Will Homeowners Who Default Need To Have A Plan?

Or for that matter, will Congress?

The big three auto makers went to Capitol Hill last year and begged for money. They were excoriated for using corporate jets to get to the meeting by people in Congress who use military jets to get around the world on the taxpayer dime. Nancy Pelosi is in Europe this week and she went there in an Air Force plane. She also took her family with her. I wonder who paid for that?

Congress spread a little money around and told the automakers that they needed to come back with a detailed plan that clearly laid out how they were going to conduct business. Congress wanted to ensure the companies had a methodology that would make them profitable and enable them to pay back the money. We can’t have these big shot executives spending money when they are going bankrupt. We can’t have them using hard earned tax dollars on half baked schemes. No, they need detailed plans that Congress can scrutinize.

It is an interesting concept and one worth exploring. Before I start, I was not and am not in favor of a bailout for the auto industry (or any other industry). I think that the market should sort it out and if a business goes under than another will come along to take its place. It is survival of the fittest. For a group of people who believes in evolution, this concept seems to escape their grasp.

Why is it that Congress is not placed on a plan? How is it they are able to spend over a TRILLION dollars in a spending bill that they did not read on things that will not stimulate? How is it that we are 10 TRILLION dollars in debt and they can still spend a TRILLION more as if it were nothing? Congress should have to submit a plan to the American people that clearly outlines how they intend to cut back. They should have to show how they are going to become responsible with our money just like the auto makers. I know Obama said he would go through the budget line by line but that was a lie in the ranks of “Its only a cold sore.”

He has not gone through the budget line by line. He has not looked at different government agencies to see which can be closed or downsized. He did not even go through the bill he signed line by line. He could not have considering all the other things he was doing while it sat on his desk (figuratively speaking).

Today though, Obama was in campaign mode once again. He prefers that because he is pretty good at it. We have seen him try the leadership thing over the past 4 weeks and he sucked at that. He got his head handed to him until he started campaigning again. He could not lead a group of people out of a burning building.

Unless you include his followers who blindly follow him like rats behind the Pied Piper.

In his campaign stop today Obama introduced his plan to reward irresponsible people. Obama unveiled his $275 BILLION dollar plan to assist people with their home loans. Obama will increase funding to Fannie Mae and Freddie Mac so they can lend money. That is what got us into this mess. At least some of his friends can get rich working there. Fannie and Freddie went from nearly $70 a share to 70 cents a share and their reckless actions helped fuel the collapse.

In addition, Obama will use the money of responsible taxpayers, the ones who pay their bills, and work to get the mortgages reduced in both principle and interest rate. Yes, Obama wants to readjust the principle people paid for their homes (lower the cost) and he wants to have banks refinance them at a much lower rate. It seems to me that the loan taken out on homes is a contract and both parties are obligated to live up to the agreement. That means if a person agreed to buy a house for a certain price then he is obligated to pay that price. The government does not belong involved.

If people bought homes that they could not afford then they need to suffer the consequences. If the government steps in and helps them out then the bad behavior is reinforced. You get more of what you subsidize and if the government starts reworking bad loans there will be even more of them. People will not learn and they will continue to do the same stupid things. What about those of us who pay our bills on time? What about those of us who did not buy more house than we could afford? We will have to pay the amount we agreed to pay and at the interest rate that was also agreed upon, as well we should. Everyone should have to pay what they agreed or they should sell their houses or have foreclosure take place. Too bad, so sad, sucks to be you. Why should the rest of us pay for YOUR mistakes?

What I want to know is what kind of plan do homeowners have to come up with? I mean, the auto makers had to make a plan to show they would be responsible and do better financially before they can get federal money. What do people who are helped with taxpayer money for their home mortgages have to do that is equal to what car makers have to do?

I think they should have to present a plan that details how they will ensure they will not get behind again and how they will not overspend or enter into foolish contracts again. The plan should include giving up cell phones, cable TV, FIOS, or Satellite. They should be forbidden from eating out at any restaurant including fast food joints. They should have to give up tobacco and alcohol and submit to random urine tests for nicotine and alcohol as well as any other drugs. Anything found should lead to serious consequences.

These people should also have to sell anything that is a luxury. If they have more than one TV or computer then the extra ones need to go. No iPods, no cell phones, and no PDAs. They should also have to sell any vehicle that is elaborate and get a small, low cost, fuel efficient model. It should also be required that they buy US savings bonds or some other investment vehicle so they can save for their future. Bonds are ideal because the money goes to the government and because they must be held for a certain amount of time and they have long maturity dates.

I am not trying to be a hard ass or anything but if I am going to be footing part of this bill then I am becoming a part owner in their homes so I get a say in how they live (as do all other taxpayers). They can take their own decisions when they pay their own bills.

This deal should also require recipients to give up any other government benefit with regard to taxes. They should lose the Earned Income Credit and any other similar deduction. They will be getting enough help from taxpayers so they should get no more.

There can be many more conditions to receive this mortgage assistance and I encourage people to list their ideas in the comments section.

Big Dog

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Calling the Democrat’s Bluff

Prior to the 2006 elections Nancy Pelosi put out a memo telling people that the Democrats had a plan to lower gasoline prices. Her memo discussed many items that Democrats, if placed in charge, would do to lower prices and ease the burden of rising fuel costs. Two years later the plan has yet to be revealed and the price of gas keeps rising. This year alone it has gone up an average of nearly 30 cents a month.

This plan must be like the mystical plan that John Kerry had for everything but refused to reveal. It is typical for the Democrats to claim they have plans but to be rather short on details. Barack Obama is no different. he talks of hope and change but other than promises to increase taxes and spending he lacks any specifics on how he intends to accomplish things and he does not state exactly what change he is looking to effect.

Back to the gas plan. The Republicans in Congress have sent a letter to Speaker Pelosi respectfully requesting that she release the plan she claimed the Democrats had oh so long ago. I doubt we will see a plan because none really ever existed. Democrats are big on making empty promises and hoping that people will not remember them. In the state of Maryland we have a governor who did this very thing in the run up to the 2006 elections. He promised that he would lower the electric rates that consumers in the state pay. The rates went up 75% and will increase again this summer (the new rates are justified and Democrats are the ones who caused the sudden increase).

I believe that this letter from the GOP is their way of politely saying to Speaker Pelosi, “Put up, or shut up.” If only it were that easy.

Big Dog