Monday, October 13, 2008

More wealth destruction from Obama

The AP reports:
Democratic Barack Obama on Monday... propos[ed] a 90-day moratorium on home foreclosures at some banks....

If enacted, this policy would make it harder and more costly for banks to foreclose on non paying home owners. By increasing the cost of foreclosure, the policy would reduce the value of the asset. The reduction in the value of the asset would show up as a net loss of wealth for the bank and society as a whole. The intrinsic destruction of wealth is the root cause of America's (and the world's) current financial crisis.

Obama has noble goals, but he can not see that how he would achieve these goals could worsen the root causes of the current financial crisis. The American people need to ask themselves, do they want to help non paying home owners stay in their home, or do they want to stop the cycle of wealth destruction that is leading America to the precipice of economic ruin. Obama and Democrats through noble goals and economic ignorance may very well push America over the edge.