Huge price tag may thwart tax cut plans

[Gneisenau]

Huge price tag may thwart tax cut plans - Eye on the Economy - MSNBC.com

But as voters try to decode their tax proposals, the recession and financial bailout are curtailing the candidate's ability to keep their multitrillion-dollar promises.

[Gneisenau]

When this debate was going on earlier in the year, I feared we would hear the next president proclaim "I know I promised you tax breaks, but <insert desaster here> was worse than I thought. Now we just can't afford it."
It seems that maybe that will be the case afterall.
I think for the next couple of years, the economy will contract, taxes will go up for everyone, not down, the cycle will become self-sustaining during that time.

[SuperFly03]

Taxes will increase. Period.

Such is life. *Goes to do his tax avoidance planning*

[BaldEagle]

I recall somebody once said "read my lips no new taxes" didn't go well later when he jacked up taxes and it won't go well for them when they back out now either.

[halbhh]

na

tax credits, rebates, cuts, etc. -- plenty of tax cuts coming.

"temporary" of course.

[Gneisenau]

I rather suspect that whomever is in power in 2 years will be in dire straights.

[halbhh]

Originally Posted by Gneisenau

I rather suspect that whomever is in power in 2 years will be in dire straights.

yah. Fortunately for the dems, it's clear enough this situation preceeds Obama, and so he'll have more time than 2 years until folks will expect his economic ideas to be responsible for anything. Perhaps about 4 years.

[Dean]

Honestly, what candidate has ever been able to really implement their proposed tax plan?? It's all a bunch of BS anyway if you ask me.

[halbhh]

I agree. And even more, a president has a very modest limited effect on an economy. Much less than the captain of a big ship. More like a small tugboat in high seas.

Together the government and fed are a little more, about like a captain at the wheel, which means something if the storm isn't too big.

[BaldEagle]

Originally Posted by halbhh

yah. Fortunately for the dems, it's clear enough this situation preceeds Obama, and so he'll have more time than 2 years until folks will expect his economic ideas to be responsible for anything. Perhaps about 4 years.

Whoever get elected looks to get one term and the boot... The economy will not get better it will get worse as the recession has just gotten started. Nobody is going to live up to the promises made in the campaigns and will be hung with those words in four years just as George H Bush was.

The problem here is the Dems took control of Congress in 2007 and shortly thereafter the economy tanked. Let's look at the fall of Fannie and Freddie had there been a Republican that was responsible they would already have been crucified. Since they can't pin it on one instead we hold hearings in kangaroo court to find out what the problem was. In fact the Democrats know they were the problem and are holding hearings are simply to pacify the court of public opinion as eventually someone will likely perjure themselves and we will then have a sacrifice to heap all the blame upon.

If the economy is in the tank in several years as it looks to be then how is Obama going to find a Republican to blame?

[Gneisenau]

Originally Posted by Dean

Honestly, what candidate has ever been able to really implement their proposed tax plan?? It's all a bunch of BS anyway if you ask me.

True, but if people actually used their heads during elections, there would more far more run away elections instead of the always present battles we have these days.

[halbhh]

Originally Posted by BaldEagle

Whoever get elected looks to get one term and the boot... The economy will not get better it will get worse as the recession has just gotten started. Nobody is going to live up to the promises made in the campaigns and will be hung with those words in four years just as George H Bush was.

The problem here is the Dems took control of Congress in 2007 and shortly thereafter the economy tanked. Let's look at the fall of Fannie and Freddie had there been a Republican that was responsible they would already have been crucified. Since they can't pin it on one instead we hold hearings in kangaroo court to find out what the problem was. In fact the Democrats know they were the problem and are holding hearings are simply to pacify the court of public opinion as eventually someone will likely perjure themselves and we will then have a sacrifice to heap all the blame upon.

If the economy is in the tank in several years as it looks to be then how is Obama going to find a Republican to blame?

While you can blame democrats for Fannie and Freddie (in the original sense)....in the end the gses were only a small part of the picture.

Really it's more the simple collapse of a credit bubble.

Plain and simple.

That isn't Democratic or Republican.

That's the burst of a speculative bubble.

Not a bubble in housing (which was only an aspect.).

A bubble in money (including credit) itself.

A fractional reserve lending/credit bubble.

A big super-bubble. Like Soros talks about.

[BaldEagle]

Originally Posted by halbhh

While you can blame democrats for Fannie and Freddie (in the original sense)....in the end the gses were only a small part of the picture.

Really it's more the simple collapse of a credit bubble.

Plain and simple.

That isn't Democratic or Republican.

That's the burst of a speculative bubble.

Not a bubble in housing (which was only an aspect.).

A bubble in money (including credit) itself.

A fractional reserve lending/credit bubble.

A big super-bubble. Like Soros talks about.

The bubble in housing was only the catalyst the real problem was why was there was bubble in housing.

'No Money Down' Falls Flat

(a) The "balloon mortgage," in which the borrower pays only interest for 10 years before a big lump-sum payment is due.

(b) The "liar loan," in which the borrower is asked merely to state his annual income, without presenting any documentation.

(c) The "option ARM" loan, in which the borrower can pay less than the agreed-upon interest and principal payment, simply by adding to the outstanding balance of the loan.

(d) The "piggyback loan," in which a combination of a first and second mortgage eliminates the need for any down payment.

(e) The "teaser loan," which qualifies a borrower for a loan based on an artificially low initial interest rate, even though he or she doesn't have sufficient income to make the monthly payments when the interest rate is reset in two years.

(f) The "stretch loan," in which the borrower has to commit more than 50 percent of gross income to make the monthly payments.

(g) The "NINA Loan" in which a borrower indicates an employeer but states no income and declares no assets beyond the property being purchased.

(h) The ultimate "NINJA loan" in which the borrower states no income, provides no employment information and declares no assets beyond the property being purchased.

Now while property was going up in some markets 10% per year banks were more than happy to lend money with hefty up front charges to people who would likely later default or even better refinace for more money. This left them with those huge up front fees and in the event of defaults a property that would be proabably be worth 20% more than the value at the time the loan was written. While markets were hot they could quickly sell maybe even to another subprime buyer and repeat the cycle again, and again, and again. And the money flowed, and congressmen got their palms greased with political contributions and life was good... until...

The FED jacked up rates and mortgages rates rose, which reduces home sales. Well that set off a wave of ARMs adjustments and with mortgage rates rising people saw those mortgage rates double making them beyond what they could afford and then the housing market imploded with dozens of sellers for each buyer in a glut of property.

Unless they can find a victim in kangaroo court I expect after Obama is elected he'll sack Bernake and they move to pin the rap on the FED for screwing up the whole thing just as I described.