Busting the Budget to Buy an Election

Rob Port tells us via Reuters that Obama may try a Hail Mary pass to save the election for the Democrats in November by throwing hundreds of billions of dollars at homeowners:

Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011.


The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses. The key date to watch is August 17 when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie. …


Democrats are in real danger of losing the House and almost losing the Senate. The mortgage Hail Mary would be a last-gasp effort to prevent this from happening and to save the Obama agenda. The political calculation is that the number of grateful Americans would be greater than those offended that they — and their children and their grandchildren — would be paying for someone else’s mortgage woes.

Of course this would add massively to the debt to fix a problem that Democrats themselves created when they forced lenders to make loans to people who couldn't afford them in the first place, refused to allow Fannie Mae and Freddie Mac to come under increased regulation, and in so doing set the table for the collapse of the housing market.  Now, in order to save a few seats in Congress, they're willing to set America on a path to complete financial destruction.

There shouldn't be a single Democrat returned to power in November.