The truth behind the fallout of American lending institutions
The subprime crisis is the result of too much government interference, not the free market.
The start of the havoc-producing mess began with the Community Reinvestment Act that tried to prevent "redlining" and pressure banks to make loans in low-income neighborhoods.
Banks received positive ratings by giving loans they usually wouldn't have...but did with the help of government pressure and incentives. Consistently encouraged by government and politicians, these risky loans ignored the credibility of the borrowers.
Problem identified
Under the Clinton Administration, this problem started to become apparent.
Lenders were trapped in a Catch-22. "If they comply," wrote Loyola College economist Thomas DiLorenzo during the Clinton-era, "they know they will have to suffer from more loan defaults. If they don't comply, they face financial penalties...which can cost a large corporation like Bank of America billions of dollars."
Lending to those who wouldn't normally qualify, no down payments, no verifications of income, interest-only payment selections and ignoring weak credit histories became the norm.
Those institutions that tried to raise interest rates to better cover their risk were accused by the liberal politicians of "predatory" loans.
This economic insanity continued to look like it was working as long as home prices kept rising--the latter being an unsustainable practice.
But now that the bubble has burst, many mortgage lenders are bankrupt and thousands of homes are in foreclosure.
Politicians caused the problem.
Politicians' bailout plans will only make it worse.
In economics, this is an example of the law of unintended consequences.
The free market would have protected us from this mess. Government intention is counterproductive and destructive.
Socialism in Mexico is crashing the Mexican economy.
For example, the country is sitting on huge reserves of oil. They should be generating jobs and wealth for Mexican citizens.
Instead, the government-run oil industry there is destroying production. Like any government-run program, centralized planning is filled with inefficiencies and corruption.
Here's what's needed:
Privatization
Removal of government regulations
Crack down on corruption
The allowance of U.S. investment capitol and expertise into the country
Removal of free-trade barriers
The Mexican people are hurt. We are hurt.
Ironically, the trilogy of Communism: Cuba, Venezuela and China, has increased production of offshore of oil exportation and development near Florida.
Insane. Another example of government failure here in the U.S. and elsewhere.
Because of such high taxation, businesses and wealthy taxpayers are leaving California. This means fewer jobs, less innovation and less opportunity.
And it winds up hurting the poor and low-income citizens the most—but it also affects all of us. And the irony: increasing taxes drives business and people out of the state, which inevitably causes less tax revenue.
First, the liberal Democrats and Arnold Schwarzenegger overspent.
Now, with a $14 billion debt crisis, they are talking about raising taxes. And California is already one of the highest-taxed states in the U.S.
And, they talk about "taxing the rich." It's anti-Christian-envy rhetoric that is not just immoral, but counterproductive.
What's happening is that businesses are leaving California, resulting in a loss of jobs and opportunities.
And now...so are individuals.
Here are a few examples:
Tiger Woods fled California, saving himself $4 million in 1 year.
Natalie Gulbis made $1.5 million and moved to Nevada to avoid the abusive California tax.
Scott McCarron left California for Nevada.
Of course, with our great weather, it's hard to think about leaving friends and families, relocating a business and moving to a no-income-tax state such as Florida, Texas, Nevada, or other lower-tax states. But the taxation in California is out of hand.
Liberal Assemblyman Paul Koretz represents wealthy locations in Los Angeles and Beverly Hills. He says, "I have not run into in individual in my district who doesn't like the idea of paying a little more in taxes to shore up the education system."
And Assemblywoman Fran Pavley of Los Angeles said, "If you lived along the Pacific Ocean or the Santa Monica Mountains—yeah, you can't find that in Nevada."
It's becoming class warfare, and the politics of envy will cripple California.
Many of the Republican candidates for president are advocating a big change in the tax system, to make it less abusive, more fair and to increase economic growth for all.
Basically, the IRS is out control:
Its auditors are heartless and arbitrary
It becomes more complicated and expensive each year
This year, it took the average American 24.2 hours and $207 to fill out their 1040 form. This is up from 23.3 hours and $179 three years ago.
However, if you're self-employed, it takes 80 hours. I know I had to spend over $5,000 on the tax return for my business and hundreds of employee hours.
6.654 billion hours were spent in America on federal tax returns this year! And Americans spent $102 billion just for tax preparation, software and related expenses.
And unless something is done, it will get worse.
Part of our evaluation of each candidate for president (and other offices) is their position on tax simplification and reduction.
The Department of Veterans Affairs conducted a nationwide study to examine the future use of its facilities.
One of the facilities in West Los Angeles has 387 acres and 91 buildings...of which over 21 are partially or wholly vacant.
Its recommendation was to reduce the wasted space and modernize the facility (and establish other important services for Vets) with the estimated 4 billion dollars it could raise.
The facility would keep 108 acres (huge!) and the remaining 200-plus acres could be leased out, raising money for better Vet care.
But the politicians and liberals in the area objected.
So Senator Feinstein slipped an earmark provision in the Vet bill to ban the VA from selling or leasing anything. What a waste of taxpayer money and an injustice to our Vets.
On April 30, Californians will celebrate Tax Freedom Day. It’s the day the average Californian stops forking over hard-earned money to the federal, state and local government and starts taking it home.
Last year, California was the 7th highest-taxed state in the nation, but this year we’ve gotten even worse at 4th highest.
In fact, you spend more days working for the government (121 days) than you do for food, clothing and housing combined (108 days). It's no wonder entrepreneurs, businesses and over-taxed Californians are simply fed up and fleeing to nearby tax-friendly states like Arizona, Nevada and Oregon.
The federal government takes and takes
In 2008, Congress snuck 11,610 pet projects (or earmarks) into your federal budget—the second highest number ever and a whopping 337% increase over 2007.
Earmarks like $211,509 for fruit fly research—in France. $188,000 for the Lobster Institute of Maine. And $148,950 for the Montana Sheep Institute.
Spending is so out of control, the total federal debt is now $9.4 trillion. Worse, liberals want the Bush tax cuts to expire. This means the largest tax increase in history is coming…with the child tax credit to be cut in half, the 55% death tax and the mortgage tax penalty returning—all totaling an average tax hike of $3,000 per household.
Before the ultraliberal United Church of Christ (UCC) national conference, Obama sought to reach out to Christians and blast conservative Evangelicals. The UCC, with 1.2 million members, is one of the nation's most liberal denominations.
The UCC was soft on communism in the 1960s, and even ordained openly gay pastors as early as 1972.
Obama had this comment to make:
“Somehow, somewhere along the way, faith stopped being used to bring us together and started being used to drive us apart. It got hijacked.
“Part of it is because of the so-called leaders of the Christian Right, who've been all too eager to exploit what divides us.
“At every opportunity, they've told evangelical Christians that Democrats disrespect their values and dislike their church, while suggesting to the rest of the country that religious Americans care only about issues like abortion and gay marriage, school prayer and intelligent design.”
Craig Huey is the coordinator and speaker for the Election Forum. Mr. Huey is an author, public speaker, entrepreneur and owner of two successful businesses.
He has led Bible studies at Calvary Chapel and Rolling Hills Covenant Church and has given his election recommendations on KKLA’s Frank Pastore show, KWVE’s Brian Perez show, and KBRT’s Paul McGuire show.
"There is a word for people who put children in a car to be blown up. The word is evil...It's important that we say this out loud and that we render this moral judgment. Because if we fail to understand that our enemy is evil, we have failed to understand what we are fighting."
Taxes and Regulations 
