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In Friday’s New York Times, there was an article about McCain’s new proposal to help homeowners who are in that borderline group of people that were impacted by the recent rate resets and yet are legitimately able to pay a fixed rate mortgage.

The Times characterized this as a “shift” and “pivot”, which is probably fair to an extent.  McCain’s plan does not appear intended, however, to help those that have be reckless in their borrowing or lending.  McCain’s comments in the past have been such as:

“it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers”

McCain’s plan provides a path for about 200,000 to 400,000 homeowners to refinance their mortgages on primary residences to 30-year fixed-rate mortgages.  As long as they can demonstrate their ability to meet the terms of the new loans.  In his speech on Thursday, McCain said:

“There is nothing more important than keeping alive the American dream to own your home, and priority No. 1 is to keep well-meaning, deserving homeowners who are facing foreclosure in their homes,”

I know I probably sound like the curmudgeon that McCain was accused of being prior to Thursday’s speech, but this statement about the “American Dream” of owning a home, we have got to stop treating it like an entitlement.  Dreams are goals.  Goals are something you work to attain.  Handing out dreams at the door as people graduate from college is exactly the kind of mixed up thinking that has got us where we are today.  And people have got to learn from their mistakes, and learn that they can actually live in a smaller home or rental unit.  Believe it or not, today many renters are in a better position than many people that bought homes that are heavily mortgaged and now have negative equity because of falling home prices.

And what really concerns me about this deal is: if a homeowner can demonstrate their ability to meet the terms of a new fix-rate mortgage, what do they need the government’s help for?  Is it to help with closing costs?  To somehow provide a guarantee against negative equity?

I don’t want to make people’s lives more difficult.  But I don’t think I should be sacrificing so I can foot the bill for the mistakes of others.  Any mistakes I’ve made over the years, my family has made whatever sacrifices were necessary to deal with them.  When finances were short, we tightened the belt.  Television is not an entitlement.  A computer, broadband, iPods, cell phones, or any other technologies are not entitlements.  New furniture, dishwashers and garbage compators, remodeled kitchens, hot tubs, riding lawn mowers, new decks, they are not entitlements.  New cars, Disney vacations, dinners out 3 times a week, movies once a week, golf once a week, these are not entitlements.  But many of them are considered as necessary as having breakfast everyday to some.  If you can afford these things, you shouldn’t be having any trouble with mortgage payments.

I will sacrifice if I can for the truly needy.  Not for those that are simply wanting.

McCain’s deal is a good political compromise, but I don’t think it’s necessary.  I applaud our leadership’s desire to heal some of the pain our economic situation is creating.  And there are certainly areas that need direct help, especially where jobs are lost.

What’s really needed is a means to hold people accountable for their decisions and actions.  I bet a free market capitalist economy could do that.  We should try that some time.

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