Today, the President and his ilk tell us the economy is fixed, that we're moving in the right direction, albeit slowly. Everybody sing kumbaya, and somebody get that chorus of angel singers from General Hospital.
Meanwhile, reality intrudes. The latest figures show that banks seized a record number of homes in August... a crystal-clear sign that the problem underlying all of our problems is NOT fixed. And it's not going to be "fixed" any time soon.
http://www.msnbc.msn.com/id/39207626/ns/business-real_estate
A record number of homeowners lost houses to their banks in August as lenders worked through the backlog of distressed mortgages, real estate data company RealtyTrac said Thursday.
Root problems of high unemployment, wage cuts, negative home equity and restrictive lending practices persist, however, pointing to lingering housing market pain.
RealtyTrac sees a record 1.2 million repossessions this year, up from just under 1 million last year, with more than 3.2 million homes in some stage of foreclosure.
In 2005, before the housing bust, banks took over just about 100,000 houses, according to the Irvine, California-based company.
Any guesses as to WHY this problem hasn't been "fixed?"
The Democrats in Congress haven't even tried to fix this one, really. Doing so would go against their political philosophy, and we can't have THAT, now can we?
Democrats believe that everybody "deserves" to own a home. So, a long time ago, they started passing laws making it easier to own homes. How? By requiring mortgage lenders to give high-risk mortgages to people who couldn't really afford the payments, i.e. the poor. Oh, they were so happy when home ownership rose above 60%... but this led DIRECTLY to our current problems.
People who couldn't afford the payments began defaulting on those loans, and the rest is history.
Now, in response to this, a sane man would remove the laws that required mortgage lenders to write high-risk loans to those who couldn't afford the payments, i.e. the poor. I guess that settles THAT question, though... our current political masters aren't sane. Not only didn't they remove those laws, they created new programs that mirrored the old, encouraging even MORE such loans.
I know, it's crazy not to fix the laws that caused the problems in the first place... That's my point.
Here is my prescription to "fix" the housing problems. First, repeal any law, dismantle any program, and remove any regulation that requires mortgage lenders to write high-risk loans. This will go a long way towards fixing the underlying housing problems.
That alone, however, isn't enough anymore. The continuing housing problems can be tied to the unemployment rate, which can be tied to the current policies coming out of Washington DC. So...
Second, roll back the entire Federal budget, sparing nothing, to 2008 spending levels. Don't spare the military, don't spare social security, the goal is to reduce spending immediately. That means repealing ObamaCare and refusing to pass any useless new spending initiatives that the Democrats dream up. That includes EPA regulation of greenhouse gasses and any cockamamie cap & trade schemes that might be in the works.
Third, repeal all pending tax increases... In fact, roll back all tax rates to their 2008 level. The goal is to get lower tax rates across the board.
Once all that is accomplished, it's time for the next step.
Fourth, begin taking business friendly steps that will encourage economic growth. Lower taxes AND SPENDING, and begin paying down the national debt.
THAT is what the government can do to help this economy recover. Behave responsibly, stop raising taxes, stop instituting new entitlement programs, and stop enacting business-hostile regulatory overhauls.
The economy WILL respond.
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