George Bush's disguised Tax increase.

Discussion in 'Economics' started by SouthAmerica, Aug 31, 2007.

  1. .
    August 31, 2007

    SouthAmerica: The Chinese must love it when they see their savings being wasted like that on the United States.

    Quoting from the enclosed article: “Fannie Mae and Freddie Mac have said they can help market liquidity by being allowed to buy more of the mortgages and mortgage bonds shunned by investors.”


    If the garbage is not good enough for the private sector to touch, then pass the buck to the American taxpayer.

    Bush will let the Federal Housing Administration, which insures mortgages for low-and middle-income borrowers, guarantee loans for delinquent borrowers….

    Dump the mess on the lap of the US tax payers.

    A George W. Bush considers himself a tax cutter. (For the wealthy anyway.)

    But he is willing to bailout the people who made bad business decisions when they gave these mortgages out – and now he is going to pass the problem to the federal government.

    The ironic part of all this is that it’s not even the US government that will be behind this bailout and will pick up the tab – it is the foreign investors that keeps financing the United States deficit spending.

    The US is borrowing trillions of dollars from foreigners and is investing that money in great projects for the future such as: the Iraq war, the war in Afghanistan, and now, the US government is going to give money to people who made terrible business decisions by insuring the mortgages of people who are delinquent on the payment of these mortgages.

    Maybe George W. Bush’s should announce also that the federal government will give retroactive insurance to all the people who can’t pay their credit card bills including Master Card, Visa, American Express and so on….

    It will be nice for the federal government to pay all the bills that Americans can’t pay.

    And this is where the US government is investing the borrowed money.

    And many people in the United States have the balls to say that other foreign governments are wasteful regarding their allocation of resources.

    Anyway this Bush bailout is a disguised future tax increase on the American taxpayer.

    You can bet that eventually this bailout will cost a ton of money to the federal government.


    “Bush to Expand Government Role to Deal With Subprime”
    By Holly Rosenkrantz
    Bloomberg News – August 31, 2007

    Aug. 31 (Bloomberg) -- President George W. Bush today will announce steps the administration says will help people with subprime mortgages keep their homes.

    Bush will let the Federal Housing Administration, which insures mortgages for low-and middle-income borrowers, guarantee loans for delinquent borrowers, allowing them to avoid foreclosure and refinance at more favorable rates, according to an administration official.

    The change would affect borrowers who are at least 90 days behind in payments and let them continue living in their homes, the official said on condition of anonymity. Bush, in a statement in the White House Rose Garden, also will back proposals to provide tax relief for homeowners who refinance.

    Tighter credit and higher borrowing costs threaten the housing market, which has been an engine of U.S. economic growth. Democrats in Congress and the party's presidential candidates have criticized Bush for not taking action to prevent the spread of foreclosures.

    The president still opposes Democratic calls to let Fannie Mae and Freddie Mac, the two largest U.S. mortgage finance companies, boost purchases of mortgages as a way to ease lending constraints, White House spokesman Tony Fratto said.

    Bush's proposals will address ways ``to prevent these kinds of problems from arising in the future,'' Fratto said.
    Asian stocks rose to a three-week high ahead of Bush's announcement.
    Home Resales

    U.S. home resales fell in July to an annual pace of 5.75 million, the slowest since November 2002, the National Association of Realtors reported on Aug. 27. Sales have declined for five consecutive months.

    About 14 percent of banks raised standards for mortgages to their most creditworthy borrowers and 56 percent made it more difficult for people with limited or tainted records to get loans, according to a Federal Reserve survey of senior loan officers in mid-July.

    Among the plans Bush will announce is a joint initiative of the Treasury and Housing and Urban Development departments to identify people who are at risk of defaulting on their mortgages, the official said.

    Bush wants the government to work with lenders, insurers and others to develop more favorable loan products for those borrowers, the administration official said.

    Congressional Plans

    Congress also is looking at ways to minimize the fallout from the collapse of the subprime mortgage market, including rising numbers of foreclosures among borrowers with poor credit or high debt. Democratic presidential candidates also are pushing for action to stem the number of foreclosures.

    Christopher Dodd of Connecticut, chairman of the Senate Banking Committee, said in an interview with CNBC last week that he plans to move legislation next month that would expand the FHA's role to ``provide additional avenues for people to get cheaper, reasonable, safer credit'' without relying on subprime loans.

    Senator Hillary Clinton, a New York Democrat, said this month she planned to introduce legislation that would ban penalties for people who pay off mortgages early and require federal registration of mortgage brokers.

    An administration proposal to give low-income homebuyers an alternative to subprime loans last month was greeted skeptically by Republican senators and congressional auditors, who said it might be too risky.

    The FHA's plan to lower down payments and boost loan limits in its lending program doesn't include a pilot project or consider the impact on African-Americans, Senator Elizabeth Dole, a North Carolina Republican, told the Senate Banking Committee last month.

    The FHA is trying to steer borrowers away from subprime mortgages that often carry higher fees and interest rates. The administration plan would also give the government flexibility to charge different premiums based on buyers' risk.

    Bush is holding to his position outlined earlier this month that Congress should first strengthen oversight of Fannie Mae and Freddie Mac before letting the government- sponsored enterprises exceed their current regulatory limits on mortgage holdings.

    Fannie Mae and Freddie Mac have said they can help market liquidity by being allowed to buy more of the mortgages and mortgage bonds shunned by investors.


  2. This just mean no rate cut, market is rising and may make new highs by the time the fed meets. No rate cut now.
  3. Daal


    You do realize that if that happened to your pal lula he would do the same thing in a 5x scale?
  4. Yes, no Fed Funds rate cut now.

    By the way, why stop selling the garbage now?

    The US government eventually would bail you out.

    Why Wall Street should stop right now? Let's sell another trillion dollars of bad mortgages, repackage it and get a nice fat fee in the way.

    I guess the US government is coming to the rescue and it will bailout "La La Land" once again.

  5. .

    August 31, 2007

    SouthAmerica: Reply to Daal

    Before you talk about Brazil and Lula for that matter - you should read first the latest issue of "The Economist" magazine - on Pg 67 article: "A shrug not a shudder."

    Brazil is the clearest example of Latin America's newfound financial stability......

    PS: "The Economist" dated August 25, 2007.

  6. I just checked the Asian markets and they are way up overnight.

    I guess they heard the news that Christmas is coming early this year for the folks in Wall Street.

  7. It was all part of the plan, I can still see Bush right about this time last year tell his audience " more americans own their homes now than ever before"

    The plan failed to keep his party in power though. Now he is helping these who made everyone and their dogs home owners.

    And yes this bill will be passed on to the middle income tax payers. Not the rich but the middle class get the bill.
  8. sprstpd


    Bush to America, "To everyone who has any financial common sense, here's your stinking pile of turd. For everyone who likes to speculate and got burned, party on!"
  9. You think we would be smart enough to take all the foreign capital that comes in and invest in infrastructure and to foster state-of-the-art high tech, green and productive industry. Then, once that infrastructure and industry blossoms, our GDP zooms and prosperity rules the day.

    That would be the smart and shrewd thing to do -- take foreign capital and use it rebuild our domestic economy to once again lead the world. Too bad Bush is too stupid and Congress is too self-absorbed to think strategically like that.
  10. You're missing Daal's point. He outed you as a duplicitous pos. You're a socialist who advocates government control ala' Lila yet you have the balls to criticize Bush for bailing out low income homeowners in delinquency. We should follow the way of Brazil and force folks to live in shantytowns.

    #10     Aug 31, 2007