Housing Rescue Bill: Another Example of Treating Symptoms Instead of the Disease

http://www.reuters.com/article/newsOne/idUSN2141192720080726?sp=true

The U.S. Senate was expected to approve a massive housing market rescue bill on Saturday and President George W. Bush was ready to sign it soon, amid questions about how much it will help.

… The 694-page legislation would set up a $300 billion fund under the Federal Housing Administration to help distressed homeowners get more affordable, government-backed mortgages and get out from under exotic mortgages they cannot afford.

Here is yet another example of treating a symptom of our economic ills instead of the disease itself.  Instead of addressing the root cause of declining incomes and benefits – high-paying manufacturing jobs lost to free trade with overpopulated nations and steadily rising overpopulation right here in the U.S. – we try to mitigate the effects by making it easier for people to borrow money to stay afloat.  It’s exactly the same thing as treating the unaffordability of health care by providing government-funded insurance instead of by boosting incomes by bringing back all of the jobs that we gave away with our free trade global welfare program. 

All the while, the government calculates an inflation index, the Consumer Price Index, or CPI, that makes it appear that incomes are keeping pace with inflation when, in fact, the CPI grossly understates increases in the cost of living  (something the government itself admits).  In effect, anything that rises faster than the CPI becomes unaffordable – especially health care and, more recently, housing. 

We don’t want to continue mortgaging our descendants’ future to keep up an illusion of prosperity, Uncle Sam.  We want our jobs back!!

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4 Responses to Housing Rescue Bill: Another Example of Treating Symptoms Instead of the Disease

  1. Daniel says:

    Thank you for pointing out the symptoms versus the problems. If I may, I like to add that no one thought to SAVE any money during the good years, did they? Nor did they think the good times might end? So, there are some other root problems that society needs to consider. But they won’t because they’d have to admit the problem is within more than from without. Anyway… http://www.bentpage.wordpress.com.

  2. Pete Murphy says:

    Daniel, no doubt there is some truth to what you say, that many people who now find themselves in financial trouble had the wherewithal to avoid their plight, but frittered it all away through conspicuous over-spending. But that doesn’t change the fact that median incomes and family net worth have been declining for decades, thanks to the loss of millions of high-paying manufacturing jobs. Even those of us not employed in manufacturing have been impacted by the resulting bulge in the labor pool.

  3. Also sandwiched in the Fannie and Freddie bailout was an increase in the National Debt ceiling of $800 Billion.

    Numbers of this magnitude are simply words and no longer have any mathematical meaning to the multitude. This raise in the debt ceiling represents nearly the same amount of debt that our country accumulated in the first 204 years of existence. Today, it represents the overspending of one year.

    This bill will provide new loans to those who over-purchased by asking the banks to discount their loans. In other words, the homeowners who are in trouble will get to discount their original purchase price and receive special terms on their new loans.

    What about those who pay their loans on time, shouldn’t they also get a discount? What about those who saved up and had an actual down payment, shouldn’t that down payment be refunded by the government and a new discounted loan with 100% financing be made available?

    Fannie and Freddie are private corporations that trade on the NYSE, how many bad companies can we bail out by mortgaging our kids futures?

  4. Pete Murphy says:

    Agreed, Mike!

    Apparently, Fannie and Freddie and all banks and financial institutions enjoy protected status, but not a single manufacturing company.

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