The letter below was submitted to the Cabinet Press on 9/27/08 in repsonse to a letter from Fred Morse: “Letter writer says don’t blame him; he didn’t vote republican.”  Fred, using his trademark incomplete facts and gross abuse of suppostion, takes the opportuntiy to blame Bush and Republicans for [insert issue here] the housing credit crisis. I don’t mean to keep picking on him, but he makes it too easy.  Fred is probably a great guy, and maybe someday we’ll have a beer together, but I can guarantee we won’t be talking politics.

To the Editor:

In the September 25^th Merrimack Journal Fred Morse states that “people paying attention know the origin of the sub-prime mortgage disaster.”  Well let’s hope so, because Mr. Morse would like you to believe that it was the “American Dream,” legislation passed by a ‘Republican controlled congress’ in 2003.  He claims they passed it because the “Bush GDP was sinking fast,” indicating that it provided free taxpayer money to people who couldn’t afford a down-payment on a home.  The assumption here is that increased home sales would drive up GDP.   But Mr. Morse was a bit thin on details so let me elaborate for him.

S.811 was passed in November of 2003 by the Senate of the 108^th congress, a senate with 51 Republicans, 48 Democrats, and 1 independent.  If you are not overwhelmed by the 1% Republican majority in the Senate, the House had an enormous 2% Republican majority.   You might also want to know that the measure passed unanimously in the Senate, and skimmed straight through the House without objection.   

This “crisis creating” legislation included housing assistance for grandparents who are raising grandchildren, renewed ‘HOPE VI’ main street revitalization money, and included a maximum of 200 million annually for each of the following 5 years to provide down-payment assistance block grants to be administered by the States in amounts not to exceed 6% of cost or a maximum of $10,000 dollars per applicant. 

Money could also be allocated from the grant pool for low-income home improvement assistance at the States discretion so the money wasn’t all going to first time home buyers.  Mr. Morse rightly ignores all the other limitations because they just make his argument untenable.  

So how much impact do you think 200 million might have in a 12-14 trillion dollar economy? Not much.  Oh, and those of us paying attention also noticed that GDP grew steadily for 25 consecutive quarters, from July of 2001 until October of 2007, but then dropped a bit, but only for one quarter.   The only thing sinking fast here is Mr. Morse argument.