Rich Uncle Pays Your Mortgage (Lew Rockwell)

Lew Rockwell reminds us that government has no money of its own, so whatever it spends is stolen from you and me:

The economic meltdown has put the country on the fast track to socialism, but through a series of tiny steps. One need only to examine the supposed victories in the war on depression to see how this is happening. The latest is the claim that the Obama administration has successfully renegotiated many mortgage obligations in a way that allows people to keep their homes.

Before looking at the program, we have to ask, is this really a victory? If people are in over their heads, drowning in debt, it is a far wiser path to lift them out rather than hand them a snorkel through which to breathe. The answer for most of the sad cases of people with homes larger and more expensive than they can afford is to move to a new abode. I don't know why or how such thoughts became unthinkable: we not only have a right to a home now, but we have a right to live forever in a discounted home.

If people would move to cheaper places, their debt problems would be solved in shorter order. If many people bailed out of expensive homes, their prices would go down and approach reasonable levels, and perhaps then the people who are living beneath their means could actually ramp up their standard of living by buying from the glut out there. And isn't this something that has been a national priority for several decades, providing better housing for the poor? Here it is within our grasp: let the prices fall!

In any case, how was the Obama administration able to accomplish the miracle of letting people continue to live in lifestyles they can't afford? They offer to pay $1,000 for every loan that a mortgage company could renegotiate. Why didn't they just agree to pay the mortgages? It's unclear. Seems like that would have been an easier path from A to B. Instead, they wanted the mortgage companies in on the deal.

And where is this money coming from? You can use all the fancy words you want, but in the end government has no money. Everything government has it gets from you. That is the most fundamental lesson of political economy, without which no clear thinking takes place.

Read the rest