by frog
Given the just failed US$700 billion financial bailout was about preventing widespread poverty and economic turmoil I’ve been wondering whether the money couldn’t be better spent in other ways. Now that the bailout is dead maybe USA can afford to be inventive. For that kind of money you are talking about a fairly comprehensive free healthcare system and social welfare net for those in need.
I have a lot of sympathy with the Republicans who voted against the bail out arguing it would be an interference in the mechanisms of the free market. It certainly would.
The financial markets could actually operate much more freely without a bailout that promotes completely the wrong behaviours, but instead with a government investment in protecting the people, rather than companies, that are likely to be most hurt by the financial crisis. The US government could be moving to finally provide free universally accessible health care and social welfare for all its people so that it knew no-one would be thrown into absolute poverty. It could invest in new sustainable businesses for the 21st century like renewable energies, rebuilding its public transport networks and local sustainable farming, instead of failed 20th century banks and lenders. US$700 billion could go a long way.
Published in Economy, Work, & Welfare by frog on Tue, September 30th, 2008
Tags: , financial markets, frogblog, green party, healthcare, new zealand, social welfare, USA
on the trolls and those who are unable to keep on topic
>>I have a lot of sympathy with the Republicans who voted against the bail out arguing it would be an interference in the mechanisms of the free market. It certainly would.
Indeed.
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$700 billion might have many fantastic uses, but if they decided to spend it on something other than a bailout like clean energy, we’re all doomed, or something.
Add the 700 to the current government debt and we then have approximately 23 abacajillion dollars in debt. Nice, where’s Bill Clinton when you need him?!
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THis is not the result of the free market. I suggest you read:
http://myslu.stlawu.edu/~shorwitz/open_letter.htm
And here is the executive summary of my report to the Reserve Bank in 1996. I hate to say “I told you so – but:
The Principle Findings of this Report Are:
General Principles
• General economic theory, and international experience, strongly indicate that the regulation of the supply of land should be light-handed, for reasons of both equity and efficiency.
• Policy makers must recognize, and must explain to their constituencies, that heavy-handed regulation of the supply of residential land carries a burden of significant economic and social costs. Such over-regulation affects prices, construction output and finally employment.
• In New Zealand those same price rises make a significant contribution to the CPI, which, in turn, forces a response from the Reserve Bank, which means that these distortions impact on the competitive performance of New Zealand’s trading sector.
• Many of these costs fall most heavily on those least able to deal with them. Those already comfortably settled, benefit from the increased capital value of their properties. Those struggling to become established, find themselves paying higher prices for housing, or are priced out of the market altogether. A large percentage of the population who have a mortgage on their home or who have borrowed to finance their business or other activities are paying higher interest rates that necessary.
• Some increased costs associated with protection or enhancement of the environment are to be expected. As populations become wealthier, they demand higher environmental standards.
Local Government and the Supply, Demand and Regulation of Land
Local government has a responsibility to ensure that an adequate land-bank is available to meet rapid and unforeseen increases in demand.
Unless sufficient sections are available and ready for occupancy, an increase in demand can lead to a vicious cycle, whereby, at the end of the cycle, the land-bank is no better supplied than at the beginning.
Pressure on rural fringe land will increase rather than decrease over the next decade. Contrary to much planning mythology, economic efficiency and the need to make the best use of rural land, demand that the ‘lifestylers’ should be allowed to have their way. There is no shortage of agricultural land.
The Impact of the Resource Management Act
• The major change in the economic environment surrounding the residential property market in recent years has been the passing of the Resource Management Act in 1991.
• The Act was genuinely intended to be light handed and to increase the individual choice in land use and resource allocation, provided there was no adverse impact on the natural and physical environment.
• Most local bodies have been determined to add the control of environmental effects to their long standing right to control land-use, and to allocate resources. They have shown considerable ingenuity in using the new Act to make the allocation of resources a necessary means of controlling effects.
• The “omnibus” nature of the Act has improved the project planning environment for major players. On the other hand, the costs of the Act fall more heavily on the smaller players, if only because they have fewer resources, both monetary and political, with which to deal with them, while they are not receiving the same benefits.
• Local Authority officers claim that the necessary policy statements and standards are taking a long time to appear and those that have been published (such as guidelines for water and air standards) are of little use to those operating in urban areas, and residential sectors in particular.
• A general lack of direction front central government means that local authorities have either failed to provide guidelines to applicants, or have been quite inventive in developing their own.
• The RMA, as it has been, and is being, implemented, has imposed massive extra costs on the residential housing market in the Auckland Region, in terms of both time and money. These costs could be greatly reduced without diluting the environmental objectives of the Act.
Specific Centres of Increased Costs -
• Subdivision is now subject to a more complex process, and is more frequently subject to notification, with associated increases in costs, delays and risks.
• Applicants are required to pay both for the work of their own consultants and then again for checks carried out by the Councils’ own consultants.
• Unexpected and broad definitions of terms such as “environment” and “heritage” have led to an explosion of controls and costs which impact on areas such as building design, colour, clearance of vegetation, choice of planting, and even the right to occupy land at all, without first gaining a Resource Management consent. Many owners have lost any clearly defined ‘right to use, and yet are not eligible for compensation. Such properties are increasingly difficult to value.
Performance of the Private Sector
• The land development/subdivision industry has been able to deliver the increased environmental standards demanded by the Act without increasing its own costs of construction. The industry has been aided by increased productivity, and the benefits of deregulated capital and labour markets.
The High Cost of “Providing for Growth by Containment”
The ARC policies of containing growth
The major cause of ongoing increases in housing costs is the ARC’s policy that Auckland’s growth should be managed by a policy of containment which restrains growth outside the present urban limits, (which are currently under review) while concentrating development within the present urban limits. These policies rest on the unfounded assumption that the present city form is unsustainable. These arguments are without foundation both in fact and probably in terms of the Act. Opinion surveys and Census Data, indicate that the Regional Policy Statement seeks outcomes which the majority of Aucklanders do not want, and are likely to resist, and are contrary to present practice. Such a massive re-direction of preferences must introduce high costs with downstream effects on the whole economy.
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Where’s the bit about immigration and house prices Owen?
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NZ’s population increased 21% between 1990 and 2004 and vehicular traffic increased 57%.
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YES – The US congress finally got a backbone and funny that it wasn’t the democratics waking up it was the house republicans.
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Yeah – yay for the republicans who refused to sell what they stand for down the line. Thats not to say my politics are republican – far from it – but kudos is due to these folks for listening to those they represent.
The point the Frog missed was that there never was $700b to do anything with – it at this time is just a figment of the collective imagination of Paulson and Bernanke. Congress could have turned it onto something else however.
I’d rate as “unlikely” any American government voting a social programme of this magnitude on anything, so am heartened to see that the money is not being comitted to a bailout plan.
Congress having grown a backbone, Wall Street is next. Time to stand up and be counted. Take the losses, move on. But judging on how the Dow is feeling, Wall Street seem shocked they aren’t getting a handout at the expense of the taxpayer.
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Reminding all, this 700 billion was to be paid to the same people who created the CDS’s that represent 62 TRILLION dollars of obligations against the actual money that was in the original mortgages. Twenty to one leverage. Mixed up 5% of good stuff in a CDS crap sandwich and no way to unscramble the egg on their faces.
This is “the smartest guys in the room” all over again (remember Enron?)
Too clever is dumb.
Note, Oil dropped but Gold is going up. If decoupling has started that’s a marker I think to be significant.
http://andymarlette.com/NATIONALS/2008.09.23wwjd2.gif
… which led to 5 years of one hell of a depression (in 1837)
respectfully
BJ
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The current US financial meltdown is an almost exact repeat of the 1929-1932 meltdown and has happened for much the same reason: setting the merchant bank speculators free from the commercial/merchant bank separation that was imosed during Rooseveldt’s New Deal legislation. The trouble with the New Deal was that Roosevel lured Japan into a war so that he could placate the merchant banks. This time round, Cheyney got the war first, now the melt down and a (possibly) fumbled attempt to invert the New Deal and reward the speculators instead of protecting the general population. Typical free market; privatise the profit and socialise the cost, and all the time milk the community cash cow for everything it’s got.
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jh,
The introduction and the body of the report dealt with the demand side of the housing equation. The market does not distinguish between demand caused by immigration, by household splitting (divorce etc), by natural growth, or by internal immigration.
A lightly regulated market responds to increased demand by increasing production.
Houston received 130,000 additional households immigrating from New Orleans during the twelve months following Katrina. House prices barely moved and the stock was higher at the end of the twelve months than at the beginning.
Why do you assume increased demand should increase prices. Someone has quoted the increase in motor car owership from 1990 to 2004. What happened to the price of cars?
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bj, do you have a link to more info on this:
“Reminding all, this 700 billion was to be paid to the same people who created the CDS’s that represent 62 TRILLION dollars of obligations against the actual money that was in the original mortgages.”
I’d like to know more about the mechanism used to gear things up that much.
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Frog you may want to check out: http://www.dollarsandsense.org/blog/2008/09/us-financial-system-of-our -own.html for the US Green Party suggestions for how the money could be spent. It makes interesting reading.
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Why are you guys talking about spending $700,000,000,000 on all these other things. The money doesn’t exist the government would of had to borrow it from the Fed.
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Turnip28 is exactly right it is foolish spending theoretical money, as I noted waaaaay above.
But heres the thing. If some unattributable webchat is to be believed, one of the greatest reasons Americans are defaulting on mortgages is medical bills. They’ve used home equity to fund their health.
Thus, if America had universal free healthcare then it may not be in the mortgage mess.
As ye sow, …
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OK well after reading Billy’s link i am glad the US Green party isn’t going to win the election, just like the NZ Green party they don’t understand markets.
1) Enactment of a foreclosure moratorium now before the next phase of ARM interest rate increases take effect;
Why?? Price fixing which is what option 1 amounts to don’t work, Jeez do you guys want to cause another great depression.
2. elimination of all ARM mortgages and their renegotiation into 30- or 40-year loans;
How the ARM mortgage has been chopped up and spread into many MBS, you will need to buy each of those MBS and then change them, One of the problems with this housing bubble is that its very hard to rewrite the loan terms, when the loan has been chopped up into so many MBS.
3. establishment of new mortgage lending practices to end predatory and discriminatory practices;
These were the very reason’s which got us into this mess in the first place, House Democrats were attacking Freddie, Fannie when they wouldn’t loan to a poor black person, well i’m sorry the reason a poor black person couldn’t get a loan had nothing to do with them being black and everything to do with them not being able to pay back the loan. Ron Paul was right when he said “The only thing we learn from history is that we don’t learn from history.”
4. establishment of criteria and construction goals for affordable housing;
Lets spend more taxpayer money, where is this money coming from the US is running a $500,000,000,000 deficit and growing every day, I predict 2009 that it may top $1,000,000,000,000, cool but the greens want to spend more, hell lets keep on spending shall we.
5. redefinition of credit and regulation of the credit industry so that discriminatory practices are completely eliminated;
Good luck, here this isn’t a federal issue, its a state issue, you will need to take back control of delaware first. Anyway if Obama wins no chance in hell of any changes here, Obama’s VP is in bed with the credit card companies.
6. full funding for initiatives that eliminate racial and ethnic disparities in home ownership;
Oh great more spending, jeez, the US needs to CUT spending a lot, Its going broke, hell the US is broke.
7. recognition of shelter as a right according to the United Nations Declaration of Human Rights to which the U.S. is a signatory so that no one sleeps on U.S. streets;
The U.N. – go away, any party who thinks anything good can or could come from the UN is absurdly lost. Besides allowing the U.N. to bind policy in the US is very very very unconstitutional, need i remind all the bloggers here that the US is a republic and housing policy is not a federal issue, it is up to each state to decide what it wants to do.
8. full funding of a fund designed to cushion the job loss and provide for retraining of those at the bottom of the income scale as the economy transitions;
Yes lets spend more money and more money, I know the greens think US dollars come from trees after all, well once again the greens are mistaken as US dollars do not come from trees.
9. close all tax loopholes and repeal of the Bush tax cuts for the top 1% of income earners; and
Agree and disagree they should close all tax loopholes, but they should either abolish income tax or have a flat income tax, a tiered tax structure is nothing but an envy tax on the rich. Since we live in a democracy their is nothing the rich can do to defend themselves from having their private property stolen disproportiatly.
note taxation is the perfect example of why democracy is an evil form of government.
I am sick of reject socialist’s explaining that a person who earns 250,000 a year should pay an avg rate of 30% where as a person earning 30,000 can pay 20%. How is that fair taxation. The more you earn the more society punishes you.
10. fairly tax corporations, denying federal subsidies to those who relocate jobs overseas repeal NAFTA.
Finally a policy i agree on. companies that move jobs overseas should still have to contribute the employer medicare/S.S, TAX. They should also have to pay more corporate tax.
In addition to these ten points, I now add four more:
11. Appointment of former Comptroller General David Walker to fully audit all recipients of taxpayer cash infusions, including JP Morgan, Bear Stearns, Fannie Mae, Freddie Mac, and AIG, and to monitor their trading activities into the future;
Well Fannie Mae and Freddie Mac and AIG should of all been allowed to fail.
12. elimination of all derivatives trading;
eh???? derivatives are used to hedge risk, if used correctly they work fine, if used to gamble they are bad.
13. nationalization of the Federal Reserve and the establishment of a federally-owned, public banking system that makes credit available for small businesses, homeowners, manufacturing operations, renewable energy and infrastructure investments; and
Close but the correct line is abolish the federal reserve and replace it with nothing. A public banking system would allow cronnieism to dictate who got loans and who didn’t and would end up costing taxpayers.
14. criminal prosecution of any activities that violated the law, including conflicts of interest that led to the current crisis.
So you want to round up thousands and thousands of home oweners who lied on their application forms, they either comitted tax fraud or banking fraud, take your pick.
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Nice try, turnip, blaming the NINJA loans on liars and democrats. No one had to lie on their loan applications, the banks were practically shovelling money into their accounts. We have the same thing happening here to a lessor degree. Pre-approved credit cards in the mail each week, “no interest for 24 months” adverts every day on the telly. Interestingly, the pawn shops (Cash Converters) are now advertising heavily on telly. I guess the sharks know when and where to circle, after all. First the easy credit, then the sharks. The US is just about 10 months ahead of us on this downward credit spiral. We’re likely to be next, given that our personal indebtedness in NZ exceeds most American’s debt levels.
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Nice try Frog, but oh wait I forgot Frog thinks human beings are all little babies that need to be taken care of by the state, roll on Frog’s nanny state.
People lied on their loans they also never read the agreenments and just signed away on the dotted line. Of couse some people still believe in personal responsibility of course I know you don’t. It makes for some good class warfare for people like Frog to blame the evil bankers and defend the poor helpless poor people, it just makes it easier to push your socialist agenda i guess.
If you think that for one second Barney Frank and Chris Dodd are not upto their eyeballs in this mess Frog then you have been smokin to much of PhilU’s weed.
Thank god the green party has members like myself who are real greens as opposed to communists like you Frog, who just pretend to be green so as to push your socialist agenda.
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>>Pre-approved credit cards in the mail each week, “no interest for 24 months? adverts every day
You know what I do, Frog? I ignore them. I have no problems ignoring things, because I’m an adult, not a child.
I’m not sure what type of idiot you’re imagining who responds to these messages like some brain-dead robot, but I can only imagine that tend to vote to abdicate all responsibility in their lives.
Which would explain the on-going popularity of the left….
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I blame both the bankers who lent the NINJA loans and the people who took out the loans. They’re both to blame for mucking up the economy in a way that will hurt lots of people who are not members of either group and therefore are blameless for this stuff-up.
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BP said: >>Pre-approved credit cards in the mail each week, “no interest for 24 months? adverts every day. You know what I do, Frog? I ignore them.
So do I BP. That is why my total debt is less than $1K currently – which is frictional, rather than structural, debt – i.e. I effectively owe nothing to anyone.
Sure, I don’t “own” vast assets either, but I’m old enough to have gone through 1987 and realised that financing one’s lifestyle with debt is a particularly dumb idea.
Gotta say, personally just love what happened in the US Congress today. It will bring the reality of financial responsibiliy home to millions of people all around the world.
The pity is that it was motivated by the stageof the US electoral cycle, and Reps being terrified of losing their seats, rather than any genuine desire to rein in the excesses of unregulated capitalism.
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Toad, Kahikatea –
with you both!
I don’t have much consumer debt, having stringently down-sized then cut up my credit-card, lived without HP’s, car loans, or taking up a mortgage, because I felt that the interest I would be committing to paying was both iniquitous, and unsustainable while I was studying and accruing student loan debt.
The greed of those who have taken out loans as Ninja’s, and the greed of those who signed them up just to get the commission income, is what will destroy them.
The USA has walked eyes-wide-open into this one, and finally their shonky ‘fantasy money’ market is falling down.
I recommend Dierdre Kent’s book, Healthy Money, Healthy Planet, for an effective view of the debt spiral, and how to unhook oneself from it.
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Toad, Kahikatea, katie – Am I the only debt free bloke around here? That’s the advantage of a strong union – a good redundancy package. Now I just need to find an interesting stress free job within (easy) cycling distance of home and I’ll be set for life. The time off has been handy for getting the vege garden sorted out.
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“>>Pre-approved credit cards in the mail each week, “no interest for 24 months��? adverts every day
You know what I do, Frog? I ignore them. I have no problems ignoring things, because I’m an adult, not a child. ”
I suspect you are ignoring them because your income is pretty good.
I’d say social expectations around housing are part of the problem – I do think building is over-regulated. Maybe regulations should be relaxed as long as you are going to live in the property yourself. There’s a need to retain regulations on what can be rented out to prevent slumlords ripping people off, but if you want to put up a shanty for yorself I see no problem.
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>>I suspect you are ignoring them because your income is pretty good.
And my income is pretty good because I have built assets, not liabilities.
When I had no money, I ignored those offers because debt is poison, unless it is used to build assets.
People need to learn to say no, and accept responsibility for their decisions.
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I suspect also that the student loans scheme has socialised people into thinking of it as normal to borrow to buy everyday items, and socialise people out of being scared of getting into debt.
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Turnip
I’m sorry, the abnormality began with the bankers, not with the regulations requiring them to make bad loans. The loans that are failing are NOT the “poor black folk” who were being helped by the fairness in lending rules and the failing loans should never have been given the LEVERAGE that they were given in the system.
Understand that the banks were NOT doing due diligence. They quit. They sold risk to investment banks and then they sold it to each other. They sliced and diced ownership of the risk until nobody can even say who has the right to foreclose a non-performing mortgage. The risk was decoupled from the actual loans it is associated with, just a piece of paper representing tranches of different types of risk. Selling stuff like that to each other and using it as collateral against further loans. None of this was regulated at all because that would have been a sin against the ideology of the government of the day.
Suddenly realizing that they are dealing with thieves every bit as vile and despicable as themselves, the bankers quit buying the CDS paper. They quit trusting each other. The individual at the coal face of this, the house buyer, was handed a LOT of bum steers. The banks wouldn’t work with appraisers who didn’t give inflated valuations, the poor sod who wanted to buy was looking at a runaway price bubble because all that debt based money that the bankers were able to create in their fractional reserve hell, had to find a home. So interest rates were pushed into negative real territory and the buyer asked the appraiser what’s it worth and the appraiser lied… because the banks wanted to make those loans. They could onsell the risk,,,, no risk to them… well maybe…
Now judges across the country are adopting a principle that has much in common with habeas-corpus. If the bank can’t show it has legal title (and if it has onsold risk in a pile of CDS paper it may not be able to do that at all), then it can’t foreclose the non-performing loan.
To blame the individual customers for this stuff is just wrong. Some few are culpable, not enough to bring down the system. The amount of money involved in the non-performing loans is peanuts compared to the valuations of the CDS packages and loans between banks based on those valuations.
respectfully
BJ
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Red Letter Day (blood red)! US National Debt now > $10,000,000,000,000,00
Total Accumulated Debt of the United States Government 1776-1996:
$4,988,397,941,589.45
Total Accumulated Debt of the United States Government 1996-2008:
$5,036,326,955,323.04
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Well that explains why the $700bn bailout is now a trillion dollar bailout. $700bn for the bankers on Ball St (to paraphrase Monty Python) and $300bn for middle class voters. Democracy weaves it’s magic again.
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Need to add 3 more to the blame list.
Foreign Investors
-Failed to asses the risk before buying the MBS.
American Citizen
-Failed to not vote for Republicans/Democrats.
Banks
-For thinking they could loan money with 0 risk.
So many people to blame it isn’t funny, Of course nobody can blame Turnip since he doesn’t fall into any of the above categorys, except of course as usual in socialist society when everyone else fails Turnip has to step in and pay for everybody elses mistakes.
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My post got screw up so try again:
Here is my blame list, I am not signaling out one group like you bjchip i blame all of them.
Greenspan
-lowered fed target rate to 1%
-encouraged option ARMS etc.
Congress (Democrats & Republicans)
-removed restrictions on Freddie/Fannie
-allowed Freddie & Fannie to become to large and to dangerous
( there were a lot of people warning them but they didn’t listen)
-failed to see the danger and risk associated with MBS and CDS.
Ratting Agency
-Failed to understand and aportion risk correctly to many MBS
Media
-Presented a false image of real estate
-i.e real estate is a good investment
-it always goes up etc.
Foreign Investors
-Failed to asses the risk before buying the MBS.
Banks
-For thinking they could loan money with 0 risk.
Harvard
-For producing these retard 20 somethings with MBA’s
who think they are so smart
American Citizen’s
-For voting for either Republican or Democratic candidates for the last 25 years.
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Look i still stuffed up because you need to add one more group to that
list
The person who entered into the mortgage.
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Thousands of Americans who have lost their homes in the foreclosure crisis may find themselves ineligible to vote in November.
http://www.planetizen.com/node/35248
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Oh, piffle.
The plan is NOT for the Treasury to spend $700 billion of tax payer money that could instead go on Health or Education.
The plan is to buy stuff for $700 billion, and then sell that stuff later. It’s not obvious whether or not the Treasury will make a profit or loss overall. Probably guesses are a loss of under $100 billion, which is much less than the Federal govt will lose in lost taxes because of the recession resulting from this mess.
And what about that stuff? They’re talking a wierd type of forced sale (via auctions), including the ability to force companies to give the Treasury equity in them. You could just as honestly call it a “forced asset sale and bank nationalization” bill as a “bailout” bill.
Property booms go bust. Happens in regulated or de-regulated property markets, always has, always will. When they do financial institutions get caught with their pants down, and it turns out the regulators got slack during the happy times. Again happens all the time – every few decades anyway.
So what’s different this time? Well, the bust is bigger than usual.
But more than that – the credit markets screwed up not JUST on mortgages. Big global CDS and CDO markets are relatively new instruments. There are deals out there backing out credit risk on all sorts of things – shares, corporate bonds, etc. The credit crunch comes because it seems like credit spreads were too low on *all* types of credit, not just mortgage-backs. Methodologies for valuing them were wrong.
The real problem is that people thought diversification can get rid of risk. It can. If you loan one company a million dollars, then you could lose it all if the company goes bankrupt. But if you load a thousand companies a thousand dollars each then you’re not going to lose it all, but you can be almost certain that you’ll lose a thousand or two. That’s okay – and you can guarantee you’re not going to lose more than 10% at most. So you reduce risk by diversifying.
Unless it’s 1929 on Wall St, in which case you could still lose bucketloads.
It looks like it might be 1929 on Wall St. At least, there’s an obviously-non-zero chance of that. That means the guarantors of credit are in bad shape as their assets are worth a lot less than people thought. And having shown the old values to be wrong, no-one knows what their asserts are really worth. But if they go down then those who rely on them go down to, and then it really *will* be 1929 on Wall St.
Which gets me back to the “it’s not obvious if the Treasury will make a profit or loss overall”. The fear that it could be 1929 is what keeps those asset prices low. By buying enough of the assets the Treasury stops it being 1929 – and so increases the value of the stuff it buys. For some credit derivatives it’s a fantastic time to buy – if you’ve nerves of steel and a few billion to spend. Warren Buffet’s going to make another fortune out of this.
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By the way – here’s a thought to keep you awake at night:
Right now banks can’t borrow money on the international markets. The money markets have frozen up.
Your country, New Zealand, relies on its banks rolling over every few months loans of (literally) billions. And no-one is lending to banks right now.
Wall Street doesn’t need New Zealand. But we sure need Wall St. Because you live in a country that is in debt to the tune of about $50,000 per person and most of that debt is private. Kiwis owe our local banks, but since there aren’t enough Kiwi depositors our local banks borrowed that dosh from the big boys overseas.
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Icehawk
You got at least one thing right…. I’m still awake and still wondering how TEOTFWAWKI is going to affect ME.
The comparison being made now is to the panic of 1873.
The credit market iceberg is not coming unstuck with the Titanic Pass the Bucket Bail Out.
Market on Monday ? Your guess is as good as mine.
respectfully
BJ
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http://globaleconomicanalysis.blogspot.com/
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A breif explanation of how the neocons dodged the constitutional prohibition on the Senate originating tax legislation can be found here.
http://ti.org/antiplanner/?p=534
The bill text has just been posted. It’s 451 pages (skim through to find the index to each section. This Bill is obsfucation at it’s finest). You’ll be surprised how many unsuccessful Bills have been slipped into this “urgent” Bill, such as the tax credits for “clean coal”.
http://tinyurl.com/4d5gjw
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Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008
The Senate couldn’t have chosen a more aptly named Bill to hijack to sidestep the constitution
To save you the trouble of wading through all 451 pages of the Bill here’s the headings so you can get an idea of what’s been slipped in and see that even in a crisis pork-barrelling is alive and well.
DIVISION A—EMERGENCY ECONOMIC STABILIZATION
DIVISION B—ENERGY IMPROVEMENT AND EXTENSION ACT OF 2008
TITLE I—ENERGY PRODUCTION INCENTIVES
Subtitle A—Renewable Energy Incentives
Subtitle B—Carbon Mitigation and Coal Provisions
TITLE II—TRANSPORTATION AND DOMESTIC FUEL SECURITY PROVISIONS
includes SEC. 201. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS DEPRECIATION FOR BIOMASS ETHANOL PLANT PROPERTY.
TITLE III—ENERGY CONSERVATION AND EFFICIENCY PROVISIONS
TITLE IV—REVENUE PROVISIONS
DIVISION C—TAX EXTENDERS AND ALTERNATIVE MINIMUM TAX RELIEF
TITLE I—ALTERNATIVE MINIMUM TAX RELIEF
TITLE II—EXTENSION OF INDIVIDUAL TAX PROVISIONS
TITLE III—EXTENSION OF BUSINESS TAX PROVISIONS
includes SEC. 317. SEVEN-YEAR COST RECOVERY PERIOD FOR MOTORSPORTS RACING TRACK FACILITY.
TITLE IV—EXTENSION OF TAX ADMINISTRATION PROVISIONS
TITLE V—ADDITIONAL TAX RELIEF AND OTHER TAX PROVISIONS
Subtitle A—General Provisions
Subtitle B—Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008
TITLE VI—OTHER PROVISIONS
includes REAUTHORIZATION OF THE SECURE RURAL SCHOOLS AND COMMUNITY SELF-DETERMINATION ACT
‘‘TITLE I—SECURE PAYMENTS FOR STATES AND COUNTIES CONTAINING FEDERAL LAND
‘‘TITLE II—SPECIAL PROJECTS ON FEDERAL LAND
‘‘TITLE III—COUNTY FUNDS
‘‘TITLE IV—MISCELLANEOUS PROVISIONS
Subtitle A—Heartland and Hurricane Ike Disaster Relief
Subtitle B—National Disaster Relief
TITLE VIII—SPENDING REDUCTIONS AND APPROPRIATE REVENUE RAISERS FOR NEW TAX RELIEF POLICY
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Property booms go bust. Happens in regulated or de-regulated property markets, always has, always will. When they do financial institutions get caught with their pants down, and it turns out the regulators got slack during the happy times. Again happens all the time – every few decades anyway.
So what’s different this time? Well, the bust is bigger than usual.”
Alls fair in love and war and commerce……… I was interested to read the comments with regard to leaky homes (along the vane of) : “if they don’t do research it’s their own stupid fault”. I think a lot of heads ought to roll, including crooked real estate agents, valuers and corrupt councilors and planners. In other words we need to go through the system from the ground up.
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