Today, President Bush used his weekly radio address to defend his administration’s policies towards the housing crisis and the economic stimulus package. The president continued to put a happy face on the terrible state of the economy. “In the long run, we can be confident that our economy will continue to grow, but in the short run, it is clear that growth has slowed. Fortunately, we recognized this slowdown early, and took action to give our economy a shot in the arm. My Administration worked with Congress to pass a bipartisan economic growth package that includes tax relief for families and incentives for business investment. I signed this package into law last month — and its provisions are just starting to kick in.”
He continued, “My economic team, along with many outside experts, expects this stimulus package to have a positive effect on our economy in the second quarter. And they expect it to have even a stronger effect in the third quarter, when the full effects of the $152 billion in tax cuts are felt.” His attention then turned towards the housing crisis. “A root cause of the economic slowdown has been the downturn in the housing market. I believe the government can take sensible, focused action to help responsible homeowners weather this rough patch. But we must do so with clear purpose and great care, because government actions often have far-reaching and unintended consequences.”
The president then discussed why he rejects Democratic proposals such as allowing bankruptcy courts to degree reductions in mortgage debt, and action to artificially prop up home prices. “My Administration opposes these proposals. Instead, we are focused on helping a targeted group of homeowners — those who have made responsible buying decisions and could avoid foreclosure with a little help.” In other words, his administration is only going to help people with good credit. If you got scammed in a subprime mortgage, and missed payments, that’s your problem.
President Bush’s solution to everything is tax cuts, and this situation is no different. “Congress also needs to take other steps to help our economy through this period of uncertainty. Members need to make the tax relief we passed permanent, reduce wasteful spending, and open new markets for American goods, services, and investment.” It is extremely doubtful that $152 billion of stimulus is going restart the U.S. economy. The reality is that those who make public policy decisions are the last to react to economic downturns. It is too late for the stimulus package to do any good.
As far as his solution to the housing crisis is concerned, what good does it do to offer people who have good credit, and have been making their payments help? By using this criterion, the president exempts the very people who are caught up in this mess. The people who are losing their homes are working middle class or lower people who were a credit risk. Why should they have to lose their homes because of predatory lenders who took advantage of them? I have a newsflash for the president, many of these borrowers didn’t know about the ARM clauses in their mortgages. Overall, President Hoover, oops, I mean Bush continues to be more concerned with the appearance of action, instead of solving nation’s problems.