Republicans: Stuck in the 1950s

Lately, we’ve heard a lot of blather from Republicans about nationalization, socialism and other  formerly hot-button words.  Boy, talk about stuck in the 50s…These guys are so old they actually think these words still have power. Do they really believe that voters born in the 70s and later react with horror to the gasp, urgh “Socialism”…These kids haven’t grown up with bomb shelters or air raid drills. They don’t automatically call China, RED China,  or cringe with disgust at the mention of RUSSIA. All of that is so old-school.

From what I’m hearing  the Republicans in the US Congress, both the House and the Senate, are proud to say they didn’t vote for the Stimulus about to be signed into law by President Obama.  I’ll bet they’ve got their hands out to rake in the dough, though.

California Senate Chambers
Image by Aquafornia via Flickr

Here in California the whole state, the 10th largest economy in the world [so I’ve heard anyway, could be wrong about that–it is very big] is about to literally go down the tubes because we have to have 2/3 vote of our representatives  to pass a budget.  Our dear elected ones just can’t seem to get it together. Anyone with eyes can see we need to raise taxes–but the minority party Republicans resist. And, if their ideological stance against taxes means that taxpayers don’t get their tax refunds, construction projects get shelved and workers laid off, well, so be it…That’s just too bad. They personally don’t expect to suffer so why not stick it to those who will?  They are probably Democrats anyway.

Then, today’s N.Y.Times carried a story pointing out that Republicans in Kansas are pulling the same trick, attempting to strong arm Governor Sibelius into allocating funds to their projects which usually involve giving business more breaks and helping out the already rich.

What is it with these old goats? Why are they getting in the way of everyone else? Time has passed them by. Now they seem to want to stick it to the younger generation.

You know what is happening in California is actually sickening. Most of these obstructionist legislators are really far right-wing.  In fact, they are for the most part far to the right of their constituents. It is shocking that they can paralyze the whole state. Apparently, the few Republicans who are on the fence now realize they have power and are using it to extort more from the Democrats and the Governor who apparently has no friends in his own party.

We absolutely need to get in line with the rest of the states and pass our state  budget with a simple majority vote of our representatives. It’s time to end this charade of a budget agreement that we must go through every year. The people of California have had enough of the childish tactics of our representatives. If they can’t agree on a budget, they should all be impeached. Right now.

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And Now For the Good News

Finally, some relief for California home sellers and home buyers. As part of the federal stimulus package,  conforming loan limits have been raised substantially, up to $729,000 and, to FHA  loan limits are up to the same amount until the end of the year.

Well, hooray for mortgage wonks! We were hoping for something that made sense,  you might say…Here’s what it all means…

 Until now, conforming loan limits,  meaning those conforming to the guidelines issued by Freddie Mac and Fannie Mae and thus saleable on the secondary market, capped at $417,000. Above that limit and buyers had to purchase a so-called jumbo loan with rates at least 1% higher and sometimes far more. That hadn’t bothered us in SoCal much.  Even with our ever-escalating prices, lenders simply packaged a first loan up to $417,000 and offered a smaller second loan to cover the difference.

Then came August 07 and the subprime crisis hits the fan. Foreclosures start to multiply, so lenders revise their guidelines to plug up the gaping holes speculators and the penniless had been running through. The investors who provide the money for the second loans designate SoCal counties as “distressed” and decline to provide any more funds. 

   Jumbo loans cost 1-3% more than conforming, so who is going to take the hit?   With lenders heading for the hills, it’s pretty clear that sellers will have to revise their prices, but even then buyers are declining to participate. The market slows to a snail’s pace, making a bad situation worse.

 Then, our do-nothing Congress, mired in gridlock, wakes up: 2008 is an election year! Miraculously, passing a bi-partisan stimulus package in record time, Congress  makes sure we all receive $300, $600, $1200 or whatever from our tax returns. But, this bill  also helps home owners sell their homes by raising the conforming  rate up to $729,000 in highest priced areas, such as our own.

 What about the buyers? Buyers will have an easier time to qualify with the lower rates, but first-time buyers are getting a break, too. FHA loan limits are $729,000 until the end of the year; that rate expires  right after the election. FHA loans typically have down payments of 3-5% or 103% of the purchase price for repairs, all guaranteed by the Federal Housing Authority [FHA]. FHA made home ownership possible for millions of Americans after World War II. FHA may save us once again.

So, you see this is really good news, not just for wonks but for home sellers and first time buyers.