Both presumptive Presidential Candidates, in their efforts to promote palatable bromides, are trying to “do something” to address this country’s current financial fiasco.
The most outrageous idea, allegedly seriously discussed, concerns the foreclosure debacle and gigantic mismanagement and financial losses of Fannie Mae. According to the media, 210,000 homes are presently foreclosed on each month, with no immediate end in sight. The seriousness of the large number of defaults can hardly be overstated. The “solution to the problem” allegedly contemplated is simply to allow Fannie Mae to arbitrage the foreclosed and about-to-be-foreclosed houses, and to market them as “rental purchases” at “reasonable rents” to occupants and to voters who do not have a large enough down payment to buy a home, thus guaranteeing eventual ownership. At whose expense? This is preposterous: the promise of something for nothing, except for a vote! First, the government bail-out would force the taxpayer to be obligated to pay for the losses of the largest financial mortgage institution; second, it would force the taxpayers associated with the rental industry (including MH owners) to compete in the market with the same quasi-government institution. It would reduce every homeowner’s real estate value. In fact, it would devastate the entire residential real estate market for years to come. We would, in effect, be obliged to finance our own competition! Who would survive?
The idea is incredible, and I would like to believe, one that would seriously backfire on its champion(s).
Is this the stuff of rumors, food for doom-and gloomers and congenital pessimists? It could not happen in the Land of the Free . . . or could it?
Is such an immoral, and gigantic, transfer of wealth even remotely possible? I don’t know.