"But wait, there’s more."
Yep, it was like sen McAmnesty was trying to sell us a set of Popeil Kitchen Knives -- "But wait, there’s more."
Posted on 10/09/2008 8:40:19 AM PDT by shortstop
John McCain is insane.
I’m still voting for him, but he’s out of his freaking mind.
I’m talking about his new wrinkle on the bailout fiasco. As if it and its accumulated crud weren’t enough of an offense, he’s figured out a way to make it even worse.
He brought it up at the debate.
Proud as a peacock, in response to the first question, he popped out his new plan. On the night he needed to draw blood – or make vacation plans for January 20th – the best John McCain could do was try to out-socialist Barack Obama.
And that’s a pretty tall order.
But John McCain pulled it off.
Here are the details. John McCain said that, if elected, he will have the government buy up all these troubled mortgages. Then he would have them renegotiated, lowering the amount of indebtedness to the current market value of the mortgaged properties. That would lower – probably dramatically – the amount owed and the interest rate paid.
And it would screw the country.
Which seems to be a pretty bipartisan objective.
Let’s think through what would happen if Insane Johnny got his way.
First of all, American taxpayers would get beaten from pillar to post. Just a week after the liars promoting this bailout told us that the government would probably make money on it, by reselling the mortgages after they appreciated in value, my candidate decided to make it so that the government – by which I mean “the taxpayer” – would lose money on each and every mortgage.
Here’s how. If you buy it at a price that reflects the total amount owed, and then you reduce the total amount owed – and consequently the amount paid back – you lose money. The government absorbs the difference between what it buys the mortgage for and the price it then reissues the mortgage at – it just writes it off. It is an immediate and certain loss which will not be made up, no matter what happens to the market.
You don’t buy a $10,000 car and then resell it for $8,000 and get good grades in your MBA class.
That’s Major Flaw No. 1.
Major Flaw No. 2 is that the plan rewards irresponsibility. If you were dumb, crooked or greedy enough to buy more house than you were willing or able to pay for, John McCain would save you by giving you the house at a price lower than what it cost when you moved in.
Say you live in a neighborhood where homes went for $300,000 two years ago when your neighbor, who delivers pizzas for a living, moved in. Surprise, surprise, he’s delinquent on his mortgage. And the economy is in the toilet, and the most you could get for a house in the neighborhood right now, if you had to sell, is $150,000.
Enter Nut Job Johnny.
He would take your bum neighbor, who is defaulting on a loan for $300,000, and save him from foreclosure. Further, he would reissue the loan for the current value of the property -- $150,000.
I’m not sure if you know this, but the mortgage payment on $150,000 is a whole lot less than the mortgage payment on $300,000. And, in the midst of a financial crisis, the interest rate is a whole lot lower.
So your punk neighbor is living in the same neighborhood and size house as you are, only he’s making a far smaller payment with a far smaller debt, all because of John McCain. And the fun part is that you, paying the whole freight on your home, are going to be taxed to pay for it all.
Those who make their mortgage payments will be taxed to pay for those who don’t.
And we don’t even want to get into how many of these defaulted-on homes were “bought” by illegal aliens or as part of social engineering programs intending to increase home ownership by the unemployed and welfare dependent.
But I digress.
Bonkers McCain will not only bail out these failed buyers, he will give them new mortgages at bargain-basement prices.
But wait, there’s more.
What happens when the value of homes goes back up? Let’s say in five years, when the economy gets back on its feet, the homes in your neighborhood regain their value, and are selling for $300,000 again, what happens?
Well, you – who kept your word and paid your mortgage – will sell yours for $300,000 and walk away even. And your neighbor, who defaulted and got the new mortgage at the bottomed-out price, will also sell for $300,000 – and make $150,000 on the deal.
Thanks to John McCain.
But wait, there’s more.
There’s still Major Flaw No. 3.
And that is that anybody with half a brain – and no conscience – watched the debate and decided to stop paying their mortgage.
Seriously. The value of your home right now, in most parts of the country, is less than what it was when you bought it – less than what it was when you took out your mortgage.
So stop making your payments. Fall behind a little bit. Become a troubled mortgage. In a few months, the government will rescue you.
And John McCain will give you a new mortgage, for the depressed value of your home. It’s like saving tens of thousands of dollars at the stroke of a pen. All you and McCain have to do is rip off the taxpayers.
Apparently, he’s perfectly willing to do so.
Repeating, for emphasis: People who paid their mortgages will labor under higher taxes and government debt. People who didn’t pay their mortgages will get a giant gift from the government.
Responsible people will be punished and irresponsible people will be rewarded. The people who contribute to America get hosed and the people who tear down America get to raid the Treasury.
Thanks to John McCain.
As if the bailout con job wasn’t bad enough, Crazy Johnny found a way to make it worse.
But I’m still voting for him.
Because I’m pretty adept at picking the lesser of two evils. And the idiot who wants to give people welfare mortgages is a little bit better than the idiot who thinks health care is a right. One will tax me to give my lazy neighbor a house nicer than mine, and the other will tax me to pay for people who are so lazy they won’t even work to hire a doctor to take care of their families.
In closing, let me be one more person to observe: In a country of 300 million people, how in the heck did we end up with these two idiots as our presidential candidates?
McCain's plan is to have the government buy the loans at full value from the banks and then have the government give the homeowner a new loan at a lower principal. The government absorbs all the loss instead of the lender that made the bad loan. That is stupid, and unfair to America's taxpayers.
And exactly why the credit markets froze completely after the bill was signed. Who would lend anyone money knowing that some judge, or some member of the treasury department, can come in and arbitrarily change the amount owed AFTER the money is lent?
The key to unfreezing the credit markets is to go back to the rule of law - government enforcing legal contracts, not government stepping in and changing the terms of legal contracts. The firm foundation of capitalism is government protection of the right to own property (in this case cash), so everyone knows what the rules are and what to expect. Since the government is abrogating that responsibility, no one knows what to expect, so they fear doing anything.
"But wait, there’s more."
In the name of fairness, charge the seller a windfall profits tax, equal to the amount the new buyer was cruelly gouged and taken for. Use the revenue from the windfall profit tax to reduce the debt of the struggling home owner. Simple effective and fair.
What’s the difference between someone not voting, or someone unable to vote? I may get hit by a bus on the way to vote, so should I not be able to complain about who others have elected? Besides, there’s a chance I may write in Fred T.
I think McCain is onto something.
If we’re going to bail out gamblers and bundlers of mortgages, then why shouldn’t some of that money go to the holders of the mortgage ON THE BASIS of what is best financially in terms of the government spending less money or getting more of its money back.
We’re giving out the money anyway, and McCain attempted to stop the entire bad-loan scheme for the last decade, but he was ignored. Now, the people who approved that scheme are being rewarded in public opinion and the guys who opposed it are being vilified.
Taking over Freddie/Fannie means that the government ALREADY owns (or controls) a lot of these mortgages. If some bank in China bought a security based on mortgages bundled by F/F, and if those mortgages are highly over-valued, then WHO along that entire chain did NOT know they were buying mortgages from a hyper-inflated mortgage market?
I’d say that the one MOST likely not to have known were some young adults getting into their first mortgage.
I would target those who have only ONE house loan in the last decade for help. That would cut out those who were flipping houses in an inflated market.
AMEN
Nice to see that everyone doesn't drink the Kool Aid
I will reserve judgement on her until after she’s been in DC for a few years.
well, duh - one is a voluntary choice, one is not.
If you can't understand that simple concept - no other explanations will be understood by you.
I have already voted. Absentee Ballot. For Chuck Baldwin
Actually I feel sorry for Sarah. How in good conconice we can vote for her after she worked for Mccain for 4 or 8 years. You he will trot her out when we complain. Trot her out to sale his socialism.
Hey, you're on to something there. Let's see. The govt. takes my money (because I'm paying my mortgage) and gives it a guy who scammed the system in the form of equity. He sells the house and takes the equity (my money) and spends it on bling, I-phones, etc. The economy jumps and well, I, and the other millions that supplied the money for this will just go under because of ridiculously high taxes. And then the cycle can start all over again.
I hope you're following this closely!
Then, before you know we'll all be rich with equity once again.
Have you ever heard of a pyramid scheme?
This is rediculous!.....I’m only voting for him because it’s an anti-Obama vote. He’s nuts!
You have to vote for McCain if only to block the judicial appointments whacko Barry would make....
Lucky you, I didn't even have that option,the spineless republicans are letting a seat go to the senate and congress. it is just the dems vs the greens. I voted dem for senator because he isn't too bad. I wanted to kick out the representive so I voted for the green.
We cannot allow the principal to be renegotiated in order to keep people in their homes. If they paid $300,000 for a house, then they took the risk that it could someday be worth less than that.
To allow them to renegotiate the principal down to $150,000 is to give them $150,000 of my money and your money. They should renegotiate the terms of the loans so that they can make the payments, but we cannot allow the principal to be reduced. If it requires 0% interest loans or negative amortization loans, I can live with that.
But if you allow them to renegotiate the principal, then not only are you giving them money now, but these people will be the biggest winners when the market turns around. I'm sitting in my $450,000 house that is now worth about $300,000 and when the market turns around and my house is once again worth $450,000, then I've only broken even.
But the guy who gets his principal reduced not only gets to live in the house for 10 years and pay a lower payment than everyone else, but when his house is worth $300,000 again, he has made $150,000 while I've only broken even.
This idea is beyond foolish.
Sorry x, we usually agree, but not on this one.
right there is why I dont fear an Obama presidency, we might rise up against. WIth mccain, you guys will go along and find something positive.
haha, you think he will nominate a conservative. remeber he likes to reach across the aisle!
I wish people would think of a house as a place to live instead of a money vehicle. I was smart enough to get a fixed mortgage at 28 for 39k, yeah they said I could afford a 75k-100k. I really didnt see how, I had lots of tough times too. 5 years later I refyed from 8.5 to 5.6 change the term from 30 to 15 without increasing my payments. it is awesome. I have probably done 20k of work on the home in the 10 years I have owned it it probably still isnt worth a dime over 39k. AND I DONT CARE. I bought it to LIVE IN!
Correction ... According to the IRS webaite at ...
http://www.irs.gov/irs/article/0,,id=179073,00.html
... things have changed.
As of 2007 — in most cases — mortgage relief is probably not taxable.
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