Very disturbing charts on the wealth imbalance in USA

[QUOTE=RedBlackAttack]It hasn't just gone down... It has shrunk to relatively nothing (compared to past decades). The top marginal tax rate in the 1950s was 91-92%.

Now, it is mid-30%.

[url]http://www.truthandpolitics.org/top-rates.php[/url]

People are calling Obama a socialist because he wants to raise the marginal tax rate for the Top 1% from 35% to 37%. Meanwhile, under Eisenhower and back when the middle class was at its absolute strongest, the top marginal tax rate was 91%.

If we are turning to socialism by going from 35 to 37%, what the hell kind of system was it when we were at 91%? It is fascinating to me that people fall for these talking-points.

Meanwhile, the redistribution of wealth to the top is absolutely clear.... And Obama is a socialist because he wants to raise the top marginal tax rate from 35 to 37%.

SMH

Not that it will solve anything to make such an incremental raise or even a massive raise in the top marginal tax rate. Our problems go far, far deeper than that, which I have outlined in prior posts.

However, I do think it is pretty ridiculous that our marginal tax rate stops at around $300,000. So, a person who makes $1 billion a year is paying the same taxes as a family who brings in $300,000 a year.

That tax rate should continue to go up as it gets into the ludicrously over-the-top salaries. Maybe, under a system like that, the top marginal tax rate can actually even approach what it was in the economic boom-time in America -- the 1950s.

Maybe we also wouldn't have such a massive deficit. Food for thought.



As I said early on in this thread, this isn't a left-right issue... Or it shouldn't be. This impacts everyone.

Do you want to know whom I consider the greatest offender in the absolute decimation of the US manufacturing base? It's not Reagan or Bush or Bush II or Obama...

It was Clinton. Sure, those other guys played a part and later presidents furthered his policies, but Clinton -- the face of the 'new' moderate democratic party -- was the one who pushed NAFTA through. He is the one who massively lowered tariffs. He is the one who endorsed other trade agreements that made it more cost efficient for companies to pack up their things and leave than to provide jobs to Americans and keep their money circulating in this country.

It was Clinton who I consider mainly responsible for these massive CEO earnings... And he is maybe the major culprit in the destruction of the middle class.

For as revered as he has become to the modern American left, if they really examined his policies and their impacts, I doubt many would walk away with a smile on their faces.




How can you possibly say that attempting to get these CEO salaries under control wouldn't help the situation? If a CEO was making, say, 50x the average worker instead of 500x, I think it is safe to say that said worker would be in much better shape to support his family, re-circulate that money into the economy, buy things... And, all of that extra money could also fund more jobs for more people.

No, it isn't going to 'solve' the real problem. These massive CEO salaries are only the RESULT of the core problems. But, that doesn't mean that they should be ignored and deemed hopeless in trying to remedy.[/QUOTE]

You're correct, it shouldn't be a left right issue. The left and the right have both failed us.

Getting "CEO salaries under control" is to me, an anti-American statement. People have the right to make money in this country, and the government putting a cap on earnings has no business in a free society.

People spending money won't fix the economy, people saving money will. We need savings in this country, and to do that we need the federal reserve abolished. They are artificially keeping interest rates low, making the return of savings next to nothing. Then to make matters worse, they keep inflating the dollar, meaning that if you save money today you'll actually have LESS money in the future.

We need REAL savings, so that entrepreneurs can use that money to start businesses. Businesses that people actually WANT, not businesses that failed and had to be bailed out (a very anti-capitalist move). Failed businesses should be allowed to fail so that productive businesses can grow in their place. From there, we can create jobs and wealth.

Instead what we do is heavily regulate businesses so that EVEN IF the above were true, nobody would want to start a business in America anyway.

Obama isn't a socialist because he's raising taxes. He does however support some socialist policies, his health care reform being the most despicable of all.

Good intentioned but arrogant liberals laugh at republicans for their fear of socialism. I'm neither democrat or republican, and from my outside view it's democrats that are the wrongful party in that situation. Socialism IS something to be feared, and it IS slowly being integrated into America. It started with social security and welfare but it continues on today. Yelling "socialist!" isn't just a way for republicans to insult Obama, it's a very true criticism, and quite a scary thing.

We don't need tax rates going up on ANYONE, we need tax rates going down. We need massive cuts of government programs, we need to get out of these wars and withdraw our troops all over the world. Military spending needs to be cut, education spending, welfare, social security, all of these things need to be massively cut.

Then, the American people need to take a good hard look at the constitution and decide if they want it anymore. We're at a crossroads here people.. are we going to continue to be a free nation with all the personal responsibility it entails, or go down the road of big government, loss of freedoms, welfare state, weak economy? What do you guys want?

You mention that unregulated capitalism isn't perfect either. I agree, some regulations should exist. But we've over regulated and now we're driving businesses out of America, have been for some time. Not only that, but we're making the businesses that do stay here uncompetitive. Then people wonder why their company is cutting employees and moving to other cities. It's not profitable to do business in America now, entirely thanks to our government interfering with the economy. This has been a slow moving train that started in 1913, and now we're in complete free fall mode.

[URL="http://finance.yahoo.com/banking-budgeting/article/112189/who-owns-the-us?mod=bb-debtmanagement"]How much we owe in debt[/URL]

[QUOTE=joe]You're correct, it shouldn't be a left right issue. The left and the right have both failed us.

Getting "CEO salaries under control" is to me, an anti-American statement. People have the right to make money in this country, and the government putting a cap on earnings has no business in a free society.

People spending money won't fix the economy, people saving money will. We need savings in this country, and to do that we need the federal reserve abolished. They are artificially keeping interest rates low, making the return of savings next to nothing. Then to make matters worse, they keep inflating the dollar, meaning that if you save money today you'll actually have LESS money in the future.

We need REAL savings, so that entrepreneurs can use that money to start businesses. Businesses that people actually WANT, not businesses that failed and had to be bailed out (a very anti-capitalist move). Failed businesses should be allowed to fail so that productive businesses can grow in their place. From there, we can create jobs and wealth.

Instead what we do is heavily regulate businesses so that EVEN IF the above were true, nobody would want to start a business in America anyway.

Obama isn't a socialist because he's raising taxes. He does however support some socialist policies, his health care reform being the most despicable of all.

Good intentioned but arrogant liberals laugh at republicans for their fear of socialism. I'm neither democrat or republican, and from my outside view it's democrats that are the wrongful party in that situation. Socialism IS something to be feared, and it IS slowly being integrated into America. It started with social security and welfare but it continues on today. Yelling "socialist!" isn't just a way for republicans to insult Obama, it's a very true criticism, and quite a scary thing.

We don't need tax rates going up on ANYONE, we need tax rates going down. We need massive cuts of government programs, we need to get out of these wars and withdraw our troops all over the world. Military spending needs to be cut, education spending, welfare, social security, all of these things need to be massively cut.

Then, the American people need to take a good hard look at the constitution and decide if they want it anymore. We're at a crossroads here people.. are we going to continue to be a free nation with all the personal responsibility it entails, or go down the road of big government, loss of freedoms, welfare state, weak economy? What do you guys want?

You mention that unregulated capitalism isn't perfect either. I agree, some regulations should exist. But we've over regulated and now we're driving businesses out of America, have been for some time. Not only that, but we're making the businesses that do stay here uncompetitive. Then people wonder why their company is cutting employees and moving to other cities. It's not profitable to do business in America now, entirely thanks to our government interfering with the economy. This has been a slow moving train that started in 1913, and now we're in complete free fall mode.[/QUOTE]

Regulations making the US uncompetitive? Are you talking about minimum wage, child labor laws, workplace safety, etc?

Because, in order to be 'competitive' with places like China and India, we would have to use American workers 14 hours a day for $10 a day.

There are still major corporations in America that are bringing in RECORD profits... Not just profits, but RECORD profits. Americans still love buying stuff and this country still uses a hell of a lot of steel.

The biggest difference between now and 50 years ago are the trade agreements, globalization and the lack of tariffs on imported products... And that is why CEOs are making obscenely more money, there are virtually NO jobs that can support a family for unskilled workers and there has been a massive redistribution of wealth to the Top 1%.

If you want to take things back to when the Constitution was written, fine... Massive tariffs on imported goods and no trade agreements. I'm with you on those two things.

[QUOTE=joe]
People spending money won't fix the economy, people saving money will. We need savings in this country, and to do that we need the federal reserve abolished. They are artificially keeping interest rates low, making the return of savings next to nothing. Then to make matters worse, they keep inflating the dollar, meaning that if you save money today you'll actually have LESS money in the future.

We need REAL savings, so that entrepreneurs can use that money to start businesses. Businesses that people actually WANT, not businesses that failed and had to be bailed out (a very anti-capitalist move). Failed businesses should be allowed to fail so that productive businesses can grow in their place. From there, we can create jobs and wealth.
[/QUOTE]

And you do know that if people were saving money, many (if not most) would save up their money in the bank without ever touching it? It would essentially lead to money being "stuck" - not the best word to use for this situation but can't think of a better one. Not everyone will invest the money they save up, not even half will.

I actually hear a similar argument to that earlier today (much more extreme than your argument but their logic for end result is similar). The other person said that government needs to remove income taxes entirely so people have more money in their pockets to buy more things with and to invest more with, allowing the economy to flourish. I asked him "What happens when the people refuse to buy more things and refuse to invest and end up keeping the extra money they make in the bank?" He said "Well then it would be their choice." I wasn't too happy with that response. That tells me one of 2 things: a) He doesn't understand the basics of how taxation works and/or b) he doesn't understand that cutting all income taxes is not an answer to solving the economic problems.

As I mentioned in my opening post, capitalism works best when money is cycling between different sectors (i.e. public sector, private sector, etc). Taxing helps the money cycle between the government and the people. When the government receives the tax money, they spend that money on other matters, such as building roads and providing service to the people. As soon as the money cycle stops or slows down, capitalism starts to destabilize and fall apart.

Therefore, leaving the spending in the hands of the people is not a solution. If anything, it could hurt the economy more than help.

[QUOTE=RedBlackAttack]Regulations making the US uncompetitive? Are you talking about minimum wage, child labor laws, workplace safety, etc?

Because, in order to be 'competitive' with places like China and India, we would have to use American workers 14 hours a day for $10 a day.

There are still major corporations in America that are bringing in RECORD profits... Not just profits, but RECORD profits. Americans still love buying stuff and this country still uses a hell of a lot of steel.

The biggest difference between now and 50 years ago are the trade agreements, globalization and the lack of tariffs on imported products... And that is why CEOs are making obscenely more money, there are virtually NO jobs that can support a family for unskilled workers and there has been a massive distribution of wealth to the Top 1%.

If you want to take things back to when the Constitution was written, fine... Massive tariffs on imported goods and no trade agreements. I with you on those two things.[/QUOTE]

There are other differences between now and 50 years ago. 1- There are more regulations. For instance, due to the Patriot Act banks have to monitor their clients banking habits and are forced to report those habit to the government. That is extra time and money, and is one of many regulations we have on businesses today.

Another difference is government interference in markets. The most obvious example of this is college tuition. People wonder why college tuition is so high and I know the answer, it's a fairly simple one. They're high because the government guarantees the repayment of loans to the lenders. Because of this, the lenders take no risk by giving out loans. Even if the student doesn't pay them back, they get their money from the government. This leads to lower loaning standards, and now EVERYONE and their momma is able to get loans.

You'd think this would be a good thing, right? More kids could go to college? Actually it's a negative, because due to this, colleges can raise the tuition as high as they please. Because EVERYONE can get a loan, they don't lose any customers by raising the tuition.

If the government didn't guarantee tuition loans, tuition would be much cheaper. Colleges would be forced to lower prices to attract customers. Imagine trying to charge $25,000 a year for college, when customers had to pay cash? It'd be impossible. Prices would come way down.

And in fact that's what you see. Look at college tuition prices before government got involved and they're in the $2,000 a year range, more or less depending on the school.

Government is similarly involved in other markets, including medical care and real estate.

But by far the biggest difference between now and 50 years ago is inflation. We had inflation 50 years ago, sure, but it's continued to skyrocket since then and now we're at a precipice. This is caused by the Federal Reserve, an entirely unconstitutional bank that is allowed to expand the money supply at their own will.

Of course companies are still bringing in profits.. it's the smaller companies that are most hurt by regulations. The big companies can afford to pay the extra money, the smaller companies can't. They either go out of business or move overseas.

Also, their record profits may be misleading. With so much inflation, of course their raw dollar number is higher. But is it of the same worth?

[QUOTE=joe]There are other differences between now and 50 years ago. 1- There are more regulations. For instance, due to the Patriot Act banks have to monitor their clients banking habits and are forced to report those habit to the government. That is extra time and money, and is one of many regulations we have on businesses today.

Another difference is government interference in markets. The most obvious example of this is college tuition. People wonder why college tuition is so high and I know the answer, it's a fairly simple one. They're high because the government guarantees the repayment of loans to the lenders. Because of this, the lenders take no risk by giving out loans. Even if the student doesn't pay them back, they get their money from the government. This leads to lower loaning standards, and now EVERYONE and their momma is able to get loans.

You'd think this would be a good thing, right? More kids could go to college? Actually it's a negative, because due to this, colleges can raise the tuition as high as they please. Because EVERYONE can get a loan, they don't lose any customers by raising the tuition.

If the government didn't guarantee tuition loans, tuition would be much cheaper. Colleges would be forced to lower prices to attract customers. Imagine trying to charge $25,000 a year for college, when customers had to pay cash? It'd be impossible. Prices would come way down.

And in fact that's what you see. Look at college tuition prices before government got involved and they're in the $2,000 a year range, more or less depending on the school.[/quote]

College tuition and student loans are complete rackets. I think we can all agree on that... At least, anyone who has ever been to college. You are right in that there is no risk to lenders and there seems to be no cap on the ever-increasing price of tuition.

I think that there is another, less obvious problem at work, here, involving the current state of colleges, tuition and -- more importantly -- the value of a diploma.

There was a time when reaching the upper-levels of education by getting accepted into college and earning your degree was a real accomplishment that came with real rewards (full-time employment upon graduation, plenty of job offers).

These days, with the massive number of people attending universities and colleges across the country, the market-place has been totally diluted with students and graduates and they all cannot be compensated with work.

This goes back to your statement about the enterprise that upper-echelon schooling has become. It is no longer about developing the nation's future leaders and the people who are truly skilled in a subject, but about holding onto you for as long as possible (average time for degree completion has increased from four to five years in the last 15-20 years), milking as much money as possible out of you and then getting you out of there.

Things like graduation rates have supplanted actual education for a lot of schools, because the higher the graduation rate, the more they can charge.

Now, throw in the fact that the unskilled labor force is basically done in this country and you have an influx of students who may have worked in a mill for a good, livable wage right out of high school being forced to go to college to even have a shot at a similar paying job.

It is really a vicious circle. The fall of our manufacturing base has had ripples in literally every segment of society. From the ridiculous redistribution of wealth to the top 1% of the country to the completely deluded workforce all competing for the same jobs.

[QUOTE=joe]Also, their record profits may be misleading. With so much inflation, of course their raw dollar number is higher. But is it of the same worth?[/QUOTE]

Raw dollar numbers really have nothing to do with it. Again, in 1950, the average CEO made 30x the average worker. Now it is 300-500x the average worker. There is no amount of inflation that is going to explain away this disparity. It is staggering, frankly.



I would like to hear your opinions on NAFTA, tariffs and other trade agreements.

[QUOTE=RedBlackAttack]College tuition and student loans are complete rackets. I think we can all agree on that... At least, anyone who has ever been to college. You are right in that there is no risk to lenders and there seems to be no cap on the ever-increasing price of tuition.

I think that there is another, less obvious problem at work, here, involving the current state of colleges, tuition and -- more importantly -- the value of a diploma.

There was a time when reaching the upper-levels of education by getting accepted into college and earning your degree was a real accomplishment that came with real rewards (full-time employment upon graduation, plenty of job offers).

These days, with the massive number of people attending universities and colleges across the country, the market-place has been totally diluted with students and graduates and they all cannot be compensated with work.

This goes back to your statement about the enterprise that upper-echelon schooling has become. It is no longer about developing the nation's future leaders and the people who are truly skilled in a subject, but about holding onto you for as long as possible (average time for degree completion has increased from four to five years in the last 15-20 years), milking as much money as possible out of you and then getting you out of there.

Things like graduation rates have supplanted actual education for a lot of schools, because the higher the graduation rate, the more they can charge.

Now, throw in the fact that the unskilled labor force is basically done in this country and you have an influx of students who may have worked in a mill for a good, livable wage right out of high school being forced to go to college to even have a shot at a similar paying job.

It is really a vicious circle. The fall of our manufacturing base has had ripples in literally every segment of society. From the ridiculous redistribution of wealth to the top 1% of the country to the completely deluded workforce all competing for the same jobs.



Raw dollar numbers really have nothing to do with it. Again, in 1950, the average CEO made 30x the average worker. Now it is 300-500x the average worker. There is no amount of inflation that is going to explain away this disparity. It is staggering, frankly.



I would like to hear your opinions on NAFTA, tariffs and other trade agreements.[/QUOTE]

Haven't done much research on NAFTA or US tariffs, but I'll do some and come back with an opinion later tonight (if I'm able to learn enough about it in a few hours to form some type of rational opinion).


To respond to your other points though..

1 - More people in college, college holding us there longer. I don't disagree with you but I don't necessarily blame the colleges for wanting people there longer. When you're making the amount of money they're making for one year of classes, it makes good business sense to get people to stay an extra year. I think the blame for this goes back to the government for guaranteeing the repayment of loans, allowing tuition prices to sky rocket.

The fact that so many people are attending college is again the governments fault. Hate to sound like a dead horse, but the truth is the truth is the truth. Government has made college a VERY profitable business venture. By guaranteeing the loan repayments, college tuition has skyrockets as a result. Of course this should lead to more colleges opening up. And that's what I find with my research:

[url]http://nces.ed.gov/fastfacts/display.asp?id=98[/url]

Scroll down and look at the chart. As you can see, the number of higher education institutions has increased every year studied.

That page also shows that colleges are enrolling more people every year. Again, this is the cause of government. If colleges weren't making $20,000 a year per student, they couldn't afford to allow so many people to enroll. They couldn't afford to build the extra dorms, hire the extra teachers, etc.

Then here's the real effect of this: College is leaving too many citizens with too much debt. The more debt a citizen has, along with the more taxes they pay, equals the less amount of money they have to save. Coupled with the federal reserve inflating the money/artificially lowering interest rates, saving is now more than ever an impossible option for most Americans. If you believe like me that it's a surplus of savings which allows new businesses to be born and to thrive... it becomes a huge problem.

How can new businesses be born when banks have no money to lend, and people have no money to spend?

To your point about the fall of our manufacturing base. This is a huge problem and the main reason for our trade deficit. We produce very little these days, which is why everything you own says "made in China" on it. In the 30's, it'd say "Made in the United States."

Production is the key to a great economy because it increases exports. Exports not only decrease our trade deficit but put us on the positive side of things.. we'd be owed more money than we owe.

There's many many factors to our lack of production and I can't pretend to know them all. I think the surplus of college students may be a small part of it, but I'd say the larger part is that [B]we as a country haven't had to pay the price of our negative trade deficit.[/B]

Because the dollar is the default currency, and because of our overall reputation as a prosperous nation, we've gotten away with all this importing, even when we hardly export anymore.

Eventually, sooner rather than later, this will all come crashing down. People aren't going to keep giving us cars/tv's/computers in exchange for the dollar soon enough, because the dollar won't be worth jack. When that happens, expect all of your standards of living to go down.

For now, other countries are propping our way of life up. But when they stop.. could be this year, could be within the next few years.. It will be a long fall down.

The inflation of the dollar, the big government, and everything else will act as a bed of spikes at the bottom of our fall.

The real estate bust isn't helping either.

Middle-class people who were trying to buy homes, ended up losing their homes and destroying their credit. Lower-class people completely lost any dream of owning a home. And the upper-class people with disposable income are buying up homes for dirt cheap... and then renting them to the poor and middle class people.



Rich get richer.

[QUOTE=bdreason]The real estate bust isn't helping either.

Middle-class people who were trying to buy homes, ended up losing their homes and destroying their credit. Lower-class people completely lost any dream of owning a home. And the upper-class people with disposable income are buying up homes for dirt cheap... and then renting them to the poor and middle class people.



Rich get richer.[/QUOTE]

Exactly whats happening in Florida.

[QUOTE=-playmaker-]I don't know what the f*ck you guys are talking about...10% of our households make $164k a year?

that is VERY GOOD!!!

10% is A LOT OF PEOPLE!!!


[B]hell the BOTTOM 10% makes $30k...that is pretty poor, but they are living, and that is our "dirt"...[/B]


these charts are good IMO...not bad

this country is well off![/QUOTE]

Re-read the chart.

That's not the bottom 10%. That's the bottom 90%.

Some people (not Breason :-)) like to blame the housing bubble/housing collapse/recession on capitalism.

The housing bubble was NOT the fault of rich people, or capitalism, or anything like that.

It is the fault of government interference with the economy.

What we currently have in the USA, is the federal reserve bank which artificially manipulates interest rates. I won't get into why or how, but they've been keeping interest rates artificially low for a very long time. Including the time period before the housing collapse. This means you get less return for saving, but you pay less interest to borrow.

What this did was allow many people who had no business borrowing money, to borrow money from banks. Now we've got a bunch of Americans with loans looking for something to spend the money on.

Then, we've got the government guaranteeing bad mortgages. They say to any mortgage company, that if a person defaults on their loan, don't worry about it, we'll pay you the money. Because of this, mortgage companies lowered their standards. Even if you had not-so-good credit, they'd accept you and give you the money for a home.

Meanwhile, the false perception was growing that homes were a good investment. The thought was that the price of homes would continue to rise forever, so smart people should borrow money, buy a home, and later sell it for a profit. Remember all those people with the bank loans? This is what they spent their money on.

Because the DEMAND for homes was growing from people who seemed to have money (they didn't REALLY have money, they just borrowed it), companies began to increase the supply to match it. We had companies all over the USA building new homes, thinking there'd be massive amounts of people with money ready to buy them all up.

This my friend, is what we call a bubble. We had a housing bubble. So how did the bubble burst?

The bubble burst because banks/real estate brokers/mortgage companies realized the people couldn't really afford those homes they bought. We got people defaulting on their loans left and right, and suddenly the price of real estate is going DOWN because the companies see that nobody can really afford these houses at the inflated prices. Meanwhile we've got all these homes being built across the country that nobody can afford anymore (nor could they truly ever).

The true cause of the housing bubble was government interfering with the economy. If the federal reserve wasn't messing with interest rates, companies could better read if people had money to spend, and banks wouldn't be giving out loans to people who didn't have the money to pay it back. If the government wasn't guaranteeing mortgages, we wouldn't have a bunch of people buying homes that truly couldn't afford them.

This also helped cause the recession, but I'll get into that another time if anyone is still interested.

And now what direction are we going in? We are only getting more government interference with the economy, and worse yet, the people are CLAMORING for it! They don't understand that that's what caused these problems to begin with.

I'm a Real Estate agent with a BA in Economics... but thanks.

I didn't blame anything on "the rich people". I simply stated that the real estate bust is further increasing the wealth gap between the upper, middle, and lower class.


I'de say 90% of the homes I sell these days are secondary homes or investment properties... and most of them are short sells as well(meaning the original owner is defaulting on the loan).

[QUOTE=bdreason]I'm a Real Estate agent with a BA in Economics... but thanks.

I didn't blame anything on "the rich people". I simply stated that the real estate bust is further increasing the wealth gap between the upper, middle, and lower class.


I'de say 90% of the homes I sell these days are secondary homes or investment properties... and most of them are short sells as well(meaning the original owner is defaulting on the loan).[/QUOTE]

My fault, didn't realize you had a background in economics. Honestly, that "rich get richer" bit you said was true, but most people who say that are people who AREN'T educated in economics. "Oh, the rich get richer, what a horrible country we are," calling for the end of capitalism and what not. That's why I went off on that whole lecture. My apologies.

[QUOTE=joe]My fault, didn't realize you had a background in economics. Honestly, that "rich get richer" bit you said was true, but most people who say that are people who AREN'T educated in economics. "Oh, the rich get richer, what a horrible country we are," calling for the end of capitalism and what not. That's why I went off on that whole lecture. My apologies.[/QUOTE]


No worries man, it was good info.



I personally hold the lending institutions largely responsible for the real estate bust... and many of my good friends are loan officers (or were). These institutions were making loans they knew people couldn't afford, and then after everyone started defaulting on their loans, these same institutions tried to act like they were the victims.

I feel part of the blame falls on my shoulders too. I was selling homes to people even though I knew they couldn't afford them, and connecting them with my friends (loan officers) to get them pre-approved. Some of these sub-prime loans these people were taking out were beyond ridiculous, and I knew they could never pay them... but I said nothing. I have plenty of former clients who have defaulted on their loans, and it's something that I regret everyday of my life.




ps- a sub-prime loan is a loan that starts off with a low, fixed interest rate, but then changes to an adjustable rate mortgage (ARM), increasing the monthly payments on the loan. Most the people who took these loans could barely pay their initial monthly payments, and once the ARM kicked in, they were forced to default on the loan.

[QUOTE=bdreason]No worries man, it was good info.



I personally hold the lending institutions largely responsible for the real estate bust... and many of my good friends are loan officers (or were). These institutions were making loans they knew people couldn't afford, and then after everyone started defaulting on their loans, these same institutions tried to act like they were the victims.

I feel part of the blame falls on my shoulders too. I was selling homes to people even though I knew they couldn't afford them, and connecting them with my friends (loan officers) to get them pre-approved. Some of these sub-prime loans these people were taking out were beyond ridiculous, and I knew they could never pay them... but I said nothing. I have plenty of former clients who have defaulted on their loans, and it's something that I regret everyday of my life.




ps- a sub-prime loan is a loan that starts off with a low, fixed interest rate, but then changes to an adjustable rate mortgage (ARM), increasing the monthly payments on the loan. Most the people who took these loans could barely pay their initial monthly payments, and once the ARM kicked in, they were forced to default on the loan.[/QUOTE]

My brother in law worked for a mortgage company, and he feels some of the same guilt you speak of. Got to do what you got to do to support yourself/the family, though.

He worked with people to re-structure the terms of their mortgage, so they wouldn't have to default. This generally let people lower their monthly fee, but added years and years of repayment overall, and of course much more interest to be paid overall as well.