US News
Clinton proposes urgent rescue plan for default homeowners
Mar 24, 2008, 22:32 GMT
Washington - US Democratic presidential hopeful Hillary Clinton Monday proposed an emergency rescue plan for struggling homeowners facing mortgage default, saying the White House should do the same for individuals that it has been doing for the investment bank sector.
Senator Clinton, 60, who is struggling to pull ahead of Senator Barack Obama, 46, for the Democratic presidential nomination, called for US President George W Bush to appoint an emergency working group on foreclosures and set up a 30-billion-dollar two-year emergency fund to help states and cities support homeowners in trouble.
The amount is, not coincidentally, nearly equal to the 29 billion dollars offered Monday by the US central bank, the Federal Reserve, to cover losses that JPMorgan Chase may experience in buying the beleaguered Bear Stearns investment bank.
'Our economic crisis is, at its core, a housing crisis, a crisis caused in part by unscrupulous mortgage lenders and brokers and unregulated transactions in mortgage-backed securities,' Clinton told an audience at University of Pennsylvania in Philadelphia.
Obama and Clinton face off in the last big race of the primary season, in Pennsylvania, on April 22.
Clinton blamed the crisis on speculators trying to make a quick buck, buyers who didn't act responsibly and the White House, which 'failed to anticipate and continue(d) to downplay the problems we face.'
Clinton cited the latest foreclosure statistics, saying 2.2 million foreclosure notices were sent out in 2007, a 75 per cent increase over the year before.
Clinton has an average 16 per cent lead over Obama in pre-primary polling in Pennsylvania, a state she needs to win to move ahead of Obama in her bid for the nomination. She beat Obama in Ohio earlier the month, evidence of her strong appeal in working-class, industrial states.
Clinton was critical of the 400 billion dollars in Treasury securities freed up by the Federal Reserve over past weeks to help struggling investment banks.
'The president's plan was the bank lobby's dream - a plan that let banks off the hook and left homeowners fend for themselves,' she said. 'If the Fed can extend 30 billion dollars to help Bear Stearns address their financial crisis, the federal government should provide at least that much emergency assistance to help families and communities address theirs.'
Investments in subprime mortgages to risky borrowers - which circumvented government regulations that apply to traditional banks lending to homeowners - were extremely volatile and have resulted in a US financial crisis that has spread worldwide.
Housing prices have plummeted as a result of the glut of overpriced properties on the market and banks have tightened up credit supplies.
For existing housing alone, prices have dropped 8.2 per cent from February 2007, the National Association of Realtors said Monday.
There was a ray of light in the crisis on Monday, when the Realtors' group said that month-to-month sales of existing homes rose 2.9 per cent in February, the first increase in months.
But the ongoing crisis has prompted calls for stricter regulations of investment banks after years of deregulation opened up loopholes that allowed the current crisis to occur.
In a commentary column Monday in The New York Times, Paul Krugman described investment banks like Bear Stearns as the 'shadow banking system' which relies on 'complex financial arrangements to bypass ... safety regulations.'
'Now, the shadow banking system is facing the 21st-century equivalent of the wave of bank runs that swept America in the early 1930s,' Krugman wrote.
He criticized the government rush to bail out the banks, writing: 'If Wall Street companies can count on being rescued like banks, then they need to be regulated like banks.'
US President George W Bush has defended the government moves, saying 'the United States is on top of the situation.'
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Older Talkback
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Why did she vote against the cluster bomb ban in 1996?
Sorry, why did she vote against the cluster bomb ban in 2006? :)
'Why did she vote against the cluster bomb ban in 1996?'
Because they are a useful weapon in our arsenal.
...she needs 3 million swing votes. This is perfect, because, even if it does not pass, she gets a favorable rating from the folks it would have helped.
Notice, Obama didn't think about it.
Just how much nanny care do banks need, for god's sakes?
It's real simple, boys and girls. If the government does not rescue the banks, the economy will crumble like a stale cookie. Of course, the economy is going to crumble anyway, but that will be down the road--after the truly serious inflation starts. It ain't gonna be no fun.
i think hillary is a clone to bill thus billary is born.
and their love child is this total idot sp4 AKA bumbling idiot # 2
bush being # 1 of coarse
just had to say bush, didn't you!
Hillary beat you to it, you straggler. Get with the program McCain or find another program to get with.
We Bail out Banks (go see how many)
We Bail out whole nations (Mexico, how many times?)
We Bail out corporations (Chrysler, XM radio i.e. merger)
Maybe we ought to start selling these assh-les failure insurance?
Bush....gets pilloried by these jerks for seven years and then runs to save them. This XM merger is the cherry on top: both parties are losers so they get the gov't to greenlight the merger, creating a single monopoly in satellite radio. All this after they spend seven years spitting in Bush's eye. What a f--king farce.
They've not been spitting in his eye; they've been kissing his moronic ass.
...but you can bet they are, now!
i like bush .he's my favorite asshole
the Clinton administration gave us the best eight years of economic growth and prosperity and Bush took it and not only destroyed it but siphoned off all the money into the top 1% of the top 1%. And those people do not even pay taxes. There should be a law against republicans and their 'deregulate business' and thier 'government should be hands off'. All that means is that the fox is in the hen house. Hillary is the one to turn it back around.
Exactly,and meanwhile medicare and social security are nowhere to be found .Those programs are condemned by the republicans .Notice how 8 years of republican administration have drained money from the poorest to the richest .And some even proudly proclaim that is the american way of life .I beg to disagree,some values like compassion and social justice,health care and proper education are universal values .Why do some people even care to post ridiculous claims like 'those who lost their homes owe it to themselves,because their eyes were bigger than their wallets' ?As if that was the explanation for the current crisis in the real estate .Is there no shame ?It is the very same people that encourage them to buy,telling them that the raising value of real estate would turn their investment into a bonanza of future wealth .THe result is that some people are now camping close to the house they used to own,in a tent or a camper.It takes no more than losing your job and a femily member getting cancer to ruin your life .To cynically say those people owe it to themselves if they end up in misery is only the rich plaming the poor for their condition,wiping their hands after stealing your money.In a deregulated society where the most wealthy part of the population holds all the economical and political power,where laws are tailor made for the one percent that holds haldf of the wealth the poorest part is just a victim to be sucked to the bone .That has been happening during Reagan and Bush especially .
In these crucial elections for the USA the republicans prefer to concentrate on mudslinging rather than talk issues like medicare and social health .No wonder,these programs are bankrupt,no doubt the poorest again will be blamed for that by the republicans .
why Bbush didn't propose a similar plan before Hillary and McCain did.
Good point save the fact it is difficult to call Bush a Republican. It is difficult to call him anything other than what he is. Bush, as president, is just a freak of nature. It is unexplainable how he got into office and how he's remained there for two terms. One for the books. You are right though; in so many words he has trashed everything so many have sacrificed to achieve. He did it intentionally.
is to busy dodgeing bullets in iraq
a house they can't afford? Don't people have brains any more to do their own thinking? No.....it's easier to blame the mistake on someone else and oh yes it's the rich who worked and invested wisely to make their money who should be blamed for everything. But then we always have the good old government to bail us out which boils down to everyone of us who will pay one way or another.
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This bail out is crazy .Mar 24th, 2008 - 23:13:36
Most people buy a house that they can afford. Why should we help bail out someone whose tastes are bigger that their pocket books ?
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