Tag Archives: Loan

Videos

George Will explains Obama’s dependency agenda at CPAC 2010

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From Muddling Towards Maturity: George Will’s speech at the 2010 CPAC convention. He is a moderate conservative.

Part 1:

Topics: the conflict of freedom and equality, equal outcomes vs equal opportunities, wealth redistribution vs liberty, dependency on government, public sector vs private sector, cash for clunkers, state capitalism, credit, crony capitalism, subsidizing failure, TARP, profit and loss, risk, incentives, freedom to succeed or fail, cradle to grave welfare, SCHIP, socialized medicing, single payer health care, social security, medicare, vouchers, school choice, public education, public option, choice and competition, inter-state commerce.

Part 2:

Topics: health savings accounts, private property, stewardship and ownership, drug companies, health insurance, dependency agenda, entitlement mentality, lawsuits, trial lawyer lobby, tort reform, personal responsibility, stimulus, public and private sector wages and benefits, union payoffs, income tax, moral hazard, death tax, envy, farm subsidies, bureaucracy, schools vs families.

Here’s the graph he mentions of who pays for taxespays for taxes. High earners pay for everything and the low earners pay for nothing. High earners don’t depend on government but low earners do depend on government.

Part 3:

Topics: crisis as a means to enlarge government, manufacturing a crisis using massive deficits, environmentalism as a manufactured crisis, how bigger government means small individuals with less freedom, structure of american government, the founding fathers, free will, personal responsibility, small government.

By the way, many people are saying that Glenn Beck’s speech was the best of the conference. And you can watch it here at Caffeinated Thoughts. The best part starts at 25:25 minutes in where he explains being broke and turning his life around, and talking about the freedom to fail and personal responsibility.

UPDATE: ECM sent me this article about George Will’s appearance on ABC’s This Week.

Video:

Excerpt:

TERRY MORAN, HOST: There’s a sense that something is broken in Washington summed up this week by Senator Evan Bayh (D-Ind.) who announced his retirement. I think it’s fair to say he’s leaving in disgust. Here’s what he had to say.

SENATOR EVAN BAYH, (D-IND.): I have had a growing conviction that Congress is not operating as it should. There is much too much partisanship, and not enough progress. Too much narrow ideology, and not enough practical problem solving. Even at a time of enormous national challenge, the people’s business is not getting done.

MORAN: Is he right, George?
GEORGE WILL: Well, it’s hard to take a lecture on bipartisanship from a man who voted against the confirmation of Chief Justice Roberts, the confirmation of Justice Alito, the confirmation of Attorney General Ashcroft, the confirmation of Condoleezza Rice as Secretary of State. Far from being a rebel against his Party’s lockstep movement, Mr. Bayh voted for the Detroit bailout, for the stimulus, for the public option in the healthcare bill. I don’t know quite what his complaint is, but, Terry, with metronomic regularity, we go through these moments in Washington where we complain about the government being broken. These moments have one thing in common: The Left is having trouble enacting its agenda. No one when George W. Bush had trouble reforming Social Security said, “Oh, that’s terrible – the government’s broken.”

News

Canada’s finance minister proposes changes to mortgage lending laws

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From the National Post.

Excerpt:

On Tuesday, the Department of Finance announced three changes to the standards governing government-backed mortgages, that come into force April 19. Here are a summary of the changes.

QUALIFYING FOR A FIVE-YEAR RATE

The adjustments to the mortgage framework will require mortgage insurers to ensure that new borrowers qualify for a five-year fixed rate mortgage when calculating the gross debt service and total debt service ratios. The measure is intended to protect Canadians by providing them with additional flexibility to support mortgage payments at higher interest rates in the future.

LIMIT THE MAXIMUM REFINANCING

Borrowers seeking financial flexibility can currently refinance their mortgage and increase the amount they are borrowing on the security of their home up to a limit of 95% of the value of the property. The adjustment will lower the maximum amount of the mortgage loan in a refinancing of a government-backed high-ratio mortgage loan to 90% of the value of the property, consistent with the principle that home ownership is a tool for savings.

DISCOURAGING SPECULATION

This measure will require a minimum down payment of 20% for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation. At present, borrowers may purchase a residential property with a 5% down payment. The change will require a 20% down payment for small non-owner-occupied residential rental properties. Borrowers purchasing owner-occupied residential properties which also include some rental units (such as a duplex) will still be able to access government-backed mortgage insurance with a 5% down payment.

But the CEI reports that the Democrat mortgage bailouts encourage fiscal irresponsibility.

Excerpt:

Economists and real estate experts are saying that a $75 billion mortgage bailout program designed by the Obama administration has backfired and harmed the housing market…

[…]Earlier, the government pushed through billions more in other mortgage bailouts, to bail out even reckless high-income borrowers, and forced financial institutions the government took over in the name of fiscal responsibility, like Freddie Mac, to run up billions in losses bailing out irresponsible borrowers.

Banks will now be pressured to make even more risky loans. The House has approved Obama’s proposal to create the so-called Consumer Financial Protection Agency. Government pressure on banks to make loans in economically-depressed neighborhoods was a key reason for the mortgage meltdown and the financial crisis. Yet Obama’s disturbing proposal would empower the new agency to enforce the Community Reinvestment Act without regard for banks’ financial safety and soundness.  The Community Reinvestment Act was a key contributor to the financial crisis.

The mortgage crisis was also caused by the reckless government-sponsored mortgage giants Fannie Mae and Freddie Mac, and by federal affordable-housing mandates. But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury Secretary, tax cheat Timothy Geithner, even though he admits that “Fannie and Freddie were a core part of what went wrong in our system.”

Worse, the Obama Administration lifted the $400 billion limit on bailouts for Fannie and Freddie, so that they could continue to buy up junky mortgages at taxpayer expense, and showered their executives with $42 million in compensation.

Obama’s financial-regulation plan is “largely the product of extensive conversations” with two lawmakers responsible for the corrupt status quo, Chris Dodd and Barney Frank, and it expands the reach of regulations that have been used by left-wing groups to extort pay-offs from banks.

This is why we should have elected an economist like Stephen Harper.

News

Canadian court rules that student need not repay 50K of student loans

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Story from Yahoo News.

Excerpt:

A Nova Scotia court has ruled that a former university student does not have to pay back tens of thousands of dollars he borrowed from a bank.
Alfredo Abdo won his case in bankruptcy court this week, with the court concluding that the Royal Bank of Canada was at least partly responsible for what happened.

“I question whether advancing all that money at one time was prudent banking on the part of RBC,” registrar Richard Cregan said in a written decision.

Abdo was a promising engineering student at Dalhousie University in September 2004. He had good grades, a scholarship and lived at home with this family.

In his second year, at the age of 19, he borrowed $20,000 from RBC though a student line of credit. He made bad investments online, according to court documents, and he accepted an offer from the bank for another loan of $30,000 to solve his problem.

Abdo started having dizzy spells. Finding his engineering program very stressful, he switched to commerce. But he dropped out of university in his third year.

The dizziness and social anxiety never went away, Abdo said, and therefore he couldn’t work or pay back the bank loans. He filed for bankruptcy last November.

The Canadian court probably thinks that they are compassionate, good people sticking it to the corporations. But actually what they’ve done is caused the banks to think a second time about making loans to borderline cases, so that the poorest students will now be refused student loans. If the courts refuse to enforce contracts signed by both parties, then the banks just won’t enter in to those contracts.

Down in New Zealand, they have the same problem.

Excerpt:

Thousands of people with student loans are defaulting on payments, leaving the Government to chase hundreds of millions of dollars.

More than one in five borrowers – or 114,000 people – have overdue payments and thousands of students are leaving tertiary education with no qualification and big bills.

The Education Ministry’s student loan scheme annual report shows that $306 million in payments is overdue, a $100m increase from a year ago.

The substantial growth includes a big rise in the level of payments owed by people now living overseas, more than doubling to $114m.

New Zealand University Students Association co-president Sophia Blair said it was not surprising that students with loans were heading overseas and letting the bills mount. “You can earn higher wages [overseas].”

[…]Total student loan debt had reached $10.2 billion and is predicted to grow by an average of $875m a year to more than $20b by 2022.

The report also showed about 39 per cent of students who left tertiary education with a loan did so without achieving a qualification.

About 8000 students with loans who left study in 2005 had nothing to show for it by 2007.

New Zealand, if I understand correctly is a fairly left-wing country, which probably subsidizes tuition and taxes income. So, students would be incentivized to game the system by taking out loans backed by the government, and then leaving to work abroad in more capitalist economies. Socialism encourages people to game the system and avoid taking responsibility for their own decisions.

UPDATE: New Zealand blogger Madeleine Flanagan wrote to me in an e-mail:

It’s old news, it has been the same way for years and years and that story comes out every year but as always it is interesting.

Your assessment is pretty spot on. In New Zealand student loans are pretty much available to anyone who applies for one. Acceptance at University or an alternative tertiary institution is not difficult, especially once you are over 20 as the institutions want your money – they get more funding the more students they have. Student loans are interest free and you do not have to begin repayments until you finish study. The state funds something like 75% of the tuition fees directly anyway so the loan is only for 25% of the actual cost. There are benefits available for living costs and if you don’t qualify for them you can borrow living costs and have them added to your student loan. So it is set up to make it easy to get into debt.

Being a fairly left-wing country there is a lot of regulation in the market place so of course you can pretty much always earn more overseas and once overseas the state cannot garnish your wages to get your student loan repayment.

The system has some fairly bad holes in it. For example, people who are being funded for Uni by they employer, like I was pre-accident, to study can take the cash for tuition fees from their employer, invest it and then take out an interest free student loan to pay their tuition fees. At the completion of study they then pay off the loan with the invested funds and pocket the interest – compliments of the taxpayer. Only students with cash coming from somewhere can do that as your student loan gets paid straight to the education provider apparently a lot of students with wealthy parents do this too.

As if this situation were not bad enough, organizations like New Zealand University Students Association (NZUSA), quoted below whinging about the level of pay rates in New Zealand , typically also whinge that education is not “free” anymore like it used to be when the politicians went to Uni! They argue that being educated to tertiary level benefits society so therefore society should pay for all of it (and have much higher wages).

New Zealand is crazy.

Madeleine and her husband Matt write at MandM blog.