McArdle: There Is No "Someone Else"

h/t Instapundit for this item on Obama's housing plan by Megan McArdle:

Me, I think if we think homeowners should get free reductions in their interest rates, we should pay for it, not make a law forcing someone else to do so.

I think the plan warrants stronger opposition, take serious exception to its "bounty" provisions - and Americans have to stop thinking that there is some "someone else." The new Murtha scandal, as much as anything else, tells us that. The corporate interests behind the mortgage industry will get taken care of through Washington. They'll do just fine. Whether as consumer, or taxpayer - "we're," as in the average Joe or Jane that pays bills and taxes, going to foot the bill for this. The bounty provision is so sad as to be laughable:

A novel approach in the Obama plan is a "bounty" it would pay as incentives for lenders, borrowers and mortgage servicers. The bounty would reward the servicers and lenders who modify mortgages according to the rules. Borrowers would get $1,000 a year for five years for staying current in their renegotiated loans.

So people who traditionally pay their mortgages on time have to pay $1000 a year to people that traditionally haven't so they might start? Shouldn't we be rewarding the people who didn't cause this problem, as opposed to the ones who did? What's next, bonus credit card points from Uncle Sam for paying your credit card bill on time?

Do we want government running a cash incentive plan like that? I don't. And banks get a bonus for doing deals that ultimately benefit them, as the alternative would be foreclosure and likely a larger loss?

I just can't see how a transfer of wealth from people who acted responsibly to people that didn't under any circumstances sends the right message. Ultimately that message is that the consequences are always shifted to those who caused no problem and away from those who did.

Comments

[Georg Felis]

Will this transfer of wealth from the responsible to the irresponsible be taxed as income? Will it reduce the amount of their welfare...um... I mean stimulus check?

And why not?

[templar knight]

Does anyone know what percentage of people in foreclosure are black, hispanic, white or asian? I would like to know.

[Lala]

In New York City, and on Long Island, the neighborhoods with the most foreclosures are minority.
There are some in the better parts of Manhattan but I think these are speculators or people who lost their jobs.
A lot of the foreclosures in Florida, are, I believe, second homes and condo speculators. Same with Vegas. I could be wrong but that's what I think.

[mark l.]

why stop at the bounty on paying their mortgages?

how about a bounty for not reproducing? nancy pelosi has already told us that children are a burden.
pay 200 bucks to those who show up for depro-provera shots, every 3 months.