Thursday, November 19, 2009

Keeping a roof over the unemployed

The papers have been full of stories discussing Representative Barney Frank's proposal to give loans to unemployed homeowners struggling to stay in their homes. The money for this proposal would come from the interest the Fed collects from the financial industry bailout.

I can't really argue against this. In theory we're not talking about a handout, but really a hand up. One of the things we need to do to stabilize our economy is to stabilize our housing market and that's a tough goal with foreclosures ticking upwards.

The problem I do have is that all these government plans seem designed to help people who are already in trouble. Having trouble paying your mortgage and you're out of work? The GOVERNMENT will step right in to assist you. Having trouble paying your mortgage and you've fallen several payments behind? The GOVERNMENT will step right in to help you refinance at rates you can afford. Having trouble keeping your head above water, but your working and your paying your mortgage on time? The GOV-E-RN.., .... um... I don't think there's a plan for that.

There are thousands of Americans, hell there are probably MILLIONS of Americans who are facing tough times and struggling to get by paycheck to paycheck. Where's the help for us?

Gee, I wouldn't mind refinancing at a more affordable rate so I had some extra cash to pay down my bills, invest in home improvements, maybe buy some essentials. I'm not talking about the Government throwing me some cash so I can get a new Lincoln or something. I'm saying that there are a lot of people who haven't sunk but they're taking on water and wouldn't it make sense to help them out BEFORE they go under?

4 comments:

Anonymous said...

Lefty, I couldn't agree more. There aren't any government programs for the "working poor". A friend of a friend was on welfare when she had her first child and received an ABUNDANCE of support from government agencies such as free daycare (she didn't work so why did she need daycare?), free classes at a community college, etc, etc, etc..

However, as soon as she found a job so she could get back on her feet, all the assistance disappeared. Suddenly she was no longer a candidate for free day care (even though her income was poverty level). Surprisingly, she didn't need daycare when she was unemployed, now that she needs it, they don't offer it.

Anonymous said...

Lefty, I couldn't agree more. There aren't any government programs for the "working poor". A friend of a friend was on welfare when she had her first child and received an ABUNDANCE of support from government agencies such as free daycare (she didn't work so why did she need daycare?), free classes at a community college, etc, etc, etc..

However, as soon as she found a job so she could get back on her feet, all the assistance disappeared.


Awwwwww, poor little welfare case!
Popped out one kid and couldn't get daycare and free stuff FOREVER! Makes you wonder how people live who NEVER get any freebies

Dr. Momentum said...

People barely making ends meet don't feel like the system is working for them. The truth is, the system isn't working very well for them. However, if they're employed, they are at least PART of the system.

There is a real danger with rising unemployment of a cascading effect where people clamp down on spending. The lower down you go on the economic scale, the more percentage of income is spent (because it is spent on necessities) and therefore the bigger the short-term stimulating impact on the economy.

It makes the most sense to make sure that the unemployed can still spend. Not just sense for them, but sense for everyone, everywhere in the economy.

But, perhaps you mean politically rather than economically.

Lefty said...

I never argued against what is being done. I am saying that I think such plans need to be expanded to include those who haven't fallen behind, who haven't lost their jobs but are struggling to get by.

By helping those who have fallen behind or have lost their jobs you may keep them in their homes, and that's important. But to stimulate the economy you need to free up discretionary spending. To do that you I think you need to help those that are just barely getting by and give them enough breathing room to invest in home repairs, buy a few new things, etc.