In the Las Vegas Democratic debates, Hillary advocated a moratorium on foreclosures and even worse an interest rate freeze. Edwards chimed right in as well. All I heard was years instead of months of recession!
Think about it, these are completely destructive ideas. First, consider that the bulk of us are NOT defaulting on our loans. So we would reward the people who exploited the system while the rest of us pay. No foreclosures would simply delay the inevitable, and prolong the misery we are experiencing. Everyone knows we need a correction and the sooner we get on with it, the sooner we can get back to business. Who wants to live through years of sub par growth? The people that are being foreclosed on should never have bought houses in the first place. Whether they were greedy investors or just trying to buy more home than they could afford, greed over upfront fees put them in houses they could never afford. Now they must go back to renting, with credit damaged, and a loss of cash. If it were me I would make realtors and mortgage brokers have to disgorge fees on bad sales tha tultimately foreclosed. These people knew the low end buyers could not ultimately afford the homes they were sold, but they took the fees and moved on.
Even worse, an interest rate freeze. Imagine you are a lender and the government steps in and changes your deal. How eager will you be to lend again? Interest rates on new loans will skyrocket upward, make real estate even less affordable, meaning the prices drop even more. Why stop at motgage contracts, why not just wipe out contract law all together?
I feel the same way about banks and bond insurers. Bailing out corporations is just as bad as bailing out individuals. The shareholders have to bear the brunt of bad management. Individuals have to bear the brunt of bad decisions. To have the rest of us pay for their bad behavior is wrong!
The market is working out the problems. As always, people with cash are getting “deals” as per the old saying CASH is KING! These ideas for government intervention will only make things even worse, and punish the people who did not cause the problem in the first place.
I fear anger over Bush’s incompetence is driving many voters from the frying pan into the fire. Bush did a lot of good things for which he gets no credit. But as a CEO, failing to deal with Rumsfeld in a timely manner resulted in his loss of support from the American people. This casued a huge shift in sentiment, even though we have had no more terror attacks and 6 years of booming economy. Unfortunately, he went on TV and bragged about record homeownership. That was the ALARM bells going off for me! Now we are faced with people suddenly looking for anything different in terms of leadership. Specifically, a democratic landslide will increase taxes, hammer the economy and result in years more of the recent lanquishing economy. What we need most is much LESS government spending except perhaps on infrastructure. What we need least is higher taxers and lots more beauracracy.
Every poll that comes out reinforces that Obama or Hillary will win in a landslide. Everytime one of these polls comes out the stock market goes down another 200 points out of fear.
Mark my words, next the retirement funds will be underfunded due to the decline in the stock values. Corporations will have to increase investment here to meet future obligations. The world is not a static place, when you hear a proposal think about what you would do as a result. If it doesn’t make you want to invest your money then run!
I fear the old saying “people get the government they deserve” is about to be proven right.