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February 24, 2009

Destroying the Economy to Save It

Quote of the Day: “The high cost of living has reduced its popularity.” — Anonymous

Subject: Must they destroy the economy to save it?

Here’s some good news. Between January of last year and January of this year home sales have grown rapidly in the markets most harmed by the Federal Reserve’s housing bubble . . . 

  • Home sales in San Diego grew from 1,826 to 2,459
  • And sales in Southern California as a whole grew from 9,983 to 15,227

This is happening because the free market works. Housing prices are doing what prices should when there’s a glut of supply, they are falling. Over the past year the median price has fallen from $429,000 to $280,100 in San Diego, and from $415,000 to $250,000 in Southern California as a whole.

Think about all the people who didn’t buy houses they couldn’t afford. The free market is now rewarding their prudence by making homes available at affordable prices. This will also help people who are upside-down on their mortgages, because housing prices can’t move upward again until the glut clears. All hail the free market and personal responsibility!

Screeeech!

That’s the sound of the politicians hitting the brakes. Politicians hate personal responsibility. Everyone must be dependent on them, instead. No one should be able to benefit from being responsible and prudent. INSTEAD, SUCH PEOPLE MUST BE PUNISHED!

Failure and irresponsibility must be rewarded. Not only that, failure must actually be encouraged, because only then will people become more dependent on the politicians. That’s why Congress and the President are now considering legislation that will . . .

  • Bail out the most irresponsible home buyers, and . . .
  • Encourage people to stop paying their bills and file bankruptcy!

Here comes another bailout. Congress and the President want to rush through legislation that will rescue homeowners who bought more housing than they could safely afford. This legislation will allow homeowners who have filed Chapter 13 bankruptcy to  . . .

  • reduce the principal they owe on their mortgages,
  • lower the interest rate to the current fixed rate, and
  • reset the term of the mortgage to 40 years, minus the time the mortgage has been in effect.

If you are current on your mortgage, but your house is now worth less than you paid for it, YOU WILL GET NO BENEFIT!

Or . . .

If you’ve prudently saved and waited for housing to become more affordable, YOU WILL BE PUNISHED, because one aim of this legislation is to PREVENT home prices from falling. But it gets worse . . .

The legislation creates an incentive for people to rush to bankruptcy court in order to qualify for the bailout.

The politicians think they must destroy the economy in order to save the economy. This makes perfect sense if you recognize a fundamental truth. Politicians are in the FAILURE BUSINESS. They benefit when things fail, NOT when they succeed.

Do not consent to this. Oppose this new bailout. Use our quick and easy Educate the Powerful System to send your representatives a message opposing the housing bailout.

Use your personal comments to point out that . . .

  • The housing market is correcting itself in places like Southern California
  • The housing bailout punishes people who didn’t buy a house at inflated prices, and encourages people to rush to file bankruptcy

Resist. Do it now. And share this message with others to spread the word and expand the rebellion.

Thank you for being a part of the Downsize DC Army.

Jim Babka
President
DownsizeDC.org, Inc.

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