Posted 2/19/2009 05:08:00 PM by Douglas

The mortgage crisis continues, unabated.

President Obama announced a plan on Wednesday to help as many as nine million American homeowners refinance their mortgages or avert foreclosure, saying that it would shore up housing prices, stabilize neighborhoods and slow a downward spiral that was “unraveling homeownership, the middle class and the American Dream itself.”

It could ultimately cost taxpayers as much as $275 billion — $75 billion in direct spending to keep people in their homes and the rest in additional financial backing for the government-controlled mortgage giants, Fannie Mae and Freddie Mac.

Well, duh. It's going to help out bad banks a helluva lot more than it's going to help out troubled homeowners. But to we even want to help them, anyway?

The plan has three components. The first would help homeowners who are still current on their payments, but who are paying high interest rates and cannot refinance because they do not have enough equity in their homes, a problem afflicting growing numbers of people as housing values tumble.

And this is where they lost me. So your hyper inflated home is worth less (according to someone) than your mortgage, and you're just going to throw the keys to the bank? What on earth for? You've still got to live somewhere. You're going to pay to live somewhere. Hell, a new car is worth less than the note the second it drives off the lot, but you don't throw it back just because you owe more than it's worth. You drive it. You get its value out of it by using it, or in the case of a house, by living in it.

The thought of spending public money to prop up the values of these overinflated homes so people that can afford their mortgages stay in them makes me want to move somewhere the notion of socialism isn't idly bantered around, but publicly embraced. Cuba, perhaps.