McCain Loses

McCain needed to win the debate tonight and instead he bowed down to populist ideals and failed his party and the American people. Unfortunately, B Hussein was much better on his feet and gave a message that most likely relates to the majority of irrational voters.

McCain certainly removed any doubt that he is an economic idiot. His solution to the housing crisis is to work on home prices. For a micro second I thought he was on to something. But instead of saying that home prices need to fall to real market levels on their own, he begins to explain an alternate solution. This solution is one where the government buys the existing mortgage and then gives the homeowner a new mortgage based on the new value of the home. Two problems. One, the government (AKA tax payer) takes a huge bath, not the irresponsible homeowner (moral hazard). Two, how does the government know what the true market price really is? Who is to say they won't pick a price that is too high and home prices continue to fall. Will the government give the homeowner another mortgage? Government does have have the knowledge or the ability to make such a call locally, let alone nationally.

Now the really good part. How about all those people that have homes that are paid for or nearly paid for? When the government steps in to help the 5% of homeowners who are in default and seeing their mortgage drop by 25-50%, everyone that has a long-term mortgage will want a piece of that action. Again, this punishes homeowners that have no mortgage and actual equity in their home. Overnight, the government will wipe out millions in equity when they reprice the nations homes. Some of it is certainly required, but I am confident the government will get it wrong.

The market is an overwhelming force. It cannot be stopped. It toppled communism. It topples other governments that try to contain it. It has to be allowed to function. Interference of this magnitude will almost certainly create unintended consequences. My guess is the cure will be much worse than the disease.

Wouldn't it be nice if the politicians actually took responsibility for this mess? Instead they blame every other body but themselves. Now we will have a Democrat Congress and White House. It will be a very sad day for America on election day.

Ron Paul for write in......