I haven't heard mention of forgiving any of the debt. I don't understand that, because most of the debt is bad because ordinary citizens have found themselves in a house that is mortgaged for twenty-thirty percent more than the property is worth and is mortgaged at higher than normal rates.They aren't going to bother with paying it off. It's hard to feel sorry for them. I've friends in the new house building business. Brokers were eager to write high-priced mortgages over and above the price of the house without a proper credit check. "Don't worry," they'd say, "we'll keep the payments unrealistically low at first, and the way the market is booming, you'll be able to re-finance with a standard mortgage in a couple of years. Why, you'll even make a pile of money on the deal."
Yeah. I really want to add to the national debt to bail these jokers out. They knew what they were doing; the risks they were taking. Still, wouldn't it be cheaper to work from that end? Cut the interest rate on the loans a few percentage points, Government pays the difference. Cut the principal 10 percent. That will make a bad loan good. And, it's not like the house prices will slump forever. Don't create another agency. Let the mortgage companies report it on their taxes, get a credit. I'll bet doing it this way would be a much cheaper route.
But no. Bush wants us to help the same persons who milked millions out of the tax cuts he pushed through the Republican-dominated congress during his first term. Tax cuts that a number of wealthy Americans claimed were too much and unfair to the middle class. Tax cuts that caused record deficits and forced us to increase the national debt in order to fund important programs and the Iraq war.
In my opinion the first and most important litmus test for a conservative politician is fiscal responsibility. Time and again our president has failed this one miserably. Look at how the national debt has ballooned during his time in office. The second test is less government. Check both the increased cost and the increased number of governmental agencies and employees over the last seven plus years. Another serious failure.
Two years ago, during the last congressional elections, social security default was the bell ringer. Don't hear much about that these days. I predict that by the next congressional election two years from now, just the interest on the national debt will be a larger bill than social security. We may have to borrow money to pay it!
Some interesting links: