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February 3, 2009
A Stimulus Proposal that Even Responsible, Non-Politically Connected Americans Can Love?
If there is going to be a major binge of stimulus spending in one form or another, and since Fannie Mae and Freddie Mac have already been taken over by the government anyway, doesn't this stimulus proposal being put forth by Senate Republicans make a lot of sense, because it brings regular folks who have been spending responsibly and living within their means into the program...
Senate Minority Leader Mitch McConnell, R-Ky., told reporters Monday that Republicans would offer a plan to have the government step in to reduce mortgage rates to around 4 percent, which could shore up home prices and lower housing payments for millions of Americans.Yeas or nays, anyone?"A stimulus bill must fix the main problem first, and that's housing," McConnell said. "That's how all of this began. We think you ought to go right at housing first."
Republicans want to have banks lower the interest rates to 4 percent or 4.5 percent on 30-year fixed rate loans, up to a certain cap. Rates could drop if Fannie Mae and Freddie Mac agreed to buy the mortgages.
The two companies were seized by the government in September, and have bought the majority of the new home loans issued over the past year because Wall Street's appetite for mortgage securities has vanished. The new rates would be available through 2010 for both new purchases and refinanced loans.
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I'm in. Living on the bubble in Newport -- where housing is down, but not much -- is becoming trying.
Not only would this shore up existing homeowners, but it could introduce new investment in the market. And if people aren't spending as much on the mortgages, and the government doesn't decide to jack our taxes, there'd be more money where it matters: in consumers' pockets. Construction, retail, etc. would follow.
All in all, it sounds like a pretty sound idea -- provided it doesn't get loaded with pork.
Posted by: anonymous at February 3, 2009 12:29 PMDidn't Mitch have his shot at this last year? Where was that idea last year? Or is he just suggesting that Congress throw more money at the same banks as last year?
Posted by: Patrick at February 3, 2009 1:59 PMThis is so odd because I was listening to Cianci this afternoon and all the while thinking about my reading of e-zines earlier in the day highlighting the good parts of the stimulus package. Sadly, there was nothing I found stimulating about the stimulus bill at all.
In fact, it sounded more like expanded Welfare programs.
Then I thought about the 'ground up' approach starting with broad based tax cuts and doing whatever is possible for people to keep their homes but NOT with Fed money. Lower the rates and expand the terms or renegotiate the entire terms of the loan but LOCK IN the mortgagee to the terms.
And then I come home and read this...right on!!!
In fact, if a homeowner does not want to agree to the terms of renegotiated mortgage then someone else, who is willing to accept the new terms, should be allowed to take over the property.
Why is the Obama stimulus bill aimed as increasing government support or people who should be able to sustain their own existence?
When I was laid off years ago and needed money, I sold of my possessions to survived and beat the streets everyday to find whatever work I could find.
Posted by: Roland at February 3, 2009 4:02 PM