As much as I love my current home, it's too small to raise a family. After many years of responsible home ownership, I should be able to purchase something larger and more expensive, provided I can afford it. But when the price of that larger home has been manipulated, artificially maintained above it's real value, then it really doesn't matter what I can afford. Let's put aside the imagery of soviet era housing assignments, which is what this would result in by way of unintended (I hope) consequences. Let's forget the question of fairness where some people will get to remain in larger homes they could not afford, at goverment backed interest rates and government contributions to the principle, while responsible Americans like me are stuck in their responsible homes with their responsible interest rates and responsible principle. Why would I buy a house whose price is artificially high? Why would any bank these days provide a mortgage for a purchase of an overvalued home? Answer: I wouldn't and the banks wouldn't, and that's the problem here. This plan has no concern for any of these important questions, it just puts off the inevitable cost correction of inflated home prices for just a few years more (I'm assuming about 8).
So Many Strawmen, Crows are Endangered
Liberals suggest that all guys like me can do is complain about these policies without providing alternative suggestions. Fact is there are many alternative suggestions that just haven't been listened to. Here's one: If people can't afford the home they are in, then perhaps the government can help find them a new home to buy or rent that is within their means. Simple, keeps the market functioning as it should, but unfortunately, this wouldn't mean a major increase in government spending or control, and actually implies people have to deal with consequences of their actions, which I'm now learning is terribly unfair.
The president himself is no stranger to strawmen, using one most recently in his prime time conference, "What I won't do is return to the failed theories of the last eight years that got us into this fix in the first place, because those theories have been tested and they have failed." Can we be specific? If we are talking about the Bush tax cuts, then I'd like an explaination dotting the line from those cuts in taxes apparently for "the wealthiest few Americans" to the current mortgage mess. There simply isn't one. Moreover, there is plenty of blame to be shared between both parties for the current mortgage mess, Dems for pushing politically correct lending schemes on banks, Republicans for going along with it. Those failed policies are what should be abandoned. But Obama's housing plan seems to double down on the real failed policies, all the while demonizing an actual tried and true method for stimulating the economy - tax cuts.