Quote from: FayeforCure on August 22, 2011, 09:34:57 AM
Quote from: acme54321 on August 22, 2011, 09:29:15 AM
Jeffrey, where did I ever say that the lenders should have been bailed out?
So then nobody gets bailed out and the economy crashes.
Government by no means should ever take corrective action to remedy economic ills (snark)
The US Government should not "bail out" ANY private entitiy. (Actually, the USG has no Constitutional authority to do so. Another argument for a return to Constitutional government.) And yes, "crashes" will occur.
Quote from: stephendare on October 15, 2011, 11:06:36 AM
Quote from: NotNow on October 15, 2011, 10:25:59 AM
Quote from: FayeforCure on August 22, 2011, 09:34:57 AM
Quote from: acme54321 on August 22, 2011, 09:29:15 AM
Jeffrey, where did I ever say that the lenders should have been bailed out?
So then nobody gets bailed out and the economy crashes.
Government by no means should ever take corrective action to remedy economic ills (snark)
The US Government should not "bail out" ANY private entity. (Actually, the USG has no Constitutional authority to do so. Another argument for a return to Constitutional government.) And yes, "crashes" will occur.
Actually the Constitution does grant Congress the Authority, and we are presently living in a Constitutional Government. while you might favor the opinion that limited government is best, and that you would prefer to return to the weak government that existed under the Articles of Confederation, where there truly was no Constitutional Authority for such things, the argument has already been settled twice since then.
There is no point in making untrue statements in the pursuit of advancing your argument about limited government.
It completely discredits the validity of the rest of your posts on the subject.
I disagree. Where in the Constitution is the USG granted the authority to give our tax money to private entities? We have had this discussion many times, and my call for a return to Constitutional government has absolutely nothing to do with your constant red herring referral to the Articles of Confederation. Our Constitution clearly defines the role of the Federal Government. Only since the Roosevelt Supreme Court have we been saddled with a USG that is allowed to regularly act beyond that clearly defined role. The result is the behemoth, out of control, unresponsive and indebted monstrosity that the is the current Federal Government.
We do live in a Constitutional Republic. It is my wish that we actually follow the document. The USSC must reverse the decisions that have resulted in an unrestrained Federal Government. The FDR Court made mistakes. The USSC has made mistakes before...and corrected them.
To argue for an unrestrained Federal Government, as you do, flies in the face of history and the founding of our country.
There is a large and growing call for the USSC to correct itself. To fail to do so will result in what you and others such as Faye appear to want, European style "social democracy" or even fascism. Both of which have effectively failed there. I'll take the model of Jefferson, Madison, and the other founders.
What I want to know is why bank of america was allowed to buy all of the country wide mortgages in a fire sale instead of the homeowners. It is just another example of the government favoring corporations over people. Tom Hartman always rails against corporations being treated as people. I say why would they want to lower themselves to only the same rights as people.
Giving tax money to private businesses has nothing to do with interstate trade.
I will ask again where you find the justification in the US Constitution for such an activity by the USG? Where is it authorized to buy stock in corporations? Who decides where the public money goes?
As for arguing that the government is legally empowered to do something, isn't that what political debate is all about? Hasn't the USG been found to be outside of its Constitutional jurisdiction many times before? The US Constitution is not a "living" document. It is a legal standard and if this country is to be a nation of laws, and not men, then those standards should be followed. If change is needed, then the amendment process is well laid out.
Calling names and just stating that my views are wrong does not constitute "intellectual muscle". In fact, it is just the opposite. I would welcome an argument based on facts. Please leave out the snide insults if you wish to debate with me.
Quote from: stephendare on October 16, 2011, 02:56:42 AM
Quote from: NotNow on October 15, 2011, 10:35:22 PM
Giving tax money to private businesses has nothing to do with interstate trade.
I will ask again where you find the justification in the US Constitution for such an activity by the USG? Where is it authorized to buy stock in corporations? Who decides where the public money goes?
As for arguing that the government is legally empowered to do something, isn't that what political debate is all about? Hasn't the USG been found to be outside of its Constitutional jurisdiction many times before? The US Constitution is not a "living" document. It is a legal standard and if this country is to be a nation of laws, and not men, then those standards should be followed. If change is needed, then the amendment process is well laid out.
Calling names and just stating that my views are wrong does not constitute "intellectual muscle". In fact, it is just the opposite. I would welcome an argument based on facts. Please leave out the snide insults if you wish to debate with me.
Um ok. Here we go again.
The Elastic Clause.
Article One of the United States Constitution, section 8, clause 18:
The Congress shall have Power - To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer there of.
http://en.wikipedia.org/wiki/Elastic_clause
Notnow. Produce in the Constitution where it forbids any activity you mentioned.
Let's show ALL of Article 8, shall we?:
Section. 8.
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
To borrow Money on the credit of the United States;
To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;
To establish Post Offices and post Roads;
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
To constitute Tribunals inferior to the supreme Court;
To define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations;
To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;
To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;
To provide and maintain a Navy;
To make Rules for the Government and Regulation of the land and naval Forces;
To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;
To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;
To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;--And
To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.
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So the clause should only apply to the "foregoing powers"! Seems pretty clear that giving tax money to private business is not in those "foregoing powers".
To understand a law, we should understand the writers thoughts:
"The first and governing maxim in the interpretation of a statute is to discover the meaning of those who made it." --James Wilson, Of the Study of Law in the United States, 1790
Alexander Hamilton argued for adoption of the Constitution, and attempted to dissaude those who feared the "elastic clause" would provide unlimited Federal power in the Federalist #33. A synopsis:
"Hamilton notes that the Necessary and Proper Clause and the Supremacy Clause "have been the source of much virulent invective and petulant declamation against the proposed Constitution." He argues that the first clause is implicit in the constitutionâ€"if congress is granted a power, it must necessarily be able to draft laws that enable it to execute that power. Hamilton then applies this line of logic to the issue of taxation, stating that Congress must have the power to create legislation to collect taxes.
He poses the question of why the clause should be included, if its power is implicit? He answers by saying that the clause is included "to guard against all cavilling refinements in those who might hereafter feel a disposition to curtail and evade the legitimate authorities of the Union," in other words, to guard against those who would seek to evade the authority of the Union by an overly literal interpretation of the constitution.
His response to a potential abuse of these powers is that the government must be responsible for the proper exercise of its powers, but ultimately the people themselves must hold the government to account. "If the federal government should overpass the just bounds of its authority and make a tyrannical use of its powers, the people, whose creature it is, must appeal to the standard they have formed, and take such measures to redress the injury done to the Constitution as the exigency may suggest and prudence justify."
Hamilton similarly argues that the Supremacy Clause is simply an assurance that the government's powers can be properly executed, saying that a law itself implies supremacy, and without supremacy it would amount to nothing. He returns to the example of taxation, stating that the supremacy of the constitution as the law of the land did not preclude states from independently raising their own taxes as necessary, except for duties on imports and exports.
Hamilton concludes by saying that this concurrent jurisdiction in the realm of taxation was the only acceptable substitute to complete federal control, an idea he expounds upon in Federalist No. 34."
Madison commented in the Federalist #44. A synopsis:
"Madison then argues at length for the Necessary and Proper Clause, noting that no part of the constitution had come under more attack. He states flatly that the clause is "invulnerable" and that without it the constitution would be a "dead letter." He says that the Constitution might have listed either enumerated those necessary and proper powers or attempted to list those that were expressly not necessary and proper, but argues that either exercise would have been futile in that no list could ever fully take into account all of the nation's present and future concerns.
He responds to critics who feared that the clause would allow the government to overstep its powers that the people would have the same redress to this as to any occasion on which the legislature abused its powers: the balance of the executive and legislative branches, and the potential to remove the offending legislators via the ballot box."
A wiki synopsis of the argument:
"Although the court in McCulloch v. Maryland[5] held that all Federal laws need not be "absolutely necessary" to be necessary and proper and noted "The clause is placed among the powers of Congress, not among the limitations on those powers," it also noted "Should Congress, in the execution of its powers, adopt measures which are prohibited by the Constitution, or should Congress, under the pretext of executing its powers, pass laws for the accomplishment of objects not intrusted to the Government, it would become the painful duty of this tribunal, should a case requiring such a decision come before it, to say that such an act was not the law of the land." (a reference to judicial review established by the court earlier in Marbury v. Madison.) Whether various federal laws are necessary and proper exercises of Constitutional power or violations of Constitutional limits on federal power and whether the Supreme Court has ruled properly in cases where this question is at issue seems a constant matter of deep controversy."
As for where in the Constitution such behavior by the USG is forbidden:
"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."
Commonly known as the Tenth Amendment, the most violated amendment of the US Constitution.
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I encourage everyone to read the Federalist #'s 33 and 44...and ALL of the Federalist Papers. And just read the Constitution as well. It was written well before the politicians started writing the kind of blabbering meaningless drivel we call "law" now. It is quite clear and concise in it's language.
http://www.archives.gov/exhibits/charters/constitution_transcript.html
http://en.wikipedia.org/wiki/United_States_Bill_of_Rights
http://www.foundingfathers.info/federalistpapers/
I believe Stephen has this one already, but arguendo, even if he didn't, the General Welfare Clause would also cover it.
Again, your continuous reference to the Articles of Confederation has ... nothing...to...do... with....what....we....are.... talking....about.
I believe that any reading of the Constitution easily illuminates what the Federal government is "empowered" to do. The 10th amendment speaks for itself and seems quite clear in what it "prohibits". And of course, you (and no one else) can point to one of the "foregoing powers" and say it is the one that the "elastic clause" is supporting when the USG is giving tax money away to private businesses owned by political cronies.
Have they "gotten away with it"? It would appear so, at least as of now. It would also appear that the public is about fed up. The "elastic clause" and the "general welfare clause" that have been used by the Federal government since the Roosevelt court came up with interpretations that give the USG powers FAR beyond what was intended by the writers of the Constitution. It has resulted in our government resting on the brink of bankruptcy, devaluation and possible ruin of the dollar, and the strangling our our individual freedoms.
Some would argue that such a consolidation of power in the Federal government was necessary to get through the Great Depression and WW2. I won't argue the past. I AM arguing that we must return to the original intent of the founding fathers AS STATED IN THE US CONSTITUTION in order for the United States to survive as a country that resembles what it was in its first 200 years.
Even the Democrats won't support another "bailout". Any common citizen can read the Federalist and the US Constitution and see how far our government has strayed from the "original intent". It is my fervent hope that the USSC comes to its senses and corrects these aberrant interpretations of our Constitution. I have pointed out in previous discussions where both Madison and Jefferson support my position on "the general welfare clause" (actually, I just support THEIR position).
I will continue to point out (correctly) that our government has strayed from following the Constitution as intended by the founding fathers. Many in this country agree with me. The legal debate about the "elastic clause" and the "general welfare Clause" have been going on since the early nineteenth century. The debate about the recent bank bailouts and TARP are ongoing and court cases are still pending. My position is not "outlandish" or "false". Why would you claim so? Are you just not aware that this country used the Madison view of this "clause" for most of the history of this country? Is it possible for you to debate without using shrill invectives? The rapid increase in Federal power over the last seventy five years has been a detriment to the country. The call for "social democracy" or fascism that you seem so enamored with will not work here as it has not worked in Europe. We do live in a Constitutional Republic. A return to the "original intent" of the founding fathers in the US Constitution is the proper course of action for our country. That is what built a small group of thirteen colonies into a world power in the first 150 years of our country.
_______________________________________________________________________________________________
Chris,
I would be interested in your opinion of this "cramdown" theory, and if possible, how that would be legislated to fulfill what Faye is proposing.
Blah, Blah, blah? Really? For the last time, we are discussing the US Constitution, NOT the Articles of Confederation. The Constitution has a process for amendment. It has NOT been amended to allow the government to give public money to private businesses run by political cronies. It really is just that simple.
As for the founding fathers, I would suggest that you do a little reading and you will find that Madison and Jefferson argued against exactly what you are for well after the Louisiana Purchase.
What is "ludicrous" is the weak attempt to justify the government handing over public money to cronies by the trillions.
I have never referred to the Articles. I am discussing the Constitution. It seems that you do not know the difference between the two, or that you do not understand the long standing debate over the very "clauses" that you and Chris have mentioned. I have pointed out that we (the people) have allowed our government to seize power that was not authorized by the US Constitution IMHO.
I am still waiting to hear which "enumerated power" you believe that either clause supports in the USG handing out public funds to private businesses of their choosing.
The constant red herrings are boring and have nothing to do with the subject. Our positions are clear. There is no need to continue this. I will return to Faye's mortgage thread. I am still waiting for Chris's opinion on your "cramdown" posts. Are you suggesting that anyone who is "underwater" in their mortgage should declare bankruptcy? Or is there a legislative alternative?
Quote from: NotNow on October 17, 2011, 09:10:07 PM
The constant red herrings are boring and have nothing to do with the subject. Our positions are clear. There is no need to continue this. I will return to Faye's mortgage thread. I am still waiting for Chris's opinion on your "cramdown" posts. Are you suggesting that anyone who is "underwater" in their mortgage should declare bankruptcy? Or is there a legislative alternative?
Well, the government would have two issues with cramdowns, the first being that it is expressly constitutionally barred from passing any ex post facto law. Legislating a mandatory reduction in the value of a private asset whose value was set prior to the enactment of the cramdown legislation would constitute an ex post facto problem, and likely would not pass judicial scrutiny. The second problem is that this would clearly constitute an unconstitutional taking without just compensation, which again would not pass judicial scrutiny. I do not believe the government could order private lenders to reduce the value of their private assets, that would be unconstitutional for the two reasons I just described.
With that said, however, we certainly could do it if the government were willing to pay for the reduction in value, then there would be no taking without compensation, and it would be much more likely stand on judicial review. We've spent how many trillions in Iraq now? It would probably be money well spent.
But to answer your question without injecting my admittedly liberal political philosophy into it, no, the government could not simply order mortgage cramdowns. This very issue in fact has been litigated all the way to SCOTUS, some time ago bankruptcy judges were reducing the principal on mortgages, and ultimately that was found to be an unconstitutional taking without just compensation, plus the ex post facto problem. Which is why mortgage principal is the one liability that can not be adjusted in bankruptcy court. Even student loans can be reduced or discharged if you show sufficient hardship. It's an almost impossible standard to meet, but at least it is theoretically possible. But not so with mortgages.
If the government wanted to do that, they'd have to pay for the costs of it.
Which would probably still be a fraction of what we've spent in the middle east in the past couple years.
I still don't understand why we're spending trillions helping millions of people in foreign countries that, by and large, want to kill us, but when it comes to people who need help within our own borders it's just "tough luck"?
Quote from: stephendare on October 18, 2011, 09:44:03 AM
It would actually be part of a modified bankruptcy procedure.
http://www.housingwire.com/2009/09/10/barney-frank-eyes-mortgage-cramdown-revival
QuoteA controversial piece of bankruptcy legislation may see a revival soon, according to discussion begun this week with House Financial Services Committee chairman Barney Frank, D-Mass., indicating mortgage cramdowns through bankruptcy is an increasingly relevant idea.
At a House subcommittee hearing Wednesday, Frank gave vocal support to cramdown legislation, which would allow bankruptcy judges to alter mortgages on primary residences, potentially lowering â€" or "cramming down" â€" a portion of the balance.
Frank remains "disappointed by the pace of foreclosure mitigation efforts" across major servicers, according to a spokesperson with his office. If the pace of these efforts does not increase, he may soon push the campaign for bankruptcy reform in the broad financial regulatory reform bill moving through the House.
At the hearing over the progress of the Making Home Affordable (MHA) Program's modification and refinance initiative, Frank disputed the notion a bankruptcy cramdown law would make people eager to enter bankruptcy as an alternative to foreclosure. He said "bankruptcy is no picnic" and again pointed toward the sluggish performance of servicers within the MHA modification program six months into its operation.
"The best lobbyists we have for getting bankruptcy legislation passed are the servicers who are not doing a very good job of modifying mortgages," Frank said. "And if they do not improve their performance, then they improve the chances of that legislation."
Opponents of the legislation, including Rep. Spencer Bachus, R-Ala., say cramdowns would not solve the key issues prolonging the foreclosure crisis, like high unemployment that prevent homeowners from affording mortgage payments.
"Bankruptcy cram-down [legislation], which was rejected by the Senate earlier this year, would severely undermine recent measures taken to unfreeze credit by private markets and I think would prolong our housing recovery by adding uncertainty to the market and increasing mortgage costs to the vast majority of Americans," Bachus said in opening remarks at the hearing Wednesday. "[It] would precipitate some of the very things the Administration is attempting to prevent with this legislation."
But Frank said waiting for jobs to return is a "wholly inadequate" approach to reducing the flow of foreclosures. Bankruptcy reform, which would include cramdown legislation, bears little relevance to the availability of credit.
"We are talking about a bankruptcy bill that would be limited to mortgages already granted," Frank said. "The notion that this would somehow stop the flow of credit is hard to maintain. It would have nothing to do with credit going forward."
Second mortgages remain an issue to modifications, as second lien holders are reluctant to agree to modification, and Frank said he hopes to address the problems legally next year.
"There are people who say it would be good to modify…or reduce the principal, but no one's got the authority to do it," he said. "No one can decide how to arbitrate between first and second mortgages."
If it passes, I'm afraid it won't last long. You can't pass a law today that alters the legal status of what happened yesterday. That's really about as bedrock as it gets, it would constitute both an ex post facto law and a taking without just compensation. It would never make it through the federal appellate circuits, and I doubt it would even require SCOTUS review.
If the government wants to pay the lenders for the costs of the cramdowns, it could work. But simply ordering the reduction in value of a private security instrument after the fact, and not compensating the private party for the taking, is unconstitutional. Discharging unsecured debt against an individual debtor is a different story, because you aren't interering with private right to contract. While the debtor may be absolved, the bank has a right to the security interest in the real property that exceeds the scope of the bankruptcy courts' jurisdiction.
This is why second and third mortgages, and HELOCs, are dischargeable when the value of the house falls below the value of the combined mortgages, because they thereby become unsecured debt. But the bankruptcy court lacks the power to alter a private security instrument that isn't tied to the individual debtor, but to another asset.
I think we do need to reduce mortgage principal, and I loathe the thought of the taxpayers having to pay the same banks who caused the crisis all over again, but I question whether this would work legally. I wish it could be done, I really do, I think it's necessary. But it's like trying to thread a needle with no hole here, I am not sure what Mr. Frank is proposing is actually possible in its current form.
I think the government should simply cover the cost of the cramdowns, the benefit there is far worth the cost. And like I said to NotNow, it would be a small fraction of the amount spent invading countries we have no business being in, which he was wholeheartedly behind. I guess we can only be humanitarian outside our own borders?
Quote from: stephendare on October 17, 2011, 11:40:18 PM
Quote from: NotNow on October 17, 2011, 09:00:02 PM
I have never referred to the Articles. I am discussing the Constitution. It seems that you do not know the difference between the two, or that you do not understand the long standing debate over the very "clauses" that you and Chris have mentioned. I have pointed out that we (the people) have allowed our government to seize power that was not authorized by the US Constitution IMHO.
I am still waiting to hear which "enumerated power" you believe that either clause supports in the USG handing out public funds to private businesses of their choosing.
So when the united states does business, who should it do business with, notnow? Should it be only other governments? Not for profits? How about no independent contractors and the 25% of the economy that is supported by government spending is done solely with government employees?
What part of the Constitution is it that you suddenly believe prohibits this activity. It is a 180 degree about face from your belief that Vice President Cheney was perfectly right in handing half a trillion dollars to Halliburton isnt it? You had no qualms about Warrantless Wiretapping, or torture, or extraordinary renditions. All of which are directly unconstitutional. Why on earth do you care about that ole constitution all of a sudden?
If you can't see the difference between government contracting for services or products and the Government bailouts of the last few years, then there can be no conversation. Giving away public money is not "business".
If you wish to discuss the other subjects that you broached, then start another thread (you seem to enjoy doing that) about those subjects. I would hope that you might actually read the US Constitution first.
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Thanks for the replies on the "cramdown" idea. What would you think of a proposal to guarantee loans to underwater homeowners at the new lower rates? In other words, those homeowners who hold large or second mortgages at rates above the current rates could get new, guaranteed loans at a lower rate whether they are behind or not. That could substantially lower payments at least.