ELISE PATKOTAK
COMMENT
(01/04/11 19:21:18)
As Congress prepares to go back into session and finally get a grip on the deficits that are strangling our economy and our children's financial future, I think we should stop for a moment and take a look at the latest frivolous spending that they have in their cross hairs for elimination.
Yes, middle class Americans, I'm looking at you when I say that. Because the same people who felt the deficit was not as important as giving millionaires a tax cut have decided that the deficit is now so important they need to consider taking the mortgage-interest tax deduction away to help control it.
That deduction is one of the few readily available to America's middle class, giving us at least a small tax break. I don't think millionaires particularly care about this since they have lawyers and accountants making sure they pay less taxes than your average sales clerk. But for America's great middle, those of us still clinging stubbornly to the idea that the American dream is meant for more than just the powerful and wealthy, bringing this idea up so soon after continuing a tax cut for millionaires seems like a deliberate insult.
This proposal is part of the package put forth by the federal deficit commission. While I respect the intelligence and wisdom of that group, this piece of the proposal sticks in my craw in a way none of the rest does.
Perhaps it's because policy makers are reconsidering the idea of home ownership as a good goal. Given the recent debacle in the housing market, our politicians are apparently wondering if middle class Americans can be trusted with owning a home. Those junk mortgages, created by hotshots who are for the most part still hauling in millions, are going to be placed on our (mortgaged) doorsteps as proof that we're simply not ready for grown-up responsibility.
While I agree that people who bought into junk mortgages were clearly not thinking very logically or well, I think at least half the blame must also fall on the shoulders of the "financial geniuses" who not only created these fatal instruments, but then sold them to an American public that had already been sold on the American dream of home ownership. It makes me feel like the mark in a street corner shell game to suddenly be asked to bear the full burden of this stupidity.
When I have a financial professional telling me that I can afford a certain type of mortgage and it is a safe transaction in which to engage, I am apt to believe that person. Most of the time, they are honest brokers working with you to ensure your financial future. But in the case of junk mortgages, the brokers were clearly more interested in lining their own pockets than in providing an honest service to their clients. Here in Alaska we were lucky that the people overseeing the mortgage market did not let junk mortgages into the state. But if they had, I have to wonder how many of us would have taken advantage of the offer.
So the situation is now this. Those brokers who created the instruments that led to the implosion of the housing market win on two fronts: One, the banks they represent got bailed out by our tax dollars so they never missed a paycheck; and two, they are still receiving bonuses for being some sort of financial wizards -- bonuses that are larger than most of our annual salaries by a factor of 100 or so.
We poor fools down on the middle rungs of this upward mobility ladder, on the other hand, lose on two fronts. Either we are part of the group that lost our homes and our American dream when the market tanked or, having bought a house we could afford with a conventional mortgage, we will now be penalized for daring to think that the American dream applied to us.
Clearly America's middle class cannot be trusted to understand and achieve the American dream. That apparently is something reserved only for millionaires who managed to hold on to their tax break. Given that our Congress, and the Senate in particular, is rapidly becoming a millionaires club, you can see how that makes sense ... at least it does inside the Beltway.
Out here in real America, it stinks.
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