This quote is from an editorial titled Homeland Insecurity ($) by Barack Obama in this weekend’s WSJ (emphasis mine):
This week, President Bush outlined a limited agreement with lenders to ensure that some families don’t face higher mortgage payments they can’t afford. It is a start. But we need to do more. That’s why, several months ago, I proposed tax breaks to help millions of homeowners make their payments, direct relief for the victims of mortgage fraud, and counseling so homeowners know what options are available to avoid foreclosure and refinance. And I have outlined a program to help make it easier for middle-class families, not speculators, to renegotiate or refinance their mortgages.
To prevent the current problems in the housing market from spreading, shaking confidence in other sectors of the economy, we need to put money in the pockets of middle-class Americans. In September, I proposed a middle-class tax cut that would offset the payroll tax that working Americans are already paying. It would give every working family a tax cut worth up to $1,000. It would also make retirement more secure by eliminating income taxes for any senior making less than $50,000 per year. And over the long term, I’ve called for an automatic workplace pension enrollment policy, which would include a federal government match for part of the savings of middle-class families so they can count on more savings when they retire.
So let me get this straight: people are facing massive increases in their mortgage payments when rates reset and this is going to be fixed with a $1,000 per year tax cut? And Barack says that Bush’s plan doesn’t go far enough? Is this guy serious?
Oh, and in case you think I’m being unfair to Barack, I’m not a fan of Bush’s plan. As a nation, we need to stay out of this and let the market take care of itself.
Just one note: it’s “Barack.” Not “Barrack” or “Barrick.”
Oh, and I think his tax cut idea sounds pretty lame too.
Did you see this part…
And over the long term, I’ve called for an automatic workplace pension enrollment policy, which would include a federal government match for part of the savings of middle-class families so they can count on more savings when they retire.
WHEN oh WHEN will people realize that the GOVERNMENT doesn’t HAVE any money – If he plans to give group A money, he has to TAKE it from group B!!!
Classic redistribution of wealth…
NCN
Mrs. Micah,
Geez. I spelled it different twice and BOTH of them were WRONG! I fixed them all.
Thanks for the catch.
Ahh, I love when the elections come around. We get to hear some truly amusing plans. Every candidate claims to have the answer to every problem. A ‘simple’ 1,000 dollar tax cut will help people who are paying 12% on a $400,000 mortgage? Give me a break.
I don’t have access to the whole article, but even the beginning had a lot of rhetoric:
“I’ve spoken with folks across this country who have worked all their lives to put their children through college, but now can’t afford the rising tuition. I’ve spoken with many others who’ve done everything right, but fell into bankruptcy once they became sick, because they couldn’t afford their skyrocketing medical bills. And since working Americans have to pay these rising costs with incomes that remain stagnant, many are falling deep into…”
1. Families working their whole lives to put kids through college? Well, congratulations parents, it was a noble idea to give your kids a free college education, but if you put that ahead of other financial needs, that’s your fault. Your kids can get loans if they need to, or get scholarships, or GASP, they could even work part-time to help defray some of the costs.
2. Going into bankruptcy due to health issues? Ok, this is a truly unfortunate issue, and there are some serious health care issues that need to be addressed. But I love the use of the most dramatic situation possible to try and pave the way for a national healthcare plan where the money is going to come from….
3. Wages are stagnant? No, wages aren’t stagnant, but workers are stagnant. Too many people become complacent in their positions and just expect their employer to keep paying them more each year for doing the same job. Sure, I’d love to be in a position where I could do the same thing for 30 years and just get a flat 4% raise every year, but that isn’t how you create a productive workforce. As if people aren’t lazy enough in this country, let’s just force companies to give people more money. If it is somehow based on performance or advancement, then maybe you could encourage people to actually do work. Plus I just read a report on yahoo finance today that said wages are expected to increase by about 3.9% in 2008. That’s higher than inflation, so how is that stagnant?
Ok, I’m done. It just irritates me how politicians paint such a negative picture and then pretend that they have such a simple solution that will make everything better. No, sorry, the economy is extremely complex, and if you’re elected, chances are your grandiose ideas will never come to fruition because they are too expensive, not feasible, or you were just plain lying to get votes.
Sounds like the ‘solution’ you would expect from someone who wants votes in an election year. I’m interested to see the further comedy that is sure to follow as the other candidates jump on the sub-prime bandwagon as they seek votes this year.
I don’t want to turn this into a Ron Paul derail, but Obama’s solution just isn’t that effective. Mortgage payments, like everyone has mentioned, are too high for a small amount like $1,000 per year to help with. This is on top of the fact that people will be losing their houses, not their lives.
When I first heard about Obama, I thought he was actually going to stand for something and make change, demonstrated by his previous history. Now I think he won’t change anything, particularly by statements like this.
I am just wondering how Obama went from helping subprime borrowers to the government making contributions to pension plans. Hmm…seems a bit of a stretch.
Fortunately, Bush’s plan does little. It applies to only a small percentage of homeowners, and the lenders do not have to comply. Basically, it is letting the market correct without saying that…or so I hope. I just wish we had a politician who had the guts to say, “you made your bed, now lie in it.”
Bush had to do “something”. The fact that he did quite little, but something, means that other politicians are reduced to quibbling over details versus principle-based argument over “the role of government”.
At the moment, when populist silliness is at maximum volume, you aren’t going to win such an argument with a strict free-market line. So, do “something”, but very little…
Assuming “redistribution” is necessary, I believe economists would take Obama’s plan over Bush’s (or Clinton’s).
The idea is to get liquidity into the system at the demand level. Folks are free to spend it where they choose. And since the people Obama is targeting have a 100% propensity to consume, they will spend it and fuel the economy.
OK. It won’t prop up the housing market. But then that is a bad idea. I think Obama knows this too.
If you give people $1000 a year more to pay for their homes, home prices will go up. Just like if Hillary gives $5000 to families for their kids’ college, then colleges will just raise their prices by 5 grand. When lending institutions threw money at homes, home prices went up. It doesn’t solve the problem.
@Jayson Is there something in the text indicating that the $1000 must be used for buying homes? If not, then it isn’t much different then the Reagan-era EITC.
What would you all propose doing about this foreclosure mess, or do you believe it’s not a mess? And if not, why not? Thank you.
Fuzzy,
As bad as I feel for those who are losing their homes, I don’t think it should be the taxpayers’ responsibility to make arrangements so they can stay in a house they can’t afford. So, I don’t think we should do anything but allow the market to work its magic.
Barack Obama is the best democrat president in my opinion. he makes the best judgment and foreign policies.. –