|Source: U.S. Representative Scott Garrett- Franklin Raines-|
Perhaps Frank Raines is not the best spokesperson to be talking about financial housing assistance right now. After all, he was the President of Fannie Mae that when it went down in 2008. Which was one of the reasons for the housing crisis because of all the mortgages that FM were holding. Which help lead to the Great Recession of 2008 along with the collapse of our banking system. If you're going to bail people out and generally bailing people out is not a good idea especially for bad behavior, because that encourages more bad behavior and making the problem worst, but if you're going to bail people out, bail people out that are in trouble for no fault of their own. People that got screwed by big banks and now owe more money on their homes than they are worth. These people are overwhelmingly middle class, at least before the Great Recession and how still have their homes. But are at risk of losing their homes, because they owe more money on the home than it's worth and they can afford to pay back, their savings and retirement funds were wiped out.
Because of the collapse of Wall Street and the banking system, these one time middle class workers are now out-of-work as a result of the Great Recession and haven't worked since. Or lost their savings during the Great Recession, or a combination of some or all of these factors. And that's what President Obama is addressing with his new financial assistance program. To help people refinance their homes and retire some of their mountain size debt, so they can keep their homes. Start spending money again and jump start economic growth which would lead to job growth. The fact is we can't get our economy going again, economic and job growth, unless people especially the middle class start spending money again. Retiring some consumer debt would help jump start consumer spending again. And the only way thats going to happen, is we get a lot of our consumer debt paid off. Refinancing homes giving homeowners the resources to refinance their mortgages and paying off their debt.
Which is why I support a few things in this area.
Home refinancing, like some type of housing insurance system. To accomplish this that people would pay into based on how much their property is worth. That they can collect from when their home is worth more than they can afford to pay back to help meet their mortgage payments. As well as public assistance for people that they can pay back who have underwater mortgages in the short-term and also some type of tax credit or tax deduction. That would be temporary that people could collect to pay down their debt.
And after that an extension of the Payroll Tax Holiday for workers and apply that to employers as well. For the middle class and low-income people, so they can have some extra money to spend. And then a Consumer Tax Credit that people can collect, but they can only spend it. By a certain amount of time to help boost consumer spending.
We'll never get the economy going again which means strong economic and job growth and a falling unemployment rate, unless we start spending as consumers again. And we can't do this until we retire a lot of our consumer debt and get past the housing crisis, a big part of the Great Recession. I'm all for tax cuts, regulatory reform, infrastructure investment and creating a national energy policy, that leads us to energy independence. But none of those things mean much, without consumer spending. And we need to retire a lot of our consumer debt before we can get the consumer spending that we need.