President Obama's intentions may be good, and he may have zeroed in on the problem.
But his proposed housing crisis solution is only raising questions -- and hackles, too, almost to the point of a citizen revolt.
People who have played by the rules, made good choices and sacrificed to pay their mortgages on time are growing furious as they see the government preparing to use their tax money to bail out irresponsible and reckless homebuyers who gambled that rising equities would cover their inability to afford their houses.
Cable network CNBC editor Rick Santelli's increasingly famous rant on the floor of the Chicago Board of Trade this past week has struck a chord with those Americans livid about bailout after bailout from Washington.
"The government is promoting bad behavior!" an angry Santelli intoned, as traders nearby cheered him and jeered the government. "This is America!" Turning to the traders, he asked, "How many people want to pay for your neighbor's mortgages that has an extra bathroom and can't pay their bills? Raise their hand!"
Instead, the traders loudly booed the idea, as Santelli only got angrier. He suggested a "Chicago Tea Party" -- and in a later CNBC poll, 93 percent said they'd join in.
"President Obama's massive mortgage-bailout plan," writes finance guru and CNBC commentator Larry Kudlow, "is nothing more than a thinly disguised entitlement program that redistributes income from the responsible 92 percent of home-owning mortgage holders who pay their bills on time to the irresponsible defaulters who bought more than they could ever afford. This is Obama's spread-the-wealth program in action.
"Team Obama is rewarding bad behavior."
Indeed, taking the tax money of homeowners who acted responsibly and prudently and using it to bail out those who did not is making the responsible ones the suckers.
On the other side are those such as the American Bankers Association, which calls Obama's plan "a constructive, flexible and multifaceted initiative likely to have a positive effect."
Maybe. But we've got some questions:
- How will the government fulfill Obama's pledge not to reward irresponsible or unscrupulous borrowers? It's a nice thought, but how do you do it?
- How in the world can a government that couldn't track the billions in the bank bailouts be able to watchdog the $75 billion to $275 billion in the mortgage bailout?
- Where in the Constitution does it authorize the federal government to take money from one citizen and use it to lower another citizen's mortgage payments?
The Heritage Foundation reports that grassroots anger at the "Bush-Obama Bailout Parade" has already erupted in rallies in Seattle, Denver, Mesa and Kansas.
"Santelli's criticism of the mortgage bailout plan is dead on," Heritage says. "The plan treats borrowers who sacrificed to pay their mortgages on time the same as those who used their equity for a boat and stopped paying their loans."
Actually, Heritage has it wrong. The bailout plan treats responsible borrowers worse than the irresponsible ones.
You have to wonder whether Americans will stand for that.
The Augusta Chronicle ©2010 Morris Communications, LLC. All Rights Reserved.
Demonstrations and protests on the grassroots level are the way to battle this philosophical moral wrong. It's time for a Ronald Reagan sagebrush revolution in communities all over the country. On the state level, don't accept funding with strings attached that pull us to the left. Governors should heed the examples of Haley Barbour and Bobby Jindal and not accept funding that the states will be required to later fund and continue on their own for the most liberal of programs. The uproar from the people will be louder than the national news on TV approving Obama's socialist measures.
Fine, folks. Let your home's value drop more than it should have to. I hope every one of you who oppose this has a million foreclosures on your block, and your house is worth about a penny. As I've said in the past, AC, about 0million more people agree with Obama.
You really do have wealth envy, don't you GaCop?
Do you live in an area where there were a lot of people buying homes they could not afford?
Not going to be foreclosures on my block. Most everyone around me has paid off their loans years ago. And those who haven't are very responsible.
By the way, those are some interesting concepts....a million houses in a block and a house worth a penny. You are definitely very angry tonight.
A million foreclosures on my block would be great! My property value would drop, and thus my taxes would drop. I'm not a house flipper.....I intend on staying.
Don't count on property taxes dropping.
I have yet to see that.
The article is factually terrible and here's why: If a homeowner has been paying the mortage on time and he believes that no effort should be taken to help his neighbor, and the neighbor loses his home. How does that event affect the "responsible" homeowner's home? It bring his home's price down, so keeping the neighbor in his home helps both. Now the fake outrage is being conjured up by the all-white media, in an attempt to distort the facts and lower the president's approval numbers. It's also a clever attempt to misuse the Constitution, much like the Southerns states did prior to the Civil War, to appear as if the debate is a legal one. Problem is, most folks are more intelligent than in the 1860s, well that is most Americans. The article is dismissed due to a lack of merit.
Fix the link.
Not necessarily, Justus. A foreclosure does not diminish the prices of the surrounding houses. I have never seen it happen. And leave it to you to make this a racial issue. You are a real nutcase. You make it a racial issue by bringing up race. You must know something that I don't know. Are most of the foreclosures black people who have failed to pay, who took on loans they could not pay back? Until now, I thought it was mostly white people.
No, ksl, I abhor idiots. Don't waste your time justus. Republicans will never give up their "righteous" indignation. It compliments the fiscal responsibility
they showed for the last 8 years. I do agree with ksl, this isn't a racial issue.
I agree, cop. There was no fiscal responsibility the last 8 years. There has been even less in the last month. After all. It has taken only one month for O to equal 8 years.
Where is the indignation over that?
I wonder what would happen if tens of millions of folks refused to pay their federal taxes?
I owe more money on my truck than it's worth. Where's my loan adjustment??? And where is it written that you are guaranteed to have your home's value increase perpetually? I say let the banks do the same thing to houses as they would do to my truck if I quit paying - repossess and sell to someone who can afford it.
Nothing, if you ask Democrat candidates for cabinet posts.
Justus continues to feel we owe his kind and must support them.
This is a responsibility and vote buying issue. The people that are truly fools don't seem to realize only about 8% of people buying houses are unqualified to do so. How many in your neighborhood fall into that category? This stimulus scam is about rewarding Dem contributors and voters with money taken from the opposition. Divide and destroy has been the mission of the Marxist left since the Manifesto was written. Look how many fools fell for this Robin Hood BS in the last election. Our education system does our country no favors.
PT, I don't know about blaming the education system. My kids came through 7th grade through high school unscathed.
Did they learn the government entitles them to a free ride ksl? I think your kids might not have relied on government schools for their values. This isn't true any more. Most "parents" allow their children to fall for the government spiel. Besides, aren't your children in their 50's? Things were different back then.
Everything is a racial issue with justus requiring no further comment. Might as well be trying to reason with a brick wall!
Good morning ksl. I would never have dreamed that even you would be in your 50's. Sorry PT. I'm throwing a BS flag on that one. I'm not sure ksl is even old enough to have kids outta K1.
Cie la vie. If you can't pay your mortage, guess what...It is not the government's job to help. Even in great economic times, we should not increase the welfare roles beyond the very elderly, very young or disabled. It just doesn't make sense. I have certainly had difficult times in my life and needed help. I have never thought to look to the government. Fortunately for America, Obama has exposed his penchant for big government and wealth redistribution early in his term. His approval rating will soon join that of this democratic congress. I am glad that America, including the liberal media, which actually has lots of non whites employed there, are coming to their senses. Is it too early to start impeachment proceedings? Empty suits who talk real pretty are not leaders. I strongly suspect that we will get down to only about 12% of the population supporting this form of socialism real quick.
Love reading about all these RIGHTS & WRONGS. I just can't wait to have the Gun and Abortion issue come into play. (Next)
This is NOT about homeowners. It is NOT about race. It is NOT about redistribution of wealth. It is NOT about jobs. It is NOT even about American citizens. The mortgage industry and auto industry bailouts are about banks and their stockholders and the Treasury and the state and local governments. The stimulous package will establish a new equilibrium for stock prices on Wall Street, not on your street.
I'm ready to go to Wash, anytime, to throw the bums out, and I mean all of them, dems and repugs!
Even in neighborhoods with foreclosures, the value drop is always temporary. Forcing a bank to lower it's balance will result in a PERMANENT devaluation!!! Can ya understand the difference now?
Revolt yes, and while we are at it, let's have a recall movement!! You can bet 2010 will see a big change in who's in control.
It seems that a lot of people have the "WHAT'S IN IT FOR ME MENTALITY"