Freddie Mac

Obama's August Surprise: Forgiving Mortgage Payments?

Sinking in the polls and facing the largest wave election since 1946 (a GOP gain of 55 House and 12 Senate seats, see Ashbrook.org), the Obama administration reportedly isn't waiting for October. Instead, as several sources report, the president is planning an August surprise and deal a "fairness card" (again, turning the language on its head); a Main Street bailout rather than a Wall Street bailout (which he engineered, though he blames it on Republicans). The reported plan is that Barack Obama will instruct Fannie Mae and Freddie Mac, which he the federal government now owns, to forgive up to 20 percent of underwater mortgage balances (see Liz Peek wowOwow's sheconomics blog). Forget redistribution of wealth and spreading the wealth around. Just outright order it to be given away. 

As usual with this misguided regime, there's a better idea. Writes Capitol Securities Management Chief Economic Strategist and Managing Director Kent Engelke in his daily Early Morning Commentary today:    

There are rumors that on or about August 17 the Administration will propose up to a 20% deduction of any Freddie Mac, Fannie Mae or FHA mortgages balances that are underwater. In my view this would cause a political firestorm on both sides of the political aisle.

Instead of taking this radical step, I propose the doubling or tripling of the mortgage interest deduction for all home owners for the next two years. Yes this change would create a revenue shortfall but it will increase the monies in consumer’s pockets which should in turn increase housing prices and stimulate economic demand.

Engelke notes that such tax credits have worked in stemming, or even turning around, previous bubble-caused crises. For example, about eight years ago, the Congress and president approved an "accelerated depreciation schedule for many capital expenditure items purchased between 2001 and 2003," which accelerated the recovery in the aftermath of the dotcom bubble. 

Something needs to be done — and fast. Families are hurting. Weekly unemployment claims jumped again today, even above an upward revision of last week's increase (CNNMoney.com)! Yet, the only answers — all devastatingly wrong — from Washington's liberal, left-wing leadership are more taxes, more borrowing and blowing it all on redistributionist themes. Remember when Nancy Pelosi said unemployment benefits create jobs? (See Neil Braithwaite at American Thinker.)  This new plan exceeds that.

Forget those who struggle and play by the rules and make their payments. Those who don't apparently will just get it for free, except that nothing is free. Instead, homeowners, already struggling, will have to pay twice.

Virginia News Stand: March 24, 2010

Annotations & Elucidations It's Up To Ken

It's official as of about 3:00 today: Virginia law prohibits the federal government from imposing an individual mandate on Virginians to buy health insurance. That's when Governor Bob McDonnell signed the Virginia Health Care Freedom legislation into law. Now, it's up to Attorney General Ken Cuccinelli to defend the feds' assault on us.

Here are some highlights of today's News Stand: It's not a day old and already there are problems with the children's portion of the takeover — that portion doesn't start until 2014. Hmm. Perhaps read the bill next time. So much for all the "good things" that begin immediately, Mr. President. Also, if health care, AIG, GM, the banking and insurance industries, Fannie Mae and Freddie Mac are enough, pretty soon the federal government will be the sole proprietor of student loans. Isn't that great? While they're at it, the White House says Joe Biden dropping the F-word yesterday was a good thing. Pure class, this bunch.

In Commentary and Analysis: It's always a good day when we feature Walter Williams. Today, we have him twice, along with the great Thomas Sowell. Tony Blankley chimes in, as well, mincing no words: they're socialists. 

News

McDonnell to sign Virginia Healthcare Freedom Act today (Norfolk Virginian-Pilot)

Cuccinelli sues federal government to stop health-care reform law (Washington Post)

Virginia, 13 other states sue over health-care law (Richmond Times-Dispatch)

University, local lawmakers file suit over health-care bill (Lynchburg News & Advance)

For Beach activists, a goal: Stop clinic from opening (Norfolk Virginian-Pilot)

Richmond firm receives lottery marketing contract (AP.org)

National News

Abortion activists fired up for 2010 (Politico/Norfolk Virginian-Pilot)

Stem-Cell Health Care Must Put the Patients First (Roll Call)

Senate writing final chapter to health care bill (AP/GOPUSA.com)

Problems already with child health care coverage (AP/GOPUSA.com)

Banks losing student loan business to government (AP/GOPUSA.com)

White House, experts: Health care suit will fail (AP/GOPUSA.com)

White House embraces Biden profanity (AP/GOPUSA.com)

Judge: No school prom but lesbian's right violated (AP/GOPUSA.com)

Breyer, Scalia explain why they often disagree (AP/GOPUSA.com)

Protests cancel Coulter speech in Ottawa (AP/GOPUSA.com)

Analysis

Is Health Care a Right (Walter E. Williams/GMU.edu)

Commentary

Sunday's Socialist Triumph (Tony Blankley/GOPUSA.com)

An Off-Budget Office? (Thomas Sowell/GOPUSA.com)

Constitutional Awakening (Walter E. Williams/GOPUSA.com)

How Political Correctness May Cost Us $700 Billion

Many years ago, when the first musings of something called "political correctness" starting popping up on campuses and the culture at large — an attempt, ostensibly, to use words not to offend people and to paper over the truth about anything in an attempt at hyper politeness, but whose real aim was to suppress opinion contrary to liberalism — it was paid little notice. When it was talked about, it was in the vein of the little oddity that would run its course into fad history. Nothing to be taken seriously. Except that it got to full march, permeating more than the academy, spreading to entertainment, journalism and media, art, sports, the workplace, anything and anywhere you could think, including (and especially) government at all levels, even to the point of possibly permanently altering the practice and course of our mostly-capitalist-economy that has created the greatest standard of living ever know to man. This really is the chickens coming home to roost.  As "political correctness" morphed into a speech code that discredits anything opposite liberalism as "hate speech" or ignorance or hayseed stupidity, and arrogantly talks down to everyone else, its government proponents encoded it not just in employment practices or protections, but in regulations affecting how financial institutions conduct business by mandating loans to people (out of "fairness" no doubt) regardless of their means to make good on the payments. Even though the House of Representatives voted down the latest government takeover of an industry earlier today, one may still come. The price tag is in the range of $700 billion of our money, threatening our economic well being.

A more detailed look at this phenomena comes from Ann Coulter (click here). It is worth the read to understand the nexus of the culture war and how its political outcome affects everything else, including our economy's capability to function. Coincidentally, a friend brought to my attention a YouTube video that is doubly worth the look (click here). Although a bit long, it documents, albeit in an entertaining way, the cold hard facts, with statements of those in Congress responsible and actual legislative language authored by said incompetents. Or, as this concise news report from Fox News Channel's Brett Baier provides more background (click here), documents, one of the presidential candidates, at least figuratively, voted "present," again.

But here is the best one of all . . . the politically correct (and powerful) crowd in House committee defending Fannie Mae and Freddie Mac when they were being warned of their impending peril! This is a must see video, not long, and in their own words (click here). When will the left be held accountable for what they say and do?