The Wall Street Journal takes a look at President Obama's proposed mortgage rescue plan and finds that it could create far more problems than it solves:
Obama yesterday announced his plan to prevent home foreclosures, saying
he wanted to be "very clear about what this plan will not do: It will
not rescue the unscrupulous or irresponsible by throwing good taxpayer
money after bad loans . . . And it will not reward folks who bought
homes they knew from the beginning they would never be able to afford."
really do wish he were right. In fact, the details released yesterday
suggest the President's plan will do all of the above. The plan will
help some struggling homeowners. But by investing in failure, the
Administration will also prolong the housing downturn and make
financing a home purchase more difficult for future borrowers.
Meanwhile, the plan isn't likely to slow the continuing decline in
The President's plan is predicated on the
false belief that everyone deserves to own a home. The fact is that not
everyone can afford to own a home. The efforts of Fannie Mae and
Freddie Mac to make it easier for people to buy homes they could not
afford are at the heart of the current financial crisis. Unfortunately,
the President's plan does nothing to address this fundamental issue and
instead just prolongs the crisis and leaving taxpayers on the hook.
As CNBC's Rick Santelli correctly points out in this clip,
this is an example of government rewarding bad behavior. Unfortunately
it's the 92% of honest, hardworking Americans he refers to that will
pay the price.