Click here for update: McConnell says his “goal is not to kill the bill.”
Where is my Mitch McConnell head-banging graphic? Why did he make me have to dig it up again first thing Monday morning? I can’t take it. I really can’t:
Over the weekend, you see, Sen. McConnell gave the GOP radio address. The subject was the “stimulus.” Generational Theft Act, Crap Sandwich Supreme, Porkulus, Spendulus, Debt Stimulus Plan. Pick your name. It’s all B.S. And Americans know it. Senate debate begins today at 2pm Eastern. On the heels of the House Republicans’ unanimous rejection of the Obama/Democrats’ Big Government package and shifting public opinion against the plan, you might think the Senate GOP minority leader would get a clue:
Big Government = Bad Idea.
But nooooo. Sen. McConnell knows how to extinguish any fledgling flame of enthusiasm among grass-roots activists who were starting to think the Republican Party was returning to its fiscal conservative principles.
Fuhgeddaboudit, people. Sen. McConnell’s grand idea to “fix” the stimulus is to create new, government-backed mortgages.
Is he freaking kidding, you ask? No, no he is not:
Under the mortgage plan, any ”credit-worthy borrower” could get a government-backed loan at 4 percent. Details were not available, but Republicans have talked about having the government guarantee the 30-year loans for a year or two. Thirty-year fixed rates recently have been around 5 percent.
No cost estimates were available for the McConnell plan. Democrats, who will be crucial to its success since they control 58 Senate seats, have not ruled out backing such a plan, but wanted to see more details. The Senate version of the stimulus bill is now costing $889 billion, about $70 billion more than the one passed this week by the House. The increase is largely due to changes in tax breaks.
McConnell estimated Saturday that under his mortgage plan, the average family would see its monthly mortgage payment drop by $466 a month, or $5,600 a year. Over the life of a 30-year loan, that’s a savings of $167,760.
Question: Why should government be guaranteeing mortgages? Isn’t that what got us into trouble in the first place?
Question: Why should government be setting mortgage rates? Aren’t those supposed to be set by the market?
Question: How can Republicans on the one hand argue that Fannie Mae, Freddie Mae, and other interventions in the housing and mortgage markets were bad and then at the same time propose a doomed policy along similar lines?
Question: Have Republicans learned nothing from the housing meltdown? “Credit-worthy” borrower = anyone with a pulse. Who will pay when these borrowers default on their loans? Taxpayers will.
Question: Who will sell these mortgages? Probably the banks. What incentive do they have to ensure the credit-worthiness of borrowers, since they will bear no risk if the borrowers default? Sounds like a formula for another mega-subsidy to the banks…to go along with all the others.
Question: Why do Republicans continue to believe, as Democrats do, that the number one goal of economic policy should be to prop up housing prices? (Recall McCain’s moronic $300 billion mortgage plan.) Why not let the market determine the correct level of housing prices? Clearly, in many parts of the country, housing prices are still too high.
The proper response by government is to let the market allow prices to decline.
The problem is too much borrowing, too much artificial inflation of home prices.
On what planet should the Republican/conservative alternative be to encourage more borrowing and to prop up prices so they don’t fall “too much?”
This is more of the same old, same old: Kicking the can down the road. Real change — fiscally repsonsible change — means sucking it up, allowing housing prices to fall, and getting the government out of the home-lending business.
What a disaster and — coming from Sen. McConnell — how sadly, utterly predictable.
More than a year ago, I called for the GOP to distinguish itself from the Big Government Democrats running for president and demagoguing this issue. Remember?
The bipartisan meddlers in Washington are going to make the housing “crisis” drag on for a decade when, if they had adopted the suck it up plan in the first place, it would have been over by now.
Time to flip the elephant over again: