@RBB - Your over generalization neglects to mention the true agents who carried
out the housing crisis. Realtors, Brokers, Investment Bankers (and undereducated
home buyers) all colluded to increase all of their bottom lines at the expensive
of the general public. Also, the Federal Reserve, is not a government entity, it
is actually a private organization, so in fact if your reasoning is that the
Federal Government caused the housing bubble due to keeping rates artificially
low, you can in fact thank a private company not the government.
The solution is simple. But as quoted from Hillarys organization they want to
give high risk loans to people who can't afford them.Here's the solution. Instead of requiring 3% down payment and a warm
body. You require 10-20% down payment and an income that can support the home
they're purchasing.That will prevent people from leveraging
their money when they can afford a $500,000 home and leverage that money to buy
a $1,000,0000 home. That will prevent people that can afford a $120,000 home
from purchasing a $240,000 home.The other issue is offering arm
loans to people. Many people are poor, because they are not financially smart.
They just see that right now they can afford their dream home at a young age
with zero savings and low income. Then interest rates rise and they were already
extended and can no longer make the monthly payment. I would argue that people
in that situation are very financially stupid.Perhaps on top of
people needing a bigger down payment, is to have people go through a class and
educate them on the risk. After taking the class the government is no longer
responsible for them.
Child Tax Credits and Mortgage Deductions and all deductions for that matter are
entitlements. Getting something for nothing. That is entitlement. They are
just the more Republican ways of stealing as compared to the more Democratic way
of stealing in the form of welfare and medicare/medicaid. Not
paying your full tax is an entitlement. You pay less tax and thus have more
money for doing nothing that doesn't already majorly help you. Getting $ from others because you have children is an entitlement.... Child
Tax Credits and the like.Getting $ for food from others is an
entitlement.Getting your health care paid for from others is an
A major cause of the housing crisis was that the government kept interest rates
artificially low. House prices went up, up , up because everyone looked at
whether they could afford the mortgage payment rather than the actual price of
the house. Then, when a recession hit, housing prices started falling to more
realistic levels and everyone was upside down. The more the
government gets involved, the more likely the disaster will be repeated.
Who writes your summaries? Nowhere in the article is there ANY mention of doing
away with the mortgage deduction. And you incorrectly label the deduction an
“entitlement”. Entitlements involve the government paying something
out or giving a credit – that does not happen with a mortgage
deduction.And Fannie and Freddie were significantly privatized under
Reagan – though not totally. There was no legal obligation for the feds
to take them over. Since slick willy and barney frank essentially forced them
to buy bad mortgages, there may have been a moral obligation to do so, and the
housing market would have tanked even worse had they ceased to exist, perhaps it
was best for the feds to take them over, but barney never should have exposed
them to undue, artificial influence in the first place.
Question for the headline writer, where is the story about a mortgage deduction?
It's not in the article let alone any crosshairs.I'm
aware of Simpson - Bowles and talking reducing the mortgage interest deduction
on sched A, which idea would be a very good leveler if the mortgage interest
deduction would be capped at say the amount paid yearly on an average cost
house. Not to reward mcmansion buyers. But to reward middle class home owners
who are the rock of our economy and our neighborhoods. mcmansion buyers can
fend for themselves with their wealth very well without we taxpayers helping
them.So back to the headline, the article is missing the content you
advertised. The article is an interesting discussion about how the taxpayers
can avoid holding the bag, again, for risky real estate financing ventures.
Let's pursue that, letting investors hold their bag.