Saturday, January 26, 2008


To this point, I have avoided politics. I feel it necessary to write something about two issues being raised lately: the need to give a lot of people a check to stimulate the economy, and the need to let people out of contracts they signed. The people receiving checks are people who pay taxes, so what the government is doing is returning their own money - proving that the economy would be better off if people had more of their own wealth. So the misnomer to me is that the government is doing something positive by "giving people money" but instead they're proving they are guilty of holding back the economy by taking more dollars in taxes. The same is true of any plan to reduce corporate taxes. Corporations should not pay taxes, since their owners already pay taxes on their distributions. By taxing corporations, prices go up (read: inflation) and jobs are less available (read: unemployment). If the economy can be improved by lowering taxes, then why have higher taxes in the first place?

As for letting people out of adjustable rate mortgages because those loans might have reached their adjustable periods personally offends me. I have such a loan, and I had to ask to even get one when I got it. People have had the chance to prepare themselves for the increase in payment. Their failure to plan is not my fault, and I should not have to pay more taxes to help them out of their own mistakes. I think the Federal Reserve has done enough to ease the problems by dropping the Prime Rate and anything more from the government risks a repetition of the Savings and Loan debacle of the 1980's. The government went beyond what they were legally obligated to in bailing the Savings and Loans out of bad loans, and the response from the owners of the Savings and Loans was to give away more bad loans with the knowledge they would never have to worry about those loans being repaid. The hole got deeper because of government intervention. ARM loans can actually be a wonderful way to get equity in a home faster, as I wrote here. According to research done in Canada on their loan market, ARM loans involve less total interest on average than standard fixed rate mortgages, which agrees with my post and my own research. Bailing people out of these loans because of poor planning is unfair to the rest of us. Calling them evil is just plain wrong.

What does any of this have to do with "Making That Money"? The government keeps wanting to take more and more of the money we make - income taxes, gas taxes, sales taxes, property taxes, and various forms of licensing fees - and then redistribute it in what ways they think make us feel good. I personally am for less government, more personal freedom, and more personal responsibility. That goes hand in hand with lower taxes, which means more of my money in my hands - more to invest, more to save, and more to spend as I see fit.

-- Robert

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