Leaning on gov't largesse to get you through a rough patch

[TimC]

As a side-note, I was unemployed when my daughter was 18 months old and did not accept unemployment (even though I qualified), and depeleted all savings, sold the house, moved into an apartment, and, by the grace of God and a ton of hard work, I was able to dig out.

 

However, now that I have four kids, I am finding that my positiion would probably change. I mean, if I'm sitting in an apartment, just trying to get a business stated, I probably take the unemployement.

 

Related to this ... if the government gives a tax cut to people in your tax bracket, are you going to say "no thanks, that's a handout"?

 

Actually, I'd have no problem taking unemployment whatsoever. You have paid into that during your working career for the sole fact that if you are laid off, it's there for you. And it's a short-term plan.

 

But without cutting this person's massive mortgage, they won't make it IMO. I just hope they have a little equity (doubtful, of course) and can downsize. It's as basic as the SNL skit of "Don't buy things you can't afford". Also, this person is in dire need of some better financial planning with the swings in income they are experiencing.

 

Of course, the Government should not guarantee you the lifestyle you've grown accustomed to when times were good -- unless you are a large bank, insurance firm or one of these other bogus "too large to fail" (a complete and total lie by our Government) places as evidenced by their bailouts.

 

TimC Do you walk around shaking your head trying to understand how we got here? I do!

 

Michael J. Fox's head shakes less than mine nowadays.

[TimC]

uh, ever heard of something called a corporate bond? businesses have deficits all of the time and often for very good reasons

 

If a business wants to gamble on failing by taking on massive debt and trying to manage it, then that is their risk in failing.

 

Our Government should not be allowed to take those same risks. What happens if it fails?

[wiegie]

If a business wants to gamble on failing by taking on massive debt and trying to manage it, then that is their risk in failing.

 

Our Government should not be allowed to take those same risks. What happens if it fails?

what do you mean "fails"?

 

Pretty much the worst that will happen is that the government will attempt to monetize the debt (through inflation) and then it will have a harder time borrowing money in the future.

 

Edit to add: I'm not saying that running continuous deficits is a good idea. The government should run deficits in bad times and surpluses in good times, so that in the long-run the budget is balanced.

Edited August 6, 2009 by wiegie

[westvirginia]

what do you mean "fails"?

 

Pretty much the worst that will happen is that the government will attempt to monetize the debt (through inflation) and then it will have a harder time borrowing money in the future.

 

You mean through just printing more money hand over fist?

[matt770]

Let's see, I've paid well into the 6 figures in taxes over my lifetime, I've seen lazy and ignorant people collecting from the gubment without a second thought, and now I'm about to lose my home because of an economy that went downhill in part because of lack of oversight by the jackasses in Washington, and I'm supposed to feel guilty about collecting some of MY money back to keep a roof over my head? That's a really tough decision.

 

I'd cut lawns and flip burgers if it came to that, but if I still couldn't make ends meet and I qualified for a program, of course I would take the assistance. I don't see the shame in it.

[TimC]

what do you mean "fails"?

 

Pretty much the worst that will happen is that the government will attempt to monetize the debt (through inflation) and then it will have a harder time borrowing money in the future.

 

Edit to add: I'm not saying that running continuous deficits is a good idea. The government should run deficits in bad times and surpluses in good times, so that in the long-run the budget is balanced.

 

Unless you live in a picturesque campus away from the realities of the world, then our Government is failing. No longer can they issue bonds at the drop of a hat for projects because....people don't trust the Government. Everything our Government does is backed by the trust of our Government, including our money supply. When the Government abuses that trust by printing money like it was candy, artificially inflating and deflating our currency on the whims of keeping Wall Street and the stock market propped up whether they deserve it or not, and by outright simply handing over cash to prop up failing ventures for no other reason than they could bring down the entire American economy because they lied, cheated, and stole for the past decade(s) and no one stepped in to stop them...least of all the Government that was supposed to regulate them.

 

So my choice is I can take my $10.00 and invest it in my Government that will take that $10.00 and shove it back up my ass or I can take my $10.00 and try to put some overpriced food on my plate because my $50.00 ten years ago is worth $10.00 today.

 

Yeah, I'd say that's failing with a slow burn. Or they can turn things around and start doing right by people. Otherwise, your precious dollar won't be worth the paper it's printed on because it's backed by the trust of a deceitful and poorly run entity.

[paulzale]

Just because you paid into, doesn't mean you should/need/deserve to collect some of "your" money back. You have Interstates to drive on, protected boarders, right to vote, freedom of speech, I guess these are not worth as much as ones precious lifestyle!

 

The government has been operating in a deficit for a long time, no need to argue this, but over the long haul if it truly balanced out then I would be okay with it, but they are just digging a deeper hole and don't plan to get out.

 

GM-Chrysler-et el should have been left to fail and restructure on their own, they dug the hole, why did I have to help them out? The market would have treated this more favorably than what the government did!

 

My opinions are the minority I believe and I don't have the energy to argue them too much more

[muck]

As a side-note, I was unemployed when my daughter was 18 months old and did not accept unemployment (even though I qualified), and depeleted all savings, sold the house, moved into an apartment, and, by the grace of God and a ton of hard work, I was able to dig out.

 

However, now that I have four kids, I am finding that my positiion would probably change. I mean, if I'm sitting in an apartment, just trying to get a business stated, I probably take the unemployement.

 

Related to this ... if the government gives a tax cut to people in your tax bracket, are you going to say "no thanks, that's a handout"?

 

Muck, I applaud your hard work and wouldn't fault you in your current situation for taking unemployment. Tax cuts are not very real IMHO, they usually only amount to a few hundred bucks and no I wouldn't give it back, however I firmly believe in a flat % tax across the board and that government needs to be run like a business and not allowed to operate in a deficit. That my friend is another argument

 

To avoid any misunderstanding, I'm not unemployed. But, if I were, I'd find it much harder to not take the unemployement than I did when faced with the choice when I only had one kid.

 

I was really thinking about all of this:

 

What the company you work for gets a big government contract, and as a result you get a big ol' bonus, do you turn it down because it's a "hand out"?

 

If you have a special needs kid, do you turn down the special help provided by the local school district because its a "hand out"?

 

...for those of you who are hard-liners on this sort of thing, I was curious about this...

[westvirginia]

Unless you live in a picturesque campus away from the realities of the world, then our Government is failing. No longer can they issue bonds at the drop of a hat for projects because....people don't trust the Government. Everything our Government does is backed by the trust of our Government, including our money supply. When the Government abuses that trust by printing money like it was candy, artificially inflating and deflating our currency on the whims of keeping Wall Street and the stock market propped up whether they deserve it or not, and by outright simply handing over cash to prop up failing ventures for no other reason than they could bring down the entire American economy because they lied, cheated, and stole for the past decade(s) and no one stepped in to stop them...least of all the Government that was supposed to regulate them.

 

So my choice is I can take my $10.00 and invest it in my Government that will take that $10.00 and shove it back up my ass or I can take my $10.00 and try to put some overpriced food on my plate because my $50.00 ten years ago is worth $10.00 today.

 

Yeah, I'd say that's failing with a slow burn. Or they can turn things around and start doing right by people. Otherwise, your precious dollar won't be worth the paper it's printed on because it's backed by the trust of a deceitful and poorly run entity.

 

The college economist getting abused by the Hall & Oates/ Shatner fan...

[Ursa Majoris]

what do you mean "fails"?

 

Pretty much the worst that will happen is that the government will attempt to monetize the debt (through inflation) and then it will have a harder time borrowing money in the future.

Wait, are you ruling out entirely the possibility of government default a la Argentina?

[wiegie]

You mean through just printing more money hand over fist?

yes

 

(but if you are referring to the current situation, that isn't exactly what is happening right now--the increase in M2 is fairly moderate right now)

[wiegie]

Wait, are you ruling out entirely the possibility of government default a la Argentina?

yes

 

For at least two reasons:

 

1) The US tax base is large enough that the US can service its debts if it wants to.

 

2) Argentina defaulted because it owed money denominated in foreign currency over which it had no control. (Unlike the US which has borrowed money in its own currency which it does control.

Edited August 6, 2009 by wiegie

[wiegie]

Unless you live in a picturesque campus away from the realities of the world, then our Government is failing. No longer can they issue bonds at the drop of a hat for projects because....people don't trust the Government.

uh, the US government is currently borrowing money for 30 years at about 4.5% interest. By historical standards this is very low. If people don't trust the US government, how come they are lending money to it for such a long period at such a cheap rate?

[whomper]

Let's see, I've paid well into the 6 figures in taxes over my lifetime, I've seen lazy and ignorant people collecting from the gubment without a second thought, and now I'm about to lose my home because of an economy that went downhill in part because of lack of oversight by the jackasses in Washington, and I'm supposed to feel guilty about collecting some of MY money back to keep a roof over my head? That's a really tough decision.

 

I'd cut lawns and flip burgers if it came to that, but if I still couldn't make ends meet and I qualified for a program, of course I would take the assistance. I don't see the shame in it.

 

Good post

 

 

Just because you paid into, doesn't mean you should/need/deserve to collect some of "your" money back. You have Interstates to drive on, protected boarders, right to vote, freedom of speech, I guess these are not worth as much as ones precious lifestyle!

 

It isnt about a precious lifestyle . It would be about survival. I agree with you that if a person is using their food stamps to buy Patron they should be kicked in the tits but hard working people that find themselves on the downside of advantage by no fault of their own should feel no shame benefitting from a system they paid in to.

Edited August 6, 2009 by whomper

[dmarc117]

its all about responsiblity and accountability. be a friggin responsible human being. buy what you can afford. take care of your kids. do whats fruckin right!!!!!!

[whomper]

its all about responsiblity and accountability. be a friggin responsible human being. buy what you can afford. take care of your kids. do whats fruckin right!!!!!!

 

 

I would say a fair amount of people using these assistance programs are dying to do all of the above in your post but their lives got ripped out from under them because of the failure in the economy. Not everyone is happy on the teet.

[muck]

its all about responsiblity and accountability. be a friggin responsible human being. buy what you can afford. take care of your kids. do whats fruckin right!!!!!!

 

Right, the point being, the guy in the example above is, say, either:

* Previously employed at 40hrs a week (and had been for the previous five years at the same company), and his employer lost a big contract and so instead of firing people, they asked everyone to go 1/2 time. His compensation is down 50% through no real fault of his own. He blows through 75% of his savings just trying to make ends meet and while also trying to start, in his extra time, a "sell it on eBay" home business (which isn't as lucrative as he thought it might be) and he knows that he'll need to get a 3rd job and will stil use up the final 25% of his savings in the next three months if he doesn't get "homeowners assistance".

 

* Is self-employed, running a successful ________ company, more than able to pay is work and personal bills on time and in full and builds up a nice savings, has another kid, needs a bigger house / yard, buys a bigger house/yard, and a year later, he loses his two biggest clients (who were, say, an advertising agency and an auto parts company) and his take home is cut in half. He blows through 75% of his savings to stay in the house his kids love and knows that he'll use the final 25% in the next three months without the "mortgage assistance".

 

The point being is that these two guys weren't being crazy with their decisions that got them to where they are now and they're not buying new TVs, they are not taking vacations that involve anything more than a car, a tent and a campfire, and they are not sending their kids to private school anymore. No more cable TV. They've cut it way back, and they are facing a choice -- do I ask for help from the federal government to buy time to see if I can get the ship righted (but may also be delaying the inevitable) ... or ... do I throw in the towel, sell everything to repay creditors, move into my parents basement (with my wife and kids) declare bankruptcy and start all over again?

[Azazello1313]

Actually, I'd have no problem taking unemployment whatsoever. You have paid into that during your working career for the sole fact that if you are laid off, it's there for you.

 

ok. I agree.

 

Of course, the Government should not guarantee you the lifestyle you've grown accustomed to when times were good

 

wait, isn't that exactly what unemployement insurance is?

 

this really doesn't make much sense to me. you pay in what the law at the time says you have to pay in, and you get back what the law at the time says you get back. otherwise the only thing you accomplish is to screw yourself individually relative to your fellow citizen. in the situation of mortgage assistance it's a little different in that there is a personal debt obligation involved, but as I understand it, that's not really where the government is stepping in and getting involved, the bank isn't compelled to accept a writedown they don't feel is in their interests. where the government comes in is they are basically underwriting the risk on a re-constructed mortgage debt. it's pretty much the exact same thing they do with student loans.

[Perchoutofwater]

I would say a fair amount of people using these assistance programs are dying to do all of the above in your post but their lives got ripped out from under them because of the failure in the economy. Not everyone is happy on the teet.

 

I think you are right to an extent. Sure they would love to live within their means now. Problem is that is a new desire for them, and part of the reason they are in the shape they are in is that they did not have the same desire the prior to about a year ago. It is hard to have sympathy when you see people living lavishly, spending money on junk like manicures, satellite, nice cars, too much house, too much bling, designer clothes etc...all of a sudden wake up to the realization that they've can no longer afford their life style, and want my tax dollars to help them out of that mess.

 

I am really against any federal assistance at all, as I do not believe that is the federal government's job. I'd much rather see that done locally (as it can be done on a case by case basis instead of an inefficient easily cheated one size fits all system), or even better by charitable organizations and churches. I know my church has an extensive welfare program, but prior to receiving a dime, someone from the church does a home visit to make sure the families are not wasting money on luxury items.

[Savage Beatings]

Sometimes you swallow your pride and do what must be done in order to take care of your family.

[dmarc117]

I would say a fair amount of people using these assistance programs are dying to do all of the above in your post but their lives got ripped out from under them because of the failure in the economy. Not everyone is happy on the teet.

 

if you did all the right things, are trying, and are in a bind, then by all means get the help you need.

 

Sometimes you swallow your pride and do what must be done in order to take care of your family.

 

this is true. once you have a fam, pride goes out da window.

[westvirginia]

Sometimes you swallow your pride and do what must be done in order to take care of your family.

 

And there's the best answer I've seen so far. I f'n HATE hypocrisy in all it's forms, but if I MUST be a hypocrite to feed my kids and keep a roof over my wife's head, done deal. That's one place I don't have ANY pride is when it comes to taking care of my kids.

[yo mama]

It's not opulence, it's generosity.

Fair enough, but its generosity in a lofty or condescending manner. Not opulence, I agree. But both connote abundance and affluence.

[yo mama]

I wonder how much your creditors will appreciate your high ideals?

Why should I care if they appreciate my ideals or not? My creditors have collateral sufficient to protect their economic interests. I could be wrong, but I don't believe I'm contractually or morally obligated to anything more than: (1) pay my mortgage; or (2) turn my house keys over to the bank and pay any remaining balance after the foreclosure sales proceeds are applied to my mortgage. Do you disagree?

[jetsfan]

As a child, we went on welfare for nearly a year. My father had left us and my mother was raising a 2 and 4 year old on her own.

She was able to get things turned around and find a job that paid for us to get off food stamps. She has reiterated to us (my sibling and I) through our lives that the govt helped her/us through a very rough spot. But that these types of programs are a last resort, and I still think that today. When my wife and I were first married, we qualified for food stamps, etc. because our combined salaries were below the poverty level. We did not take them because we could still afford to eat. However, now that I have a family to provide for, I voted "yes" to the above as a temporary help to get me moved somewhere else or get the business turned around. I don't think anyone can honestly vote that they wouldn't take help that is freely offered when they cannot afford groceries to feed their kids.