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Left And Right Politics

…plus the cream in the center.

The Administration Has Ideas For The Housing Market

Posted by Billy On September - 2 - 2011

What those ideas are, we don’t know yet. According to the White House officials, Obama will unveil new plans to help the ailing housing market and to reduce foreclosures. He will outline the plans next week in his speech on “job creation”.

Unfortunately, the Administration suffers from short term memory since only a little more than two years ago, he tried to slow down the foreclosure rate and was totally unsuccessful. His last plan was to help between 4-5 million homeowner keep their homes from foreclosure, but the plan (as of May of this year) only help 810,000 refinance into loans with a lower rate. The refinancing initiative will allow certain borrowers to refinance loans that are backed by the improperly operated Fannie Mae and Freddie Mac. As a side note, both Fannie and Freddie have borrowed over $170 million over the last three years because of poorly run plans.

The Obama Administration is looking to make changes to existing programs aimed to allow borrowers to take advantage of lower mortgage rates, which will also include allowing them to refinance the loan even if they owe much more than the current property’s value. While the idea is expecting to help the borrower to free up cash for other spending to drum up overall business activity, it’s most like not going to do so since many don’t have enough money as it is to do more than they already are.

Either way you look at it, Obama and his cronies are grasping at straws to figure out a way to “fix” the economy. The only true way for the housing market to correct itself is to get the government out of the way and let the market correct on it’s own. While Fannie Mae and Freddie Mac account for nearly 90% of all residential mortgages, their time has come for them to be dissolved. It will take years to work out all the paper work to get all the assets of their books, but it needs to be done. The federal government was never intended to be in the housing market wither as a seller, buyer, loan manager or a landlord.

It’s too bad that Barney Frank is too close to the issue of Fannie and Freddie to make any clear decisions on what the right thing is that needs to be done. His life mate is on the board of directors and he doesn’t know how to run a business either.No matter what the government does, it’s going to affect the housing market in a negative way. As long as they are involved it will continue to be dragged out instead of a some-what quick recovery.

Let’s face it, the federal government is doing what they can to help the financial sector from taking another dive into the abyss and asking for more money from the tax payers.

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Government Distorts The Free Market

Posted by Billy On August - 29 - 2011

Over the past hundred years, the federal government has been more involved with the free market and it’s hard to even know where the line is drawn between the two. The general philosophy behind the free market is the old rule of supply and demand. As long as there is a demand for a product or service, someone will find a way to supply either of the two.

The issue that has been going on is that the federal government has been getting involved to “help” a particular industry and/or company for so long that we no longer know what is an artificial or organic supply and demand product or service.

During W.W.II, the wool industry was busy supplying the material to make our military’s uniforms. To make sure the industry would always be there to keep our troops clothe, the federal government gave subsidies to them to the tune of millions of dollars. Years later as synthetic materials were being used for the military, Washington continued to pay the wool farmers.

The agricultural subsidies assist farmers and agribusinesses to supplement their revenue, manage the supply of the different commodities and to influence the cost and supply of such commodities (ie corn, wheat, rice, milk, sugar). So the government is dictating the price as well as the supply of these commodities. In this situation, the laws were passed during the Great Depression and have remain in place to this day. We have farmers being paid not to grow corn on their land. Many farmers receive some sort of government (tax payer) financial assitance.

A Canadian report claimed that for every dollar U.S. farmers earn, 62 cents comes from some form of government, with total aid in 2009 from all levels of government adding up to $180.8 billion.

These are just two incidents where government has manipulated the free market for decades. The free market hasn’t been free for just as long. As long as the federal government is involved, no industry or company will go bankrupt. The whole idea of competition is that the strongest one wins. Well in this case, whoever pays more money to the politician campaign funds, wins.

Let’s take a look at the recent bailout of General Motors. They received billions of dollars from Washington to keep them from filing bankruptcy. If GM was left to file bankruptcy, the union contracts would have been history at that point. The company would have restructured to survive or close their doors forever. Is that a bad thing. On the surface, yes. When you go ahead and let the free market work it out, it would become a good thing.

How? Simple, it’s obvious that GM wasn’t making the product(s) that the customers wanted. If they continued doing the same thing, they would have had to close their business forever. An entrepreneur, with the financial backing, would step in and buy the assets of GM to build his own vehicle. They would hire the former GM workers and a new car manufacturer would be born to make it or break it. He either builds want the customers want or he goes out of business too.

The unions are a powerful force with plenty of money to persuade politicians to help the their industry/company. The government makes it impossible for new car companies to start in the industry since there are so many regulations that only the “big” dogs can work within them.

The federal government has made it so hard for the free market to run like it should that it’s questionable to say that we can ever separate the two. The first step is having Congress cut programs that support industries that wouldn’t survive without it.

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Free Phones From The Federal Government?

Posted by Billy On August - 4 - 2011

In the current state of this economy, The federal government has decided to give people, who are already on some sort of entitlement program, a free cell phone and 250 minutes each month. For those of us who pay for our own cell phone and would like to know where the funding for this program is coming from, you’re paying for it, that’s who.

That’s right, you are. If you’re like me, you’re the type that looks at the bill each month to be fully aware of what I’m being charged for. On our monthly bill, there is a charge from the federal government. For each cell phone provider, it’s written different. My company lists it under government fees and taxes. An extra 3% is added to my bill each month. These charges help pay for these free phones. The programs, Assurance Wireless and SafeLink Wireless, are federal government programs to provide free phones to the lower income families.

So how do you qualify for this program? If you are already on some sort of entitlement program, you pretty much qualify. Depending on what state you live in will decide the details of the program.
In the state I live in, Florida, here’s the basics to qualifying:

If you’re on any one (or a combination) of these programs, you qualify.
. Medicaid
. Food Stamps/SNAP
. Supplemental Security Income (SSI)
. Temporary Cash Assistance

. Bureau of Indian Affairs Programs (BIA)
. Federal Public Housing Assistance (FPHA) or Section 8
. Low Income Home Energy Assistance Program (LIHEAP)
. National School Lunch Program’s Free Lunch Program

The way we read it, this Safelink Wireless program gives you a free cell phone, free monthly service, and free minutes. You qualify even if you make 35% more than the designated “poverty” level or if you’re already getting additional freebies from the government. And we see nothing that indicates you have to be a legal resident of the United States to qualify.

How much more is it going to continue? As it is right now, $1 trillion of the national budget is slated for low-income assistance. I understand that there are people who are in dire straits because of the current (and for some time to come) economic situation, but this is going a little too far now. As we’ve seen in the last week, our country is already having difficulties paying for the programs it has in place. The federal government has gone too far over the last twenty years and if we don’t stop it, it will get worse.

As it is, many Americans are starting to think that the government owes them something just for the simple fact of existing. Why is that? Because the federal government has given the American people that feeling that it’s what they are there for. The federal government has made it where many people have no idea of what the federal government authorities actually are. Americans no longer seem to care about what the government does as long as they’re getting something for free.

These types of programs do nothing but weaken the country as a whole and damages the natural flow of the free market. When will people realize that once the government gets involved with any industry and starts to subsidize any part of it, the products that come out of the industry has gone up for their customers. Doing this is going to do nothing but push the price of service up even more. Each phone that is connected, the phone provider is paid $10 per customer. My own bill’s basic service is $49.95 a month. So how is the company making money off of the program? They charge the individual customer $49.95 for basic service along with the government fees and federal universal charges to make up for the lost.

Until we as Americans stand up to the politicians and their way of doing business, we will continue to deal with programs like this one. Like the old saying goes…”Nothing is forever except for government programs.
These are the things that need to be cut in the budget, I know damn well the Social security and Medicare are just scare tactic tools that politicians use to confuse most Americans.

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So When Do The Jobs Start?

Posted by Billy On August - 3 - 2011

After thirty months in office, president Obama is saying that he is focused on creating jobs in America. The odd thing about that is the fact that he’s been saying that since he was on the campaign trail. So what’s different now than three years ago?

The whole idea (according to Obama) of getting the debt ceiling raised was to stop the country from defaulting on it’s loans as well as creating more jobs in this country. I find that hard to believe since one of the first things he did when he was sworn into office was to get an almost $1 trillion stimulus bill passed to do the same thing. Yes I know he tells us that the stimulus bill created or saved two million jobs. Analysts have looked into the facts of jobs created from the stimulus and it’s way lower than what the Obama administration has been reporting.

As you can see the stimulus and anything else that the administration is doing hasn’t created any jobs or even turn this economy around. It’s been reported that economic growth in America for the first half of the year (2011) is a staggering less than 1%. So how is giving the federal government any more money going to help?

The federal Reserve is now thinking of what they can do to stimulate the economy and get the country back on it’s feet. All I have to say about that is they are part of the reason why we’re in this mess. Manipulating the currency and controlling inflation artificially for the last hundred years hasn’t helped, so where should we think they’ll do anything now in the best interest of America. Chairman Ben Bernanke has touch base on starting a third round of bond purchases. The federal Reserve can also cut the interest rate for banks that hold excessive reserves as well as pledging to hold its assets at a record high and interest rates at record lows for a longer period, Bernanke stated.

As a nation, the only way we can create jobs and to get the economy moving again is to stop Washington from continuing has they have for many years. We need to cut back on government spending. When I say cut spending, I don’t mean cut Social Security or Medicare. Those programs are not the main problem. Yes they both have issues within the systems but reform is much different than cutting. Politicians are too concerned for their contributors as well as their own political careers. Doing the right thing in Washington would be political suicide. So if we want to save this country, we must remove each and every one of the politicians within the Beltway. Of course it will take years to do so since not all of them are up for re-election in 2012. If they’ve been in office for two terms, it’s time for them to move out of the way and let someone else try something else, or at least improve some of the current policies. Once we get Congress and the president to stop their excessive spending and let the markets correct themselves, we will continue to be in the same position.

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