Market Watch: Democratic presidential candidate Kamala Harris is proposing $100 billion in federal grants to pay for down payment and closing costs to help close what she says is a racial wealth gap and address historical discrimination in home ownership against black families.
Harris announced her plan Saturday at the Essence Festival in New Orleans, where the California senator was among several of the 2020 White House candidates attending the largest annual gathering of black women in the country.
“By taking these challenges on, we can close that gap,” Harris said. “That not only lifts up black America, that lifts up all of America.” more …
Opinion: Here we go again. Excerpts from our post June 23, 2017:
“In 1975, Jimmy Carter signed into law the Community Reinvestment Act (CRA) that was intended to provide loans for inner city families to purchase homes. The CRA was signed into law by George H.W. Bush and turbo-charged in 1995 under Bill Clinton when the government pressured banks to make loans on almost any type of income, i.e. alimony, child support, etc.
George W. Bush was also a proponent of the CRA.
As mortgage bonds got packaged with both good loans and toxic loans, banks purchased large quantities of these government agency AAA bonds with a 5-6% return. In 2007, the bonds began to fail as millions of families who couldn’t afford the homes defaulted.
QE provided newly printed money to buy the housing bonds from failing banks. It was supposed to stimulate the economy by giving banks fresh capital to lend.
It didn’t work. But it did make stock prices skyrocket and bond yields plummet creating an ever expanding gap between rich and poor. When QE1 failed, QE2 and QE3 followed. By that time $4.5 trillion counterfeit money had been created most of which is still on the Fed’s balance sheet today.
So is QE 4 on the way? Of course it is. The housing crisis that nearly bankrupted the planet was caused by politicians looking for votes. It really doesn’t matter if it is Kamala Harris or Donald Trump who recently called for QE 4:
“I think they should drop rates,” Trump said. “I think they really slowed us down. There’s no inflation. It terms of quantitative tightening, it should actually now be quantitative easing.”
Once politicians take the drug of money printing, they realize that any scheme, no matter how big it fails, can be bailed out.