Obama's new housing plan: more government

The new plan is the same as the old plan. Obama announced his big new housing initiative today aimed at stemming the foreclosure crisis. Essentially, the government is going to lean on lenders to decrease the value of loans held by borrowers who are struggling financially.

The administration’s earlier efforts to stem foreclosures have largely been directed at borrowers who were experiencing financial hardship. But the biggest new initiative, which is also likely to be the most controversial, will involve the government, through the Federal Housing Administration, refinancing loans for borrowers who simply owe more than their houses are worth.

About 11 million households, or a fifth of those with mortgages, are in this position, known as being underwater. Some of these borrowers refinanced their houses during the boom and took cash out, leaving them vulnerable when prices declined. Others simply had the misfortune to buy at the peak.

Many of these loans have been bundled together and sold to investors. Under the new program, the investors would have to swallow losses, but would probably be assured of getting more in the long run than if the borrowers went into foreclosure. The F.H.A. would insure the new loans against the risk of default. The borrower would once again have a reason to make payments instead of walking away from a property.

The government tried to run its own lending companies before and you'll recall what happened with Fannie Mae and Freddie Mac. Now they're going to start refinancing loans for struggling families. This is the first government program in memory that forces companies not to collect money that's owed to them. With the economy tough and very few loans going out as it is, what will be the economic impact of forcing lenders to take massive losses?

And then there's this problem.

This much was clear, however: the plan, if successful, could put taxpayers at increased risk. If many additional borrowers move into F.H.A. loans, a renewed downturn in the housing market could send that government agency into the red.

If the program gets bigger, as do most government programs, a substantial portion of the lending section could become tied to the mast of the F.H.A. Any losses would inherently become the government's losses and could require massive injections of cash to keep the F.H.A. afloat -- cash the government doesn't have. In other words, it's just more creep into the economy by a government that doesn't have any money to begin with.

As the House plans to approve a plan to nationalize the entire student loan industry, how long until Obama just nationalizes the entire lending sector?

Obama secures $1.15 billion in reparations for black farmers

In 1999, the USDA agreed to pay $1 billion to 16,000 black farmers. A judge had ruled that the agency had a 50-year history of discriminating against African-Americans, back when virtually every agency was discriminating against African-Americans. But that wasn't enough for the black farmers and one former senator.

Critics argued that more than 70,000 farmers were shut out of the lawsuit. In 2008, then-Sen. Barack Obama and Republican Sen. Chuck Grassley got a law passed to reopen the case, and the settlement talks moved forward.

The USDA and the farmers reached a deal last month to award another $1.25 billion for the rural blacks. All this is to make amends for a grievance that occurred decades ago and that was solved 11 years ago. Now the government has to find a way to pony up over a billion dollars before the imposed deadline of March 31. If the money isn't appropriated in time, both parties could walk away from the table and the case could rage on. The black farmers, who were initially demanding $2.5 billion but settled, are likely to do just that. With staggering amounts of debt piling up and the Congress in paralysis after the health care debate, Obama needs to find a way to shove his latest affirmative action payout through and fast.

Orszag strikes out as Social Security goes bankrupt

Before he came to Obama's Office of Management and Budget, Peter Orszag used to work for the Congressional Budget Office. While there, Orszag warned that Social Security would start running deficits in 2019 unless the system is reformed. Orszag was off by about 3,285 days. The New York Times is reporting that as of today, Social Security is officially producing red ink.

This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.

Stephen C. Goss, chief actuary of the Social Security Administration, said that while the Congressional projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual.

With the Obama Administration having done nothing to help create jobs, somewhere near 20% of the country is estimated to be unemployed or underemployed. Those people are paying little to nothing to the Social Security Administration, which has rapidly accelerated its collapse. Turns out you actually need people to be productive in order to tax them. And with the economy already teetering on top of massive debt and a $1 trillion health care bill on the way, Social Security recipients will find there isn't very much money left to go around. The program could go bust any day at this point.

The same CBO that miscalculated Social Security's red ink by nine years also claimed the health care bill would reduce the deficit. Its former oracle, Orszag, now has the president's ear on all budget matters.

Obama appoints powerless debt commission so he doesn't have to do anything

Whenever Obama doesn't want to deal with a problem, he signs an executive order appointing a commission to "examine" it. Last week he created a commission to tackle the $14.3 trillion national debt racked up by his massive spending spree. The commission will spend eight months talking about the debt before making recommendations. The president then may or may not hand these recommendations to Congress who then may or may not do something.

When Obama wanted to socialize the health care sector or create a cap-and-tax energy system, he didn't create a useless commission. He told Congress to ram legislation through immediately. If Obama actually cared about reducing his debt, he could start by cutting up his proposed budget of more than $3 trillion. But instead he'll create a commission, allowing him to ignore the issue for another year.

Confirmed: Obama's America to collapse under the weight of its debt

Here at Obama Watch News, we've been warning for months that America is going to cave in under the trillions in debt caused by Barack Obama's reckless spending spree. Now, with Greece facing its own ominous debt crisis that threatens to destabilize the entire country, the media is starting to wake up.

The Associated Press has a fascinating article out that confirms everything we've been telling you.

"It’s bad enough that Greece’s debt problems have rattled global financial markets. In the world’s largest economic and military power, there’s a far more serious debt dilemma.

For the U.S., the crushing weight of its debt threatens to overwhelm everything the federal government does, even in the short-term, best-case financial scenario _ a full recovery and a return to prerecession employment levels.

The government already has made so many promises to so many expanding “mandatory” programs. Just keeping these commitments, without major changes in taxing and spending, will lead to deficits that cannot be sustained."

Even the liberal media is starting to see the truth. How bad is it? Currently Obama's government owes more money than actually exists in terms of paper dollars. In other words, it's physically impossible for the United States of America -- the most powerful nation on earth -- to pay off its own debt.

Barack Obama came into office blaming George W. Bush for his debt problems. He then went on a spending spree, increasing funding to every worthless social program imaginable and creating plenty of new ones. His most recent budget spends more than $3 trillion in taxpayer money that doesn't exist. Congress had to raise the debt ceiling from $12.4 trillion to $14.3 trillion just to pass it. And America's most important entitlement, Social Security, is in massive debt and scheduled to go bust in 2037, twenty years earlier than was initially predicted. A nation built on a bubble of debt will eventually see it pop. It's time to start asking the question: Can America survive Barack Obama?

Time for a spending freeze on Michelle Obama

Barack Obama has recently been pretending he cares about all the debt he's racked up. No doubt the president would appreciate a cool $1.5 million in the country's pocket, right? It's not nearly enough, but it's something. Here's how to do it, Mr. President: Put a spending freeze on your damn wife.

Michelle Obama has a staff of 22 employees, an unprecedented number. Combined, they make a total of $1.5 million per year. Her chief of staff alone makes $172,200. All this for a woman who has no constitutional duties at all. We've come a long way from the days when Mary Lincoln was criticized for purchasing china for the White House during the Civil War.

There may be even more money to be saved, Mr. President. Word is that Michelle enjoys $20,000 dates to New York City and buys absurdly expensive clothes in her delusional quest to become the next Jackie Kennedy. If America wants to save money, perhaps it's time to stop financing our own monarchy.

Obama Maxes Out Our Credit Card

File this under galling hypocrisy. Barack Obama has spent our nation so far into debt, Congress is rushing to raise the national debt ceiling. Right now the government is legally barred from accruing a debt greater than $12 trillion. With his enormous spending spree underway, Obama is slated to exceed that debt. If Congress doesn't either cut spending or increase the debt ceiling by $1 trillion or so, the government could go broke and lose its triple-A credit status.

You didn't think the profligate Barack Obama was going to cut spending, did you?

But the president hasn't always been so reckless with the country's finances. Back in 2006, President Bush asked Congress to raise the debt ceiling, primarily to finance the continuing military escalation in Iraq. With righteous indignation, an outraged Senator Obama took to the floor. "Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren," he railed. "America has a debt problem and a failure of leadership." Although domestic spending increased between 2001 and 2008, Bush's government debt was spent primarily fighting the wars in Afghanistan and Iraq. Obama is more than willing to mortgage America's future in order to bring one-sixth of the American economy under federal control with his health care bill, or to give the likes of the AARP and La Raza kickbacks with the stimulus. But accruing debt to fight for national security? That's just irresponsible.

Obama later voted "no" on the debt ceiling increase along with his fellow Democrats.

This is stunning hypocrisy, but it also has a large silver lining. Obama is trying to force feed his health care bill through the Senate in December, the same month in which the debt ceiling must be raised to prevent financial hell from breaking loose. A coalition of Republican and moderate Democrat senators, led by Dianne Feinstein of California, are drawing a line in the sand, demanding that Obama submit budget cuts before they'll vote to raise the debt ceiling. If more liberal Democrats protest this (which they likely will), there could be a contentious battle on the Senate floor which could drag on for days. This would take up a good deal of the precious time that Harry Reid needs to steer ObamaCare through before the Senate adjourns for Christmas break.

Will Obama's big spending come back to bite him this month? It seems almost too good to be true.