BigBallinStalin wrote:
patches, we're talking about regulation/control---not taxation and debt.
You don't think taxation is a form of regulation?
Granted, the only legitimate use of taxation is to raise revenue, but we don't do that anymore do we? We use taxation to regulate behavior.
Want people to quit smoking? Create cigarette taxes to make smoking more expensive. People are too fat? Impose a soda tax. The reverse is true as well. Want people to have children? Grant a tax break. Wealth distribution is out of kilter? Tax the wealthy and redistribute the wealth. In the end, or the point we've reached today, is that you get a tax code that in and of itself is a regulation nightmare. Our tax code is a form of regulation. It regulates behavior and social experiments. Taxes are no longer just for raising revenue, they are now used to get you to do or not to do something. And as a final line of control as well.
Al Capone was a known extortionist, murdered and downright prick, but the government couldn't get him on any of those charges. What did they resort to? Tax evasion. The tax code helps insure that the government has the last laugh, a final card to play in case they ever feel the need to break a person's balls.
It's funny that you say you put the house up as collateral when you get a mortgage. It's true enough I suppose, but certain questions arise. For instance, if you sit in the banker's office and get a mortgage, you pledge the house as collateral. Even though you don't actually own the house, someone else/some other bank owns the house. How can you pledge something as collateral if you don't have the right to do so in the first place?
Can I get a loan and pledge your house as collateral? If you own a house outright, and go to the bank to purchase another home, I'll bet you a dollar to a doughnut that you'll be putting your owned home up as collateral (because you actually own that one!). The bank will happily be giving you that loan, if you default they could well end up with two houses! For the first time home buyers, there is no other collateral, but the home being purchased. But you know well enough that if you have significant hard assets it's easy to get a loan, because you have
real collateral.
It's a strange system indeed, and all too often does not regulation in the end benefit some over others? That is, misplaced regulations such as you appear to be targeting for this thread.
Want people to "own" homes? Tax credits and subsidies for home "ownership". Who benefits most? People line up to get into debt for 15-30 years hooked to the plowshare for an asset that has been overvalued through fraud and maleficence. I don't have to go over the history of the housing bubble that burst back in 2008 do I? Who was bailed out? The real home owners of course! The banks.
It doesn't matter that when you applied and got your home mortgage that the money the bank loaned you was created out of thin air and didn't exist (except for about 10%) until you signed the dotted line. What did the bank ever actually put up then if it simply created the money from nothing and if you default the government will simply take from everyone else to make good on the debt through TARP?