LOL no I have not been mugging any brokers. When you sell any asset you own (house, land, shares, mutual fund units, gold, debentures, bonds) and make a profit, it is known as capital gain. The tax you pay on this profit is called the capital gains tax.This according to (www.rediff.com/getahead/2005/jun/23cap.htm)

Meaning that a if some one had some land that had nothing on it then built a house on it and then rented it that would be a investment that generates income but does that incur capital gains unless sold And this is what I meant 

Did any one see some of the ear marks that the senate put in the bill? here are some of the ones that I remember funds for wool research, subsides Rum….that’s all that I can remember any way the amout that was ear marked totals 150 billion. 

Sincerely, Stephen 

So if I'm reading you right, you're saying that the shareholders are stupid enough to appoint or look to appoint a 'poor' CEO due to their focus on short-term gains, and also design their contracts? The problem I have with this argument though is that many shareholders are companies, or big investors, who will stand to make or lose huge sums of money, and hence will be highly unlikely to be stupid (since it'd be in their interests to pay a tiny proportion of that on hiring a few experts who aren't stupid). Meanwhile with the CEO argument I agree there is the problem of intertwining the aims of the CEO with those of the shareholders which is one of the biggest problems with designing an optimal contract for them. However it's fairly easy to do this better in some cases, such as my suggestion before to introduce time restrictions on shares+options - if a CEO only gets bonuses for doing well that are tied in with the companies long-term performance, then it means by looking for a quick buck now, they don't actually benefit much at all, while if they take the best long-term course, they can maximise their own benefit (and in turn the shareholders). Of course you also run into issues with the directors ending up risk-averse themselves when the shareholders might want them to be risk neutral, but I'm not fully convinced by the argument that the cause for this was stupidity on the part of so many shareholders (in so many different institutions). I would agree with you however that in the event of such stupidity the best thing to do is usually to let the institution fail, since propping it up can not only prove costly, but also encourage such behaviour again.

On to other issues:

And compared to the average person in the US (or any country!) that is well above average, and hence not a pittance.

There likely is such a point! If you increase taxes to 100%, people aren't going to bother working. If you increase them to say 99% then you'll have a ton of people moving to a different country to work, while people probably won't be bothered to work much past subsidence either. Hence you'll likely suffer poor revenues (but more than nothing). Decrease taxes some more and again you'll likely see an increase in incomes. Suddenly you hit a point where the increase in total income isn't enough to outweigh the decrease in the % of income you're receiving in taxes, and hence tax cuts cause a fall in income. Now based on the data available it seems fair to say that the current level of taxes are below that point, so cutting taxes for everyone won't cause the extreme of increasing income (although there might still be the possibility that targetted tax cuts on particular groups/demographics could). However you will still have the increase in total income outweighing some of the impact of the tax cut, meaning the 'face cost' of the tax cut will be higher than the real cost after taking this into account, and the reverse with tax increases (that is, say that you're a ruler of an area, and people are earning $100m with taxes at 40% of income. If you increase taxes to 50%, it's highly likely that total $100m will fall, hence although you might think the increase to 50% will increase your revenue from $40m to 50m, it will only increase it to some of that way (since some people won't work as hard, and others might just leave for a neighbouring area with nicer taxes).

Anyway looks like the bailouts gone through. I was shocked when it was rejected the first time (mainly because everyone seemed to think it was a done deal), but possibly slightly dissapointed it's gone through now, especially after hearing some of the bizarre concessions made to try and convince some people to switch their votes. Maybe it will work out for the best, maybe it won't. I just hope that the government does it's utmost to make sure it doesn't have a repeat of the problem now that it's effectively encouraged it by bailing out all those institutions who have failed.

Maudlin, herd mentality.  Don't assume board members and fortune 500 companies are an intelligent group of entities.  Individually, maybe, but the herd always wins the voting contests.

Beyond that, form a lower opinion of humanity in general.  Individuals have a habit of being intelligent on occasion, but when you put people in a group they are almost universally stupid.  We can't even manage to blame the right presidents for a 30 year problem that was severely exasperated 13 years ago, and now we're going to do something really stupid and elect another Carter with majorities in the House and Senate to solve it.  We're stupid.

I can't read everything in all the pages (I would if I could) but has anyone talked about the what FDR did with removing our Gold standard? Or Nixon removing our Silver Stander. How about Community Reinvestment Act signed in 1977 by carter or in 2006 when clinton made it worse.  How about what greenspan did in 2001 lower in the federal funds rate, and in 2002 lowered it again?

Starting with FDR you could see over how long of a time period politions have been screwing up the economey.  Its going to take years maybe even longer then it took to screw it up to fix it. 

The goverment I feel takes most of the blame, followed by the states and the fact at the citizen level people have a problem spending.  The goverement needs to stop trying to help because they are onlying making things worse.  We has citizens need to stop our spending problem.  If the goverment wants to help then set as back on the gold and silver standards, and remove the CRA.  Don't base your loans on whever a person is on the good or bad side of the that line, but rather have some kind of formula to deside.  Say how much you make, what do you want, and how much is it going to cost.  Then base your loan of that.

Some one that knows more about this then me try to chime in. 

Pschoak I just noticed your pst above about Carter.  LOL

The problem you have here is that you have two contradictory premises. That large investors are not stupid and will (obviously) protect their own interests in the long term with the CEO compensation, and that it's really quite easy to design a method for aligning the CEO's interest with the stockholders.

And if those were *both* true, would we be having this conversation now?

Obviously - one, or both of those assumptions is untrue.

The ever famous Laffer Curve.

Or more accurately, the Neo-Laffer Curve as proposed by Martin Gardner.

The first problem, as Martin Gardner suggests, is that a theory that tells you what revenues will be at 0% and 100%, but has no predictive value at anything other than those extremes, isn't a scientific theory even by economic standards. It is, at best, a somewhat useful thing to keep in mind.

The second is that the Laffer curve has an obvious assumption, an assumption that conservatives obviously accept, and liberals obviously disagree with, but one that no one mentions. That you will *NEVER* get a better return on your investment out of pooling your money with other taxpayers and setting up a service as a group than you would buying that same service on your own as a private citizen.

I just don't see that as true - if only for economies of volume, doing something as a group, in a co-op for instance, typically saves it's members money simply due to the scale. There is no magic curse that makes this less true for a scale of the size of the government than there is for a scale the size of a farmers co-op - and the instant you get $1.01 worth of service for $1.00 of taxes, then the laffer curve is going to shift to the right.

That isn't to say that the government can't do something badly - an economy of scale presupposes a great deal of momentum in the infrastructure, and it may be worth trading off a return of $1.10 on your dollar of tax for a return of $0.98 on your dollar buying it separately if the government bureaucracy can't keep up with changing times.

But you should actually know what the return is on each of those before making that decision, and making a legitimate, informed decision on why you have not had the government do something it can do more cheaply than the private sector.

It's a mess that's for sure - Jonnan

Hey guys, I got an idea.  From my point of view, the stockmarket looks like if the capital gains tax were ended, Wall Street would be the biggest legal casino in the world.

What if the tax code was changed so that anyone who made money on the market would have to fill out an IRS gambling income form. That way, the winners would be taxed on their winnings according to what their payout was with no way out of it.  I wonder if the market would stabilize so that people are not making so much of a risky bet.  I know that I would tend to make safer investments so as not to be hit with such a huge lump tax sum.  I suppose there would always be someone who just couldn't resist the temptation of a huge payout and so would still take the larger risks in hope of the larger gain.  For some, the risk of loss is not as important as the high of gain, so the money would still flow.

What are your thoughts on that?

You're crazy.  Thoughts concluded.

People take losses in the market all the time.  Taxing the increases and ignoring the losses just gets you an even more screwed up system than we have now.  Under current tax law, which everyone is screaming bloody murder about, if you make a hundred grand and 20k in short term gains, that 20k is costing you 5600 in taxes.  If you take 20k in short term losses, you save 840 bucks from the deductible.  The fuckers have it capped all the way down at 3k.

Basically, it fucking sucks as is and would just be even worse with that system.  When the markets tank like they have this year, and hold out till the end of the tax period, people get hosed big time.  They've already paid taxes growing their investments, they get dick for a deductible when those investments go south, and then they get to repay the same taxes when they go back up again to the level they were already at before.

The easiest and fairest way to do it would be to make all capital losses and gains income, with no deduction limits, and screw the taxes as a whole.  Investment is good, there are lots of people with money and nothing to do with it.  There are lots of people with no money and a lot to do with it.

Jonnan, liberals create anti-trust laws to guard against monopolies because they are inefficient, cost the people more, and can become dangerously powerful.  Liberals then create their own monopolies in government that suffer the same problems.  Logical flaw?

Laffer curve or no Laffer curve, giving government, an entity with no motivation to optimize in the first place, a monopoly in anything, is stupid.

Um, John Sherman and Benjamin Harrison were Republicans governing pretty much at the height of the first GOP peak in the late 19th. Hardly "liberals," if you insist on using that outdated, distracting, worthless pair of dueling vacant adjectives. It isn't really a matter of L vs. C, but in-power vs. out-of-power. When you're in power, there are immense pressures to reshape gov't to suit the needs of your associates while hopefully doing well by "the people" or at least avoiding popular ill will.

Here you're at least on historically reasonable ground for using the L-C language. I agree that there's an appearance of cognitive dissonance, but the full situation really depends on how you care to run your cost-benefit analysis. IMO, the postal monopoly and the currency monopoly both worked out well for a long while (not as sure about currency these days).

But when you start getting into smaller public monopolies, like the Port Authority of New York and New Jersey (yes, I know they have a few minor competitors, but they are at least roughly like a "Microsoft" of shipping and water crossings in the NY area), things do indeed get messy. The Port Authority was ineed established by "liberals" (who called themselves progressives, even back then). Their idea of trying to insulate long-term infrastructure projects from the travails of corrupt politics was a good one. But like many good ideas, it turned out to have its own problems in the long run, effectively isolating the Authority from public opinion as well as public corruption.

It was really nice reading you guys as someone who isn't the US citizen and as someone who is a complete outsider to the US way of living.

Excuse me for asking these questions but I need few clarifications :

1) Why are you (as the nation) against regulations ? You can clearly see that everytime you let the market "autoregulate" itself  you ended up in the deep bullshit not to mention the World War 2 that was indirect consequence of the 1929 financial crisys

2) Why do you hate liberal way of thinking so much ?

Isn't normal that we help each other ? Isn't normal that people are granted right to healthcare or to have shelter or even simply to have food ? I know that many of you will tell me that things must be earnd and I agree with them but comme on not everyone is born with same chances. Some will have to fight to have just a little bit while others are born with the golden spoon in their mouth. It isn't as the planet isn't able to sustain the population since the economy produces more goods than ever yet only a little percent of mankind has access to them.

3) Why are you so much attached to private companies inssurences when you have less guranties than systems in other countries seen by you as "liberals"?

Just an exemple of what I have in mind : You contract the inssurence for healthcare, few years later you have an heartattack or you are in need of medicine that isn't very cheap. Because of how your system functions there will be two possible awnsers from you inssurence company : A) The price is too high and they are suspending the contract or B)They refuse to pay for it because it is not covered by your contract terms

At the end you paid all that moey for nothing but you are still in need of medical tratement which off course you can't afford; since being sick you can't work and for you to be able to work you need to follow the medical procedure which you can't because you don't have enough money. A nice vicious circle.

At the end of the day you toss more money to private companies with less gurantiees than what would you have tossed in taxes should you have some sort of national mutual inssurence such is done in Sweeden or Norway or Finland or even in France.

Thank you.

As for 700 billion dollars well don't worry for that. The rest of world will pay it. How ? The dollar will be devaluated once again which will skyrocket the price of baril again (the oil is negociated in US dollars not euros nor pounds) and since 80 % of oil companies and raffineries in teh world are US well you get the picture. Not to mention that your local products will be very attractive for export regarding ratio price/quality.

"We" aren't. We're just very messy about how we disagree over what should be regulated and how. Only a modest minority seriously support an end to everything like our food standards, building standards, emissions standards, etc.

The short answer is "1980s political rhetoric combined with Ronald Reagan's strong popularity." The longer answer begins with the fact that these days most US folks ranting about "liberals" or "conservatives" are just ducking the specifics of why they disagree with someone. We have majorities who want English to be our official language, but leaders who use the language well and tackle complicated subjects are often regarded with susupicion. It's far easier to call names and duck questions.

It goes back to our founding. The dominant faction back then (Federalists) were deeply committed to their vision of a free society (market) and they had just finished a long, hard fight to separate from a parliamentary monarchy that happily used soverign power to make and break whole sectors of their economy. Fast forward to the early mid-20th, and you have the Red Scare and Cold War, which together did a whole lot to make the word "socialism" pretty much equal to "evil" in many minds. Despite having gone hard against the Nazis and the fascist Japanese in WWII, we somehow never gained widespread understanding that authoritarianism is the real enemy. Instead, many of us are prepared to freak out about the notion of building or own national health care system because "it's socialism."

I tend to think that you're not looking back far enough - the 1980's "Reagan" really traces it's roots back the 1940 to 1890's era.

There's an old saw about how cats were worshiped as gods in ancient egypt, and have never forgotten that. I think that there is something of the same thing going back to the 1890's "Gilded Age" - the wealthy acquired *so* much power to make or break the government that it became something they felt entitled to - and lost it from there on out, from Congress amending the consitution to override the supreme courts suddenly deciding an income tax was unconstitutional, Teddy "Dammit the man didn't stay bought" Roosevelt breaking up trusts, the stock market crash, culminating in the ultimate humiliation, FDR 'betraying his class' and actually forcing regulation and controls on an entire market.

You developed this split in the cultural history, an schism between the history of what actually happened (People that became rich, and were corrupted by power, eventually being reigned in before the entire system was destroyed) as documented by the papers of the era(s), court cases, and other historical documentation, and the conservative mythology of what happened (Extraordinary men overcame great odds to stand astride the world leading the way to a better tomorrow, only to be dragged down by weaker, immoral men, jealous of their success.) as passed down by the conservative thinktanks, Ayn Rand, the mythology erected around Ronald Reagan, and on and on and on.

Talk to any conservative that has gone to the trouble of being more thana knee jerk conservative, and you will find two things:

A. that historical schism between a conservative mythological history and the actual documented history, and

B. a rock hard determination that the documented history is dogma perpetrated by a liberal 'elite' - the history professors, the newspapers, the media, are all either pawns of or actually actively involved in a conspiracy to dupe the public about what *really* happened.

The problem is that this determination, is something liberals are nearly unable to process and combat.

At it's core, a liberal (Too be fair, a liberal that has gone to the trouble of being more than a knee jerk liberal) gets that way because they are raised respecting logic and science, taking a set of known facts and deducing "If this is true and this is true, then that has to be true too . . .", then going looking for 'that' and seeing if it's true or not - and if it's not true, questioning the original premise. That's the piece of feedback that keep a real liberal in touch with reality - checking the original premise.

So when a liberal is confronted with an argument that is premised in a conspiracy to dupe the public, his or her first instinct is to grant the premise and see where it leads. But the person he or she is talkng to isn't playing by the same set of rules - you will never be permitted to go back and question the premise. It's the difference between an axiom or assumption, which can be proven wrong, and an article of faith, which cannot.

So, when a prisoner at Guantanomo is released after five years with no charges, having supplied no information, the premise that they were a terrorist is still not up for debate. That the result was completely unsupported by that premise is completely irrelevant to the conservative, and the liberal that attempts to do so is merely another pawn of the liberal conspiracy, again jealously trying to bring down the conservative 'great man' of the moment.

I don't entirely know how to deal with it - after a long life of debating conservatives, all I can offer is a sort of mental map of conservative mythologies that are taken as fact, worth knowing because if you do know them, you can sorta predict where they are going to go mentally on current events, most of them not disprovable.

Vietnam was winnable, and if we had stayed in just {insert time frame here} we could have left with honor.

There were no war crimes by the U.S. during Vietnam. (Semi Debunkable - The speaker may or may not acknowledge the Mai Lai Massacre, but if they do 'it was an exception', and the armies attempt to suppress it in no way indicates that they might have successfully suppressed other crimes reported by soldiers. Soldiers that reported on these other, undocumented war crimes are traitors that lied to smear the country.)

Reagan was a great president that improved the economy for everyone (Debunkable. Reagan did in fact have the best economy of modern Republican presidents. By contrast, Carter had the worst economy of modern democratic presidents. In terms of GDP increase and other objective analysis, they are tied so closely that it depends what measurement is used as to who was slightly ahead.)

Today immigrants are different from the ones that came in when my grandparents came into the country. (Not debunkable, though interestingly enough, people thought so then too.)

I'm not going to go on  - You could make your own wikipedia off of stuff like this, indeed there is one called conservapedia which basically documents the conservative mythology (From the viewpoint of believers unfortunately), but be careful not to get any of it on  you - {G}.

Jonnan

Hence my use of liberals as opposed to democrats, not to be confused with classical liberalism, which is the opposite of neo-liberalism.  People who expand government power and restrict the economy to "protect" the little guys are liberals.  As written, the bill isn't that bad either, as implemented it's been horrific unfortunately.

I call bullshit.

First, the postal monopoly.  Craptastic failure since inception.  It's inefficient, operating at a deficit that is often in the billions, delivering things late, delivering things to the wrong address, losing them entirely...  Oddly enough, we have direct, irrefutable evidence of what happens when that monopoly is lifted.  Before UPS and FedEx went mainstream, how long did it take for the postal carrier to ship standard packages around Christmas, a month?  How long now, five days?  USPS priority generally arrives in three days or less and is cheaper than the UPS and FedEx alternatives on light or small packages.  The entity is obviously capable of fast delivery and competition, yet letter delivery is still horribly slow.  A shining beacon of what not to do, create a government protected monopoly that doesn't need to compete and doesn't even need to survive on it's own.  We didn't start with one either.  Private companies did it for the first half a century, and still had involvement in intra city mail delivery for quite a while after.  That they had to be killed by making it illegal shows how effective the USPS has been.

Second, currency.  We originally started without a monopoly. Gotta love the idea of carrying around 20 different kinds of money eh?  I'll admit, this one is probably a necessary evil.  But it is an evil.  Since nationalizing the currency, there has been one problem after another.  The biggest were the seasonal bank runs, farmers go to withdraw their accounts from last years harvest to pay for this years planting, poof, no money in the bank.  Brilliant huh? 

The first national banking system lead to a collapse of government funds thanks to no power over a central currency, they dissolved the bank. 

The second banking system led to a collapse of the bank.  They learned from the first time and used bonds to back government debt to protect against fluctuation.  Unfortunately, as debt grew, so did the money supply, massive inflation.  The War of 1812 was expensive apparently.  Hello panic of 1819, they dissolved the bank.  Monopoly, no monopoly... not a lot of difference.

So we drop the banking monopoly, again.  All hail the free banking system.  If you've ever seen the inflation rates... omfg.  Absolutely hilarious.  Note, when creating a free banking system, either go with no rules, or reasonable rules.  When you go with stupid rules, people tend to do stupid instead of sensible.

At this point, we finally get around to nationalizing the currency.  This brought about the previously mentioned liquidity problems that lead to seasonal bank runs.  Bloody brilliant.  It did last a whopping fifty years before it fucked up enough that they were forced to replace it though.  So from a duration perspective, it was better than the previous.

This of course brings us to the Federal Reserve Bank, the most recent attempt, an entity created because currency was inelastic and unresponsive to market changes and completely lacked the ability to keep liquidity in the markets.  Since creation, we've suffered one Great Depression that makes all the previous panics seem like trivial nuisances.  Numerous other bubbles since of course, but none quite so impressive, although the current one will make it look like a tea party if it keeps going.  Then of course, there were the massive inflation rates of the 70's, wasn't that wonderful?  All the flaws the previous systems suffered, all rolled into one.

Each banking system has failed in turn, and we've had half a dozen of them.  The nationalized versus competetive banking systems haven't been particularly tilted in direction of nationalizing, and the nationalization of currency isn't much better.  With a good board and chairman, the Federal Reserve doesn't do too badly, but with a bad one it can be catastrophic.  The motivation to create debt bubbles is a serious flaw.

Perfection is the only guard against corruption, the root of why government is never any good.  We will never design the perfect system, thus corruption will always destroy it.  It's the simplistic beauty of an actual free market.  Corruption itself is simply another force for good.  Not that we have one, they keep bailing the fuckers out.

When a company becomes corrupted by greed, that greed creates inefficiency and destroys it.  I'm not talking about CEO's taking home billion dollar pay packages either.  Unions extorting companies for absurd pay grades and preventing modernization are equally to blame in the auto industry.  The other factor isn't the management pay either, it's the get everyone one philosophy behind the crappy vehicles they keep making.  Management pay is a trivial problem when a corrupted company kills itself, just like how much the Senators pay themselves to fuck us over is a trivial problem with Congress.

Edit: Jonnan, you fail at life.

Comparing presidents by "objective" measures without regard for reality is just as idiotic as your mythical presentation on conservatives.  Carter's effects are long lasting, we're in one of his aftershocks right now.  The S&L crisis was the first one, both are blowback from his wealth redistribution via bank loans in the CRA of 1977, made catastrophic by Clinton's changes, may congress rot for letting that one through.  The Carter presidency is directly responsible for both mortgage market failures by setting up the GSE's in such an assinine function.  Without such idiocy, the deregulation would never have resulted in either.  You can't collapse a banking system by defaulting on 20% down loans unless the entire world goes to hell for completely unrelated reasons and no one ever buys a house again. No Carter idiocy, no Reagan recessions from them.

You'll note that under Clinton, Reaganomics were followed for much of it thanks to a certain House Speaker actually living up to campaign promises and forcing votes in the House.  If he'd kept his mouth in check and been less petty he'd probably still be Speaker.  They even got welfare and NAFTA through, hardly a liberal administration even if Clinton did try with that godawful healthcare plan and his idiotic changes to the housing and mortgage systems.  Yeah, I'm giving Clinton credit on conservative issues.  Bush just put the nail in his coffin with this idiotic bailout as being left of Stupid.

Actually, ah, no Psychoak - Reaganomics has a strict meaning in relationship to supply side economics, and the Clinton plan doesnt qualify, nor was it even close enough to be confuced with it.

As for Carter? Well, yeah, we're into classic libertarian conservative theory here - after of ten, fifteen years, we'll blame Jimmy Carter for the crisis, and what we don't blame on him we'll blame on Clinton . . . because of course Bill Clinton went back in his time machine and talk Reagan into insisting on loosening controls on banks. He had to have, since the Savings and loan scandal happened, ah, before Bill Clinton was elected President.

But, by all means, blame the fact that the economy consistently does worse under Republicans on anything you like besides Republican economic policy. To the extent that Paul Volker was appointed by Jimmy Carter specifically with the purpose of getting Stagflation under control. Which is BTW, *Why* Jimmy Carters presidency is the worst among democrats economically - he had three good years, then the oil crisis hit, and we went into stagflation, which pulled Carters Average down to where Reagan's economy was/would be. Arguably Carter mishandled it until he got Volker involved, but yes, Volker's fervor about not letting inflation out of control worsened the S&L crisis, but was a minor factor in comparison the 1986 tax 'reform', the 1982 Garn-St.Germain Depository Institutions act, the Keating Five scandal, Neil Bush treating Silverado S&L as his personal piggy bank and the failure of regulators to enforce the regulations that were left after those two were passed.

But yes, if it makes you feel any better, Jimmy carter appoint Paul Volker, and getting inflation under control made the S&L crisis harder, so you *do* have something to trace back to President Carter.

So I guess I got nowhere by suggesting that we stop the name-calling and try to do a better job communicating?

Seriously, I'm pretty tired of this from my friends, much less folks I consider political enemies. If we want to restore civility, much less productivity, to public discourse, we've just *got* to kick the liberal-conservative claptrap out of the conversation. At their best, the adjectives are gross oversimplifications. At their worst, they are guaranteed to disable an otherwise engaged mind by evoking some ephemeral Great Enemy, who, in the immortal words of Pogo, "is us."

Let me try to invoke the spirit of that sadly neglected OT thread on saying good things about "other candidates."

If I had to guess, I'd say that Jonnan and I have similar voting patterns while psychoak and I might have almost always cancelled each other's votes if we lived in the same district. Jonnan vexed me seriously when he tried to contrast 'deluded conservatives' with 'reality.' (I'm a recovering postmodernist; reality is there, but we can only deal with it through consensus.) psychoak also seems at times too married to his economic dogma and far too ferocious in his word choice for my taste. And I'd fight to a metaphorical death to keep both of them in the civic discourse because at least it is clear that they care very much and try to think their way through things, not just react to shiny labels or nasty slurs.

It never gets anywhere.  Myths can't be argued.

I point to unsound real estate lending turning a normally bulletproof, low risk investment into one of the worst, he ignores it and blames the deregulation that makes it technically possible for you to choose(free country right?) to fuck up in a catastrophic manner by creating government backed securities that are guaranteed to fail and were bought from yourself thanks to the GSE's.  Forcing people to have 20% down before you'll give them a loan is unfair and racist, thus allowing it to be the prime factor is unacceptable, thus it has to be ignored completely as knowing all variables allows you to solve an equation.  You'd come to the unfair and racist truth that lending people money to buy houses they can't afford causes a housing bubble built on bad debt, resulting in a crash.  It would be so much better if, after the loss of trillions of dollars in savings sunk into mortgages people couldn't pay, the banks were still standing.