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petegz28
03-25-2010, 07:42 PM
http://www.washingtonpost.com/wp-dyn/content/article/2010/03/25/AR2010032502426.html

The Obama administration plans to overhaul how it is tackling the foreclosure crisis, in part by requiring lenders to temporarily slash or eliminate monthly mortgage payments for many borrowers who are unemployed, senior officials said Thursday.

Banks and other lenders would have to reduce the payments to no more than 31 percent of a borrower's income, which would typically be the amount of unemployment insurance, for three to six months. In some cases, administration officials said, a lender could allow a borrower to skip payments altogether.

The new push, which the White House is scheduled to announce Friday, takes direct aim at the major cause of the current wave of foreclosures: the spike in unemployment. While the initial mortgage crisis that erupted three years ago resulted from millions of risky home loans that went bad, more-recent defaults reflect the country's economic downturn and the inability of jobless borrowers to keep paying.

The administration's new push also seeks to more aggressively help borrowers who owe more on their mortgages than their properties are worth, offering financial incentives for the first time to lenders to cut the loan balances of such distressed homeowners. Those who are still current on their mortgages could get the chance to refinance on better terms into loans backed by the Federal Housing Administration.

The problem of "underwater" borrowers has bedeviled earlier administration efforts to address the mortgage crisis as home prices plunged.

Officials said the new initiatives will take effect over the next six months and be funded out of $50 billion previously allocated for foreclosure relief in the emergency bailout program for the financial system. No new taxpayer funds will be needed, the officials said.

The measures have been in the works for weeks, but President Obama is finally to release the details days after his watershed victory on health-care legislation. Following that bruising battle on Capitol Hill, his administration is now welcoming a chance to change the subject and turn its attention to the economy and, in particular, the plight of the unemployed -- concerns that are paramount for many Americans.

The administration has been facing increasing pressure from lawmakers and housing advocates to overhaul its foreclosure prevention efforts. So far, fewer than 200,000 borrowers have received permanent loan modifications under its $75 billion marquee program, known as Making Home Affordable. In the meantime, there is a growing backlog of distressed borrowers awaiting help from their lenders, which threatens to undercut efforts to stabilize the housing market.

Assistant Treasury Secretary Herbert M. Allison Jr. told a House panel Thursday that "we did not fully envision the challenges that we would encounter" when the earlier program was launched.

The efforts have been hampered by the difficulty of helping unemployed homeowners, who struggled to qualify for the government's mortgage relief plan. In requiring temporary relief for jobless borrowers, known as forbearance, officials are hoping to give them time to find a new job. Some will still need more assistance after the six-month period while others will ultimately lose their homes, administration officials said.

"We certainly support a forbearance opportunity for unemployed borrowers," said John A. Courson, chief executive of the Mortgage Bankers Association. He said he had not seen full details of the program.

Four measures


In addition to mortgage relief for unemployed borrowers, the program features four other key elements, including several steps to address the growing population of borrowers who owe significantly more than their home is worth, according to officials who spoke on the condition of anonymity because the official announcement had not been made. Underwater borrowers now make up about a quarter of all homeowners, according to First American CoreLogic. Economists consider these homeowners at higher risk of default because they cannot sell or refinance their home when they run into financial troubles.

The first key element is that the government will provide financial incentives to lenders that cut the balance of a borrower's mortgage. Banks and other lenders will be asked to reduce the principal owed on a loan if the amount is 15 percent more than their home is worth. The reduced amount would be set aside and forgiven by the lender over three years, as long as the homeowner remained current on the loan.

Until recently, administration officials had been reluctant to encourage lenders to cut the principal balance, worrying that this would encourage borrowers to become delinquent. But as federal regulators have struggled to make an impact on the foreclosure crisis, those qualms have weakened.

"We would prefer to see a required principal forgiveness program. But this is helpful," said David Berenbaum, chief program officer for the National Community Reinvestment Coalition, a nonprofit housing group. "This is another tool that will help consumers weather the crisis."

Second, the government will double the amount it pays to lenders that help modify second mortgages, such as piggyback loans, which enabled home buyers to put little or no money down, and home equity lines of credit.

These second mortgages are an added burden on struggling homeowners, especially when their total debt, as a result, is greater than their home value.

Federal officials have estimated that about half of all troubled homeowners have a second mortgage and last year launched a program to encourage lenders to restructure them. That effort has struggled to get off the ground.

Third, the new effort also increases the incentives paid to those lenders that find a way to avoid foreclosing on delinquent borrowers even if they can't qualify for mortgage relief. For example, the administration is scheduled to launch a program next month encouraging lenders to have borrowers sell their homes for less than the mortgage balance in what is known as a short sale.

Fourth, the administration is increasingly turning to the Federal Housing Administration to help underwater borrowers who are still keeping up their payments. The aim is to help these borrowers refinance into a more affordable loan. The FHA will offer incentives to lenders that reduce the amount borrowers owe on their primary mortgages by at least 10 percent.

For those borrowers who have more than one mortgage on their house, the FHA will allow refinancing of the first loan only. The new loan and any second mortgage could not exceed 15 percent of the home's value. This approach is meant to benefit not only borrowers but also lenders by allowing them to offload mortgages that might otherwise fail.

Only homeowners who are refinancing their main residence, have a credit score above 500 and can document their income are eligible.

Administration official say this refinancing program should not strain the FHA's already weakened finances because the effort will be financed with up to $14 billion out of the federal bailout program.

max sleeper
03-25-2010, 08:03 PM
http://www.washingtonpost.com/wp-dyn/content/article/2010/03/25/AR2010032502426.html

The Obama administration plans to overhaul how it is tackling the foreclosure crisis, in part by requiring lenders to temporarily slash or eliminate monthly mortgage payments for many borrowers who are unemployed, senior officials said Thursday.

Banks and other lenders would have to reduce the payments to no more than 31 percent of a borrower's income, which would typically be the amount of unemployment insurance, for three to six months. In some cases, administration officials said, a lender could allow a borrower to skip payments altogether.

The new push, which the White House is scheduled to announce Friday, takes direct aim at the major cause of the current wave of foreclosures: the spike in unemployment. While the initial mortgage crisis that erupted three years ago resulted from millions of risky home loans that went bad, more-recent defaults reflect the country's economic downturn and the inability of jobless borrowers to keep paying.

The administration's new push also seeks to more aggressively help borrowers who owe more on their mortgages than their properties are worth, offering financial incentives for the first time to lenders to cut the loan balances of such distressed homeowners. Those who are still current on their mortgages could get the chance to refinance on better terms into loans backed by the Federal Housing Administration.

The problem of "underwater" borrowers has bedeviled earlier administration efforts to address the mortgage crisis as home prices plunged.

Officials said the new initiatives will take effect over the next six months and be funded out of $50 billion previously allocated for foreclosure relief in the emergency bailout program for the financial system. No new taxpayer funds will be needed, the officials said.

The measures have been in the works for weeks, but President Obama is finally to release the details days after his watershed victory on health-care legislation. Following that bruising battle on Capitol Hill, his administration is now welcoming a chance to change the subject and turn its attention to the economy and, in particular, the plight of the unemployed -- concerns that are paramount for many Americans.

The administration has been facing increasing pressure from lawmakers and housing advocates to overhaul its foreclosure prevention efforts. So far, fewer than 200,000 borrowers have received permanent loan modifications under its $75 billion marquee program, known as Making Home Affordable. In the meantime, there is a growing backlog of distressed borrowers awaiting help from their lenders, which threatens to undercut efforts to stabilize the housing market.

Assistant Treasury Secretary Herbert M. Allison Jr. told a House panel Thursday that "we did not fully envision the challenges that we would encounter" when the earlier program was launched.

The efforts have been hampered by the difficulty of helping unemployed homeowners, who struggled to qualify for the government's mortgage relief plan. In requiring temporary relief for jobless borrowers, known as forbearance, officials are hoping to give them time to find a new job. Some will still need more assistance after the six-month period while others will ultimately lose their homes, administration officials said.

"We certainly support a forbearance opportunity for unemployed borrowers," said John A. Courson, chief executive of the Mortgage Bankers Association. He said he had not seen full details of the program.

Four measures


In addition to mortgage relief for unemployed borrowers, the program features four other key elements, including several steps to address the growing population of borrowers who owe significantly more than their home is worth, according to officials who spoke on the condition of anonymity because the official announcement had not been made. Underwater borrowers now make up about a quarter of all homeowners, according to First American CoreLogic. Economists consider these homeowners at higher risk of default because they cannot sell or refinance their home when they run into financial troubles.

The first key element is that the government will provide financial incentives to lenders that cut the balance of a borrower's mortgage. Banks and other lenders will be asked to reduce the principal owed on a loan if the amount is 15 percent more than their home is worth. The reduced amount would be set aside and forgiven by the lender over three years, as long as the homeowner remained current on the loan.

Until recently, administration officials had been reluctant to encourage lenders to cut the principal balance, worrying that this would encourage borrowers to become delinquent. But as federal regulators have struggled to make an impact on the foreclosure crisis, those qualms have weakened.

"We would prefer to see a required principal forgiveness program. But this is helpful," said David Berenbaum, chief program officer for the National Community Reinvestment Coalition, a nonprofit housing group. "This is another tool that will help consumers weather the crisis."

Second, the government will double the amount it pays to lenders that help modify second mortgages, such as piggyback loans, which enabled home buyers to put little or no money down, and home equity lines of credit.

These second mortgages are an added burden on struggling homeowners, especially when their total debt, as a result, is greater than their home value.

Federal officials have estimated that about half of all troubled homeowners have a second mortgage and last year launched a program to encourage lenders to restructure them. That effort has struggled to get off the ground.

Third, the new effort also increases the incentives paid to those lenders that find a way to avoid foreclosing on delinquent borrowers even if they can't qualify for mortgage relief. For example, the administration is scheduled to launch a program next month encouraging lenders to have borrowers sell their homes for less than the mortgage balance in what is known as a short sale.

Fourth, the administration is increasingly turning to the Federal Housing Administration to help underwater borrowers who are still keeping up their payments. The aim is to help these borrowers refinance into a more affordable loan. The FHA will offer incentives to lenders that reduce the amount borrowers owe on their primary mortgages by at least 10 percent.

For those borrowers who have more than one mortgage on their house, the FHA will allow refinancing of the first loan only. The new loan and any second mortgage could not exceed 15 percent of the home's value. This approach is meant to benefit not only borrowers but also lenders by allowing them to offload mortgages that might otherwise fail.

Only homeowners who are refinancing their main residence, have a credit score above 500 and can document their income are eligible.

Administration official say this refinancing program should not strain the FHA's already weakened finances because the effort will be financed with up to $14 billion out of the federal bailout program.

:clap: A unbiased (no smart ass comment) informative post!!! See Petey28 there is good in u!

Duck Dog
03-25-2010, 08:19 PM
The title should read. 'Nobama readies for HC bill affects by readying the US for foreclosures and unemployment'.

BucEyedPea
03-25-2010, 08:33 PM
The title should read. 'Nobama readies for HC bill affects by readying the US for foreclosures and unemployment'.

LMAO:LOL:LMAO:LOL:

Taco John
03-25-2010, 08:40 PM
No problem.

http://www.sfbg.com/blogs/politics/monopoly%20money.jpg

mlyonsd
03-25-2010, 08:52 PM
No problem.

http://www.sfbg.com/blogs/politics/monopoly%20money.jpg

No chit.

Mr. Kotter
03-25-2010, 08:55 PM
Yeah, like this would be a really, really bad thing. Right?

I mean, that evil, evil, awful...gubmernt!!! This means, Re-vo-lu-tion!!!!

:cuss::cuss::cuss:

petegz28
03-25-2010, 10:56 PM
Here is a great sister story....

Half of U.S. Home Loan Modifications Default Again
http://www.bloomberg.com/apps/news?pid=20601087&sid=aVYxPZ56vjys


I know it's shocking to some people like Kotter to think that people who took out loans they never should have had defaulted on them and then defaulted on them again after the fucking Fed Gov made the bankers play nice with the unqualified borrower.

Suddenly now we are going to reward the delinquant again by telling banks to take it up the ass. In the meantime Obama wants banks to increase lending to spur the economy.


The guy is a fucking idiot.

Taco John
03-25-2010, 10:59 PM
Yeah, like this would be a really, really bad thing. Right?

I mean, that evil, evil, awful...gubmernt!!! This means, Re-vo-lu-tion!!!!

:cuss::cuss::cuss:


Why even have jobs if we've got a gubment?

petegz28
03-25-2010, 11:01 PM
Why even have jobs if we've got a gubment?

No shit!! Let's see....2 years of unemployment and now the Fed Gov will keep you from losing your house if you decide you don't want to make the payments anymore. And on top of that now, you will get free health care to go along with your food stamps and welfare check.

Rain Man
03-25-2010, 11:03 PM
There's never been a better time to be poor in this country, which may be why we're all headed that way.

Chiefshrink
03-25-2010, 11:07 PM
F'n unbelievable!!!! But not really considering the players involved.

What did Ben Franklin say: Something to the effect of when a society makes poverty comfortable then..............................................

Chiefshrink
03-25-2010, 11:08 PM
There's never been a better time to be poor in this country, which may be why we're all headed that way.

Unfortunately you're RIGHT!!!!!!!!!!!!!

stevieray
03-25-2010, 11:09 PM
Why even have jobs if we've got a gubment?

It's time to push the accelerator down, get as many as they can on the govt tit, and demonize the opposition.

It's funny to watch the gov't take over...

mortgages
banks
auto industry
healthcare
education

...spending trillions, saying the worst is behind us, when it's never been worse. and it's not gonna get better, not on an economy based on service.

petegz28
03-25-2010, 11:16 PM
People who have second mortgages don't deserve one ounce of help or sympathy. I am willing to be these are the people who..

A) took out a variable loan on a house they could not afford thinking rates would never go up

B) took out a second mortgage to furnish the house they could not afford, including the boat they can't afford that sits in their driveway all year long.

C) Again, used a second mortgage to buy a house they otherwise could never afford.

fan4ever
03-25-2010, 11:18 PM
There's never been a better time to be poor in this country, which may be why we're all headed that way.

Dead on . . .

Chiefshrink
03-25-2010, 11:20 PM
It's time to push the accelerator down, get as many as they can on the govt tit, and demonize the opposition.

It's funny to watch the gov't take over...

mortgages
banks
auto industry
healthcare
education

...spending trillions, saying the worst is behind us, when it's never been worse. and it's not gonna get better, not on an economy based on service.

Marxist Communists on a ROOOOOOOOOOOOOOOOOOOOOOOOLL:shake:

HonestChieffan
03-26-2010, 06:07 AM
http://iowntheworld.com/blog/wp-content/uploads/2010/03/OtotalRecall01.jpg

HonestChieffan
03-26-2010, 06:19 AM
People needed jobs so he passed the stimulus. It didnt work.
Stimulus didn't work so he passed a jobs bill. It won't work.
Bad Mortgages were being forclosed. So we passed a forclosure program. It didnt work.
Business needed a boost so he passed the stimulus bill. It didn't work.
Small business needed a hand. So we passed a tax increase.
Banks needed to make loans. So he took the student loan proram away from them.
Banks needed Cash flow. So we are going to stop inflow and make them eat bad mortgages.
Bad Mortgages were caused by government and Fannie/Freddie. So we gave bonus' to F/F management.

One has to marvel. It all starts and stops with business being allowed to do business and expand so they can hire. And all we want to do is increase taxes and increase cost of doing business in the US.

BigRedChief
03-26-2010, 06:34 AM
It all starts and stops with business being allowed to do business and expand so they can hire. And all we want to do is increase taxes and increase cost of doing business in the US.
We decreased taxes on business's and deregulated most industry's and even ignored most of the regulatory laws on the books for 8 years under George W. We already tried getting out of business's way and letting business do business. Where did that get us? the great recession and almost another depression. The solution is not to deregulate and let business's do whatever they want and everyone will have jobs again.

What we need to do is get rid of the lobbyist in Washington. Outlaw the pork and special deals in Washington. The people/industry's in power want to keep the status quo and will fight to keep their power. It won't be easy. The special interests are in charge of our democracy, not the people.

We need to make a "widget" that is in demand that is cheaper and better quality than the rest of the world can do while at the same time paying the workers that build that "widget" middle class wages. And thats going to be hard to pull off. The labor cost are going to be tough to beat. Why pay an American $50K to do a job when it can be done in India and China for $5K?

I think we have seen our heyday come and go after WW2. We don't make chit and want $50K to work at a job. It's just untenable. It's not going to work.

HonestChieffan
03-26-2010, 07:55 AM
Lobbyists dont make people borrow more than they can pay or fail to make payments they are responsible for. Lobbyists didnt make the stimulus fall on its ass or create an approach that makes business afraid to hire or expand. Bush is not the President. Business is what creates jobs. Growing business creates more jobs. Profital business creates jobs. Without business we only have government jobs and no income for government. This is Obamas recession and its Obamas economy.

Its time to wake up BRC. Everything this guy has touched has turned in to a steaming pile of dung. You cannot polish a turd.

Brainiac
03-26-2010, 08:20 AM
We decreased taxes on business's and deregulated most industry's and even ignored most of the regulatory laws on the books for 8 years under George W. We already tried getting out of business's way and letting business do business. Where did that get us? the great recession and almost another depression. The solution is not to deregulate and let business's do whatever they want and everyone will have jobs again.

What we need to do is get rid of the lobbyist in Washington. Outlaw the pork and special deals in Washington. The people/industry's in power want to keep the status quo and will fight to keep their power. It won't be easy. The special interests are in charge of our democracy, not the people.

We need to make a "widget" that is in demand that is cheaper and better quality than the rest of the world can do while at the same time paying the workers that build that "widget" middle class wages. And thats going to be hard to pull off. The labor cost are going to be tough to beat. Why pay an American $50K to do a job when it can be done in India and China for $5K?

I think we have seen our heyday come and go after WW2. We don't make chit and want $50K to work at a job. It's just untenable. It's not going to work.

Again with the rewriting of history. "Getting out of business's way" did not lead to the Great Recession. The Great Recession was caused by the Credit Crisis, which was caused by the government forcing banks to make mortgage loans to people who couldn't afford the houses they were buying.

Sound familiar? Those who ignore history are doomed to repeat it.

Mr. Kotter
03-26-2010, 08:23 AM
...You cannot polish a turd.

Actually you can. They proved it on an episode of Myth Busters.

KC native
03-26-2010, 08:24 AM
Again with the rewriting of history. "Getting out of business's way" did not lead to the Great Recession. The Great Recession was caused by the Credit Crisis, which was caused by the government forcing banks to make mortgage loans to people who couldn't afford the houses they were buying.

Sound familiar? Those who ignore history are doomed to repeat it.

JFC, how long are you guys going to try and hang onto this myth?

The credit crisis is a direct result of radical deregulation (started under Reagan), leverage (sparked by Easy Al's artificially low interest rates) and greed. Trying to blame a fraction (and a very small portion) of the overall problem on subprime is stupid.

stevieray
03-26-2010, 11:03 AM
JFC, how long are you guys going to try and hang onto this myth?



STFU

Andrew Cuomo went on TV in 98 and bragged about it.

petegz28
03-26-2010, 11:10 AM
JFC, how long are you guys going to try and hang onto this myth?

The credit crisis is a direct result of radical deregulation (started under Reagan), leverage (sparked by Easy Al's artificially low interest rates) and greed. Trying to blame a fraction (and a very small portion) of the overall problem on subprime is stupid.

Native is correct about this. The CRA is a good political pawn to beat but the fact is most of the blame lies with people who took out loans they cannot afford and banks making loans they knew good and damn well they should not have made. And I am not talking about the sub-prime loans. I am talking about the interest only loans,no momney down loans, second mortgages on homes, home equity loans where there was no equity, short term variable rate loans where they knew the borrower would not be able to sustain a rise in rates.

KC Dan
03-26-2010, 11:51 AM
"Banks and other lenders would have to reduce the payments to no more than 31 percent of a borrower's income, which would typically be the amount of unemployment insurance, for three to six months. In some cases, administration officials said, a lender could allow a borrower to skip payments altogether."

"The first key element is that the government will provide financial incentives to lenders that cut the balance of a borrower's mortgage. Banks and other lenders will be asked to reduce the principal owed on a loan if the amount is 15 percent more than their home is worth. The reduced amount would be set aside and forgiven by the lender over three years, as long as the homeowner remained current on the loan."


Is the incentive worth it is the first question I would have and What if lenders say "no" and do not do as the gov't dictates? Where is the gov't hammer then?

mlyonsd
03-26-2010, 12:02 PM
Awesome. Now instead of the banks holding onto the risk Obama is going to pass it on to the rest of us. I guess we can just print more money.

Just freaking awesome.

vailpass
03-26-2010, 12:54 PM
Foreclosures are neccesary; interfering with them is interfering with the natural order of business which in turn creates a false environment wherein people live beyond their means on support from taxpayers.
If you can't afford the house turn it in and find living arrangments within your means. That obama continues to throw our money at issues that are unavoidable in a free-market economy bodes ill for the health of that free market economy.

KC Dan
03-26-2010, 01:00 PM
There is not enough money in the world to counteract stupidity

BigChiefFan
03-26-2010, 01:34 PM
Native is correct about this. The CRA is a good political pawn to beat but the fact is most of the blame lies with people who took out loans they cannot afford and banks making loans they knew good and damn well they should not have made. And I am not talking about the sub-prime loans. I am talking about the interest only loans,no momney down loans, second mortgages on homes, home equity loans where there was no equity, short term variable rate loans where they knew the borrower would not be able to sustain a rise in rates.Exactly. The banks made the loans. Let them deal with their own screw-ups. It's also not like they don't get the house back, to sell it again. This government is lost at sea. Enough of the breaking of the workers back to fund their shit agenda.

bevischief
03-27-2010, 03:07 AM
So when does the super flu that is suppose to kill 75% of population get released, so the remaining 25% can start over again?

Pioli Zombie
03-27-2010, 05:30 AM
Oooooooo those lucky poor people. Gettin all the breaks. Evil Obama being so mean to the kind and wonderful banks.
Posted via Mobile Device

HonestChieffan
03-27-2010, 06:56 AM
All you have to owe is 700 Grand or less.....What a freaking joke.

http://www.foxnews.com/politics/2010/03/26/mortgage-rescue-overhaul-viewed-skepticism/?test=latestnews

Duck Dog
03-27-2010, 08:59 AM
Oooooooo those lucky poor people. Gettin all the breaks. Evil Obama being so mean to the kind and wonderful banks.
Posted via Mobile Device

You don't have a fucking clue.

patteeu
03-27-2010, 10:32 AM
We decreased taxes on business's and deregulated most industry's and even ignored most of the regulatory laws on the books for 8 years under George W. We already tried getting out of business's way and letting business do business. Where did that get us? the great recession and almost another depression. The solution is not to deregulate and let business's do whatever they want and everyone will have jobs again.

What we need to do is get rid of the lobbyist in Washington. Outlaw the pork and special deals in Washington. The people/industry's in power want to keep the status quo and will fight to keep their power. It won't be easy. The special interests are in charge of our democracy, not the people.

We need to make a "widget" that is in demand that is cheaper and better quality than the rest of the world can do while at the same time paying the workers that build that "widget" middle class wages. And thats going to be hard to pull off. The labor cost are going to be tough to beat. Why pay an American $50K to do a job when it can be done in India and China for $5K?

I think we have seen our heyday come and go after WW2. We don't make chit and want $50K to work at a job. It's just untenable. It's not going to work.

Thank goodness the people who think our heyday has come and gone are in charge now. That gives me confidence in our future. :rolleyes:

The Mad Crapper
04-01-2010, 01:52 PM
http://thepeoplescube.com/images/Obama_Coin_ExactChange_160.gif

Hopey Change™

The Mad Crapper
04-03-2010, 09:48 AM
No problem.

http://www.sfbg.com/blogs/politics/monopoly%20money.jpg

It's working out great, isn't it?

prhom
04-03-2010, 02:04 PM
We decreased taxes on business's and deregulated most industry's and even ignored most of the regulatory laws on the books for 8 years under George W. We already tried getting out of business's way and letting business do business. Where did that get us? the great recession and almost another depression. The solution is not to deregulate and let business's do whatever they want and everyone will have jobs again.

What we need to do is get rid of the lobbyist in Washington. Outlaw the pork and special deals in Washington. The people/industry's in power want to keep the status quo and will fight to keep their power. It won't be easy. The special interests are in charge of our democracy, not the people.

We need to make a "widget" that is in demand that is cheaper and better quality than the rest of the world can do while at the same time paying the workers that build that "widget" middle class wages. And thats going to be hard to pull off. The labor cost are going to be tough to beat. Why pay an American $50K to do a job when it can be done in India and China for $5K?

I think we have seen our heyday come and go after WW2. We don't make chit and want $50K to work at a job. It's just untenable. It's not going to work.

There's a lot more to it than just building some widget better than everyone else. You can pay an American worker $50k as long as the overall cost of production is competitive with the rest of the world. In addition to high direct labor costs, we have high corporate taxes, payroll taxes, and all manner of safety and environmental compliance costs. All of these extra costs reduce our competitiveness with a factory in a foreign country where these costs are not as high. We do, however, benefit from good infrastructure and power supply, and high transportation costs that add to the costs of shipping something here from overseas.

There are very few manufacturing processes that can't be replicated easily so we can't rely on making something that no one else can copy. If we want to keep wages high then somehow the other cost components must be lowered. That means we should have lower taxes, more realistic environmental regulation, and strive for even cheaper power.

I think we could recover and be dominant again, but it will require rethinking some of the ideas we've come to believe as true. In other words, I don't think the future factory of America is going to be a zero-waste utopia powered by wind where people work 32 hours a week, make some environmentally friendly "widget" and retire after 30 years with a full pension. We've sort of given up trying to compete with other countries, we just say "this is the way things should be" and then complain when it doesn't work out.

patteeu
04-03-2010, 02:34 PM
There's a lot more to it than just building some widget better than everyone else. You can pay an American worker $50k as long as the overall cost of production is competitive with the rest of the world. In addition to high direct labor costs, we have high corporate taxes, payroll taxes, and all manner of safety and environmental compliance costs. All of these extra costs reduce our competitiveness with a factory in a foreign country where these costs are not as high. We do, however, benefit from good infrastructure and power supply, and high transportation costs that add to the costs of shipping something here from overseas.

There are very few manufacturing processes that can't be replicated easily so we can't rely on making something that no one else can copy. If we want to keep wages high then somehow the other cost components must be lowered. That means we should have lower taxes, more realistic environmental regulation, and strive for even cheaper power.

I think we could recover and be dominant again, but it will require rethinking some of the ideas we've come to believe as true. In other words, I don't think the future factory of America is going to be a zero-waste utopia powered by wind where people work 32 hours a week, make some environmentally friendly "widget" and retire after 30 years with a full pension. We've sort of given up trying to compete with other countries, we just say "this is the way things should be" and then complain when it doesn't work out.

Great post. Our focus should be on making the US more competitive as a producer nation. The consumer nation we used to be is a dead end in the global economy.

KC native
04-03-2010, 02:51 PM
There's a lot more to it than just building some widget better than everyone else. You can pay an American worker $50k as long as the overall cost of production is competitive with the rest of the world. In addition to high direct labor costs, we have high corporate taxes, payroll taxes, and all manner of safety and environmental compliance costs. All of these extra costs reduce our competitiveness with a factory in a foreign country where these costs are not as high. We do, however, benefit from good infrastructure and power supply, and high transportation costs that add to the costs of shipping something here from overseas.

There are very few manufacturing processes that can't be replicated easily so we can't rely on making something that no one else can copy. If we want to keep wages high then somehow the other cost components must be lowered. That means we should have lower taxes, more realistic environmental regulation, and strive for even cheaper power.

I think we could recover and be dominant again, but it will require rethinking some of the ideas we've come to believe as true. In other words, I don't think the future factory of America is going to be a zero-waste utopia powered by wind where people work 32 hours a week, make some environmentally friendly "widget" and retire after 30 years with a full pension. We've sort of given up trying to compete with other countries, we just say "this is the way things should be" and then complain when it doesn't work out.

Unfortunately, you little dream scenario completely ignores the biggest drain on our manufacturing base which is manipulated competitive advantages from countries such as China. The US enters into free trade agreements with countries that allow their citizens to be paid pennies a day and work in substandard environments. Well, worker conditions only get lip service in these agreements and the US holds to their end of the bargain while the parties that we negotiate these agreements with continue with their policies.

Furthermore, we have tried deregulation. It failed miserably. We have cutback corporate tax rates and enabled them to play accounting games that allow them to shift profits to no tax jurisdictions. Now, we have some of the largest structural deficits ever.

We have tried everything you suggest and it has failed. It's time to take a new approach to things.

mlyonsd
04-03-2010, 04:26 PM
Unfortunately, you little dream scenario completely ignores the biggest drain on our manufacturing base which is manipulated competitive advantages from countries such as China. The US enters into free trade agreements with countries that allow their citizens to be paid pennies a day and work in substandard environments. Well, worker conditions only get lip service in these agreements and the US holds to their end of the bargain while the parties that we negotiate these agreements with continue with their policies.

Furthermore, we have tried deregulation. It failed miserably. We have cutback corporate tax rates and enabled them to play accounting games that allow them to shift profits to no tax jurisdictions. Now, we have some of the largest structural deficits ever.

We have tried everything you suggest and it has failed. It's time to take a new approach to things.

What's a structural deficit?

prhom
04-03-2010, 04:31 PM
Unfortunately, you little dream scenario completely ignores the biggest drain on our manufacturing base which is manipulated competitive advantages from countries such as China. The US enters into free trade agreements with countries that allow their citizens to be paid pennies a day and work in substandard environments. Well, worker conditions only get lip service in these agreements and the US holds to their end of the bargain while the parties that we negotiate these agreements with continue with their policies.

Furthermore, we have tried deregulation. It failed miserably. We have cutback corporate tax rates and enabled them to play accounting games that allow them to shift profits to no tax jurisdictions. Now, we have some of the largest structural deficits ever.

We have tried everything you suggest and it has failed. It's time to take a new approach to things.

What you're saying fits in perfectly with what I said at the end of my post. You want the world to be one way, but as you pointed out other countries don't always play by our rules. I'm not saying we should get rid of safety regs or totally trash the environment. I believe that US workers can be incredibly productive and truly deserve the wages they desire. We just aren't doing the right things to allow that to happen.

Comfortable, safe environments are productive environments. The sweatshop-like conditions you envision are not going to produce a quality product of moderate complexity. The sweatshops can make hangars and spatulas just fine, but that's not the stuff we should care about. It's small engines, appliances, and electronics that we should be making competitively. We're still good at making heavy machinery and since that stuff is expensive to transport locally produced equipment is always going to have a certain comparative advantage versus foreign equipment.

The deregulation you speak of was in the banking and financial services industry, right? That has very little to do with the topic I was writing about which is restoring the competitiveness of American industry. Yes, banks affect the economy at large which in turn affects demand for manufactured goods, but it did not directly hinder or benefit manufacturing that I'm aware of.

You're looking at taxes from the budget deficit point of view. I'm talking about looking at things as if you were running the business and had to decide whether to do a project in the US or in a foreign country. The business is going to do whatever makes the most money at the bottom line. So you factor in the capital cost of the equipment, the operating cost of the plant (power, supplies, labor), revenue and finally taxes. You can't do much about capital costs or supplies, but power, labor, and taxes are the most important consideration because they vary significantly depending on whether you are in the US or a foreign country. So if you (a government) want to make your country more competitive globally you should make sure that power is reliable and cheap, labor is productive and trainable, and taxes are not prohibitive. The US has hamstrung power generation through the Clean Air Act, and wants to do more through cap and trade. Labor is productive and our education system makes it very trainable so we're doing fine there. Taxes may have been lower at various points in time, but they are by far the easiest way to directly encourage economic activity -- or punish it. The budget has two parts -- revenue and spending. Maybe we try to reduce spending rather than trying to increase revenue?


To tie this back into the OP, we have a problem with unemployment and foreclosures. Foreclosure means lower property tax revenue, unemployment means more foreclosure. If you can solve unemployment then everything benefits. Employed people are typically net contributors to tax revenue, unemployed people aren't. We're just treating the symptoms rather than the cause. The efforts to increase employment so far aren't what I'm proposing. They are marginal, temporary benefits that aren't going to drastically alter business plans.

What is the new approach that you would like to see happen?

patteeu
04-04-2010, 07:49 AM
Unfortunately, you little dream scenario completely ignores the biggest drain on our manufacturing base which is manipulated competitive advantages from countries such as China. The US enters into free trade agreements with countries that allow their citizens to be paid pennies a day and work in substandard environments. Well, worker conditions only get lip service in these agreements and the US holds to their end of the bargain while the parties that we negotiate these agreements with continue with their policies.

Furthermore, we have tried deregulation. It failed miserably. We have cutback corporate tax rates and enabled them to play accounting games that allow them to shift profits to no tax jurisdictions. Now, we have some of the largest structural deficits ever.

We have tried everything you suggest and it has failed. It's time to take a new approach to things.

None of your first or second paragraphs contradict his post at all.

Your second paragraph is only partially right. We do have large structural deficits but those are caused not by policies designed to make us competitive but by the leviathan entitlement state and with SS now paying out more than it brings in it's only going to get worse. To the extent that tax policy is a culprit, it's because of the failure to make everyone pay their fair share of the tax burden and by that I mean the people who consume a disproportionate portion of their production (i.e. the lower income folks).

Your third paragraph is simply wrong.

prhom
04-04-2010, 11:08 AM
Great post. Our focus should be on making the US more competitive as a producer nation. The consumer nation we used to be is a dead end in the global economy.

Yep, I agree, we need more balance in that area. I don't see how we can continue on that path and have a strong economy.

Hog Farmer
04-04-2010, 02:27 PM
The guy is a ****ing idiot.[/QUOTE]


No, Actually he is brilliant enough to get enough votes to be elected by enough dumbasses tha don't understand his goal is to destroy America.

KC native
04-04-2010, 03:14 PM
What you're saying fits in perfectly with what I said at the end of my post. You want the world to be one way, but as you pointed out other countries don't always play by our rules. I'm not saying we should get rid of safety regs or totally trash the environment. I believe that US workers can be incredibly productive and truly deserve the wages they desire. We just aren't doing the right things to allow that to happen.

Comfortable, safe environments are productive environments. The sweatshop-like conditions you envision are not going to produce a quality product of moderate complexity. The sweatshops can make hangars and spatulas just fine, but that's not the stuff we should care about. It's small engines, appliances, and electronics that we should be making competitively. We're still good at making heavy machinery and since that stuff is expensive to transport locally produced equipment is always going to have a certain comparative advantage versus foreign equipment.

This is full of vague generalities that belie the real picture of manufacturing. A manufacturing environment doesn't have to be a sweatshop to under cut American labor. China is a perfect example. The have made tremendous improvements in terms of sweatshops. What they haven't done is make improvements in actual wages or worker's rights.

The deregulation you speak of was in the banking and financial services industry, right? That has very little to do with the topic I was writing about which is restoring the competitiveness of American industry. Yes, banks affect the economy at large which in turn affects demand for manufactured goods, but it did not directly hinder or benefit manufacturing that I'm aware of.

Deregulation has been across the board since Reagan (it actually started under Carter but no one likes to give him credit for that). This recent crisis was a direct result of radical deregulation of the finance industry which repealed Glass-Steagall and kept many derivatives unregulated.

You're looking at taxes from the budget deficit point of view. I'm talking about looking at things as if you were running the business and had to decide whether to do a project in the US or in a foreign country. The business is going to do whatever makes the most money at the bottom line. So you factor in the capital cost of the equipment, the operating cost of the plant (power, supplies, labor), revenue and finally taxes. You can't do much about capital costs or supplies, but power, labor, and taxes are the most important consideration because they vary significantly depending on whether you are in the US or a foreign country. So if you (a government) want to make your country more competitive globally you should make sure that power is reliable and cheap, labor is productive and trainable, and taxes are not prohibitive. The US has hamstrung power generation through the Clean Air Act, and wants to do more through cap and trade. Labor is productive and our education system makes it very trainable so we're doing fine there. Taxes may have been lower at various points in time, but they are by far the easiest way to directly encourage economic activity -- or punish it. The budget has two parts -- revenue and spending. Maybe we try to reduce spending rather than trying to increase revenue?

No, I'm looking at taxes as a total view.

But I do love this part as conservatives love to repeat it despite it not making business sense. Simply, IF YOU'RE MARGINAL COST CONCERN IS TAXES THEN YOU ARE IN THE WRONG LINE OF BUSINESS.

The US is no where near prohibitive levels of taxation. Despite what many of the anti-tax zealots (on CP and others), taxes in the US aren't prohibitive and they don't drive away business.

The reality of the situation is that our tax burden has been shifted from businesses onto the backs of people of the US. The corporate welfare that we have engaged in has not benefited our country.

Finally, let's face reality. No politician, liberal or conservative, is going to cut spending in any meaningful way. The only solution is to manage tax policy to prevent massive increases in debt like we have seen under Raegan, Bush, and Obama.


To tie this back into the OP, we have a problem with unemployment and foreclosures. Foreclosure means lower property tax revenue, unemployment means more foreclosure. If you can solve unemployment then everything benefits. Employed people are typically net contributors to tax revenue, unemployed people aren't. We're just treating the symptoms rather than the cause. The efforts to increase employment so far aren't what I'm proposing. They are marginal, temporary benefits that aren't going to drastically alter business plans.

What is the new approach that you would like to see happen?

Foreclosures have to run their course. I forget the exact stats but north of 70% of all mortgage modifications end up sliding back into default. The foreclosure problem isn't going to be solved by Obama's initiative.

What you are ignoring in your characterizations of unemployment benefits is their impact on the velocity of money. If these are successful (which they haven't been yet) then that will impact business plans.

Finally, what I want to have happen has been repeated on here several times but here is a short synopsis.

1. End corporate welfare.

2. Rewrite the tax code based upon current structure but drastically remove exemptions, loopholes, etc which IMO would probably lead to lower statutory rates if ways to dodge taxes are eliminated

3. Strong and smart regulation. Immediately reinstate Glass-Steagall. Contrary to the deregulators' cries, markets, people, and businesses don't self regulate.

4. Aggressively pursue sanctions or penalties against countries that manipulate free trade agreements and other economic issues.

KC native
04-04-2010, 03:15 PM
None of your first or second paragraphs contradict his post at all.

Your second paragraph is only partially right. We do have large structural deficits but those are caused not by policies designed to make us competitive but by the leviathan entitlement state and with SS now paying out more than it brings in it's only going to get worse. To the extent that tax policy is a culprit, it's because of the failure to make everyone pay their fair share of the tax burden and by that I mean the people who consume a disproportionate portion of their production (i.e. the lower income folks).

Your third paragraph is simply wrong.

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penchief
04-04-2010, 05:06 PM
F'n unbelievable!!!! But not really considering the players involved.

What did Ben Franklin say: Something to the effect of when a society makes poverty comfortable then..............................................

I love it when righties quote Ben Franklin as if his beliefs somehow support right-wing ideology. Franklin is this country's shining example of someone (a founding father) who believed that self-government should be proactive in promoting the general welfare, advancing social progress, and ensuring UNIVERSAL liberty and justice for ALL.

This is not to say he was an advocate of big government because that is not the case. I don't think that liberals, per se, believe in big government (that is as much a talking point from the right as it is anything, the military-industrial complex is just as much an example of right-wing big government). I simply believe in effective government. Government that is not corrupted by powerful interests or undue influence.

What Franklin believed was that individuals and government both have a civic duty. And that the inherent virtue of self-government is that it is the primary vehicle by which that civic duty is exercised.

There is absolutely no doubt that Franklin advocated personal responsibility, something in which both liberals and conservatives can agree. But there is also no doubt that Franklin personified what it meant to be a progressive.

If Ben Franklin were alive today righties would revile him in the same reactionary knee-jerk manner in which they blindly hate anything that doesn't conform to their dogmatic mantras or their rigid ideals.

Otter
04-05-2010, 12:33 AM
I wish there was some kind of home pregnancy test for guys like KC Native to prove he's an idiot' That's the scary part about truly stupid people, they don't know they're stupid.

penchief
04-05-2010, 05:12 AM
No, Actually he is brilliant enough to get enough votes to be elected by enough dumbasses tha don't understand his goal is to destroy America.

Obama's goal is to "destroy America?" Literally, you believe that? Christ people, get a fucking grip.

Overblown rhetoric like this is a perfect example of why the tea party and the extreme right will eventually discredit themselves.

patteeu
04-05-2010, 07:04 AM
Obama's goal is to "destroy America?" Literally, you believe that? Christ people, get a ****ing grip.

Overblown rhetoric like this is a perfect example of why the tea party and the extreme right will eventually discredit themselves.

He wants to transform America. He told us so. He wants to destroy the old form and replace it with a new form. That's what transformation is.

BigRedChief
04-05-2010, 07:05 AM
He wants to transform America. He told us so. He wants to destroy the old form and replace it with a new form. That's what transformation is.It's that hopey-changey stuff.

penchief
04-05-2010, 07:38 AM
He wants to transform America. He told us so. He wants to destroy the old form and replace it with a new form. That's what transformation is.

Change is bad? Where is it written that transformation = doom & destruction?

patteeu
04-05-2010, 08:05 AM
Change is bad? Where is it written that transformation = doom & destruction?

In the Obama playbook.

penchief
04-05-2010, 08:22 AM
In the Obama playbook.

I see.

BigRedChief
04-15-2010, 06:55 AM
Foreclosure rates surge, biggest jump in 5 years
‘On pace to see more than 1 million bank repossessions this year’
By Alex Veiga
The Associated Press
updated 6:27 a.m. CT, Thurs., April 15, 2010

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LOS ANGELES - A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report.

RealtyTrac Inc. said Thursday that the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009.
More homes were taken over by banks and scheduled for a foreclosure sale than in any quarter going back to at least January 2005, when RealtyTrac began reporting the data, the firm said.

"We're right now on pace to see more than 1 million bank repossessions this year," said Rick Sharga, a RealtyTrac senior vice president.

Foreclosures began to ease last year as banks came under pressure from the Obama administration to modify home loans for troubled borrowers. In addition, some states enacted foreclosure moratoriums in hopes of giving homeowners behind in payments time to catch up. And in many cases, banks have had trouble coping with how to handle the glut of problem loans.

Trend reversing
These factors have helped slow the pace of foreclosures, but now that trend appears to be reversing.

"We're finally seeing the banks start to process the inventory that has been in foreclosure, but delayed in processing," Sharga said. "We expect the pace to accelerate as the year goes on."
In all, more than 900,000 households, or one in every 138 homes, received a foreclosure-related notice, RealtyTrac said. The firm based in Irvine, Calif., tracks notices for defaults, scheduled home auctions and home repossessions.

Homeowners continue to fall behind on payments because they've lost their job or seen their mortgage payment rise due to an interest-rate reset. Many are unable to refinance because they now owe more on their loan than their home is worth.

The Obama administration's $75 billion foreclosure prevention program has only been able to help a small fraction of troubled homeowners.
About 231,000 homeowners have completed loan modifications as part of the Obama administration's flagship foreclosure prevention program through March. That's about 21 percent of the 1.2 million borrowers who began the program over the past year.

But another 158,000 homeowners who signed up have dropped out — either because they didn't make payments or failed to return the necessary documents. That's up from about 90,000 just a month earlier.
Last month, the administration expanded the program, launching a plan to reduce the amount some troubled borrowers owe on their home loans and give jobless homeowners a temporary break. But the details of those programs are expected to take months to work out.

Glut of homes
The states with the highest foreclosure rates in the first quarter were Nevada, Arizona, Florida and California, with Nevada leading the pack, RealtyTrac said.

Rising home prices and speculation fueled a wave of home construction there during the housing boom. But now the state, particularly around the Las Vegas metropolitan area, is saddled with a glut of unsold homes.
Still, the number of homes in Nevada that received a foreclosure filing dropped 16 percent from the first quarter last year.

All told, one in every 33 homes in Nevada was facing foreclosure, more than four times the national average, RealtyTrac said.

Foreclosure filings rose on an annual and quarterly basis in Arizona, however.

One in every 49 homes there received a foreclosure-related notice during the quarter.

Florida, meanwhile, posted the third-highest foreclosure rate with one out of every 57 properties receiving a foreclosure filing.

California accounted for the biggest slice overall of homes facing foreclosure — roughly 23 percent of the nation's total. One in every 62 properties received a foreclosure filing in the first quarter.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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BigRedChief
04-15-2010, 06:59 AM
Foreclosure aid helping more homeowners
158,000 who signed up have quit, up from amount in previous month
By Alan Zibel
The Associated Press
updated 5:34 p.m. CT, Wed., April 14, 2010

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WASHINGTON - The number of homeowners in the Obama administration's flagship foreclosure prevention program is growing, data released Wednesday show. Yet it's not all good news.

About 231,000 homeowners have completed loan modifications through March. That's about 21 percent of the 1.2 million borrowers who began the program over the past year.

But another 158,000 homeowners who signed up have dropped out — either because they didn't make payments or failed to return the necessary documents. That's up from about 90,000 just a month earlier.
Many more applicants are still in limbo, awaiting a final answer from their bank. Meanwhile, a Treasury Department official said Wednesday that the administration is working to get the foreclosure prevention effort on track after a slow and problem-plagued start.

"When you're doing something at this scale that's never been done before, you're going to have challenges," Phyllis Caldwell, chief of the Treasury Department's homeownership preservation office, said in an interview.
The program is designed to lower borrowers' monthly payments by reducing mortgage rates to as low as 2 percent for five years and extending loan terms to as long as 40 years. Mortgage companies get taxpayer incentives to reduce borrowers' monthly payments. Homeowners have to complete at least three months of payments to qualify.

Treasury officials say many disqualified homeowners will end up getting help anyway. If not, they are still eligible for $3,000 in moving expenses — if their bank agrees to let them sell their home for less than the value of the mortgage.

Earlier in the day, a watchdog panel's report said the $75 billion program lags well behind the foreclosure crisis and leaves consumers strapped with high levels of debt.

More than a year after the plan's launch, the Obama administration "is still fighting to get its foreclosure programs off the ground," said Elizabeth Warren, who heads the independent Congressional Oversight Panel set up by Congress.

Lawmakers, deluged with calls from homeowners seeking help, are feeling the heat. "The fact of the matter is our constituents are unhappy," said Maxine Waters, D-Calif.

Last month, the administration expanded the program, launching a plan to reduce the amount some troubled borrowers owe on their home loans and give jobless homeowners a temporary break. But the details of those programs are expected to take months to work out.

Obama officials, meanwhile, stress the plan's limitations.

"We cannot stop every foreclosure," David Stevens, who runs the Federal Housing Administration, told lawmakers. "Some people simply cannot afford to stay in their homes."

Earlier in the week, top banking industry executives expressed skepticism about helping troubled borrowers by forgiving a portion of their debt.
The executives told lawmakers on Tuesday they are reducing the amount that troubled borrowers owe on their home loans only in limited cases. That's because consumers who are paying their mortgages on time are likely to see such reductions as unfair.

But Jamie Dimon, chief executive officer of JPMorgan Chase & Co., which has been skeptical about mortgage reductions, told analysts Wednesday that "we're not ideologically opposed to principal forgiveness."

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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The Mad Crapper
04-15-2010, 12:08 PM
Foreclosure aid helping more homeowners


Uh yeah, for about 3 months. Then they foreclose anyway. But hey, we can always print more money.

You f'n dope.