Harper to prorogue parliament AGAIN?

[Alta4ever]

Being able to deduct your mortgage takes away the incentive to pay it off. It is one of the policies that has helped lead to the bank meltdown in the US. Its a bad, bad idea.

[bush_cheney2004]

Being able to deduct your mortgage takes away the incentive to pay it off. It is one of the policies that has helped lead to the bank meltdown in the US. Its a bad, bad idea.

I think you mean the deduction of home mortgage interest, not principal. Several mortgage backed securities and products helped undermine a fraction of US banks, but the mortgage interest deduction in and of itself has existed in Internal Revenue Code for a very long time without bank failures. Indeed, before 1986 many forms of personal interest was tax deductible. Several other nations also permit such mortgage deductions, and Canada permits such deductions for business residences and rental properties.

[Alta4ever]

I think you mean the deduction of home mortgage interest, not principal. Several mortgage backed securities and products helped undermine a fraction of US banks, but the mortgage interest deduction in and of itself has existed in Internal Revenue Code for a very long time without bank failures. Indeed, before 1986 many forms of personal interest was tax deductible. Several other nations also permit such mortgage deductions, and Canada permits such deductions for business residences and rental properties.

Yes it does, but what it does is entice people to take out a mortgage against the house deduct the interest and then put that money into mutual funds, stock ect. It also begs to ask why pay off a mortgage when you can deduct the interest you are training people to not pay off debt.

[bush_cheney2004]

Yes it does, but what it does is entice people to take out a mortgage against the house deduct the interest and then put that money into mutual funds, stock ect. It also begs to ask why pay off a mortgage when you can deduct the interest you are training people to not pay off debt.

Not sure I follow you...the mortgage interest deduction does impact financial planning and home purchases, but it is unclear to me how the reduction from taxable income relates directly to other direct investments. People are investing in mutual funds and stock through many other mechanisms. Unless somebody has a negative mortgage product, they still have to pay principal and interest each month, thereby "reducing" the mortgage principal.

Also, towards the latter part of the mortgage payment period, the interest deduction begins to have less and less advantage.

[Alta4ever]

Not sure I follow you...the mortgage interest deduction does impact financial planning and home purchases, but it is unclear to me how the reduction from taxable income relates directly to other direct investments. People are investing in mutual funds and stock through many other mechanisms. Unless somebody has a negative mortgage product, they still have to pay principal and interest each month, thereby "reducing" the mortgage principal.

Also, towards the latter part of the mortgage payment period, the interest deduction begins to have less and less advantage.

If you give someone a tax deduction to keep credit, they will keep the credit, even when they don't need it.

It gives them more incentive to re finance houses to purchase vehicle/rvs/consumer goods and to live off credit.

Or over extend themselves through leveraging.

This policy has harmed the US. Broad based tax relief is a much better option.

With long amortization or a home equity line of credit the payment on principle isn't much.

Edited January 16, 2010 by Alta4ever

[bush_cheney2004]

If you give someone a tax deduction to keep credit, they will keep the credit, even when they don't need it.

But it's not a credt...it is a deduction...big difference.

It gives them more incentive to re finance houses to purchase vehicle/rvs/consumer goods and to live off credit.

That is true for any 2nd mortgage or HELOC product. Most cars and trucks are purchased using credit too.

Or over extend themselves through leveraging.

Then they lose the house and get a lower credit score.

This policy has harmed the US. Broad based tax relief is a much better option.

On balance, the policy has been more beneficial than harmful. Capital markets in general have been much more robust in the USA than in Canada.

With long amortization or a home equity line of credit the payment on principle isn't much.

That's the idea....borrowers can make additional principal payments if they wish.

[jbg]

Being able to deduct your mortgage takes away the incentive to pay it off. It is one of the policies that has helped lead to the bank meltdown in the US. Its a bad, bad idea.

You nailed it.

I have a 15 year, 4.75% mortgage. Since interest is deductible I'm in no particular hurry to pay it off.

[bush_cheney2004]

You nailed it.

I have a 15 year, 4.75% mortgage. Since interest is deductible I'm in no particular hurry to pay it off.

But that is good for banks....not bad.

[Alta4ever]

But it's not a credt...it is a deduction...big difference.

you don't understand credit as in a mortgage not a tax credit

If you give someone a tax deduction to keep credit (mortgage), they will keep the credit (mortgage), even when they don't need it

That is true for any 2nd mortgage or HELOC product. Most cars and trucks are purchased using credit too.

This policy with an easy availablity of getting credit (a morgage/heloc) created a lending bubble in your economy, coupled this with leveraging and vola crap shoot the USA was in is created.

Just pile more credit on more credit try to absorb it in the house, to get the tax deduction, housing market goes down, you lose your job and your already on the edge boom big problem.

Then they lose the house and get a lower credit score.

On balance, the policy has been more beneficial than harmful. Capital markets in general have been much more robust in the USA than in Canada.

That's the idea....borrowers can make additional principal payments if they wish.

On the whole this has been beneficial? I really do like the US but come on you guys are in serious trouble your debt load as a country is huge you are on verge of bankruptcy and your current president want to loan more.

Had you financial policies been sound you would not have had to spent 1.4 trillion dollars on bank bailouts, just to keep your lending markets open, your entire system of lending just about took down your whole economy.

Edited January 16, 2010 by Alta4ever

[bush_cheney2004]

you don't understand credit as in a mortgage not a tax credit

I think I do....a credit reduces taxes directly...dollar for dollar. A deduction only reduces the taxable income base.

If you give someone a tax deduction to keep credit (mortgage), they will keep the credit (mortgage), even when they don't need it

People still keep credit cards without interest deduction (phased out and eliminated in 1986). Some people want mortgages even if they don't need them, lest they tie up all their savings in real estate.

This policy with an easy availablity of getting credit (a morgage/heloc) created a lending bubble in your economy, the people coupled this with leveraging and vola crap shoot the USA was in is created.

The mortgage interest deduction has been around for far longer than that. Several other changes were made starting in 1999 that set the stage for credit default swaps and mortgage backed securities. Different issue entirely.

On the whole this has been beneficial? I really do like the US but come on you guys are in serious trouble your debt load as a country is huge you are on verge of bankruptcy and your current president want to loan more.

Then you must like France or Japan even more...they have far more %/GDP debt.

Had you financial policies been sound you would not have had to spent 1.4 trillion dollars on bank bailouts, just to keep your lending markets open, your entire system of lending just about took down your whole economy.

But it didn't take down the whole economy....it was just another hard recession. We've had them before. Perhaps you should worry more about why Canada would tank if the USA economy ever does go under.

Edited January 16, 2010 by bush_cheney2004

[Alta4ever]

I think I do....a credit reduces taxes directly...dollar for dollar. A deduction only reduces the taxable income base.

No you don't get it whe I say credit I don't mean tax credit I mean

cred⋅it  [kred-it] Show IPA

10. a sum of money due to a person; anything valuable standing on the credit side of an account: He has an outstanding credit of $50.

http://dictionary.reference.com/browse/credit

A loan/mortgage...borrowing money.

[bush_cheney2004]

No you don't get it whe I say credit I don't mean tax credit I mean

OK...but in the context of a home mortgage and mortgage interest, credit has a particular meaning. Most home mortgages are collateralized loans, not unsecured credit. The "bubble" removed unrealistic valuations in the market, a necessary reset. The absence of false wealth is not a disaster.

[Alta4ever]

People still keep credit cards without interest deduction (phased out and eliminated in 1986). Some people want mortgages even if they don't need them, lest they tie up all their savings in real estate.

And whats the first thing they do when they get in to trouble with that card the consolidate the debt in a mortgage. They get a tax deduction on the increase interest payment. They do this over and over, with bigger and bigger houses. Then the bottom falls out of the housing market. They can't repay the loans declare bankruptcy and loose it all.

The the so called smart ones. Borrow against the house to invest (a leverage) again bottom falls out of the housing market they are over extended bankruptcy enough of this happens banks go under domino effect.

As I said before you couple this with lose lending policies like the ones barney frank wanted crdit markets freeze up. No more loans, business can't operate, loans are being called in that can't be paid system fails.

The mortgage interest deduction has been around for far longer than that. Several other changes were made starting in 1999 that set the stage for credit default swaps and mortgage backed securities. Different issue entirely.

It has been around a long time and through its use by financial advisors and tax advisors that it is better to have the mortgage to get the tax deduction then pay off the mortgage. If your getting a tax deduction on interest year over year and next year your mortgage is paid off you won't get the deduction. You have just created a tax incentive to get a mortgage even though you don't need one

Then you must like France or Japan even more...they have far more %/GDP debt.

Nope they are just further down the crap shoot then you, how ever the global markets aren't as dependant on them as the world is on the US markets.

But it didn't take down the whole economy....it was just another hard recession. We've had them before. Perhaps you should worry more about why Canada would tank if the USA economy ever does go under.

Its not over if Obama doesn't stop spending on crap policies you are close to the Brink

Hoover and FDR spent the world into a depression and obama is close to doing it again.

Like I was saying before I really like the US, but this is one policy that has created a monster.

[Alta4ever]

OK...but in the context of a home mortgage and mortgage interest, credit has a particular meaning. Most home mortgages are collateralized loans, not unsecured credit. The "bubble" removed unrealistic valuations in the market, a necessary reset. The absence of false wealth is not a disaster.

It was a necessary reset, but the problems where compound from one bad policy to another, and this tax deduction just teaches people to keep mortgages not pay them off.

A broad based tax cut is much more effective, and also the benefit of having a mortgage should be home ownership not a tax deduction.

[bush_cheney2004]

And whats the first thing they do when they get in to trouble with that card the consolidate the debt in a mortgage. They get a tax deduction on the increase interest payment. They do this over and over, with bigger and bigger houses. Then the bottom falls out of the housing market. They can't repay the loans declare bankruptcy and loose it all.

But even if that happens, the bank still has the real estate as collateral. Most people just tap into their equity for very reasonable investments like home improvements, college funding, new business startups, etc. If they go bankrupt then there is a tax revenue chapter for that too. What's the big deal?

The the so called smart ones. Borrow against the house to invest (a leverage) again bottom falls out of the housing market they are over extended bankruptcy enough of this happens banks go under domino effect.

Banks do not go under so much as they don't make as much money. The USA has over 8,000 banks and credit unions....many you will never hear about because they are fine.

As I said before you couple this with lose lending policies like the ones barney frank wanted crdit markets freeze up. No more loans, business can't operate, loans are being called in that can't be paid system fails.

System does not fail...system just tightens up credit qualifications. Loans are still being made.....commercial paper is flowing just as before.

It has been around a long time and through its use by financial advisors and tax advisors that it is better to have the mortgage to get the tax deduction then pay off the mortgage. If your getting a tax deduction on interest year over year and next year your mortgage is paid off you won't get the deduction. You have just created a tax incentive to get a mortgage even though you don't need one

Mortgages are a good investment if you can service the interest debt....millions of Americans (and Canadians) have built nest eggs doing exactly this. I don't know anybody who walks in and pays for an expensive new home with a check....maybe you do.

Nope they are just further down the crap shoot then you, how ever the global markets aren't as dependant on them as the world is on the US markets.

That is not the fault of the USA...better diversify.

Its not over if Obama doesn't stop spending on crap policies you are close to the Brink

You're thinking like a Canadian, not an American. We are not scared by puny billion dollar deficits.

Hoover and FDR spent the world into a depression and obama is close to doing it again.

Hoover didn't do anything but leave things alone, and FDR increased the debt even more to win a World War. Wanna undo all that and speak German or Japanese?

Like I was saying before I really like the US, but this is one policy that has created a monster.

Doesn't matter very much, the deed is done. The USA has no intention of ever paying off all the national debt, just servicing the interest. Even Canada carries a debt load with deficit spending....and it teetered far closer to defaulting than the USA ever has (1990's).

[Alta4ever]

You aren't even servicing the debt, its growing almost exponentially. And unfortunately at this time you are the linch pin in the global economy, you fail we all fail.

[bush_cheney2004]

You aren't even servicing the debt, its growing almost exponentially. And unfortunately at this time you are the linch pin in the global economy, you fail we all fail.

But therein lies the conundrum...if my fellow Americans do not continue to buy your exports, housing, cars, etc. (and the rest of the world's plastic crap) with credit then you are screwed anyway. You can't have it both ways.

The "linch pin" you refer to is of your own making.

What does any of this have to do with the prorogey two-step dance?

[William Ashley]

But therein lies the conundrum...if my fellow Americans do not continue to buy your exports, housing, cars, etc. (and the rest of the world's plastic crap) with credit then you are screwed anyway. You can't have it both ways.

The "linch pin" you refer to is of your own making.

What does any of this have to do with the prorogey two-step dance?

Hey atleast they will only be plastic bullets.

[Alta4ever]

What does any of this have to do with the prorogey two-step dance?

Nothing but this thread is so far off topic

[Jerry J. Fortin]

I think you mean the deduction of home mortgage interest, not principal. Several mortgage backed securities and products helped undermine a fraction of US banks, but the mortgage interest deduction in and of itself has existed in Internal Revenue Code for a very long time without bank failures. Indeed, before 1986 many forms of personal interest was tax deductible. Several other nations also permit such mortgage deductions, and Canada permits such deductions for business residences and rental properties.

You are right, Clark proposed to allow for the deductions of mortgage interest from taxable income.

[Wild Bill]

He is not doing anything illegal. Then again he is not doing the right thing. The people seem to understand this in great numbers. Big enough numbers to cause a 33 seat slide if an election were held today. That still leaves him in power, but that is just pure speculation.

Interesting. "Perogies" are legal but not "right", which upsets voters.

Sounds an awful lot like my longstanding argument that a coalition would have been legal but not "right", which would've upset voters.

[jbg]

OK...but in the context of a home mortgage and mortgage interest, credit has a particular meaning. Most home mortgages are collateralized loans, not unsecured credit. The "bubble" removed unrealistic valuations in the market, a necessary reset. The absence of false wealth is not a disaster.

What gives it the feel of a very serious event, if not necessarily a real disaster, is the fact that instruments that suddenly seemed solid aren't. I think the key is that the old thinking was that people would surrender, literally, their babies before defaulting on a mortgage. This was true until their houses were so far below the amount of the mortgage that paying the mortgage became stupid.

Then the swaps of wihch parts of the mortgages were incorporated fell apart.

[myata]

Interesting. "Perogies" are legal but not "right", which upsets voters.

Sounds an awful lot like my longstanding argument that a coalition would have been legal but not "right", which would've upset voters.

Good point (though the analogy between coalition and prorogation still needs to be qualified; was the idea of coalition really so unpopular as Harper's becoming routine prorogations?)

In any case, the fact that these situation of "legal ws right" are starting to happen so often probably indicates that the legal foundations of our political framework, inherited from the times of our grand grand ancestors with barely any modifications, are coming in conflict with the realities of modern political life and we'll be much better of as a functioning democracy having an open debate on these issues and modify our system in accordance with the outcome.

Most importantly, we'll have to decide, and write it in the law without confusion and compromise, who holds the supreme authority, final say on matters political, the body of elected representatives, or the government with the sleigh of unelected, responsible only to it (the government) officials. The answer to this question could very well define the direction in which our democracy is going to evolve.

[Argus]

So I gather you can produce another example in the Commonwealth or British Empire of a Prime Minister using prorogation to evade a confidence motion. I keep asking and you guys just keep ignoring the question.

We keep ignoring you because you seem to be about a year behind the world and insist on debating something which we already dealt with last year. I suggest you look in the archives and and stop bothering us.

[Argus]

He is not doing anything illegal. Then again he is not doing the right thing. The people seem to understand this in great numbers. Big enough numbers to cause a 33 seat slide if an election were held today. That still leaves him in power, but that is just pure speculation.

Polls go up, polls go down. The national media is in a frenzy of agitation, gnashing their teeth, wailing and banging their heads against the wall, howling about the end of the world because Harper added a thirty day recess onto MPs vacations.

Kelly McParland had a decent take on this in today's Post.

I'm beginning to appreciate the serious price to be paid for Stephen Harper's decison to close down Parliament for two months: an entire division of pundits, robbed of anything else to do, is forced into ruminations on cabinet shuffles, election dates and the threat to democracy represented by MPs having to spend every afternoon in their office instead of insulting one another at Question Period.

Kelly McParland