Obama proposes cash for caulkers?
Obama today unveiled a plan to offer tax incentives for those individuals who are willing to retrofit and upgrade their homes in the name of energy efficiency. No, this is not a sick joke, this is the brilliant economic plan of the Obama administration. Don't believe me?
Before I explain, keep in mind that our financial banks despite the repaying of TARP moneys are still principally broke and nothing more than zombie banks. Most of the balance sheets are littered with toxic junk consisting of readily appreciating mortgage paper as foreclosures continue to rise. No one has actually written off these losses because that would mean bankruptcy so instead the day of reckoning will simply be postponed. There is this nagging matter of Option ARMs, a group of mortgages issued not too long age that are set to reset sometime in 2010 and when they reset, the chance of people refinancing their loans on homes whose values have plummeted by 20-50 percent are slim to none. There are going to be more Option ARMs failures than there were subprime failures, just saying.
So that being said...
What can this administration do to preserve the value of houses? We have already thrown BILLIONS of dollars into tax credits for first time buyers and even passed legislation recently to coerce existing home owners to upgrade. Ok, did not work. We have given over 30 billion to home builders, but why would that help considering the inventory of houses already exceeds the number of potential buyers by a good seven to one margin. Then there is HAMP - the streamlined process offered by Obama the savior to refinance one's home for up to 125% of it's value, too bad none of the banks could actually find suitable people. So what else?
Let's get people to dump thousands of dollars in their houses and outfit them with the latest and greatest technology and appliances! That way when it comes time to sell or get an appraisal for a refinance the house can be worth up to 24k more! Brilliant. Who cares if we go further into debt, we are helping out house values which in turn makes the big banks very happy and happy banks means happy Americans. Right?
Wrong! First of all we do not need to save the banks because they should have been bankrupt and out of business by now. Second of all house values are SUPPOSED to fall! Duh? When prices fall it usually indicates that either demand has fallen or there is too much supply. We have too many houses and not enough people interested or capable of paying for them. Yet due to clueless politicians and clueless economists we are literally destroying ourselves in a vain attempt to prop up a market that should be rapidly declining. Considering that most Americans are already over leveraged and in debt up to their eyeballs it becomes extremely puzzling as to how putting them into further debt for the sake of future energy costs makes any rational sense.
People should be retrofitting their homes and upgrading their appliances when and if they have saved enough money, not at the expense of the taxpayer or in this case the children of the taxpayer. This is madness.
Of course throwing in incentives to small business will be the cherry on top and will convince the "fiscally conservative" Republicans to jump on board like they always do. This junk of a proposal will be drafted, voted on and passed with remarkable swiftness. Just another stimulus in the insane asylum, nothing to see here folks, move along.
We know energy efficiency "creates jobs, saves money for families, and reduces the pollution that threatens our environment," Obama said. "With additional resources, in areas like advanced manufacturing of wind turbines and solar panels, for instance, we can help turn good ideas into good private-sector jobs."
The administration didn't provide immediate details, but said it would work with Congress on crafting legislation. Steve Nadel, director at the American Council for an Energy-Efficient Economy, who's helping write the bill, said a homeowner could receive up to $12,000 in rebates.So despite the Climategate, despite the failure of the 787 stimulus package we are going to continue to beat our head against the wall in order to save the economy. Let me tell you right away, this is a sham. It is fraud, deceit and a pack of lies. This plan is not designed for the purpose of saving us money and it's not designed to create jobs - this is just another bailout for the banks. Huh? That does not make sense you say, but allow me to explain.
Before I explain, keep in mind that our financial banks despite the repaying of TARP moneys are still principally broke and nothing more than zombie banks. Most of the balance sheets are littered with toxic junk consisting of readily appreciating mortgage paper as foreclosures continue to rise. No one has actually written off these losses because that would mean bankruptcy so instead the day of reckoning will simply be postponed. There is this nagging matter of Option ARMs, a group of mortgages issued not too long age that are set to reset sometime in 2010 and when they reset, the chance of people refinancing their loans on homes whose values have plummeted by 20-50 percent are slim to none. There are going to be more Option ARMs failures than there were subprime failures, just saying.
So that being said...
What can this administration do to preserve the value of houses? We have already thrown BILLIONS of dollars into tax credits for first time buyers and even passed legislation recently to coerce existing home owners to upgrade. Ok, did not work. We have given over 30 billion to home builders, but why would that help considering the inventory of houses already exceeds the number of potential buyers by a good seven to one margin. Then there is HAMP - the streamlined process offered by Obama the savior to refinance one's home for up to 125% of it's value, too bad none of the banks could actually find suitable people. So what else?
Let's get people to dump thousands of dollars in their houses and outfit them with the latest and greatest technology and appliances! That way when it comes time to sell or get an appraisal for a refinance the house can be worth up to 24k more! Brilliant. Who cares if we go further into debt, we are helping out house values which in turn makes the big banks very happy and happy banks means happy Americans. Right?
Wrong! First of all we do not need to save the banks because they should have been bankrupt and out of business by now. Second of all house values are SUPPOSED to fall! Duh? When prices fall it usually indicates that either demand has fallen or there is too much supply. We have too many houses and not enough people interested or capable of paying for them. Yet due to clueless politicians and clueless economists we are literally destroying ourselves in a vain attempt to prop up a market that should be rapidly declining. Considering that most Americans are already over leveraged and in debt up to their eyeballs it becomes extremely puzzling as to how putting them into further debt for the sake of future energy costs makes any rational sense.
People should be retrofitting their homes and upgrading their appliances when and if they have saved enough money, not at the expense of the taxpayer or in this case the children of the taxpayer. This is madness.
Of course throwing in incentives to small business will be the cherry on top and will convince the "fiscally conservative" Republicans to jump on board like they always do. This junk of a proposal will be drafted, voted on and passed with remarkable swiftness. Just another stimulus in the insane asylum, nothing to see here folks, move along.
Comments
Post a Comment