At The Corner on National Review Online, Stephen Spruiell makes one heck of a point that deserves much discussion among House Republicans and their alternative plan.
* Rather than providing taxpayer funded purchases of frozen mortgage assets, we should adopt a mortgage insurance approach to solve the problem.* Currently the federal government insures approximately half of all mortgage backed securities. (MBS) We can insure the rest of current outstanding MBS; however, rather than taxpayers funding insurance, the holders of these assets should pay for it. Treasury Department can design a system to charge premiums to the holders of MBS to fully finance this insurance.
Immediately, this strikes me as the kind of program that has the potential to become a permanent feature of the policy landscape as opposed to a temporary measure. These kinds of government insurance plans can be very hard to kill. Whatever its drawbacks, the Paulson plan -- buy, hold, liquidate -- would be easier to terminate.
The shelf-life of any government involvement is key to my view of any such assistance plan or program. In fact, I will be willing to "pay more" or endure more short term pain (presuming it is one that actually addresses the crisis constructively) if I know it (the program and government direction in our free market) has a shelf life and will be terminated - in other words, a course and an end point.
Permalink | E-mail This | Technorati Links | Sphere: Related Content | Digg this! | FARK It!
Filed under:
Economics
Comments (5)
I'm not for any program tha... (Below threshold)1. Posted by GarandFan | September 26, 2008 11:12 AM | Score: 6 (6 votes cast)
I'm not for any program that includes funding for ACORN. Dodd and Frank can piss off with that part of the bail out. Their %#$%@ party started this mess and they've got the balls to insist that part of the bail out includes future funding?
1. Posted by GarandFan | September 26, 2008 11:12 AM |
Score: 6 (6 votes cast)
Posted on September 26, 2008 11:12
2. Posted by JLawson | September 26, 2008 11:22 AM | Score: 6 (6 votes cast)
Is there anything more permanent than a 'temporary' government program?
2. Posted by JLawson | September 26, 2008 11:22 AM |
Score: 6 (6 votes cast)
Posted on September 26, 2008 11:22
3. Posted by Jeff | September 26, 2008 11:23 AM | Score: 2 (2 votes cast)
the proposal is for a "privately" aka non-taxpayer funded insurance program.
So this is not the same as taxpayer funded programs. Not perfect but not as bad as you are painting ...
3. Posted by Jeff | September 26, 2008 11:23 AM |
Score: 2 (2 votes cast)
Posted on September 26, 2008 11:23
4. Posted by A Stoner | September 26, 2008 11:43 AM | Score: 3 (3 votes cast)
Paulson plan, precedence for the Federal Government to spend 6% of GDP every time there seems to be a problem. Cost to tax payers, not measurable, because the $700,000,000,000.00 is just the tip of the iceberg on this.
Republican plan, persistant company financed, government handled mortgage insurance. Cost to tax payers is what ever oversite costs, likely less than a few tens of millions a year, and likely can be rolled into the actual cost of the insurance premiums, thus, no cost!!!!
4. Posted by A Stoner | September 26, 2008 11:43 AM |
Score: 3 (3 votes cast)
Posted on September 26, 2008 11:43
5. Posted by Rob | September 27, 2008 3:31 PM | Score: 0 (0 votes cast)
Have we ever seen a government program get "terminated"?
It is much easier to pass legislation than to get it recinded, as congress seems to write it in stone.
I don't know what the answer is, but either way I see it costing us all a lot to fix what a few have profited from.
5. Posted by Rob | September 27, 2008 3:31 PM |
Score: 0 (0 votes cast)
Posted on September 27, 2008 15:31