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Old 06-12-2012, 07:16 PM  
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Originally Posted by RedJeepXJ View Post
but if we focus on the debt we can destroy any chance of this economy recovering and get obama out of office
The wee signs of recovery are in spite of rather than due to Obama. Obama seems primarily to be interested in public sector jobs which do not contribute to GDP, but do garner votes.
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Old 06-12-2012, 09:18 PM  
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Originally Posted by Eddie_T View Post
The wee signs of recovery are in spite of rather than due to Obama. Obama seems primarily to be interested in public sector jobs which do not contribute to GDP, but do garner votes.
One of the items in the AJA was "Spending $15 billion on a program that would hire construction workers to help rehabilitate and refurbishing hundreds of thousands of foreclosed homes and businesses."

I work in the real estate industry, and I am familiar with many aspects of the foreclosure market. Major institutional lenders are pushing for distressed homes to be significantly rehabilitated, and when I first joined the industry, this push for institutional rehabilitation didn't make much sense to me. The cost of the repairs they were willing to perform was *always* greater than the increased market value of the properties they were trying to sell. They would *never* recoup their expenditure, so why would they be willing to do this?

The answer is simple: Institutional lenders don't just own that home; they own the loans on every home in the neighborhood. If they allow that foreclosed property to fall into disrepair, it will negatively affect the market values on all the other properties in the neighborhood, which will increase the number of people underwater on their mortgages, which increases the number of foreclosures, etc. etc. Because these institutional lenders have a vested interest in all of these properties, it makes sense for them to take a big loss on a few properties since it will help prevent a wide rash of small losses on all of their properties.

Sinking 15 billion dollars into repairing foreclosed properties has the direct effect of creating public sector construction jobs. It has a direct effect in improving the marketability of these "bad apple" properties. It has the indirect effect of preventing these bad apples from spoiling the whole bunch. It improves the market value of *every* house on the market. It reduces foreclosures. The cost of such an expenditure is a one-time blip. The effects ripple throughout the entire housing market and into the economy in general.

You would see it as $15 billion assigned to public-sector jobs; $15 billion added to the budget. I see it as a shot of adrenaline straight to the heart of an ailing economy. I see *massive* positive repercussions. And I see congressional Republicans refusing to sign the consent form.
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Old 06-12-2012, 11:54 PM  
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Originally Posted by rivalarrival View Post
One of the items in the AJA was "Spending $15 billion on a program that would hire construction workers to help rehabilitate and refurbishing hundreds of thousands of foreclosed homes and businesses."

I work in the real estate industry, and I am familiar with many aspects of the foreclosure market. Major institutional lenders are pushing for distressed homes to be significantly rehabilitated, and when I first joined the industry, this push for institutional rehabilitation didn't make much sense to me. The cost of the repairs they were willing to perform was *always* greater than the increased market value of the properties they were trying to sell. They would *never* recoup their expenditure, so why would they be willing to do this?

The answer is simple: Institutional lenders don't just own that home; they own the loans on every home in the neighborhood. If they allow that foreclosed property to fall into disrepair, it will negatively affect the market values on all the other properties in the neighborhood, which will increase the number of people underwater on their mortgages, which increases the number of foreclosures, etc. etc. Because these institutional lenders have a vested interest in all of these properties, it makes sense for them to take a big loss on a few properties since it will help prevent a wide rash of small losses on all of their properties.

Sinking 15 billion dollars into repairing foreclosed properties has the direct effect of creating public sector construction jobs. It has a direct effect in improving the marketability of these "bad apple" properties. It has the indirect effect of preventing these bad apples from spoiling the whole bunch. It improves the market value of *every* house on the market. It reduces foreclosures. The cost of such an expenditure is a one-time blip. The effects ripple throughout the entire housing market and into the economy in general.

You would see it as $15 billion assigned to public-sector jobs; $15 billion added to the budget. I see it as a shot of adrenaline straight to the heart of an ailing economy. I see *massive* positive repercussions. And I see congressional Republicans refusing to sign the consent form.
Will the math support the position? Or might it be yet another failed stimulus? Marketability is not the problem, people with jobs that can afford to buy is the problem and those who purchase would have to have private sector incomes to result in black ink.
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Old 06-13-2012, 12:17 PM  
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Originally Posted by Eddie_T View Post
Will the math support the position? Or might it be yet another failed stimulus? Marketability is not the problem, people with jobs that can afford to buy is the problem and those who purchase would have to have private sector incomes to result in black ink.
Recently, I was faced with a decision: Spend a "huge" amount of money on a new-to-me vehicle, or sink a "large" amount of money into the vehicle I had. (keep in mind that my job is very transportation-intensive)

If my house had lost value, I wouldn't have had much equity in it; the only savings I would have had would have been the money in my investment accounts, and if the **** hit the fan, I would have to live on that money. With the equity in my house available if I needed it, I was able to spend the "huge" amount rather than the minimum "large" amount I would have had to have spent.

When people aren't upside-down on their mortgages; when they have access to the equity in their homes, they can take more risk with their money. Consumer confidence improves; consumer spending improves, sales improve, the job market improves (which further improves consumer confidence), unemployment rate improves, welfare and entitlement spending drops, tax revenue increases without tax rates increasing, etc.

No, home values aren't the only factor involved. It's easy to determine the cost of a project like this, it's *very* difficult to calculate the return on such an investment. Is it worth it? Ask the people who buy these rehabbed houses; ask their neighbors; ask realtors and appraisers and lenders. I think it is. I think that its biggest effect would come in neighborhoods where market values are strongly influenced by REO sales.
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Old 06-13-2012, 12:51 PM  
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Originally Posted by rivalarrival View Post
Recently, I was faced with a decision: Spend a "huge" amount of money on a new-to-me vehicle, or sink a "large" amount of money into the vehicle I had. (keep in mind that my job is very transportation-intensive)

If my house had lost value, I wouldn't have had much equity in it; the only savings I would have had would have been the money in my investment accounts, and if the **** hit the fan, I would have to live on that money. With the equity in my house available if I needed it, I was able to spend the "huge" amount rather than the minimum "large" amount I would have had to have spent.

When people aren't upside-down on their mortgages; when they have access to the equity in their homes, they can take more risk with their money. Consumer confidence improves; consumer spending improves, sales improve, the job market improves (which further improves consumer confidence), unemployment rate improves, welfare and entitlement spending drops, tax revenue increases without tax rates increasing, etc.

No, home values aren't the only factor involved. It's easy to determine the cost of a project like this, it's *very* difficult to calculate the return on such an investment. Is it worth it? Ask the people who buy these rehabbed houses; ask their neighbors; ask realtors and appraisers and lenders. I think it is. I think that its biggest effect would come in neighborhoods where market values are strongly influenced by REO sales.
I understand your point, but the government seemingly can do nothing without cronyism, just look at how much stimulus money was spent in support of public sector union jobs.
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Old 06-13-2012, 03:45 PM  
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Originally Posted by Eddie_T View Post
I understand your point, but the government seemingly can do nothing without cronyism, just look at how much stimulus money was spent in support of public sector union jobs.
Are you suggesting that no stimulus money should ever go to public sector union jobs? I just showed you how one variety of public sector jobs can stimulate the economy.

You said it: the government seemingly can do nothing without cronyism. How much of what you refer to as cronyism is actually improper?

I've got a list of contractors my clients have pre-authorized to work on my properties. These contractors applied directly to my clients, agreed to terms that my clients have set. Any contractor can apply; any contractor who agrees to my clients terms can make the list. When I need to have someone perform some work on these properties, the only question that concerns me is how well they will perform the job.

When one of these contractors burns me on every job I send him, do you think I'm going to call him again? How about the contractor who performs the job well?

Fast forward 5 years, and my preference for these contractors is going to look just like cronyism to someone who doesn't understand why I'm sending work to these contractors and ignoring others who are seemingly qualified. I'm going to be working with the people I know, the people I trust, the people I like.

Most of what you would call "cronyism" I call "Free-Market Capitalism".

Yes, it can be abused. If and when I forget who I'm working for; if and when I make my decision because it's best for me and not best for my client, there's a problem. *THIS* is actual cronyism.
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Old 06-13-2012, 05:57 PM  
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Originally Posted by rivalarrival View Post
Are you suggesting that no stimulus money should ever go to public sector union jobs? I just showed you how one variety of public sector jobs can stimulate the economy.

You said it: the government seemingly can do nothing without cronyism. How much of what you refer to as cronyism is actually improper?

I've got a list of contractors my clients have pre-authorized to work on my properties. These contractors applied directly to my clients, agreed to terms that my clients have set. Any contractor can apply; any contractor who agrees to my clients terms can make the list. When I need to have someone perform some work on these properties, the only question that concerns me is how well they will perform the job.

When one of these contractors burns me on every job I send him, do you think I'm going to call him again? How about the contractor who performs the job well?

Fast forward 5 years, and my preference for these contractors is going to look just like cronyism to someone who doesn't understand why I'm sending work to these contractors and ignoring others who are seemingly qualified. I'm going to be working with the people I know, the people I trust, the people I like.

Most of what you would call "cronyism" I call "Free-Market Capitalism".

Yes, it can be abused. If and when I forget who I'm working for; if and when I make my decision because it's best for me and not best for my client, there's a problem. *THIS* is actual cronyism.
Political cronyism has little to do with performance, just track stimulus dollars.
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Old 06-13-2012, 06:54 PM  
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Originally Posted by Eddie_T View Post
Political cronyism has little to do with performance, just track stimulus dollars.
I'm sure you can cherry pick a a few examples. I could cite a few examples of shoddy work that my preferred contractors have done over the years. Why don't you give us a list of all the organizations that received stimulus money and hilight the ones that demonstrate your point?
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Old 06-14-2012, 07:16 AM  
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Originally Posted by rivalarrival View Post
I'm sure you can cherry pick a a few examples. I could cite a few examples of shoddy work that my preferred contractors have done over the years. Why don't you give us a list of all the organizations that received stimulus money and hilight the ones that demonstrate your point?
Try Google, and while you are at it check for those that worked.
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Old 06-16-2012, 10:30 AM  
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http://thinkprogress.org/economy/201...ific-programs/

There is a pretty broad consensus here. The people want to maintain or increase federal spending on:

Education
Public Schools
Veterans Benefits
College Financial Aid
Medicare
Health Care
Aid to needy in US
Social Security
Combating Crime
Infrastructure
Environmental Protection
Scientific Research
Energy
Agriculture
Terror Defenses
Military Defense
Unemployment aid



19 major polls over the last 6 months have indicated that the people want higher taxes on the rich than cuts in spending: http://www.capitalgainsandgames.com/...r-taxes-really


Imagine you're the richest person in America. You invest your money in business, and you show a positive return on your investment. Where did those gains come from? The answer is simple - because you're the richest person in America, that money came from people less wealthy than you. Please explain to me how this represents a net benefit to the economy and/or society. Sure, you think you're a job creator, but what you've actually done is shrunk the economy for everyone else.

Now by all means, go ahead and do it! Please do it! Capitalism is supposed to be a cutthroat endeavor. Consumers do benefit from vicious business competition. But don't try to hide behind the idea that your profitable business is in any way philanthropic, altruistic, or a net-benefit to society. It's not. It's a business. Your profits come at someone else's expense. If you're making money, someone else is losing.

You are not entitled to a profit. Be grateful that society has allowed you to earn one.
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