It’s insanity I tell you! It’s insanity!
The other night, I’m driving down the road listening to my radio and for the umpteenth time I hear the talk show host define insanity; Doing the same act over and over again the same way hoping for a different outcome.
This is what we are doing…….isn’t it?
Being in debt used to be a bad thing. Then it became a good thing. We began basing our entire economy on how much credit card debt and lending we could create, caring very little as to whether or not anyone could pay it back. This was proven time and time again as people who defaulted on loans or credit cards and in some cases declared bankruptcy and within days credit care deals were sent them in the mail.
It was hammered into my head growing up that savings were good and debt was bad. It morphed from there.
But now look what we’re doing. Most economists believe that what got us into trouble with the housing industry was giving loans to people to buy houses they could not afford. Most of us have heard discussions on the Community Reinvestment Act of 1977. The CRA “encouraged” banks to loan money within all communities so that everyone would have a chance at home ownership. As time went along, fearing fines and penalties from the federal government for not meeting quotas, loans were given out to people knowing full well they could never be paid back. The CRA’s purpose as stated:
The Community Reinvestment Act is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound operations.
Today, President Obama is scheduled to release some details of his plan to save the housing industry. The Washington Post this morning reports that one democrat said this about the plan.
“will encourage servicers and lenders to do the right thing and give relief to struggling homeowners,”
What is this? Guilty retribution to those who became victims to the socialized/welfare housing program called the Community Reinvestment Act?
According to Yahoo News the plan sounds like a repeat performance of the CRA.
“The plan not only helps responsible homeowners on the verge of defaulting but prevents neighborhoods and communities from being pulled over the edge too,”
WaPo is saying that the plan will attempt to make provisions so that everyone who should never have been allowed to borrow money to buy a home to begin with, get some bailout so they can keep their homes. Isn’t this doing the same thing again only this time hoping for a different outcome? The cards are completely stacked against these people from being able to keep their houses in a failing economy. They couldn’t do it when things were booming, who expects they can now. Or does it no longer matter?
The plan intends of offer help to “responsible homeowners”. Please define a “responsible homeowner”.
But what really gets under my craw is what I heard on television this morning and went unquestioned. In discussions about Obama’s plan, it was revealed that with some $50 billion initially, lenders might be forced or encouraged to reduce interest rates through government subsidized loans. This could lower payments for some “struggling” to make their payments. Or, they could reduce the amount of the loan to help offset the loss of value of the property and through a refinancing program this would essentially reduce monthly payments as well. There were other options discussed.
What left me in shock was when an “expert” said that unfortunately those with mortgages they can afford will probably see their interest rates go up to help pay for this program. Are you kidding me? Is this even legal? If this is true, why would anyone do this? Why not just walk down to the bank and give them the keys and tell them the house is theirs?
Thomas Sowell today says that the media is pushing the idea that the current economic problems we face were caused by the free market and that only the government can rescue us. That is essentially what President Obama said in one of his recent speeches, that government is the answer to all our problems. This is further proof that the U.S. has turned upside down and inside out. Government has never cured anything and has only been the cause of all things bad.
Bad has become good. Being a useless slug is rewarded with subsidized life in the fast lane. Hard work is punished with more taxes and giving it to the slugs.
!pU edisnwoD sI .S.U ehT
Tom Remington
