The common refrain in response to these issues, voiced by the President himself, is that Republicans raised the deficit, so any debt hawkishness is now hypocritical. Never mind the realities Bush had to deal with at the time, Worldcom, Enron, 9/11, Iraq, Afghanistan, and so on — none of that matters, and in fact, was probably all Bush's fault too by this line of reasoning. Never mind that Obama himself chastized Bush/McCain for increasing the deficit during the '08 campaign. The entire episode drips of insincerity while eerily reminiscent of a kindergarten squabble over birthday cake.
Help Me Obama, You're My Only Hope!
Next up is Obama's housing plan introduced yesterday. Some aspects of the plan, most notably the lack of draconian government interference, and instead a reliance on incentives for the private sector to adjust overvalued mortgages, are actually better than I had expected. But to really agree with the housing plan means suspending any critical thinking and concern for the long term.
For example, is injecting even more money into Fannie and Freddy, so that they can back even more loans, really the right way forward? Weren't Fannie and Freddy, and their backing of loans that shouldn't have been made in the first place, at least part of the problem?
With regard to providing government incentives to banks for rewriting existing mortgages, does anyone really believe that this won't have drastic consequences to the future of America's economy? We're not just talking about a new relationship between private banking and individuals who apparently don't have to be responsible for their own decisions, but also in terms of interest in investment in our economy. Take hope and change out of the equation for a second, would you invest in an economy whose participants can arbitrarily rewrite the contracts that they enter into?
As a homeowner who will not be taking advantage of some of these primo giveaways by our new President, I have been spending a lot of time wondering about my own home's value. Namely, what is it worth when prices throughout the country are being artificially elevated by government action? The response to this question is a false-choice strawman: Would you rather have all of your neighbors forclosed? What would the value of your home be then? As bad as our economy is, most Americans will not lose their homes. What we will lose with this plan however, is the ability to purchase new homes for what they are actually worth, and this is a much more devastaing outome.