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McCain's platform of "slashing government spending" seems...

BurlyShirley

Rex Grossman Will Rise Again
Jul 4, 2002
19,184
13
TN
...off to a rocky start. I don't have some link to prove this, nor have I heard the pundits pick up on this yet, but hasn't McCain been going on and on and on about slashing spending?
Yet, within the last two weeks, I've heard him back a $700billion "rescue plan" to bail out wallstreet, and then last night, I heard him back a $300billion "bad mortgage buyout" plan to rescue people who took out loans they couldn't afford.
Also, I heard him go on about a $5000 healthcare rebate that he's going to "handout" and also doubling (from $3500 to $7000) child exemptions on people's taxes.
Oh, and he's going to make the Bush tax cuts permanent too.

So at a minimum, before even taking office, he's gotten behind $1 Trillion plus in new spending, all while running on the platform of cutting. And he's cutting taxes too... any idea how he plans to pay for this? Just doesn't add up me.... nor is it consistent with his record of "deregulation" or the republican party's boner for "personal responsibility". All I've been hearing from conservatives leading up to this election is how Obama is a "socialist," and how that's bad for America...but yet when McCain suggests basically socializing the entire mortgage industry, suddenly it's okay with everyone.

?
 

Defenestrated

Turbo Monkey
Mar 28, 2007
1,657
0
Earth
Taxes have never been cut during war time iirc.

All lies and false promises.

I hope that some of Obama's promises are realized, specifically universal health care and energy reform...
 

Toshi

Harbinger of Doom
Oct 23, 2001
27,809
2,308
neocons don't feel like they need to stick to the "truth" or do "arithmetic" on their budgets. claiming oneself to be a maverick and against govt waste is apparently enough, while obama's revenue-neutral plans are somehow horribly socialist.
 

X3pilot

Texans fan - LOL
Aug 13, 2007
5,861
1
SoMD
McCain: Buy back mortages and refinace to current home values? F that! I bought a house in the midst of the boom and only bought what I could afford. There shouldn't be "do overs" to compensate for people that got in over their head. With risk comes rewards, whether it be good or bad.

McCain: Double the child tax credit? It's a vagina, not a clown car. You had them, they are your responsibility. Close ALL tax loopholes to help correct the revenue income deficit.

If McCain is such a reformer, why does he admit in the same breath that Warshington is broke? Tells me you failed as a great reformer.


http://www.ridemonkey.com/forums/showpost.php?p=3070999&postcount=60
 

ohio

The Fresno Kid
Nov 26, 2001
6,638
4
SF, CA
BurlyShirley said:
I heard him back a $300billion "bad mortgage buyout" plan to rescue people who took out loans they couldn't afford.
I actually don't get why we didn't do that to begin with. Why bailout the banks directly? We should have bought into foreclosing houses in return for a proportionate share of the principle. e.g. owner makes payments up to 38% of income, fed government pays remainder owns that share of the principle. Would only apply to primary residences.

Would have stabilized the loans (or as many as we need to stabilize) with the barest minimum of investment because the owner still has to bear as much burden as they can, but they also don't get all of the upside if/when the market recovers and house sells. If the loans were stabilized, shouldn't that prop the credit market and derivatives behind it?

I put up a post to similar effect months ago based on a Biz Prof's talk... not like this is a novel idea.
 

Samirol

Turbo Monkey
Jun 23, 2008
1,437
0
Well, because the main threat is that the credit markets are absolutely frozen right now, and getting trying to unfreeze it by stabilizing mortgages won't work from what I understand.
 
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BurlyShirley

Rex Grossman Will Rise Again
Jul 4, 2002
19,184
13
TN
I actually don't get why we didn't do that to begin with. Why bailout the banks directly?
Well Im not in disagreement with McCain's new plan... only pointing out its inconsistency with regard to what he constantly says. But yeah, if you ask me, all things being equal, if Id rather bail out the rich scumbags or the poor idiots, I guess I'll go for the poor.
Outside of that though, I'll readily admit that I don't understand which would be the smarter move economically.
 

X3pilot

Texans fan - LOL
Aug 13, 2007
5,861
1
SoMD
I actually don't get why we didn't do that to begin with. Why bailout the banks directly? We should have bought into foreclosing houses in return for a proportionate share of the principle. e.g. owner makes payments up to 38% of income, fed government pays remainder owns that share of the principle. Would only apply to primary residences.
That plan would be more palatable. But that 38% needs to be from pre- adjusted income.
 

stevew

unique white person
Sep 21, 2001
32,271
3,091
Neither party will have the money to spend on sh*t for the next four years.

As far as what either side wants to do as far as spending...don't believe it.
 

N8 v2.0

Not the sharpest tool in the shed
Oct 18, 2002
11,007
149
The Cleft of Venus
Well Im not in disagreement with McCain's new plan... only pointing out its inconsistency with regard to what he constantly says. But yeah, if you ask me, all things being equal, if Id rather bail out the rich scumbags or the poor idiots, I guess I'll go for the poor.
Outside of that though, I'll readily admit that I don't understand which would be the smarter move economically.

dont the rich scumbags employ the majority of the poor idiots?

just askin.. cuz i'm thinkin funding those who make the jobs and pay teh taxez might yield a better roi..
 

Defenestrated

Turbo Monkey
Mar 28, 2007
1,657
0
Earth
dont the rich scumbags employ the majority of the poor idiots?

just askin.. cuz i'm thinkin funding those who make the jobs and pay teh taxez might yield a better roi..
Trickle down/supply-side economics is the greatest scam ever conceived aside from maybe Scientology.

Demand-side economics is much fairer in that it works to empower the masses with disposable wealth (which as tax dollars is rightfully theirs anyway) instead of merely distributing it to the most wealthy individuals in the country.
 

3D.

Monkey
Feb 23, 2006
899
0
Chinafornia USA
neocons don't feel like they need to stick to the "truth" or do "arithmetic" on their budgets. claiming oneself to be a maverick and against govt waste is apparently enough, while obama's revenue-neutral plans are somehow horribly socialist.
some people need to bear in mind that Obama was quick to sign the ill conceived bail-out as well... really quick that is.

With his talks of transforming our military into the ultimate modern machine, coupled with ideas of adding 100,000 troops and revitalizing the war in Afghanistan, he’s going to blow through counterfeit money as fast as the bills can hit his desk for signature.

By the end of their second terms, Obama or McCain will drive this country into a newly adopted currency.
 

Defenestrated

Turbo Monkey
Mar 28, 2007
1,657
0
Earth
I really can't tell if Obama is truely warmongering over Afghanistan or... if he is trying to act tough to sway pro-military independents (which would make sense considering the Republicans have basically claimed ownership of the Iraq issue).

I hope his zeal for Afghanistan is just a front really...
 

DaveW

Space Monkey
Jul 2, 2001
8,728
637
Karori, Poneke Te Ika-a-Maui
By the end of their second terms, Obama or McCain will drive this country into a newly adopted currency.
I honestly don't believe whom ever gets in will have a second term.
The whole term is going to be spent fixing the bush admins f*ck up's...... He won't have time to indulge in his own pet fiscal fantasy's, and by the time the first term is up the public will be tired of it.

Exit stage left Mr President sir. :huh:
 

sanjuro

Tube Smuggler
Sep 13, 2004
17,411
0
SF
I have a theory about government spending: by raising military spending, it allows a conservative government to cut social programs because the cash is not there.
 

Samirol

Turbo Monkey
Jun 23, 2008
1,437
0
I have a theory about government spending: by raising military spending, it allows a conservative government to cut social programs because the cash is not there.
It also prevents new social programs from being implemented, because we don't have the money
 

Defenestrated

Turbo Monkey
Mar 28, 2007
1,657
0
Earth
I have a theory about government spending: by raising military spending, it allows a conservative government to cut social programs because the cash is not there.
Basically yeah.

The George Orwell quote in my sig + this one by Ike

Dwight D. Eisenhower said:
Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.

This world in arms is not spending money alone.

It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children.

The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities.

It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals.

It is some fifty miles of concrete pavement.

We pay for a single fighter plane with a half million bushels of wheat.

We pay for a single destroyer with new homes that could have housed more than 8,000 people.
Every time I read that one I think of how far the Republican party has fallen...
 
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dante

Unabomber
Feb 13, 2004
8,814
8
looking for classic NE singletrack
It also prevents new social programs from being implemented, because we don't have the money
It's called "Starve the Beast", and has been a neo-con argument for years now. Cut taxes first so the government doesn't have money, then there's no money to spend on wasteful projects.

Well Im not in disagreement with McCain's new plan... only pointing out its inconsistency with regard to what he constantly says. But yeah, if you ask me, all things being equal, if Id rather bail out the rich scumbags or the poor idiots, I guess I'll go for the poor.
Outside of that though, I'll readily admit that I don't understand which would be the smarter move economically.
At first glance, it looked good... However McCain changed it overnight so that it pretty much screws the ordinary taxpayer. So John and Mary bought that $500,000 house in CA, took out an additional $300,000 through HELOCs, and are now stuck with $800,000 in debt on a house that's only worth $400k. Guess what, the US Gov't buys the loan for 800 thousand dollars from the bank, writes off $400k (eh, just add it to the debt, no one will care), and John and Mary get to live in their house and just have a $400k mortgage. So the bank that made this loan gets bailed out for making a terrible decision, the homeowners get bailed out for making a terrible decision, and we get screwed.

I'm all for restructuring mortgages, and offering low fixed-rate, 40y mortgages to help people stay in their homes. For someone with a $500,000 loan, think about the following:

30 year at 10% (balloon mortgage, or ARM) - $4387 / month
40 year at 4% - $2089 / month

All along we were told that the problem was these evil mortgages, the option ARMs and balloon mortgages where people's rates skyrocketed were the problem. Now it seems like the real problem is just that people took out mortgages they weren't willing to pay, and had no equity in their house to ride out any collapse of the market... :disgust1:
 

ohio

The Fresno Kid
Nov 26, 2001
6,638
4
SF, CA
dont the rich scumbags employ the majority of the poor idiots?

just askin.. cuz i'm thinkin funding those who make the jobs and pay teh taxez might yield a better roi..
This forum often greets the above statements with an outcry that "trickle-down doesn't work!" and cites history as proof. While they are correct, it doesn't get us anywhere because many folks, you included, *want* to believe in the mechanism, as it seems to reward folks who have "earned it."

Let me explain the mechanism itself rather than just saying "you are wrong."

The rich will ALWAYS employ the poor and middle class, because that is how the rich make money. Employment is not a handout or charity; the rich are not doing the middle class a favor by employing them, nor are the middle class doing the rich a favor by donating their labor; the rich are leveraging middle call labor into mutual profit for both parties. If you are wealthy and you are paying more taxes, the way to increase your revenues is to employ more, not less. If you can't figure out how to do it, someone else will. Obviously all within reason. You can't raise taxes infinitely (communism) or lower them infinitely (anarchy) but certainly within a range.

Additionally, money to the middle and lower classes a greater stimulus to the economy vs money to the wealthy because poor and middle class are much more likely to keep that money in circulation (and I'll explain in a minute why that is a good thing). You may recall that one of the criticisms of the stimulus check was that many people would "just use it to pay down debt." Paying down debt is another way of saying, "keep it in the financial markets rather than use it to consume." We (both sides of the aisle) want people to consume (not beyond their means obviously...). So point 1: Poor and middle class spend much more of their income directly on goods and services. THAT provides revenues and jobs which is a more direct and organic way for companies to secure capital for reinvestment than borrowing against a stock value. Why is spending a more powerful stimulant than investing? Ask anyone in a startup whether they would rather have more revenues or a higher valuation of an equal amount. There's a reason that stock valuations are typically 3X revenues or higher for a healthy company - some money spent by the middle class as revenue is leveraged into 3X that amount of money in a companies valuation. The challenge is that as an individual investor, it's not like you can buy a $300 camera and get $900 back, but as a society every $300 camera means $900 in value to Best Buy's valuation. So Point 2: it is a much better investment as a nation to pursue efforts that drive consumer spending directly.

Again, there is a balance and a range that this works within but trickle UP is actually the way the economy works by cycling money directly through goods and services which levers higher revenues into higher valuations, while trickle down stagnates us by giving only a 1:1 return on investment and reducing the cash available for spending. Obviously, we still need the financial markets and credit, but the middle class is the engine of the economy and I hope the above explains the mechanisms at work.

edit: cleaned up.
 
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N8 v2.0

Not the sharpest tool in the shed
Oct 18, 2002
11,007
149
The Cleft of Venus
This forum often greets the above statements with an outcry that "trickle-down doesn't work!" and cites history as proof. While they are correct, it doesn't get us anywhere because many folks, you included, *want* to believe in the mechanism, as it seems to reward folks who have "earned it."

Let me explain the mechanism itself and why your above assumptions are wrong, rather than just saying "you are wrong."

The rich will ALWAYS employ the poor and middle class, because that is how they make money. Employment is not a handout or charity; the rich are not doing the middle class a favor by employing them, they are leveraging that labor into mutual profit for both parties. If you are wealthy and you are paying more taxes, the way to increase your revenues is to employ more, not less. If you can't figure out how to do it, someone else well. Obviously all within reason. You can't raise taxes infinitely (communism) or lower them infinitely (anarchy) but certainly within a range.

Additionally, money to the middle and lower classes provides maximum stimulus to the economy vs money the wealthy, contrary to the trickle down claim. This is because poor and middle class are much more likely to keep that money in circulation (and I'll explain in a minute why that is a good thing). You may recall that one of the criticisms of the stimulus check was that many people would "just use it to pay down debt." Paying down debt is another way of saying, "keep it in the financial markets rather than use it to consume." We (both sides of the aisle) want people to consume (not beyond their means obviously...). That stimulates the economy. So point 1: Poor and middle class spend much more of their income directly on goods and services. THAT provides revenues and jobs which is a more direct and organic way for companies to secure capital for reinvestment than borrowing against a stock value. Why is spending a more powerful stimulant than investing? Ask anyone in a startup whether they would rather have more revenues or a higher valuation of an equal amount. There's a reason that stock valuations are typically 3X revenues or higher for a healthy company - some money spent by the middle class as revenue is leveraged into 3X that amount of money in a companies valuation. The challenge is that as an individual investor, it's not like you can buy a $300 camera and get $900 back, but as a society every $300 camera means $900 in value to Best Buy's valuation. So Point 2: it is a much better investment as a nation to pursue efforts that drive consumer spending directly.

Again, there is a balance and a range that this works within but trickle UP is actually the way the economy works, while trickle down stagnates us by discouraging spending. Obviously, we still need the financial markets and credit, but the middle class is the engine of the economy and I hope the above explains the mechanisms at work.
awesome, thx!

:thumb: