I don’t agree with everything Michelle Malkin says and I am sure the libs hate her with a passion but she is DEAD ON with her post below.

In this case, I agree with pretty much everything she is saying.  I am so sick of having to pay for the bad behavior and stupid decisions of everyone else.

I have worked my tail off to nearly have my house paid for and now I get to bail those out that were greedy and/or just plain stupid.  Ignorance is no defense for stupidity.

The fact that the government seems to want to turn all renters into homeowners is completely asinine.  People rent for a reason.  They don’t have the money or the discipline to own a home.

Manly

Questions & answers and more questions about O’s massive mortgage entitlement

By Michelle Malkin  •  February 18, 2009 11:28 AM

The White House just released the dirty details of Obama’s massive mortgage entitlement program.

Bottom line:

Refinancing for Up to 4 to 5 Million Responsible Homeowners to Make Their Mortgages More Affordable

A $75 Billion Homeowner Stability Initiative to Reach Up to 3 to 4 Million At-Risk Homeowners

Supporting Low Mortgage Rates By Strengthening Confidence in Fannie Mae and Freddie Mac

In addition, there will be forced mortgage modifications (bad idea when GOP pitched it, bad idea now) and unprecedented new meddling in private loan contracts, including a $10 billion “insurance fund,” $100 billion more for Freddie and Fannie (rewarding failures again), and a provision to “Allow Judicial Modifications of Home Mortgages During Bankruptcy for
Borrowers Who Have Run Out of Options” (pushed by Dodd and the Dems for more than a year now).

More details:

“Pay for Success” Incentives to Servicers: Servicers will receive an up-front fee of $1,000 for each eligible modification meeting guidelines established under this initiative. They will also receive “pay for success” fees – awarded monthly as long as the borrower stays current on the loan – of up to $1,000 each year for three years.

Incentives to Help Borrowers Stay Current: To provide an extra incentive for borrowers to keep paying on time, the initiative will provide a monthly balance reduction payment that goes straight towards reducing the principal balance of the mortgage loan. As long as a borrower stays current on his or her loan, he or she can get up to $1,000 each year for five years.


Reaching Borrowers Early: To keep lenders focused on reaching borrowers who are trying their best to stay current on their mortgages, an incentive payment of $500 will be paid to servicers, and an incentive payment of $1,500 will be paid to mortgage holders, if they modify at-risk loans before the borrower falls behind.

Home Price Decline Reserve Payments: To encourage lenders to modify more mortgages and enable more families to keep their homes, the Administration — together with the FDIC — has developed an innovative partial guarantee initiative. The insurance fund – to be created by the Treasury Department at a size of up to $10 billion – will be designed to discourage lenders from opting to foreclose on mortgages that could be viable now out of fear that home prices will fall even further later on. Holders of mortgages modified under the program would be provided with an additional insurance payment on each modified loan, linked to declines in the home price index.

Now, before we get to questions about O’s plan, let me remind you of the basic questions I had when Mitch McConnell proposed the GOP’s moronic mortgage entitlement plan two weeks ago:

Question: Why should government be guaranteeing mortgages? Isn’t that what got us into trouble in the first place?

Question: Why should government be setting mortgage rates? Aren’t those supposed to be set by the market?

Question: How can Republicans on the one hand argue that Fannie Mae, Freddie Mae, and other interventions in the housing and mortgage markets were bad and then at the same time propose a doomed policy along similar lines?

Question: Have Republicans learned nothing from the housing meltdown? “Credit-worthy” borrower = anyone with a pulse. Who will pay when these borrowers default on their loans? Taxpayers will.

Question: Who will sell these mortgages? Probably the banks. What incentive do they have to ensure the credit-worthiness of borrowers, since they will bear no risk if the borrowers default? Sounds like a formula for another mega-subsidy to the banks…to go along with all the others.

Question: Why do Republicans continue to believe, as Democrats do, that the number one goal of economic policy should be to prop up housing prices? (Recall McCain’s moronic $300 billion mortgage plan.) Why not let the market determine the correct level of housing prices? Clearly, in many parts of the country, housing prices are still too high.

The proper response by government is to let the market allow prices to decline.

The problem is too much borrowing, too much artificial inflation of home prices.

On what planet should the Republican/conservative alternative be to encourage more borrowing and to prop up prices so they don’t fall “too much?”

This is more of the same old, same old: Kicking the can down the road. Real change — fiscally repsonsible change — means sucking it up, allowing housing prices to fall, and getting the government out of the home-lending business.

What a disaster and — coming from Sen. McConnell — how sadly, utterly predictable.

More than a year ago, I called for the GOP to distinguish itself from the Big Government Democrats running for president and demagoguing this issue. Remember?

MakeStickers.com

The bipartisan meddlers in Washington are going to make the housing “crisis” drag on for a decade when, if they had adopted the suck it up plan in the first place, it would have been over by now.

You remember what the response from Senate GOP staffers was to my questions? They rationalized their support for this disastrous “solution” by explaining to me that Republicans needed to be “for something” because they didn’t want to look obstructionist.

Now, just as I warned, Obama has picked up the mortgage entitlement ball and run with it — with the muscle of ACORN thugs behind him. How is the underlying premise of his plan any different than what Senate Republicans foolishly championed two weeks ago?

At least the House Republicans seem to have a clue. Here are questions about O’s plan they’ve released this morning:

1. What will your plan do for the over 90% of homeowners who are playing and paying by the rules?

2. Does your plan compensate banks for bad mortgages they should have never made in the first place?

3. Will individuals who misrepresented their income or assets on their original mortgage application be eligible to get the taxpayer funded assistance under your plan?

4. Similarly, will you require mortgage servicers to verify income and other eligibility standards before modifying mortgages?

5. What will you do to prevent the same mortgages that receive assistance and are modified from going into default three, six, or eight months later?

6. How do you intend to move forward in the drafting of the legislation?

Chris Kinnan of Freedomworks adds a few more questions:

Will people who cashed out their equity with a refinancing be eligible?

Will borrowers who never had any equity in their homes be eligible (people who financed 100%)?

What is the upside for taxpayers if housing prices recover? Who gets the gain?

And mine:

How is this fair to renters and home owners who had the foresight to take on loans they could afford?

Will illegal aliens be eligible for the program?

Why is it government’s role to take my money to fund someone else’s property value preservation?

Answers, please.

For all the geeks out there like me.

Many people believed that by “change”, Obama intended to:

su – President
del /SpecialInterests
cd /newUS
./configure
make
make install

Unfortunately for them, by “change” he meant:

su – President
mv /SpecialInterests /opt/agenda2009

and they never expected to see

 cp lobbyists /home/whitehouse/cabinet/

  or

cp taxcheats /home/whitehouse/cabinet/

Most people who are well educated and interested in economics know who Keynes and Friedman are.  I keep hearing people mention Keynes in the news lately.  Few really understand his theories or his thinking.

What is more important, in my opinion is understanding the difference between Keynes and Friedman (who’s work came a long much later and is more widely accepted).

It interests me that the differences between the two are also basic differences between Liberals and Libertarians/Moderate Conservatives.

I.E. Government is everything to the Liberals, it will provide for our every need and save us from every problem we may encounter.  In contrast, Libertarians view government as a necessary evil and believe in personal freedom and less government intervention.  Low taxes, small but strong government, limited regulation.

Cato Stimulus

Will this guy ever get it?  Handing out money taken from the pockets of taxpayers to every Tom, Dick and Harry does NOT stimulate the economy.

I have to believe that Obama actually understands this.  He simply cannot be that stupid.  If he does understand this then it’s almost as bad.  He is now just paying back the special interests who put him in the White House.

If I were in charge of this mess, I would offer a little relief to homeowners, extend unemployment benefits and health care and do NOTHING ELSE.  The wheat needs to be separated from the chaff in times like these.  Sparing everyone the pain they NEED TO FEEL does little to prevent this from happening again.

Manly

Taken from the Wall Street Journal:

President Obama has started to play the “catastrophe” card to sell his economic stimulus plan, using yesterday’s terrible January jobs report to predict doom unless Congress acts. No doubt he’ll get his way, but the tragedy of this first great effort of the Obama Presidency is what a lost opportunity it is.

AP

Everyone agrees that some kind of fiscal stimulus might help the economy, and that running budget deficits is appropriate in a recession. The stage was thus set for the popular President to forge a bipartisan consensus that combined ideas from both parties. A major cut in the corporate tax favored by Republicans could have been added to Democratic public works spending for a quick political triumph that might have done at least some economic good.

Instead, Mr. Obama chose to let House Democrats write the bill, and they did what comes naturally: They cleaned out their intellectual cupboards and wrote a bill that is 90% social policy, and 10% economic policy. (See here for a case study.) It is designed to support incomes with transfer payments, rather than grow incomes through job creation.

This is the reason the bill has run into political trouble, despite a new President with 65% job approval. The 11 Democrats who opposed it in the House didn’t do so because they want to hand Mr. Obama a defeat. The same is true of the Senate moderates of both parties working to trim their $900 billion version. They’ve acted because they can’t justify a vote for so much spending for so little economic effect. You know a piece of legislation is in trouble when even its authors begin to deny paternity, as economist Martin Feldstein has recently done.

Speaking to a House Democratic retreat on Thursday night, Mr. Obama took on those critics. “So then you get the argument, well, this is not a stimulus bill, this is a spending bill. What do you think a stimulus is? (Laughter and applause.) That’s the whole point. No, seriously. (Laughter.) That’s the point. (Applause.)”

So there it is: Mr. Obama is now endorsing a sort of reductionist Keynesianism that argues that any government spending is an economic stimulus. This is so manifestly false that we doubt Mr. Obama really believes it. He has to know that it matters what the government spends the money on, as well as how it is financed. A dollar doled out in jobless benefits may well be spent by the worker who receives it. That $1 of spending will count as economic activity and add to GDP.

But that same dollar can’t be conjured out of thin air. The government has to take that dollar away from someone else — either in higher taxes, or by issuing new debt in the form of a bond. The person who is taxed or buys the bond will have $1 less to spend. If the beneficiary of that $1 spends it on something less productive than the taxed American or the lender would have, then the net impact on growth will be negative.

Some Democrats claim these transfer payments are stimulating because they go mainly to poor people, who immediately spend the money. Tax cuts for business or for incomes across the board won’t work, they add, because those tax cuts go disproportionately to “the rich,” who will save the money. But a saved $1 doesn’t vanish from the economy, unless it is stuffed into a mattress. It enters the financial system, where it is lent to others; or it is invested in the stock market as capital for businesses; or it is invested in entirely new businesses, which are the real drivers of job creation and prosperity.

At the current moment, amid a capital strike, the latter is the kind of fiscal stimulus we really need. Yet there is virtually none of it in the bills now moving through Congress. Senate moderates may succeed in cutting $100 billion or so in spending from the bill, which is political window dressing. Even they aren’t talking about adding the kind of tax cuts that would really help the economy now.

We should add how different this is from the 1980s or even the 1960s. Democrats added business tax cuts to the Reagan package of 1981, while Jack Kennedy’s chief economist (Walter Heller) promoted marginal rate tax cuts on stimulus grounds in the 1960s. Yet Mr. Obama, on Thursday, dismissed any such tax cuts as “the same tired arguments and worn ideas that helped to create this crisis.” That’s rhetoric for a campaign, not for a President hoping to rally bipartisan support.

The biggest gamble with this stimulus is what it means if the economy doesn’t recover. Monetary policy is already as stimulative as it can safely get, and the Obama Administration is set to announce its big financial fix on Monday. Stocks rallied Friday on expectations of the latter, despite the job loss report, with big bank stocks leading the way. If done right, this will help reduce risk aversion and gradually restore financial confidence.

We hope it does, because the size and waste of the stimulus means we won’t have much ammunition left. The spending will take the U.S. budget deficit up to some 12% of GDP, about double the peak of the 1980s and into uncharted territory. The tragedy of the Obama stimulus is that we are getting so little for all that money.