The Bush Social Security Plan, Take 2
A couple of years ago, you probably thought investing in companies that bought and sold subprime mortgage loans was a license to print money. After all, a couple of million people had taken them out, the economy hadn't yet tanked, and the "variable rate of interest" those would-be homeowners had to pay hadn't varied much yet.
That was then ...
On Monday, the New York Times
editorialized about Bush's plan to bail out about one-eighth of those subprimers who are now facing foreclosure on the properties they couldn't really afford in the first place ... although the administration refuses to call it a "bailout."
Those 240,000 will soon be able to refinance their loans through the Federal Housing Administration, but in addition, the Federal Reserve is lowering its lending rate to the companies who've been trading that subprime mortgage debt, making, according to the Times
, "tens of billions of dollars" available to Wall Street - and several extra billions to the banks who lend money to those companies - all to avoid a "meltdown in the market for subprime-mortgage-related debt."
But aside from the fact that throwing all this cash at the problem may not work ... some of us can't help but remember that only a couple of years ago, Bush was pushing the idea of converting the Social Security Administration into individual stock portfolios, so that rather than the government collecting money from each of our paychecks and (supposedly) banking it for when we reach retirement and collect Social Security payments from the feds, everyone would take all those deductions and put them into the stock market, which, he said, would pay a much better return on investment that the SSA ever could.
Wow! Just think: A couple of years ago, if Bush had had his way, you too could have invested your retirement insurance money in subprime mortgage debt and been a rich person today!
Ain't privatization wonderful?