White House Admits Demand Side Failed, Again.

By now we are used to the Obama administration’s confessions that they blew it on the economy. This however is different.  Previously  the Obamunists claimed  that they underestimated how bad the economy was when they said that it was the worst economy since the depression that capitalism  failed and that we were  very close to  financial Armageddon. Now however it seems that they are admitting in a very sheepish way that their very model doesn’t work. That model is of course “Supply side economics” or as Savage and others  aptly  called  it ,”trickle up misery!”

In a letter signed by both Treasury secretary Timothy F. and secretary of the Department of Housing and Urban Development Geithner  Shaun Donovan, the White House acknowledged that since its  launched in March the $75 billion program known as Making Home Affordable, is  an abject failure.   The program gives  taxpayer money, yours and mine , to lenders which in turn try  to keep borrowers in homes they should have never bought by  modifying their mortgage, including lowering their interest rate or extending the term of the loans. I simply cannot understand the logic behind giving money collected from people living in modest homes  or even renting modest apartments to fund those who bought houses that they couldn’t afford. There is no moral of economical justification for this except maybe as a round about form of reparations.

Far from keeping people in homes that they can’t afford and had  no business buying the program’s ultimate result is to make homes unaffordable for the rest of us!

“We believe there is a general need for servicers to devote substantially more resources to this program for it to fully succeed and achieve the objectives we all share,” the letter said.
…
The banks were also told to designate a senior liaison for the program and to prepare for a July 28 meeting with senior Treasury and HUD officials …

“We are asking that all servicers expand servicing capacity and improve the execution quality of loan modifications in order to help the sizable number of homeowners at risk of foreclosure and eligible for the program,” the letter said.

The administration will begin issuing monthly reports by Aug. 4 detailing lenders’ performance …

To make matters worse the large part of loan modifications have been the so called “extend and pretend” variety. Another words that missed payments are being capitalized, fees and interest rates are lowered and  and the banks pretends that the homeowner can somehow pay the mortgages.

Unfortunately this also extends the payments term and the homeowner is still deep in negative equity, of course this leads to a high possibility of default.

Many voices,  yours truly included, have argued that these programs do nothing but try to keep the housing bubble inflated or at best  deflate at a slower rate.  Given the rising unemployment rate and the inability of this administration’s programs to get the economy moving the high probability that the “extend and pretend loans” will go into default is becoming a certainty. So far the Obama administration has thrown upwards of $75 billion dollars at this problem and it looks like they are gearing up for another round of  stealing your money. Of course that won’t help anyone but the Obama cronies in the banking business and yes you and your children will be put further in debt by the Obama administration.

One thing is clear, what leftist regimes from the Nazis to the Fascists to the Communists  to FDR have proven all along still holds true. The so called “supply side” economics or Kenisyan economics or whatever moniker you want to give it does not work never did and brings about nothing but untold misery and suffering.  Our misery is  just beginning.

OK Joke’s over all the libits who fell for it .OH WELL!!