I have previously written of my opposition to this legislation in its earlier form. It is, once again, the moral hazard writ large. But I am feeling somewhat chastened by the near collapse of Fannie and Freddie, and, since that piece of the bailout puzzle is folded into this bigger bill, I now support it.
But, once again, with my nose held and a serious case of pissedoffia.
The reasons not to support his bill are manifold, but I won’t go into them all again. Read the post linked above if you’re interested. There is, however, one key piece of this bill that should tell you all you need to know about it. The bill includes a provision that raises the federal debt ceiling by $800 billion to a grand total of $10.6 trillion (yes, with a T).
That cushion, which I guarantee you will be borrowed and spent, will bring our national debt to over ten trillion dollars! You, the American taxpayer, owe that money. You, the renter who waited patiently until you could afford a home, will bailout the dickweed who couldn’t afford the McMansion but bought it anyway with an ARM. You the responsible borrower will see your (or your children’s) taxes go up because Wall Street, banks and mortgage companies, and irresponsible borrowers decided home prices would go up forever (and by double digit percentages).
This legislation may well help put a floor under the housing freefall. Our economy needs this. But more importantly, our economy needs to evolve from the Reagan/Bush borrow and spend policies of the past to become a society of savers who balance their budgets and live within their means. Furthermore, Fannie and Freddie need to be radically altered and our financial system need serious regulation and reform.
This bill starts that ball rolling, but it doesn’t go far enough. There must be limits to the greed that created this crisis. It is clear the market cannot self-regulate. So if we’re going to bailout Wall Street and Main Street, then the whole town is going to have to start playing by new rules. Read up on the bill here and then get pissed (and do something about it).