James Pethokoukis

Politics and policy from inside Washington

Poll: Americans dubious of government forgiving mortgages

Aug 9, 2010 18:32 UTC

Superpollster Scott Rasmussen apparently noticed my recent column:

A new Rasmussen Reports national telephone survey finds that:

1. 58% oppose a proposal to have the federal government forgive a portion of the mortgage debt owned by troubled homeowners.

2. 63% of voters think a government mortgage forgiveness program is unfair to those who have been regularly paying their mortgages …  vs. 23% who disagree and believe such a program is fair.

3. 48% of homeowners think government-ordered mortgage forgiveness for some homeowners would be bad for the economy … 30% say it would be good for the economy, and 15% believe it would have no impact.

4. Nearly half (49%) of Democrats say government-ordered mortgage forgiveness for some homeowners would be good for the economy. Sixty-seven percent (67%) of GOP voters disagree and say the plan would be bad for the economy. Among unaffiliated voters, 33% say good, but 47% say bad.

5. Sixty-eight percent (68%) of the Political Class say a mortgage forgiveness plan would be good for the economy. Fifty-five percent (55%) of Mainstream voters feel otherwise and think it would hurt the economy.

COMMENT

I don’t believe most of those polled were aware of who would suffer if President Obama’s mortgage forgiveness plan would ever become a reality. The derivative default swap fiasco that ripped our economy to pieces was in large part to too how many times mortgages were sold. The only real loser would be the last owner of the mortgages and I don’t think the public really cares if they get burned. Maybe if that Geitner fellow relinquishes some real information regarding who stands to lose, the President will have an easier time selling the concept to everyone and once again embarrass the Senate republicans, again.

Posted by Tim456897 | Report as abusive

Soak the rich?

Aug 9, 2010 15:27 UTC

It worries me when I hear folks, mostly liberals, speak fondly of the 1950s economy and its 90 percent marginal tax rates. In this piece, James Surowiecki advocates soaking the super-rich:

A better tax system would have more brackets, so that the super-rich pay higher rates. (The most obvious bracket to add would be a higher rate at a million dollars a year, but there’s no reason to stop there.) This would make the system fairer, since it would reflect the real stratification among high-income earners. A few extra brackets at the top could also bring in tens of billions of dollars in additional revenue.

There would be political advantages, too: the reform could actually make tax hikes on top earners more popular. Critics like to describe tax hikes as hurting small business, because small-business owners make up a sizable percentage of people in the top two brackets and because small-business owners, unlike Wall Street traders, are popular on Main Street. It would be harder to mount a defense of millionaires, which may be why this year a Quinnipiac poll found overwhelming support, even among Republicans, for a millionaire tax.

And the economic reason would be what, again? You’re not going  to balance the budget that way, and you only feed the mistaken view that taxing “somebody else” will bring fiscal solvency.

COMMENT

It is certainly true that you will never bring in enough tax revenue to erase these deficits, and most likely it will have the worst impact on the middle class if the tax cuts are allowed to expire. The storied American middle class is already being wiped out. I am a proponent of a flat tax though I do not know how politically viable it is at this time. The compromise I would strike is to add more brackets on the top end on the income tax but abolish the estate tax (its flat out immoral) and eliminate/reduce the capital gains tax for 5+ years. The very rich will have a choice…invest in American businesses or start to pay down the deficit. My guess is that you will see a sharp increase in investment in energy and new technologies that would increase the potential of job growth.

Posted by CraigRock | Report as abusive

Ezra Klein: Welcome to the Recovery

Aug 9, 2010 14:12 UTC

WaPo blogger Ezra Klein yet again comes rushing to the defense of the Obama administration by making the case that the economy is pretty much as good as can be expected given the nature of the financial meltdown and recession.

A look at the history of financial crises shows that our slow, halting recovery is right on schedule and the business community’s caution is predictable.Not all recessions are created equal. Recessions caused by financial crises take a lot longer to dig out of than their more common cousins. One is like the flu. The other, a car crash. When the flu goes away, you’re good. When a collision spins to a stop, that’s when the long, slow process of healing begins.

In “This Time is Different: Eight Centuries of Financial Folly,” Carmen Reinhart and Kenneth Rogoff study every financial crisis of the past 800 years. It’s an exhaustive study, and its conclusions are depressing for a country that believes itself exceptional even in its suffering: We’re not special. If you consider unemployment, housing prices, government debt and the stock market, Rogoff says, “the U.S. is just driving down the tracks of a typical post-WWII deep financial crisis.” In some areas, we’re even a bit ahead of the game: Economic output usually falls by 9 percent. We held the drop to 4 percent.

A few thoughts here:

1) Team Obama itself is dismissive of the R&R argument. The U.S. is so unique an economy (the dollar as the global reserve currency, for instance), they argue, such historical and cross-economy comparisons are not applicable.

2) I would like to see a counterfactual simulation run on this plan: a $400 billion payroll tax holiday in 2009, a permanent 10-percentage point cut in corporate taxes,  a five-year extension of all the Bush tax cuts (giving time to totally revamp the code), and a regulatory freeze.

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