Skip to main content

Socialism has already failed in the United States

Bernie Sanders
How many nations have already embraced socialism’s promise of paradise but instead experienced the effects of socialism’s disastrous reality?

CNN’s “Venezuela: How a rich country collapsed” details how Venezuela, considered the “richest country in Latin America,” in only 20 years became the current poster child of socialism’s disastrous reality. But is there an example in recent memory on your own doorstep?

There is little doubt that the 2008 housing market collapse was precipitated by extensive subprime loans. Subprime loans take the form of interest-only loans, option adjustable rate mortgage loans, ultra-long fixed-rate loans, balloon loans, and no-money-down loans. Such loans have a higher risk of default. According to the Federal Deposit Insurance Corporation, "These borrowers have been delinquent, bankrupt, or have low credit scores and/or low income. Specifically, they've been delinquent on their payment with two or more 30-day delinquencies in the past year."

In 1977, the Community Reinvestment Act (CRA) was passed, encouraging banks to lend to low- and moderate-income borrowers.

Sue Kirchhoff and Judy Keen reported in “Minorities hit hard by rising costs of subprime loans” that subprime lending surged because lenders have been supported by politicians and community leaders eager to promote minority homeownership, which remains about 25 percentage points below that of white non-Hispanics, subjecting these borrowers to “debt servitude.”

Under Andrew Cuomo in 2000, the Department of Housing and Urban Development announced the historic federal regulations that raised the required percentage of mortgage loans for low- and moderate-income families that finance companies Fannie Mae and Freddie Mac had to buy “from the current 42 percent of their total purchases to a new high of 50 percent — a 19 percent increase.”

In “Yes, the CRA Is Toxic,” Edward Pinto reported that “50 percent of CRA loans for single-family residences were nevertheless made to borrowers who made down payments of 5 percent or less or had low credit scores — characteristics that indicated high credit risk.” Some lending institutions reported 19 to 35 percent delinquency rates on CRA-mandated loans versus 2 percent on non-CRA loans. And Pinto reported that “Bank of America said in 2008 that while its CRA loans constituted 7 percent of its owned residential-mortgage portfolio, they represented 29 percent of that portfolio’s net losses.” This lead him to conclude the following: “Whatever the precise magnitude of the CRA’s role, there is no question that as the government pursued affordable-housing goals — with the CRA providing approximately half of Fannie’s and Freddie’s affordable-housing purchases — trillions of dollars in high-risk lending flooded the real-estate market, with disastrous consequences.”

The Financial Crisis Inquiry Report (FCIR) concluded, “As a nation, we set aggressive homeownership goals with the desire to extend credit to families previously denied access to the financial markets. Yet the government failed to ensure that the philosophy of opportunity was being matched by the practical realities on the ground. ... The talk of opportunity was tragically at odds with the reality of a financial disaster in the making.”

The FCIR further reported that government-sponsored enterprises such as Fannie Mae and Freddie Mac "used their political power for decades to ward off effective regulation and oversight — spending $164 million on lobbying from 1999 to 2008." It added that "from 1999 to 2008, the financial sector expended $2.7 billion in reported federal lobbying expenses; individuals and political action committees in the sector made more than $1 billion in campaign contributions. ... The nation was deprived of the necessary strength and independence of the oversight necessary to safeguard financial stability."

The career politician’s purging of regulations, promises of lavish rather than affordable home ownership and legislation forcing risky loan practices to “low- and moderate-income families” resulted in, according to the FCIR, “about four million families … [losing] their homes to foreclosure and another four and a half million … [slipping] into the foreclosure process or ... seriously behind on their mortgage payments.”

Isn’t this a clear example in recent memory that affected us all of socialism’s promise of paradise but instead delivered socialism’s disastrous reality?

So much of the rhetoric from our career politicians professes the socialist promise of paradise to elicit campaign contributions and votes with candidates pledging free education, free housing, free health care, promises of rewards without labor, promises of spending without expense and promises of a Shangri-La existence supported by the government.

But when the smoke clears, aren’t the financial consequences resulting from the disastrous reality of socialism carried on the shoulders of the very people who relied on the socialist promises from these career politicians, politicians who continue to enjoy their profits from the billions “in reported lobbying” and “campaign contributions?”

With this experience, do we want to support contenders who would expose our health care, education, housing and other social infrastructures to the financial consequences, on our shoulders, of the “disastrous reality of socialism?”

Comments

Popular posts from this blog

First confirmed case of COVID-19 in Canyon

The Amarillo Area Public Health has confirmed 1 case of coronavirus (COVID-19) in Canyon.

"Due to sensitive information we are not able to share details regarding this case," the city said in a statement.

On Monday, Canyon Mayor Gary Hinders hosted a Facebook Live giving details of Canyon’s response to COVID-19 Status Level Red, which is aligned with the City of Amarillo and new Amarillo Public Health guidance.

Effective immediately, Amarillo Public Health has updated its coronavirus (COVID-19) Level to RED. This is the highest alert level, indicating there are widespread confirmed cases of COVID-19 in Amarillo and the surrounding area.

Hinders issued stay at home guidelines, that went into effect tonight, (March 30) at 11:59 pm and will be in place at least through Monday, April 13, 2020.

"We ask that residents stay at home except for outings essential to their own health, safety, and welfare and that of their family members," the city said.

Under these guideline…

Grocery stores impacted by COVID-19 outbreak

With the continued spread of COVID-19, many grocery stores throughout the area have been facing changes in operations as well as economic impacts.

Nancy Sharp, manager of communications and community engagement for the United “family,” which includes all Llano Logistics, RC Taylor, United Express, Amigos, Market Street and United Supermarkets, said COVID-19 has many people doing some fear-driven, panic-type buying, causing a significant increase in traffic in stores and people purchasing items.

The closure of dining establishments has also impacted sales as more people are cooking at home, which Sharp said has provided an increase to grocery stores across the country. The increase in traffic has also increased the amount of people who are working in the stores and the need for additional cleaning.

“We are cleaning multiple times a day, multiple surfaces. And so that has definitely increased the number,” Sharp said. “We're restocking several times a day; that also has increased th…

White House projects between 100,000 and 240,000 American deaths from coronavirus

President Trump's top health advisers said Tuesday that models show between 100,000 and 240,000 Americans could die from the novel coronavirus even if the country keeps stringent social distancing guidelines in place.

Without any measures to mitigate the disease's spread, those projections jump to between 1.5 and 2.2 million deaths from COVID-19.

The models, which were displayed at a White House press briefing Tuesday, underpinned Trump's decision to extend social distancing guidelines to the end of April.

Dr. Deborah Birx, the White House coronavirus task force coordinator, explained the data, urging the public to steel for difficult weeks ahead while expressing hope that the efforts would reduce the spread of the coronavirus. 

“There’s no magic bullet, there’s no magic vaccine or therapy. It’s just behaviors,” Birx said, adding that it would be those behaviors that could change “the course of the viral pandemic.”

Second COVID-19 case confirmed in Canyon

The Amarillo Area Public Health has confirmed a second positive case of coronavirus (COVID-19) in Canyon. Due to sensitive information the City of Canyon is not provided details on any cases.

Last week, Mayor Gary Hinders hosted a Facebook Live giving details of Canyon’s response to COVID-19 Status Level Red, which is aligned with the City of Amarillo and new Amarillo Public Health guidance.

Effective immediately, Amarillo Public Health has updated its coronavirus (COVID-19) Level to RED. This is the highest alert level, indicating there are widespread confirmed cases of COVID-19 in Amarillo and the surrounding area.

Hinders issued stay at home guidelines, that went into effect March 30 at 11:59 pm and will be in place at least through Monday, April 13, 2020.

"We ask that residents stay at home except for outings essential to their own health, safety, and welfare and that of their family members," the city said.

Under these guidelines, all businesses, except those essenti…

50 children may have been exposed to COVID-19 at Amarillo daycare

Friday morning, City of Amarillo’s Public Health Director, Casie Stoughton, confirmed that 50 children may have been exposed to COVID-19 at an Amarillo daycare.

A child enrolled at Imagination Station Child Development Center has tested positive for COVID-19. All of the exposed children have been placed under quarantine by the City of Amarillo until at least April 10.

The daycare said it will comply with public health guidelines and plans to reopen next week.

"We will do a floor-wall-ceiling and every thing in between cleaning. We will re-open Monday morning to the families who have not been quarantined by the Public Health Department.

"Being essential workers isn’t an easy job. We are placed on the frontlines with nothing more than hand sanitizer and prayers.

"Also with being an essential worker we risk being the ones with the initial exposure. We have all made sacrifices for each other because when you feel a calling on your life you don’t back down in the face of ad…