Question: When is a $7,000 tax credit a problem? Answer: When it makes a bad situation even worse. And that’s just what might happen if Congress enacts a $7,000 tax credit for people who buy foreclosed homes. As Bloomberg News columnist John M. Berry notes, the misguided tax credit may well “encourage foreclosures and drive down house values”-the very opposite of what’s needed. Proponents of the measure say they want to stabilize home prices. But Berry notes that, by making it easer to sell foreclosed homes, “banks could be more …
The National Taxpayers Union released its 2007 “Taxpayer Score” yesterday. The annual NTU rating reflects a congressperson’s commitment to reducing federal spending, taxes, debt and regulation by analyzing every roll call vote affecting fiscal policy (including appropriations, authorization, and tax bills; budget target resolutions; amendments; and certain procedural votes that could affect the burden on taxpayers). Comparing 2006 scores to 2007, Sen. Hillary Clinton (D-N.Y.) fell furthest, dropping below 30 of her colleagues to a 3% score. On the House side, indicted Rep. William Jefferson (D-La.) steered the furthest to …
American businesses shed 80,000 jobs in March and 232,000 jobs in the first quarter of 2008, confirming that economy ground to a halt in the first quarter of 2008. The unemployment rate rose to 5.1% — the first time it climbed above 5% since September 2005 — although that’s still lower than the average unemployment rate for the 1970s, 1980s and 1990s. Heritage’s Rea Hederman offered his analysis on CNBC today: [youtube]http://www.youtube.com/watch?v=Lbj1HyguMuc[/youtube] The bad news is already prompting new calls for action from Capitol Hill. “Democrats are focused on the …
According to the E.J. Dionnes of elite media groupthink, the current economic troubles are due solely to unfettered Wall Street greed and the federal government’s only sin was not enough command and control of the economy. Former National Economic Council director Lawrence Lindsey sets the record straight: Contrary to the claims last year of Sen. Barack Obama, it was never the financial services industry (in my experience) that lobbied for easier lending terms. Rather it was politicians who sought easier lending regulations so more constituents could borrow. Community activists (Mr. …
Reporting on the Senate’s new housing bailout bill, the New York Times claims “Senate Republicans, in particular, had felt compelled to move housing legislation quickly after the Federal Reserve’s intervention to avert the collapse of Bear Stearns.” Apparently these Republicans are determined to prove that limited government intervention in the economy does in fact breed a more massive federal role. The Senate is set to consider a slew of new amendments to the bill that could add billions more in spending and grant federal judges new powers to unilaterally rewrite …
Here’s a preview of the week ahead in Washington. [youtube]http://www.youtube.com/watch?v=an2ZGW85Ad0[/youtube] Recent troubles with the financial and housing markets have lead to proposed action by Congress to help distressed homeowners and to find a government solution to the Bear Stearns collapse. Massive new billion-dollar handouts to aid homeowners and utilizing sweeping new power for the Federal Reserve will do nothing to change the fact that our economy is in a slowdown. Why doesn’t Congress reduce regulation, reduce taxes and allow for more domestic drilling for oil to lower energy prices? These …
Sen. Hillary Clinton yesterday threw her weight behind a plan by Rep. Barney Frank (D-Mass.) and Sen. Chris Dodd (D-Conn.) to authorize the Federal Housing Administration (FHA) spend $20 billion in taxpayer money to guarantee up to $400 billion in questionable mortgages. Considering Sen. Barack Obama is already a co-sponsor of Dodd’s legislation, and the House has already scheduled hearings on the bill, the plan is likely to become the front line in Congress’ fight to “do something” about the current financial instability. Under the Frank-Dodd bill, lenders that chose …
The recent failures of Bear Stearns and the Carlyle Group, coupled with turmoil in the housing markets and overall pessimism about the economy, has Congress rushing to microphones to promise a legislative quick fix. Meanwhile, President Bush and the Federal Reserve are being second guessed by liberal economists for not promising more government intervention. What is the best course of action for the government to take? Today former congressman Ernest Istook, a distinguished fellow at Heritage, sat down with Heritage’s top economists, Bill Beach, David John and J.D. Foster, to …
The Washington Post solicited plans from each of the remaining presidential campaigns on what each candidate will do, if elected, “to solve the current crisis.” Gene Sperling wrote for Hillary Clinton, Dougla Holtz-Eakin wrote for John McCain, and Austan ‘I did not make reassurances to that Canadian” Goolsbee wrote for Barack Obama. We will have a more detailed look at the main thrusts of both Obama’s and Clinton’s plans (both of which center around a Rep. Barney Frank/Sen. Chris Dodd like mortgage bailout plan) later in the week, but more …
The campaign to turn the current economic turmoil into justifications for new invasive federal government intervention in the marketplace is in full swing. The Hill reports, “After Bear Stearns bailout, Dems renew push to help homeowners,” and E.J. Dionne comments: “Never do I want to hear again from my conservative friends about … how government should keep its hands off the private economy. … The Wall Street titans have turned into a bunch of welfare clients. They are desperate to be bailed out by government from their own incompetence, and …
