question about government involvements in our lives

[kimba1]

if someone isn't careful enough to manage their own finances, tax payers shouldn't be on the hook to bail them out.

see .that`s the rub.
we did that with those loans I mentioned earlier and the loss was so great we experience the collateral effects of it. I`m not saying tax payers should bailout anything but I`m pushing prevention not cleaning other peoples messes far from it.

[sirs]

The rub is tax payers being punished for someone else's ineptness and/or nefariousness.  Never is the Government punished

[Xavier_Onassis]

The only taxes that are punishment are fines levied for breaking the law, like parking tickets.

[sirs]

completely missed the point Kimba & I have been talking about   

[Plane]

   What prevents government from conducting flim flam?

[sirs]

Precisely......whistleblowers are all there is.  Problem is, when its Democrats in power, the whistleblower is merely a "disgruntled employee" or is motivated by *insert PC related term here* animosity.  And don't even think about requesting an independent investigator

But more to the point, and how it helps reinforce the point I was making with Kimba, is that there are no repercussions the Government has to deal with.  And the larger, more complex the bureaucracy & Government, the easier it is to get away with it

[Plane]

    When the government is a certain amount complex it can frustrate itself , and with the best intentions cannot do what it is intending to do.

     
     Fannie Mae was supposed to help the people afford mortgage and make homeownership more common in the population.

      It worked to a certain extent , but it also helped set up the crash by accepting a lot of bad debt that banks all over the nation were setting up and selling without proper vetting of borrowers.


     Once it became true that almost anyone could get a large loan without having to demonstrate earning power, the crash was inevitable .

     Why was this not seen?

     Political popularity of zero down loans?

[kimba1]

Once it became true that almost anyone could get a large loan without having to demonstrate earning power, the crash was inevitable .

     Why was this not seen?

it was once blamed on minorities because the encouragement to open the process to make it easier to access.but  the sheer volume of loans makes the highly suspect due to the fact the lender is totally and legally allowed to limit the loans given out to minimize loss. it`s simply bad judgement by those those involved in believing greater returns can be made loaning to people with bad credit.

[Plane]

   That is close, but it isn't necessary to consider minority status in the question.

    The bad judgment to make loans to anyone who has less than the margins to repay should be a bad judgment with consequences to the lender .

    But if the government is handy with a program to buy all the debts before they have even been a year old there is no consequence to the lender at all and the biggest profit is going to the least discerning lender .

     This program might have been intended to assist the public in home buying , and provide affordable homes to the greatest number possible.

     But by pushing the margins past sustainability , it produced a collapse which caused an era of foreclosures.

     The government cannot make 2+2=5 even with the most complex and thoughtful lawmaking. Good intentions are not enough for good government, good math helps too.

[kimba1]

no argument there.

[sirs]

   That is close, but it isn't necessary to consider minority status in the question.

    The bad judgment to make loans to anyone who has less than the margins to repay should be a bad judgment with consequences to the lender .

    But if the government is handy with a program to buy all the debts before they have even been a year old there is no consequence to the lender at all and the biggest profit is going to the least discerning lender .

     This program might have been intended to assist the public in home buying , and provide affordable homes to the greatest number possible.

     But by pushing the margins past sustainability , it produced a collapse which caused an era of foreclosures.

     The government cannot make 2+2=5 even with the most complex and thoughtful lawmaking. Good intentions are not enough for good government, good math helps too.

BINGO

(and for clarification, for certain others, that's sirs again acknowledging how someone else is right)

And let me also address Kimba, in that I don't think anyone was "blaming minorities" for the housing collapse.  I sure wasn't.  It was Government policies started under Clinton, exacerbated by Bush.  When the red flags were all over the place, DC Democrats circled the wagons around Freddie & Fannie, and the rest...as they say....is history

[Xavier_Onassis]

The reason for the bad loans was that banks making the loans could peddle them elsewhere and take none of the risk. This was allowed because of what REPUBLICAN Phil Gramm did to permit the sale of loans earlier.

[sirs]

The reason Banks were making bad loans was specific to Governments insistence that banks start making these loans to folks who would otherwise not be approved....that the Government "had their back", and if they didn't, then the Government, under the FDIC would have to look "very hard" as to any "bad practices" that these institutions were perhaps performing *wink wink...best start approving these loans*.  I realize the knee jerk attempt to make this all some GOP act, while the Dems were completely innocent, however Graham had squat to do with this.

It was put in place under Clinton, and then exacerbated by Bush, so yes, Bush was also very much to blame.  Republicans in both the House and Senate could see the writing on the wall, and were trying to do something, but were stonewalled in both houses by DC Dems, that portrayed those effort as some supposed witch hunt after the folks running Fannie & Freddie. 

And then it came crumbling down, when it could have been prevented.  A Bipartisan caused crash.

Which is why Dems are so desperate to have Republicans sign on to Obamination Care, that way all this destruction of our healthcare can be portrayed as a bipartisan caused debacle, and not what it really is, pure partisan democrat caused

[Plane]

The reason for the bad loans was that banks making the loans could peddle them elsewhere and take none of the risk. This was allowed because of what REPUBLICAN Phil Gramm did to permit the sale of loans earlier.

   I didn't know about Phil Gramm being involved this way, but this still counts as government management being a problem, and causing a problem.

[kimba1]

i was trying to point out those loans was only partially caused by the government and that the main motivator was greed. the lenders wanted a lot of those loans to default to get those properties which at that times was growing in value . but then eventually the collapse actually happened. note the sheer volume of those loans far exceed any requirements the governments has suggested. but now is round two with the relaxing of the loan requirements . are the banks foolish enough the repeat this again ? I don`t recall anything saying sub-prime loans are back.