick fixes are only going to hurt us.

Why is it the government’s job to fix problems that we created?  If I go out and buy a house I can’t afford and then can’t make payments, why is it the government’s job to right my stupidity?  It’s not, but ever since FDR did it in the depression, we’ve become dependent.  Herbert Hoover was right in not helping the people who just kept investing all their money in the stock market – their stupidity cost them.  Now, I understand that banks shouldn’t have been investing money that they didn’t actually have, but I’m not talking about that – I’m talking about the individuals.

If Americans aren’t careful, the economy will be slaughtered and the government won’t be able to bail people out time after time.  LEARN from your mistakes and don’t make them again, PLEASE for the sake of all of us!

Done Ranting,

Ranting Republican
add to del.icio.us :: Add to Blinkslist :: add to furl :: add to ma.gnolia :: Stumble It! ::

Monopoly Electronic Banking & Credit Cards: Terrible for Kids

March 19, 2008

OK, so over the weekend, me and some friends got bored and wanted to play Monopoly, but nobody had the game up here at college, so we decided to go out and try the new Monopoly Electronic Banking Edition.

It’s pretty cool – you put the credit card in, and the calculator senses a bump on the card (each card’s bump is different & some have 2), and it keeps track of how much money you have.  It makes the game go a whole lot faster.

But, we had been discussing (before we bought it) how terrible this is for kids.  The game is marketed for ages 8 & up.  After we bought it, this fact became apparent – this game is terrible for kids, and pretty much everybody who stopped by to see what we’re playing made a comment along those lines.

Now, let me explain why:

  • Monopoly used to teach kids counting and stuff – not with a calculator.
  • The even bigger problem: we’re teaching kids to use credit cards at age 8 (of course you can’t spend more money than you have in Monopoly).  And here’s why that’s a bad idea: most adults don’t know how to use a credit card properly.  Rule #1 of a credit card: never use it to buy something that you couldn’t buy with cash.  If you don’t have the money to pay for it in cash, don’t pay for it with a credit card.  Rule #2: ALWAYS pay the credit card balance off every month – then you don’t get charged interest.

It’s the fact that adults can’t use their money wisely that’s put us into this economic mess.

  • People are going around buying houses that they NEVER should have bought for way more than they’re worth.  Just because you can afford the down payment doesn’t mean that you will be able to make the monthly payments.
  • The banks are giving mortgages to people that they never should have, and now they too are losing money.  Banks are actually not wanting to foreclose on homes because they know that they won’t be able to resell them and make a profit.
  • How many people actually have budgets?  If you don’t have even a basic budget, unless you’re loaded, you’re going to find yourself in a financial mess that you 1) weren’t planning to get into and 2) have no clue how to get out of. 
  • Adjustable rate mortgages (ARMs) are terrible ideas – that’s what’s getting people into these messes.  Mortgage companies advertise these things, and then people who normally wouldn’t qualify for a fixed rate mortgage (FRT) are qualifying for an ARM and just getting slaughtered financially.
  • Cars – people are buying cars with dollar down payments or even no down payments, but that only means that they’ll have to pay MORE in interest later – people just see original costs and don’t factor any of this in.

If adults can’t even manage their finances correctly (the Stock Market Crash of 1929 – Hoover was absolutely right in not bailing them out – the government isn’t here to help people who make stupid financial decisions, it’s not the government’s job.  If you screw up your checkbook, the government is not here to balance it), then we shouldn’t be teaching 8 year-olds to use credit cards.

I really am scared of what’s going to happen when my generation is going around buying houses and in charge of financial institutions – with some of the spending and loaning principles that are going on now, I am terrified of the worse things that could come in the future.

Done Ranting,

Ranting Republican
add to del.icio.us :: Add to Blinkslist :: add to furl :: add to ma.gnolia :: Stumble It! ::


%d bloggers like this: