McCain’s terrible idea
The only thing that really caught my attention during the debate was McCain’s proposal for buying up bad mortgages. This struck me as an atrocious idea.
John McCain
First of all, housing prices need to come down. Responsible and prudent people like me decided not to buy during the last four years because we thought the housing market was overpriced. This was not due to deep insights — all you had to do was read the news to know there was a bubble in housing. Now we find out that John McCain wants to bail out the irresponsible and improdent people who bought homes they could not afford. This makes me just sick to my stomach. What about me? I lived within my means. I’ve been trying to save 20% down (which in New York means saving $100K to buy a half million dollar 500-square-foot studio — and still being stuck with $600 a month in maintenance on top of your mortgage). I made the smart move and rented, but now the idiots get bailed out?!?
Second, not only would this suck for me personally, but this would suck for America. It would be a moral hazard. People simply have to pay the price for taking risks. If they don’t, they won’t stop taking risks. Right about now it sounds like the government is going to bail out everyone and anyone (Bear Stearns, Fannie, Freddie, AIG, $700 billion for the whole financial sector, and now hundreds of billions more, under McCain’s plan, for homeowners who borrowed more than they could afford to repay) . I would frankly rather suffer a 5-year depression (which would hopefully teach people in this country the value of working hard and saving their money) than just keep bailing out everyone and setting ourselves up for even greater crisis later. Our national debt is at $10 trillion, for crying out loud. We can’t afford to bail anyone out!
If we don’t watch out, the US government itself could go bankrupt. As soon as the world loses faith in our ability to pay our debts we won’t be able to borrow money any longer. When the US government defaults, that will be the crisis to end all crises. People think it simply can’t happen, but if we keep bailing everyone out it will. We need to buck up and take our medicine.
Michelle Malkin (who is no fan of Obama’s) has a great post on McCain’s terrible idea. A key quote:
He spent the entire debate assailing massive government spending — while his featured proposal of the night was to heap on more massive government spending to pursue home ownership/retention at all costs. If Obama had proposed this, the Right would be screaming bloody murder about this socialist grab.