Ideas have consequences

[sailaway21]

Here is a classic example of the law of unintended consequences by Mr. George Will. Anyone who believes that government can be an engine for positive change in our lives should read the article. After you've read it, and cogitated on it, I'd ask that you then consider what of government's role in encouraging banks and Fred/Fannie to make loans backing unqualified borrowers. this is how government becomes a bigger problem than the original problem.

RealClearPolitics - Articles - The Toll of a Rights 'Victory'

[Undine]

I keep hearing that "unqualified" borrowers were the cause of the mortgage crisis. BUT what I SEE, from my little corner of reality, is foreclosures of high-end homes whose owners could have made the payments on a smaller home. Their greed, and the greed of the banks is at least a contributing cause. In fact when Hubby and I bought in 2001, we could have easily gotten a mortgage for a house costing twice what we needed.

[sailaway21]

Originally Posted by Undine

I keep hearing that "unqualified" borrowers were the cause of the mortgage crisis. BUT what I SEE, from my little corner of reality, is foreclosures of high-end homes whose owners could have made the payments on a smaller home. Their greed, and the greed of the banks is at least a contributing cause. In fact when Hubby and I bought in 2001, we could have easily gotten a mortgage for a house costing twice what we needed.

That would make them unqualified buyers for that high end home then, wouldn't it? And the bank would have looked at them a bit more diligently if they did not have the government to sell the loan to, correct? Just as an employer would be perfectly capable of hiring an employee with only a high school diploma and the required aptitude if they did not have to worry about being sued by the federal government. And college expenses might be less if we didn't assume that college was meant for everyone, or even necessary for everyone, were government subsidies not readily available for the outrageous costs of attending college. Why should college administrators attempt to control spending when the government is going to make them whole on it via student loans? Did government intend for tuition costs to escalate in such a dramatic fashion?

[Undine]

Unqualified for that amount, yes. BUT the usual implication by most who use this term is that the "unqualified borrowers" are unqualified to borrow the amount necessary to purchase any house. AND the US government was not the one bundling these bad loans as securities to sell to the rest of the world. Freddy and Fanny are the tip of the iceberg.

As for the cost of collage, it has gone up in large part because the support which the State governments have been giving them has not kept up with inflation. States cannot cut taxes if they do not cut spending, so they pass the cost on. My Father put two kids through college making $13K as an accountant. My son-in-law is an accountant making $75K, he will be able to pay for college for my future grandkids.

[PBzeer]

Undine, check the Ivy League schools, which are not state funded, and have huge endowments. Tuition costs have risen in concert with the amount of federal funding avaiable at private and public colleges.

Without the implicit backing of government funds that came with Fannie/Freddie, there would have been no market for the toxic bundles.

[xort]

Oh great, another housing bubble arguement. ricky is on his way, I'm sure to tell everybody how smart he is and how dumb everybody who doesn't listen to him is...even tho he doesn't believe himself

[danjarch]

Sway, I agree with both the articule and your conclusions but that dosn't deal with the bigger problem. Which boiled down to it's root is that the republicans have largely lost they're credibility. Name a Rep who stood on the senate floor, turned to his own party and said " After the lobbiest scandles, running up record deficits and getting our army stuck in Iraq far longer then intended, if we don't use some of our political capital to rein in fanny and freddie then none of us should even bother to run for re-election."

Truth be told, there are very few leaders left in the republican party. Even now they are trying to prop up people like Palin, who mortgaged the town of Wasilla to build a rec center with federal pork. They keep pandering to not to pious practicing religious conservatives who less concerned with out lawing gay marigage or abortion, instead the go for the christmas christens who think that opposing those to biggies is all that matters, screw the rest of the commandments or all the other bits of the bible like render onto ceaser and all.

We'll have to see if the republican party is going to spend the next four to eight years beating there head against the wall trying to convince America that ideas matter when the real problem is know one believes the republicans will practise what they preach. I hope they don't. I also hope the Dems don't simply screw things up so bad, which they apt to do, that America has to once again choose between the lesser of two evils and elect Reps that still don't practise what they preach.

Shoots the local paper had a good articule about how a lot of Rep autosales owning donors were mad that they're elected officials didn't step up and chuck money at detroit. "How could they screw us" They all cried. Guess they forgot they supported reps. More likely they we're suprised to here no for once.

[sailaway21]

Dan,
Both parties are complicit in the expansion of "rights bestowed by government". Nowhere more distressing has this been when they've failed to introduce and pass legislation that would remediate the Supreme Court decisions of the last quarter century. Courage and Congress don't often collide within the same sentence.

What Mr. Will perhaps most laments is the apparent loss of first principles among Republicans of a conservative wont. As the recent election showed; when given the opportunity to vote for a Republican acting like a Democrat versus a Democrat, the public will take the Democrat every time.

The government as mommy or nanny is a heady brew that intoxicates many whom should know better than to sip it.

[kd3pc]

Undine and the group..

on paying for college with a $75K salary...best of luck the kids better work their buts off and get scholarships...even today in state kids with top tier grades are still looking at 12-15K a year minimum. Two kids at the same time..could be $30K a year..pretty heavy hit for that $75K, and if some little something goes away, they are done.

By the way, $30K is about the parents share of the good out of state schools even with a nice financial aid package, by the time you let them come home two three times a year, pay for insurance, parking and food for their co-op/internship and a few other niceties.

Best of luck.

dave, parent of a sophomore, out of state

[sailaway21]

Originally Posted by Undine

Unqualified for that amount, yes. BUT the usual implication by most who use this term is that the "unqualified borrowers" are unqualified to borrow the amount necessary to purchase any house. AND the US government was not the one bundling these bad loans as securities to sell to the rest of the world. Freddy and Fanny are the tip of the iceberg.

As for the cost of collage, it has gone up in large part because the support which the State governments have been giving them has not kept up with inflation. States cannot cut taxes if they do not cut spending, so they pass the cost on. My Father put two kids through college making $13K as an accountant. My son-in-law is an accountant making $75K, he will be able to pay for college for my future grandkids.

undine,
Perhaps you'd like to rephrase the above sentence where you state that, "the cost of collage (sic), it has gone up in large part because the support which the State governments have been giving them has not kept up with inflation".

What the state pays has nothing to do with what college costs other than to the extent that we can get the taxpayer to pay for our kid's education. To the extent that the states have not increased funding to state colleges there has been some measure of cost containment on college educations. That fact is offset by college's knowledge that federal funds are readily available to most college students. Therefore colleges continue to raise their tuition unchecked and far, far in excess of the rate of inflation which, if you check, you'll find has been negligible. Tuition continues to increase at something like 15% per year. It's a shakedown and it wouldn't be happening if the government wasn't standing by to offer loans and grants to students.

In essence, government is doing the same thing they did to housing by telling the prospective student to forget about what it costs as the government will back you up. Colleges respond by raising rates since they know your rich Uncle Sam is guaranteeing the payments.