# OK, the debt deal is apparently made. How will it affect 2012? **URL:** \ **Category:** Politics & Elections\ **Created:** [August 1, 2011, 4:13am UTC](https://boards.straightdope.com/t/ok-the-debt-deal-is-apparently-made-how-will-it-affect-2012/591004 "2011-08-01T04:13:21Z")\ **Posts on this page:** 8\ **Page:** 10
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [August 6, 2011, 11:24pm UTC](https://boards.straightdope.com/t/ok-the-debt-deal-is-apparently-made-how-will-it-affect-2012/591004/181 "2011-08-06T23:24:26Z")
> [@galveston](#): > > We were promised that the stimulus would hold the unemployment below 8%. How’s that working out for you? You guys have a pretty short memory don’t you? Senate Republicans howled about spending too much and held up the bill until $150 was cut out of the Senate version. The stimulus was far too small. We need another at least 2-3 times as large. ---
**Author:** ![carnivorousplant](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/carnivorousplant/32/3563_2.png) [@carnivorousplant](https://boards.straightdope.com/u/carnivorousplant)\ **Post date:** [August 6, 2011, 11:57pm UTC](https://boards.straightdope.com/t/ok-the-debt-deal-is-apparently-made-how-will-it-affect-2012/591004/182 "2011-08-06T23:57:35Z")
> [@Fear\_Itself](#): > > The stimulus was far too small. We need another at least 2-3 times as large. My place of employment is getting work done from the stimulus. I’ve not seen it helping anyone except contractors and the winos they hire. 🙂 ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [August 7, 2011, 1:49am UTC](https://boards.straightdope.com/t/ok-the-debt-deal-is-apparently-made-how-will-it-affect-2012/591004/183 "2011-08-07T01:49:24Z")
Your experience is different than mine. The I93 widening project between Salem and Manchester, NH ain’t being done by winos. ---
**Author:** ![carnivorousplant](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/carnivorousplant/32/3563_2.png) [@carnivorousplant](https://boards.straightdope.com/u/carnivorousplant)\ **Post date:** [August 7, 2011, 2:10am UTC](https://boards.straightdope.com/t/ok-the-debt-deal-is-apparently-made-how-will-it-affect-2012/591004/184 "2011-08-07T02:10:53Z")
> [@Fear\_Itself](#): > > Your experience is different than mine. The I93 widening project between Salem and Manchester, NH ain’t being done by winos. I’m glad to hear it. ---
**Author:** ![Bryan\_Ekers](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bryan_ekers/32/183_2.png) [@Bryan\_Ekers](https://boards.straightdope.com/u/Bryan_Ekers)\ **Post date:** [August 7, 2011, 3:19am UTC](https://boards.straightdope.com/t/ok-the-debt-deal-is-apparently-made-how-will-it-affect-2012/591004/185 "2011-08-07T03:19:27Z")
> [@galveston](#): > > The Community Reinvestment Act (CRA, Pub.L. 95-128, title VIII of the Housing and Community Development Act of 1977, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.) is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of **borrowers in all segments** of their communities, \*\*including low- and moderate-income \*\*neighborhoods.[1][2][3] Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as **redlining.[4][5**] > > The Act **requires the appropriate federal financial supervisory agencies to encourage regulated financial institutions to help meet the credit needs of the local communities in which they are chartered,** consistent with safe and sound operation (Section 802.) **To enforce the statute, federal regulatory agencies examine banking institutions for CRA compliance, and take this information into consideration when approving applications for new bank branches or for mergers or acquisitions** (Section 804.)[6] > > This is self explanitory, I think. If a bank wants to open a new branch, it must meet the credit needs of low income neghborhoods. They cannot refuse a loan because it is not fiscally sound. > > We see how that “consistent with safe and sound operaton” worked out. You quoted something as evidence and then contradicted it. The Act calls for operations that are “consistent with safe and sound operation”, yet you blame the Act for the entirely unsafe and unsound mess that followed, in which banks made bad loans but then largely packaged them and sold them off to other institutions. I’m not aware of government (let alone ACORN) forcing the banks to make obviously bad loans. I’ll admit the possibility of a few isolated cases, but hundreds of thousands of loans? All indications I’m aware of point to greed motivating the practice rather then governmental orders. I don’t even recall Lehman Brothers claiming at any point that the government (or ACORN) _made_ them take on so many bad loans, and I can’t imagine why they’d have stayed silent about it. Do you know of this occurring? Can you cite it? And, yes, a balanced budget amendment is a bad idea. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 7, 2011, 5:05am UTC](https://boards.straightdope.com/t/ok-the-debt-deal-is-apparently-made-how-will-it-affect-2012/591004/186 "2011-08-07T05:05:29Z")
> [@galveston](#): > > Exactly. Unemployment numbers. We were promised that the stimulus would hold the unemployment below 8%. How’s that working out for you? Fine. The numbers are not in the 8s, But 1 higher. Can you understand that it would have been a lot worse without the stimulus. If it was 15, how would that work out for you ? ---
**Author:** ![RadioWave](https://avatars.discourse-cdn.com/v4/letter/r/91b2a8/32.png) [@RadioWave](https://boards.straightdope.com/u/RadioWave)\ **Post date:** [August 7, 2011, 8:29pm UTC](https://boards.straightdope.com/t/ok-the-debt-deal-is-apparently-made-how-will-it-affect-2012/591004/187 "2011-08-07T20:29:02Z")
> [@galveston](#): > > The Community Reinvestment Act (CRA, Pub.L. 95-128, title VIII of the Housing and Community Development Act of 1977, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.) is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of **borrowers in all segments** of their communities, \*\*including low- and moderate-income \*\*neighborhoods.[1][2][3] Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as **redlining.[4][5**] > \ > We see how that “consistent with safe and sound operaton” worked out. The fact is that loans made by CDA affected banks were actually better than loans made by other institutions [[cite].](http://blogs.wsj.com/economics/2008/12/04/dont-blame-cra-the-sequel/) Here’s the pertinent quote: > [@](#): > > Loans originated by lenders regulated under CRA in general were “significantly less likely to be in foreclosure” than those originated by independent mortgage companies that weren’t covered by CRA. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 13, 2011, 9:00pm UTC](https://boards.straightdope.com/t/ok-the-debt-deal-is-apparently-made-how-will-it-affect-2012/591004/188 "2011-08-13T21:00:42Z")
> [@galveston](#): > > Are you saying that the bankers would have made loans to people who could not pay for them without government prompting or gaurantees against loss? That is the starting point or basis for all that followed. > > I doubt those bankers are dense enough to do that. > > The only part that ACORN had was to actively find customers (a lot of them) for those sub-prime mortgages. It somehow seems immoral to me to encourage people take out loans that they have nearly zero chance of repaying. As we see in hindsight, it caused a major upheaval. > > To the OP: I think our side blew the debt deal on at least one major point. They let the next fight on this subject come after the 2012 elections. Obama was desparate (i believe) to not have that discussion during his campaign. Dead wrong again. The subprime mortgages were dreamed up by banks and the mortgage companies. They were making so much money when the good ones ran out, that they directed the lenders to drop standards. They took no risk. They packaged and sold them in minutes.They created CDOs and made trillions of dollars. In order to make that work, the bankers forced the rating agencies to rate all their crappy packages AAA. Fannie was not the driving force at all. [Previous page](https://boards.straightdope.com/t/ok-the-debt-deal-is-apparently-made-how-will-it-affect-2012/591004.md?page=9)