Maybe We All Should Vote on the Housing Bill
The great Arnold Kling provides some insight into the megagigantic housing bill, the bad boy that the New York Times describes as "a landmark shift in the government's role in the housing market, extending a helping hand to both Wall Street and Main Street...[ranking] in importance with the creation of the Home Owners' Loan Corporation to prevent foreclosures in the 1930s as part of the New Deal, and legislation in 1989 responding to the savings and loan crisis."
Mr. Kling:
Basically, the housing bill rewards everyone who participated in the excesses of the housing market and punishes the rest of us. Lately, I've been reading a lot about Switzerland. There, just about any legislation is subject to veto by a popular referendum. This is an instance in which I wish we had a referendum in this country. I doubt that this housing bill would win more than 20 percent of the vote.
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I've been telling my wife and others in my community that we should be able to vote against boondoggles such as this. On a completely different issue, but entirely related, I have thought about passing an amendment to the Constitution that makes it illegal for the federal government to own property within the continental United States, the entire states of Alaska and Hawaii, and up to fifty miles of ocean off the shores of coastal states including Alaska and a fifty mile radius around the state of Alaska. Right now, the only way I see us being able to ever drill for natural resources within the US is by passing a constitutional amendment. This is absolutely ridiculous that our politicians make arbitrary decisions about what we want without consultation from us.
But wait.
The government is largely responsible for the housing mess. The fed gave us easy money and now it's time to pay. If banks begin failing on a grand scale who will be left hold the bill. We the people. It is unlikely but conceivable that this could end up costing the government several trillion dollars. IF a few hundred billion now can save us 3 trillion later, I'm all for it.
Paul Lee...
Unfortunately, this type of short-term thinking is what gets us into long-term messes. Sound banks are not going to begin to fail, but those that do will be bought by those that are sound. Same with housing. If Fannie and Freddie goes under, their mortgage holdings will be sold to companies that can afford to manage them soundly. Government always tries to address and issue by throwing money at the problem. Do you think $300 billion will prevent the mortgage meltdown from stopping?
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