"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
I don’t like how you keep calling him “McStupid.” It’s mean.
He’s McMentallyChallenged.
(Vote McCain/Palin)
He doesn’t. The plan, which is available on the McCainpalin.com website, clearly states that the plan is to simply direct $300bn of the existing bailout toward buying up the bad mortgages. The truth is, this would be significantly cheaper than buying out the bad MBSs and CDOs and CDSs, which will run into the tens of trillions. I had thought that a fundamental problem with the bailout is that it did not address the underlying immediate problem, which is the collapse of housing prices. Some believe it needs to collapse more, but I think with the 20-30% drop in many areas, it is starting to get oversold. I do think a better plan would be to buy up unsold new construction and demolish it.
Again, the bill is passed already. Besides, 50% of all mortgages (and something like 80% of those issued since 2006) are already backed by Fannie and Freddie, meaning that the US taxpayer was already on the hook. Since the vast majority of defaulted mortgages are already covered by Fannie and Freddie, and the McCain Plan specifically targets mortgages that are defaulting because of the inability to refinance with a collapsing price, the total number would probably be much lower than $300bn. There are also a number of qualifications set forth in the plan.
In other words, the plan is simply to direct some of the money already being appropriated towards these mortgages. I don’t like the idea of any bailout, but since it’s already a done deal, I think this approach is actually somewhat better than the crazy, almost unworkable MBS purchase plan they concocted in the end (which is far, far worse than the original Paulson proposal).