Household HSBC Watch

The chief of the Federal Deposit Insurance Corp warned on Thursday that if industry solutions fail to help subprime mortgage borrowers, the odds of government involvement will increase. President Bush is already talking about a Reagan-style tax rebate. Nancy Pelosi and her Democrats are in no position to argue. The entire idea is a sham that applies a bandage to a mortal wound. Stimulating consumer spending as an economic stimulus is ridiculous. The mortgage industry already stimulated consumer spending using home equity as the stimulus. Greed got in the way, and U.S. Government regulators could not be found when abuses went unchecked.

Now that people spent the equity in their homes, and have little or no savings, our leaders plan to “fix” the economy by giving them a $50 bill - or perhaps $600 or $800. It will accomplish nothing, is not sound economic policy, and those subject to foreclosure might be able to keep the lights on for another month. Government officials were witnesses to the robbery but we can’t expect them to give good eye-witness reports. It’s hard to offer a fix while denying that it happened on their watch, otherwise Americans may ask “Where were you when I needed you?” Those subject to foreclosure or facing huge mortgage payment increases might ask the question of President Bush.