Freddie Mac/Fannie Mae takeover

[Rich-n-Texas]

Unfortunately voters in democratic counties have to hold their noses and vote for the lessor evil. No, I'm not going to justify the Democrat congress today or any Democrats in any interval.

Right. Just throw rocks and run. That's why I have such a hard time taking you seriously.

Sarah Palin looks successful among Repubicans because she represents Smalltown, U.S.A. The middle class folks who love God & The American Way (-- and we could perhaps add white skins). But I warn these folks that their "values" are not high priority to the real Repulican agenda setters and they will be betrayed when the latter decide it's expedient.

And maybe because she could be the first female VP in history? There sure was a lot of press in the case of Obama's history changing possibility.

Everything else here is just personal opinion from an outsider.

[E-Stat]

... the cause of keeping taxes low, especially for the wealthiest classes.

It is axiomatic that tax reductions will only benefit those who pay taxes. Half our populace pays nothing or gets a "rebate" in the form of EIC. Depending upon where you choose to draw the line on "the wealthiest", they are responsible for the overwhelming majority of tax revenues. Top 10% of filers (which includes my working wife and me) contribute something over 70% of the tax revenue. Damn right I don't want the Dems to come back and reach into my pocket for more.

rw

[kexodusc]

Kex,

OK, I'm talking about Reagan and Bush II.

Yeah, me too...Reganomics saw Bush and co raise taxes a few times to offset rising deficits.
Contrary to your comment about Republican presidents dogmatically opposed to raising them. Your comment implies that Democratic presidents don't similarly try hard to lower taxes. In reality, both parties spin the same rhetoric depending on which crowd their preaching too.

The decision for governments to borrow vs raise taxes to finance anything is fundamental finance theory. It's more a question of cost of capital than politics and appetite for tax increases. Financing through debt, much like in the corporate world, is often cheaper, particularly where keeping tax money in the hands of consumers is determined to greate more economic value. The Republicans shouldn't be criticized for borrowing, maybe just spending so much....

Pierre Trudeau, a liberal icon, certainly had no problem increasing Canada's National Debt by 1200% while also raising taxes.

[Feanor]

It is axiomatic that tax reductions will only benefit those who pay taxes. Half our populace pays nothing or gets a "rebate" in the form of EIC. Depending upon where you choose to draw the line on "the wealthiest", they are responsible for the overwhelming majority of tax revenues. Top 10% of filers (which includes my working wife and me) contribute something over 70% of the tax revenue. Damn right I don't want the Dems to come back and reach into my pocket for more.

rw

At least you're forthright: you simply don't want to pay more taxes and, yes, I'll concede you'll likely do better with Republicans than Democrats in that regard.

In my case my non-working wife and I are a long way from the top 10% in our country: perhaps that gives me a different perspective. To me it seems quite reasonable that those who have benefited the most from the socioeconomic system should pay the most to support it: simple fairness. Beyond that is the issue of the consequences of ever growing income disparity on society and the economy: growing disparity presages the decline of both.

The upper-middle class in the US is very complacent. They don't seem understand that their elevate economic statis depends on the prosperity of the average people -- not on the super-rich elite. The impoverishment of the working classes presages the decline of the wealthier middle class. What can the latter do by way of enlightened self-interest in this regard?

[Feanor]

Right. Just throw rocks and run. That's why I have such a hard time taking you seriously.

And maybe because she could be the first female VP in history? There sure was a lot of press in the case of Obama's history changing possibility.

Everything else here is just personal opinion from an outsider.

Rich, the reason why I can't take you seriously is that you don't rebute my arguments. Some of the others here try to do that albeit with limited success. You, however, just huff and puff with indignation.

Sometimes you seem ingenuous or self-contradictory. Why justify Palin because she might be the first female VP when you could have supported Clinton who might have been the first female President?

[Feanor]

....

Pierre Trudeau, a liberal icon, certainly had no problem increasing Canada's National Debt by 1200% while also raising taxes.

Right on. Trudeau borrowed and it proved the wrong thing to do. It was a classic failure of Keynesian ecomomics. But it took a Conservative government under Brian Mulroney to make matters much worse, and Ironically, another Liberal government to begin to turn the situation around.

You will agree that borrowing is justified based on future positive cashflows. It isn't exactly clear what positive cashflows will flow from the Iraqi war. Given that much of the US debt is now finance abroad rather than domestically, the debt is exactly what it is accused of being: current expenditure today at the expense of future generations.

[Rich-n-Texas]

I'm not justifying the Democrats, only saying the Republicans are worse...

Unfortunately voters in democratic counties have to hold their noses and vote for the lessor evil. No, I'm not going to justify the Democrat congress today or any Democrats in any interval.

This is what puts you on the same garbage barge as the rest of the Democrats you align with. B!tch about how the Republicans are ruining the country, but offer no solutions. I'm from the liberal Northeast so I had 39 years of experience and observation to draw my opinions from.

In the big picture though, there's no use arguing about Conservative philosophy vs. Liberal philosophy because the outcome will always be the same... no one's mind being changed.

[Rich-n-Texas]

Rich, the reason why I can't take you seriously is that you don't rebute my arguments. Some of the others here try to do that albeit with limited success. You, however, just huff and puff with indignation.

Quite the arrogant remark there Bill. I'd say with much success, but that's just me. My indignation is brought on by your outrageously left wing fallacies.

Sometimes you seem ingenuous or self-contradictory.

Ingenuous: Candid, Fair, Open, Frank. "A man is fair when he puts things on a just or equitable footing; he is candid when be looks impartially on both sides of a subject, doing justice especially to the motives and conduct of an opponent; he is open and frank when he declares his sentiments without reserve; he is ingenuous when he does this from a noble regard for truth."
A compliment and insult all in one sentence. So who's being contradictory?

Why justify Palin because she might be the first female VP when you could have supported Clinton who might have been the first female President?

How did I know you'd say that? Had you paid attention to Hillary's history, like back when she was a lawyer ( ) you'd understand why I'd never throw my support behind her. Why justify Obama just because he could be the first black president?

[Feanor]

Quite ...

Ingenuous: Candid, Fair, Open, Frank. "A man is fair when he puts things on a just or equitable footing; he is candid when be looks impartially on both sides of a subject, doing justice especially to the motives and conduct of an opponent; he is open and frank when he declares his sentiments without reserve; he is ingenuous when he does this from a noble regard for truth."
A compliment and insult all in one sentence. So who's being contradictory?

...

The other definition ...

Dictionary.com Unabridged (v 1.1) - Cite This Source - Share This
in·gen·u·ous Audio Help/ɪnˈdʒɛnyuəs/Pronunciation Key - Show Spelled Pronunciation[in-jen-yoo-uhs]Pronunciation Key - Show IPA Pronunciation–adjective

1.	free from reserve, restraint, or dissimulation; candid; sincere.

2.	artless; innocent; naive.

3.	Obsolete. honorable or noble.

[kexodusc]

Right on. Trudeau borrowed and it proved the wrong thing to do. It was a classic failure of Keynesian ecomomics. But it took a Conservative government under Brian Mulroney to make matters much worse, and Ironically, another Liberal government to begin to turn the situation around.

Well let's not forget there's a delay between policy shifts and economic crisis. Mulroney didn't increase programs or social benefits much beyond what Trudeau started - they just cost more because of hyperinflation and already predictable deficits grew in absolute terms. His failure was not undoing enough of what Trudeau did. To Mulroney's credit, he did increase taxes substantially, and did start to addresst he deficit. But he didn't survive long enough to take credit for a turnaround.

Yes, Mr. Martin, through a clever scheme of hidden taxes and massive cutbacks did balance the budget. And he deserves credit for it. But the liberals should also be reviled for blatant overtaxing, then trying to take credit for "surplus". And likewise, the modern conservatives should be reviled for crying about that liberal scam, and following up by continuing to do the same damn thing.

My point - in classical sense, modern liberal and conservative governments in the West are much, much closer in belief and behavior, at least economically, than the perpetuated myths they continue to feed the voting public. Socially...well, I won't tell you about the dinner I had with a Mr. Vic Toews.

You will agree that borrowing is justified based on future positive cashflows. .

Not exactly, borrowing is justified based on the perception the borrower can make future service payments on the debt. Internationally, that often means borrowing from Peter to pay Paul.

It isn't exactly clear what positive cashflows will flow from the Iraqi war. Given that much of the US debt is now finance abroad rather than domestically, the debt is exactly what it is accused of being: current expenditure today at the expense of future generations

"Isn't exactly clear what positive cashflows will frow from the Iraqi war". What positive cash flows flow from welfare, healthcare, supporting the disabled etc? In many cases, it's economically more practical to cut bait. You can't think of these in isolation. Not all government investments, military or otherwise, are justified only by positive cashflow. Some are necessary, or just desirable for what ever reason. At any rate the lenders of the world see comparatively little risk in lending massive amounts of money to the USA.

But I digress....cost of capital and internal rate of return remain the reason why capital expenditures are being financed in part by debt rather than solely by taxation. Dems vs Pubs isn't the issue there. And do not for 1 minute think if the war never happened that the US would not still borrow money to finance government operations, whether in periods of deficit or surplus. The world no longer works on the pay as you go system...

[Rich-n-Texas]

Right on. Trudeau borrowed and it proved the wrong thing to do. It was a classic failure of Keynesian ecomomics. But it took a Conservative government under Brian Mulroney to make matters much worse, and Ironically, another Liberal government to begin to turn the situation around.

You will agree that borrowing is justified based on future positive cashflows. It isn't exactly clear what positive cashflows will flow from the Iraqi war. Given that much of the US debt is now finance abroad rather than domestically, the debt is exactly what it is accused of being: current expenditure today at the expense of future generations.

Interesting Bill how you seem to tone down and deflect away from your anti-conservative rhetoric when presented with facts that dispute your bombastic claims. In my opinion that is very disingenuous. ("Lacking in frankness, candor, or sincerity; falsely or hypocritically ingenuous; insincere: Her excuse was rather disingenuous.")

[bobsticks]

Bribe the rich to do exactly what? Not continue to foot the vast majority of the tax base? 70% of the burden comes from 10% of the populace. Nearly half pay nothing. Or get EIC, i.e. get "paid" each year. Negative tax. When one compares taxation vs. benefits, we see an income redistribution of about a trillion dollars per year downward.

rw

Thank you yet again.

[bobsticks]

It is axiomatic that tax reductions will only benefit those who pay taxes. Half our populace pays nothing or gets a "rebate" in the form of EIC. Depending upon where you choose to draw the line on "the wealthiest", they are responsible for the overwhelming majority of tax revenues. Top 10% of filers (which includes my working wife and me) contribute something over 70% of the tax revenue. Damn right I don't want the Dems to come back and reach into my pocket for more.

rw

And one more time...

I could just sit here and let Stat make this argument, and do so with unlimited success, but there are other perspectives. As someone who pays 20 to 25 times the national average in taxes explain to me please how not wanting to pay more is unfair, not in the spirit of "simple fairness".

As a person in his thirties simple math tells me that I'll invest 350-400k in a Social Security system from which I will never reap a thing. Yeah, that's a good investment. And btw, your boy Obama's Social Security bail-out plan is projected to elongate the program by seven years. Whooppee. How is it not "simple fairness" to not want to contribute more to a system that I will ultimately draw less utility from than the rest of the populace?

Again, I can respect your disdain for Conservative politics, at least in a theoretical way, but when you apply it to circumstances in which you do not live in a country in which you do not live it becomes preachy.

[Feanor]

...
My point - in classical sense, modern liberal and conservative governments in the West are much, much closer in belief and behavior, at least economically, than the perpetuated myths they continue to feed the voting public. ...
...

You're absolutely right about that.

...

"Isn't exactly clear what positive cashflows will frow from the Iraqi war". What positive cash flows flow from welfare, healthcare, supporting the disabled etc?
...

I'll bet the beneficiaries of these programs think their cashflows are improved. Anyway, I'd argue that social programs and transfer payments out to paid from current funds, not from borrowing.

...

In many cases, it's economically more practical to cut bait. You can't think of these in isolation. Not all government investments, military or otherwise, are justified only by positive cashflow. Some are necessary, or just desirable for what ever reason. At any rate the lenders of the world see comparatively little risk in lending massive amounts of money to the USA.
...

The sub-prime lenders too saw little risk. They were wrong.

My school days were many years ago. Back then a distinction was made between a domestic borrowing, where interest payments and principal repaidments are made to residents, and foreign borrowing where payments are to foreigners. The former is a sort of zero-sum over time; the latter doesn't necesarily work out that way.

[Feanor]

And one more time...

I could just sit here and let Stat make this argument, and do so with unlimited success, but there are other perspectives. As someone who pays 20 to 25 times the national average in taxes explain to me please how not wanting to pay more is unfair, not in the spirit of "simple fairness".

As a person in his thirties simple math tells me that I'll invest 350-400k in a Social Security system from which I will never reap a thing. Yeah, that's a good investment. And btw, your boy Obama's Social Security bail-out plan is projected to elongate the program by seven years. Whooppee. How is it not "simple fairness" to not want to contribute more to a system that I will ultimately draw less utility from than the rest of the populace?

....

I respect that you, as individual, are likely to pay many time more into a programs than you are likely to collect. But there are a few of points to consider.

Consider the simplest point first. In my modest circumstance, I have paid unemployment insurance for over 40 years without collecting a cent, nor will I ever do so now. Yet I don't begrude this since the possibility long existed that I might benefit from UI if my circumstance changed only a little. That is, insurance is worth its cost.

The second point is what is it worth to you to live in a civil society? Do you want to spend all your money on fences for your gated community and bullet-proof cars, or would reducing poverty and improving opportunity for others actually be more cost effective?

Thirdly, you earn (let's say) several time the average income. Would you earn this living on a desert island? No: you earn it because you live in a sophisticated society. Perhaps you really do contribute in proportion to your income, yet without other people to work with, (help or exploit), you would live at a subsistance level. I think is "simple fairness" that you should be willing rebate some portion of your prosperity to others. You might not agree. (Aside: are you a member of the Christian Right?)

Perhaps there is even a fourth point. As a well-to-do individual, you might benefit less from "social programs" than the poor but much more from other government activities including, say, national defense. When you've got nothing, you've got nothing to loose. Got anything to loose?

It is quite clear to me that I a preaching to an unreceptive audience here, so this is my last comment on the subject. (Rich, consider it a win for your side.)

[Rich-n-Texas]

Again, I can respect your disdain for Conservative politics, at least in a theoretical way, but when you apply it to circumstances in which you do not live in a country in which you do not live it becomes preachy.

I am SOOOOOO glad someone finally sees what I saw a loooong time ago. (I apologize in advance sticks if it looks like I'm sucking you into my disagreements with Feanor... not my intention.)

[Rich-n-Texas]

The sub-prime lenders too saw little risk. They were wrong.

Bill, now you've not only flip flopped on your sub-prime mess position, you're also coming across as a suck-up.

By the way Bill, I'm PROUD to be an American.

[Rich-n-Texas]

It is quite clear to me that I a preaching to an unreceptive audience here, so this is my last comment on the subject. (Rich, consider it a win for your side.)

So we're a bunch of dumbasses now are we Bill? Yes you are preaching, in the same vain as Jim Baker. Look where it got him?

[bobsticks]

I think is "simple fairness" that you should be willing rebate some portion of your prosperity to others. You might not agree. (Aside: are you a member of the Christian Right?)

Bill, this is a fairly charged issue so I'm gonna tone it down a bit. You've done a commendable job being civil and I respect that...and I can see where it would be difficult being a man on an island unto himself.

I agree with all four of your points to a greater or lesser degree, though I would point out the very different set of circumstances between our environments in relation to crime.

Yes, you have paid into unemployment insurance that you have never used. Commendable to be sure though, as you said, nice to know it was there just in case. I would also imagine that you have paid into a retirement fund, both private and public ( I'm unfamiliar with the Canadian Government's retirement scheme). I'm sure you're planning on using those funds at some point or another. Now what if they weren't available to you?

My point is a simple one. Look at what you wrote:

I think is "simple fairness" that you should be willing rebate some portion of your prosperity to others.

I don't have a problem paying "some" portion of my prosperity for the public good. I have a problem with paying any more of my hard-earned into a system that simply will not exist to take care of me in my elder years. I'm not talking about jet flying and limousine ridin' here Mistah Bailey, I'm raising the issue of the need for me to save prodigiously for my own retirement fund because a lot of folks are gonna be eatin' kibbles and it ain't gonna be me.

I find it interesting---and this isn't a cheap shot, I'm genuinely curious---as to how in one thread you can claim that equality has nothing to do with money and materialism but when it comes to taxation the equality of opportunity for the younger generations should be subservient to demands to turn over as much income as possible to a system that doen't serve their longterm interests. I find the two positions hard to reconcile.

[bobsticks]

..and as to the aside, "No", I am not part of the Christian Right. I don't think the governement, any government, has any right to insert itself into peoples' minds, souls, bedrooms, or music collections.

[nightflier]

Interesting thread. Getting back to the original topic of the bail out: if the Chinese really did pressure the US government to bail out Freddy and Sally, then isn't that just transferring their own risk (presuming they have large investments in Freddy & Sally) to the US government? They're just smart debt-holders, then, and certainly not bloodthirsty commies at the gates.

In regard to the discussion about politics, I haven't really been too impressed with either the RNC or the DNC (same drivel as previous elections for the most part). But I do have some serious reservations about our current elected officials that will likely sway my vote this time around:

- I am offended by our current VP. He regularly curses out fellow lawmakers, he refuses to obey congressional summons, he outed Valery Plame's name, and he shot a guy in the face while inebriated. I don't think any of these faults are in question, so this makes him a fairly despicable character, never mind his financial ties to Haliburton. That somehow he is above the law and above criticism stinks balls, in my book.

- The current administration has grown the size of government beyond any size it's ever been, it has accumulated the largest debt of any government in history, it has allowed christian religious bias to cloud sound policy, it did not respond adequately to Katrina, it influences the news and media (the proverbial 4th branch of government), it laid down its guard on 9/11 thus causing far more harm than necessary, and it does not take care of the people who return home after fighting for it. Hardly a Republican record, in my book, and it stinks like a congressional filibuster's underpants after 36 hours of yammering about nonsense.

- I don't give a rat's a$$ if Palin is a woman. What pisses me off is that for all the hawing and hooting about Obama being experienced, they dig up the least experienced person they can find and prop her up to be a heartbeat from the presidency. And why is she not allowed to speak on the talkshows? Is it because anything she says will likely be embarrassing? Michelle Obama doesn't seem to have that problem. That stinks like a bad Alaskan oil spill.

- McCain voted with Bush over 90% of the time. That's not being very maverick. Look, I have tremendous respect for what he had to endure in Vietnam, his ongoing fight with a deadly cancer, and his moderate positions in earlier years. But lately he's been right alongside Bush. The way he rolled over on the statute against torture and allowed the religious right to force him to select Palin, is not at all the McCain I knew 10 years ago. That kind of catering and pandering stinks like a marine latrine at 4pm in the hot sun.

Then there are the obvious observations from the RNC and DNC:

- During the DNC, the seats were packed, not so much at the RNC.
- The DNC's message was waayyyyy more positive than the RNC's.
- Nary a black or Asian face at the RNC - just a bunch of old white folks.
- Just about every speech at the RNC was about character, almost nothing about policy.
- 500+ protestors arrested at the RNC, less than 150 at the DNC.

So I think it's high time for some justice and some change. Between McCain and Obama, it's just not even a fair fight. Obama, regardless of the faults of his party, has far more to offer than McCain. It's just that simple: more intelligent discourse, more inclusion, more respect from the rest of the world, more thoroughly researched proposals, and above all a more positive and believable message. Over 60% of the military is voting for him, that should be a clue. And even after the RNC, at the height of misguided Republican euphoria, the Democrats are still ahead in most polls.

One more thing about those polls: most of them are done by phone: that implies a landline and excludes much of the voting public, particularly the young people that are likely to vote for Obama. Speaking of young people: if they are likely to vote for Obama (apparently by a 4-1 margin), then what does that tell you about the future? And yes, I probably also belong to the upper 10% of American income earners, so I am sensitive to tax policy, but I also have faith that Obama's proposed plan will better address the very real economic issues that we face like the problem Feanor brought up of our shrinking middle class, that also pays a large portion of the tax burden, serves in our military, and votes. If I have to pay a little bit more in taxes for the betterment of our country, I can do that, and so can the rest of the upper 10%. By the way, if anyone is paying 70% of their income in taxes, then they need a better tax adviser (that is, if you live in the US - I know nothing about Canada's tax system).

P.S. #1 - Rich, your comment about Palin being a woman and then dismissing Hillary because of her record, smells pretty bad too. Why not talk about Palin's political record, and praise Hillary for being a woman candidate? Look I don't like the Clintons very much either, but I think Feanor had you dead rights about the double standard.

P.S. #2, the largest investors in the US are the British, the Dutch, the Canadians, in that order. I believe the Chinese are somewhere around 12 or 13 and the Kuwaitis are the largest Middle Eastern investors. I did some poking around the net and this is what I found:

- The UK: $252B
- Japan: $177B
- Panama: $11B
- Mexico $7.9B
- Venezuela: $5.5B
- China: $5B (est.)
- Israel: $4.1B
- Taiwan: $3.2B
- Hong Kong: $1.8B
- Kuwait $1.2B
- Brazil: $1.3B

So those big bad Chinese Commies invest even less than a country that is quickly entering the Axis-of-Evil fraternity, apparently. Even combined with Hong Kong and Taiwan, it still does not even equal Panama's investment. I think we should be more worried about the Queen of England coming back to claim her pound of flesh before we worry about those pesky Chinese. Hey, those friggin Brits tried it in 1812 after kicking Napoleon's empire in the teeth, so who's to say they won't be back in 2012? I don't think they've quite gotten over the loss of their Sun-Never-Sets overlordship and they're bound to be just a tad peeved about our cozy chumming up to the snooty French over the years. So let's point some nukes towards London, just to be safe, OK?

In any case, this also calls into question whether the Chinese actually did put pressure on the US congress to bail out Freddy and Sally. Unless the Chinese were foolish enough to invest all their whopping $5B in our mortgage quagmire (not likely), I think it was probably Gordon Brown who was on the proverbial phone to our lawmakers Sunday night, no?

[Feanor]

...

I find it interesting---and this isn't a cheap shot, I'm genuinely curious---as to how in one thread you can claim that equality has nothing to do with money and materialism but when it comes to taxation the equality of opportunity for the younger generations should be subservient to demands to turn over as much income as possible to a system that doen't serve their longterm interests. I find the two positions hard to reconcile.

I guarantee everybody that this is absoluely my last contribution to this thread.

I don't recall saying that equality had "nothing to do with money". I seem to recall that I said that exact financial equality wasn't necessary for the three equalities I enumerated: Opportunity, Protection, and Civic Responsibility.

After that, Sticks, you lost me completely. I certainly said nothing about the young "turning over as much money as possible"; much less did I say that they should do so to "a system that doesn't serve their longterm interests". It seems my eloquence has failed me again. What I indended to make clear was that it is in the self-interest of the wealthy to adequately support a society that has rewarded them so well (in order that it might continue to do so).

[thekid]

Why do so many people here have McCain dead before he's even elected? Why are people not jumping for joy that the possibilty of there being a female in the second highest office in the land exists? What are Presidential Advisors used for?

Rich
I am not saying McCain is dead-my point was that he is living off of a reputation garnered during the 2000 that his actions leading up to the 08 presidential campaign run don't support. That is why it is easy for Obama to attack him because McCain has voted with the Bush administration/GOP leadership so consistently. As to your other comment about a women VP candidate- alot of people would be exicited about the prospect of a female VP if it was a qualified women. The GOP must have a really shallow bench if Palin represents the best women candidate they have-I said it before and I will say it again if the Dems put a candidate up with Palin's political resume the GOP would be jumping for joy but not because she is a women but because they'd Swiftboat her so fast the lipstick would'nt have time to dry on the hockey playing pit bull.......

Getting back to the original topic of the bail out: if the Chinese really did pressure the US government to bail out Freddy and Sally, then isn't that just transferring their own risk (presuming they have large investments in Freddy & Sally) to the US government? They're just smart debt-holders, then, and certainly not bloodthirsty commies at the gates.

Night- It is not about the Chinese being communists it is about a foreign country using our debt to influence policy decisions. China opposes us quite often in the UN Security Council and other areas of foreign policy. If they saw that they were able to use their investor position to influence our domestic policy you can be d#@% sure they will use it to influence our foreign policy. IMO the arguement that they are acting in the own self-interest as an investor similar to Warren Buffet etal is naive. They have created a new type of financial MAD (Mutual Assured Destruction) sure they would lose alot of $ if they started dumping our debt paper but in doing so they would destroy the US economy.

[E-Stat]

At least you're forthright: you simply don't want to pay more taxes and, yes, I'll concede you'll likely do better with Republicans than Democrats in that regard.

When you pander to those who pay little, there is only one successful mantra.

In my case my non-working wife and I are a long way from the top 10% in our country: perhaps that gives me a different perspective.

BTW, the top 10% (by numbers of taxpayers, not the amount earned) reaches pretty far down to folks who are not really *rich* in the sense of driving Rollers and having the vacation home at the beach or mountain.

Beyond that is the issue of the consequences of ever growing income disparity on society and the economy: growing disparity presages the decline of both.

That reminds me of the *wisdom* of the tax policy years ago that levied heavy taxes on "luxury items" like uber expensive cars, jets, and yachts. Soak the rich - they can afford it, right? If you recall the outcome was the wealthy simply purchased used - or stopped buying. Result? Lots of blue collar workers who made those goods were put out of jobs!

The impoverishment of the working classes presages the decline of the wealthier middle class.

When I was growing up in the 60s, Dad drove our one "loaded" car - which meant power steering and brakes, automatic, radio (AM only), air conditioning, wheel covers, and a V-8 engine. Only Cadillacs had electric windows and locks along with doodads like auto-on lights, AM/FM radios and power antennas. We had one 19" Zenith black and white TV on a rolling stand. Today, the "impoverished" drive better equipped vehicles and have multiple color TVs. The point of reference has drastically changed.

What can the latter do by way of enlightened self-interest in this regard?

Convince them that education works and that they need to teach their kids to seek and actively pursue a career - not just find or expect to get a "job".

rw

[kexodusc]

I'll bet the beneficiaries of these programs think their cashflows are improved. Anyway, I'd argue that social programs and transfer payments out to paid from current funds, not from borrowing.

Semantics. If expenditures exceed revenue, borrowed funds are financing everything partially - how you rationalize what was paid for with cash in hand is just optics - I suspect the Republicans spin it one way, the Democrats the other. The bottom line is you didn't have enough money to pay for it all. Also note,both the US and Canada both have borrowed money in years where there were budget surpluses. In many conditions it remains a cheaper form of capital than raising taxes.

The sub-prime lenders too saw little risk. They were wrong.

Yes, but you'll find very few nations with credit analysis as loose as sub-prime lenders. In fact, you won't find many other nations with credit analysis as shoddy as that in the US mortgage business of recent history - that's the exception not the rule. I will wager, 30 years from now the USA will still be one helluva huge economic generating machine, capable of paying its debts back, particularly at the ultra-low finance rates nations are awarded.

Back then a distinction was made between a domestic borrowing, where interest payments and principal repaidments are made to residents, and foreign borrowing where payments are to foreigners. The former is a sort of zero-sum over time; the latter doesn't necesarily work out that way.

Not exactly, the sum of all international borrowing would be zero over time as well. You'd be amazed how much foreign influence the financial institutions in North America are subject too, directly (debt and ownership) and indirectly through other financial arrangements. I doubt domestic residential lending stays even 75% inside domestic borders these days.
The (USA) used to be a huge lender, now we're a net borrower. But that's ok if its managed well (its not).