Prime loans are now defaulting at much higher rates. (http://money.cnn.com/2008/08/12/real_estate/prime_defaults_price_drops/i...) Anyone with a little common sense could have predicted this years ago. Unfortunately, we're stuck with Bernanke, Paulson, and Congress, who ensured us that it was "contained" to subprime. Now, we are trusting the very people who caused this mess to clean it up?

For a moment, lets put aside the facts that the American Housing Rescue and Foreclosure Prevention Act : (1) privatizes profits and socializes losses; (2) is a moral hazard because it rewards reckless behavior while punishing prudent behavior; (3) increases our national debt; and (4) puts the U.S. credit rating at stake. Common sense tells us that taking money from people currently struggling to pay their mortgages on time puts them at greater risk of foreclosure. The more foreclosures there are, the more downward pressure there will be on prices. Also, taking money from potential buyers leaves them with less money to spend on home purchases, also causing downward pressure on prices. But, that is exactly what our government has decided to do -- take money from those paying their bills on time and those who would put a floor under the housing market by buying homes to cover the losses of banks and Chinese investors. Rather than preventing foreclosures, as indicated by the title of the bill, it seems to me that this legislation will only prolong and deepen the market correction. It is clear to me that our Congressmen are working not for the best interests of the American people they are supposed to represent, but for the banks who paid them hefty bribes (google "Friends of Angelo" and "Bank of America Bill") and the foreign governments who are financing their pet projects (be it the war or the proposed universal health care).

Ron Paul gives his colleagues in Congress the benefit of the doubt in his latest Texas Straight Talk (http://www.campaignforliberty.com/blog/?p=321) by saying they have good intentions. Maybe I'm cynical, but, for the reasons above, I see no good intentions. Furthermore, even if they had good intentions -- i.e. helping families avoid foreclosure -- they have no right to steal from some to "help" others.