Posted by
john prange on Friday, November 21, 2008 10:53:30 AM
Honest, financially responsible citizens will be marching with pitchforks and torches on Washington and Wall Street if the newly nationalized banking system provides irresponsible borrowers with lower mortgage interest rates than the rates being paid by those who faithfully make the mortgage payments every month, year after year. However, there is a way to help overextended borrowers stay in their homes without being unfair to the rest of us -- 3 percent interest rates for everybody making house payments.
In addition to being fair, such an across-the-board lowering of interest rates would stimulate the housing industry and the whole economy. It would make housing affordable for more people and minimize the foreclosure epidemic while at the same time raising home values. Such a plan would also put a couple of hundred extra dollars a month in the hands of millions of consumers, which would revive the consumer spending on which our economy -- the auto industry, restaurants, retailers, etc. -- thrives.
President Bush could improve his tarnished reputation by directing banking czar Henry Paulsen to make this economic stimulus plan happen. If Bush won't do it as a going away present to the people, Obama and his allies in the House and Senate could make it happen. Across-the-board 3 percent mortgage interest rates would be a fair and feasible plan. Perhaps its greatest feature is that it restore a measure of credibility to the government and the banking system.
We will see which is stronger -- the government of the people or the invisible government of bankers. Let your representatives know which one you prefer.