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Ed Pinto of the American Enterprise Institute on the administration’s push to help homeowners with a bank tax.
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Now I just a couple of minutes the president will announce his plan that he says will help home -- it will let people who are on the -- talk on their homes refinance.
Joining us now is Ed Pinto from the Americans and enterprise institute.
I head of the Chicago this rights the president will propose a plan that says if you go to privately backed mortgage and you on the war -- If you have good credit and if you're up to date on your mortgage payments we will let you -- finance and will pay for it with a bank tax is that correct that's basically what he's proposing.
And you don't like the bank tax I don't like the bank tax or the proposal generally.
First of all the bank -- went wrong with it.
I don't think it has a chance of passing congress that this becomes a political football he's basically just trying to embarrass congress and forced to turn it down.
Knowing that it would likely be turned down.
And it didn't go anywhere but -- the president can say the key tried to help you guys but those -- Republicans they wouldn't even -- this on the back I think you have to look at any proposal through two glances what's wrong with the housing market.
Number one there's too much debt that's where you have underwater borrowers does this address that no it doesn't he leverage they -- -- period to.
Does it soak up excess supply or otherwise speed up the foreclosure process doesn't do that either.
So what you need to do to solve this problem is one.
If you were going to address people who are under -- by 20% or more which is that but they talk about which is usually not what they deal with but that's what they talk about.
You take those individuals.
Look offered to refinance to lower rate.
But take the money and reduce.
The as speed up the amortization rather reduce the payment these are people already paying purity have been -- to do this speed up the conversation so they get out of the hole.
Nothing the president is doing does that number one number two.
Deal with jobs so if you do some simple math he created a million jobs there's lots of ideas out there and how to do that.
That would -- a 100000 dollars GDP for each job that's -- hundred billion dollars that's a real impact on a fourteen trillion dollar economy seven tenths of a percent a year.
If on the other hand you take five million loans which is a big number in this program.
Say 3000 dollars that's fifteen billion dollars but that's at fresh money like jobs are.
That's just move in the money around from one pocket to another.
Because today somebody is using that fifteen billion is -- so it's a bad plan it won't look -- -- not gonna pass in the first and it's not to test for exactly.
At -- do you summarized it nicely thanks very much and they've always a pleasure to.
