Debates are raging across the blogosphere about whether there should be a bailout for the housing crises. In American politics, it’s already been decided there needs to be one; the debate is how big and for whom.
Here’s what we’ve seen so far:
- A Bush plan to freeze mortgage interest rates for a very limited number of homeowners. It will be amazing if this plan helps more than 100,000 Americans out of the roughly 2 million facing mortgage resets. (Failure out of the starting gate.)
- A Federal Reserve plan designed to allow banks wider access to credit via international credit auctions. The Term Auction Facility, as this plan is being called, allows cash-strapped banks to borrow money at a slightly better rate than they currently can. (A small solution for a HUGE problem.)
- A super Structured Investment Vehicle Fund that allows banks to sell their highest-quality junk before writing off their worst quality junk. (Starting to look like a failure.)
- The Fed has lowered the lending rate several times. (This has failed to help the credit markets, but has done much to devalue the dollar and our homes via inflation even further. Total failure.)
So dear parent, I bet you are wondering what all this means to you. Nothing. And everything.