The ink barely dry on President Obama’s health care bill – and so-called victory over the American people – the president has a new set of victims to help: those unable to pay their home mortgages. His plan is a particularly abominable one straight from the playbook of Karl Marx. If President Obama has his way, lending institutions will be compelled to reduce mortgage payments to no more than 31% of their debtors’ income.
The problem of "underwater" borrowers has bedeviled earlier administration efforts to address the mortgage crisis as home prices plunged.
Officials said the new initiatives will take effect over the next six months and be funded out of $50 billion previously allocated for foreclosure relief in the emergency bailout program for the financial system. No new taxpayer funds will be needed, the officials said.
I’ve been upbraided by several people who say that it’s not this president’s fault that he has to take these sorts of steps, that it’s actually Ronald Reagan’s fault, or Bill Clinton’s, or, inevitably, George W. Bush’s failings as a president that lead to this moment in history.
There’s a grain of truth at the center of this argument but there’s no pearl of wisdom forming around it. Yes, President Obama inherited a difficult situation when he took office. But the fact that he’s done virtually everything wrong since taking the reigns can neither be excused without comment nor blamed on anyone else.
Only a few short months ago Democrats were railing against banks for failing to loan money. Now the president’s latest financial debacle is certain to hamper banks’ ability to offer new loans, keep capital locked up in vaults instead of flowing through the economy, and lengthen the economic valley we find ourselves in as a result.
It’s all well and good to try to help people, but I have to wonder if Democrats even bother to consider the consequences of their actions. In the aftermath of their policies they wring their hands and wonder why businesses fail to respond as they’d hoped. The answer is simple: The fear and uncertainty liberal politics creates is one of the major causes of corporate reticence to invest while they are in office. And now this.
Can you now blame banks for not wanting to lend money when the terms of the contracts they wrote no longer have any meaning?