The sad fact is that, in the long run, the wealthy are hurt by the very side of this argument that they support.

American Political Myths – Trickle-Down Economics

This one should be a no-brainer. Just think about it. What will stimulate the economy more, giving a million dollars to 100 people who already have millions, or giving a hundred dollars to a million people who have very little? Which group of people would be more likely to spend the money and thus stimulate the economy?

Even if the millionaires do spend the money, their impact on the economy is aptly described by the word “trickle.” Limited, slow, and short-lived. Which spending do you think would stimulate the economy faster and more completely, a hundred millionaires buying a new yacht, or a million people buying a new toaster and coffee maker?

Yes, this is a little simplistic, and there are other ways that the wealthy stimulate the economy. They invest, own businesses, and buy big-ticket items. But the real strength and health of the economy comes from small businesses and consumer spending. Republican politicians, and the big-business and wealthy conservatives that back and control them, are hell-bent on increasing their wealth with tax cuts and deregulation, and they want to pay for it by cutting entitlement programs and not cutting taxes for the middle class and the poor. This is the opposite of what will actually work. And the sad thing is that this only helps big business and the wealthy in the short-run. In the long-run, a bad economy is bad for all Americans, including big business and the wealthy.

The selling of trickle-down economics has been a textbook example of masterful deception and political spin. The Republicans are very good at deception, but their success in deceiving the American people has only been possible with the help of mass media. As long as they are allowed to tell complete lies via the mass media without having the truth pointed out in rebuttal, the American people are put into the position of having to to the media’s job of fact-checking, or they end up being deceived and voting against their own best interests.

Don’t be deceived! Trickle-Down Economics only helps big business and the wealthy. For everyone else, Bubble-Up Economics is what the economy really needs!

http://reverse-spin.com

There must be a cost, a huge emotional cost, for some homeowners to be given an option they to rent. One could venture to guess that the idea of renting is still abhorrent to underwater homeowners even though it makes great sense to "save" by renting. Save someone from the street. Millions would see renting from Fannie Mae just as awful as having a fraudulent mortgage underwritten by them.

Imagine a homeowner who has put everything into a house, enourmous sweat equity, to see the market explode and the jobs dry up along with it.
Cramdown is would have ended this disaster in 2009, but the Banks wouldn't permit it. It needs to be revisited, but the stooges are in election mode so that will have to wait. There are many Democrats who won't permit cramdown. F$%k 'em.

Well, we tried 'trickle down,' then we tried 'trickle up' under the Bush administration.

Neither worked.

How about this plan:

- everyone pays the same percentage of their earnings to Social Security (ending the "cap" that lets the very rich pay the same dollar amount as their employees);

- anyone who pays a salary to someone else out of their pocket can deduct 110% of that salary (creating jobs and giving small businesses a tax break);

- ALL income, including unearned income, is taxed at the same rate. Since the very rich now pay substantially lower taxes on their investment income (which hasn't come from hard work, just luck), their tax burden truly WOULD be equal, percentage-wise, to those who are less fortunate;

- the first $50,000 of ALL income is tax-exempt.

Sound fair?

Homeowners have a lot more power then most columnists will ever let on, if there are even two of you in the same neighborhood, you can put up a pretty good fight. Banks are in your community, if they are declaring war on you, fight back!

First, the author totally misunderstands how Americans view of the role of government. Taking a wide spectrum and cramming it into an either/or scenario, one of which is a total fiction, is extremely disingenuous.
 
Then, the author totally misses the cause of the mortgage meltdown. The FED's monetary expansion and artificially low interest rates guaranteed a bubble, if not in real estate, then somewhere else (too much money, too easy to get, chasing too few goods). Advocates for the poor and minorities lobbied the government to pressure banks into making loans to those with a high risk of default.

Here's Obama talking about how great it is that poor people are getting sub-prime loans.
http://www.youtube.com/watch?v=FewmvkaTXHU

Here's Daniel Mudd, CEO of Fannie Mae, kissing the butt of Obama and the Congressional Black Caucus.
http://www.youtube.com/watch?v=usvG-s_Ssb0

Here's an article about Jesse Jackson, Jr. taking credit for Fannie Mae's "HomeStyle Chicago" initiative, which was started with $1 billion that JJ, Sr. extorted from Fannie.
http://www.allbusiness.com/banking-finance/banking-lending-credit-services/6799858-1.html

"If the market is allowed to run its course, millions of homeowners will default on mortgages, leaving banks and investors with large losses."

The losses have already taken place. They're in the past. They're a done deal. They're history. Nothing can bring back the lost value. All they're trying to do is get YOU (the taxpayer) to take the economic hit instead of them. Why should you have to pay for someone else's bad decision? The market SHOULD run its course, and the only role for government should be in enforcing contract law. Why should the government force those who don't own homes to pay for those who do? Why should it force those who aren't underwater or facing foreclosure to pay for those who are? This won't help the economy... it'll just shift the burden from those who should take the hit to those who shouldn't take the hit. Taking from Person A and giving to Person B does absolutely nothing to help the economy... it's just an Enron accounting method used to hide the loss.

"...prevent a glut of vacant foreclosed homes from driving down property values..."

That's the biggest reason to be AGAINST the bill, not for it (besides its being an ex post facto law, and, therefore, unconstitutional). Houses are STILL overvalued and prices need to come down.
 

What Bill are you referring to, Von Dipshit?

Don't send a mortgage check to the bank if you are underwater, breach the contract. You'll send them money if they reduce the principle. Walk if they refuse, they do it all the time. (This is a strange article from Baker, misses out on many, many, many happenings in the thrill ride world of housing.) He takes the high, ambivalent road sometimes, which I suppose is what's required of a top-40 economist - you like to believe he's rooting for the lil'guy, but you know he's thinking about his paycheck and can't quite endorse massive civil disobedience.

Wealthy folks routinely use a Judge to cram down their vacation homes, yachts, sports cars and investment properties in bankruptcy proceedings. The oligarchs wont allow the po'folk any such convenience, for these people it's indentured servitude or financial ruin.

Thank you, "Erick Von Freemason" for taking the time to list all the wingnut talking points concerning the mortgage cisis. (You left our Fanny and Freddie, but that was implied, right.)

Funny, how none of them have any basis in fact. If you want to fix problems you have to understand what the problem REALLY is, talking points, sound bites and political bugaboos aren't really very helpful. That's exactly why Republicans are only good at tearing down. You can tear down without facts, but you can not build anything on a foundation of lies, falsehoods and misinterpetation.

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