Government Solution Causes Problems
Yeah, that’s not news, is it? Nearly ANY time the government tries to “solve” a problem, they create MORE problems. As Walter Williams so clearly spells out — government FORCED lenders to make risky and dangerous loans. When people couldn’t pay the loans, that created a problem. So now government wants to show up to fix the problem THEY CREATED.
Oh, and their solution, besides be anti-capitalist and totally anti-freedom, is also blatantly unconstitutional. I know, I live in the past — where the Constitution was the law of the land. I wish there were a true Constitutional Republic where I could go live in freedom. Unfortunately, despite the successes of the Free State Project, I just don’t see freedom coming to earth any time soon.
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Again those who pay on time, and who purchase within our means, PAY for everyone who doesn’t….sure it’s only a small number of people overall who couldn’t afford these loans, but it’s enough to COST US BILLIONS.
What a scam.
I am SO tempted right now to just call my bank and say, “Gee, I can’t afford my mortgage any more, so I’m not paying. Go ask the government, they’ll pay you for me.’
Heck, the guvmint will pay your mortgage for you if you “qualify”- go get a loan you know you’ll never be able to afford. Get a subprime market loan!
I should. I wouldn’t have to worry about that- all this working I do to pay off my mortgage yrs ahead of time!
Why are we so stupid? Why haven’t we surrendered yet? Are we crazy or what?????????
The temptation is great, I tell you. It would be so easy to just live WAY beyond my means and let the government and suckers pick up my tab. But that concept of responsibility really is ingrained in me. I just wish many others had it as well.
Love me some Walt Williams. I remember the “red-lining” controversy bubbled-up again a few years ago just as the market was taking off. Boy, sure glad the gummint made sure the lenders weren’t employing discriminatory lending practices.
okay - here’s a scenario NOBODY has even thought of - and i know this to be true because it happened to us (long story i won’t go into here) - when a bank charges off a loan - ANY loan - because a borrower CANNOT repay the loan - the borrower MUST claim it as INCOME on their income tax - so, if i owed no income taxes beforehand, i now owe several thousand dollars worth. it happened to us, it can happen to anybody.
do you smell a scheme? that’s because there is one and it WILL work out to the government’s benefit - they’re like a casino. who ultimately wins at a casino? you got it~!
MARK MY WORDS.
Indeed, Dean — is there anything government cannot do?
And yes, Nanc, I completely believe it. Just give government all your money, they’ll decide how much you need.
ogre - did you get my entire point?
if you default on a $200,000 loan - it will come back to bite you in the arse on the day you HAVE to claim it as income come tax time. they call it a “CHARGE OFF” and apply it to YOUR INCOME. nobody really knows the gravity of this impending situation.
thankfully, the loan we defaulted on didn’t change our taxes all that much (in the high four digits), but imagine had it been SIX digits? they would have attached everything we own and we’d be living in a cardboard box somewhere - HOW WOULD A REBATE DO US IN THAT SITUATION?
Indeed, and that makes sense. If you borrow $1000 and intend to pay it back, there’s no net gain to you, only expenses. If you borrow $1000 and never pay it back because you default on it, then you’ve just gained $1000 without working — and that is indeed, income to you.
Now I don’t think any income should be taxed — but if they’re going to tax income, loan defaults certainly fall into the category of income to you!
But don’t worry, I’m sure there’s a government program to “help…”
When the amendment “authorizing” federal income tax was ratified, the understanding was the the percent would never rise about 1% (if I have the number correct). Look where we are now with the percent!
Indeed– just like social security. That program was designed to help those physically incapable of working. It was NEVER supposed to be a retirement program. In fact, the way to fix it, as I have mentioned, is to adjust it for lifespan. If it were adjusted to reflect those who benefited from is when it was created, no one would get SS benefits until age 81!
the problem with ss is that there are far more who benefit from it than have paid in.
ogre - interest is also tacked on to the charged off amount - you end up owing the irs more money and the institution charging the debt off gets to claim a “bad expense” loss on their taxes.
it’s all so sneaky.
Ah, social security. I’ve done whole posts on how that system works and what it was intended for. Perhaps I should do another. It’s supposed to be the opposite — many people are supposed to pay in and few were supposed to benefit. It’s the opposite now because of lifespans.
And yes, it’s VERY sneaky. But if it weren’t sneaky, we wouldn’t need all those lawyers to interpret things for us and tell us dummies how much to pay government all the time.
I’m curious, if you default on a mortgage, the bank takes the house and sells it and you get stuck with the rest of the debt if it sells for less than the amount of the loan… as a rule. What bank would loan $200,000 unsecured by property, that can be sold to reduce the debt, if you fail to pay??? And how is it income unless you either earn equity on the sale or the bank writes it off and lets you keep the house? I don’t understand that. Now if the house sells for $160,000.00 and the bank writes off the $40,000.00 left… that is income and taxes would be due on it… it sucks, but it is. What is happening is sad, and income tax is killing the average American, so why is it so many just don’t get it? It is like we are just one more entitlement program away from Nirvanah to here the politicians talk.
People have been told (by Democrats) that they DESERVE a house. And if they don’t have a house, because they can’t pay for it, it’s not their fault. Therefore, anyone who doesn’t have a house, whether they work or can afford it, is being “put down” by capitalism.
[...] the government agent with a gun pointed at the lender, FORCING him to pull the lever, whether he wants to or [...]