Foreclosures Burn While Senate Fiddles

July 9th, 2008

While Senate is fiddling foreclosures are burning and scalding the country without pause or respite. After the 4th July celebrations the Senate will come back to take up the foreclosure prevention bill. But by that time another 55,000 houses would have been netted by foreclosures. The estimate is on the modest side. Three million or more are defaulting and courting foreclosures. Millions more are expected to join the party during the forthcoming months. Meanwhile the economy stumbles as delinquencies increase. Nevertheless the Senate shut down work to enjoy the holiday mood without passing the much looked forward to bill.

It had been expected that the bill would pass but at the last minute petty politics prevailed. Senator John Ensign (Republican from Nevada) for instance wanted that the Senate also include a multibillion-dollar tax break package to be utilized for renewable energy research and application. The Democrats were annoyed not because they were opposed to the idea of tax breaks but because there was no need at this juncture to tag it on to the foreclosure prevention bill. This issue would unnecessarily delay the bill in the House – the House being more interested in other priorities. Delays of this type reap political dividends. For instance the Democrats were denied the opportunity to campaign during the recess on the right issues.

Foreclosures are fuelling the slump in the economy. The turmoil has its roots in the tumble down of the housing market. Until and unless the sale of houses pick up and the price stabilizes the situation will not level off. Fearing further price drops even the most optimistic of buyers with cash in their pockets and backing of lenders are hesitant to buy property fearing that the price might further fall. Each day more and more foreclosures are rushing into the already satiated market making the situation worse. It has become a vicious circle of foreclosures leading to more foreclosures.

The slowing down of the economy is preventing Americans from buying either houses or cars.. In a gallop poll it was seen that since the last year Americans are worse off financially. This is the first time after 32 years that nearly half the population is reporting losses.

The Bush years are being blamed for unbalanced expenditure based on questionable lending and inflation of housing prices. This was matched by lack of employment, wage cuts and no gains from the housing wealth. As a result the average American is knee deep in debts.