I appreciate your long and thoughtful response—and I don’t mind the sarcasm at all!

Anyway, I think there’s no question that, at all stages, whether liberal or conservative, the people that make up the government have pandered for votes, usually with bad consequences. Which is, of course, discouraging.

And I’m not really in a position to address most of what you say about redistribution efforts, except to point out what we both know: that the difference between our views centers primarily around whether redistribution ought to be undertaken.

For me, even if it has never worked well (and by what measure it could be considered to work “well” or “poorly” I leave to economists—who are of course also politically-minded), some form of redistribution ought to be in place. For you, I suspect, even if it worked much better than it does today, no form of redistribution ought to be in place.

Given this difference, the value I see in your comment, primarily, is as a chance to evaluate previous attempts and their failures.

Having said all that, I do want to note my big problem in the article is not with the position that there ought to be no ARM bailouts. In principle, I agree, actually; I was a borrower during the “ARM boom,” if you like, and the consequences couldn’t have been more clear. (Then again, I had a great realtor.) It’s just that I think there may be economic arguments that make bailouts make sense, however apprehensive I am about the moral rationale behind them.

My big problem, instead, is with an article claiming to be “unbiased” on a website claiming, separately, to be “unbiased,” espousing what is in the end a deeply biased agenda.

Thanks again for your comment.
Devan

As with most meddling of government into economics, usually to “fix” a problem of some relatively short duration, the ‘law of unintended consequences’ takes over and what was a ‘fix’ becomes a ‘right’. This is true of the entire income tax system which the government (usually a liberal government in our history) will create a program to redistribute wealth, which a liberal government sees as it’s right, and the rest of the discussion are band-aids to keep the original program.

The programs you refer to (Schedule A tax reduction measures) were installed by (dare I say liberal congress and administrations) to continue the redistribution. These happened after WWll when the ‘housing boom’ was encouraged. An unintended consequence of those who could not take advantage of these “tax breaks” was to create tax benefits for those who built cheap rental properties. This led to “the projects” in many cities because the government (guess who was dominating the congress) fostered further programs like ‘rent control’ to help those who could not buy. Believing in the short term fix, but not allowing that the economy would grow over time, there were disincentives to the original builders and owners (like rent control at the local level–copied many times, in many cities) to ever maintain and keep up the original properties. –leading to the poor getting poorer in may cases. Unintended Consequences–but sure good vote getters.

A famous saying attributed to Ronald Reagan goes something like-” Beware of the man who shows up, saying I’m from the government and I’m here to help”.

The government (check your history to note which party was running it-nationally and locally in most populous cities) has given us AMT, without fix after nearly 30 years; the estate tax upper limit where the ‘kick-in’ did not change for so long that the Law of Unintended Consequences kicked in again and the major effect is not on the wealthy dead who were being taxed at least twice on their wealth, but on the small businessman and farmer who’s family must sell the assets to pay the taxes (the $600k limit only started to change in this century and is due for a “sunset” in 2011).
The reduction in today’s income tax program was intended to encourage home ownership. It has become a ‘right’ left in after every attempt to change the tax code in the last 40 years. The tax reduction awarded home owners for the property tax has a similar history. There is a “sales tax” deduction that also attempts to ‘redistribute’.
There have been many attempts to redistribute without anticipating consequences. The original Social Security system was never to be as distorted as it is today. The original Medicare system is also a ‘camel’ built by government that was intended to be a ‘horse’.
Enough with typing and history lesson. Happy to discuss the many attempts by a mostly liberal government to pander for votes by incentives that cannot be removed.

As for sending this in, there’s a wonderful system called TrackBack that automatically tells sites that I’ve linked to them from this article. What they do with that info is of course up to them…

Thanks for the lucid explanation!

Ellen