The Political Inquirer

The United States is a debtor nation. The average American household has accumulated $14,500 in debt, excluding mortgages. 40% of American families spend more than they earn every year, and 60% of credit card accounts aren’t paid off on a monthly basis. All along, the remedy proposed by Bush & Co. has been to encourage Americans to accept responsibility for their own financial situations by saving. But when the going gets tough, the Bush administration’s commitment to personal responsibility gets going.

Witness Bush’s plan to bail out subprime mortgage borrowers by forcing lenders to freeze adjustable-rate mortgages at low, governmentally set interest rates. Some might say that the president must do this in order to save the economy. Some might say that it would be heartless to let people lose their homes because of lenders’ predatory lending practices. Some might say this is the only option. Some would be wrong.

For starters, the idea that the Bush plan is going to save the economy is a fallacy. The economy is going to suffer in some way no matter what is done about the subprime mortgage crisis. Bush’s plan may bail out borrowers, but it will injure the economy by instead penalizing lenders. Freezing interest rates will force lenders to restrict the very kind of credit that many who are seeking to buy a home apply for, thus further driving down property value and stalling the housing market. Anyone who thinks this isn’t going to hurt the economy should have his head examined.

But there’s more to it than the effect that the Bush plan will have on credit and the housing market. By bailing out borrowers, President Bush is enabling Americans to borrow and spend irresponsibly (just like the federal government, I might add). He is encouraging the debtor mentality that now reigns supreme in the American collective psyche, and he’s setting back any progress that he or other conservative politicians may have made in shifting from a culture of debt to a culture of responsibility.

There’s nothing conservative about the Bush plan, if by conservative we still mean limited government that encourages personal responsibility among its citizens. There’s nothing liberal about it either, if by liberal we still mean allowing the market to operate free or at least relatively free of government intervention. The Bush plan, ladies and gentlemen, is socialism lite, and it would make any European politician proud.