Obama’s August Surprise
No, it won’t be a fake terrorist attack or anything like that. It’s all speculation anyway, but the rumor is that Obama is planning an $800 billion Main Street bailout.
If the rumor is true, Obama will be ordering Fannie Mae and Freddie Mac to forgive some of the millions of underwater home mortgages. The Treasury Department denies this. The linked article asks:
“Will Obama really drop this stunning political and economic bombshell so close to November elections, and if he does, who will it help politically?”
In case there’s any truth to this rumor: Would a huge Main Street bailout help the economy? Would it help the Democrats politically? And is it the right thing to do?
What say you?
Labels: Main Street bailout, Obama August surprise
posted by Tom Harper @ 5:25 PM
14 Comments:
I don't see this happening close to the midterms. Only because the righties would get all their panties in wads screaming see, Fannie and Freddie corrupt orgs getting money when little Joe the builder is closing down his shop. Don't see it happening but if it does, hmm it would help the little guy certainly but would they be able to have everything up and running before Oct, I somehow doubt it, the way this government is paralysed right now, with the reps being the obstructionist asses they are being.
I say, it couldn't Hurt. Think of Mel Brooks saying that sentence please.
It's funnier that way.
I'm with Jess. I don't see how it would goose the economy quickly or enough to justify what it would do to the deficit. I doubt it would make any noticeable difference by November.
If the rumor is true, there's too little information provided to be able to evaluate it sensibly.
So you've got couple A who are upside down with their home's current market value and the cost of their mortgage. Say their payments go down enough to ease their financial pain and anxiety. With the economy the way it is, does anyone think they're going to go out and buy a new SUV or replace all their furniture?
Then you've got couple B, who get their payments dropped enough that they can keep their home and not be foreclosed on. Assuming they still have their jobs, is this going to make them feel secure enough about their jobs to go out and spend? I don't think so.
A better way would be to have a four-year tax excusal for persons making up tp $35,000 a year and families making up to $48,000. For persons making $35,001 to $80,000 and families making 48,001 to $100,000, excuse taxes on the first $20,000 and $25,000, respectively.
On the other end, raise the top marginal tax rate to 85 percent.
You still need money to own a home with maitenence, insurance, etc. There are all kinds of hidden costs with home ownership. Without jobs where's the money going to come from. Or are all those homes just going to fall into disrepair and become slums?
During The GW Bush Days there were constant Midterm rumors that he was going to use his influence with the Saudi's to drive the price of gas down so everybody will think Republican.
Never happened
Erik
The thing that constantly occurs to me is what would the Rethugs do differently?
They'll be bailing out their interests too, and are we bailing out our interests in the right way?
As long as the taxpayer keeps paying, I guess, it's all good.
Snark ending.
S
I think it would be a good thing since HAMP was such a dismal failure because the banks decided not to apply. I would give that money to small/regional banks so that they can also take out loans to increase spending on jobs for small business. All of the big banks are taking their paltry $1000, intentionally losing paperwork and putting people out of their homes. This would be a HUGE positive for O'bama and you can let the repubs scream as well. I doubt the Bush tax cuts for the weathy will go through congress, but if it does, O'bama should veto it.
I don't think so either. The Dems said that after the "big" stimulus package they passed the last time that it would be hard to get anything that big done again. Their plan was to get smaller bills passed that could be done by reconciliation.
A large bill would work. Remember what FDR did. His programs amounted to 40% of GDP. But I do wonder if spending bills have to be budget neutral where they'll make cuts to pay for it.
By the way what part of Pittsburgh are yons guys from? :-)
$800 billion spent on actual infrastructure would do much more long-term good than a Main Street bailout.
The Rushpubliscums, of course, will do everything in their power to stop it. And the dems, with spines of rubber, are almost sure to cave.
I don't see it because Obama is too beholden to "conventional wisdom" regarding the economy and what it will take to jumpstart it again. A main street bailout isn't in the cards, according to "conventional wisdom".
Jess: You're probably right. It's unlikely, and any benefits would take too long.
Tim: Right, couldn't hurt.
SW: I like your tax plan better than the rumored Main Street bailout.
Kate: Jobs are definitely more important. There's a jobs bill that finally got passed; I hope it'll help.
Erik: I remember those rumors. This is probably in the same category.
Suzan: The Rethugs sure came through for Wall Street. I'd be in favor of this Main Street bailout if I thought it would help.
Lisa G: Loans to small businesses are crucial. That's another thing the GOP keeps stalling and filibustering.
Demeur: Good question, how they'd pay for this.
I'm from the Squirrel Hill section of Pittsburgh. We moved when I was ten, but that's the place that's imprinted on me. My parents weren't from that area originally, so I never had that Pittsburgh accent.
JR: Yes, that amount spent on the infrastructure would be a lot more useful. And we can always count on our rubber-spined Democrats.
Bee: That good old Conventional Wisdom would rather shower billions on large corporations, and some of it will trickle down onto us little folks.
I think this is something that Obama could do by executive order, while spending a comparable amount on infrastructure would have to pass the Senate.
I like the idea, but not the timing. The Republicans could use it for propaganda, before the effects could demonstrate the wisdom of the move. On the other hand, it would energise the Democratic base.
TC: You're right, I think this is something Obama could do through an executive order instead of flailing and jumping through hoops for the Republicans' amusement.
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