PoliCHARTZ - Thread of U.S. Politics & the Presidential Election

[Final-Fan]

halogamer1989 said:
As long as the taxes are low and yes, adjustment is always needed to prevent bubbles and the like--you see how the housing market turned out with the help from the CRA, right...

Well, I'm pretty sure we disagree on the appropriate tax burden, but the question is whether capital gains ought to be taxed at about the same rate as income.  It looks like we do agree on that.

(That is NOT what I meant by "adjusting for inflation", but sure, why not roll with it.) 

Hmm, a short search turned up a dissenting point of view ... http://bigpicture.typepad.com/comments/2008/10/misunderstandin.html

The CRA is not remotely one of the proximate causes of the current credit crunch, Housing collapse,and mortgage debacle. As I detailed in Barron's, there is plenty of things to be angry at D.C. about -- but this ain't one of them.

If you were to ask me to reveal the prime causative factor for the Housing boom, I would point you to Fed Chairman Greenspan taking rates to 1%, and then leaving them there for a year. The prime factor in the bust was nonfeasance on the Fed's part in supervising bank lending, allowing banks to give money to people who couldn't possibly pay it back.

The root legislative cause of the credit crisis was excessive deregulation. From exempting derivatives from regulation (2000 Commodities Futures Modernization Act) to failing to adequately oversee ratings agencies that slapped a triple AAA on junk paper, the pendulum swung too far away from reasonable oversight. By taking the refs off of the field and erroneously expecting market participants could self-regulate, the powers that be in DC gave the players on Wall Street enough rope to hang themselves with -- which they promptly did.

So I would say the proper remedy would be to reregulate the market. 

P.S.  By the way, you apparently don't dispute my characterization of the USA PATRIOT Act?  If so, I'm glad to see we at least agree on that.

P.P.S.  Just out of curiosity, how exactly did you come to the conclusion that a piece of legislation passed in 1977 suddenly caused the housing market to explode and then collapse 30 years later?