Out of Control Policy Blog

McCain wants more bailouts

Its beginning to be hard to tell the difference between the Republicans and Democrats. In the wide world of bailouts there are three sides in the discussions: those who want more bailouts, those who don't like bailouts but think they are a necessary evil, and those who stand against them on principle.

During the debate on The Bailout, that $700 billion mega-expenditure, both McCain and Obama--de facto leaders of their parties--were in the middle camp. There were plenty of Democrats who wanted more added on to the bailouts, money to go directly to homeowners, but Obama told them to back off wanting such earmarks to make sure The Bailout passed. McCain swept aside those in his party that wanted to stand against The Bailout on principle, a standard practice America has come to know and used to love.

Now its McCain who is siding with the hardline Democrats and wanting $300 billon more federal dollars to buy troubled mortgages directly from the homeowner. This is the cash that the 94 Democrats who voted "No" in the House on the first bailout vote wanted.

During the debate last night, McCain proposed his program. that would push federal bailout dollars well over $1 trillion. The purpose would be to let people keep their houses. His reasoning was: "Until we stabilize home values in America, we're never going to start turning around and creating jobs and fixing our economy and we've got to get some trust and confidence back to America." McCain said he would push for this plan as President, and direct the treasury to replace troubled adjustable rate mortgages with fixed-rate mortgages, ostensibly at a loss to the government.

Anthony Randazzo is Director of Economic Research


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