Reply #24: Wow. What a good idea. For 1944. [View All]

[jtuck004]

Today, however, that would sentence tens of millions of people to being beholden to a landlord for their entire lives. Incomes are vastly lower across the board and are likely to stay that way for some time, especially since the wealthy who purchased the politicians necesary to insure a wealth disparity that works to their advantage see no incentive to change the system.

Since those halcyon, post-war years we have systematically sold the wealth-creating capacity of the vast majority of Americans, i.e. manufacturing, for short-term gains, replacing it with a housing industry that, as long as it kept growing, fooled us all with a notion that there was an economy sufficient to survive on.

The result has been tens of millions of jobs which no longer exist, in addition to at least as many that have replaced the well-paid skill of the machinist with the lower-paying ability to say "Do you want fries with that?".

As far as the local bank, there is little to no advantage to working with them. Over the past decade, with the advent of securitization, local banks no longer limit themselves to just loaning out the capital they have. They make a loan, then sell it to the nearest investment criminal bank, using the proceeds to make another loan, which is then sold, and the cycle continues. The only thing the local bank does is get you into a computer so your payments can be sold to someone else. (For that matter take a look at the books of the 6 major investment banks - they sold hundreds of millions of dollars worth of policies on loans that never, ever, existed - it was just a bet. They have almost single-handedly removed the need for the consumer in their huge Ponzi Scheme. But that's another post, eh?). Yes, there have been some efforts to make them keep some of the risk, but that has been watered down so thoroughly that it offers no protection.

Until we address income inequality any discussion about re-creating home loans that does not take into account the changes that have occurred over the past 40 years, or the role the purveyors of our current economic crisis, the investment banks and their politiccal puppets, played and are playing in the desctruction of the lives of millions of Americans, the only thing limiting loans to 20% down will do is cement and insure that inequality.

PEOPLE often remember the past with exaggerated fondness...During the three decades after World War II, for example, incomes in the United States rose rapidly and at about the same rate — almost 3 percent a year — for people at all income levels. America had an economically vibrant middle class. Roads and bridges were well maintained, and impressive new infrastructure was being built. People were optimistic.

By contrast, during the last three decades the economy has grown much more slowly, and our infrastructure has fallen into grave disrepair. Most troubling, all significant income growth has been concentrated at the top of the scale. The share of total income going to the top 1 percent of earners, which stood at 8.9 percent in 1976, rose to 23.5 percent by 2007, but during the same period, the average inflation-adjusted hourly wage declined by more than 7 percent."

If this were Utopialand, simple would make sense, and 20% down to a local bank would be attainable. But it's not, and the only thing that will do is put what little bits of income tens of millions of people manage to scrounge under the control of ruthless, greedy, and corrupt banks and politicians. And that's not simple, it's destructive.

IMHO