My good friend Brian, who suspended his blog Liberty Pundit last August, has returned to the blogosphere. Brian and his wife bought a home last October, and with the passage of Obamanomics, he noted this interesting fact:
You wanna know something? I just bought a new house in October, right? If this were my first-ever home purchase, I would have gotten a tax break of 10% of the purchase price or $7500 (whichever was higher) on it this tax season as a first-time homebuyer. However, I would have to pay that back over 15 years.
Now say I waited a couple of months and bought the house on January 1, 2009, instead. Under Urklebama’s “stimulus” plan, I would get a tax break of 10% of the purchase price, or $8000 (whichever is higher) this tax season. But wait, it gets better. In addition to the potential $500 extra deduction, I wouldn’t have to pay that back. Ever.
Not only can someone get an extra, free $500, but they would never, ever have to pay that back. “Free” money, courtesy of the federal government (via actual taxpayers, of course). Just don’t call it socialist “wealth redistribution”, or you’re a racist.
Pfft. And they wonder why we’re so far in the red and only going in deeper…
Of course, there’s even more that Brian didn’t mention. Homeowners get to deduct their mortgage interest payments on Form 1040, Schedule A, so we — yes, the Pico family does take that deduction — are being subsidized by the government for buying a home rather than renting already. Now we get Uncle Sugar giving up to $8,000 to people to buy a house, and they still get the mortgage interest deduction.
Unfortunately, the source I use concerning the 2008 vote breakdown didn’t differentiate between renters and homeowners, but I’d be willing to bet that President Obama got much of his margin from renters; they are generally poorer (Barack Obama and John McCain split the $50,000 and over vote, 49%-49%, but Mr Obama dominated poorer voters, 60% to 38%) and more heavily minority than homeowners (Mr McCain won the white vote, 55% to 43%, while Mr Obama carried minority voters by a wide margin.) But it looks to me as though it will be the people who gave Mr Obama his electoral victory who will be paying the most — and getting the least — from this mortgage bailout.
Schadenfreude, indeed!
This, to me, is welfare not for the poor — which I can at least justify in my mind as the poor needing help — but welfare for the well-to-do. After the mortgage meltdown, you have to have a solid and stable employment history, a substantial down payment, and good credit to get a mortgage. These are precisely the people who don’t need help from the government.
At least with the old $7,500 tax credit — which I never took — the taxpayers had to pay it back over fifteen years; the new form is just a gift, a gift to people who don’t need one.
Dane, you REALLY need to read Galbraith’s “Culture of Contentment”.
“One wonders what sayeth
John Kenneth Galbraith”
Wm. F. Buckley Jr in a moment of frivolity.
JKG made his bones with a book on the economic ramifications of the Treaty of Versailles. We did a lot better with the Marshall Plan.
This bit of fame was the basis for a lifetime of humbuggery.
Gee, Art. That’s devestating coming from someone who knows, well, nothing about economics. I’m sure he would be devastated by your opinion.
Liberty Pundit back online again? This proves two things: 1) God answers prayer, and 2) He has an awesome sense of humor
Looking forward to many blocked comments, locked threads, flawed logic, strained sentences, and outright lies! so far my favorite new hit is LP’s sudden distaste for deficits, which from 2001-2007 were no big deal and nothing whatsoever to fret about. What amazing feats of reversal will the Liberty Pundit show us next? The Shadow knows!
Shorter Art Downs> I haven’t read any Galbraith.
Pho> Art did say once that when the Alaskan government redistributes earnings gained from oil profit taxation that it isn’t socialism because “Alaska has a long history of doing so”. One of their new economic gurus; John Hitchcock, stated not long ago that the government providing services such as a fire department or police department wasn’t socialism because the Constitution says that they aren’t. And in trying to keep believing the fantasy that CRP changes enacted by Clinton caused the current financial collapse I see that Dana and Brian have now decided that a tax break is now welfare. Who can dispute some iron-clad logic?
The house of financial cards began to fall when the chickens came home to roost at Fannie Mae. The SEC assessed a ‘fine’ in the orders of hundreds of millions but the man who cooked to books to create paper profits that justified nearly a hundred million in bonus payments took the money and ran.
Franklin Delano Raines had tight connections with Barney Frank and Chris Dodd and has been slithering from Washington to Wall Street and back. He was the #1 choice of John Kerry to head Treasury had he been able to fool the elecrorate in 2004.
Raines is probably a bit too hot for a subcabinet post in the short term but the public has a short memory.
Dealing with the crisis with more bailouts may be analogous to the old trick of replacing a blown fuse with a penny. It gets the power back but there will be hell to pay later.
./
You wonder why I block you retards from my site? Because of crap like this:
I must have missed that part, where I said “no big deal” to he deficits of the last eight years! If you were honest (ha!), you’d know that I did nohing but bash Bush and Congressional Republicans over their spending.
But by all means, you keep spreading your lies about my positions and what I’ve said/written in the past. Whatever blows your skirt up, man.
Because President Bush and the Republican-controlled Congresses of 2001-2007 spent way, way too much money, and because most Republicans, including me, supported President Bush and the Republicans, for our friends on the left we must have all supported the overspending. It’s great demagoguery, but it isn’t true. We simply realized that the Democrats would be far, far worse, and, less than two months into the Obama Administration, we are being proved right, far more so than I ever expected in my worst nightmares.
The FY2008 deficit was $455 billion, far too high, due to all of the social spending contained therein. And while part of the FY2009 spending can be blamed on President Bush, half of the $700 billion TARP spending was withheld for release by President Obama — and he released it. The entire Porkulus Plan spending can be laid at the smelly feet of President Obama. The earmark-laden $410 billion Omnibus Spending Bill can be laid at the feet of President Obama.
The FY2009 deficit is expected to be somewhere around $1.75 trillion, and much of that will be attributable to excess spending asked for and authorized by our 44th President, not the 43rd. The FY2010, 2011 and 2012 deficits are all projected to be over a trillion dollars; you can’t blame Republicans for that!
I’ve said many times that if you made me Tsar and Autocrat of All the Americas, I could balance the budget in a year, at far lower levels, and it would all be predicated on two things: no payments will be made to any individual except for salaries earned, services provided or retirement earned; and if you don’t work, you don’t eat.
What most libs don’t get is the reason why Republicans lost in ’06 and ’08. They think it was because of Iraq, but it wasn’t. We conservative voters got tired of their spending ways, so we either voted for someone else, or we just stayed home.
Art Downs> So you’re at odds with the assessment given by Henry Paulson to President Bush last August? The one where he stated that “The turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for US. Subprime mortgages, beginning in late 2004 and extending into early 2007.”
According to the New York Fed “…about 77% of subprime mortgages and 85% of Alt-A mortgages were issued after 2004.”
What happened in 2004? Subprime mortgage securitizations were able to take off because, as Bloomberg reported, in August 2004 Moody’s and Standard and Poor’s loosened their standards for rating mortgage backed securities which enabled companies like Bear Stearns to pass their garbage off as gold. This was a direct result of the passing of the Commodities Futures Modernization Act.
Again, I’ll say the same thing to you as I did to John Hitchcock. If you want to talk policy that’s great but stop wasting my time with your AM radio conspiracy theories.
So, what’s your point, Mr Ganzeveld? Is it simply an argument over who is at fault?
Art brought it up. I’m responding to him. What’s your point?
But while we’re on the subject of blame I’d like to point out that I’ve been on the record as saying that there is plenty to go around. My problem is that whether out of ignorance or cynicism, Art Downs and Co. continue to insist that it was a problem created by a few crooked Dems. I find such explanations disingenuous. I also feel very frustrated over the fact that it seems like I’m the only one here who isn’t interested in playing Lib/Con ping-pong.
In your defense (and Sharon’s) I will say that you have long been against deficit spending. I can’t think of any specific posts off the top of my head but I do remember you taking issue with it on several occasions.
As for Brian’s tales of mortgage tax credits having the same effect as Bank of America convincing a Perkin’s shift manager to buy a Toll Brothers house I think that’s idiotic and a woeful misreading of the history of the last housing bubble.
Where on earth did you get THAT from?!? See, this is why I don’t let you guys on my site. You constantly read something that isn’t there into everything I say or write (i.e., at best you twist my words into something I never said, at worst you flat-out lie…that, and you guys constantly google-bomb my full name…what are you, like 12 years old?). If I think a certain way about something, believe me, I’ll say it and not think twice about it.
My only point in saying something about the additional tax credit (which won’t have to be paid back) is that it’s bad budgetary policy. We’re far enough in the red as it is, adding more to it isn’t going to solve anything, it’ll only make our problems worse. I’ve no problem, as I wrote on my blog, with giving tax breaks and incentives to people to get them to do certain things, but there should be strings attached in some way, shape, or form. Just giving them a handout because they went ahead and bought a house (which they probably can’t afford but hey, they want that refund check!) is ridiculous.
For what it’s worth, since you brought it up, you’re going to sit there and tell me that people don’t buy a house based on what kind of taxes have to pay on it, or what kind of tax incentives/breaks they can get? Pfft.
Brian> As far as “reading into” what you’re saying has it ever occurred to you that you’re simply incoherent? That you’re not a very good writer to begin with and use logic in a haphazardly fashion? That your prose is tedious and derivative?
Obviously the line about lowly Perkins shift managers and Toll Brothers houses was meant as a demeaning characterization and wasn’t meant as a full blown rebuttal of your “argument” that *cough* tax breaks should come with strings attached or that not having those tax breaks would improve the current fiscal state of the country. In fact, the two have absolutely nothing to do with each other and since that was your suggestion the burden rests upon you to prove it. So far you’ve done a terrible job at doing so. I mean, AIG is out there begging for multiple billions every month or two and you’re here bitching about $500? $500 you happily accepted, I might add. So much for having the courage of your convictions.
For what it’s worth, since you brought it up, you’re going to sit there and tell me that people don’t buy a house based on what kind of taxes have to pay on it, or what kind of tax incentives/breaks they can get? Pfft.
Oh, is that what I’m sitting here telling you? No, taxes have a great deal to do with the decision to purchase a home as do a many other factors. Christ, Brian, why don’t you just ask me how I feel about gravity or algebra.
The only strings I want to see attached to any tax breaks is that something is gained by giving them out.
For example, say I want to attract a large company to my town. I offer them a tax break. They accept. What did we get in return for the tax break? Well, we got a large business who will hire local people as employees (which means they’ll pay taxes on their income). We get the business to pay property taxes, income taxes, etc., that we wouldn’t have had before (albeit at a lower rate than what we otherwise would have gotten, but they wouldn’t have come in at all otherwise). In short, it’s a win all the way around.
Now if we’re just saying “here, here’s some free money, do what you want with it”, then I’m against that (I was against last year’s rebate checks, btw, for the exact same reason, and I said so on the blog). And that, basically, is what Obama is doing with this rebate. Buy a house that you can’t afford, get up to $8000 cash back this year that isn’t, and never was, yours. I would be a little more comfortable with it if he said that that $8000 (or whatever the 10% ends up being) has to go towards paying their mortgage (that is, putting a condition on the tax break), but he didn’t. I just feel that 1) we can’t afford to be doing this, and 2) it’s going to be repeated again next year when these people start defaulting on their loans again.
As for the last part, you sounded like you were trying to say that people don’t make long-term purchases or plans based on taxes. If I misunderstood you, sorry.
If that’s truly the case, then why do I bother you so much? lol Me, I ignore people like you just described. I don’t concern myself with them, but for some reason you guys do, or claim to, at least. Why is that, I wonder? (FYI, I already know the answer, it’s a rhetorical question)
Look, I’ll admit that I’m not writing Shakespeare here. I’m not writing some college thesis, and I certainly don’t try to write in such a way as to make myself sound smarter than I actually am. A lot of people in the blogosphere are guilty of that, but I’m not one of them. I write so the average Joe can read and understand what I’m saying, plain and simple. And it must work, because my site has done pretty well over the years. Yeah, it could do better, but I’m happy with it. Plus, I like doing it, and that’s why I came back to it. I left because I didn’t have the time and I had other stuff on my plate (buying and moving into the new house, for one). Now that we’re settled in, I’m good to go, at least until it comes time to renew the domain (I might, I might not…depends on how I feel about it when the time comes).
Buy a house that you can’t afford, get up to $8000 cash back this year that isn’t, and never was, yours. I would be a little more comfortable with it if he said that that $8000 (or whatever the 10% ends up being) has to go towards paying their mortgage (that is, putting a condition on the tax break), but he didn’t. I just feel that 1) we can’t afford to be doing this, and 2) it’s going to be repeated again next year when these people start defaulting on their loans again.
I’m not buying your assumption that:
A> Relaxing a tax is tantamount to giving money away. I would contend that like a lot of taxes, the 10% wasn’t the government’s in the first place.
B> That people reflexively buy houses they cannot afford, fritter away any leniency granted via their taxes, and are guaranteed to go delinquent or default as a result.
And what do mean by “defaulting again”? Did they buy two houses in as many years? That doesn’t make sense.
C> That everybody accepting the tax credit doesn’t need it and wont put it to good use.
and…
“Free” money, courtesy of the federal government (via actual taxpayers, of course). Just don’t call it socialist “wealth redistribution”, or you’re a racist.
Who is saying this? Seriously, find me one example of someone being called a racist for saying that BO’s tax policy is socialism.
A)But we’re not talking about “relaxing a tax”, are we? We’re talking about giving away tax money in the form of a tax credit. But you knew that…
B)Yes, people buy houses they know they can’t afford all the time. Now, I’m not a mind reader, but I would suspect that some of them are for money-making purposes (flipping houses, for example). Others are just plain idiots (see here, for example), thinking they can afford them when in reality they have no hope of doing so.
C) “Defaulting again” means, basically, that they’re in default right now, then they’ll get a bailout, and six months later they’re right back in the same boat and in default. Default doesn’t automatically mean “foreclosed”, you know.
D) Uh, basically everyone on the left. If we disagree with him on anything, we’re supposedly racists. Don’t deny that, it’s been that way since he first announced he was running. But if you want examples, here’s one. Anytime we disagree with him on anything, we’re accused of using “coded language” and being racists. Here is another example, the premise being that to note vote for Obama would basically make you a racist. Need I go on? Don’t deny that you guys have said/done this, because you have.
Me, I couldn’t care less what color the man is. He could be purple and green, with stripes, no less, and I couldn’t give a crap less. It’s his ideology and policies I have a problem with.
D’oh. Should say “to NOT vote for Obama”, instead of “to NOTE vote for Obama”.
I need some coffee, lol.
Brian, you dismissed any worry about ballooning deficits as Bush-bashing. I’d link to where you did that, but your legendary cowardice causes you to delete and/or edit posts whenever you’re wrong and/or make a fool of yourself. This will happen some more as you continue to wrongly predict political events and to take positions that don’t hold up. And that’s why I look forward to more of the same dishonest, angry, blustery posturing I used to enjoy back when you were insisting that “libs” worrying about the net cost of pumping billions of dollars into Iraq & uncontrolled deregulation was just peacenik worrywart stuff instead of genuine concern for what would happen when it came time to pay the piper.
On behalf of the entire reading audience of the blogosphere, I thank you for returning. I have missed you.
(also, the link you provide doesn’t support what you wrote at all – it only states the rather obvious truth that race was an issue in the campaign. not that people describing Obama’s policies as “socialist ‘wealth redistribution’ [are] racist.” You won’t be able to find one example of that, because it’s more of Pickrell’s Paranoid Posturing ™.
I don’t really have a problem with tax credits, since the whole point is to get people to do things that are beneficial, but they might not do otherwise. The recent mortgage mess has more to do with people being encouraged to buy more house than they could afford, based on a lot of tactics that just come down to betting. It’s possible that the same people might use a tax credit to continue this pattern, but my guess is that that is unlikely to happen in the current climate.
BTW, Brian, I’ve always held that the reason the Iowa Liberal people will latch onto you (or me, or whoever) like a deranged pit bull is that they simply don’t get enough feedback at their own place to keep them interested. I’m not going to argue about the number of hits you guys get, but I’ve seen the low numbers of comments your posts tend to get, and I guess, like most people, you like to go someplace where people will argue with you until the point has long been lost. Maybe I’ve just done that too often with too many people who don’t know when to stop, but I’m just not interested in that “You said X, so you have to find an exact link for that argument!” conversation anymore.
A) Okay, does “relaxing the tax burden” work better for you?
B & C) Yes, Brian, I understand these practices occur. But to say that they’re axiomatic is illogical.
D) So you couldn’t find an example of someone being called a racist for calling BO a socialist. I’m glad we could clear that up.
Shorter Sharon> Inductive fallacy.
I most certainly did not. As I’ve said in other areas, this is one of the major things I took issue with him over. If you honestly think I said something else, then do a Google cache search or try the Wayback Machine and try to find it. In fact, knock yourself out, because I know I didn’t defend the massive deficits. About as far as I ever went was to say that “I know we’re at war, but “x” amount…this is ridiculous” or words to that affect.
Mike, you guys call us racists all the time whether we’ve done or said anything racist at all (in fact, you guys just did it over at your site, saying that my statement was a “cover” for whenever I may say something racist). Nice try, though.
Oh, and by the way: it’s not, as you said, “relaxing a tax burden” because they’re not getting taxed, period. They’re getting cash back simply because they bought a house, whether or not they can afford it. It’s wealth redistribution. In simple english, the government is paying people’s mortgages for the year.
Sharon, I’ll tell you why these “tea-smoking hippies” (as I love to call them) take issue with you and me: they know we’re right and they know we have an audience (readers). Two things that make us a danger/threat to their agenda and beliefs.