There is a lot of hype about the extension of the Tax Credit. Some look at it both from a professional point of view, and from a personal perspective as a citizen. I understand that. I wrote about it in Are You Ready to Write a Check for $8,000?

Some are just happy and there is even a notion that all real estate agents gotta be ecstatic about it. Well, not me. And I hope not you.

I am trying to understand how could it happen that we became so narrow minded. We are against wasteful spending, but we are allowing the government to do it at an unprecedented pace. The realities of life are changing, but we are fighting to preserve the status quo by all means. Even borrowing from our own future.

I am afraid the biggest consequence of the way the government is fixing the economy is the one that we are not expecting. And which we are not discussing.

It is the change in our mindsets. In Democrats, Republicans, independents...

A mindset of free people relying on themselves is what makes them entrepreneurial. It is what makes them find the ways to better themselves and the Nation as a result of taking care of themselves.

A mindset of people becoming happy campers if they can get a buck for themselves in the overall destructive and wasteful giveaways is the first step to socialism. Because it is no longer important where we are going, as long as we can pick up some slack on the way.

The road to Socialism does not start when the government proposes another wasteful and politically charged giveaway. It starts when we, The People, become a group of people. When we become happy campers every time we are on the receiving end. When the interest of the Nation becomes the fragmented interest of groups, a blanket that we try to pull our way...

We were angry with banks getting trillions, but we are so pleased with home buyers getting billions... Guys, it is the same waste, different recipients. Since when we start praising the smaller waste as the Good for the nation? It is our nation's check book that is already empty, and we are using our Nation's Credit Card. Bborrowing billions instead of trillions will simply make us bankrupt a day later, but that's where we are heading... and we are happy campers?

It is when we claim that we are to protect the environment, and then decide to rebuild the Lower Ninth Ward, which should have never been built there in the first place. But then we did not know... We can now say that we are wiser today and correct it... but we lack the courage to do the right thing for the future, and instead do a politically correct thing for today. We will rebuild it... As a symbol of what?

If symbols are so important to us as nation, why we can't rebuild theTwin Towers? Eight and a half years later it is still not there, while it took initially 5 years to build them nearly 40 years ago (1966 - 1971). It is not a technology that takes that long, it is our mindset that allowed this to happen.

As people we might have more than we really need. We can survive with smaller homes, cheaper cars... No society in the history of civilization ever had everything, no civilization was demanding to have what they want and get it.

The trouble is when we are ready to sell our souls so that we keep getting it even if this can hurt our future. When we willingly start hurting our future because we want something today, that we can't have, we are losing both.

We are not going to fix our trouble with our grandchildren money, but we will terribly affect their lives.

Don't we care about our grandchildren? Our Future?

 
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19 Comments on Fixing The Economy. For Better or for Worse?

NOV
06
298,579 Points Localism Sponsor Outside Blog

Jon- Its one of those wordless Friday's I guess....can't spend our way out of a recession.

7:39pm • #1
199,671 Points 19 Featured Posts Outside Blog

Jon,

Having spent more than twenty years in Las Vegas changes your reactions to the word "fixing!" My first reaction is "fixing" any thing is never in the public interest. 

"The road to Socialism does not start when the government proposes another wasteful and politically charged giveaway. It starts when we, The People, become a group of people."   I would have said socialism starts when people decide they're entitled!

Regardless, it's a great post.

Bill

7:44pm • #2

Mr. Zolsky,

If I cannot pay I cannot play.  If you want to dance you have to pay the fiddler.  If you do the crime you do the time. A man's word is his bond.

I suppose I am old fashioned and my father was old fashioned and his father before him.

8:03pm • #3
378,463 Points 18 Featured Posts Localism Sponsor Outside Blog

Nicholas - why is it that housewives know that and the President does not? As he clearly trying to "spend our way out of a recession".

Why what is not working for a family should work for the country?

8:11pm • #4

I actually have a desire to start another blog to document all the Ways the Federal Government is in Violation of the Constitution

  1. deciding which company is worth saving while deciding others are not
  2. dictating compensation due to TARP, or possibly 'just because'
  3. taking over the Car industry
  4. taking over the health industry
  5. prison if you do not do as Herr Pelosi says
  6. etc....ad nauseum and it has only just started
you keep the blogs coming Jon with your unique perspective.  I am so glad your blog caught my eye.  I would bring up how many people on Fox News are bringing up comparisons to the USSR but that would bring out the wing nuts.  

8:15pm • #5
203,975 Points 6 Featured Posts Localism Sponsor

Jon, William's words were what I have read and was thinking - that when the people start voting entitlements for themselves, where do you stop? If you read the history of the Founding Fathers and even early lawmakers - like Davy Crockett - you will see how far we are from our beginnings.

8:16pm • #6

Jon, this is America- what you fear just will not come to pass.... we would all join to stop it! This government intervention is nothing new. Have you seen the beneficiaries of these bailouts? Its not the American people. Its, but the few at the top. This isn't the road to Socialism. What this was, or is, is nothing more than larceny perpetrated by BigCorp, aided by the last adminstration and by this one.

I don't believe its a failure of capitalism, but the failure to regulate it, that was the catalyst for this mess. We cannot ignore the greed component. This is why we must bust these big companies- they will consume themselves in greed and take the whole damn thing down with them.

We were brought along for the ride. We contributed to it. And then we got left holding the bag. Entitlements? Shoot- we're worried about the little guy when the Banks were complicit in this thing, full hilt? The tax credit puts people to work. The tighter standards in lending now make it possible for responsible lending- something that wasn't there in the last 10 years.

If your going to help someone, help the bread and butter of the economy, not the paper pushers that don't make sqaut but move money around and create scams (credit default swaps), using hard earned American retirement money to do it.

8:27pm • #7
579,639 Points 34 Featured Posts Localism Sponsor Outside Blog Hit Router

The country is like a small child telling on another kid for getting candy... until he gets some candy of his own. 

10:28pm • #8
Outside Blog

Jon, you are a very wise man.  I have heard it said that immigrants make the best Americans.  I believe it to be true, and I know why.  You come here for a better life - or, at least an opportunity to make a better life for yourself.  To have control over your destiny, succeed or fail.  I admire that. 

10:39pm • #9
NOV
07
400,698 Points 3 Featured Posts Outside Blog

Another Band Aid!  I hope we run out of them soon and things will get back to normal the right and sustainable way.

4:26am • #10
298,579 Points Localism Sponsor Outside Blog

Congratulations this post is now featured in Silent Majority of Active Rain

7:54am • #11
173,473 Points

Jon- Very good points. Hopefully we all wake up before it is too late.

8:28am • #12
378,463 Points 18 Featured Posts Localism Sponsor Outside Blog

Bill - I think it is pretty much the saem. The groups tend to fight for entitlements.

9:46am • #13
245,598 Points 1 Featured Post Outside Blog

If the government really wanted to stimulate the economy and not just pander to certain groups, they would simply put a moratorium on federal taxes - income, FICA, excise, utility, unemployment, and a hundred other taxes.  All these so-called stimulus programs are simply the government's way of pandering to specific special interest groups.  For this reason, I refused to follow or distribute NAR's call to action regarding this $8000 tax credit.  Personally I don't think the tax credit made a significant impact anyway.

12:40pm • #14
378,463 Points 18 Featured Posts Localism Sponsor Outside Blog

Ross - there are only two ways to make ends meet:

1. Make more (earn more);

2. Spend less

of the combination of those two.

Our country's situation is none of the above. Actually, it is the oppostie.

5:30pm • #15
378,463 Points 18 Featured Posts Localism Sponsor Outside Blog

Daniel - that would be very interesting. Go for it.

5:31pm • #16
378,463 Points 18 Featured Posts Localism Sponsor Outside Blog

Sharon - we are much richer today in terms of goods and services, but can we say the same about our ideas and ideals? I really doubt it. I think we are more shallow today.

I would happy to be proven wrong on that

5:33pm • #17
NOV
08
209,822 Points 34 Featured Posts Outside Blog

The Law, by Frederic Bastiat

Jon,  So much of what's going on today was written about back in 1850 by Frederic Bastiat in "The Law"

Here is a quote that is appropriate to what you write about here:

 

But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

Then abolish this law without delay, for it is not only an evil itself, but also it is a fertile source for further evils because it invites reprisals. If such a law — which may be an isolated case — is not abolished immediately, it will spread, multiply, and develop into a system.

The person who profits from this law will complain bitterly, defending his acquired rights. He will claim that the state is obligated to protect and encourage his particular industry; that this procedure enriches the state because the protected industry is thus able to spend more and to pay higher wages to the poor workingmen.

Do not listen to this sophistry by vested interests. The acceptance of these arguments will build legal plunder into a whole system. In fact, this has already occurred. The present-day delusion is an attempt to enrich everyone at the expense of everyone else; to make plunder universal under the pretense of organizing it.

8:54am • #18
NOV
09

I'm with you Jon.  It is a joke to try to fix the housing industry with entitlements of monies that WE DON'T HAVE! 

Nogui, there weren't enough tax credits to do anything for this country.  What was it $13 a week?  Please.  Don't insult anyone with half a brain.  Have you seen any employment and job creation happening?  10.2% and continuing higher.  

But boy was there pay backs for votes in the stimulus!!  In spades.  Those pay backs continue with this healthcare takeover.  I have inside information in this area.  Trust me, this healthcare takeover will financially benefit big business people, at the expense of the average American taxpayer.

Subprime loans were created by laws from dems in 1977 (Carter) and 1999 (Clinton). 

"Fannie Mae was always a political beast, but it reached its elbow-swinging heights during the time when former Clinton administration budget director Franklin Raines sat in the CEO chair. Under Raines' leadership, Fannie overstated earnings by a stunning $10.6 billion, all the while paying Raines and his senior management team massive bonuses.

"It was under Raines' management that Fannie morphed from being a company in a sleepy business -- issuing debt to buy mortgages from lenders -- into a far more risky and exciting one: buying up mortgages and holding them, thus capturing the spread between its borrowing costs (which were lower than anyone's other than the federal government's) and the interest rate received. It was a great business, except that it had nothing to do with Fannie's charter. According to a May 2006 report from OFHEO, Raines became obsessed with keeping earnings per share as high as possible and motivated management to achieve that goal by setting up a bonus system that rewarded increasing earnings per share.

The thing is: Any company can hit an EPS number if it doesn't worry about little things like accounting rules, debt levels, and risk factors. All told, Raines pulled in some $90 million between 1998 and 2003, the majority from bonuses. 

As Fannie's CFO from 1990 to 2005, Howard signed off on the financials that overstated the company's earnings by $10.6 billion from 1998 to 2004. His reward? A cool $14 million in salary and $16.8 million in bonuses during the period -- bonuses based on the earnings plan that Raines set up. 

Barney Frank
The House Financial Services Committee chairman and Democratic congressman from Massachusetts has long been a proponent of both Fannie and Freddie, assuring the public that their mission to encourage home ownership outweighed the distortive risks they brought to the market, and that the federal government was not, in fact, on the hook for their liabilities. In fact, it seems clear now that Frank had no idea of just how poor a grasp Fannie and Freddie had on their lines of business. As recently as Aug. 25 he told Money magazine, "Fannie and Freddie are better off than the market thinks. ... Part of the problem is rumormongering by short-sellers." - The Motley Fool 9/2008

Georgia
9:27am • #19

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