Monday, September 12, 2011

Obama's New Mortgage Scheme

Socialist President Obama is so desperate to win re-election that he will try just about anything to reward his PEEP's.   In Obama's latest Socialist Scheme, Obama wants Fannie Mae and Freddie Mac, the holders of millions of US mortgages, to unilaterally offer lower mortgage payments to people who have bad credit and/or who are upside down on their mortgages.   In addition, Obama is pressuring Fannie and Freddie to loosen credit requirements to refinance mortgage loans.   Of course, Obama is hoping that this will stem the tide of foreclosures while at the same time acting as stimulus money as people paying less to live in their homes will have more to spend on flat screen TV's made in Asia.  Wait a minute.  Isn't this what caused the financial crisis in the first place. 

The fact that this scheme would reward people with poor credit doesn't seem to matter to Obama.   Why should it.   This is the same President who stole General Motors from its legitimate owners and gave it to his union PEEP's for nothing.  Once again any time government intervenes in the marketplace, markets are forever distorted usually with unintended consequences.  The housing market is a mess; but it is giving young people with good jobs and credit an opportunity to buy homes that would not otherwise have been possible when real estate markets were inflated.   In addition, investors willing to risk their capital are swooping in to buy homes at bargain prices recognizing that this is a ten year play.   Lower prices mean lower rents for tenants, which in and of itself is like a tax cut.  As painful as it may be, the housing market needs to achieve equilibrium the old fashioned way.   When there are more qualified buyers than there is supply, prices will once again start to rise.   Until then, the government should mind its own business. 

We also face an imbalance as 75 million baby boomers began retiring last January at 10,000 a month.  Over time, many of these newly retired people will begin to downsize to smaller homes, or even rental apartments.   As that happens more family size homes will come on the market, which will add to pricing pressures; but that might be OK as young families will better be able to afford bigger homes at lower prices.  The real estate market, like all markets, is all about supply and demand.   Builders will not build more new homes as long as the number of older homes on the market remains high.   In the end, though it will take perhaps five years or more, balance will be achieved.  Government intervention will only delay the day of reckoning, no doubt Obama's intent until after election day in November, 2012. 

We don't need any more Socialist Schemes, or government intervention, that are prolonging a bad economy, the same way it did during the Great Depression.   We need to allow free market capitalism to work as it always does to address imbalances in our economy.   Yes it will be painful, but the sooner the government gets out of the way, the sooner we will see economic growth and job creation again in America.   The best way to deal with the housing mess in the US is through job creation.   We will not see job creation again unless corporate taxes and regulations are reduced, companies are able to repatriate profits without double taxation, environmental wackos at the EPA and Socialists at the NLRB stop killing jobs,  frivolous lawsuits are limited, crazy employment laws and ObamaCare are repealed and we finally have a President that is pro-business.  Most important, we need a 50 year energy plan designed to reduce the cost of energy and make the US energy independent once and for all.  Obviously, none of these things will happen as long as President Obama and his Socialist pals in government remain in office. 

So clearly we have to sweep these Socialists out of office in 2012 and 2014 to restore economic growth and job creation once again our country.   President Obama's SwindleUS Plan IV, the American Jobs Act, will do little to create jobs.   It is just more of the same that has failed three times before.  In order to create jobs and restore economic growth, we need more free market capitalism, limited government, lower taxes and less regulation, a balanced budget, term limits to help end the corruption in Washington and real education, energy, health care and entitlement reform.  

Socialists are focused on their PEEP's, those that pay no income taxes at all, those on the dole, illegal aliens, public and other union employees and companies that benefit from crony capitalism that contribute to Socialist campaigns.   Socialists are trapped in the class warfare argument they have been making for the last 100 years, which is the reason they can never represent the interests of all Americans.   As a result, we must make Obama a one term President and sweep his Socialist pals out of office, as well.  The fate of our nation depends on it. 

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