Many of the professional economists who formally endorsed John McCain’s economic plan are expressing bewilderment with his most recent proposal to rectify the home mortgage crisis.
some quotes from the economists:
Michael Connolly, an economics professor at the University of Miami, called the idea “Robin Hood economics.”
“It will provide an incentive for people to default [on their loans],” he warned. “And they might get rid of their negative equity and take the subsidy and default on their next loan too.”
Houston Stokes, a professor at the University of Illinois at Chicago, said he didn’t agree that the government should “pay a face value” due to the moral hazard it created.
“These guys got themselves into a jam and it is now their problem,” he said. “We should not overpay. We should buy these mortgages at the lowest price… I don’t want to be accused of helping out the Wall Street types.”
after mccain made the stunning announcement during the debates, obama immediately released a counter ad stating that mccain’s plan would shift the burden from the lenders to the taxpayers.
as CNN’s factcheck describes:
McCain previously supported renegotiating mortgages with lenders, who would take losses. His economic adviser, Douglas Holtz-Eakin, told reporters Wednesday that McCain now believes having the government pay the entire value of the loans is “the only way” to begin stabilizing the housing market “in a timely fashion.”
having taxpayers foot the bill for $300 billion of bad mortgages?
this isn’t just socialism, it’s lunacy.