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What McCain said about buying up bad mortgages.

After last week's debate, I wrote:

I should have paid more attention to this [McCain's proposal that the government buy up bad home-loan mortgages and reset the value of the loan]. I heard it last night, but couldn't understand how it would deal with the crisis. It seems like a massive government benefit going out to people who overextended themselves taking loans. Why not give money to all the frugal people who believed they couldn't afford to buy a house? I don't understand the theory, other than as political pandering.

During last night's debate, I felt like I was getting a personal response from McCain:

Now, we have allocated $750 billion. Let's take $300 (billion) of that $750 billion and go in and buy those home loan mortgages and negotiate with those people in their homes, 11 million homes or more, so that they can afford to pay the mortgage, stay in their home.

Now, I know the criticism of this.

'Well, what about the citizen that stayed in their homes? That paid their mortgage payments?' It doesn't help that person in their home if the next door neighbor's house is abandoned. And so we've got to reverse this.

Is that a good enough answer?

By the way, this problem reminds me of the parable of the prodigal son, specifically, the complaint of the other son:

And he was angry, and would not go in: therefore came his father out, and intreated him.

And he answering said to his father, Lo, these many years do I serve thee, neither transgressed I at any time thy commandment: and yet thou never gavest me a kid, that I might make merry with my friends:

But as soon as this thy son was come, which hath devoured thy living with harlots, thou hast killed for him the fatted calf.

Don't conservatives usually sound like the older son, irked with the way liberals wreck the incentive structure? But McCain is like the father in the story:

Son, thou art ever with me, and all that I have is thine.

It was meet that we should make merry, and be glad: for this thy brother was dead, and is alive again; and was lost, and is found.

Full post as published by Althouse on October 16, 2008 (boomark / email).