The housing market has been in decline since about 2007, the reasons being as varied as they are frustrating. The responsible parties are a different topic all together but the common denominator is that the housing lenders were very indiscriminate about whom they were lending hundreds of thousands of dollars to. Most of the people who received these loans could not possibly pay them back, something the lenders already knew but ignored. For example, someone who makes $40,000 a year could not possibly payback a $500,000 loan in a reasonable amount of time. That is roughly $3400 a month for 160 months. The lenders knew this, but did not care.
The lenders took their cues from the corrupt Wall Street brokers who finally got caught with their shenanigans, and then bailed out. The Fannie Mae and Freddie Mac $25 billion+ bailouts were just the tip of the iceberg, with the 2008 Bush bailout program projections costing U.S. taxpayers upwards of a trillion dollars.
So here we are, trying to come up with ways to get the market back to a condition of stasis. Enter the U.S. government and its controls. Politicians think they can manage and prevent messes like these better than the private sector. I challenge you to find a government run program that actually works as intended, without the heaps of bureaucratic red tape- government programs are inherently built upon these heaps. An outsider looking at this housing mess might be inclined to say that if the private sector can't manage their own business models, then perhaps the adult supervision needs to step in.
This administration is adult supervisionn. Like most Democrats, they believe their form of government intervention is for the greater good, damn the non-believers. Obama is trying very hard to entrench our nation in the ideal that the government is the only entity capable of taking care of its citizens. Obama's mortgage program is just one more example of these measures and, unfortunately, a blinding example of arrogance, stubbornness and that just throwing money at things won't always solve the problem.
Almost half of the people enrolled in the program have been cut- 630k out of the initial 1.2B- and the numbers continue to grow. It appears that the $75B alloted for this program will be another drop in the bucket and add to the downward spiraling national debt this administration continues to add to and disregard.
Obama continues to put his arrogance on the forefront and allow the American taxpayer to foot the bill for his failed policies. It is very clear that this administration, for all its talk, cannot produce results. I realized the misguided illusions of financial recfovery early on when the Cash for Clunkers was introduced. Coincidentally, today is the 1 year anniversary of that unprecedented drain on our checkbook. The Bureau of Economic Analysis estimated that 11 million cars were sold each costing the American taxpayer about $24,000 per car. It was a band aid fix that shows short term gains but did nothing to stabilize our economy.
This is not the first time our country has seen bad economic times. The first brought a halt to the Roaring 20's when the Stock Market crashed and then again, with even more severe of a drop, in 1987. In fact, there was a crash in 1973 and in 2001. The markets contracted, but we recovered.
Hoover enacted many programs after the crash in 1929 and many failed. For example, the Smoot-Hawley Tariff Act increased tariffs on imported materials in the hopes that it would increase the buy American revenues. Other countries retaliated by increasing their tariffs on our products. The Cash for Clunkers program has a similar parallel.
Hoover also started the Federal Home Loan Bank Act in hopes to provide relief to Americans and stop the flooding of foreclosures. It was unsuccessful just like Obama's mortgage aid program.
The Obama administration fails to learn from the annuls of U.S. history and is condemning all of us to suffer the consequences of their shortsightedness, stubbornness and lack of vision.
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