RUSH: All right, Ron in Las Vegas, thank you for waiting and welcome to the program, sir.
CALLER: Hello, Rush. It’s an honor to speak to you. Mega dittos.
RUSH: Thank you, sir.
CALLER: And my question to you is, there’s been talking about this tax rebate thing with $145 billion. Wouldn’t the American people be better served to stimulate the economy by giving tax incentives to people that are buying houses that — you know, there’s a lot of houses here in Las Vegas I think they paid $25,000 that are in foreclosure. Wouldn’t it be better to give tax incentives to get people to buy those houses?
RUSH: Well, we’re not talking about that much money. We’re talking anywhere from six to 800 bucks.
CALLER: All right, instead of giving it to every single person, if you gave it to the people that were buying the houses and people that are invested in buying rental properties or whatever and get these houses off the market, wouldn’t it help the American people more, the homeowners here that maybe their equity has gone down —
CALLER: — because of all the houses that are on the market?
RUSH: Okay. You know, I’m running out of time here. I need to answer this, Ron, when we come back from a commercial break.
RUSH: All right, Ron, you had a different theory here on the economic stimulus. Explain this to me a little bit more. You want tax credits only for people who are being foreclosed on, something like that, correct?
CALLER: Oh, I just think it would stimulate the economy more if you gave a tax break to people that are going in to buy houses that are being foreclosed on right now rather than sending $800 to each person. I don’t see how that would stimulate the economy.
RUSH: All right, I need some numbers here, Ron. People that are being foreclosed on were generally — you know, banks — takes a couple months for this to happen, of you not making a payment. I mean, we’re talking a lot more than 800 bucks here. And your proposal to give a tax credit, not cash, a tax credit to people who are unable to pay their loans, being foreclosed on —
CALLER: No, no, no. No. I’m saying on their closing costs, let’s say they wouldn’t have to pay these hefty taxes —
RUSH: The closing costs have already been paid. We’re talking about people who have been foreclosed on or in the process of being foreclosed on. Oh, you mean people who are going to buy the foreclosed houses?
CALLER: Right. What I’m saying is, people are waiting for the market to bottom out and then they’re going to probably start buying a few houses, and so instead of giving $800 to each person, if they were able to save a few thousand more on the purchase of a home to get it off the market instead of being in foreclosure —
RUSH: A-ha. I see. Well, I see the difference — I thought you were talking about people about to lose their houses, let ’em keep the house with some government action. What you want to do is spur economic activity by having people buy the foreclosed houses —
RUSH: — and making it easier to do so.
RUSH: Okay, we do have a built-in incentive to home purchases, and that’s the deduction of the mortgage interest that one pays. I would also guess that homes that have been foreclosed on are a pretty large number of them. I would think that the prices of those homes have come down incredibly, making those homes more affordable, because I think that’s one of the greatest sources — if there is any economic angst out there, I don’t think it’s oil, I don’t think it’s gasoline, I don’t think it’s any of these things that people talk about — I think that it has to do with existing homeowners who are seeing the value of their home plummet, and they’re worried how long it’s going to take to get back because that’s their sole source of equity. That’s going to bother people more than three-dollar gasoline. All the value of housing is coming down, except in certain pockets of the country, very few pockets, it’s coming down, those houses are already much cheaper, these foreclosures are much cheaper to buy now. Some of them you can get on the courthouse steps and at auction. But if we’re going to do that, I don’t know how much money we’re talking about to do that, and why do you think that there is economic stimulus in people buying houses that have been foreclosed?
CALLER: Well, I know that they’re talking about lower tax revenues here locally, and I would say that, you know, they send around a thing showing how much your house is worth, and so they’re not able to tax us as much and so they’re saying that we’re going to have to cut back in Nevada in certain areas, and I think that would have to do with everybody’s, you know, house value has gone down because there’s so many houses on the market.
RUSH: Right. Exactly right.
CALLER: I think that giving $800 to each person is a Band-Aid, and I think there are smarter things to do with that money, you know, even if it is just a drop in the bucket, I’d rather see it go to somebody that’s trying to get the economy going, investors, or home buyers, whatever.
RUSH: Eight hundred bucks may be a drop in the bucket to you, but it’s not to women and minorities who are always hardest hit, and it certainly is not a drop in the bucket to illegal immigrants. It’s not a drop in the bucket to pets. The pets have been rendered homeless here because of this. We just had the story out of Naperville, Illinois. Not making this up. We have homeless pets now because of these foreclosures. Now it’s serious. I think your example here of local governments crying, ‘Oh, no!’ Make ’em cut the services. The idea that we’ve gotta maintain a certain level of tax revenues so government never has to cut back has got to change. There’s so much wasted money in government — local, state, national — it’s obscene! People don’t have the slightest idea how much money these governments are taking in and how much they’re wasting and where it’s going to. But they are never asked to do with less. Okay, so you get, in a convoluted way the value of your home goes down, you worry about the equity loss but your property tax goes down. Of course it’s not going to happen instantly because you can take it off the assessment, but still your property tax is going to go down, and now that’s bad news.
I, as an American conservative, do not consider tax rates going down bad news. (laughing) I’m sorry. I don’t. The reason I said, Ron, that I thought I was going to be sick, is because when you come up with alternatives to the stimulus plan — and I understand your heart’s big and your intentions are honorable — but when you accept the premise and then try to come up with a better idea, I feel that you have been lassoed, that you’ve been hooked into this notion that the government can fix this. Markets fix themselves. It’s called corrections. Bureaucracies never correct their mistakes. They just add to them. They just pile on to them. You can see government program after government program, I don’t care if it’s state, local, or national. So the idea, instead of 800 bucks, I know what they’re saying, but, Rush, they’re going to do it anyway, I know and it’s a shame they’re going to do it. But if you start targeting it like that, the first thing you would hear, the Democrats would object to this on the basis that this is only going to benefit the speculators. If you’re going to go out and come up with a government program to make foreclosed houses easier to buy for people that want to get into the home market, then the speculators are going to move in and they’re going to start speculating on the future value of these homes, and who are the evil speculators? They’re mostly Democrat slumlords, but they’re going to be portrayed as Republicans.
Evil Republicans would be accused of benefiting most from that kind of tax credit, when, in fact, Democrat slumlords would. So then we would have this issue, we’d have Pelosi and Clinton at the debate saying, ‘I can’t believe President Bush. He wants the rich to get richer with this tax credit to allow people the American dream. The real beneficiaries of this are going to be these speculators who are going to drive the prices up. Has President Bush no shame? Don’t the rich have enough money?’ And then, of course, people go, ‘Well, there’s no way I’ll support that, I want my 800 bucks.’ Look, I got an idea. Let’s just deal with this all at once, okay? We have a subprime crisis, we’ve got foreclosures, we’ve got equity loss, we got all kinds of problems out there. Let’s right now resolve that, as a people, we are going to come up with a big enough stimulus that will retire everybody’s bad debt on their homes. We’re not going to pay off the whole mortgage. Whatever they’re in arrears on, we’ll pay it, get ’em back to square one, don’t have to lose their house.
Then, after that, we’re going to come up with a stimulus package that is going to make sure we wipe out every bit of debt that every American has run up on his Visa or MasterCard. You can’t run up a debt on American Express because you pay it all off in 30 days unless you take the easy payment plan, which is not offered to too many people. But in the case of these poor people that we’ve read about in Los Angeles, making a hundred thousand dollars a year and would have to take public transportation to the job scooping ice cream at the local Scooby Dip, $40,000 of credit card debt, that’s just un-American, we can’t have that, we’ll wipe that out, wipe out everybody’s credit card debt. I mean, we have to do this, folks. It’s the only fair thing to do. Then we’ll pay off everybody’s automobile loan. Then, for those of you with teenagers, we will pay all of your neighbors, we will all gather together for the good of America to stimulate the economy, we will make sure to pay all of your teenaged kids’ overages on their minutes used for text messages and phone calls. This is easy. I could get elected tomorrow.
RUSH: This is J.D. in Randolph, Vermont. Hi, J.D., welcome to the program.
CALLER: Yeah, Rush, thank you very much.
CALLER: I have an answer for Ron and all the other people who are worried about the stimulus package.
CALLER: Let’s not have one. I’ve been in the workforce now for 30 years if you count high school jobs.
RUSH: That is option C. Just don’t do anything. Let the market correct.
CALLER: Yes. I’ve been in the workforce for 30 years, including high school jobs. I hung my shingle out two years ago, my dad told me, ‘Be prepared to struggle for five years.’ I said, ‘Okay.’
RUSH: Wait, wait. That means you’re a lawyer.
CALLER: I’m sorry?
RUSH: You hung your shingle. You’re a lawyer?
CALLER: No, actually I’m a carpenter, but I work for me.
RUSH: Okay, good.
CALLER: I’m chasing the dream.
RUSH: Oh, you’re self-employed.
CALLER: I’m chasing the dream!
CALLER: I had a lousy year. So what? That happened. Big deal! I’m doing my taxes. It turns out that I don’t owe anything this year because I didn’t do so well. Now the government wants to give me a refund of money I didn’t pay in — by the way, thank you; I assume that’s coming out of your pocket and other people like you — and then they want to give me 800 more dollars on top of it. It’s not a refund; it’s a subsidy. They want to pay me for not accomplishing anything! They want to encourage me to not work or something. I don’t know. The system drives me crazy.
RUSH: Yeah, but it sounds like it’s working on you.
CALLER: No, it’s not! I don’t want a subsidy. I want to work and make money, which I will do this year and I will continue to do and I —
CALLER: — will get to paying taxes.
RUSH: Wait a second I got less than a minute. People want to know: You had a great year last year, and not good year this year. How does that result in you not owing any income tax.
CALLER: Just because of my deductions and everything. I come out, but I have a child so I get this earned income credit, all it is other stuff, these things pile up.
RUSH: Okay, so you are in the bottom 50% that’s paying 3% of the total tax burden?
CALLER: At least. This year I’m paying none! You and others like you are giving me money.
RUSH: Okay. So you’re paying none, and you’re getting a refund to boot. How much is the refund, do you mind my asking?
CALLER: Between the state and the feds, almost two grand.
RUSH: And you didn’t pay any income tax.
CALLER: I don’t pay a dime — and then they want to give me 800 bucks on top of it! We can’t spend like this. We just can’t keep pouring out money we don’t have.
CALLER: It’s stupid.
RUSH: Here’s the problem, though. Look, J.D., I appreciate your attitude, and you’re absolutely right. But when the government is giving away money, most people aren’t going to have your attitude about it.