MaggieD
DP Veteran
- Joined
- Jul 9, 2010
- Messages
- 43,244
- Reaction score
- 44,664
- Location
- Chicago Area
- Gender
- Female
- Political Leaning
- Moderate
Inflation and the Federal Reserve
A sound monetary policy is critical for maintain-ing a strong economy. Inflation diminishes the pur-chasing power of the dollar at home and abroad andis a hidden tax on the American people. Moreover, the inflation tax is regressive, punishes those who save, transfers wealth from Main Street to Wall Street, and has grave implications for seniors living on fixed incomes. Because the Federal Reserve’s monetary policy actions affect both inflation and economic activity, those actions should be transparent. Moreover, the Fed’s important role as a lender of last resort should also be carried out in a more transparent manner. A free society demands that the sun shine on all elements of government. Therefore, the Repub-lican Party will work to advance substantive legisla-tion that brings transparency and accountability to the Federal Reserve, the Federal Open Market Com-mittee, and the Fed’s dealings with foreign central banks. The first step to increasing transparency and accountability is through an annual audit of the Federal Reserve’s activities. Such an audit would need to be carefully implemented so that the Federal Reserve remains insulated from political pressures and so its decisions are based on sound economic principles and sound money rather than on political pressures for easy money and loose credit. Determined to crush the double-digit inflation that was part of the Carter Administration’s economic legacy, President Reagan, shortly after his inaugura-tion, established a commission to consider the feasi- bility of a metallic basis for U.S. currency. Thecommission advised against such a move. Now, threed ecades later, as we face the task of cleaning up the wreckage of the current Administration’s policies, we propose a similar commission to investigate possible ways to set a fixed value for the dollar.
Ending the Housing Crisis andExpanding Opportunities forHomeownership
Homeownership expands personal liberty, builds communities, and helps Americans create wealth. “The American Dream” is not a stale slogan. It is the lived reality that expresses the aspirations of all our people. It means a decent place to live, a safe place to raise kids, a welcoming place to retire. It be-speaks the quiet pride of those who work hard to shelter their family and, in the process, create caring neighborhoods. Homeownership is best fostered by a growing economy with low interest rates, as well as prudent regulation, financial education, and targeted assistance to responsible borrowers. The collapse of the housing market over the last four years has been not only a severe blow to the en-tire economy, but also a personal tragedy to millions of Americans whose homes have lost value and to so many others who have lost their homes. Combined with high unemployment, that decline has left count-less homeowners saddled with mortgages exceeding the value of their homes. The response of the current Administration has done little to improve, and much to worsen, the situation. By discouraging private sec-tor investment, it has stalled the housing recovery. Its massive intervention in the housing market, with the Federal Housing Administration (FHA), FannieMae and Freddie Mac backing nearly all new mort-gages, has hit the taxpayers with a bill for almost$200 billion to bail out the latter two institutions. It has spent billions more on poorly designed and inef-fective housing assistance programs. Making matters worse, the Congress, under Democrat control, en-acted the Dodd-Frank Act, a massive labyrinth of costly new regulations that deter lenders from lend-ing to creditworthy homebuyers and that dispropor-tionately harms small and community banks. As aresult, home sales remain weak, investment in hous-ing remains depressed, construction industry jobs re-main down, and mortgage lending has yet to recover to pre-crisis levels
Rebuilding Homeownership
We must establish a mortgage finance system based on competition and free enterprise that is trans-parent, encourages the private sector to return to housing, and promotes personal responsibility on the part of borrowers. Policies that promote reliance on private capital, like private mortgage insurance, will be critical to scaling back the federal role in the hous-ing market and avoiding future taxpayer bailouts. Re-forms should provide clear and prudent underwriting standards and guidelines on acceptable lending prac-tices. Compliance with regulatory standards should provide a legal safe harbor to guard against oppor-tunistic litigation. Fannie Mae and Freddie Mac were a primary cause of the housing crisis because their im-plicit government guarantee allowed them to avoid market discipline and make risky investments. Their favored political status enriched their politically-connected executives and their shareholders at the ex-pense of the nation. Both Fannie Mae and FreddieMac should be wound down in size and scope, andtheir officials should be held to account. The FHA, tripled in size to more than $1 trillion under the current Administration, has crowded out the private sector and is at risk of requiring a taxpayer bailout. It must be downsized and limited to helping first-time homebuyers and low- and moderate-income borrowers. Taxpayer dollars should not be used to bail out borrowers and lenders by funding principal write-downs. While the federal government must prosecute mortgage fraud and other financial crimes, any settlements received thereby should be directed to individuals harmed by the misconduct, not diverted to pay for unrelated programs. FDIC insurance for bank depositors must be pre-served. However, to correct for the moral hazard cre-ated by deposit insurance, banks should be well capitalized, which is the best insurance against future taxpayer bailouts.The federal government has a role in housing by enforcing non-discrimination laws and assisting low-income families and the elderly with safe and ade-quate shelter, especially through the use of housing vouchers. Homeownership is an important goal, but public policy must be balanced to reflect the needs of Americans who choose to rent. A comprehensive housing policy should address the demand for apart-ments and multi-family housing. Any assistance should be subject to stringent oversight to ensure that funds are spent wisely.
A sound monetary policy is critical for maintain-ing a strong economy. Inflation diminishes the pur-chasing power of the dollar at home and abroad andis a hidden tax on the American people. Moreover, the inflation tax is regressive, punishes those who save, transfers wealth from Main Street to Wall Street, and has grave implications for seniors living on fixed incomes. Because the Federal Reserve’s monetary policy actions affect both inflation and economic activity, those actions should be transparent. Moreover, the Fed’s important role as a lender of last resort should also be carried out in a more transparent manner. A free society demands that the sun shine on all elements of government. Therefore, the Repub-lican Party will work to advance substantive legisla-tion that brings transparency and accountability to the Federal Reserve, the Federal Open Market Com-mittee, and the Fed’s dealings with foreign central banks. The first step to increasing transparency and accountability is through an annual audit of the Federal Reserve’s activities. Such an audit would need to be carefully implemented so that the Federal Reserve remains insulated from political pressures and so its decisions are based on sound economic principles and sound money rather than on political pressures for easy money and loose credit. Determined to crush the double-digit inflation that was part of the Carter Administration’s economic legacy, President Reagan, shortly after his inaugura-tion, established a commission to consider the feasi- bility of a metallic basis for U.S. currency. Thecommission advised against such a move. Now, threed ecades later, as we face the task of cleaning up the wreckage of the current Administration’s policies, we propose a similar commission to investigate possible ways to set a fixed value for the dollar.
Ending the Housing Crisis andExpanding Opportunities forHomeownership
Homeownership expands personal liberty, builds communities, and helps Americans create wealth. “The American Dream” is not a stale slogan. It is the lived reality that expresses the aspirations of all our people. It means a decent place to live, a safe place to raise kids, a welcoming place to retire. It be-speaks the quiet pride of those who work hard to shelter their family and, in the process, create caring neighborhoods. Homeownership is best fostered by a growing economy with low interest rates, as well as prudent regulation, financial education, and targeted assistance to responsible borrowers. The collapse of the housing market over the last four years has been not only a severe blow to the en-tire economy, but also a personal tragedy to millions of Americans whose homes have lost value and to so many others who have lost their homes. Combined with high unemployment, that decline has left count-less homeowners saddled with mortgages exceeding the value of their homes. The response of the current Administration has done little to improve, and much to worsen, the situation. By discouraging private sec-tor investment, it has stalled the housing recovery. Its massive intervention in the housing market, with the Federal Housing Administration (FHA), FannieMae and Freddie Mac backing nearly all new mort-gages, has hit the taxpayers with a bill for almost$200 billion to bail out the latter two institutions. It has spent billions more on poorly designed and inef-fective housing assistance programs. Making matters worse, the Congress, under Democrat control, en-acted the Dodd-Frank Act, a massive labyrinth of costly new regulations that deter lenders from lend-ing to creditworthy homebuyers and that dispropor-tionately harms small and community banks. As aresult, home sales remain weak, investment in hous-ing remains depressed, construction industry jobs re-main down, and mortgage lending has yet to recover to pre-crisis levels
Rebuilding Homeownership
We must establish a mortgage finance system based on competition and free enterprise that is trans-parent, encourages the private sector to return to housing, and promotes personal responsibility on the part of borrowers. Policies that promote reliance on private capital, like private mortgage insurance, will be critical to scaling back the federal role in the hous-ing market and avoiding future taxpayer bailouts. Re-forms should provide clear and prudent underwriting standards and guidelines on acceptable lending prac-tices. Compliance with regulatory standards should provide a legal safe harbor to guard against oppor-tunistic litigation. Fannie Mae and Freddie Mac were a primary cause of the housing crisis because their im-plicit government guarantee allowed them to avoid market discipline and make risky investments. Their favored political status enriched their politically-connected executives and their shareholders at the ex-pense of the nation. Both Fannie Mae and FreddieMac should be wound down in size and scope, andtheir officials should be held to account. The FHA, tripled in size to more than $1 trillion under the current Administration, has crowded out the private sector and is at risk of requiring a taxpayer bailout. It must be downsized and limited to helping first-time homebuyers and low- and moderate-income borrowers. Taxpayer dollars should not be used to bail out borrowers and lenders by funding principal write-downs. While the federal government must prosecute mortgage fraud and other financial crimes, any settlements received thereby should be directed to individuals harmed by the misconduct, not diverted to pay for unrelated programs. FDIC insurance for bank depositors must be pre-served. However, to correct for the moral hazard cre-ated by deposit insurance, banks should be well capitalized, which is the best insurance against future taxpayer bailouts.The federal government has a role in housing by enforcing non-discrimination laws and assisting low-income families and the elderly with safe and ade-quate shelter, especially through the use of housing vouchers. Homeownership is an important goal, but public policy must be balanced to reflect the needs of Americans who choose to rent. A comprehensive housing policy should address the demand for apart-ments and multi-family housing. Any assistance should be subject to stringent oversight to ensure that funds are spent wisely.
