TUESDAY, January 20, 2004
ON THE ROAD AGAIN
As soon as today's show is over Belinda and I, along with our intrepid
engineer Charles Youngs, will head for The Beltway. We'll be in the House
Gallery tonight to watch President Bush deliver his 4th State of the Union
Speech. Tomorrow we'll be broadcasting from the White House with what
promises to be an impressive lineup of guests. Remember also, next week
we're broadcasting from Manchester, New Hampshire on Monday and Tuesday!
We need a big Prevo tour bus.
BUSH'S GRAND NO MONEY DOWN IDEA
Last week we heard that George Bush was going to propose some new tax-free
savings account and Super-IRA plans this evening. Later we learn that he
will bring the issue of Social Security Reform up yet again. Now this
morning we are hearing that he is going to propose eliminating the down payment
requirement for FHA home loans.
Let me put on my old real estate lawyer's hat and tell you where this is
going to go.
First of all, private home ownership is at a high in this country. More
than 68% of Americans own their own home. The people who don't own their
homes are those who have irresponsibly screwed up their own credit ratings, and
those who just flat don't want the problems associated with home ownership.
In my legal career I closed somewhere in the neighborhood of 6000 real estate
loans. Generally speaking, the less money a person puts into their home,
the more likely they are to get into trouble later. Once the FHA starts making
no-money-down loans tens of thousands, maybe even hundreds of thousands of
people are going to move into home ownership with absolutely no personal
investment in their new home. Why do lenders like down payments?
Because that personal investment, that 10% of the purchase price the borrower
has paid, means that the borrower will work especially hard to make those
payments and keep that home maintained. A person who has paid a large
amount of cash to move into a home has much more to lose in the event of a loan
default than does the no-money-down buyer.
So .. here's a look into the future if the Bush plan goes through. Thousands
of people with no savings and marginal credit will rush to get the new
no-money-down loans. Along with the no-down-payment bonus, credit
requirements will be relaxed. Many of the people who buy these homes will
continue doing just what they have been doing over the past years to screw up
their credit. At the beginning many of these people will develop a chronic
lateness problem in paying their mortgages. They will not understand that
accrued interest is deducted from every payment before any principal is applied
to their loan. After a year of so of chronic late payments they'll
start missing a few. Then come the letters from the lender. The
letter will cause a few payments to be made on time, then back to the old
pattern of late payments and missed payments. The old habits of financial
irresponsibility die hard.
In the meantime, the homes are going to fall into disrepair. When you
have a large hunk of your own cash in a home you have some motivation to keep
that home in good repair. You fix broken toilets. You change filters
on air conditioners. You keep the yard looking nice, you repair leaking
roofs and broken gutters. After all, your home is an investment.
Investments need care and attention. No down payment = no
investment. No investment = no real concern over the condition of your
home.
Eventually the home is in such a state of disrepair that the no-money-down
homeowner sees no real benefit in continuing to make those payments ... even
late. Finally the lender has no option but to foreclose. The
"homeowner" vacates the home leaving it in horrible condition .. the
foreclosure takes place .. and the government is stuck with a trashed house
that, at best, it is going to sell at a loss; and at worst is going to have to
tear down. And who gets stuck with the tab? You guessed it!
You! The great American taxpayer. The 50% of American income earners
who actually pay income taxes.
In the meantime the bad-credit, no-money crowd, which strangely mirrors the
50% of income earners who don't pay income taxes, continues to line
up for their no-money-down home loans Same old story. The people who
have introduced a modicum of financial responsibility into their lives get the
shaft, the careless and irresponsible get the government goodies.
Bad idea.
IOWA EARTHQUAKE: KERRY FINISHES FIRST, DEAN MELTDOWN
As suicide hotlines all over the country were flooded with distraught
Deanie babies, John Kerry finished first in Iowa, followed by
multi-millionaire trial lawyer John Edwards. Bringing up third place is
the ever-angry Howard Dean. Richard Gephardt finished fourth and is,
therefore, finished. The top three finishers now head to New Hampshire,
where Weasley Clark and Joe Leiberman are waiting for next Tuesday's primary.
This is going to get very interesting, because of the relatively tight
timetable. After New Hampshire, there's John Edwards' birth state of South
Carolina and a handful of others, then Super Tuesday on March 2nd. The
Democrats want to chose their candidate as soon as they possibly can so they
can get on with the campaign against Bush.
We're going to find out how strong the former general ... you know, the one
who was fired because of integrity and character issues ... is in New
Hampshire. The better Clark looks the more Bill and Hillary will start
to sweat. At what point will they pull the plug on their stalking
horse? That leaves Senators Kerry, Edwards and Lieberman as the only
alternatives. One is a Massachusetts liberal, the other a former
ambulance-chasing trial lawyer and one was the Democratic loser just 4
years ago. On top of that, they're all very boring.
Will Kerry end up being the candidate? I particularly like that story
about how John Kerry threw his Bronze Star over the fence into the White House
grounds during a Vietnam War protest. Later we find out that Kerry
lied. He didn't really throw his medal .. he tossed something else
instead. Ahhh ... another honest Democrat.
No ... I'm not feeling particularly cocky here. My absolute,
number-one issue in this campaign is our security. We are in the middle
of World War IV, the war against Islamic terrorism. Domestic
issues remain important, but all fall behind the war on terrorism. It is
insanity to entrust our national security to a Democrat, but there are many
people in this nation who put their own access to taxpayer funds and
government programs far above any concerns they have about terrorism.
These people can be counted on to vote only for the candidate who promises the
freest access to the national treasury. On the other side we have
conservative and libertarian voters who are so disgusted with Bush's orgy of
domestic spending that they just don't have the heart to go to the polls.
When November comes, just ask yourself: WWOVF?
Who would Osama Vote For? It's a question worth asking.
A DAY IN THE LIFE OF HOWARD DEAN
Howard Dean Alarm System
You heard it first on the Neal Boortz Show, the Howard Dean Alarm System! Listen again, share with friends! |
Boy, what a rough day for Governor Dean. Despite endorsements from former Vice
President Al Gore, former New Jersey Senator Bill Bradley, Iowa Senator Tom
Harkin and a little love from Jimmy Carter, third place was the best he could
do yesterday. Dean complains that he suffered as the front-runner because he
was a "pin cushion" for attacks from the other campaigns. Poor baby.
Appearing before supporters in a Des Moines ballroom following his caucus
defeat, Dean threw a complete temper tantrum. He went into a screaming
rant and became red-faced and started shouting out the names of states
where he would continue his battle to defeat George Bush. We
have the sound bite ... listen today. It's much fun. Bitter and angry,
he stormed off to New Hampshire on a midnight flight. How bizarre
is that? What a sore loser.
The day actually started badly for Howard Dean. After inviting himself to a
Martin Luther King celebration in Iowa, he was overcome by hordes of media
(his campaign itinerary had promoted it) and left in embarrassment after 5
minutes. Upon getting on his bus, he yelled out to the press: "You
know why I wasn't able to attend this event, because you guys are behaving so
badly you've got to get a new life." Organizers of the event were not
pleased. Then there's the sorry spectacle of Dean inviting himself to
Jimmy Carter's Maranantha Baptist Church in Plains, Georgia.
Pundits trace the beginning of Dean's slide to the capture of Saddam
Hussein. That's when Dean said that Americans are no safer because of
the capture. Dean went on to say that Americans were no safer now than
they were before 9/11. Even Democratic voters recognize completely
absurd statements when they hear one. And here are a few more
Deanisms that captured the imagination of the American people ... and not in a
positive way:
The theory that George Bush knew in advance of the attacks of 9/11 is
"interesting."
He would be all too happy to fight to protect Americans and American
interests abroad, but only if the United Nations gave him
"permission" to do so.
Careful, though. It's not over. Do you know who else finished
third in Iowa? George Bush, that's who. There have been candidates
nominated from both parties who finished worse than second in Iowa. Next
week in New Hampshire ought to be fun.
SPEND, SPEND, SPEND: BUSH TO HAND OUT MORE STATE OF THE UNION GOODIES
Continuing the trend of his entire administration, reports say President Bush
will propose in his State of the Union address increasing Medicare payments
10.6%, which is 5 times the annual increase of recent years. Add on top of
that the new prescription drug benefit, increased NASA spending, a 9% domestic
security increase, and $2.5 billion for something called the Millennium
Challenge Account, which is some sort of aid to third world countries. In
addition to all of that, President Bush has not vetoed a single spending bill
during his 3 years in office.
But don't fall victim to this deficit nonsense, either. You'll hear a lot of
the Democratic candidates this year rail against the deficit, as if somehow
this extra government spending needs to be "paid for" with more of
your tax dollars. Wrong...what we need is for the politicians to stop spending
so much in the first place. It really is that simple. Of course, it will never
happen, because people are ignorant and politicians will continue to buy their
votes with government programs.
Remind me what the difference is between Republicans and Democrats? Oh ..tax
cuts and the war on terrorism. That's right.
READING ASSIGNMENTS
Wall Street Journal editorial: The
Republicans are spending like drunken sailors.
Actress Gwyneth
Paltrow is leaving America to raise her child in England because she says
"I worry about bringing up a child in America. At the moment there's a
weird over-patriotic atmosphere over there, like, We're #1 and the rest of the
world doesn't matter." That's right sweetheart, we are #1. And don't let
the door hit you on the way out.
Click here. Just do it. You won't regret it. You need
to remember ... you need to be reminded. You must never forget.
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