DogJ's Blog

"We're From the Government and We're Here To Help" - the Mortgage Bailout Plan.  The FDIC is working with the US Treasury and Federal Reserve on a plan that would share the costs of restructuring loans for home owners to enable them to avoid foreclosure.  For 2008-2010, Moody's estimates that their will be 7.3 million defaults on mortgages with 4.3 million losing their homes.  However, the program could actually increase the number of home owners defaulting and then attempting to access the program.   Why?  LUC.  Mortgage holders who can are making timely payments, but are under water on the value of the home have every incentive to restructure the contract.  

This is why government is more often the problem not the solution.  While progressive politicians like to think they are acting in the best interests of the people, they often ignore the best interests of the economy and enact legislation that has ramifications beyond their level of understanding.  Let's face it if Ben Bernanke and Hank Paulson have problems with reaching into the economy, what hope do we have that Congress is going to do a better job?  In times of great economic uncertainty, the electorate wants protection and what they perceive as safety of the state.  What they will get will be unintended. - BAD LUC