Sunday, October 19, 2008

The 5 "Cs" of Credit

From the Obama08 website:

"Obama's plan will cut taxes overall, reducing revenues to below the levels that prevailed under
Ronald Reagan (less than 18.2 percent of GDP).iii The Obama tax plan is a net tax cut – his tax relief for middle class families is larger than the revenue raised by his tax changes for families over $250,000.
Coupled with his commitment to cut unnecessary spending, Obama will pay for this tax relief while bringing down the budget deficit."

How does he propose to lower taxes to this level, by just putting it on the back of the "rich" and cutting spending and finding "efficiencies". He proposes new spending, up to $1 trillion, and says that he will not bring in as much, hence shrinking government? When was the last time you saw a politician, let alone a Democrat, lower spending and shrink government? Never that's when.

He promises all this BS with no track record of ever doing any of it. He does have a track record of voting for higher taxes, and against tax cuts.

I'm in the business of making loans to folks. There are 5 things I look at when I underwrite a loan. The 5 "Cs" of credit. I will apply them to Senator Obama:

  • Collateral - what is the asset that backs up the promise to repay. How does this apply to Sen. Obama? It is our country's assets, it's wealth, private property and our lives. It's great collateral for the right customer, lets see if he is;

      • Credit - looking at someones past provides a very good predictor of future behaviour. So what has Obama done in the past that would make me feel he would keep his word. Not a damn thing! Like I said before, he has always supported tax increases, and voted against tax cuts. He also has a very thin credit report, with very little to hang a decision on;

      • Capital - does he have the capital to invest in these programs? Sure, just print more, that's what we're doing now, and he voted for that and his programs and ideas laid out on his website show he wants to spend more than any president, ever!

      • Capacity - Cash flow is what this is talking about, and again, his own plan states that he will cut more taxes for the lower 95% of tax payers than he will increases taxes on the "rich". So with that in mind, he fails this "C". It sounds like the guy that comes to his wife and says, "honey, I know I spent $2,500 for this flat screen TV, but is was on sale and I saved $500 bucks."

      • Character - This is the one that, today with all of the impersonal contact lenders have, we use the least. But in this case we can see the character of Mr. Obama by looking at his friends. A good saying I go by is, "look at your friends and I'll show you your future." So looking at Mr. Obama's friends should tell us quite a bit about him. Bill Ayers, Rev. Write, ACORN, the list goes on and on. This tells me all I need to know about his view on America. And it tells me that his view is not mine or that of hardly anyone else I respect. Looking at how he speaks to different groups, telling them what he thinks they want to hear, reminds me of another Democrat that was shy on the "truthyness" factor. Former Pres. Clinton told everyone that he would cut taxes on the working class, and then, the first thing he did in office was pass the biggest tax increase in history. As the conservatives have always said, Character matters.

      • My decision on Mr. Obama.......Request Denied!

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