Welfare

Pizza Shop Talk The Think Tank
21

Not when the government alters market forces as they did with the subprime market. Tell banks they have to make risky loans and they will. Tell them you will cover their risky loans and they will make even more risky loans. When you have lobbyists running the government, you get the government they want, not what you want.

And if your only criterion for choosing a presidential candidate is whether you prefer “Drill, baby, drill” or “Hope and Change”, they you feed the cycle of incompetence and influence.

22

Actually capitalism works just fine! You start running into problems when you force feed liberalism to a capitalistic market!

23

I hardly think subsidizing the oil industry counts as liberalism. Nor is the mortgage banking collapse liberal. If you look at the architects of deregulation in the banking industry, you will see it was people like mccain. It may be convenient for you to blame the other side, but it’s inaccurate.

Similarly I am confused when people keep saying US capitalism is socialized. We, unlike most other western democracies, do not have socialized health care. Other states with far more socialized aspects to their governments, e.g. transportation, national maternity and paternity leaves, etc. are not experiencing the financial crisis that we are now - though their markets certainly feel our backlash. Now that our capitalist system is in trouble, yes, they are trying a more socialist remedy. But socialism was not the problem.

24

They have to work a few hours so they get a w-2 to file taxes on. That way they get a $4600.00 EITC cash gift from the rest of us. I had a great team leader who wouldn’t go full time because she didn’t want to lose her free insurance with no co-pays or out of pocket at all. Her 2 kids got free breakfast, lunch and they got $140.00 a month each for the three of them in food stamps for dinner. I don’t think her rent was paid but who knows. It just isn’t right. She said to me one day and I quote, “Why work?”

25

I fail to see how subsidizing oil has anything to do with this??? Oil is an ugly industry that we all need unfortunately, and while they do have huge amounts of income and tax breaks, they also provide huge amounts of jobs and tons of taxes!

 I am very sure that good old greed (AIG) has caused a good chunk of our problems as well, and I feel that would best be played out without a "buyout!"  The liberal cause from organizations like Acorn have basically forced our financial institutions to loan people that otherwise could not afford a mortgage in the first place.  If these loans were not made they would have wound up in court for discrimination!  So here we find ourselves in a market where some people can't pay their bills and record forclosures have really hurt our housing market.  This has grown and grown, and now has spilled over into our labor and financial markets. 

 I am sure that your view will not change much, and neither will mine, but that freedom is what makes our country great!  Just remember that many people have died for your freedom so use it wisely and make as educated of decisions as you can!
26

It was not DEregulation that caused the problem in the mortgage industry. It was regulation that forced and later rewarded making loans to people that should never have received them.

Research the history of FNMA (New Deal), Freddie Mac (Johnson), the CRA (Carter), the Federal Housing Enterprises Financial Safety and Soundness Act (Clinton), and the failed Federal Housing Enterprise Regulatory Reform Act of 2005 (though things were pretty screwed up at that point and it may not have helped at all). Then look up the meaning of Moral Hazard to see why all the links in the chain passed the risk off to someone else, eventually through such opaque stuff such as Collateralized Debt Obligations. Even the ratings agencies ignored problems with all this money being made.

But in the end, the spark that started this conflagration was government regulating/requiring/rewarding banks to lend money to those who should never have received it. Greed just fueled it.

27

FactCheck.org has some observations on who is to “blame” for yet another opinion (the debate will go on for years – hopefully not here. :smiley: )

So who is to blame? There’s plenty of blame to go around, and it doesn’t fasten only on one party or even mainly on what Washington did or didn’t do. As The Economist magazine noted recently, the problem is one of “layered irresponsibility … with hard-working homeowners and billionaire villains each playing a role.” Here’s a partial list of those alleged to be at fault:

* The Federal Reserve, which slashed interest rates after the dot-com bubble burst, making credit cheap.

* Home buyers, who took advantage of easy credit to bid up the prices of homes excessively.

* Congress, which continues to support a mortgage tax deduction that gives consumers a tax incentive to buy more expensive houses.

* Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes.

* The Clinton administration, which pushed for less stringent credit and downpayment requirements for working- and middle-class families.

* Mortgage brokers, who offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates.

* Former Federal Reserve chairman Alan Greenspan, who in 2004, near the peak of the housing bubble, encouraged Americans to take out adjustable rate mortgages.

* Wall Street firms, who paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities (MBS), and issued bonds using those securities as collateral.

* The Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market.

* An obscure accounting rule called mark-to-market, which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic.

* Collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up.

The U.S. economy is enormously complicated. Screwing it up takes a great deal of cooperation. Claiming that a single piece of legislation was responsible for (or could have averted) is just political grandstanding. We have no advice to offer on how best to solve the financial crisis. But these sorts of partisan caricatures can only make the task more difficult.

28

AS you guys are aware my wife and daughter are in the US right now travelling around, and also you’d be aware of my wife losing her passport and delaying her flight. When she finally got to LA she realised she left her medication at home and needed it. She went to a doctor and paid U$130 for the consultation which only lasted a few minutes as she knew what she wanted and the doctor only had to write out a pre$cription ( I can’t believe this word was censored ???). The script cost U$195. A visit to our doctors without an appointment is about $AU75 which you can claim back about $0 from the Government under a system we call Medicare. Most everyday prescriptions are government subsidised to a AU$31 flat rate.

Our Medicare system allows free medical treatment to low income, aged, and disabled under the Medicare system and scripts free scripts up to a ceiling amount when they then pay AU$2.80 … and then they whinge.

We also have our share of out of control welfare for those who can’t, don’t or won’t work and even better ones for illegal immigrants and refugees.

I think we all have our own inherent social welfare systems that are driven by powerfull do gooder fringe elements who have the vote capacity to force the two major political parties to “work” with them or be voted out of office. Unfortunately these minorities have enough sway to force issues that are not benefical to all but the gutless politicians are coherced to them to remain in office.

I will stop now before I get started real big.

Dave

29

Dave

Are you sure you don’t secretly live in Canada?

30

Richard, It’s funny how our countries are similar in many aspects.

I was even asked on many times when I was living and working in Europe in the 70’s if I was Canadian. My main reply was that it was funny how Canadians loved to imitate us Aussies. :lol:

I guess our similarities relate to us being a part of the British Commonwealth where we have similar characteristics as many other countries through this. At least you guys had a government who had the guts to take the Union Jack off your flag and have the Maple Leaf. We could have the Kanagaroo on ours … no that wouldn’t work because we eat our national emblem. :oops:

Dave

31

Apparently there is a lot of similarities between Australia and Canada…So much so that our sitting Prime Minister, Stephen Harper borrowed part of a speech from your Prime Minister for the ongoing campaign…

As far as the medical system…I live right on the Canada US border and frequently run into Americans who come north for medical care…I think they pay something like $50.00 for a Dr visit with pre$cription…And they come to our hospital for x-rays, cat scans, etc, because it is cheaper for them to pay the full price here, versus just the co-pay in the US…

PS…Pre$cription is censored to stop auto spammers…

32

[quote=“royster13”]
Apparently there is a lot of similarities between Australia and Canada…So much so that our sitting Prime Minister, Stephen Harper borrowed part of a speech from your Prime Minister for the ongoing campaign…
So you have a egotistical, boring, long winded Prime Minister as well

As far as the medical system…I live right on the Canada US border and frequently run into Americans who come north for medical care…I think they pay something like $50.00 for a Dr visit with pre$cription…And they come to our hospital for x-rays, cat scans, etc, because it is cheaper for them to pay the full price here, versus just the co-pay in the US…
I saw that on Michael Moores SICKO.

PS…Pre$cription is censored to stop auto spammers… I now understand why I can’t try and sell V1agra, Pe…s enlargers and the like on this site :cry:

Dave[/i]

33

CATCHING WILD PIGS

There was a chemistry professor in a large college that had some exchange students in the class. One of them asked him a strange question. He asked:

“Do you know how to catch wild pigs?”

The professor thought it was a joke and asked for the punch line. The young man said that it was no joke.

"You catch wild pigs by finding a suitable place in the woods and putting corn on the ground. The pigs find it and begin to come everyday to eat the free corn. When they are used to coming every day, you put a fence down one side of the place where they are used to coming.

When they get used to the fence, they begin to eat the corn again and you put up another side of the fence. They get used to that and start to eat again. You continue until you have all four sides of the fence up with a gate in the last side.

The pigs, which are used to the free corn, start to come through the gate to eat that free corn again.

You then slam the gate on them and catch the whole herd. Suddenly the wild pigs have lost their freedom. They run around and around inside the fence, but they are caught.

Soon they go back to eating the free corn . They are so used to it that they have forgotten how to forage in the woods for themselves, so they accept their captivity."

The young man then told the professor that is exactly what he sees happening in America . The government keeps pushing us toward socialism and keeps spreading the free corn out in the form of programs such as supplemental income, tax credit for unearned income, tax cuts, tax exemptions, tobacco subsidies, dairy subsidies, payments not to plant crops (CRP), welfare, medicine, drugs, etc. while we continually lose our freedoms, just a little at a time.

34

Long and somewhat interesting thread…

  1. Capitalism is not dead, but it may be on life support after this latest “crisis” bailout of the mortgage-backed securities scandal.

  2. The free market and government de-regulation were not the cause of this, but rather political pressure/coaxing from the government for lending institutions to act irrationally and lend money to many who could not/would not be able to repay their loans. (i.e. people with poor credit histories)

  3. Greed became a factor when lending institutions realized the windfall profits available from all these “creative loans” which would quickly be bought up (taken off their hands) by Fannie Mae/Freddie Mac, allowing them to generate even more “creative loans”. The greed factor extended toward those in the middle/upper middle class when “house flippers” caught the wave of easy loans riding the crest of a booming housing market, allowing for quick profits on short real estate transactions.

  4. Government oversight of Fannie Mae/Freddie Mac has obviously been lacking, but the congressional record clearly shows that any attempt to reign in these GSEs (government sponsored enterprise) has been vigorously opposed primarily by one party. (The concern was that they were taking on too many assets and were vulnerable, the opposition vehemently denied this, and praised both organizations for providing “affordable housing” for the “economically disadvantaged” and victims of lending “discrimination”. ) Former Fannie Mae/Freddie Mac execs were very well compensated, and some have already “called on the carpet” for this lax management approach.

  5. Investment banks should have done more “due diligence” before investing heavily in these “mortgage backed securities” which were repackaged and sold off by Fannie Mae/Freddie Mac. Many greedy CEOs overlooked the risk because of the high yields, and took their companies down with them. (Sarbanes-Oxley’s “mark to market” may have played a factor as well, as falling real estate values depleted asset value.)

Not all investment banks followed Bear Stearns and Lehman Brothers risky investment strategies. (see Wells Fargo)

  1. The freedom and prosperity of a free market economy cannot exist long term without moral responsiblity, and part of that moral responsibility is to allow bad decisions to be punished with market consequences (i.e. failure). Attempts to alleviate these consequences usually result in additional unintended (negative) consequences.

  2. FOR THIS REASON, WE CHOOSE TO HAVE MANY CHILDREN (8) AND RAISE THEM TO FEAR GOD, CHERISH FREEDOM, ACCEPT RESPONSIBILITY, UNDERSTAND ACCOUNTABILITY, EXTEND CHARITY, AND OBEY THE LAW.

Welfare destroys the human spirit.

35

Hi Guys:

Great discussion.

Just think you are the proprietor and you have several employees.

Just think how would you business faire if it was run like our country and all your employees had a vote and you had only one vote as to hours to be worked and wages to be paid.

The voters have found that they can elect people who will tax the productive businessmen and motivated workers and redistribute the wealth they produce to those those who are not productive or barely productive.

There will always be some who need to be supported by the community but our present system will soon have more on the dole than the productive can support.

Revolutions have been by the majority who were being oppressed by the wealthy.Do you think Americans would have revolted if England was taxing their rich and sending massive amounts to the people in America ?

The politicians are doing what England did not do, they are keeping themselves in power by buying the votes of a vast portion of the electorate.

Looks like no voter revolution until the idiots in Washington bankrupt the productive and can no longer have billions in tax money to buy votes.

George Mills

36

Just a littel update on welfare from downunder in Western Australia.

This weekend one of the local TV stations ran their annual Telethon to raise money for the Perth Children’s hospital and other children institutions such ones for disabled. This annual event sees TV and musical stars from across Australia come to town to man the phones, get out in public and act like idiots just to raise a few bucks.

The 24 hour telethon this year raised $7.5 million. Not bad for a state of 1.7 million people, and in a time where all the financial woes of the world are impacting on everyones confidence and financial security.

For our part we donated an amount of money as well as donating another $2 for each pizza sold on Sunday night. We sold 114 which increased our donation by $228. We also put every purchasers name into a draw for a $100 Pizza Party which consists of pizzas, garlic breads, serves of potato wedges and bottles of drinks delivered to their house on the winners nominated night.

The night turned out to be our best ever Sunday withs sales up about $600 - 700 on a normal Sunday. We broke the $2000 sale figure for a Sunday for the first time.

Our involvement was a spur of the moment thing on Sunday afternoon while I was rolling out the bases for the night so the final result was even more pleasing, but the best thing was the end result of $7.5 million for a really great group of charities.

With all the doom and gloom about people still find that little bit extra to help others less fortunate. We talk about the welfare mentality, bad governments, dodgy businesses and the like but when it comes to helping our fellow less fortunate we always forget the woes and dig deep for others.

I feel good tonight.

Dave

37

I hated to leave this thread a few days ago but our locations, for some reason, have been unusually busy. We have a combination concept with pizza being one side. And every night I head home tired, as we all do, and I am thinking I am so grateful for the business and the opportunity to be this tired from enterprise.

As I was catching up several things caught my eye. I like the story about the wild pigs. I read a story many years ago about some island whose residents were mostly fishermen. Every day the boats would go out and on the way back I guess they would clean their fish or something (to long ago to remember) and the gulls would flock to the boats picking up all the scraps. For years this was the same story every day. Well, one day the fish schools started to die out and soon the fishermen left the island. It was said that many gulls simply died because they to, forgot how to forage for themselves. I would think is this analogous to the point of the wild pigs story. The more government does for us the less we can ultimately do for ourselves. All this “help” and all of these government programs are insidious tools to render us fully dependent on government. It kills the human spirit. Much like we all have seen rich parents who came from nothing who give their children everything that they did not have and thereby destroying the children’s ability, in many cases, to be strong and independent. I once knew someone who was fortunate enough to inherit a large sum of money at a very early age. He had everything he needed in terms of material things. As I watched him develop I feared for his future. I told him one day that he had the blessing of having enough money to do what he wanted and the curse of never having had his back up against the wall. I opened my first restaurant (a very successful franchise company) with everything I had in this world and anything I could borrow at the time and the location turned out to be the slowest location the company had ever experienced. My back was to the wall and I had a wife and one child. That was scary. One year, seven days a week, and massive hours. I learned every skill to stretch cash, to get things done with less labor, to be efficient, to probe every angle to increase business and how to simply work harder than I thought possible. That experience set the stage for the rest of my career. I still made a lot of mistakes but I learned how to accept and learn from them and move on to the next stage.
All of these government programs have the potential to steal from us, our opportunity to learn these lessons that are so important. They are seductive because in each of us there is an element that wants to do it the easy way even if it costs us something more important. We vote for politicians who promise us the most benefits. We take the money they offer which is taken from other taxpayers and we sign up for the stamps, subsidized housing, benefits paid per child, maybe the $20 per month the Dems just put in the bailout package paid to anybody who rides their bike to work. This equals more dependence on government as we become just like the wild pigs or the gulls. This gives more power to the government over our lives and to the politicians. As one poster said, government has to get it from somewhere so they keep taking it from the producers. And they will until there are no more producers. They will have died out from the sheer weight of having to support so many others dependent on their production.
No where in the world has Socialism succeeded. Someone mentioned that several countries in Europe with extensive welfare programs seem to have escaped the brunt of this current financial crisis. Well, it seems in the last few days that picture has changed. Not that it was was not changing anyway. Many of those countries are having the life blood sucked out of their societies by the increasing weight of Socialistic obligations to the people.
We had Socialism in this country once before, remember? The pilgrims tried it and almost became extinct before they discarded socialism and changed to capitalism. As someone once said, capitalism is not perfect, but it beats the heck out of anything else that has been tried. We can fail and then pick ourselves up and try again. We can do this as many times as we wish until we learn the lessons that allow us to become successful in our the area of our chosen interest. If we were to devise a program for humans to exist on the earth would be devise a system where humans were given absolutely everything they needed without extending any effort of their own? Would we devise a system where nobody would be challenged or presented any difficulties at all? How is happiness achieved? Joy results from what? Satisfaction is derived from what? Or would we devise a system where humans are presented challenges so that they could grow? Frustration so that they could truly enjoy achievement? A system where rewards in most any form would be tied to our own efforts and discipline?
Maybe I am getting a little crazy here but I think that most of us would be a lot happier if government would stay out of our lives as much as possible. Our schools need to stop this insanity of trying to prevent anyone from failing or having their feelings hurt. Maybe they could do something really dramatic and revolutionary and just teach the basics which hopefully include a thorough history of our country so that younger generations would understand the price that has been paid to for us to live in this free country. Maybe our politicians can cease to tell us that we need the help of government to make it in life. Even today it is clearly obvious that each of us can accomplish just about anything that we can set our minds to focus upon. As bad as government is getting, each of us, individually, represent the greatest impediment or boost to our dreams of success; not some external factor or factors beyond our control. Do we have the discipline? Do we want something bad enough to pay the price, to make the sacrifices necessary? Under capitalism we can do these things. Our chances are severely diminished under socialism and non-existent under Communism which is the next step.

95% of us are not going to get a tax cut; it is impossible.
Everybody is not entitled to a free college education if only because that means that some of us are obligated to pay for it against our will.
Institute a wide range of new taxes and this economy is not going to get better; history tells us that.
The “rich” are not and cannot pay for everything the politicians are promising. There are not enough of them so either some of the middle class are classified as “rich” it doesn’t work (and even then it doesn’t work).
The majority of jobs in this country come from small business. Tax the hell out of them (even more) and what we get is fewer jobs and fewer small businesses.
OIL. I agree that we should not subsidize oil companies but to say that oil companies are making to much money and not paying enough taxes seems absurd. The last figures I saw indicate that the largest oil companies pay an average of 47% of their incomes in taxes. I was also amazed at the amount of money required to search and drill for new oil. And additionally surprised at the percentage profit of most oil companies which is below many of the large industries in this country. And don’t you just love it when phony politicians pretend they are outraged at the cost of gas yet never once try to cut the taxes on a gallon of gas. The higher gas goes the more taxes they rake in and they love it. Of course we can lower the cost of gas by simply drilling for more in our own country. I was reading about ANWR and how the environmentalists term it as pristine. From what I have read we would have to drill on less than 1% of the land area to effectively extract oil. And as for being pristine and beautiful for people to view…I understand the average temp there is something like 70 degrees below zero and the terrain is rather desolate. Sounds like a great tour bus opportunity to me.

Two things…
(1) read “Atlas Shrugged”. It might bring clarity to events unfolding today.
(2) One of the most exciting things I have read recently is the news today that a recent poll indicates that 59% of the people in the country today think we should vote all of the present politicians out of office and begin anew.

38
  1. Government oversight of Fannie Mae/Freddie Mac has obviously been lacking, but the congressional record clearly shows that any attempt to reign in these GSEs (government sponsored enterprise) has been vigorously opposed primarily by one party. (The concern was that they were taking on too many assets and were vulnerable, the opposition vehemently denied this, and praised both organizations for providing “affordable housing” for the “economically disadvantaged” and victims of lending “discrimination”. ) Former Fannie Mae/Freddie Mac execs were very well compensated, and some have already “called on the carpet” for this lax management approach.
    ==================================================================
    And unfortunately two of the members of that party were somewhat hesitant to do anything about the problems that were disclosed a few years ago because they were major recipients of cash from Fannie Mae.

“taking on to many assets?” I thought the late 2004 report to Congress said that the problem was that they were reporting assets they did not have and income they did not make. And the execs walked away with millions. Franklin Raines made 90 million in six years because of “fraudulent” reporting it was reported. If the price I had to pay to get 90 mil was being “called on the carpet” then I would gladly pay that price and provide the carpet at my expense. The Enron boys were whisked into Congressional hearings to testify under oath quickly and rightfully so. Their lives and fortunes were destroyed. Last time I looked both of the last two CEO’s of Fannie Mae were enjoying their millions and working for one of the candidates today. Why the difference between them and Enron? Where is the outrage? We are fueling our own demise.