Austerity kills

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Originally Posted by earthJoker

I stay with what I said. Mortgages are not the problem, mortgages that are higher then the real value of the object are the problem. And when banks start to give out mortgages for expected values you are in deep shit.

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But that's what happened in the US housing bubble! Banks monetized and collateralized mortgage loans by attaching them to CDOs and MBSs, sold them as investment 'packages', which fueled speculation, and made short-term trades (ie "flipping real estate") quite profitable. Sub-prime loans were the first to default...but because financial/investment institutions had bundled them with 'conforming' loans and jumbo loans, combined them into investment 'tranches' and CDOs, when the dominoes began to fall....the foundation was exposed as a flimsy a House of Cards.

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Originally Posted by RandBlade

How do you define "real value" as opposed to market value? And I disagree on the notion that if you have a mortgage but a house worth more then you're not in debt - you're not in "net debt" as your assets exceed your debts but you're still in debt.

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"Real value" is rather nebulous, like "whatever someone is willing to pay", or whatever is thought to be rare/valuable at the time of sale. Market conditions and market values are constantly in flux that way.

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Originally Posted by GGT

But that's what happened in the US housing bubble!

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Sub-prime loans are an example how not to do it. But just because sub-primes are shit it doesn't mean that all mortgages are shit.

Sure, but that's not how financial/investment/banking institutions behaved. They packaged sub-prime (and NINJa) mortgages into investment grade MBSs and CDOs, with AAA ratings from credit-rating agencies.

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Originally Posted by Being

Lewk? Is that you? 'Cause this reflects the shallow disposition that adores vigilantes.

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Vigilantes? :confused:

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Originally Posted by Aimless

No, that's not the same line of reasoning.

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It absolutely is. How can any government cut any type of spending when those cuts will be defined in such zero-sum terms that it's equated with death?

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Originally Posted by Dreadnaught

Vigilantes? :confused:

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If I am unemployed, hopless and hungry, you'd probably have a problem with me stealing your food or sleeping on your doorstep. If the government steps in and takes money from you and gives it to me you vote them out of office and I die. It equates.

I'm not sure you're properly using the world vigilante.

Or accurately describing a scenario that relates to the modern welfare state/my opinions about the modern welfare state.

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Originally Posted by Dreadnaught

I'm not sure you're properly using the world vigilante.

Or accurately describing a scenario that relates to the modern welfare state/my opinions about the modern welfare state.

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I'm not really good at getting people past their misgivings.

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Originally Posted by Dreadnaught

It absolutely is. How can any government cut any type of spending when those cuts will be defined in such zero-sum terms that it's equated with death?

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No, this is the real equivalent:

"People need food to live. Some people depend entirely on the government for food. If the government decides to stop giving them food then the decision may cause the deaths of these people who depend entirely on the government for food if they can't get food some other way."

Death is a consequence like many others and it should be taken into consideration when evaluating the consequences of decisions.

What's at issue here is whether or not a government can be faulted for doing things that end up causing the deaths of its citizens. If the alternatives are far worse than the specific austerity measures the Greek government has taken, then I think it may be unfair/wrong to fault it for taking those austerity measures.

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Originally Posted by Hazir

I would use market value rather than 'real' value as the latter can be confusing.

I think living without debts is very well possible, all you need for it is some planning based upon your actual income and not on your inflated desires.

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But that's not how the US real estate market works. Local and state property taxes are future debt liabilities, even for homes/property owned outright (without loans). Some states have a 'Homestead' tax cut for long-term residents or primary residences, some slow tax hike rates for the elderly or poor, some use various forms of rent-control, etc.

People who want to live in the home they paid off with amortizing loans (including interest and fees that often exceed the principle) can be forced to sell....simply because their property taxes became unaffordable. That's especially true for retirees and elderly who planned their golden years based on less/fixed income and not having rent/mortgage payments. I don't consider that an "inflated desire".

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Originally Posted by Dreadnaught

RE logic that underpins opening post:

People need food to live. Thus, if the government doesn't provide them with free or subsidized food, the government is killing people.

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That's a pretty narrow definition of Public Services, subsidies, and Austerity, too. :confused: So far we've touched on healthcare, food and shelter, plus banking, investment and monetary policies....as parts of public debt. But isn't "Austerity" nation-specific that depends on levels and types of debt?

Rand likes what the UK is calling Austerity, even when that means increased public health spending, so long as other subsidies are cut, or national spending is reduced, to make balance sheets more balanced. Sounds reasonable. But that's not what the US is doing. We're under forced, indiscriminate sequestration cuts, because our congress is fubar. They can't even pass a Farm Bill (that subsidizes Big Agriculture) without first cutting food assistance to children, elderly, or poor people. :down:

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Originally Posted by Aimless

No, this is the real equivalent:

"People need food to live. Some people depend entirely on the government for food. If the government decides to stop giving them food then the decision may cause the deaths of these people who depend entirely on the government for food if they can't get food some other way."

Death is a consequence like many others and it should be taken into consideration when evaluating the consequences of decisions.

What's at issue here is whether or not a government can be faulted for doing things that end up causing the deaths of its citizens. If the alternatives are far worse than the specific austerity measures the Greek government has taken, then I think it may be unfair/wrong to fault it for taking those austerity measures.

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Hundreds of charities exist. Furthermore if government stopped providing a service then fewer people will use the "well my taxes are already paying for their basic needs they probably just gonna spend it on booze."

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Originally Posted by Lewkowski

Hundreds of charities exist. Furthermore if government stopped providing a service then fewer people will use the "well my taxes are already paying for their basic needs they probably just gonna spend it on booze."

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That's how you view "Austerity"? If teh government simply stops food assistance for the poor or working poor...charities will automatically fill the gaps? You don't seem to know that those charities, including tax-exempt religious groups, are supplemented by federal subsidies and surpluses.

What countries do you think that's happening in? Neither the USA nor the UK is abolishing all assistance.

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Originally Posted by RandBlade

What countries do you think that's happening in? Neither the USA nor the UK is abolishing all assistance.

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False comparison. The UK is allotting more funds to your NHS, while the US is de-funding food assistance and states are fighting Medicaid expansion.

Try again NHS/Medicaid has nothing to do with your point about food. US is expanding with Obamacare and it doesn't matter what's being discussed you always come back to NHS.