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From: tom ronson on 17 Jul 2010 17:22 Kurt Ullman wrote: http://www.newsweek.com/2010/07/17/dodd-frank-dissonance.html -- --tr
From: Kurt Ullman on 17 Jul 2010 18:22 In article <i1t65j$mkp$1(a)news.eternal-september.org>, tom ronson <theavlv.ronson(a)yahoo.com> wrote: > > hey, look at what happened. they drove the car into the ditch..... and > now they want the keys back.... for what? to drive it off a cliff? I'm > not sure that asking about intelligence is all that wrong here. Hey, they sobered up and got pitched. Now the GOP is all liquored up and the Dms are sober so it is time to change again. (g). > > > Nope,. Because if you look at the actual money coming in, you will > > note that the first year the revenues go down a little, but the second > > year they are at least back to what they were and after that they go > > up.. at least with the first Bush and the Reagan, the increases are > > faster for the next few years than they were the years before. There > > generally is NO lost revenue. > > hmmmm, Reagan's budget director doesn't agree with you. Failed S&L's > littered the landscape when Reagan left. Bush cut taxes, look at what > happened. Complete failure. How many times do we have to repeat that > demonstration for it to get flagged as maybe something we shouldn't be > doing? iows I've yet to see supply siders pull it off. I have seen it go > down in flames twice, in my lifetime. First round of S&Ls was because of what the FDIC called the asset/liability mismatch (spiraling inflation causing them to pay higher interest rates for deposits while they were stuck with long-term mortgages at much lower rates). S&Ls used short-term passbook savings to fund long-term, fixed-rate home mortgages. As the FDIC noted the two biggies that were supposed to help, but actually made things worse was the Depository Institutions Deregulation and Monetary Control Act of 1980 (passed during and signed into law by Carter) and the St. Germain- Garn Act named afterCongressman Fernand St. Germain, Democrat of Rhode Island, and Senator Jake Garn, Republican of Utah. The bill had broad support in Congress, with co-sponsors including Charles Schumer (Name sound familiar)and Steny Hoyer. The bill passed overwhelmingly, by a margin of 272-91 in the House and large BIPARTISAN majorities in the Senate. These did all sorts of neat things like lower capital requirements, and (tada!! allowed adjustable rate mortgages). It was somewhat exacerbated a couple of years later when Congress retroactively changed the tax laws. There were some (many) projects that had been put together under these laws that were essentially only viable when the deductions and other parts of the law were in effect. When they were taken away, then many of these projects were no longer viable, the "investors" walked away, and the S&L (and to a lesser extent the regular banks were hosed). The single biggest round was the last one. Over the years, t he Feds had worked to merge failing S&Ls with good ones. The good ones were hesitant to do so because taking on the bad assets of the S&L would mess with their balance sheets and might actually cause them to become "insolvent". To alleviate this concern, the Feds came up with "regulatory goodwill" to work as an asset against the liability of some of the bad S&Ls assets to keep them in regulatory good standings. The Congress took exception to this after awhile, legislated that they could no longer include regulatory goodwill. Dozens of good S&Ls (since they were merging bad ones with good ones) became insolvent despite the agreements with the Feds. (BTW: This not only cost the government because of a whole bunch of artifically killed off S&Ls, but many of the S&Ls sued the government about violating their agreements and won. The average amount awarded by the courts was north of a billion per. ) Some other pre-Reagan screw ups. Deposit insurance, extended to the S&Ls in 1934, played two roles. One, it was set-up so that everybody paid the same w/o looking at risk (you pay more for car insurance if you have multiple accidents). The other is that it was low premium compared to the risk. (BTW there have been at least two attempts since the early 90s to risk base the deposit insurance, each time Congress shot it down). Regulation Q, under which the Federal Reserve since 1933 had limited the interest rates banks could pay on their deposits, was extended to S&Ls in 1966. Tthe extension of Regulation Q to S&Ls was a watershed event in the S&L crisis: it perpetuated S&L maturity mismatching for another fifteen years, until it was phased out after disaster struck the industry in 1980. A federal ban on adjustable-rate mortgages until 1981 further magnified the problem of S&L maturity mismatching by not allowing S&Ls to issue mortgages on which interest rates could be adjusted during times of rising interest rates. Restrictions on setting up branches and a restriction on nationwide banking prevented S&Ls, and banks as well, from expanding across state lines. S&Ls, unable to diversify their credit risks geographically, became badly exposed to regional economic downturns that reduced the value of their real estate collateral. The secondary mortgage market agencies created by the federal government�Fannie Mae and Freddie Mac�undercut S&L profits by using their taxpayer backing to effectively lower interest rates on all mortgages. This helped home buyers, but the resulting lower rates made S&L maturity mismatching even more dangerous, especially as interest rates became more volatile after 1966. As usual these things are multifactoral and bipartisan. > > > If you factor in the scoring from the Joint Committee on Taxation, > > the increases in revenue are even more so. > > then where did all that money go then? Spending increased most years at a rate higher then the income. That is why I don't see any reason to even discuss tax increases until there is some sort of a balanced budget amendment or at least an amendment enabling a line-item veto or some such. Congress will just spend it and we'll end up at least the same and probably worse. > -- I want to find a voracious, small-minded predator and name it after the IRS. Robert Bakker, paleontologist
From: tom ronson on 19 Jul 2010 21:09 Kurt Ullman wrote: > Some other pre-Reagan screw ups. here's the bottom line -- Reagan took a $980M deficit and turned it into a $2.8T deficit. It's what Bush senior called, "voodoo" economics. but damn, a person can learn a lot from reading your stuff --- which as I've said before is refreshing. -- --tr
From: Kurt Ullman on 20 Jul 2010 09:06 In article <i22t0g$ev2$1(a)news.eternal-september.org>, tom ronson <theavlv.ronson(a)yahoo.com> wrote: > Kurt Ullman wrote: > > > Some other pre-Reagan screw ups. > > here's the bottom line -- Reagan took a $980M deficit and turned it into > a $2.8T deficit. It's what Bush senior called, "voodoo" economics. Sorta hard to do with a Democratic Congress declaring his budgets "dead on arrival". Congress has to approve the actual spending of the money. So, the voodoo part was apparently the dolls of the Dem Congresscritters he had in his office to do his bidding. Mind control is a terrible thing to waste (grin). RR was contributorily negligent in not closing down the government more often and for longer and for caving in when the Nightly News ran pics of people not being able to go to the top of the Washington Monument or see Old Faithful, etc. -- I want to find a voracious, small-minded predator and name it after the IRS. Robert Bakker, paleontologist
From: Kurt Ullman on 20 Jul 2010 09:13
In article <joGdndK-9J3cAtjRnZ2dnUVZ_r2dnZ2d(a)earthlink.com>, Kurt Ullman <kurtullman(a)yahoo.com> wrote: > > Sorta hard to do with a Democratic Congress declaring his budgets > "dead on arrival". Congress has to approve the actual spending of the > money. So, the voodoo part was apparently the dolls of the Dem > Congresscritters he had in his office to do his bidding. Mind control is > a terrible thing to waste (grin). > > RR was contributorily negligent in not closing down the government more > often and for longer and for caving in when the Nightly News ran pics of > people not being able to go to the top of the Washington Monument or see > Old Faithful, etc. BTW( He said talking to himself), my theory is that when the GOP got in control they eventually discovered how much fun it is to spend money. So, since about the middle of the second Congress after the takeover, both sides have gotten together to spend as much as possible. That can be seen by the Faustian Bargain the GW struck with the Congress leading to the so-called "War Funding" bills being laden down with as much as 1/3 of the money going to domestic earmarks. You don't question MY money and I won't question yours. -- I want to find a voracious, small-minded predator and name it after the IRS. Robert Bakker, paleontologist |