Tuesday, September 21, 2004

Bush and the Economy-

Recently, the Bush campaign has been trying to tout an improvement in the economy by using increasing home ownership, and especially unprecedented home ownership by black Americans. They conveniently forget to acknowledge two reasons for this- 1) Insanely low interest rates that were lowered in response to an economy that went into recession when Dubya took office, and 2) The high rate of ARM (Adjustable Rate Mortgages).

Many analysts are worried that these ARMs are a ticking financial time bomb, and that in 5-7 years we will see an unprecedented amount of foreclosed properties when those ARMs have their first adjustments. For example, a new homeowner may have been able to afford to buy a house at the super low intro rate on the adjustable, say 4.500%. After 5 years, however, that rate could go up to 10.000%, effectively doubling the homeowner's mortgage payment, making it unaffordable. But these little details are ignored by the administration. It just sounds so much better to tout unprecedented home ownership, doesn't it?


Blogger Kelley said...

Yes it does. Hear, hear Richard... I KNEW I liked you for some reason. :) I'm just glad to know I'm not the only one noticing these things.

9:48 AM  

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