Hello all of you reading my post! I had to think about this economic mess we are in and decided to do some research into who were the key players and what the largest factors were. Some may not agree with my opinions which is okay. Any data you can provide may eventually help someone find a solution and have it make it's way to Capitol Hill. Enjoy...
It is impossible to blame the current state of our real estate crisis on one person, company, administration or political party. However we can look back to an administration (Clinton) that "pressured" risk based lending which inevitably opened the flood gates for irresponsible lending guidelines. The cause was noble but the execution was disasterous. Fannie Mae stockholders were excited about the idea as well as they saw an opportunity to increase their profits so they too should be held accountable. See this "The New York Times" article written September 30, 1999: http://query.nytimes.com/gst/fullpage.html?res=9c0de7db153ef933a0575ac0a96f958260&sec=&spon=&pagewanted=all
As I began my career in loan origination I was astounded that lenders would offer payment option arms to people with spotty credit. I do not curse these loan programs however because people with excellent credit tend to have the discipline and resources to responsibly use these loans to their advantage. One bank (I will not mention their name) was offering payment option arms to borrowers with a credit score as low as 530 with no income or asset verification!
I am a mortgage broker not a Wall Street Firm and even I saw the writing on the wall. How could the Wall Street Executives and Pension Fund managers turn a blind eye to these lending practices? I believe this "pressure" from the Clinton administration and stockholders of Fannie Mae gave banks the green light to package up junk and sell them as AAA rated mortgage backed securities (MBSs) to unsuspecting investors. This is reflected with current losses sustained in many 401k, IRA and pension funds that invest heavily in these types of securities because they are considered "safe".
If find it hard to believe that any administration would pressure Fannie Mae and not consider oversight on the rating of these bonds. I think these policies hyper inflated the measurements of productivity and growth in our country causing a public perception that I can have anything I want no matter what the cost. I do not blame one party for this but I do blame a few powerful Washington players that shaped the past lending environment.
If credit challenged borrowers want to be able to secure financing to buy property then I believe private money would have been the key. If private investors do not want to lend to someone after reviewing their credit, income and assets then this should send a loud and clear message that these people are not in a position to borrow at this time.
So now we are faced with the same entity that helped to create this mess (our government, with special thanks to Representative Barney Frank) trying once again to make policies to shape the rules of lending. FYI, I am not a staunch proponent of the Bush administration but you should know that Barney Frank opposed a Bush administration proposal in 2003 for transferring oversight of Fannie Mae and Freddie Mac from Congress and HUD to a new agency that would be created within the Treasury Department. The proposal reflected the administration's belief that Congress "neither has the tools, nor the stature" for adequate oversight.
Frank stated, "These two entities are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."
Had our government kept their nose out of private banking and passed the oversight to the Federal Reserve I believe we would not be in this mess. Private firms have managed well in years past with minor supervision. When a government pressures or provides incentives to private companies to ease up on their risk mitigating policies I place more blame on government officials than I do private industry. In a nutshell I believe our officials encouraged and rewarded bad behavior for political gain which fed off of itself creating opportunities for big banks to make huge profits.
Solutions!
I propose:
I believe the state of our economy is 20% real and 80% perception. We all know that quick and radical changes are needed but what changes?
What I find most attractive about this plan is the fact that revenue will be collected by the federal government on all monetary activities including those that they do not currently collect on like illegal activity, immigration, side work etc. For example: Drug dealers, illegal immigrant workers will make money and will eventually spend a good portion of it in the US. When they do our federal government would receive revenue. Although I do not condone illegal activity the fact remains that it does occur and those people especially should not be excluded from contributing. Currently law abiding tax payers are paying for all of the roads and other federally funded projects that these people use but do not otherwise contribute.
Knowing there are millions of illegal workers in the US one has to wonder how many billions of dollars in funds to be used for our infrastructure and federally funded programs are being squandered. This could be a chance to reduce the taxes we tax payers have to pay giving us "buying power". Some argue that the tax would be too difficult to collect. Then how in the world are individual States collecting their sales taxes? Some argue people won't buy homes without the tax deduction, I say nonsense. Let me keep all of the federal income and social security taxes I pay and I will be willing to upgrade my house!
Another idea: Currently we are providing billions to banks to allow them the funds to lend to consumers. However, many of these banks are hoarding cash and not lending. For all future TARP funds why not reimburse banks for the money that has already been lent instead of providing them money "in hopes" that they lend?
Last idea: Stop collecting federal income taxes on people and businesses for a few months. If the Federal Reserve is going to print money why not give it all to the federal government to keep it running in the absence of taxes? Dealing with the logistics of distribution and the added cost of that distribution makes it less effective. Not to mention it and would reduce the uncertainty of who gets what and how much.
There are many things I have not considered with my opinions and proposals and all opinions are welcome. I look forward to a healthy and vibrant real estate economy where we can all succeed in meeting our clients' needs and build our business. Here's to your success!
Written by Nevin Williams, Branch manager First Priority Financial and CEO ofThe Williams Real Estate Investment Corporation.
Nevin is a professional mortgage loan broker originating residential loans in the following states: California, Oregon, Washington and North Carolina and commercial loans in all 50 states. Memberships include: Society for Business Ethics, National Association of Mortgage Brokers, California Association of Mortgage Brokers, Veteran of Foreign Wars, !st Cavalry Division, Cary Chamber of Commerce and Civitan International.
Call or e-mail me for current mortgage rates!
Nevin's services include personal budgeting, financial planning, retirement planning strategies and real estate contract review.
42 Comments
on Our economic mess, who to blame and solutions
MAR
11
2009
Nevin..Kudos...It really did all start with Clinton and Gramm...and congress was right in there as well--and then, there's Barney....And without careful monitoring, look where we are today....didn't anyone see this coming--and how are we to expect our government today to get us out of this mess...I do agree with your flat tax solution...this has been talked about for year--however, no one has ever done anything about it....
Thanks Amanda. I think our reps in Washington shudder at the thought of the fair tax. It would strip their power to force their agenda on states. I really hope enough people jopin the organization and get this approved. If it happened now I am willing to bet we would get out of this mess very quickly and would allow us to get back to reasonable underwriting standards.
The fair tax is just that, the fairest most progressive means for financing our government that has ever come along. It does take much of the special interest power away and it does require politicians to become statesmen and women. It may also take a Boston Tea Party style revolt (stop paying income taxes enmass) to make it happen. I'm ready!
Great post. Your research is the key and for the most part I find the fault in the same place you do although, I do believe the Bush Administration could and should have had more foresight and put up a biiger fight over Fannie and Freddie.
Ironically, I wrote a similar blog about 1/2 hour before yours, far less researched, but reaching similar conclusions.
"look back to an administration (Clinton) that "pressured" risk based lending which inevitably opened the flood gates for irresponsible lending guidelines. The cause was noble but the execution was disasterous."
We are all guaranteed the right to Life, Liberty and the Pursuit of Happiness, not guaranteed a home. As you said the cause was noble but disasterous.
I don't know how I feel about a fair tax, as I have not researched it enough.
But, IMO we need money in the hands of the consumers, tax credit, no tax whatever.....
The current stimulus is full of Pork and from both sides of the isle, it makes me sick. To saying nothing of the liberal agenda hidden it it.
I wrote an AR blog last week highlighting the same NY Times article http://activerain.com/blogsview/968284/Fannie-Mae-Eases-Credit-To-Aid-Mortgage-Lending-Lowlights-From-A-1999-Article. I agree with you that there is plenty of blame to go around, but the relaxation of the credit requirements and the pressure for everyone to be a homeowner was a major part of this mess we are in right now. I found it fascinating that the fall back plan was a government bailout...just like what is happening now. Wouldn't it be easy to make frivoulous business decsions if we KNEW we were going to be bailed out? I like your points on the Fair Tax. We have to many crooks running the show for it to happen anytime soon, but with enough of a grassroot effort anything is possible.
Calvin - Thank you! So i'm NOT losing my mind!!!! Amazing how much effort people put into making money, saving money like driving to far away gas stations to save $2 on a fill up or clipping coupons. Little do they know that is this fair tax passed their lifestyle would significantly improve with no effort. Thank you Calvin!
Dean - we need to hang out!
Rick - thank you for the kind words snd the invitation to read your post. I will check it out and leave a comment. Maybe we should get a rally together one day and educate the masses. I think it would save us all!
Missy - I agree that it is the Pursuit of happiness. I loved hearing that line in Will Smiths movie The Pursuit of Happyness where he states, "How did they know to put the word pursuit in there? I included some links (3 so it would not be biased info) that contain the plan, pros, cons and arguments. I hope you get a chance to read them and let us know what you think. Thanks!
Wanda - I am glad you said that. It would be a shame to write all of that and have no readers. You are welcome!
Simon - Well said. I guess the question is what do we do now? My thought is that for those who agree on the fair tax we educate others. Those who oppose it share your ideas and we educate others with that as well. Bottom line is what we are doing is not working so we have to fix it. I am very open minded to any ideas except the same old same old. Thanks for your comments.
I fear where our government has been and is heading... It looks like we are becoming more and more socialistic. Now, don't get me wrong, there are a lot of perks that come with a socialistic government. It's just that our government doesn't seem to be able to handle it.
I appreciate the research you did on this topic - it helps put things into perspective for me. I will have to look into fair tax and see what I think about it.
I agree with you that perception vs. reality is a big part of the problem - I think we all have trouble deciphering what is really going to work and what really won't due to how much has been promised to us and how little has been delivered!
Hey, you are correct on a lot of points that really never get reported or really talked about. The more disturbing factor is how people want something now and cannot handle the math on the calucations. Its eight grade math for me. Have our people's judgement gone into left field. The same people who wanted all the lending also wanted the TARP. Cooler heads wanted to get it sorted out. The same people are now wanting accountablity. Why not take time to understand the issue? What a waste.
Middle Americia is just watching in amazement. How stupid are these people? No one in jail?
There are studies that say that currently there is something like $13T in money owned by US companies and individuals that is legally off-shore. It is staying there because of the tax cost of bringing it back in. Imagine the ecoomic boon if $13T came back into the US market in short order. That could happen under the FairTax.
We allowed this to happen to ourselves because we did not participate in government. Fannie Mae and Freddie Mac were created by government for government. It was a publicly traded company but exempt from SEC oversight. So no audits etc. Fannie Mae and Freddie Mac even though they were a quasi government agency were allowed to lobby Congress. The top 5 recipients of their lobbyist monies according to their public filings...
Then after they were bailed out...with our tax dollars they are still allowed to lobby Congress! This nation only has itself to blame by electing those that benefited the most, and were the same ones that actually caused the problem. Apathy has a big price.
I'm not a blame gamer but laying the blame at the feet of Fannie and Freddie is right on target...if there wasn't a market for those ishy loans they would have never been approved...!!! I don't blame the borrowers, the lenders, or the loan officers...Fannie, and lack of proper oversight is culprit, not deregulation as some are trying to deflect...!!! Thanks, Fran
Nevin, a few weeks after the NY Times article was written, another large factor was introduced. The true key date on the financial crisis is November 12th, 1999. It was on that date President Bill Clinton signed the repeal of the Glass-Steagall Act of 1933, which basically allowed regular banks to use our money as an investment bank would.
They were able to take our money and "invest" it with hardly any regulation whatsoever. And look at where we have ended up!
For years, Freddie Mac , Fannie Mae, HUD and the VA have had Foreclosure Mitigation Standards in place that REQUIRE Note Modifications. The home loan lenders are in an illegal, immoral, greedy, and unethical frenetic feeding frenzy to foreclose in VIOLATION of EXISTING rules and laws ALREADY IN PLACE FOR SEVERAL YEARS, requiring them NOT to foreclose. Loan modifications have been required since summer 2005 according to the Freddie Mac, Fannie Mae and HUD websites.
Here's what Redwood Credit Union (RCU) in Northern California is doing to serve their community. On their own RCU called their member's lenders trying to get those lenders to do the required home loan modifications. When the lenders chose to be domestic terrorists, RCU bought their member's homes on the steps of the courthouse during the foreclosure sale. To save their member's homes, RCU had already negotiated a new loan with their member, allowing their members to stay in their homes.
Why is it you think the lenders aren't doing the required loan modifications? If they'll approve a short sale than why NOT the REQUIRED loan modification?
HUD is so frustrated with the lenders that are failing to do the required loan modifications that HUD instituted a three times the loan amount foreclosed on penalty to the lender that goes through with these illegal foreclosures.
If the banks had been doing the REQUIRED since Summer 2005 loan modifications, we wouldn't be in this mess we are in now.
You really do get it and this blog is soooooooooo good. You nailed it. For those of us, who have been in the business for a while, we remember the Clinton days and when the loan programs changed and some of us wondered what the ramification would be down the road. Thanks for such an informative and well written blog and congrads on the feature.
Wow so much has happened it his hard to say that all you have mentioned did not contribute to our current crisis. Regardless of what got us in hopefully we will someday come out of this economic times stronger and more financially conscious. Option arms, interest only, and Variable mortgages is our primary cause of the financial mess we are in. The executives are the only winners in this whole mess because they cashed in on the boom years and now their broke corporations are being bailed out while most of the executives are loaded with all the cash they made the last few years in their bank accounts. Why they get bailed out homeowners are getting kicked out. Banks allowed people to take advantage of the system with their loose underwriting standards and AE's who were selling horrible bank products to consumers in order to cash in. Its funny how option arms would pay the originator 3 times as much as a more stable fixed rate loans. I think that banks should reduce prinicpal amounts on mortgages to their value at what they would be sold thru a foreclosure sale. The bank still receives what it would thru a foreclosure sale without having to have a vacant property that will drag down values around it and probably be vandalized. They could save thousands of dollars on foreclosure attorney fees, eviction proceedings, and rehab on homes which are vandalized and stripped of whatever a home owner can sell or take with them. Not to mention people will not have to go thru the emotional roller coaster that goes with losing ones home.
Nevin, you pointed out some facts of which the average American remains unaware. Unfortunately most aren't interested enough to check it out; and until we can get their attention, the guys in DC will continue playing their political games and living high from the lobbyists. As for the Fair Tax, it's the best idea ever proposed to solve our tax problem, but, here again, DC won't listen until enough of us demand that they do. Good post.
Emily - I agree that our government cannot handle socialism. Hopefully we do not end up there. Not that I am bashingsocialism, it's just that there are many socialist countries and only one America. If we lose our freedom we will fall into the same system as many of our neighbors. Besides, where will the Canadians get their healthcare? LOL
Eric - 8th grade math it is. However given our failing school it's more like 12th grade math at a good school! I think part of the problem is that our government is so arrogant they think they can fix everything when in reality it is nothing more than a dog and pony show. Jail? Just wait, I think if this settles they will then begin the process of accountability. Of course that stirs a whole new debate, should we pay 50K a year per inmate (there would be many) or let it go and use that money to get out of this mess?
Gary - Barney is a real piece of work. Personally I can't listen to him for more than 10 minutes before I crumple my my wall street journal and throw it at the TV screen! Perception is reality I always say.
Lane - Wow! Really? 13 Trillion? Please please please, somebody help us push this fair tax movement to capitol hill! I agree that it would be a defibrillator for our economy if it would start to work it's way back in. Imagine the talentent people who would move to the USA knowing that they would not be forced to pay taxes except when purchasing something. By the way I love your pic with your youngin' !
Jim - I have mixed opinions on this. I vote in each and every election as do many qualified educated people. However I don't think we have had anyone truly worth voting for that would shake things up. I think the only way to break the cycle of corruption in DC is to vote in an independent wealthy businessman that does not need money. This way at least we have half a chance of him/her not being affected by lobbyists money. I agree and share your sentiment however. Thanks!
Fran - couldn't agree more. Oversight yes, over regulation, no. Thanks!
Travis - Wow, great stuff Travis! I had to break into Wikipedia to familiarize myself with this act. So in essence the republicans (Phil Gramm and Jim Leach) introduced the bill and with a majority vote made it impossible for Clinton to veto the bill. In a nutshell this act was established to maintain control over lending institutions from speculative investing and trading with money that would be insured by the FDIC. Initially before the act was repealled there were already mortgage backed securities and subprime mortgages only accounted for 5% of these securities. After the act it jumped to 30%. Interesting facts. The deregulation freed money and allowed banks to raise capital to fund loans that otherwise would not have been possible by introducing more money into the system to lend. With the large surge of money that came from foreign and other investors it provided an environment where they wanted to lend as much as they could hence the liberal underwriting standard. The only difference between now and 1933 that I see is that the US was a self sustaining economy and this act held banks back from truly going "global" at a time when the US was trying to forge a global economy. Once it was repealled it opened the flood gates for foreign and institutional investors and man o man did the money come in! With it came the hunger for these securities so the lenders started to invent crazy stuff...like the pay otpion arm etc.. I think an oversight system should have been put into place before repealling the act but it wasn't so here we are. Outstanding comment! Thanks!
Craig B - I have to say there is a lot of information here. I will take the time to review it and get back to you with my response to your message. I appreciate all of the time you put into your comment and I am sure I will learn a lot from it. Thank you!
Sandy - Why thank you! I appreciate the comments. I will do my best to keep good blogs going! : )
Adrian - If we don't come out of this more financially conscience then we deserve what we get and i am moving to another planet!
John - Thaks John! If you like the fair tax then let's get this thing out there and see if majority likes it for our country. I am considering joining the fair tax movement and donating to the cause. haven't yet but am considering it. Sending e-mails to my congressman is free however and I want to make sure these guys are earning their pay so they will hear from me plenty!
Yes, it was Republicans who introduced the bill! Part of me wishes to lay all the blame on Democrats, but this has been a truly bipartisan #$^% up! One can only wish for a flat tax! Tort reform! Government accountability! Is that last one an oxymoron?
I am just glad that our Canadian banking industry was and is still very regulated. It can be frustrating at times getting some deals together, but I will trade our situation for yours in the US any day. As Gary Keller pointed out at our recent convention - we effectively borrowed the next generation of Buyers.
Also interesting was a talk Gary gave last August. He showed the actual prosed bill that was defeated back in October of 2000 that said that if nothing was done, that Freddie and Fannie would eventually collapse and need to be taken over. They knew it had to happen. They just didn't think it would happen on their watch! The Bill was defeated 3 weeks before the November 2000 election.
You are Right On to put ole barney at the top of the Crooks who got us in this MESS!! Of course his cronies, kerry, slick n hil, barry the obamination and dodd the Countrywide prostitute are Very much responsible too! Unfortunately, the ones who are Responsible for this MESS are still in office, when they should be behind Bars for Destroying the US economy!
Nevin: Thanks for the post. These are interesting and good thoughts. I believe greed set it all off. Greed is a product of capitalism which is unfortunate. Otherwise, it's the best system available to us. I would argue our politicians are part of the problem. It's interesting how they look out for their own special interests that feather their own cap and extend their term. It always amazes me how they get to vote their own pay increases and pension benefits. In the old days, they only served 6 months of the year and actually had to hold down regular jobs. This is true still at the state level. Perhaps that's the solution. Extend more power to the states. What do you think? Otherwise, I see very little changing. We are a nation full of well-intentioned people. I just worry sometimes if we actually learn from our mistakes. Have a nice night!
Great research and information. The more I learn about this mess, the sadder it becomes. I'm not sure what the solution is and apparently the government really isn't either. Are they in, are they out?? Did they create this??? I liked to believe that we are in good hands but the more you dig into the mess, it seems that any government we have is not going to be what the people really want. Thank you for your research and sharing.
Nevin, your blog is an excellent start in understanding the basis of the crisis we now face, however, it is incomplete. CNBC recently broadcast an excellent two hour documentary, "House of Cards", stating exactly how this problem occurred and why it is so far reaching (global). The problem is not just MBSs, but CDOs (Consolidated Debt Obligations) and the global desire for investment vehicles that offered outstanding returns; thus, the pressure on reporting agencies such as S&P (venerable institutions) to misreport the strength of these investment products. I agree that there was pressure on FHLMC and FNMA to move toward relaxation of their guidelines, but when you see not only how the situation occurred but "who" manipulated the markets under the relaxed guidelines, you might see that its hardly fair to point fingers at Barney Frank or Clinton in this matter. Let's just say that after watching "House of Cards" on CNBC, I now understand the level of difficulty in resolving the problems in our economy today. Yes, government had a hand in this, but there are about five key players who are responsible for the fiasco that has lead to the collapse of nations and banks across the globe and if you watch the video, you'll see exactly who they are and what roles they played. Thanks!
That's a very deep conversation. Interesting is that the whole world is in a very similar but yet caused by different reasons mess. I like your 80/20 statement. America is one to blame by different countries. America is one to hope for the solution. What perception will prevail? Will we deliver?
If what you are saying is true, then what I learned in high school about the industrial revolution in this country is true.....businesses will try to get away with as much as they can. In the industrial revolution they put children in factories in horrible working conditions.
Today banks lend money irresponsibly because of greed. This has resulted in one of the worst economic times in American history.
Bill Clinton's big mistake was that he trusted the American business man to act responsibly. He was wrong.
Industry and many businesses need to be regulated, because most still will try to get away with murder.
Nevin, I can't add anything you didn't already say. Excellent, well thought-out post. I posted a similar (though certainly not as well-written) thought last week on Linked-In and was bombarded with comments blaming us "mean old bankers" for creating the mess.
It's good to see that plain old common sense (at least among Realtors & lenders) may be more common than we've been conditioned to believe.
And you can add to the list agents who recommended these loans. If you wouldn't do one of these loans, then you should not have recommended them to your prospects.
Rick - I do believe the Federal Reserve should have the oversight responsibilities on banking and that lawmakers should stand aside.
David - Thank you
Eugene - sad thing is they will most likely remain in office
Patricia - what good it does is 1) We Recognize who got us into this mess and have them removed 2) It Teaches us what not to replicate 3) It send a strong message to those in power who might consider personal and special interests gain before the nation that we are watching and holding them accountable. I agree it is what it is and we should move forward however where we differ (at least the way I am understanding your position) I am not prepared to move forward and make the same mistakes. This isn't a little boo boo, this is an enormous mess and IMO it has to be dissected, studied and prevented. I don't think we can just move on and forget it. But to back you up on one thing I too think that pointing fingers and NOT doing anything about it is unproductive. Thanks!
Paul - Thanks for your comments. Not to veer off of the subject but when our National highways were constructed (initially meant for military deployment) the Federal government paid for it. Later when the states required the use of these highways for commuting and commerce the Feds got this great idea that they could force their agenda on the state by witholding highway funds if the states did not adopt their policies. Not exactly this way but in a nutshell. So here we are with the federal government running the country. Our founding fathers wanted the states to govern themselves (at least that is how I have interpreted it) not the federal government.
Holly - I think all of us are guilty, consumer, gov't and private business, banks It's like there was a riot and all of us began looting because the other person was looting too.
James - I don't know and I agree
Chris- thanks
Grace - thank you for the excellent information. There are so many layers to this issue that if I tried to cover them all my post would be 50 pages long! All of this information is critical IMO for us in the real estate business. We are at the front line of this industry and the daily decisions we make help forge rules and behavior for future agents, loan officers and brokers. We need to know this as much if not more than our politicians and the banking system. We have the power to advise our clients to not do something because they look to us for guidance. Great comments!
Svetlana - Everyone tries to blame us for everything it seems. I still think we as Americans are better off than most.
Craig - Thanks Craig! I appreciate it.
Brien - I agree thanks
Clark - thanks!
Norma - you hit the nail on the head! The responsibility begins with us! Thanks!
It does seem like Americans have been more worried about the next American Idol than the state of our affairs. The present situation has pulled some out of the zombie state and into a position of giving a damn. Ron Paul has been pressing for a flat tax for quite some time only to be called looney, funny how he's sounding pretty logical now. I know that most feel powerless and dont feel like there voice is being heard. I recently joined a group started by Glenn Beck. The idea behind the group was to create a network of like minded individuals who think we are being lead down the wrong road, That the government works for us and we dont work for them, that if you lead from a values state of mind that the decisions made are right. The group is wesurroundthem.com . Those who wish to join will be a part of a nationwide network of concerned citizens against the changes that are happening even when we are saying stop. If you want to be a part of something real, making the changes needed to turn this around, then send your picture and small description of yourself and how you feel to wesurroundthem.com and watch Glenn or listen on the am radio. Its not to late to reverse these times we are in. Great post and I feel better now.
Nevin, thanks so much for you comments, and you're absolutely right--uncovering all of the layers of this "onion" is likely to result in a book rather than a blog. However, I did want to note that for everyone who missed it the first time, "House of Cards" will be rebroadcast by CNBC on March 15 at 9 p.m. It's worth the two hours to learn more about why "greed" on both sides of the globe and, more importantly for us as Realtors, greed on both sides of the negotiating table in a home purchase have resulted in the problems we now face. I think one analyst I've heard recently summed it up best "when you give people free money, don't be surprised if they take it and abuse it." Veritas!!
One thing that should be noted in Jim Crawfords comment (#14) is that some of the politicians racked up their total in very short order... Think about how long some of these folks were in DC... and how quickly some of them went from the Senate to higher offices.
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Nevin, I love your ideas and thank you for a well reseached blog. I thoroughly enjoyed reading it and it is much appreciated. To Your Success!
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Nevin..Kudos...It really did all start with Clinton and Gramm...and congress was right in there as well--and then, there's Barney....And without careful monitoring, look where we are today....didn't anyone see this coming--and how are we to expect our government today to get us out of this mess...I do agree with your flat tax solution...this has been talked about for year--however, no one has ever done anything about it....