For Immediate Release: September 29, 2008Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
Contact: Lauren C. Barnett
Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
Statement from David Schweikert on â€œBailoutâ€ Bill
Scottsdale, AZ â€“ Candidate for Congress David Schweikert issued the following statement on the â€œbailoutâ€ bill which failed today in the House of Representatives.
David Schweikert stated, â€œTodayâ€™s vote proves that in these unstable financial times, Americans want fiscally-responsible leadership.â€
Schweikert continued, â€œI offer solutions that will not bankrupt taxpayers.Â We also need to stimulate the economy by keeping taxes low and cutting spending. Washington must learn to do more with less.Â This will require discipline â€“ but it must be done.Â Iâ€™m ready to take this fight to Congress.â€Â
â€œOur current financial crisis stems from home values plummeting.Â Arizona has been especially hard-hit by this reality.Â Thatâ€™s why I have been proposing mortgage tax credit in addition to tax deductibility to help homeowners and reduce foreclosures,â€ Schweikert continued.
Schweikert managed a $4 billion investment pool as Maricopa County Treasurer. Through his prudent investments, David Schweikert earned taxpayers over $300 million without losing a dime.Â As Treasurer, David Schweikert also refused to invest in risky mortgage-backed bonds.Â
â€œI understand families and businesses are struggling. We need leaders in Congress who can develop a solution, protect taxpayers and stimulate the economy.Â Letâ€™s get to work,â€ concluded Schweikert.
Schweikert seems to have a fundamental misunderstanding – the crisis is not due to falling housing prices, but due to a housing bubble. People bought homes that were never worth what they paid for them. House is a mortgage tax credit going to address this central problem.
I think that Schweikert has it right… How is $700b going to solve this? There is a free market solution which could be ignited by tax incentives not the nanny state…
There’s a housing bubble because so many houses are not selling, which means prices have to be lowered. They’re related, to say the least.
Schweikert is suggesting that Congress use prudent tax policy to help homeowners stay in their homes. That IS the basic problem here and his solution makes sense.
Mortgage lenders gave ridiculous deals to people who – in many cases – had no business buying the expensive homes they bought. Mortgage bankers kept selling these flimsy mortgages because Congress (Harry Mitchell among the Yes votes, by the way) passed bills to give mortgage lenders either the legal authority or the financial incentive to do so.
Mortgage bankers bear some blame because, well, a lot of them got used to the commissions they got from selling home loans so they sold more and more loans to more and more high-risk buyers. That can’t last forever, folks.
Upon this house of cards rested a huge chunk of our financial system. This month, it collapsed.Congress is asking us to pay the bill.
Hmmm… I have enough bills. I don’t need someone else’s.That’s why the “bailout” vote failed.
And Schweikert is right to suggest that common-sense tax policy would make a huge difference. Turning over yet MORE of our economy to the “gubmint” is a bad, bad idea.
How do you stimulate the economy by cutting spending? The US government is one of the largest purchasers of a product called “everything”. Right now, people are less inclined to spend and if they DO get tax breaks, they’re more than likely to save it (or pay off existing debt) than pumping it into the economy.
How many school districts went bankrupt under Schweikert’s “leadership”?
How does prudent tax policy help someone whose mortgage payment is $2500.00 a month and they’re $150,000 upside down in their house?
I mean, normally my gut would say “Let these idiots rot” – the ones who thought living in Anthem or Casa Grande and working in Chandler or Phoenix and commuting with an SUV was a good idea. Unfortunately, too many people got caught up in the tulip mania of deregulated banks, and we’d all suffer if we do.
“How many school districts went bankrupt under Schweikertâ€™s â€œleadershipâ€?”
Ah, the classic “it’s not an accusation if it’s formed like a question” routine.
Don’t get me wrong, I like to stick my licked finger in the air and gauge the winds like any other politician, but if you are going to try to attack me, use something of substance.
Roger – not suggesting the 700 Billion would solve this, at least not they way the proposal is. What I am saying is that his suggesting that this is fixed by mortgage tax credit doesn’t address the actual problem.
“Oh how I wish I could vote for this, but Nancy and Rahm said it’s bad for my election chances. Just once, I would like to vote my conscience. What did these guys think they were getting in me – a moderate? Huh! $700billion in government spending. Heck, I would make it a trillion if I had my druthers. I am liberal hear me roar!”
PS Nancy, when can I stop voting against approval of the record to try and build up my votes against you? I am liberal just like you, why can’t I vote that way.
Fake Harry Mitchell,
Don’t be so hard on yourself… you did the right thing.
Hope you’re decorating my future office nicely. Please note that I prefer earthtones… (my favorite designer paint color is ANWR Sunset Gold)
BTW, is Charlie allowed in congressional buildings?
Based on many of your previously written trite remarks, I am undecided on whether you helped ratify the Port Huron Statement, or merely supported the Nelson Rockefeller wing of the party in 1964.
I like David and support him. This is a big political gamble. The people who would have voted for him, still will. Many of you agree with this position. Heck, I agree with the ideology of not bailing out the private sector. This situation is so serious that the cost of ideological purity is too high. As the stock market crumbles and the credit lines shrink or in some cases get shut off, small businesses, consumers, retirees and college students will feel real pain. If that happens before the election in November people will forget about ideology and look for scapegoats for their dire financial condition. I suspect this would be a disaster for sitting GOP Congressmen and all the ideological zealots that can’t see the forest but for the trees.
Big John Stud – too young for either.
I am disappointed. I was hopeful that you would have found nuance where none existed. I anticipated that you would have recycled a squib from an unintelligible pundit like Thomas Frank, as per your usual rhetorical fare.
Oops! I took a NO on this and now AP is reporting that I was waiting in the house well ready to change my vote to YES. I KNOW that I’m willing to say or do anything to get elected, but I can’t let the voters know. Well, everyone knows AP is biased anyway.
The AP is reporting that Congressman Harry Mitchell held both a â€œNoâ€ vote card and a â€œYesâ€ vote card while he was on the floor today waiting to vote on the bailout. Apparently he is up to his old tricks. Just like he did on the Ag bill in 2007, Mitchell waited to until the last minute to see if the bill was going to pass or not. Today, just as he did in 2007, he voted with the Republicans, only after finding out that the bills would not pass, in order to seem more moderate to voters in his bid for re-election. Follow the link and you will see that he switched his vote on the floor in 2007 that spurred and ethics investigation that cost the taxpayers $500,000. http://www.youtube.com/watch?v=_y08iTaGcm0
Big John Stud – I certainly know who Thomas Frank is although I very rarely read him, but have no idea what you are talking about. I do know that I stand by my position that Schweikert’s plan does nothing to address the “current financial crisis” (his wording). Now, it is easy to come here and claim I am “trite” with no backing or say I am recycling others ideas, but if you wish to disagree with me please do so with some argument other than name-calling.
What is humorous to me is that this entire site is mostly based on recycled ideas (take for instance this article which simply rehashes a candidates press release) and trite arguments.
The idea of the mortgage tax credit is to allow homeowners to pay less tax, a tax credit versus a tax deduction (or in addition to a tax deduction) would reduce the homeowner’s tax liability in a big way.
Say you spend 20K on mortgage payments per year. A 20K deduction may save you 3-7K in taxes, a tax credit of 20K (assuming 100%, although not likely) would be substantial. It works out as a bailout of the homeowner. If the tax credit is 50%, it would still be huge. Talk about government subsidized housing, everyone would rush back into the real estate market.
Now the flip side of that is fiscal shortage that would need to be made up elsewhere.
May not be your cup of tea, but a real idea worth a look.
This site may be “based on recycled ideas and trite arguments” but you at least get to leave your comments and contribute to the discussion.
nightcrawler – It may very well be a great idea to help out people who are struggling during this time, but again, this is being presented as a plan to deal with current crisis of the financial markets. I can’t see how it will affect that.
Truth crusader where is a link to the AP report?? I am having trouble finding it. That would be a great story to have and for schweikert to use
There is no silver bullet to fix things immediately. It took a long time to get here and it will take a long time to fix the problem. In the short-term we could raise the FDIC insurance from 100K to 250K to avoid a banking panic. Beyond that, there may need to be some less drastic bailout deal reached in the House to preserve the US credit structure, equities are not the answer in the short term. This is the biggest financial crisis in your lifetime, history is at your feet.
nightcrawler – I agree there is no silver bullet.
Todd it is hypersensitive of you to characterize my posts as name-calling. With your numerous posts in the past, this marketplace of ideas has provided a forum for you to express your hypercritical rhetoric amounting often times to platitudes and nuanced observations. Labeling much of your commentary as left of center on the political spectrum is hardly name-calling.
Big John Stud – A common definition of name-calling :
“Name-calling is a form of ad hominem attack that draws a vague equivalence between a concept and a person, group or idea. By linking the person or idea being attacked to a negative symbol, the propagandist hopes that the audience will reject the person or the idea on the basis of the symbol, instead of looking at the available evidence.”
So again, you have tried to link me to SDS, Thomas Frank, and Nelson Rockefeller (who I assume are all negative symbols here), all without actual offering a single argument to anything I have said, other than calling my comments trite, hypercritical, nuanced (and by the way, when did nuance become a bad thing), etc.
â€œNuancedâ€ when applied to your posts is apropos because rather than making arguments predicated on substance and merit, you often resort to semantic based approaches using pseudo-linguist interpretative techniques. For example, your first post demonstrates the exact brand of word play that you engage in and attempt to pass off as a policy-based argument. Commenting that the â€œhousing bubbleâ€ is responsible rather than deflated housing values is a tautological error. What scholarly source did you consult for that “common definition” of name calling?
Curious, Did David put any the county money into Lehman Bros when he was in charge of the county money?
You need to ask Dean Martin that question as well.
In all fairness, neither one could have predicted the Lehman Bros collapse. Did you ?
Big John Stud,
I am not sure what “pseudo-linguist interpretative techniques” are, but I certainly do look for opportunities to point out the fallacies in the propaganda that gets posted here. Regardless, I will gladly explain the point I was making, hopefully this is not to nuanced for you.
To claim the problem stems from the housing bubble rather than a deflation in housing prices is not a tautological error, but rather an important point about how one frames the issue and what viable solutions there are.
Locating the problem in price deflation implies that this is simply a matter of waiting for the market to turn back around and so in the meantime we help homeowners with tax credits. That’s why Schweikert talks of “stimulating the economy” as if that is somehow going to turn housing prices around.
However, the fact is that housing prices are still going down and have much further to fall and this is not a short-term situation or because of the current crisis in credit markers but rather because of the fact there is a vast over-supply of housing that was masked by the bubble. The effects of this bubble and the oversupply of housing that stems from it, have and will continue to suppress the prices of everyone’s homes regardless of what type of mortgage or when they purchased it.
There are now millions of homeowners sitting on mortgages that far exceed the value of their home with this value not likely to reach their mortgage levels for years if ever. Unless one finds some magic way of causing demand to skyrocket or destroying the oversupply, these fundamentals aren’t going to change.
Schweikert’s vague promises of “stimulating the economy” or offering tax credits does nothing at all and avoids the real issue (except maybe if he means it to also apply to mortgages on non-primary residences, I guess it might help subsidize some peoples’ vacation homes). The only way homeowners in dire need can be helped is through bankruptcy reform or through allowing re-negotiations of mortgages.
You sure spin a smooth sentence, alas your lexicon is superior to your logic.
The price of your home is irrelevant until the time you sell it. Sure you can borrow against it as many have to their peril, but at the end of the day debt is debt.
To stimulate the economy people need real money in their pockets, not more debt. A tax credit gives people more money (not debt) in their pocket to spend.
People who restucture their mortgages and declare bankruptvy typically fall back into bad habits. Those practices are a fool’s errand.
Those folks need to become renters as God intended. At some point the prices of homes will fall far enough for landlords to buy up the inventory. Arizona is still growing and with the baby boomers preferring sunshine to high oil heating bills, real estate is still a solid investment in the long term.
Not everyone needs to own a home, that is the fallacy that got us into this mess.
nightcrawler – what if you bought your home before the bubble and it has now dropped in price and won’t recover any time soon. what if you want to move to a new job, need more space for aging parent, etc., what do you do? Take a loss on your home?
You do understand this is not just about people who took risky subprime loans or who bought more of a house than they could reasonably afford. This is about everyone who owns a home purchased in the past few years seeing the value of their biggest investment tank.
I would not bet on Arizona to keep growing since the economy is fueled largely by housing. I think that is a fatal flow in your logic. That and the fact that the fallacy that got us into this mess was not that everyone should own a home, but rather that housing prices are a safe investment, which you seem to be repeating.
You are tipping your hand.
If you bought before the bubble you are still golden. It is those that bought during the bubble who are hurting the most.
Look at Phoenix back in the days (late 1980s) of the RTC crisis, real estate plummeted. It did recover. It will again.
They don’t make any more land, the poplution of the world is increasing, do the math.
It just depends on how patient you are…
If you want to move to a new job or need more space for aging parents you are in luck! It is a buyers market! The “loss” you take on the house you sell you will pick up on the other end when buying your new home at a much reduced price!
nightcrawler – clearly we have different conceptions about the scope of the problem, I hope you are correct but it flies in the face of the facts.
Annie – I don’t think you are correct. To simplify – let’s not even talk about interest. If a person bought a home at $200K, put $20K down and has made $10K payments in principle and the home is now worth $120K. If they sell they still owe $50K. How exactly do they make that up?