Retail sales were up in January and unemployment claims dropped in January, both defying expectations.
Of course, none of this matters to the Obama Administration and Democrats, who are pushing for still more packages that will redistribute still more wealth beyond the very troubling porkfest "stimulus" package. Never mind that the stimulus package - the most expensive piece of legislation ever considered by Congress - may be instituted after the worst of the recession is over, but we'll be paying for the costs of those programs for generations to come.
It's also not stopping the Democrats from pushing still more profligate spending. Their latest plan calls for buying up distressed mortgages and reselling them to the borrowers who were unable to pay them.
Under the proposal, the government would draw on $50 billion in funds already approved for the financial bailout to buy up millions of mortgages at a discount. A $300,000 mortgage on a house now worth $200,000, for example, might be bought at a 30 percent discount.We've been down this road before, and 60% of those borrowers who had their terms renegotiated under the last homeowner bailout found themselves right back in the same situation just months later.
The homeowner then would be able to refinance the smaller mortgage with lower monthly payments. The government could then sell the loan back to investors, freeing money to buy more loans.
The new approach could eliminate one of the biggest roadblocks that has stymied the government efforts to buy up so-called “toxic assets” that are clogging the financial system. Trading in these securities — backed by thousands of loans — has all but shut down because banks, investors and potential buyers are unable to predict their future value. But individual loans are much easier to value, making government purchases more practical, according to the plan’s proponents.
Lower home values make the properties more attractive and affordable to qualified buyers. That's the key term - qualified buyers. Far too many homeowners are not qualified buyers because they simply do not have the income to support such loans and borrowing. That's how we got into this mess in the first place. In the desire to chase after higher homeownership, lending standards were relaxed and lawsuits pressuring lenders to provide terms to those who didn't have qualifications to borrow forced banks to make bad judgments. Throw in some predatory lending for those folks who didn't understand what they were getting themselves into, and it was a recipe for disaster the moment the housing market bubble burst and prices starting dropping.
Still, the amount of pork in the stimulus package is astounding, but so is the blatant spending by none other than Harry Reid, who got billions inserted into the package to pay for a high speed rail connection between Las Vegas and California. Reid is the US Senator from Nevada. Never mind that he continues to block the opening of the nuclear repository at Yucca Mountain, which would enable nuclear power plants to safely store nuclear waste in a secure facility and provide a jump start to the nuclear industry to build a new generation of power plants that do not require fossil fuels and the emissions that go along with them. He's all about the pork and what he can bring home to his constituents, little of which will actually result in spending during the current fiscal year when it is most needed.
Has anyone in Congress actually read this monstrosity, let alone knows what it contains? The summaries of bills this size can be books unto themselves, and yet Congress is going to probably vote within hours.
This is government spending to grow government at the expense of the private sector. So much for doing things right and being responsible with my money.
It pays to be irresponsible.