One of our readers pointed out a comment by Senator Biden in last week's Vice Presidential debate that called for extending the authority of government to not only buy up toxic assets but to reset the value of the principle owed. This isn't the first time we've recently heard Democratic leaders talking about changing principle values. It's predictable really and just an extension of the core philosophy of Progressive thought.
The reasoning behind the move is to adjust principle values for properties that were bought at higher market values to current market conditions in order to protect those who are "upside down" in their homes. In other words, these property owners are in a situation where they owe more than the property is worth.
(Sidebar)It's the type of policy that warms the cockles of most Progressive's hearts. But it's also the type of dangerous policy that - despite the $700 BILLION Bailout and Pork-fest passed by Congress - would ultimately make money harder for home buyers to get.
Over the past few weeks the concept of a free market has taken somewhat of a beating. The fact is that we are the market. Our freedom to negotiate the exchange of goods or services is a foundational part of our individual liberty. When we lose the freedom of exchange we lose the freedom to be rewarded for our achievements.
Say for example, you and your neighbor engage in a voluntary transaction where you loan your lawn mower and your weed whacker to them. The neighbor agrees not only to repay (return) your lawn mower and weed whacker but to refill their gas tanks and provide you with an additional gallon of gas.
The lawn mower and weed whacker are the principle, the gas is the interest. Along comes Barrack Hussein O'Biden who decide that the extra gas is really asking for too much. In addition, your neighbor who can't afford to maintain their lawn really needs your weed whacker to help them. So the O'Biden boys change the terms of your agreement forgiving them the additional gallon of gas and allowing your neighbor to keep your weed whacker.
What do you think will happen the next time your neighbor shows up on your doorstep to borrow something? That's right... you're not gonna' give him the time of day fearing the O'Biden boys will show up and make you pay for it.
Government intervention in a private transaction never benefits either party. The lender loses money and stops lending. The borrower ultimately ends up unable to borrow what they need. The only "winner" is the politician who convinces the borrower that they're getting something for free and that their benefactor is the intervening politician.
In addition, Obama and Biden are hawking a "progressive" tax scheme that they claim only raises taxes on those rich people who make over $250,000 a year. Like the O'Biden idea of allowing the government to reset principle amounts, this Robin Hood tax policy is appealing until you take a look at who actually pays.
Who are these evil "rich people" that should be required to pay more of their earnings? As you drive around town take a look at all of those local businesses that line the major streets. They're hardware stores, lock smiths, beauty salons, pet groomeries, and restaurants. These are your friends and neighbors that have invested their money, time, sweat, and tears in a business that they believe in. These are the people that make Albuquerque unique - not the big boxes, department stores, and chain restaurants that can be found in any city anywhere in the country. And these are the very people that O'Biden propose to increase taxes on.
When faced with increased taxes small businesses look at the increase as an increase in the cost of doing business. Their only choices are to absorb the increased cost of doing business, increase prices to their customers, or go out of business. So you see, the middle class - those who Obama and crew claim to be protecting - really face higher prices or the loss of goods or services.
If that sounds familiar that's because it's no different that the lender who makes a contract with a borrower to lend a specific amount of money for a set amount of profit who has both the profit and the amount to be repaid arbitrarily set by some politician.
You'll hear The Anointed One and his chief acolyte Biden talking about fairness. What is fair about forcing someone whose hard work earns them an amount of wealth that is in excess of some arbitrary line? What is fair about changing the terms of a freely and legally negotiated contract?
What Obama proposes is no different than the local hoodlum stealing your wallet at knifepoint. Make no mistake, if Obama becomes President he will work to take from those who have earned in order to give to those who haven't. The middle class will pay for that redistribution through higher prices for goods and services, and shortages caused by small businesses that are unable to absorb Obama's small business hold-up.
Democratic leaders have long advocated this type of theft as a policy - stealing from one group to give to another in exchange for political power. In this way (as in many others) Obama isn't change - he's the logical result of class warfare politics, the stock and trade of the Democratic Party since the '30's.
We don't believe that your everyday Democrat truly believes that it's right to steal. We believe that they're good people who want to see everyone succeed. The problem is success cannot be given, it has to be earned. And while there's little doubt that Republicans lost their way... It is certain that an Obama Presidency would be a gigantic leap toward more government, more taxes, and less liberty.