http://www.forbes.com/feeds/ap/2007/08/09/ap4006038.html

Bush: No Bailout for Pinched Homeowners
By JEANNINE AVERSA 08.09.07, 5:39 PM ET

WASHINGTON -

President Bush said Thursday concern should be shown those who've lost their homes but it's not the federal government's job to bail them out.

"Obviously anybody who loses their home is somebody with whom we must show an enormous empathy," Bush said. Asked whether he would champion a government bailout, Bush responded: "If you mean direct grants to homeowners, the answer would be `No, I don't support that.'"

New home foreclosures have climbed to record highs. Homeowners with poor credit have been hardest hit as higher interest rates and weak home prices have made it impossible or difficult for them to keep up with their home loans.

In a wide-ranging news conference at the White House, the president also said that he's interested in exploring the possibility of providing tax relief to U.S. corporations. He has acknowledged that such a move would face challenges in the Democratic-controlled Congress, and he insisted it needed to be structured in a way as to not worsen the government's balance sheets.

"We're at the very early stages of discussion," Bush said. "Anything that would be submitted to Congress ... would have to be revenue-neutral."

A Treasury Department study, released earlier this year, showed the federal corporate tax rate could be cut from 35 percent to 27 percent with the same amount of revenue collected if a number of corporate tax breaks were eliminated, thereby broadening the tax base.

However, such a move would likely trigger a firestorm of protest as various groups would seek to protect popular tax breaks such as the research and development credit.

"What we'd really be talking about is a simplification of a very complex tax code that might be able to lower rates," the president explained. "However, I would readily concede to you that this is a difficult issue."

Bush said that the reason there are tax preferences is because "there are powerful interests that have worked to get the preference in the code."

Sen. Byron Dorgan, D-N.D., called Bush's interest in a corporate tax cut irresponsible given the government's rising debt. "It's hard to make a case that large U.S. corporations are paying too much in income taxes," Dorgan said.

Treasury Secretary Henry Paulson - the Bush administration's point person on the matter - discussed the corporate tax matter with Bush on Wednesday. Paulson last month had convened a one-day conference at the department, where there seemed to be widespread agreement among participants - private economists and executives - that the current system was hurting America's ability to compete against other nations which have lower corporate tax rates.

After a five-year boom, the housing market sank into a slump last year, depressing home sales and weakening once-lofty home prices. A combination of higher interest rates and weaker home values clobbered some borrowers, leaving them in some cases with costly mortgages that exceeded that value of their homes.

Worries that problems in the housing and mortgage markets will spread, sent stocks tumbling on Thursday. The Dow Jones industrials closed down 387.18 points.

Bush said that he does support financial institutions working with distressed homeowners. He also suggested that some people may not have fully understood the terms of their mortgages. The government, he said, can help out by educating prospective home buyers.

Analysts estimate that nearly 2 million adjustable-rate mortgages will reset to higher rates this year and next. Some higher-risk "subprime" borrowers were lured by initially low "teaser" rates offered during the housing boom. But those teaser rates can spike upward after the first few years, causing payment shocks.

Loose lending standards, including allowing borrowers to get mortgages with little documentation, contributed to the problems. Federal regulators have taken some steps to address problems, and Congress is also looking into possible action.

Some Democrats like the idea of easing investment limits on mortgage giants Fannie Mae (nyse: FNM - news - people ) and Freddie Mac (nyse: FRE - news - people ) to bolster the distressed mortgage market.

Bush wasn't warm to the idea.

"Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options," he said.

I wonder; does bbbjtc, count as research and development?  If so, I qualify for that tax credit.

Should the government be responsible for every home that forcloses?  Should it go in and bail out those who bought in when the terms were "doable" not looking towards the future?  

As with every boom in real estate there are sharks, vultures, and snake oil salesmen, but that doesn't mean the government should go in behind and clean up after them.  That's why reading, researching, and future forecasting based upon current salary is a must when buying a home.

Too many people feel that it is okay to follow every urge and want, but don't take into account the cost.  There is an assumption that someone else will clean up after them and make it better while they don't take responsibility for their actions.  Such is the case with those who bought because they wanted; not because they could afford to own a home.

I'm noticing many 0% financing on as much as a 60 month term on new car ads on TV(on approved credit).
Meanwhile radio is awash with ads for credit counselors and fixers.
The Fed has given both a money transfusion as well as lower certain lending rates to stymie the meltdown for large Wall Street players. Basic city and transportation infrastructures are in serious need and the working middle class has been decimated.

"Trickle down economics" and "corporate welfare" was fucking genius.

I've got to think that the law was changed to "help" the home loan industry in anticipation of this very thing so they could squeeze dispossessed homeowners indefinitely.  

The end of debtor's prison, BTW, was not done as a matter of rights. It was done as a mercy after the Panic of the 1837 and the five year depression that followed.

We are in a free market economy. The government should not bailout the banks/hedge funds/etc or these people who took out the bad loans. Same with the credit markets. Very surprised to see what how the FED is bending rules. Congress should not raise the cap for Fredie Mac and Fannie Mae for mortgages backed by the government. They currently don't go above $417,000.



-- Modified on 8/26/2007 12:29:26 PM

Is that Bush's praise to Bill Clinton?  He might as well say: "If I were a competent politician, I'd be showing enormous empathy now."  

Not only that, the conversation turns from having "enormous empathy" to giving tax relief for corporations.  I'm not arguing the good or bad of corporate taxes now, but is there any problem that Republican's think can't be solved through a tax cut?  Is there any tax cut that purportedly won't help government revenues?  It's knee-jerk conservatism.

I see the fallout in subprime loans to be a part, really, of the same mentality that's caused the huge national debt, betting on higher revenues that never materialize.  

As a point of sympathy: it's a key part of the American Dream that a person "owns" a home.  Largely, this has not been possible for this generation without extraordinary loans. It's a sign of generational economic decline.  

I

You're talking about a generation that can't do simple math and doesn't have the reading skills to get through a book.  They've been raised on the importance of self-esteem and having their every desire appealed to and sold to through commercials.  

Now that this is all gone, and there are so many  them, they can't declare bankruptcy, and can't make purchases like consumers, it's very possible that they are not going to submit to their destitution peacefully.  

There are consequent choices we make in embracing the free market. Nationalism and free market economics are incompatible. IMO, the choice is being made, or has been made, as to whether the US is going to exist for another 30 years.

Now that the consequences of our long defective education system are upon us it is possibly better that we don't support ignorance through a bailout. Like so many other things were doing, though, as I see it, it's gambling with the existence of our very nation.          




-- Modified on 8/26/2007 1:07:17 PM

-- Modified on 8/26/2007 1:26:55 PM

Your last paragraph speaks volumes.  The fact that real estate has become such a ridiculous profit enterprise ignores the issue that a place to live is a NECESSITY.  We're not talking about everyone wanting mansions.  When even low quality neighborhoods are going through this sort of pricing runup because of speculation and the desire for people to "get it while the gettin's good", yet wages are not remotely keeping pace, you see one of the ugliest aspects of capitalism.

There is another aspect behind the price inceases. Classism. Builders raised the prices to keep people away based on race and/or class. I saw smart people sell at the top and move to places where prices are more reasonable. Many towns got use to the high property taxes. It will be interesting to see how the real estate correction plays out.

They absolutely should raise the cap for specific markets. It makes no sense for a $417,000 in an area like Los Angeles where the media price is $560,000. That's not a market response, it's regional bias.

In a free market----there just can't be guarantees!!

People lose houses for all kinds of reasons.  They pick themselves up, dust themselves off and start fresh!!!

TAXES TAXES TAXES!!!!  I HATE TAXES!  I'M UP TO MY EYEBALLS IN TAXES AND I AIN'T NO BIGSHOT!

Oops,  sorry for the rant.  Taxes hit a raw nerve with me.

I ain't no anarchist neither!  I do know taxes are needed for infrastructure and such.  But you dummy craps-- oops sorry-- I mean democraps-- oops I mean democrats are like a bunch of kids in a candy store.  Spend spend spend.  

Oh, by the way--- corporations DO NOT PAY TAXES!! They never have and never will---period.  Please try to understand that.  Corporations do not pay TAXES.  

Corporations have to make a profit to survive.  Again, corporations have to make a profit to survive!!  Taxes are an expense!  They are built into the price to the service and goods provided.

It should go back down to the old level of $225,000. When the limit was increased the prices went into a bubble. The bill should not go to tax payers for folks who default.

-- Modified on 8/26/2007 9:29:40 PM

Figured I would shout so you could hear me.

Almost nothing that you said had anything to do with what we said.

And "the market" is not some fucking deity, for Christ's sake.  You Retardpuglickuns (since you picked an eight grade phrase for Democrats that I think BK Big Fish started) speak of :the market" in the same Godlike tones that you speak of "the troops" and "Jesus Christ".

JESUS FUCKING CHRIST!

Sorry...bullshit hits a raw nerve with me.

Now...go take your meds like a good Geezer.

The market, the market---long live the market.  And don't get into a reverse mortgage!

That is the problem in a nutshell Geezer.
If you WERE a big shot your income taxes would be a small percentage of what you're paying now because all the tax breaks written into the system are for (and by) the "big shots" and corporations.

 The Conservative Right has been chanting "No New Taxes" for decades; but what they REALLY mean is no "Fair" taxes.
If the humble "Greeter" at Wal-Mart and the Billionaires/Corporations all paid about 15% there would be no need for "New taxes".

I do not think John Q. Public would look at corporations paying the same fair share as a "new tax"; but rather a rectifying of an egregious manipulation.




-- Modified on 8/27/2007 5:59:52 AM

I agree also. No bailout.

Back from vacation and I agree with you..No bail out

Corporations pass the Tax on to us .. Want to see much higher gas prices ..If the Democrats win in 08 you will get your wish..Rasie the tax on Exxon and they raise the price on us... How hard is that to understand?

It's also strange how uneducated liberals think that higher corp taxes would just reduce the company's unfair excess profits.  GUESS WHAT YOU UNEDUCATED LIBERALS----THERE ARE NO UNFAIR EXCESS PROFITS!!!!  

Anytime [every-time] a company is doing fantastic, other companies come in to get a piece of the action.  Competition lowers the price in a free market!!

Look at FedEx!  Look at Crocs!  Look at that yuppie Land's End catalogue!  Look at Abercrombie Finch!!

It shouldn't effect their profits in the least if they just "pass it on." It's not as simple as that, Quad. Prices are not totally flexible.  The supply and demand curves tell you that.

Quit crying that it's all going to come down on consumers. If it did, corporations would not sweat about being taxed.

I really do believe that excess taxes are an anchor on the economy.   I'd love to see a flat tax. Say 15% to 20% on everyone and every corp (profit and non-profit including houses of worship).  I really do think our economy would take off like a rocket!

on original purchase items(IE:new) with possibly a poverty level rebate on estimated tax payed on basic essential items calculated to a national poverty level standard.

A tax like this is not only fair accross the board; but it also brings in extra revenue from tourism by foreign visitors.

they're far too small to worry about, and there's far too much money to be made foreclosing on those unlucky fuckers.   Besides, they're not nearly as smart as Republicans, or they'd be stockbrokers or lobbyists.

What?!  Most of these defaulting schmucks ARE Republicans?  Well, what can I say about the party of sadomasochism?