Free Markets, Free People

Harry Reid and the drive to preserve the big government “status quo”

Who are the reactionaries and who are the revolutionaries (progressives?) now?  Senate minority leader Harry Reid sure sounds like the reactionary:

At a Capitol Hill Press conference to announce that the Senate had agreed to a continuing resolution that will keep the government funded through March 18th, Reid was asked about GOP plans to eliminate the Home Affordable Modification Program–a program that has permanently modified nearly 600,000 loans since its inception.

“Why can’t they work on things that help the economy?” Reid asked. “Why do they have to work on things that hurt the economy? Why would they want to eliminate a program like that? Just because it came from the White House? This is hard for me to understand why they’re so fixated on destroying our government, our economy.”

What he’s talking about is the Home Affordable Mortgage Program or HAMP.  Earth to Reid — we can’t afford stuff like that anymore … not that we ever could.  And besides, it isn’t a function of government.

But Reid is convinced, as are many of his colleagues, that it is the job of government to redistribute wealth and use other people’s money to rescue those who’ve gotten themselves into a financial bind (through no fault of the “other people”).  And, of course, there’s this:

The Treasury Department had set aside $75 billion for the program,the administration promised would prevent 3-4 million foreclosures by helping people modify the terms of their loans. As of December 521,000 mortgages had been modified. That an abysmal record. But worse still is the fact that some money from HAMP has been diverted to other housing programs that are doing an even worse job of helping people stay in their homes.

"About $8.1 billion was set aside to enable certain borrowers who are current on their mortgage to refinance into Federal Housing Administration loans if their homes are worth less than what is owed on the mortgage. About 44 loans have been closed under that program." Did you get that? HAMP was poorly designed in that it was supposed to subsidize those who were delinquent on their mortgage payments, but at least some money was diverted to "help" those who were actually paying their way.

Another in  a long line of wasteful programs modified on the fly to do things not approved originally.  And that may be some sort of record – $8.1 billion and only closed 44 loans?  If you think “created or saved jobs” cost a lot, do that math.    It wasn’t the only diversion from the original program:

Another $7.6 billion was reallocated to emergency mortgage relief payments to unemployed workers in some states. The other program targeted by Republicans helps communities buy and redevelop foreclosed properties.

And there’s more.  Says an expert:

Julia Gordon, senior policy counsel at the Center for Responsible Lending, said killing the entire lineup of foreclosure prevention when tens of thousands of homes are lapsing into foreclosure each month makes no sense. "If something is not working well enough, you fix it," Gordon said. "You don’t just toss it out."

How about if something isn’t working well at all and it costs money you can’t afford Ms. Gordon?  What if it isn’t something government should be involved in – at least by the Constitution most of us were taught in school?  That’s one of our problems, Ms. Gordon – we create these wasteful bureaucratic programs and never kill them off when they’re found to be useless or costing far more than anticipated.   It is time to kill this turkey.

A $75 billion dollar boondoggle that should be cut and all we get from the reactionary Democrats and “experts” with a vested interest in continuing the farce is a fact free emotion laden argument about hurting the economy and destroying government?

Get a grip Mr. Reid.



6 Responses to Harry Reid and the drive to preserve the big government “status quo”

  • “If something is not working well enough, you fix it,” Gordon said. “You don’t just toss it out.”

    I’m guessing that, in Gordon’s mind, “fix it” = “spend more on it”.

    The Treasury Department had set aside $75 billion for the program,the administration promised would prevent 3-4 million foreclosures by helping people modify the terms of their loans. As of December 521,000 mortgages had been modified.

    Does “mortgage modified” = “foreclosure averted”?  I’m guessing not.  Rather, I’d say that AT BEST it means “foreclosure delayed by a few months”.

    Only in government can you have this sort of inefficiency, waste and outright stupidity and not only get away with it, but be REWARDED for it.

  • Fundamentally unserious about the impending crisis.

    I’m at the point where I’d basically love to see the blue states start to go belly up and pay for their actions.  I’ve really had it with them.

  • The discussion of the budget for next year should just START with the assumption everything is getting cut.
    A review can decide how much.

  • 44 Lenders, not 44 loans. Still: pretty damn egregious.

  • Thousands of homes are not “lapsing into foreclosure”, their nominal owners are not paying what they agreed to pay. Imagine if selling your home required you to provide financing for some portion of the sales price. In that case, do you think anyone would think principle reductions, interest rate cuts, etc… were are a good idea? But since it’s the “big evil banks” or “mortgage processors” or “evil union pension plans that hold RMBS”, well then go ahead. Nucking Futs!!

  • Let’s assume this problem could be addressed in some manner without being too unfair.
    The banks themselves are having difficulty dealing with foreclosures, witness their robo-signing issues.
    But the government could come up with a program to deal with this in time to help much?
    The obvious solution, by the way, would be to encourage and streamline short sales, a process already in place in which both interested parties come to a fair agreement. The problem with short sales is the debt relief taxes for the seller, and the sluggishness of the banks to accept short sales, even when it is totally in their interest.
    I think that is because Too Big To Fail means they are Too Big To Manage anything in a retail manner. But maybe there would be something the Feds could do to help speed along short sales…that is what should have been done, if anything at all.