I acknowledge your good intentions, albeit you and your fellow Congresspersons have become increasingly short-sighted. I've voiced & written my opposition to any & all "bailout" and/or"stimulus" packages, along with many other Cobb County voters. And yet, we continue to be dismissed. We want want less government, less interference, less legislation, less taxation...in fact, we want less everything pertaining to all levels of government; local, state & federal. All these have proven time & time again, with ever increasing ineptitude, that the machinery & mechanism of our governmental system is irreparably broken. We are no longer a democratic republic, but an socialist oligarchy. We are no longer the America of our forefathers, we're not even the America I served twenty years in the Air Force for during the Viet Nam Era.
Our Administration and Congress has put this nation in GREAT PERIL: Saddling us and all future generations of Americans with an astronomical debt we can NEVER REPAY. The inevitability of higher taxation, dollar devaluation & hyper-inflation is a mere heartbeat away. One single critical straw will break our nation's back when the day of reckoning arrives, and it is coming. What we're experiencing now is just the beginning of travail; labor pains which will increase in frequency and intensity. I fervently pray you and every legislator would have the epiphany of eyes wide open to see what is really happening to America. Every day I find it head-shakingly incredulous that supposedly educated individuals can be so blind and act so ignorantly. 5000 years of recorded human history should prove to us that we cannot keep making the same errors and expect different results. Babylon, Greece, Rome, Han, Ottoman, Russia and all empires crumbled for the same reasons, and America is not exempt. The disease begins from within, not without.
We don't need bigger or better government. We don't need bigger or better business. We don't need bigger or better education, finance, social engineering, or any other facet of American life. What we need are BETTER PEOPLE in all these arenas. People of true character, moral fiber and unshakable conviction that WE ARE ONE NATION UNDER YEHOVAH GOD. Sadly, I know this is not going to occur in this land again. Those days are past, lost since 1968. We are a fragmented nation in faith, in ethnicity, in creed, in economy, and in social strata, all being herded to rally under a failing political banner (agenda).
Gird your loins, Senator Isakson, we've already seen events here we never thought we'd see in America, and the worse it still to come if we don't stop the madness. The bailouts by whatever name haven't worked, will not work, and will ultimately cause greater damage to America's infrastructure. I urge you to stand on principle, not expediency. America's past & present problems can no longer be pushed off into the future for our children & grandchildren to deal with; the future has rushed up into our face, staring us down, daring us to flinch. And we have...
"An ethical person knows adultery is wrong, but would do it anyway under certain circumstances. A moral person knows adultery is wrong, and wouldn't do it under any circumstance." -unknown
Regards,
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FOR IMMEDIATE RELEASE
Wednesday, January 21, 2009
Isakson: Fixing Housing Crisis Key to Economic Recovery
WASHINGTON - U.S. Senator Johnny Isakson, R-Ga., spoke on the Senate floor last week and argued that Congress must take steps to jump-start housing demand in order to boost the slumping economy. On Jan.15, Isakson introduced the Fix Housing First Homebuyer Tax Credit Act to expand the homebuyer tax credit passed by Congress last year.
The text of Isakson's remarks is below:
"Madam President, to a certain extent I wish to follow up precisely on the remarks the Senator from Washington made at the end of her speech.
"I, too, have been disappointed with the deployment of the first half of the TARP money, and I supported that deployment in the hopes that it would stabilize the marketplace, ease credit for our customers, and help the housing market. While it probably did stabilize the banking system, there has yet to be a loosening of credit and there has yet to be a recovery of the housing market.
"Looking ahead, we continue to look at suggestions that throw money at the problem rather than getting to the root cause of the problem. In fact, with the best of intentions, I think people are struggling to meet the symptoms of a serious illness rather than treat the illness. I wish to direct my remarks tonight to that illness.
"The illness, as the Senator from Washington referred to, is the collapse of the U.S. housing market which began in the last quarter of 2007. In the first quarter of 2008, in January, I introduced a housing tax credit of up to $15,000 for the purchase of any house that was standing vacant or in foreclosure. I did it for a couple of reasons. No. 1, I was in the real estate business for 33 years, and I was in it in 1974, a year in which we had a housing collapse worse than the current situation. While many people think this one is bad, it is not as bad as 1974.
"In December of 1974, there was a three-year supply of unsold, standing new houses in the United States of America. That is a catastrophic inventory. We currently have a supply of about 11 to 13 months, depending on the State. That is not a good market, but it is not 36 months, which is a horrible market.
"President Gerald Ford, a Republican, and a Democratic Congress, came together and passed a $2,000 tax credit to any family who bought and occupied one of those standing homes. Within 1 year's time, which was the limited time of the tax credit, two-thirds of the housing inventory on the market was sold, values stopped declining and started improving, and we had a stabilization of our economy, the end of a recessionary period, and the beginning of prosperity.
"I come here tonight because about an hour and a half ago I dropped a bill known as Fix Housing First, an effort for me and others in this body to rekindle that debate of last January. Now, last year, we did pass a housing tax credit, but it was a now-you-see-it/now-you-don't approach. It was a first-time home buyer credit of $7,500 that was a refundable loan, interest free, because over 15 years you would pay the credit back to the Government in the form of income taxes. It was an incentive, but it was weak. It was not bold.
"The tax credit we introduced last year was scored by CBO at $11.4 billion, and Finance believed at that time--and maybe rightfully so--that was too big a price to pay and too expensive. Well, because we didn't do it, in October of this year, we approved $750 billion to address the symptoms of the problem, which is the failure of the housing market.
"I had the privilege yesterday of meeting with some of President-elect Obama's team, including Rahm Emanuel, Dr. Summers, and others, and told them precisely what I am saying on the floor of the Senate today; that is, I hope they will embrace this concept of incentivizing the housing market so we can stabilize values, stop the continuing erosion of equity, and begin to reflate--not inflate but reflate--the housing market.
"In America today, 20 percent of the houses are underwater, meaning there is more owed on them than they are worth. That means equity lines of credit with our banks are in default. It means students going to college are losing the money their parents had for tuition. It means there is not enough liquidity in households anymore or credit availability to make purchases of durable goods that are important to our system, and our system is continuing to feed in a downward spiral on the illiquidity, the lack of equity, and the lack of a marketplace for housing.
"I was in this business for a long time, and I called 10 people who worked for me a number of years ago last weekend in Atlanta. I asked them, I said: What is going on in the market? Tell me what the buyers are saying or are there any buyers? I talked to a lady by the name of Glennis Beacham.
"She said: Johnny, I had nine people come to my open house last weekend, and that is a good crowd for an open house in this marketplace. Every one of them had the money and they wanted to buy, but they were looking for two things: a short sale, which means somebody selling their house for less than is owed on it and getting a discount from the lender, which means it is a downward price or they are looking for somebody whose house is going into foreclosure that they think they can steal. They don't want to even make an offer on the 80 percent of people's houses in this country who are making their payments, aren't in default, aren't in foreclosure, but might need to sell. So the marketplace has died.
"Now, Fix Housing First proposes the following: Repeal the $7,500 tax credit we passed last year, which is not being used, by the way. That credit has not been used to any extent whatsoever. Replace it with a tax credit that will go from $10,000 to $22,000 depending on the formula. It would be a monetizeable tax credit. What that means is this: you make the tax credit good for this year--January 1 through December 31 of 2009--but you allow the monetization or the claiming of that credit against the 2008 income taxes of that family. The 2008 income taxes come due in April of this year, the 15th. We all know that. By allowing the credit to be taken against 2008 income taxes, you can monetize that money at the closing, use it as a part of the down payment, and immediately incentivize the marketplace. Is that a little costly? Sure. Is it something we would rather not do? Probably. But what are we going to do? Watch the marketplace go down to where four out of every five houses are underwater? Watch sales go down to where there is no viable housing market in this country? It has not stopped spiraling. It is continuing, and everything feeds off of it.
"I don't wish to belabor this point, but I wish to talk for the American people, the people of Georgia. The community bankers are hamstrung right now. Most of their investments are in real estate, residential construction, and acquisition and development loans. With no marketplace to buy the lots or buy the houses, they have no cash flow coming in to service the loans. They are deteriorating in terms of their value. Americans who have been transferred who are making their payments, who have a viable house, who have to sell it to move to the next city of choice, there is no marketplace to buy that house, so that is stagnating.
"Consumer products, take carpets, for example. The State of Georgia, the County of Whitfield, the City of Dalton produces about 85 percent of the domestic carpet in the United States of America. It is shut down. The mills are shut down. Why? People aren't recarpeting. They aren't redoing their houses. New houses aren't selling. The market is gone. I could go on and on with durable products made in the United States of America whose industries are now in trouble because the housing market has taken a severe hit over a protracted period of time.
"So my plea to the President-elect, to my friends on both sides of the aisle, to the Members of the United States House of Representatives, as we are deploying countless billions of dollars to react to problems that are manifesting because of a failed housing market and mistakes that were made in the past, let's put some money out there to incentivize Mr. and Ms. America who want the American dream to buy a home, to buy one for their family, occupy it as their residence, and give them a tax credit for doing it. It is a small price for the Government to pay to begin to restore the industry that got us to where we are and will lead us out of these dangerous and dark times.
"So I come tonight on behalf of the homeowners of the Presiding Officer's State of Florida and mine, the community bankers, the realtors, the homebuilders, the fix-it people, the durable goods producers, the building supply makers, the landscapers--every job that has been lost and gone, in some cases forever, because the housing market in this country has collapsed.
"We have learned our lesson for loose underwriting. We have learned our lesson from loaning money to people who weren't qualified to borrow. We have paid a terrible price for that lesson, both the country and the people. It is time for us to do what we know we should have done: have quality underwriting, available credit, but have accountability in our lending system, make sure values are appraised right, underwriting is done right, and credit is available but people are qualified. If we can do that and incentivize people to come back because of the tax credit, we can solve this problem.
"I don't want to oversimplify the gravity of the problem we face, but the housing market led us in; the housing market will lead us out. It is time for us to fix housing first. Our failure to do so will cost us a lot more than $700 billion of our taxpayers' money, and countless Americans who shouldn't will lose their homes, lose their jobs, and lose their faith in the greatest country on the face of this Earth.
"I ask my colleagues to study this recommendation. I hope the President-elect will embrace it. I hope, quickly, we can fix housing first in the United States of America."
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