Monday, March 31, 2008
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Advice for McCain on Handling the Mortgage Crisis
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Posted by:
Matt Lewis at
12:00 PM
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While John McCain "owns" the national security/foreign policy issue, he must also continue addressing the economy and the mortgage crisis.
As everyone knows, after a crisis occurs, the immediate impulse from Washington is to do something--anything. But in truth, often, the best option is to let the market correct itself.
This, of course, is often, not a politically tenable option. Effectively managing a financial crisis can be difficult for conservatives who realize correct long-term strategy (which may be to let the market correct itself) is almost never the politically expedient strategy.
Hillary's plan to bail-out of the mortgage industry is a prime example of what not to do. Sure, pandering can work in the short-run. But it is, after all, a dangerous moral hazard to make it easier for investors to avoid losses. Luckily, McCain is known for giving voters "straight talk" they may not want to hear (see Michigan). Unfortunately, it may be easy for the Democrat to demagogue the issue, and imply McCain is asleep at the wheel.
Aside from increasing the size of government, the biggest problem with Hillary's "plan", of course, is that it sets a dangerous precedent. Creating a win/win scenario for investors and lenders (if you invest and make money, good -- if you invest and lose money, the government will bail you out) only encourages more risky speculation -- and more opportunities for future crisis.
While McCain must avoid this sort of populist pandering, I do think there is something McCain can propose that would be both proactive and effective: He should consider changing the tax code to make property an active investment.
Property-owners currently cannot immediately deduct expenses such as repairs or home improvements (a new washing machine, for example). Instead, these expenses are added to the home-owner's cost basis, and then counted toward reducing the amount declared as profit when the house is sold.
If sold correctly to the American public, this should be an extremely popular idea with most middle-class homeowners. Essentially, this is a tax cut.
What is more, if McCain is truly looking for a long-term solution that will also be a short-term benefit, changing the tax code -- to make property an active investment -- would immediately reinvigorate the housing market. It would also ensure property values increase. And, as a side benefit, it would make foreclosed houses a more attractive investment.
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My husband works for a bad corporation. Each week, he brings home from the bad corporation, a fat paycheck, which we in turn, pay our mortgage on a home we were able to comfortably afford, pay off the credit card we don't keep a balance on and buy food, gas and entertainment. We also spare a few bucks for Charity and Tithing. The rest we actually SAVE. We complain about the price of gas, but unlike most of America, we do not have a car payment. So, regardless of the gas milegage we get on our old cars and vans, we don't have 600 or more a month going out to car payments. (made sense to us, at least.) That BAD corporation gives us a lifestyle that is comfortable and good. I don't give a flying fig if they get a tax break or two. I don't care if the CEO is driven around in a Benz, or drives himself in a VW bug. I don't care if he lives in a mansion and makes the big bucks. He's taking all the risk. My husband takes none of t, and brings home the bacon each week.
Selfish? Yea. But it's a good selfish. |
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And McCain is Clueless about it, who's he goinna pick for veep?
Romney is the only choice, at this point. All the others either are clueless (huckabee), or have too much bush baggage (portman, Frist, etc). |
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Seansfm, Charlie Rangel developed a massive tax overhaul strategy to revise the tax code and the Republicans shot it down. Rangel wanted to close up the loose ends that allow corporations to take advantage of the system. The GOP blocked it, and even if it got passed Bush would veto it.
Who is looking out for the citizens of this country? Is it the GOP, who has every corporation and special interest group in their back pockets? Is it the democrats who have no backbone to stand up to the White House scandels that are costing american taxpayers billions of dollars?
It is time for the american people to revolutionize this great nation. Our elected leaders have worn out their welcome. It is time for Congressional term limits, and to cut out special interest groups from supplanting their flags in Congress.
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"While John McCain "owns" the national security/foreign policy issue, he must also continue addressing the economy and the mortgage crisis."
Mr. Lewis:
What are you smoking?
McCain's idea of national security is to give our country to Mexico!
He is currently using his influence to block legislation which would strengthen our ability to curb Ileagal Immigration.
My advise for McCain on handling the "Mortgage Crisis":
1. Select a True Conservative for VP.
2. Commit Suicide in a slow and painful manner.
This may or may not help the economy, but I know I would feel better!
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that's change I'm willing to believe in.
Good suggestion. |
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I disagree with your statement regarding McCain's foreign policy/national security experience. Yes, McCain has over twenty five years as a State Senator dealing with security/foreign policy issues compared to Hillary and Obama much less experience on the issue. For the last eight years McCain has been lock step with George Bush on national security and foreign policy. On the surge, all along was suppose to create an opportunity for the Iraqi government to come together and develop a unity consensus on how to address the problems facing the Iraqi nation. The surge has not accomplished any of this, the intitial reason for implementing the surge in the first place.
Now, republican supporters are encouraging McCain to start addressing the economy. An, economy that in less than eight years has gone from an economic surplus to historical dificits, record debt, political corruption that has costs the taxpayers jobs, their homes, social security and medicare close to bankruptcy by 2012, record high oil prices, global warming, political corruption at all levels of the administration.
I am sorry, but the last person I have any faith in regarding any political matter that needs to be addressed is John McCain. The fact of the matter is that as soon as the democrat party unites behind their two candidates McCain will get smoked come the general election by either candidate. The good ol boy from Arizona, the revered war veteren does not stand a chance against Hillary or Obama. McCain has no economic policy agenda, no cure for social security, medicare, rising healthcare costs, immigration, educational crises, etc.
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I disagree with your statement regarding McCain's foreign policy/national security experience. Yes, McCain has over twenty five years as a State Senator dealing with security/foreign policy issues compared to Hillary and Obama much less experience on the issue. For the last eight years McCain has been lock step with George Bush on national security and foreign policy. On the surge, all along was suppose to create an opportunity for the Iraqi government to come together and develop a unity consensus on how to address the problems facing the Iraqi nation. The surge has not accomplished any of this, the intitial reason for implementing the surge in the first place.
Now, republican supporters are encouraging McCain to start addressing the economy. An, economy that in less than eight years has gone from an economic surplus to historical dificits, record debt, political corruption that has costs the taxpayers jobs, their homes, social security and medicare close to bankruptcy by 2012, record high oil prices, global warming, political corruption at all levels of the administration.
I am sorry, but the last person I have any faith in regarding any political matter that needs to be addressed is John McCain. The fact of the matter is that as soon as the democrat party unites behind their two candidates McCain will get smoked come the general election by either candidate. The good ol boy from Arizona, the revered war veteren does not stand a chance against Hillary or Obama. McCain has no economic policy agenda, no cure for social security, medicare, rising healthcare costs, immigration, educational crises, etc.
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than you are making it Matt. "Let the market correct it" is not a solution. I recommend that you read Paulson's comments from this morning. This is a VERY complicated problem whose core can be boiled down to lack of transparency and abusive market practices. Regulation is not a dirty word. It is important for investors to know that there are rules and that they have been enforced. In basketball, when you drive to the hoop and catch an elbow to the face, the referee blows the whistle and calls a foul. For the past twenty years, there has been no referee which is why markets are freezing up. Intervention is long overdue. Possibly the best message Paulson sent this morning was his statement that the most of the threat posed to market stability is "below ground". His other very important message to indict all regulators for being AWOL. In other words, this problem is the result of the abuses that arise in SUPPOSEDLY regulated markets when they are not regulated. If the markets are not going to be regulated and disclosure is not important, tell everyone so that we can all play by the same rules and the market will price accordingly. In basketball, that's when everyone goes home because no one can stop Shaq from breaking everyone else's heads on his way to dunking the ball. Do we want to play basketball or not? If we do, we need rules, they need to make sense, and they need to be enforced. Let's give that a try.
Yet so far, the only solutions offered by the politicians, from Bush to Hillary, is to bail everyone out. We need to vote this United Establishment Party out of power. |
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"But in truth, often, the best option is to let the market correct itself."
Except we don't really have a free market. We have a market where a government proxy can push inflation to the folks on the low end of the totem pole to help bail out the guys on top who made poor investment choices.
In a free market, the response would be 'life's tough, now stand aside and let the companies that didn't think buying billions of bucks worth of risky mortgage futures was a good idea profit and pick up market share.' |
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Two candidates for President are falling over themselves with solutions for the current mortgage, lending crisis. Their plans call for everything from delaying rate increases to throwing money at the debtors. This problem is really about supply and demand. Let’s look at these plans in a broad sense.
If we stay or delay the rate increases of the adjusting rates or give borrowers money to make payments, we must first solve the problem of who gets the juice – who benefits? Do we single out people who are 90 days past due and help them? If we do, then those folks 60 days past due will now have an incentive to make matters worse and become 90 days past due to qualify for help. If we help someone who paid no attention to their ability to pay, but jumped in any way, then how do we compensate someone who did not enter into such a mortgage, because they exercised good judgment – in essence, their tax dollars would be helping the person who got the house they wanted, but chose to pass on? Today’s candidates in pandering for votes want to spend your money on a problem that they clearly do not understand.
Yes, many sub-prime borrowers are out there in trouble – they are called sub-prime for a reason – did we or they expect anything else? The true victims of this crisis are all the homeowners who are now trapped in their homes due to the equity position. The value of their residential property has precipitously dropped. Whether they are investors for rental properties or occupants of their dream home, we are all being hurt by this loss in home values. So what is the solution?
Read it at: brokengovernment.wordpress.com/wp-admin/post.php?action=edit&post=49
Ken Moyes |
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There is a tax reform that will work. It's the FairTax (H.R. 25.) Of course it does away with Hugh's and your sacred cow: the mortage deduction. If enacted home ownership becomes cheaper (underlined) in the long run and since there's no income tax there is no mortage deduction! Great isn't it? |
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The left thinks you can be irresponsible about money, and then when the sh** hits the fan, the Fed will bail your butt out. What about the responsible people? The ones who buy what they can afford, work their tails off to pay for it, make improvements, mow the lawn, trim the hedges, paint, etc. Irresponsible gets a bailout, responsible gets screwed. I say as MM does: SUCK. IT. UP. |
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All Hillary's plan does is lead to more irresponsibility. It will be a great day when there is a crisis and the politicians say "tough s--t." If you live beyond your means and borrow money for home(s), car(s) and even boat(s) and you someday cannot afford the life style that is your self inflicted problem. It is not the job of the hard working tax payers to bail you out.
What the politicians should do is let the free market fix the problem. When housing prices come down, eventually people will by them. To keep housing price artificially inflated is unfair to those who live responsibly and within their means.
I do agree that changing the tax code to make real estate an "active investment" will benefit everyone.
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How can McCain claim to "own" national security as an issue when he will not uphold the laws of this country?
McCain keeps saying "Secure the border first". We know that he means amnesty next. The plan is to get the border state Gov's to declare the border secure. Conveniently, they are all on board the cheap labor express. Then his good friend Ted Kennedy will bring back McCain/Kennedy and McCain can provide his good friends across the aisle with their new permanent majority.
I will not vote for amnesty.
http://townhall.com/columnists/AmandaCarpenter/2008/03/28/b loggers_press_mccain_adviser_on_immigration
“John McCain’s position on immigration is very clear and this a question that gets asked at townhall appearances everyday in media appearances and has answered the question at least a thousand times before the New Hampshire primary,” Schmidt said.
He explained, “Any person who supports John McCain’s campaigns is a subscriber to John McCain’s views"
A vote for McCain is a vote for surrender of your country.
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