The Fallacy of Obama’s Foreclosure Plan

I am adamantly against President Obama’s new $275 billion foreclosure prevention plan.  The idea of helping people stay in their homes is a noble one, however government is ill-equipped to take on such a task.

The main argument I’ve heard is that foreclosures are bad for everyone because they lower the value of homes in your neighborhood.  Therefore, we have to help people avoid foreclosure and stay in their homes.

My question to anyone who supports this plan is simple:  How will helping a person across the country avoid foreclosure help my property value?

If we wanted to help our neighborhood home values so much, why wouldn’t we all pool our money together and get $10 from each household to go to a fund to help pay our neighbor’s mortgage?  That would do more good than Obama’s massive spending plan.  Wouldn’t we, as a neighborhood know who to help and who to let fail?  Wouldn’t we be able to see what homes are worth saving?  How is a government bureaucracy going to know better?

The amount of faith we are placing in the Federal Government baffles me more and more every day.  We continue to think that politicians in Washington who have never been to your neighborhood are smarter than experts that work there every day.  If I really wanted to pay for my neighbor’s mortgage, I would.  What I really don’t want to have is my tax dollars used to pay off someone all the way across the country.  The program makes absolutely no sense.

It is the constant meddling of government in the markets that is dragging our economy into a deeper hole.  Until we let the market work, we are going to keep delaying the inevitable.  Even if the government reduced the interest rate to ZERO on 40% of the homes facing foreclosure, the people still wouldn’t be able to make the payments.  Why waste our tax dollars on supporting something that is bound to fail?

Staving off foreclosures sounds like a great idea, but in reality, Obama’s plan is just spreading the wealth all over the country, taking your tax dollars and giving to someone across the country who made bad decisions.

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6 Responses to “The Fallacy of Obama’s Foreclosure Plan”

  1. sarcasmagician Says:

    You are placing faith in a community of neighbors, instead of trusting your government? Granted that generalizing everything on a national level might not work directly for you, but no offense, solving the USA’s problems is more important than solving your own. I’m not saying Mr. Obama’s plan is legit (since I haven’t really looked into it), but your idea for the neighbors to “decide who to let fail” is cruel and unfair. How do the neighbors decide who to let fail? Based on how much they like their neighbors? On how well their kids behave in school? On how often the dog takes a dump in your front lawn? This seems a little shaky to me.

    • bevans623 Says:

      I know it’s hard to imagine self-government as the Founding Fathers wanted, but bear with me. We have been so conditioned to think that government is the only way, that we lack the imagination to think outside the box. We have been told that the free markets failed and we need the government to step in, when we haven’t had free markets since the Federal Reserve was created in 1913.

      I have much more faith in ourselves instead of a government that is thousands of miles away. Why should we trust the government to begin with? Do they know what is best for my neighborhood? Have they ever even been to my neighborhood or yours for that matter?

      Honestly, the USA’s problems are all of our problems. It is our tax dollars and probably our kid’s tax dollars being spent right now. Why should they go to support someone who pulled out all their equity to buy ATVs and a toy hauler and now can’t make the payments? We should first offer refinancing to those that have lived within their means and are current on their payments. Why support those that are bound to fail? It is just throwing money down the drain.

  2. sarcasmagician Says:

    I agree with you when you say that the government might not have a good idea of what your neighborhood needs, but I would be pretty freaked out to know that the faith of my life is in the hands of my neighbors.

    You are basically saying thay you are against any form of taxes, and that you should be able to decide what you want to do with your money without going through a middle man (the government in this case). This would absolutely destroy the whole idea of “United” States, a country where people feel the same nationalism.

    Because whether you want it or not, if there weren’t any taxes, I’m pretty sure the average american would not spend or give money more than it is required. I dont’ have numbers here, and I admit that you might be in a different situation, as I do not know you, but it’s a general impression. If the government doesn’t collect taxes, those people will not rely on private donations to pay their mortgage.

    Maybe they don’t deserve it, because they have been operating really bad financing plans. Or maybe they were just unlucky, and invested in the wrong company. Or maybe… You get my point. The United States were founded upon the idea that their citizens would help each other, and I have the pessimist impression that they need someone to help them help each other.

    It happens that the centralization of that government recuperating and distributing taxes makes it so that you might pay for the restructuration of the home of someone who lives 2000 miles away from you. That is the price to pay to be in the United States. You may see it as socialism (and God forbid that this word may ever be used as an insult) or as communism, but it is simply the result of centralized and organised mutual help.

    • bevans623 Says:

      Thanks for keeping the discussion open. You know, we didn’t have an income tax until 1913, when we passed the 16th Amendment? So your “the foundation of America” argument kind of goes out the window.

      My views are idealistic, and I truly believe that if government didn’t get involved, we would still be able to help the needy and support the poor. But since government is there, we just say “it’s the government’s job” and don’t consider any alternatives.

      We pay almost 30% of our earnings in taxes each year. This goes to support all sorts of programs that are unnecessary and wasteful. I’d be happier paying taxes that I know have direct benefit and do not go to pay the salaries of countless government employees.

      Take education, for example. We pay taxes to the Federal Government and goes through all sorts of layers and then we might get money to a school in our neighborhood. Probably for each dollar we send, we see a 10 cent return at best.

      Why not eliminate that from the federal government from the equation? We pay our taxes to the local governments and let them fund the public schools. Then we would pay less taxes because they would be spent more efficiently, and we would see a direct effect from them.

      But back to the discussion on foreclosures. Remember from the American Revolution, the slogan “no taxation without representation?” That was the colonist response to the British taxing them without a voice in the matter.

      What’s the difference now? Our tax dollars are being spent without our say at all. I would say the majority of Americans would not want their tax dollars to go and pay for someone else’s mortgage, especially when they aren’t getting any assistance at all.

      Rather than sitting back and accepting our money being taken from us and spent on all sorts of pet projects and “stimulus,” why not raise our voice? Our future is being spent to prop up a failed system. We can’t keep printing money forever without killing the dollar, but our current path is heading that way.

  3. sarcasmagician Says:

    So you do not believe in the structure of United States, and you would rather have several little nations, instead of a centralized government that does general job, including collecting taxes? Or are you simply talking about the taxes, and recognize the government does other things correctly?

    Federal taxes should not be collected, and only local taxes should be paid? That is one way of seeing it, but it would only work for what you are talking about : helping the poor and then needy. Taxes are useful for a number of reasons, and this is only one of them. If this one is lowered to a local level, there will still be people in charge of the national taxes. In the end, more people will end up collecting taxes, and more “layers”, as you call them, will be created.

    Taxes need to be collected, for a bunch of reasons, and if the federal government is going to collect some, it might as well take care of all of them. It will be simpler and cheaper for everybody.

    • bevans623 Says:

      The entire intent of the Constitution and our Founding Fathers was to have a limited central government, and strong state governments. We are exactly the opposite of that now.

      We declared our independence from the British because we didn’t want to be ruled by a monarchy thousands of miles away, where we had no voice. How much different is the situation now? We elect our Washington politicians, but how much is our voice heard? Are those politicians serving themselves or the electorate? The government is acting on it’s own with the entire bailout scheme no matter what we say.

      We need more freedom and liberty, not more government. We need free markets and not government intervention. The market will find a way to reflect the real price. Instead of prolonging the situation by trying to prop it up, we need to get out of the way. Once the market has found the bottom, then let government get involved and help put things back together.

      If you’re really interested in freedom and liberty, you should check out Ron Paul and the Campaign for Liberty. They have great resources that will really open your eyes on the status of our country. Also, check out the Creature from Jekyll Island on google videos for a great lecture on our banking system. It’s about an hour long but well worth it. You’ll see why the banking system in our country is built on printed money and why it isn’t worth saving.

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