Mark Winston Griffith
Mayors to Bush: Stimulate THIS!
As Bush and Congress worked out the details of an economic stimulus package, the United States Conference of Mayors recently convened in Washington to figure out how their own cities could be saved from threats to their economies. And nothing loomed larger than the specter of even more foreclosures sweeping through heir streets.
As the New York Times reported on Thursday, "facing a collapse in the subprime mortgage market that has pockmarked their cities with vacant houses and crippled their budgets, the nation’s mayors pleaded Wednesday for a huge infusion of federal aid...[M]any agreed that the collapse of the subprime market had left a growing problem of vacant houses, depressed property values, tighter credit, and a need to cut services to close municipal budget gaps...The conference called on Congress to raise the limits on loans bought by Fannie Mae and Freddie Mac to stimulate the mortgage market, and increase Community Development Block Grants to help stabilize neighborhoods."
Bush and Congress, trying to demonstrate that they're not sitting on their hands as the nation faces a possible recession, are drawing up plans to introduce a series of tax rebates, tax cuts for small businesses and other features of an economic stimulus package. Most of the package is simply a doling out of cash to taxpayers, but apparently the House of Representatives also impressed upon Bush to include an expansion of the FHA's ability to insure higher priced mortgages and temporarily increase the size of mortgages that can be bought on the secondary market by Fannie Mae and Freddie Mac.
Are Bush and congress on the right track? There is widespread speculation about whether these measures will do enough to stave off a recession. What's clear, however, is that beyond this stimulus package, the federal government is going to have to go put in place a far more comprehensive set of policies that will protect families, neighborhoods and entire cities from the subprime meltdown.