The Mentality of Politicians–Making it Easier to Get Loans We Can’t Afford
Ok. I thought that with a new administration coming in that we’d have fiscal responsibility return and a reasoned approach to recovery that would benefit people other than speculators and stupid people. Alas, I have been hit with yet another disappointment.
The stimulus package is going to include 2 provisions in particular that I just cannot understand. (Oh, in addition to the 100-200 billion or so that don’t add jobs to the economy.) Those two provisions include tax credits for large purchases, including houses and cars. I will quickly discuss the car one so that I can delve into the housing one since it impacts people like me directly.
“Why when you bounce a check, the bank charges you money they know you don’t have any of?”
–Gallagher
To start off with, the feds will be providing rebates for people who buy a car (this was sponsored by a woman who, in my mind, should truly know better–Barbara Mikulski) Who does this benefit? Big business. The car industry and maybe the people who work in the factories, though I don’t believe there’s any provision that you need to buy an “American” car. By listening to any news broadcast in the past 6 months, Americans are drowning in debt. Consequently, government is pushing for Americans to get further into debt. Makes perfect sense.
As far as the housing credit goes, this is stupid on a number of levels. First off, lets look at the problem at the moment. The “crisis” isn’t that people aren’t buying new houses, it’s that people are going to loose the houses they’re in. So, strike one. Second, the with this tax credit, the politicians are artificially increasing demand for houses with access to free money. The past 8-10 years has had demand artificially increased with bad loan deals (that, by the way, they haven’t fixed yet.) so all the politicians are doing as a diluted form of what’s been happening in the past that got us into this crisis to begin with. Strike 2. Going along with that, what happens with increased demand? The part that pisses me off the most–housing prices are going up. Who does this benefit, people with a vested interest in housing prices going up. Namely, current homeowners (which, admittedly, is a benefit) and…companies with junk assets, like, say Bank of America, Citi, Wells Fargo, Wachovia……you know, those companies that we’ve learned to love to hate? Strike 3. And, by the way, what happens when people dive into these houses and the next round of ARM resets that are supposed to happen this year happen and they end up underwater on their mortgages? Umm…strike 4?
Who does this benefit? People that were already in the housing market, in the car market and in big business. That’s it. I can’t get my head around how or why they thought this was a good idea but I’m guessing it has to do something with LePetomaineism–”We’ve gotta protect our phoney baloney jobs!” They have to look like they’re doing something, so they’ve chosen to give money to a special anointed few who were lucky enough to be looking for a house when the bubble burst instead of putting that money where it would help the most, in a combination of tax cuts and spending on actual, honest to God infrastructure improvements (read Interstate Highway System, National Broadband, Building of a Renewable Energy Industrial complex)