The “Equal Misery” solution
Last week, the House of Representatives passed legislation designed to bail out homeowners who irresponsibly bought more house than they can afford. The bill, in essence, lets government agencies take over bad loans if the lender agrees to take less than the full amount of the loan in payment.
Of course, the President has vowed to veto the bill and John McCain has said he’ll vote against it. According to the Wall Street Journal, the public is sharply divided;
A Gallup Poll in late March found that 56% of Americans favor government intervention to prevent people from losing their homes because they can’t pay their mortgages, while 42% oppose it. The partisan divide was sharp: 58% of Republicans opposed intervention; 71% of Democrats and 55% of independents supported the idea.
Republicans in Congress, of course, generally oppose the bill;
The line was drawn sharply in last week’s House debate. Rep. Tom Feeney (R., Fla.) said less than 1% of homeowners would get help while the rest “will pay the price of this bill.”
Rep Feeney said, “This bill is a bailout — from American taxpayers — of speculators and imprudent borrowers.” Among the winners, he said, are lenders who would otherwise lose the entire value of a loan and people who put no money down to get a home.
Not only that, but how long will it take government to structure the actual regulations, accept application? How long from today will the first loan be taken over by any government agency? Look how long it took Congress to simply send out tax rebates by direct deposit – nearly five months. This is a bit more complicated.
But the Democrats think this is real solution for real people. After all, it has the most important element for Democrat social bailouts – equal misery;
Rep. Barney Frank (D., Mass.), who wrote the legislation, and other Democratic lawmakers insisted the bill nicks both sides. Said Rep. Jim Marshall (D., Ga.), “The deals that the borrowers get are not particularly good. The deals that the lenders get are not particularly good…. In my view, it’s a bailout for the entire economy and all of these people that have been dragged into it.”
Borrows don’t win…check, lenders don’t win…check, the taxpayers don’t win…check – perfect! That’s what makes good socialist legislation – the equal application of misery to every problem. When everyone loses, they lose equally. That’s what the Left means when they mention equality.
The Wall Street Journal took an indepth look at the bill and decided that CBO low balled Barney Frank’s numbers on the real cost of the legislation;
Looking at the details in Mr. Frank’s 45-page first draft of this bill, FIS Applied Analytics estimated that taxpayer losses could reach as high as $27 billion, more than four times Mr. Frank’s estimate. The next draft, clocking in at 72 pages when it passed Mr. Frank’s committee, was miraculously scored by the Congressional Budget Office at “only” a $2.7 billion cost to taxpayers.
According to the WSJ, CBO scored the cost lower because few lenders might not want to join in the love-fest because they might not want to only get back 85% of their loan. But Frank knows the figures are low and that it will cost taxpayers even more because the threatened lenders during the debate over the legislature;
“I want to put the servicers on notice,” the celebrated liberal declared at a recent hearing. “If we see a widespread refusal on the part of servicers to cooperate voluntarily in what we see as an important economic problem . . . they can expect much tougher regulation in the future.”
Stalin couldn’t have said it better.
