McCain Changes Mind on Solutions to Mortgage Mess

Senator McCain reversed his position to let the market sort out the mortgage mess. Yesterday he talked about “using all the resources of this government and great nation to create opportunity and make sure that every deserving American has a good job and can achieve their American dream.” This is in sharp contrast to his comments on March 25th when he said:

I have always been committed to the principle that it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers. Government assistance to the banking system should be based solely on preventing systemic risk that would endanger the entire financial system and the economy.

John McCainI have much admiration for Senator McCain. In fact he is my man this year – especially considering the fact that the Democrats can’t get their act together and seem to offer nothing but the same old “government fixes” and have not demonstrated to me that they are capable of strong leadership. The fact that Hillary is offering to spend $30 billion to fix the mortgage mess, just makes me scratch my head in complete and utter disbelief. The main reason why I’ve become more and more of an economic conservative is because I think one of the fundamental problems of the US economy is overspending by the federal government.

To think that President Bush in 2002 was the first president to sign a $2 trillion budget and will be the first to sign a $3 trillion budget is mind boggling! It’s almost like we’re building a house of cards that will one day just collapse on its own weight. I know the smart types will have a lot of “intelligent” ways of explaining this, but from a gut check point of view, simply spending by printing more money just doesn’t seem right. Borrowing and spending doesn’t seem right either. To think that the bill will never come due is just silly and irresponsible.

Having said that Senator McCain is offering a modest proposal to help struggling homeowners. It would help 200,000 to 400,000 homeowners and cost $3 billion to $10 billion. His program would apply to people who were falling behind on mortgage payments on their primary residences. These homeowners would need to demonstrate that they would be able to meet the terms of a new, 30-year fixed-rate mortgage.

Senator Obama also has a massive government bail out program for homeowners. However, I found this bit of news kind of interesting:

Barack Obama went to New York Thursday and blamed lobbyists, greedy businessmen and complacent Washington politicians for creating “an ethic of greed” that led to today’s foreclosure crisis.

Not long after he left the stage, the Democratic presidential hopeful attended a fundraiser held by his campaign in a room in the Manhattan headquarters of Credit Suisse, one of the major investment companies caught up in the subprime lending mess.

I guess the two step dance is an integral part of the art of politics. It is practiced by all who seek the nations highest office and involves speaking from both sides of the mouth and relying on people to not “remember”. No wonder I’m not a politician!

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