Congress: Help the rich

Housing Policy: Free Market Vs. Help the Rich

By Dean Baker - April 3, 2008, 8:46PM
As we all know there is an ongoing debate in politics between those who favor market solutions and those who believe that the government must intervene to protect the rich.

Okay, the first group may not exactly be market fundamentalists, but the government intervention help-the-rich faction is definitely calling the shots these days, especially when it comes to housing policy.

The economy is in recession and job loss is soaring. The banking system is on life support, with the Fed handing tens of billions of dollars to the country’s biggest banks at below market interest rates. Millions of homeowners are facing foreclosure, and more than ten million are now underwater in their mortgages, owing more than the value of their house.

In such dire circumstances, Congress did the only thing it could; it gave more tax breaks to banks and homebuilders.
Yes, that is really what Congress, or least the Senate, proposes as the answer to the crisis facing the country’s homeowners. The Senate has approved a bill that would give a tax break worth more than $6 billion to homebuilders facing losses due to unsold homes and banks facing losses due to bad mortgages. That should make troubled homeowners sleep more securely.
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