On Sun, Nov 16, 2008 at 11:25 AM, Nick Arnett <[EMAIL PROTECTED]> wrote: This does not make your case for the idea that *regulation* is to blame. In > fact, the whole story there is about the government loosening regulations > and lowering taxes, not tightening regulations or tax-and-spend politics.
These are not "loosening regulations": "Beginning in 1992, Congress pushed Fannie Mae and Freddie Mac to increase their purchases of mortgages going to low and moderate income borrowers. For 1996, the Department of Housing and Urban Development (HUD) gave Fannie and Freddie an explicit target -- 42% of their mortgage financing had to go to borrowers with income below the median in their area. The target increased to 50% in 2000 and 52% in 2005. For 1996, HUD required that 12% of all mortgage purchases by Fannie and Freddie be "special affordable" loans, typically to borrowers with income less than 60% of their area's median income. That number was increased to 20% in 2000 and 22% in 2005. The 2008 goal was to be 28%. First passed in 1977, the CRA was "strengthened" in 1995, causing an increase of 80% in the number of bank loans going to low- and moderate-income families. By pressuring banks to serve poor borrowers and poor regions of the country, politicians could push for increases in home ownership and urban development without having to commit budgetary dollars." As for the Taxpayer Relief act of 1997, that tax policy had the obvious effect of steering money from financial markets, which did not have a similar capital-gains exclusion, to the housing markets, which had the new capital-gains exclusion. If your $500K investment gains are going to be taxed 20% or 30% or more in the financial markets, but not at all in the housing markets, then the housinig market looks a lot more attractive. It is no surprise that this government interference artificially increased demand and prices in the housing market by shifting investment away from productive uses and into the housing market. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
