Failure of the Welfare State

[CrusaderFrank]

Its the Dem Party Vote manufacturing Machine in full swing: Keep them dependent on government from cradle to grave and keep them dumb by controlling the educational system.

 

[NYcarbineer]

Then what non-welfare state should we model ourselves after?

The pre-welfare USA?

If you recreate the conditions that led the American people to desire a 'welfare state' then you recreate the conditions that created the welfare state.

 

[PLYMCO_PILGRIM]

Then what non-welfare state should we model ourselves after?

The pre-welfare USA?

If you recreate the conditions that led the American people to desire a 'welfare state' then you recreate the conditions that created the welfare state.

You said model after, not re-create .

I asked about us modelling ourselves after that but that doesn't mean we have to mirror everything.

 

[PoliticalChic]

The Communists that have controlled the Democrat Party behind the scenes since FDR have been the biggest proponents of the Welfare State BECAUSE it crushes the human spirit and turns people into government worshiping slaves.

What is the Exit strategy for the "War on Poverty" that we've been fighting since the mid-1960's?

From 'Red Army,' by Aaron Klein:


1. While the United States is one of the few democracies without an official socialist party, in reality socialist occupy some of the highest positions in the “Marxist-socialist” bloc in Congress. In fact, the Congressional Progressive Caucus was founded as a sister to the Democratic Socialists of America, the DSA.

a. Before the socialist network infiltrated the Democratic Party, its ideology permeated academic institutions for decades.

b. In the 60’s, radicals attempted to overthrow the US capitalist system by actual revolution: the Students for a Democratic Society (SDS) or its spinoff, the Weathermen terrorist group. DSA was established to transform capitalism by democratic means.

2. Based on ideas similar to those of the Fabians, it was decided to drop the word ‘socialism’ and continued as the ‘Congressional Progressive Caucus.’ Stealth was determined to be more effective….boring from within.

a. Bill Ayers, Mike Klonsky, and Bernardine Dohrn attacked capitalism from academia.
b. Wade Rathke founded ACORN.
c. Heather and Paul Booth, and Steve Max, founded the Midwest Academy to attack capitalism using Saul Alinsky-style community organizing.

3.Michael Harrington, founder of the DSA, knew that infiltration of the Democratic Party was primary, and it already contained all of the progressive elementns
The Eduard Bernstein Internet Archive
Socialism time line. The DSA remains the principle branch of the Socialist International, whose primary goal is global governance under worldwide socialism.

a. The SI boasts it is successor to the First International of Karl Marx, 1864. “Ever since its inception in 1951, the Socialist International has made cosmetic efforts to distance itself from communist socialists.”
The Grasp of Socialist International

4. Creation of the Progressive Caucus is credited to Bernie Sanders. The groups in the radical network include a) the Congressional Progressive Caucus, b) the Congressional Black Caucus, c) the Populist Caucus, and the d) Progressive Democrats of America.

a. Allied with the above is ACORN, SEIU, and the Institute for Policy Studies
b. And, indirectly, the Center for American Progress and the Apollo Alliance.



Interesting that this very week, CNN tried to burn Representative Allen West for mentioning the above details.

 

[francoHFW]

Aaron Klein is a lying A-hole making money off fear mongered chumps, and you're a brainwashed MORON. Get some fresh air, read a paper.

 

[NYcarbineer]

The pre-welfare USA?

If you recreate the conditions that led the American people to desire a 'welfare state' then you recreate the conditions that created the welfare state.

You said model after, not re-create .

I asked about us modelling ourselves after that but that doesn't mean we have to mirror everything.

Don't troll if you don't have an intelligent answer. Better to just not post.

 

[NYcarbineer]

Then what non-welfare state should we model ourselves after?

Apparently there are no such states?

I think that renders the OP's point, or what passes for a point with the OP,

MOOT.

 

[Bfgrn]

2. "... is that the 2008 financial crisis was caused not by Wall Street’s shady lending practices or exotic (and ultimately worthless) financial instruments but by Fannie Mae and Freddie Mac, which were forced by the government’s expansive housing policy to make riskier and riskier loans."

Dat's da troooof!

The proper question is not: What story is consistent with my general philosophy or worldview?

The proper questions is: What story is consistent with the facts?

Fact One: Fannie and Freddie’s primary business of subsidizing conventional loans was not a driver of the housing the bubble.

Indeed, conventional loans represented less than a third of all mortgage originations during the peak price acceleration years.

This was a phenomenon of private-label non-conventional loan securitization.

1.1 Peaking in 2006 at a third of all mortgages originated, the volume of Alt-A and subprime mortgages was extraordinarily high
 between 2004 and 2007. In 2005 and 2006, conventional, conforming mortgages accounted for approximately one-third of all
 mortgages originated

1.2 Private-label issuers played a large role in securitizing higher-risk mortgages from early 2004 to mid-2007 while the Enterprises
 continued to guarantee primarily traditional mortgages.

Fact Two: Fannie and Freddie lost market volume during the boom.

That is, during the boom not only did the fraction of loans securitized by Fannie and Freddie fall, but the absolute number fell. At the same time the absolute number of private-label securitizations rose.

There is a simple and obvious reason for this. The development of structured products meant that for many consumers the free market offered a more attractive loan than the government subsidized one.

Fact Three: The major losses to Fannie and Freddie came through their expansion into guaranteeing non-traditional loans, not through their portfolio.

That is, yes like every other financial entity Fannie and Freddie were buying subprime packages in the secondary market. However, these losses were relatively mild.

The Investments and Capital Markets segment accounts for $21 billion, or 9 percent, of capital reduction from the end of 2007 through the second quarter of 2010. Losses in the Investments and Capital Markets segment stemmed from impairments of private-label securities, fair-value losses on securities, and fair-value losses on derivatives (used for hedging interest rate risk).

Fact Four:The key change in the Fannie / Freddie business model was their expansion in the types of loans they willing to guarantee. In particular moving into the Alt-A and Interest-Only categories.

As we can see these loans began to seriously underperform as the economy deteriorated. These loans were not a part of the original “crap hidden by structure” subprime business. Fannie / Freddie borrowers had on average credit scores above 710 and equity (or down payment) of above 25%.

Read more: Here's Why Fannie And Freddie Are Not At Fault For The Housing Bubble - Business Insider

 

[PoliticalChic]

2. "... is that the 2008 financial crisis was caused not by Wall Street’s shady lending practices or exotic (and ultimately worthless) financial instruments but by Fannie Mae and Freddie Mac, which were forced by the government’s expansive housing policy to make riskier and riskier loans."

Dat's da troooof!

The proper question is not: What story is consistent with my general philosophy or worldview?

The proper questions is: What story is consistent with the facts?

Fact One: Fannie and Freddie’s primary business of subsidizing conventional loans was not a driver of the housing the bubble.

Indeed, conventional loans represented less than a third of all mortgage originations during the peak price acceleration years.

This was a phenomenon of private-label non-conventional loan securitization.

1.1 Peaking in 2006 at a third of all mortgages originated, the volume of Alt-A and subprime mortgages was extraordinarily high
 between 2004 and 2007. In 2005 and 2006, conventional, conforming mortgages accounted for approximately one-third of all
 mortgages originated

1.2 Private-label issuers played a large role in securitizing higher-risk mortgages from early 2004 to mid-2007 while the Enterprises
 continued to guarantee primarily traditional mortgages.

Fact Two: Fannie and Freddie lost market volume during the boom.

That is, during the boom not only did the fraction of loans securitized by Fannie and Freddie fall, but the absolute number fell. At the same time the absolute number of private-label securitizations rose.

There is a simple and obvious reason for this. The development of structured products meant that for many consumers the free market offered a more attractive loan than the government subsidized one.

Fact Three: The major losses to Fannie and Freddie came through their expansion into guaranteeing non-traditional loans, not through their portfolio.

That is, yes like every other financial entity Fannie and Freddie were buying subprime packages in the secondary market. However, these losses were relatively mild.

The Investments and Capital Markets segment accounts for $21 billion, or 9 percent, of capital reduction from the end of 2007 through the second quarter of 2010. Losses in the Investments and Capital Markets segment stemmed from impairments of private-label securities, fair-value losses on securities, and fair-value losses on derivatives (used for hedging interest rate risk).

Fact Four:The key change in the Fannie / Freddie business model was their expansion in the types of loans they willing to guarantee. In particular moving into the Alt-A and Interest-Only categories.

As we can see these loans began to seriously underperform as the economy deteriorated. These loans were not a part of the original “crap hidden by structure” subprime business. Fannie / Freddie borrowers had on average credit scores above 710 and equity (or down payment) of above 25%.

Read more: Here's Why Fannie And Freddie Are Not At Fault For The Housing Bubble - Business Insider

Hey, pellet....did I forget to ask: was Fannie and Freddie’s provenance constitutional as per Article I, section 8?

 

[NYcarbineer]

How wide would the gap between Rich and Poor have to get before the conservative consensus would be, okay, that's good,

we're happy now...

 

[Bfgrn]

2. "... is that the 2008 financial crisis was caused not by Wall Street’s shady lending practices or exotic (and ultimately worthless) financial instruments but by Fannie Mae and Freddie Mac, which were forced by the government’s expansive housing policy to make riskier and riskier loans."

Dat's da troooof!

The proper question is not: What story is consistent with my general philosophy or worldview?

The proper questions is: What story is consistent with the facts?

Fact One: Fannie and Freddie’s primary business of subsidizing conventional loans was not a driver of the housing the bubble.

Indeed, conventional loans represented less than a third of all mortgage originations during the peak price acceleration years.

This was a phenomenon of private-label non-conventional loan securitization.

1.1 Peaking in 2006 at a third of all mortgages originated, the volume of Alt-A and subprime mortgages was extraordinarily high
 between 2004 and 2007. In 2005 and 2006, conventional, conforming mortgages accounted for approximately one-third of all
 mortgages originated

1.2 Private-label issuers played a large role in securitizing higher-risk mortgages from early 2004 to mid-2007 while the Enterprises
 continued to guarantee primarily traditional mortgages.

Fact Two: Fannie and Freddie lost market volume during the boom.

That is, during the boom not only did the fraction of loans securitized by Fannie and Freddie fall, but the absolute number fell. At the same time the absolute number of private-label securitizations rose.

There is a simple and obvious reason for this. The development of structured products meant that for many consumers the free market offered a more attractive loan than the government subsidized one.

Fact Three: The major losses to Fannie and Freddie came through their expansion into guaranteeing non-traditional loans, not through their portfolio.

That is, yes like every other financial entity Fannie and Freddie were buying subprime packages in the secondary market. However, these losses were relatively mild.

The Investments and Capital Markets segment accounts for $21 billion, or 9 percent, of capital reduction from the end of 2007 through the second quarter of 2010. Losses in the Investments and Capital Markets segment stemmed from impairments of private-label securities, fair-value losses on securities, and fair-value losses on derivatives (used for hedging interest rate risk).

Fact Four:The key change in the Fannie / Freddie business model was their expansion in the types of loans they willing to guarantee. In particular moving into the Alt-A and Interest-Only categories.

As we can see these loans began to seriously underperform as the economy deteriorated. These loans were not a part of the original “crap hidden by structure” subprime business. Fannie / Freddie borrowers had on average credit scores above 710 and equity (or down payment) of above 25%.

Read more: Here's Why Fannie And Freddie Are Not At Fault For The Housing Bubble - Business Insider

Hey, pellet....did I forget to ask: was Fannie and Freddie’s provenance constitutional as per Article I, section 8?

That's all you can parrot there Poly? Your trainer needs to teach you more words for you to mindlessly chirp.

It is not what a lawyer tells me I may do; but what humanity, reason, and justice tell me I ought to do.
Edmund Burke

Justice is itself the great standing policy of civil society; and any eminent departure from it, under any circumstances, lies under the suspicion of being no policy at all.
Edmund Burke

Fannie / Freddie borrowers had on average credit scores above 710 and equity (or down payment) of above 25%.

 

[PoliticalChic]

The proper question is not: What story is consistent with my general philosophy or worldview?

The proper questions is: What story is consistent with the facts?

Fact One: Fannie and Freddie’s primary business of subsidizing conventional loans was not a driver of the housing the bubble.

Indeed, conventional loans represented less than a third of all mortgage originations during the peak price acceleration years.

This was a phenomenon of private-label non-conventional loan securitization.

1.1 Peaking in 2006 at a third of all mortgages originated, the volume of Alt-A and subprime mortgages was extraordinarily high
 between 2004 and 2007. In 2005 and 2006, conventional, conforming mortgages accounted for approximately one-third of all
 mortgages originated

1.2 Private-label issuers played a large role in securitizing higher-risk mortgages from early 2004 to mid-2007 while the Enterprises
 continued to guarantee primarily traditional mortgages.

Fact Two: Fannie and Freddie lost market volume during the boom.

That is, during the boom not only did the fraction of loans securitized by Fannie and Freddie fall, but the absolute number fell. At the same time the absolute number of private-label securitizations rose.

There is a simple and obvious reason for this. The development of structured products meant that for many consumers the free market offered a more attractive loan than the government subsidized one.

Fact Three: The major losses to Fannie and Freddie came through their expansion into guaranteeing non-traditional loans, not through their portfolio.

That is, yes like every other financial entity Fannie and Freddie were buying subprime packages in the secondary market. However, these losses were relatively mild.

The Investments and Capital Markets segment accounts for $21 billion, or 9 percent, of capital reduction from the end of 2007 through the second quarter of 2010. Losses in the Investments and Capital Markets segment stemmed from impairments of private-label securities, fair-value losses on securities, and fair-value losses on derivatives (used for hedging interest rate risk).

Fact Four:The key change in the Fannie / Freddie business model was their expansion in the types of loans they willing to guarantee. In particular moving into the Alt-A and Interest-Only categories.

As we can see these loans began to seriously underperform as the economy deteriorated. These loans were not a part of the original “crap hidden by structure” subprime business. Fannie / Freddie borrowers had on average credit scores above 710 and equity (or down payment) of above 25%.

Read more: Here's Why Fannie And Freddie Are Not At Fault For The Housing Bubble - Business Insider

Hey, pellet....did I forget to ask: was Fannie and Freddie’s provenance constitutional as per Article I, section 8?

That's all you can parrot there Poly? Your trainer needs to teach you more words for you to mindlessly chirp.

It is not what a lawyer tells me I may do; but what humanity, reason, and justice tell me I ought to do.
Edmund Burke

Justice is itself the great standing policy of civil society; and any eminent departure from it, under any circumstances, lies under the suspicion of being no policy at all.
Edmund Burke

Fannie / Freddie borrowers had on average credit scores above 710 and equity (or down payment) of above 25%.

That was really, really interesting....

....BTW....was Fannie and Freddie’s provenance constitutional as per Article I, section 8?
Just wondering.

 

[Wiseacre]

Okay, somebody explain to me where I'm missing the boat here. The report on which the link in the OP is built is a Conservator's Report, after the housing bubble popped. They ain't talking about data prior to 2008 for the most part, they're talking about what a great job they did after the horses left the barn. There is no way on God's green earth that the F&F average loan for the period of time from the early 90s when the bubble started until it popped was 710 credit score or that they had to put down 25% or thereabouts. BFD, so they finally decided to restrict mortgages to those with a good enough credit history and enough down payment, too bad they didn't do that for the prior 15 years or so when any swingin' dick could get an ARM with nothing but a smile.

What F&F did was open the floodgates for the private sector to follow in. They led the way, maybe not in volume but in policy. I would not say that they are the sole reasons for the housing collapse, there is plenty of blame to go around, beginning in my opinion with Congress and the WH.

 

[Bfgrn]

Okay, somebody explain to me where I'm missing the boat here. The report on which the link in the OP is built is a Conservator's Report, after the housing bubble popped. They ain't talking about data prior to 2008 for the most part, they're talking about what a great job they did after the horses left the barn. There is no way on God's green earth that the F&F average loan for the period of time from the early 90s when the bubble started until it popped was 710 credit score or that they had to put down 25% or thereabouts. BFD, so they finally decided to restrict mortgages to those with a good enough credit history and enough down payment, too bad they didn't do that for the prior 15 years or so when any swingin' dick could get an ARM with nothing but a smile.

What F&F did was open the floodgates for the private sector to follow in. They led the way, maybe not in volume but in policy. I would not say that they are the sole reasons for the housing collapse, there is plenty of blame to go around, beginning in my opinion with Congress and the WH.

The housing bubble did NOT start in the early '90's. It began in the mid-2000's. F&F did not open any flood gates. F&F LOST significant market share.

More than 84 percent of the subprime mortgages came from private lending institutions in 2006 and share of subprime loans insured by Fannie Mae and Freddie Mac also decreased as the bubble got bigger (from a high of insuring 48 percent to insuring 24 percent of all subprime loans in 2006). The Community Reinvestment Act also only affected one out of the top 25 subprime lenders.

This was a RICH MAN'S crime. Here is a 2005 article BEFORE the bubble burst.

In come the waves
The worldwide rise in house prices is the biggest bubble in history. Prepare for the economic pain when it pops

Jun 16th 2005

Betting the house

America's housing market heated up later than those in other countries, such as Britain and Australia, but it is now looking more and more similar. Even the Federal Reserve is at last starting to fret about what is happening. Prices are being driven by speculative demand. A study by the National Association of Realtors (NAR) found that 23% of all American houses bought in 2004 were for investment, not owner-occupation. Another 13% were bought as second homes. Investors are prepared to buy houses they will rent out at a loss, just because they think prices will keep rising—the very definition of a financial bubble. “Flippers” buy and sell new properties even before they are built in the hope of a large gain. In Miami, as many as half of the original buyers resell new apartments in this way. Many properties change hands two or three times before somebody finally moves in.

New, riskier forms of mortgage finance also allow buyers to borrow more. According to the NAR, 42% of all first-time buyers and 25% of all buyers made no down-payment on their home purchase last year. Indeed, homebuyers can get 105% loans to cover buying costs. And, increasingly, little or no documentation of a borrower's assets, employment and income is required for a loan.

Interest-only mortgages are all the rage, along with so-called “negative amortisation loans” (the buyer pays less than the interest due and the unpaid principal and interest is added on to the loan). After an initial period, payments surge as principal repayment kicks in. In California, over 60% of all new mortgages this year are interest-only or negative-amortisation, up from 8% in 2002. The national figure is one-third. The new loans are essentially a gamble that prices will continue to rise rapidly, allowing the borrower to sell the home at a profit or refinance before any principal has to be repaid. Such loans are usually adjustable-rate mortgages (ARMs), which leave the borrower additionally exposed to higher interest rates. This year, ARMs have risen to 50% of all mortgages in those states with the biggest price rises.

More...

 

[Bfgrn]

Hey, pellet....did I forget to ask: was Fannie and Freddie’s provenance constitutional as per Article I, section 8?

That's all you can parrot there Poly? Your trainer needs to teach you more words for you to mindlessly chirp.

It is not what a lawyer tells me I may do; but what humanity, reason, and justice tell me I ought to do.
Edmund Burke

Justice is itself the great standing policy of civil society; and any eminent departure from it, under any circumstances, lies under the suspicion of being no policy at all.
Edmund Burke

Fannie / Freddie borrowers had on average credit scores above 710 and equity (or down payment) of above 25%.

That was really, really interesting....

....BTW....was Fannie and Freddie’s provenance constitutional as per Article I, section 8?
Just wondering.

This was a WORLD-WIDE bubble. Please explain what part of the US Constitution Britain, Australia, Bulgaria, China, Denmark, India, Ireland, Israel, Japan, Lebanon, Poland, Romania, South Korea, Spain and Greece are bound by?

NOW what???????????????

 

[jgarden]

Since 1979 the average pre-tax income for the bottom 90% of households has decreased by $900, while that of the top 1% increased by over $700,000, as federal taxation became less progressive. From 1992-2007 the top 400 income earners in the U.S. saw their income increase 392% and their average tax rate reduced by 37%. In 2009, the average income of the top 1% was $960,000 with a minimum income of $343,927.

..... During the economic expansion between 2002 and 2007, the income of the top 1% grew 10 times faster than the income of the bottom 90%. In this period 66% of total income gains went to the 1%, who in 2007 had a larger share of total income than at any time since 1928.

http://en.wikipedia.org/wiki/Distribution_of_wealth

- Since 1979 average pre-tax income for the bottom 90% of households has decreased by $900,

- the top 1% increased by over $700,000,

- 66% of total income gains (2002 and 2007) went to the 1%

 

[PoliticalChic]

How wide would the gap between Rich and Poor have to get before the conservative consensus would be, okay, that's good,

we're happy now...

While there certainly is a mathematical "1%," due to income mobility, there is no perpetual "1%" in the United States.

It is a hypothetical construct created by the far Left to enamor the imagination of the covetous and the dim-witted.



"More than three-quarters of those working Americans whose incomes were in the bottom 20 percent in 1975 were also in the top 40 percent of income earners at some point by 1991, says Sowell."
Source: Thomas Sowell, "How Media Misuse Income Data To Match Their Preconceptions," Investor's Business Daily, January 12, 2010.
For text:
http://news.investors.com/article/5...data-to-match-their-preconceptions.htm?p=full

 

[PoliticalChic]

Since 1979 the average pre-tax income for the bottom 90% of households has decreased by $900, while that of the top 1% increased by over $700,000, as federal taxation became less progressive. From 1992-2007 the top 400 income earners in the U.S. saw their income increase 392% and their average tax rate reduced by 37%. In 2009, the average income of the top 1% was $960,000 with a minimum income of $343,927.

..... During the economic expansion between 2002 and 2007, the income of the top 1% grew 10 times faster than the income of the bottom 90%. In this period 66% of total income gains went to the 1%, who in 2007 had a larger share of total income than at any time since 1928.

Distribution of wealth - Wikipedia, the free encyclopedia

- Since 1979 average pre-tax income for the bottom 90% of households has decreased by $900,

- the top 1% increased by over $700,000,

- 66% of total income gains (2002 and 2007) went to the 1%


[ame=http://www.youtube.com/watch?v=q2UppIdlTyQ]Occupy Everything! Do You Hear The People Sing - YouTube[/ame]

While there certainly is a mathematical "1%," due to income mobility, there is no perpetual "1%" in the United States.

It is a hypothetical construct created by the far Left to enamor the imagination of the covetous and the dim-witted.



"More than three-quarters of those working Americans whose incomes were in the bottom 20 percent in 1975 were also in the top 40 percent of income earners at some point by 1991, says Sowell."
Source: Thomas Sowell, "How Media Misuse Income Data To Match Their Preconceptions," Investor's Business Daily, January 12, 2010.
For text:
http://news.investors.com/article/5...data-to-match-their-preconceptions.htm?p=full

 

[JoeB131]

1


Again:
"only appreciable decline occurred in the 1990s, a time of
state experimentation with tightening welfare eligibility,"

So....conservatives were right....

The choice in November is clear.

You forget what else happened in the 1990's. We had a digital revolution and a tech boom that created millions of new jobs. That was before the big greedy corporations realized they could outsource those jobs to Pradip... errrr "Bobby" in India.

I personally would like nothing better than to see every able bodied American work for his or her keep. Unfortunately, the goal of business is to make as much money as possible, and that means loading down as few people as you can with as much work as possible.

 

[NYcarbineer]

How wide would the gap between Rich and Poor have to get before the conservative consensus would be, okay, that's good,

we're happy now...

While there certainly is a mathematical "1%," due to income mobility, there is no perpetual "1%" in the United States.

It is a hypothetical construct created by the far Left to enamor the imagination of the covetous and the dim-witted.



"More than three-quarters of those working Americans whose incomes were in the bottom 20 percent in 1975 were also in the top 40 percent of income earners at some point by 1991, says Sowell."
Source: Thomas Sowell, "How Media Misuse Income Data To Match Their Preconceptions," Investor's Business Daily, January 12, 2010.
For text:
How Media Misuse Income Data To Match Their Preconceptions - Investors.com

Conservative consensus on economic policy:

(note that references to 'poor' and 'rich' here are used as relative terms, as in 'lower income' vs. 'higher income')

1. Cut food stamps - thus making the poor poorer.
2. Cut Medicaid - thus making the poor poorer.
3. Cut heat/energy assistance - thus making the poor poorer.
4. Weaken unions - thus making the poor poorer
5. Cut aid to students/education - thus making the poor poorer
6. Cut housing subsidies - thus making the poor poorer.
7. Oppose minimum wage increases - thus making the poor poorer.


...and...

8. Cut taxes for the wealthy, flatten tax system - thus making the rich richer (and, relatively speaking, the poor poorer)

that list will do for starters. So, to my original question:

How wide would the gap between Rich and Poor have to get before the conservative consensus would be, okay, that's good,

we're happy now...