Obama Robs the Right to give to the Left

So you don’t do something stupid, like refinance your house to buy more toys than the folks next door, then the bottom drops out of the housing market, you keep making your payments and shaking your head.  Now the guy with the toys and the upside down house is entitled to a bail out but you get nothing for being a responsible citizen!?  Whats up with that?  Where is the tax relief for the people who were CONSERVATIVE and did not fall for the free money?

Obama is going to burden the responsible taxpayer with the debt of their neighbors, as well as the debt of his National Pork Barrel.  What the hell is going on here?

Understand this IMPORTANT POINT:

Obama and his socialist gang can force banks to take the TARP money, but HE CANNOT FORCE US TO TAKE IT! Banks, GM, Chrysler, Ford all chose to put us in this socialist place by begging for money from the Government!  If they had not gone with hat in hand there would have been no socialist reorder of Government, avenues were in place to handle their problem, namely restructuring in bankruptcy court. The too big to fail’s wanted to keep their pockets lined with welfare checks to buy jets, and bonus’, partys, all for what they consider was best for the people.

The Fiscal Conservatives who did not fall for the free money, who are only receiving debt not of their own making while others feed at the socialist trough get the socialist agenda shoved down their throats.  Fiscal Conservatives watch while unemployment rises exacerbating the Obama bail out (who can pay back loans, credit cards, car and boat loans without a job?), and peoples confidence in a turn for the better in the economy grows worse.  Those who know the debtors problems, family and friends will expotentially turn into fiscal conservatives to save themselves from the coming disaster of skyrocketing debt.  Credit cannot be created if the Fiscal Conservatives are too smart to take it, especially in a pending 2009 depression.

Cash is being hoarded by banks and Fiscal Conservatives, no one is falling for the Obama plan because he is only paying back the people who put him in office, millions to ACORN,  just to name one – what kind of stimulus is that?

David Leonhardt reports in the NY Times yesterday:

Obama’s Housing Plan: Who Will Benefit?

By David Leonhardt

In his speech in Phoenix today, President Obama emphasized that his plan would help those homeowners who had acted responsibly. “It will not rescue the unscrupulous or irresponsible,” Mr. Obama said. “And it will not reward folks who bought homes they knew from the beginning they would never be able to afford.”

The political reasons to describe the plan in this way are obvious. A housing bailout that helps those who played by the rules is likely to be far more popular than a bailout for unscrupulous investors.

But the lines aren’t quite as clear as Mr. Obama suggested. In fact, his plan will end up helping a fair number of people who bought homes that they should have known they would never be able to afford. The core of the plan gives banks a financial incentive to reduce many mortgage payments to no more than 31 percent of a borrower’s income.

Which homeowners will benefit from this reduction?

Certainly, some who took out a reasonable mortgage and later lost their job will be helped. But people who bought too much house – and banks that allowed people to do so, or even encouraged them to do so – will also benefit. As distasteful as this may be, it’s the only way to make a serious dent in foreclosures and, in the process, to help the financial system.

These same political calculations help explain the public emphasis that the White House is giving to the relatively modest steps it is taking to help underwater homeowners – those with a mortgage worth more than the value of their house – who can afford their monthly payments.

These homeowners are precisely the sort who seem as if they have done nothing wrong. They seem like innocent victims of the housing crash.

The new plan will help some of them refinance their mortgage at a lower rate. But only loans backed by Fannie Mae and Freddie Mac – not many of the subprime loans at the heart of the foreclosure problem – will be eligible. And the loan cannot exceed 105 percent of the current value of the property. Since prices have fallen almost 50 percent in some areas, like Phoenix, Las Vegas and parts of Florida, the cap will exclude many homeowners.

In fact, the number of homeowners that the White House estimates will be helped by the refinancing part of the plan – between four and five million – includes many who are not now underwater. Their mortgages are worth between 80 percent and 100 percent of their house value, which means they are above water but cannot refinance. (On many refinancings, banks require the equivalent of a 20 percent down payment, in the form of house value.)

So this plan will help only a small fraction – perhaps one in 10, or even less – of underwater homeowners. And it will provide only a modest subsidy to those it does help.

But as I wrote this morning, such an approach has many advantages. About $500 billion worth of mortgage debt is now underwater, and the number may eventually get close to $1 trillion. A plan that tried to put this debt back above water would be vastly more expensive than the one Mr. Obama announced today. It would also deliver less bang for the buck, since a great majority of underwater homeowners are likely to continue making their monthly payments.