Racefish’s Weblog

Bailout Blues
February 22, 2009, 3:41 pm
Filed under: Economy, Housing, Legislative Foolishness, Rants, Socialism

OK, I’ve been gone a while but it’s something that really gets my blood hot. Obama’s Mortgage Plan is another one of those “taxpayer financed” ways of extending the reach of the Federal Government into the daily lives of productive Americans.

Answer me this; Why does Comrade Obama think it is the duty of the productive taxpayer to pay part of the mortgage of people who #1, couldn’t afford the house in the first place, and #2, gt into a house that a wise¬† person would understand was far beyond their ability to pay for and maintain?

We have to go back to the Carter administration. This was the feel good bunch that was responsible for double digit inflation and the failed rescue attempt of the hostages in Iran. The first housing bill passed during that time was aimed at getting people who were desirous of owning a home in on the ground floor with an adjustable rate mortgage. That in itself is a noble endeavor for those who are young, professionally oriented, and stable.

The program was expanded slightly during the Reagan administration and really inflated with Clinton. The G. W. Bush administration called for greater oversight of Fannie May and Freddy Mac. Senator John McCain also called for greater regulation. The result was that the Democrats continued to say that these GSEs (Government Sponsored Enterprises) were sound and were in no trouble.

The real-estate companies and lenders took the word of Congress and were betting on the housing market continuing to grow. Organizations such as ACORN and others put pressure on lenders to provide money for houses that would be purchased with federal guarantees through the GSEs. The result was that people who were on the low side of the income ladder, and had never had any experience managing credit, were placed in the untenable position of paying a mortgage hopelessly out of their range.

The inevitable number of repossessions has caused the housing market to collapse. Many pundits would label this the bubble bursting, but looking seriously at the problem. the overbuilding and over-selling was much of the problem.

Now, we have an additional problem of the cost of fuel, namely gasoline and diesel, being artificially inflated. There are many causes for that, but the inevitable result was the population cutting back on travel, recreation, and the availability of non-discretionary funds that would have been used for new furniture, clothes, electronics, and more.

Now Obama comes out with a plan to alleviate the borrowers pain. His plan is for lenders to refinance loans in limbo, and have the lenders “pay” half of the refinancing to bring the rate down to a “reasonable” level. The “Government” namely the Taxpayer would pay the other half.

If you bought into the “Hope and Change” that Obama’s campaign sold so well, I can only say I hope you wake up and oppose his radical Socialist agenda, or you will only have Change left in your pocket.