Your tax dollars at work?

A recent article in the Wall Street Journal highlights a growing trend in government subsidized housing.

We are now learning that not only have your tax dollars been used to bail out banks that make bad loan decisions and home buyers who stupidly signed for home loans they couldn’t afford, but now enterprising individuals are buying up some of these foreclosed houses and renting them out as federal section 8 subsidized housing.

You can go to GoSection8.com and browse to see what’s available, most are traditional subsidized housing, apartment, townhouses, duplexes and so forth, but there are a few gems, such as this one, 10215 Splendor Ridge, Las Vegas. It’s a 2,203 sq. ft. 4/3 for only $1,900 / month. Now really, what section 8 qualified tenant really needs a house of this caliber? That’s aside from the moral question of whether taxpayer dollars should be paying for this.

One tenant whose story is told on the WSJ reporter’s blog moved from St. Louis to Las Vegas to rent a 2,000 sq. ft. section 8 home, her rent based on her income is $400 for the 5 bedroom home. The taxpayer chips in $1,400 a month. Does anyone besides me see anything wrong with this picture?

One individual mentioned in the story bought a Las Vegas home for $60K cash, registered it as Section 8 housing and is now getting $1,500 a month deposited in his account, courtesy of the taxpayer. After taxes, maintenance and fees, he’s profit is $15,000 per year. Not bad. Meanwhile, the federal budget deficit continues to spiral out of control.

I’m waiting for a thank-you note, or two, or three, think I’ll get one?

new tools for citizenship

Maybe you thought the federal budget, this multi-trillion document that is supposed to guide our government’s spending, is far to big to understand, too much financial “geek speak” to make sense to those with our feet firmly on the ground.  Well, think again.

The Heritage Foundation has a new resource, the 2010 Federal Budget Chart Book.  It illustrates our federal budget, how your political representatives collect and spend your dollars, in broad, easy to understand terms.

Did you know that federal spending per household has skyrocketed from $11,337 in 1965 to $31,088 this year?  in the next 10 years it’s projected to shoot up to $36,139.  In case you didn’t understand, that’s PER YEAR!

With all the demagogy, you would never know that while defense spending has decreased from 7.4% of the budget in 1965 to 4.9% this year, entitlement spending has actually increased from 2.5% ti 9.9% of the federal budget in the same time.

To pay for all that spending federal taxes have increased from $11,202 per household in 1965 to $16,543 last year, peaking at $23,947 in 2000.   In 2007, the latest year this data is available, the top 5% of income earners paid over 60% of all income taxes.  Who were those lucky people, those super rich 5%?  Anyone who earned at least $160,041 that year.

Meanwhile, the bottom 75% of income earners, those who earned less than $66,532 in 2007, were responsible for only %13.41 of all income taxes that year.  Kinda blows the liberal mantra that the rich pay nothing and the poor pay everything right out the door, doesn’t it?

At their current rate of growth, entitlement spending is projected to gobble up every bit of federal tax dollars, at the current rates, by 2052, leaving nothing for defense, roads and bridges, air traffic control, law enforcement and everything else we’ve come to expect, or even wish they didn’t but they still do, from the federal government.

That means that while in 1965 federal spending consumed only, only?, yes, only 2.7% of the total US economic output, by 2052 it will consume, at the current rate of growth, 18.2% and we really will be wishing for those “good ole days.”

So, what can we do about it?  The first thing is to educate yourself.  One of the primary responsibilities of good citizenship is to educate one’s self about their government.  For too long most of our citizens have entertained themselves with TV, movies, video games, hunting, baseball, gadgets, cars, beautifying their homes, football, you name it, we’ve distracted ourselves while the political class have stolen our nation, our economy, our freedoms and our hard earned dollars from us.

After you’ve educated yourself, find out about ways to get involved, constantly write and politely badger your representatives about their votes, their spending habits, their duty to protect the tax dollars entrusted to them and not spend them wastefully.

Yes, just about any budget item can find an advocate who can passionately articulate it’s merits.  But just because a budget item has merits doesn’t mean it should be funded by government.  What’s wrong with allowing, even requiring private citizens and business to fund projects they find worthy instead of turning to the pockets of the citizens?

Funding closer to home not only refines and winnows projects that have true merit, but it also brings it closer to those who can watch closely that the dollars are spent wisely, and if not, shut them off.

As Ronald Reagan said, “a government bureau is the nearest thing to eternal life we’ll ever see on this earth.a government bureau is the nearest thing to eternal life we’ll ever see on this earth.”  Just a few weeks ago we got a whopper!   It’s time the people cut off the life line.

Like A Thief in the Night

The Senate, led by Harry Reid, is planning a preliminary vote on Reid’s “health care” legislation at 0100, that’s 1AM on Monday morning, December 21.

A vote in the middle of the night is very indicative of the nefarious nature of those trying to push this bill through. If it was good for the nation and had the support of the American people this vote would take place in the light of day, in full view on C-Span and in time to make the next day newspaper headlines.

That the Democrat leadership is sneaking around in the middle of the night like cockroaches speaks volumes.

Among other things, to get this bill this far Reid and his cronies has had to tighten rules against funding abortion, rules that will no doubt be stripped in conference. He also, apparently in a nod to his Hollywood supporters, stripped a tax on cosmetic surgery while throwing the youth who supported Obama under the bus by adding a 10% tax on tanning bed services.

This bill will add an additional $1 Trillion to the federal budget and while it is supposedly budget neutral, that is because the collection of new taxes will begin immediately, in some cases retroactively, while “benefits” won’t start until 2014.

So while on paper the bill is “neutral” for the first 10 years, no one, at least on the Democrat side, is talking about what happens after that. Anyone with a 5th grade education can see that after 10 years, this bill will produce at minimum 30% annual deficits. That’s before the inevitable excess costs inherit to every spending bill that has come out of Congress begins producing massive deficits.

If this bill passes, our government will have set in place the tool of its fiscal destruction and the collapse of the American economy. It may not be 5 or 10 or even 15 years away, but with this kind of reckless spending, no individual, business or, yes, even government can even hope to keep its financial head above water.

“We are all in the same boat on a stormy sea and
we owe each other a terrible loyalty.” – G. K. Chesterson

Big 3 Bailout thoughts

I wrote the following to Sen. Mel Martinez of Florida on his “No” vote to on the “Cloture Motion; Alternative Minimum Tax Relief Act of 2008″. A yes vote would have allowed the Senate to move forward on this bill, to which leaders intended to attach auto financing and restructuring legislation

Thank you for voting “No” on the Cloture Motion to the “Alternative Minimum Tax Relief Act of 2008.”

While I am fundamentally opposed to government intervention in free markets, that’s in large part what got us into the financial and housing meltdown to begin with, if there is going to be government intervention, there must be concessions on “all” sides.

That the unions refused to even consider concessions to help their employers to become more competitive and preserve blue collar jobs is case in point of the arrogance they have fostered.

In tough times everyone needs to be willing to do what is necessary to keep their business viable, unions included.

That said, the very best method for the big 3 to deal with the problem of mismanagement, poor market prognostication and burdensome union contracts is the very Darwinian yet efficient method of Chapter 11 reorganization.

With good decisions they will come out stronger, more competitive and positioned for future growth and profitability without eating at the public trough.

I need my blue collar, Postal Service, earnings to support my family, not those of mis-managers and unionized extravagance.

I wrote a similar note to Sen. Bill Nelson who voted “Yes” on the motion. Except I extended my disappointment at his vote.

We must each become involved in the political process and tell our representatives what we think of their actions. Our Senators and Representatives are in Washington to “represent” each of us, the voter, the constitutent, not their own self interests and personal philosophies.

They must listen to us and seriously consider our wishes on the issues. If not, we have the responsibility in our Republic to go to the voting booth and replace them.

But if we fail to provide guidance and feedback, the onus falls on each of us for the actions they take with which we disagree. So take time to get involved, learn about the issues and write your political representatives, it’s your future, and that of your children and grandchildren.

“We are all in the same boat on a stormy sea and
we owe each other a terrible loyalty.” – G. K. Chesterson

SNL Update

YouTube has taken down the video link in the last post.

NBC has stated that the skit failed to meet standards. The question is, whose standards? SNL has never been afraid to lampoon anyone and specifically anyone on the right of the political divide.

They used their editorial commentary skits to skewer most recently Sarah Palin and her family, even going so far as to suggest incest. So I don’t understand what the problem is here unless some very powerful people, i.e. the Sandlers or George Soros, has threatened NBC with lawsuits, or even with buying them and firing them all.

Michelle Malkin is following this closely, visit her site for the latest info.

Here’s the link to the edited version just posted on the NBC Saturday Night Live site. On my first viewing the differences seem minor. The most prominent is the absence of an identifying tag under the Herb and Marion Sandler characters that states “People who should be shot.”

Maybe they were afraid that some of the people they took advantage of in their quest for billions of dollars would see that not as a satirical statement but a suggestion that should be followed up on.

I just located a site with the original unedited version of the skit along with an outtake of the edited portion and a video embed of the edited version from Hulu.

SNL Bailout C-Span Video Clip

Thanks to the internet, NBC can run but they can’t hide. Hmmm, I wonder if someone at NBC, some free thinker, is actually helping to keep this alive as a snub to whomever is trying to shut it down in original form? Ya think?

“We are all in the same boat on a stormy sea and
we owe each other a terrible loyalty.” – G. K. Chesterson

An open letter to Sen. Bill Nelson (D-FL),

While I am appreciative of your negative vote on H.R. 1424, I question whether your reasons were the same as mine.

The socialist shifts legislated in 1424 are an affront to our Republic and I fear that Section 110 will cause more damage to our nation and our economy than even the provisions of Section 101.

Short-term relief to mortgage holders who made poor decisions will result in undermining confidence in our nations banks and financial institutions even more so than current events have.

The underlying cause of the current financial and mortgage crisis originated in a Congress which, putting politics over the nations good, created legislation, the Community Reinvestment Act, that served to embolden activist groups to badger, sue and force institutions into making loans that were imprudent and unjustifiable.

It encouraged individuals to purchase homes far beyond their ability and means. Not unlike a Ponsi scheme, when the bubble burst, those caught in it’s midst found a hell hole where there should have been a castle.

Members of Congress, on both sides of the aisle, voted to encourage and allow Freddie and Fannie to dangerously expose their portfolios to these sub-prime notes in an effort to further expand home ownership by many who could not afford the responsibility of such.

While the individuals were certainly to blame to letting their greed and dreams overcome commonsense, and the lenders are to blame for not resisting the dangers of making such loans on the promise of increasing profitability, it is squarely on Congress where the blame must fall for creating the social engineering scheme that created this mess.

While Democrats demonize the current administration and Republicans, and there is blame to go around, the record clearly shows that this administration and certain Republican members raised a clarion call several times since 2001. It was the Democrat members who, though in minority, used procedure to kill these efforts to reign in those out of control entities.

Mr. Barney Frank was a primary contributor to killing these attempts and he should be a primary target of investigation for deliberately ignoring his fiduciary duty to the American people.

But Mr. Frank is not solely to blame. Every member of Congress who participated in this social engineering scheme is a fault and in my opinion should be turned out of Congress.

It is imperative that if this Republic, this great American experiment in democracy, is to survive, the People need representatives who truly represent the interest of the people. I fear this Congress is enamored with their own selves, with their quest for power, and have lost that vision, assuming they ever subscribed to it.

Write your Representative: How did they vote?
Write your Senators: How did they vote?

“We are all in the same boat on a stormy sea and
we owe each other a terrible loyalty.” – G. K. Chesterson

An open letter to Sen. Bob Martinez (R-FL)

I am very concerned by your vote in the affirmative for H.R. 1424. This bill was rushed through the legislature and little time was given to investigate alternative solutions that would be more effective and less costly to the American taxpayer.

Even now our President and other leaders are backing off their urgent pleadings, telling us now that this bill will not be implemented for several months and will have little effect on our economic crisis.

I am very disturbed by the legislation provided in Section 110. It appears to me that this Congress has created provisions that, even more than Section 101, will advance socialism in the United States and the federalization of our financial markets.

I am surprised that your college, Mr. Nelson (D-FL), voted against this bill despite on its language that socializes the US financial markets and our banks via:

1) Government ownership of financial institutions, and
2) Unwarranted government intervention into private mortgage contracts.

This slippery slope will only become steeper if Democrats, now encouraged in their agenda, retain their majority.

I plead with you to set aside political considerations and make a stand for the future of our Republic.

Alexis de Tocqueville said, “The American Republic will endure, until politicians realize they can bribe the people with their own money.”

Our legislators discovered this long ago, the people are swallowing this hook into their collective gut that will eventually rip them inside out.

Write your Representative: How did they vote?
Write your Senators: How did they vote?

“We are all in the same boat on a stormy sea and
we owe each other a terrible loyalty.” – G. K. Chesterson

The 10 most feared words

The 10 most feared words, “I’m from the government and I’m here to help you.” – Ronald Reagan

I missed this in my quick perusal of H.R. 1424 yesterday. Had I taken more time, looked closer and realized the greater implications of the following, I would have been even more adamantly against this piece of legislation.

The very important section is as follows:

10 (b) HOMEOWNER ASSISTANCE BY AGENCIES.—
11 (1) IN GENERAL.—To the extent that the Fed-
12 eral property manager holds, owns, or controls mort-
13 gages, mortgage backed securities, and other assets
14 secured by residential real estate, including multi-
15 family housing, the Federal property manager shall
16 implement a plan that seeks to maximize assistance
17 for homeowners and use its authority to encourage
18 the servicers of the underlying mortgages, and con-
19 sidering net present value to the taxpayer, to take
20 advantage of the HOPE for Homeowners Program
21 under section 257 of the National Housing Act or
22 other available programs to minimize foreclosures.
23 (2) MODIFICATIONS.—In the case of a residen-
24 tial mortgage loan, modifications made under para-
25 graph (1) may include—
1 (A) reduction in interest rates;
2 (B) reduction of loan principal; and
3 (C) other similar modifications.

This section of 1424 in essence gives the US government the authority to modify the terms of any mortgage over which it has control under H.R. 1424. Since that includes Fannie Mae and Freddie Mac, this provision extends to the majority of mortgages in the United States.

This means that if you are unhappy with the terms of your mortgage and it is in a security under the authority of the US government, you can petition the appropriate authority and they can have the holder of your mortgage lower the interest rates, reduce the principle amount owed, change the length of the note, lower the points, or what ever they determine will make you happy.

One can infer that the opposite could also happen. If you are not a constituency of what ever party is in power, if you petition the government in your behalf, it is possible they could use their authority to punish you for not having the correct political leanings. Raising your rates, increase your principle, shorten the length of the note or what ever they wish to convince you to see it their way.

This is a gross violation of both the rights of the property owner and the mortgage holder. If you are holding a note in the sale of property while you have a mortgage covered under this section, while you may be able to secure a reduction in the terms of the mortgage you owe, you may be required to reduce the terms to the individual to whom you are selling the property as well. In effect, reducing the income you receive from the sale of the property.

This is a huge socialization of the mortgage industry that very well may have implications far beyond the $700 Billion bailout of the financial markets. If you think this analysis is overblown, consider that lines 15, 16, and 17 state that “…the Federal property manager shall implement a plan that seeks to maximize assistance for homeowners and use its authority to encourage…”

That is a mandate, not a suggestion, to federal officials to secure the very best situation for the homeowner. There is no mandate to ensure a fair process, to take into consideration the costs, risks or profits of the holder of the mortgage.

And that last part, “use it’s authority to encourage.” As we all know, the federal government doesn’t “encourage” anything. They “mandate, direct, require.” Does the IRS “encourage” you to pay your taxes?

Does the State Department “encourage” you to get a passport if you wish to re-enter this country after you visit a foreign nation? Does the military “encourage” you to serve you full term of enlistment?

While many parts of this bill are legislated to expire at a date certain, and there are provisions to extend the authority set in the bill, there is no sunset provision of the authority given in Section 110. Therefore, without specific legislation by Congress, this authority will extend for as long as the federal government holds interest in any mortgages, either directly or by proxy via an institution in which it holds interest.

No, our representatives have not voted for a bailout of the financial system, they just voted in a far more sinister move to socialism than the original bill rejected by the House on Monday.

We all need to take a very jaundiced look at our Washington legislators and put them and the legislation they consider under the microscope of democracy. The actions they are taking, some with cunning and guile, others by misguided counsel and poor oversight, is taking us in a direction where we will lose the ability to live our lives in freedom.

With freedom comes responsibility. When we accede responsibility to a higher authority, we also give up our freedom.

Download and read the full text of Section 110
Read the full text of H.R. 1424

“We are all in the same boat on a stormy sea and
we owe each other a terrible loyalty.” – G. K. Chesterson

H.R. 1424 remains step toward socialism

Dear Representative Keller,

Thank you for taking the time to listen to your constituency. I’ve written previously about the “bailout” legislation for the financial markets. Specifically, I’ve been decidedly against any such legislation.

I want to reiterate that I remain so. I am a small investor, a postal worker who lives frugally and saves and invests about 20% of my gross income. I have a pretty fair exposure to the markets and have in the past year watched the value of my investments go down considerably.

The negative reaction, some would say temper tantrum, of the markets the past few days has in no way changed my take on the so-called “Emergency Economic Stabilization Act.” I remain convinced that government intervention in the private markets is dangerous and ultimately will have negative repercussions in the US economy.

Because of the nature of politics, government cannot intervene without distorting the marketplace to try to gain some political advantage for one party or the other. It’s the nature of the beast.

The current legislation sent over from the Senate remains a piece of legislation that I think if approved will one day will be looked upon as the day the United States took a great leap into socializing the US financial markets and industry as a whole.

Still, I know that the art of politics is compromise. If there is anyway that this bill can be stripped of it’s socialist underpinnings while keeping the legislative changes insuring troubled assets (Sec 103 ), Mark to Market (Sec.132), FASB 157 (Sec.132), and increases in FDIC insurance to $250,000 (Sec.132) it has the makings of a decent bill that addresses the problems that created the stagnation in the financial markets.

I would also like to see repeal of some of the provision of the Community Reinvestment Act that have resulted in a situation where many who truly cannot afford the responsibilities of home ownership are now finding themselves strangled with unaffordable mortgages. The result of which is the sub-prime “meltdown” we are now seeing.

Sec. 124 addresses some changes in the HOPE program, but I have neither the resources nor the expertise in legislative language to cross-reference and discover the implication of these changes.

I am glad to see codified in the legislation that all proceeds from the sale of the purchased assets will be returned to the Treasury for the purpose of reducing the public debt. I can only hope that future administrations and Congresses will not find a loophole around this provision.

The inclusion of sunset provisions for the aforementioned legislative changes is distressing. If we recognize that the original adoption of these provisions was a precursor to the current situation, that we would even consider returning to them a some future time demonstrates an amazing lack of foresight and stewardship with the public trust.

The addition of “sweeteners” to this legislation makes it even more distasteful to me. Inclusion of important legislation on energy issues, a plethora of random tax provisions and Title V Subtitle B are acid to me. They should stand on their own without being thrust though on the coattails of H.R. 1424.

The provisions of Title V Subtitle B alone will most likely result in further increases in health insurance costs, for benefits many would not opt for, during a time when costs are escalating on their own at intolerable rates.

While I don’t support this bill in it’s current form, it’s preferable to the original legislation defeated on Monday. I am concerned that with a new administration coming, depending on their political leanings may migrate more towards the provisions of Sec. 101 rather than those of Sec. 102. That would be a tragedy for the American people and the long-term health of US economy.

Download H.R. 1424 as passed by the Senate October 1, 2008 from FoxNews

“We are all in the same boat on a stormy sea and
we owe each other a terrible loyalty.” – G. K. Chesterson

Congressional statesmen hold the line for the people.

An open letter to Florida Rep. Ric Keller:

Thank you for your vote against the flawed Emergency Economic Stabilization Act of 2008 – H.R.3997. It was and remains deeply flawed and fails to address the fundamental problems underlying the current weakness in the credit markets.

It seems that many in Congress have the mindset that the only solution to a problem is to “throw” money at it. You cannot fix is problem caused by bad legislation with more bad legislation.

There is a much better solution that will be less costly to the American taxpayer. According to William Isaac the Fair Value Accounting rules, better known as mark to market, are a prime culprit in the current crisis.

According to Isaac, “This is contrary to everything we know about bank regulation. When there are temporary impairments of asset values due to economic and marketplace events, regulators must give institutions an opportunity to survive the temporary impairment. Assets should not be marked to unrealistic fire-sale prices. Regulators must evaluate the assets on the basis of their true economic value (a discounted cash-flow analysis).”

One Rep. John Linder has said that were this rule returned to mark to par almost every financial institution that is now in trouble would be back on solid footing. Mark to par served our nations financial institutions well for 220 years. FAS 157 and mark to market has resulted, in conjunction with other flawed legislation such as the Community Reinvestment Act, in the current crisis in our financial markets.

The CRA requires banks and lending institutions to make loans to that were otherwise fiscally indefensible. Many of the loans made under CRA form the basis of the current sub-prime mortgage foreclosure problem.

Community organizers have used CRA to force banks to make loans they otherwise would not have extended. A.C.O.R.N., for one, is well know for its methods of “shaking down” lenders and requiring them, under the auspices of CRA, to make “exotic” loans to unqualified applicants.

Contrary to assertions by Democrats, deregulation by Republicans has not been a factor in the current crisis in the financial markets. To the contrary, Sarbanes-Oxley, voted into existence by a Republican Congress in response to Enron, WorldCom, Tyco, et. al., was a buzz saw where a scalpel was needed.

This should be revisited and repealed in part or, better, in whole.

Additionally, updating F.D.I.C. insurance to cover up to $250,000 in deposits will ensure small businesses that the money they need for payrolls and operating expenses will be there when needed despite the turmoil in the credit markets.

I’m not financial wiz, but I do understand that when government gets involved in the private sector, the primary result is chaos and disruption. There is a place for prudent regulations and laws to punish abusers.

But government manipulating the private sector for the purpose of advancing “progressive” policies that fly in the face of common sense and good business practice must stop.

Further reading:

Wikipedia – Mark to Market
Talk Gwinnett – 10 Reasons Why Republican Oppose the Bailout
TMP Cafe – William Isaac’s quote
Wikipedia – Community Reinvestment Act
Michelle Malkin – The A.C.O.R.N. Obama knows
Wikipedia – Sarbanes-Oxley Act

“We are all in the same boat on a stormy sea and
we owe each other a terrible loyalty.” – G. K. Chesterson