jjamie12

Doc, this is a bad idea, for obvious reasons.

Actually, as it turns out, 86% of new mortgages are government guaranteed. I'm assuming that this includes not only Fan and Fred, but the FHA and VA, as well (probably some of the state and local programs, I'd imagine). That is up from about 30% 4 years ago, according to this article: Wash Post article from Fall '09 Their source is an industry mag called 'Inside Mortgage Finance', which I don't know too much about, and haven't corroborated the numbers with any other source. It doesn't seem 'wrong', to me, though. That's crazy... from 30% 4 years ago to 86% today... market share growth by, essentially, the WORST managed entities in the business. There's some weirdness there, yes? While that is true, I think that there are interesting reasons why that is the case. It's not that new mortgages are less collateralized, it's that Fan, Fred, and our government friends are doing the same old BS they've always done, save for the really outrageous NINA and NINJA loans. You can still get loans with nothing down. The agencies actually promote 3% down payments at historically (or close to it) low rates. The question to ask is: How is it that the government can guarantee these loans, when traditional banks won't write these loans anymore (hell, NOBODY thinks its worth it... there aren't any investors on earth willing to do what the agencies are doing!)You can see what is happening: Fed is buying trillions of dollars worth of Agency bonds, keeping Agency rates artificially low; agency 'conforming' limits keep growing, allowing ever larger slices of the population to become customers. The government is taking over the mortgage market (and, by extension the housing market). I don't know... I guess you can make the argument that this is needed to avoid economic disaster... I guess I just wish we could get some sort of real 'bottom' on the housing market, not this cluster of subsidized nonsense we have right now.

Put another way: I will NOT try to learn anything. My opinion (uninformed as it is) will continue to be that which it has always been, no matter what new information might come to me. Na-na-nuh-boo-boo. Change a few of the words around up-thread, and you will sound exactly like the ultra-right religious crew.

This whole post shows just a startling lack of knowledge about, well... everything you're making a point about (Except maybe the whole 'cashing in on his name' thing. I don't know). You, apparently, don't understand 1- How unemployment insurance works; 2- What the contents of THIS particular bill are, and by extension, its implications; and 3- What PAY-GO is (actually, I, apparently, don't know what it is, either because it obviously doesn't mean jack) How is it that you've formed such a 'locked-in' opinion on something when you clearly don't understand many of the issues central to forming that opinion?

Honestly, with all of the persecution and demonization, I had forgotten about THIS particular burden... Thanks for making me hate myself more.

You're darn right, Wisconsin! I'm tired of it, too. What we need to do is get some White Christian Males elected to positions of political power and we've got to put pressure on some of these companies to hire MORE persons of WCM. Eventually, we'll get some WCM's in C-level positions at lower-level Fortune 500 companies. Once that happens, then we could have a conversation about us WCM's not being persecuted and demonized, but NOT UNTIL we have AT LEAST 10 Senators and 20% of Fortune 500 Company CEO's. Then we'll talk. Until then, I will continue to believe that us WCM's are being demonized, simply because of our skin color and religious affiliation.

I think I read 78% of all mortgages originated in the US last year were guaranteed by the government in some way (Fan, Fred, FHA, whatever the hell else).

It would appear that we can close this one up and confidently say "No, we shouldn't" on the $5K tax credit. I haven't been able to find anything that says that this particular tax credit hurdles the "Is this good fiscal policy?" question. (Outside of the general 'Tax cut for small business' thing, which isn't necissarily good fiscal policy.) Although I can't help but believe that there would be some companies, somewhere, who would benefit from this, I've seen no data to suggest that to be the case. Furthermore, if you've got small businesses out there demanding to NOT take $5K from the gov't, so be it! Good discussion on this.

I don't presume to speak for Magox... (but I'll do it anyway) I think he just mis-spoke upthread. He doesn't strike me as a 'Republican'.

Please, God, NO!!!! I had you pegged for a third party voter in the scenario outlined above...

This is perfect. Thanks for the link and the discussion. I'm going to do a little more digging on this to see if there are any other studies done. I'm a little bit surprised at this comment: "It failed to create jobs, however,[1] because much like today, policymakers ignored the jobs the credit would destroy since it had to be funded by government borrowing." Personally, I'm having a hard time with the idea that $30 billion in government borrowing would destroy any jobs in this environment, but this is just a gut reaction. I'll need to think about it some more. Based on the above, they get a cost per job of between $111,000 and $200,000 per job created, vs. my estimated $50,000. This type of cost per job created will never turn into a positive NPV on the revenue side of the equation because the jobs created (most likely) won't be that high paying. I'll do a little more research and try to see if there are other estimates for that cost number. If their estimates are correct, I'd imagine you'd have to say that, without a doubt, this credit is not a good idea. And, of course, I agree with all of the things in the bottom section that you quoted. These things are certainly important and should be pursued.

I am, obviously, 100% in agreement with all of this. (Although I don't think anyone described as a 'small business' needs to worry about overbearing regulation of the SEC) However, we aren't talking about this, we're talking about the $5K tax credit. KD, you seem pretty definitively against it, as well as LA... Both of you see 'no' incentive in the $5K. Is there a chance that there are *any* businesses out there that would, though? It's an honest question. I've seen (well, actually Magox has seen) one estimate where 1 in 10 new hires would be directly relateable to the tax credit. Do you agree or disagree with the premise that there WILL BE some new hiring by small businesses that otherwise wouldn't based on this tax credit?

I was trying to think of a way to work one of those in! Nice job.

This is good stuff.

Re-posting from a different thread: Magox said: "Estimates range that one out of every ten new hirees will be cause of the $5000 tax credit." Great! Assume: Five year time horizon Cost of funds for gov't (5 yr) @ 2.23% Average unemployment benefit is $292 for 46 weeks (because of new laws put in place during times of financial strife... I think the normal time frame is 26 weeks) Average real federal tax rate of 20.7% Average salary: $32,140 To break even on the $5K: 11.421% of the 'stimulus' jobs created would have to have been ONLY because of the $5K. That is very close to the 1 in 10 Magox quoted earlier. So, if 'estimates' are off by 10% (ie. 2 out of every 10 jobs are solely based on the $5K stimulus): NPV for the gov't: $4,289. This doesn't even take into account other good things (I wouldn't even really know how to estimate this impact) associated with having people employed like: Having them spending money on LA's widgets, or having them pay into state and local taxes or keeping them in their home instead of going to foreclosure or or or (you get the point) (Note: I got the assumptions from the first links I opened from Googling "Average Taxes Paid in the US" and "Average Salary US" and "Average unemployment benefits". I did, literally, zero fact checking, so you may quibble with the numbers somewhat, but I think the essential point still stands up if you want to change some of the assumptions) It would appear that there is, at the very least, a decent argument to be made (strictly from the revenue side) that a $5K tax credit for small businesses per hire *might* make some sense. I'm not totally sure. I'm looking at these numbers and I think it probably does, but I haven't truly formed an opinion because I'm quite sure that I'm missing some things. Is there anything else to consider in these numbers? Any other numbers we should use? Different time horizon? Salaries? Tax Rates? Let's discuss this.

A couple of things before we can get back to the pbills bashing. 1- My central point here is that you shouldn't bash the President when you actually agree with what he's saying. You need to give him the political cover of actually agreeing with the guy (when you do agree) so that he can and will propose things you do agree with. Otherwise, he simply won't propose anything that 'right' thinking folks will agree with... I mean, why would he? If your'e going to get bashed from the right no matter what, why even try? In fact, we have this situation going on right now. There is genuine concern from folks on the right about the deficit. When President Obama proposed putting a bi-partisan commision together to come back and give recommendations on increasing taxes and decreasing spending (you know, cutting the deficit), not a single Senator voted for that. Not one. 97-0. 2- Not central to the main point in this thread, but wanted to point this out. Magox said: "Estimates range that one out of every ten new hirees will be cause of the $5000 tax credit." Great! Assume: Five year time horizon Cost of funds for gov't (5 yr) @ 2.23% Average unemployment benefit is $292 for 46 weeks (because of new laws put in place during times of financial strife... I think the normal time is 26 weeks) Average real federal tax rate of 20.7% Average salary: $32,140 To break even on the $5K: 11.421% of the 'stimulus' jobs created would have to have been ONLY because of the $5K. That is very close to the 1 in 10 Magox quoted earlier. So, if 'estimates' are off by 10% (ie. 2 out of every 10 jobs are solely based on the $5K stimulus): NPV for the gov't: $4,289. This doesn't even take into account other good things (I wouldn't even really know how to estimate this impact) associated with having people employed like: Having them spending money on LA's widgets, or having them pay into state and local taxes or keeping them in their home instead of going to foreclosure or or or (you get the point) (Note: I got the assumptions from the first links I opened from Googling "Average Taxes Paid in the US" and "Average Salary US" and "Average unemployment benefits". I did, literally, zero fact checking, so you may quibble with the numbers somewhat, but I think the essential point still stands up if you want to change some of the assumptions) 3- I swear to God, LA, not everyone who disagrees with you is an idiot. You really aren't going to find anyone out there who is more pro-business than me. I'm not convinced about the $5K tax credit, but it seems ridiculous to just reject it out of hand (and the numbers seem to bear that out somewhat, no?) Especially considering it's exactly what people like you have been begging for! It's a small business tax credit for God's sake! I'm going to start another thread specific to the $5K tax credit. I don't want to hijack this thread anymore. My main point here is stated in bullet 1. (And I don't really seem to be able to convince anyone of that, either!) OK, back to pbills.

Well... that's not really how it works, is it? You don't just expand to expand, or contract to contract. You only expand if the marginal contribution of that one employee is worth more than their cost to you, but whatever. This is like pointing out that something is a tax credit and not a tax cut when the difference in meaning related to the conversation is minimal, if at all. This will help many small businesses that are on the margins. You are correct (imo) in saying that if you definitely aren't going to expand, then this does nothing. However, if you're one of these companies that thinks 'maybe it's a good idea, I'm not sure, maybe it's not' then this tax credit might be the thing to put them over the top on hiring someone. Or do you think that there are no companies out there in this position?

This is just insane, LA. How can you possibly be against this? Tax cuts for small businesses. This is what I'm talking about... My sense is that you're against this solely because it came from President Obama's mouth. This type of thing is exactly what you're looking for, isn't it? Can you explain to me why you're against this?

The irony here is just... I don't know. It's in the air, I guess. Part of the reason for the 'ramming' and 'bribing' 'having the backs of' is that no matter what the President says, people like you in Congress kill him for it, rather than standing up and saying "Hey, that makes sense, I agree with this". I mean, that just makes sense, right? You buy that, don't you? Right now, here, today (ok yesterday), you're killing the President for saying "Hey, we need to tackle the deficit". By doing so, you're giving your own leaders political cover for voting 'No' on things like creating a bi-partisan commission to make recommendations on potentially raising taxes and lowering spending in an effort to tackle the very problem that has you so fired up that you'll go to a message board and start a topic and reply several times in a thread about. Don't you find that odd?

Did you read the rest of the post? Have YOU responded to any of the questions I've asked?

What's the question here? How is it possible? Well... he's the President, he opens up his mouth, his vocal chords vibrate, sound waves are created... I understand your point. You think it's hypocritical. Fine. I get that; I've always gotten it. My point is that if you agree with him, why not say it? If all you do is B word about everything he says, even when you agree with it, how is that helpful, in any way? If Trent Edwards finally throws a deep ball for a touchdown, do you stand up and boo that because he was unwilling to do it before?

Apparently, we can't agree with the things we agree with if someone we don't like is the one agreeing with us. So we've got that going for us, which is nice.

Yes, but can't we all agree that we should agree with the things we agree with?

But that's the thing... How is it logical to boo the things you want?!? You'll only get less of what you want, right? You've got to agree with the things you agree with, don't you?

Here's the thing, guys. If you can't get on board with President Obama saying (essentially) "We've got to start being fiscally responsible", then what can you get on board with? And I ask the question sincerely because you guys will never, ever agree with him more than when he calls for fiscal restraint. There are reasonable, intelligent people out there who believe that the stimulus bill wasn't big enough; that we'd all be better off if it had been far larger. There are reasonable, intelligent people who think that tax rates at the top of the income scale should rise significantly; that we'll all be better off with a higher marginal tax rate at the top. The reason I bring this up is: Why should he even try to listen to the other side of those arguments if all he's going to get is criticism, even when the other side agrees with him?!? If we want the political nonsense to stop, then don't we (who aren't even politicians) have to stop the political nonsense, too? Honestly, if billsfan1 (and by 'billsfan1', I mean all of us)is playing 'politics' rather than applauding or disapproving ideas on their merits, how is it even remotely possible that a politician will? Their main aim is to stay in the job. If we (voters) won't get past 'politics' in order to get to 'policy' then how can they?