Rush Limbaugh's take on the bail out plan.

[Phil de cube]

Great article explaining what will happen with this bailout. Rush Limbaugh as an alternative proposes lowering corporate taxes (which are 2nd highest in the world) so that more investment and economic activity will happen.

He sees the bailout as a lose-lose. If the government makes a good investment, it will only get bigger and intrude more into our lives. Everything will become socialized and when a democratic president gets in there he will mess everything up. If its a bad investment, criminals on wall street will profit off tax payer money.

"Okay, here we go. The piece I just read to you, Andy Kessler, I should give you the headline. "The Paulson Plan Will Make Money for Taxpayers." He's a former hedge fund manager, and that's how he analyzes this. He's one of these economists that has commuter models and he's run some projections. Now, if this guy is right -- and who knows? See, we don't know who to trust, and we don't know who's going to end up being right. Our experience is, "I'm from the government and I'm here to help you," means we're going to get screwed.

http://www.rushlimbaugh.com/home/daily/site_092508/content/01125108.guest.html

[MarsLasar]

Great article explaining what will happen with this bailout. Rush Limbaugh as an alternative proposes lowering corporate taxes (which are 2nd highest in the world) so that more investment and economic activity will happen.

He sees the bailout as a lose-lose. If the government makes a good investment, it will only get bigger and intrude more into our lives. Everything will become socialized and when a democratic president gets in there he will mess everything up. If its a bad investment, criminals on wall street will profit off tax payer money.

"Okay, here we go. The piece I just read to you, Andy Kessler, I should give you the headline. "The Paulson Plan Will Make Money for Taxpayers." He's a former hedge fund manager, and that's how he analyzes this. He's one of these economists that has commuter models and he's run some projections. Now, if this guy is right -- and who knows? See, we don't know who to trust, and we don't know who's going to end up being right. Our experience is, "I'm from the government and I'm here to help you," means we're going to get screwed.

http://www.rushlimbaugh.com/home/daily/site_092508/content/01125108.guest.html

Actually, our experience is getting screwed because there is insufficient governmental regulation.

[Phil de cube]

Actually, our experience is getting screwed because there is insufficient governmental regulation.

Ha, the reason we are in this mess is because of government regulation. See Fannie and Freddie. The free market would never write someone a homeowners loan without checking something as simple as credit, only regulation could accomplish something like that.

You are an actuary who doesn't understand economics. In my experience, about 80-90% don't even have a basic understanding, so don't feel bad.

[Listeria]

Does he mean federal taxes on corporations?

[MarsLasar]

Wasn't Limbaugh's take on the last two elections that Bush would be awesome for the country?

[Phil de cube]

Does he mean federal taxes on corporations?

Are you trolling? Its pretty obvious what he meant.

[Phil de cube]

I request that liberals who didn't major in economics to not post in this thread. This thread is for educated people only.

[H.R. Paperstacks]

I request that liberals who didn't major in economics to not post in this thread. This thread is for educated people only.

:lol:

[SirVLCIV]

I would have absolutely no opposition to lower corporate tax rates as long as all special favors (subsidies, different tax treatments, etc.) were eliminated.

Flat corporate tax rate, no loopholes. We have a very high corporate tax rate. We have a very low corporate tax realization.

[SirVLCIV]

WASHINGTON (AP) - Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, according to a new report from Congress.

The study by the Government Accountability Office, expected to be released Tuesday, said about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period.

Collectively, the companies reported trillions of dollars in sales, according to GAO's estimate.

I don't know how much is because of this:

An outside tax expert, Chris Edwards of the libertarian Cato Institute in Washington, said increasing numbers of limited liability corporations and so-called "S" corporations pay taxes under individual tax codes.

"Half of all business income in the United States now ends up going through the individual tax code," Edwards said.

The GAO study did not investigate why corporations weren't paying federal income taxes or corporate taxes and it did not identify any corporations by name. It said companies may escape paying such taxes due to operating losses or because of tax credits.

http://apnews.myway.com/article/20080812/D92GL1U00.html

[H.R. Paperstacks]

Educated people don't listen to Rush.

[SirVLCIV]

Educated people don't listen to Rush.

True.

[Person Man]

Educated people don't listen to Rush Limbaugh.
IFYP :band1:

[Looser]

Educated people don't respond to trolls.

[SirVLCIV]

IFYP :band1:

More true. Rush = awesome.

[whisper]

Great article explaining what will happen with this bailout. Rush Limbaugh as an alternative proposes lowering corporate taxes (which are 2nd highest in the world) so that more investment and economic activity will happen.

That's nice, but high taxes are not what drove us to this point in the first place.

[The Mad Hatter]

Ha, the reason we are in this mess is because of government regulation. See Fannie and Freddie. The free market would never write someone a homeowners loan without checking something as simple as credit, only regulation could accomplish something like that.

You are an actuary who doesn't understand economics. In my experience, about 80-90% don't even have a basic understanding, so don't feel bad.

Fannie and Freddie didn't create sub-prime. The "free market" did.

[SirVLCIV]

Ha, the reason we are in this mess is because of government regulation. See Fannie and Freddie. The free market would never write someone a homeowners loan without checking something as simple as credit, only regulation could accomplish something like that.

You are an actuary who doesn't understand economics. In my experience, about 80-90% don't even have a basic understanding, so don't feel bad.

Um, John, please cite the section of law that states that a company should "Write a homeowners loan without checking credit".

Here: http://www4.law.cornell.edu/uscode/

[Keep It Real, Yo]

I read Phil's childish emails and see the cocky teen kid avatar and it just makes it worse.

[Shakermaker]

Fannie and Freddie didn't create sub-prime. The "free market" did.

The free market wouldn't have set interest rates so low.

[SirVLCIV]

The free market wouldn't have set interest rates so low.

Agreed.

[whisper]

The free market wouldn't have set interest rates so low.

Part of the equation.

Another part of the equation was the assumption the real estate market would continue to rise. That didn't come from the government.

[Shakermaker]

Part of the equation.

Another part of the equation was the assumption the real estate market would continue to rise. That didn't come from the government.

True, but there was inflated demand due to the low interest rates (which was unsustainable), and due to the community reinvestment act (I can't remember the actual name of it).

People assume that markets will rise all of the time, sometimes they're right sometimes they're not. They took a risk investing in real estate when a lot of people knew that prices were inflated. They got burned. It happens.

[notreallyme]

I would have absolutely no opposition to lower corporate tax rates as long as all special favors (subsidies, different tax treatments, etc.) were eliminated.

Flat corporate tax rate, no loopholes. We have a very high corporate tax rate. We have a very low corporate tax realization.


0% Corporate tax rate. Tax Cap Gains, Dividends, and Income all the same.

Either way you get the money, why does it have to be at the Corporate level? If that causes citizens in other countries to invest here all the better.

-----------------------------------------

have you ever seen what a small portion of our Gov't tax collection is from Corporations?

Not to mention when you tax at the corporate level you are taxing EVERYONE who owns that stock at the exact same rate.
- Another area where Dems show off how ignorant they are when it comes to economics.
Complain about not taxing the rich enough then be all hell bent FOR the most regressive taxes (SS and Corporate).

Phil: AWESOME sig line, I was going to use it until I saw you were.

[notreallyme]

Fannie and Freddie didn't create sub-prime. The "free market" did.

Keep telling yourself that.

[SirVLCIV]

0% Corporate tax rate. Tax Cap Gains, Dividends, and Income all the same.

Either way you get the money, why does it have to be at the Corporate level? If that causes citizens in other countries to invest here all the better.

-----------------------------------------

have you ever seen what a small portion of our Gov't tax collection is from Corporations?

Not to mention when you tax at the corporate level you are taxing EVERYONE who owns that stock at the exact same rate.
- Another area where Dems show off how ignorant they are when it comes to economics.
Complain about not taxing the rich enough then be all hell bent FOR the most regressive taxes (SS and Corporate).

Phil: AWESOME sig line, I was going to use it until I saw you were.

I'd have no problem with the above. In addition, we don't tax Corporate revenues, we tax profits, and a loss can be carried forward as a tax deduction. This leads to some fishy business deals done solely for tax reasons.

Our tax system is way, way, way too complicated, and in the end, we reward those who can find the loopholes and punish those who can't.

I'm generally (I haven't seen the actual data in order to make an informed position) in favor of the fair tax idea.

[Ziff]

Fannie and Freddie didn't create sub-prime. The "free market" did.

Much of the development of sub-prime mortgages was in response to the Clinton administration regulations intent on strengthening the Community Reinvestment Act.

The free-market should never have extended sub-prime mortgages into markets that were not low income.

[Linus]

Phil: AWESOME sig line, I was going to use it until I saw you were.

It's not really Rush's line though. He picked it up from a Reagan quote:

The most terrifying words in the English language are: I'm from the government and I'm here to help.

[Phil de cube]

It's not really Rush's line though. He picked it up from a Reagan quote:

AWESOME

[Gary Wright]

AWESOME

Who is the wanker in your avatar?

[Phil de cube]

Who is the wanker in your avatar?

http://www.actuarialoutpost.com/actuarial_discussion_forum/showthread.php?t=143897

[The Mad Hatter]

True, but there was inflated demand due to the low interest rates (which was unsustainable), and due to the community reinvestment act (I can't remember the actual name of it).

People assume that markets will rise all of the time, sometimes they're right sometimes they're not. They took a risk investing in real estate when a lot of people knew that prices were inflated. They got burned. It happens.

Point taken on community reinvestment act. However, I still don't see how Fannie and Freddie are to blame since their role was to package conforming loans.

[Shakermaker]

Point taken on community reinvestment act. However, I still don't see how Fannie and Freddie are to blame since their role was to package conforming loans.

Fannie and Freddie have a nice direct credit line to the treasury that non-GSEs don't have. And the very fact that it was presumed that the government would step in and save them if they screwed up gives them a rubber stamp to do so.

[Phil de cube]

Point taken on community reinvestment act. However, I still don't see how Fannie and Freddie are to blame since their role was to package conforming loans.

Ive read that they crept into the private sector taking business away from private entities which forced the private entities to make riskier loans to get the same return on capital.

[ADoubleDot]

Interesting how Freddie and Fannie are being revisionist-historied into government organizations. They were shareholder-owned corporations. Yes, they assumed that the gummint would help them, but they didn't "regulate" anything.

[The Mad Hatter]

Ive read that they crept into the private sector taking business away from private entities which forced the private entities to make riskier loans to get the same return on capital.

No one forced investors to buy sub-prime, non-agency pass-throughs. The existence of Fannie and Freddie did not create that demand anymore than the existence of the U.S. Treasury issuing debt creates demand for junk bonds.

[The Mad Hatter]

Interesting how Freddie and Fannie are being revisionist-historied into government organizations. They were shareholder-owned corporations. Yes, they assumed that the gummint would help them, but they didn't "regulate" anything.

Indeed, the problem here that the government should either have made it clear that Fannie and Freddie would be allowed to fail OR tightly regulated their behavior. Neither of them blew up because of the charter business (packaging conforming loans) but rather because they were levering up to their eyeball (at low rates because of the implicit U.S. gummint backing) and buying all sorts of crap.

[Quasi]

I request that liberals who didn't major in economics to not post in this thread. This thread is for educated people only.

Why only liberals who didn't major in economics? Assuming all conservatives were econ majors or are otherwise "educated people"? I guess Sarah Palin's BA in Communication makes her an educated person?

[Shakermaker]

Calm down, there was actually some good discussion going on. Don't piss all over it.

[H.R. Paperstacks]

Why only liberals who didn't major in economics? Assuming all conservatives were econ majors or are otherwise "educated people"? I guess Sarah Palin's BA in Communication makes her an educated person?

:lol:

[Colymbosathon ecplecticos]

I guess Sarah Palin's BA in Communication makes her an educated person?

Apparently it makes her the most qualified person to be the Republican VP candidate. Maybe they need a bigger tent.

[4sigma]

Point taken on community reinvestment act. However, I still don't see how Fannie and Freddie are to blame since their role was to package conforming loans.

http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F9582 60&sec=&spon=&pagewanted=1


Fannie Mae Eases Credit To Aid Mortgage Lending

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

n moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

...

[The Mad Hatter]

Interesting. I always assumed that subprime pools were non-agency.

[Listeria]

Whoa. Score 1 for the AEI!

and I was just at their website 20 minutes ago by strange coincidence.

[cohomology]

Anyone hear of the Glass-Steagall Act? Look it up we can blame both parties.

I have a problem with idiot Senators thinking they know more then the experts Paulson ect.

[SirVLCIV]

I would have absolutely no opposition to lower corporate tax rates as long as all special favors (subsidies, different tax treatments, etc.) were eliminated.

Flat corporate tax rate, no loopholes. We have a very high corporate tax rate. We have a very low corporate tax realization.

I believe Obama said something to this effect last night. w00t.

[Linus]

Anyone hear of the Glass-Steagall Act? Look it up we can blame both parties.

I assume you're blaming the repeal of GS through GLB and not the act itself?

[Extreme Extremist]

Actually, our experience is getting screwed because there is insufficient governmental regulation..

BullS***

[SirVLCIV]

.

HorseS***
IFYP ;-)

[MarsLasar]

http://thinkprogress.org/wp-content/uploads/2008/09/econpoll.gif

http://thinkprogress.org/2008/09/24/regulation-poll/

[Sentinel]

Well, if a certain belief is a popular response to a poll, then the belief must be true.

[2PacsHotSister]

...article from NYT 1999...

From quoted article
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

My feeling is that this drove them to take in subprimes more than pressure from Clinton at the end of his term, but as usual all arguments are worthless without numbers.