Liberty MavenChris Martenson Blasts Obama’s Mortgage Bailout Plan
February 19th, 2009 11:08 am | by Mike Miller | Published in Bailouts, Big Government, Debt, Individual Responsibility, Liberty, Media, Money, Obama, Politics, Socialism, Taxes, chris martenson, government spending | 1
Yesterday, President Obama unveiled his latest boondoggle, a plan to bail out homeowners who got in over their heads and cannot pay their mortgages:
Obama Plans $75 Billion Outlay to Fight Foreclosures
Published: February 18, 2009
Seeking to stabilize the foundering housing market, President Obama is offering a plan to help as many as nine million families refinance their mortgages or avoid foreclosure, according to a summary released by the White House on Wednesday morning.
The plan, which is more ambitious than expected, would spend $75 billion to help keep as many as four million families in their homes, and would help as many as five million more refinance their mortgages to take advantage of lower interest rates.
Immediately, Chris Martenson (author of the incredible Economics Crash Course) fired back on his blog, saying:
If you did not buy more house than you could afford, or never issued a loan to a party that could (obviously and predictably) not repay that loan, then you just got punished.
He goes on to analyze the plan and the media’s mischaracterization of it, using New York Times’s coverage as an example.
Then he takes a look at it from an economic standpoint…
This is throwing good money after bad, and, worse, by seeking to “shore up sinking house prices,” it betrays a complete ignorance of the actual root of the problem. Blaming sinking housing prices for the fix we are in is equivalent to blaming the car for the drunk driving wreck. If Obama were to craft a similar program for drunk drivers, it would include new cars for any that happened to wreck their own.
In addition, Martenson says that from moral standpoint, this bill…
…is a complete disaster. The clear implication here for every sentient person is that it pays to be reckless. Moral hazard is written all over this one. I can easily envision millions of people arriving at the same conclusion: “I need to stop paying my mortgage right away so that I qualify for a handout!”
He applauds the bill from a political standpoint, since it gives the illusion of “doing something” but in the real world the bailout is nothing but trouble.
It looks like this lady will get her way after all:
Martenson sums up his article nicely:
If you have been responsible, you have just been punished. And you know what? Nobody can possibly blame you for deciding that being responsible is for suckers.
Read Chris Martenson’s scathing review of Obama’s plan here.
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May 22nd, 2009 at 10:33 am (#)
I agree.. My and husband and I have charged up credit cards to pay for gas, food and etc. But we paid for our house on time every month. Now I have 20,000 credit card debt, and Ok credit(which is bad because you get higher interest rate on a refiance). And we may have to sell our house because the plan doesnt help me. I have a friend that just decided not to pay her morgag for 6 months used their pay(which is greater then ours) to purchase everything else. So she is able to refiance her house at low interest and they are writing off 1000,000 of the loan because the house value is low. SHe has no credit card debt and better credit score? So perfect example of being responsible, just gets you punished. Sometimes I feel like I need to teach my children the wrong way.