The federal housing bailout bill passed by Congress, which has a promise of a signature from the president, is fine as far as it goes.
The problem, as the progressive economist Dean Baker notes, is that it doesn’t go very far at all.
The bill allows lenders to bring failing mortgages to the Federal Housing Authority (FHA), which will guarantee a new mortgage at 85 percent of the current appraised value of the home. The Congressional Budget Office (CBO) estimates that lenders will bring 400,000 mortgages to the FHA over the next three years. CBO expects that 140,000 of these mortgages will go into foreclosure a second time, leaving a net of 260,000 homeowners who will hang onto their homes as a result of this program.
By contrast, there are likely to be 2.5 million to 3 million foreclosures in both 2008 and 2009. This means that the housing bill will likely help less than five percent of the families facing foreclosure over the next two years, leaving 95 percent of this group out of luck.
That’s 19 of 20 homeowners that will be left out in the cold, while
securing the multimillion-dollar salaries of the top executives of Fannie Mae and Freddie Mac, and protecting their shareholders from facing the full consequences of their bad stock picks, the bill also provided funds for guaranteeing new mortgages for homeowners facing foreclosure.
Baker touts an alternative:
the Saving Family Homes Act, which would allow many of these homeowners to stay in their homes.
The bill, sponsored by U.S. Rep. Raœl Grijalva, works like this:
The bill temporarily alters the rules on foreclosures. It allows homeowners facing foreclosure the option to stay in their home as renters paying the fair market rent. They would be allowed to remain in their home for up to 20 years. The bill would only apply to homes that were purchased for less than the median price in the area. This ensures that it only benefits those most in need of help, rather than millionaires who made bad bets in the housing market.
But most of those in Congress lack the creativity — or, more important, the political courage — to buck the conventional wisdom, which generally sides with the money.
Hank Kalet 
We have socialism for the super rich and the big corporations but survival of the fittest capitalism for the little guy who can\’t lobby congress and grease the hands of our legislators. The losses are socialized while the profits are privatized, this is the \”genius\” of the \”free\” markets that the goofertarians are always robotically trumpeting. Whatever happens, the CEOs still get their multimillion salaries and golden parachutes while millions in the middle class lose everything. The libertarians stand on the sidelines and cluck approvingly as they blame the victims for this financial Armageddon. Everything is simple for libertarian ideologues who slavishly adhere to their obnoxious so-called philosophy. There is no room for empathy in libertarian land.
Excuse me? Your beloved gooferment programs, so called laws, diktats, regulations, and taxes sets up a disaster and you blame LIBERTARIANS! Wow, that\’s an overwhelming stretch.Andrew Jackson fought against the Central Bank way back when, because this is the harm that it causes. Suddenly, it\’s a libertarian problem. Wait a minute!Let\’s go through the list of Libertarian principles and see which caused the debacle.Honest money (i.e., metal back limits to gooferment spending) … no not that one.No Central Bank (i.e., the Fed, FreddieMac, FannieMae, and their ilk allowing loans backed by the public treasury) … no not that one.No fractional reserve banking … ditto.As a matter of fact, you\’ll find that \”limited liability companies\” are a creation of the gooferment and Libertarians don\’t like them as abdications of personal responsibility.Empathy; sure I have lots of empathy, for those people who scrimp and save and work hard — until July29th Tax Freedom Day in NJ — only to have the goofermetn and the politicians rip them off.And, it\’s a libertarian problem?Sheesh.Ya gotta be kidding!
In 1831 the Supreme Court of the United States, in a decision rendered by Justice, John Marshall, declared the forced removal of the entire Cherokee Nation from their ancestral homes in the South Eastern United States to be illegal, unconstitutional and against treaties made. President Andrew Jackson, having the executive responsibility for enforcement of the laws had this to say:\”John Marshall has made his decision; let him enforce it now if he can.\”U.S. President ANDREW JACKSON whose life was saved by the Cherokee at the Battle of Horseshoe Bend, sent 4,000 Cherokee children, women and men to their deaths.Libertarians have so much empathy, if you have money.