President Obama's big legislative push to juice the economy, the $447 billion American Jobs Act, is running into a brick wall of Republican opposition in Congress. So he's replacing his refrain of "Pass this bill" with a new mantra: "We can't wait." The substance behind the new slogan is a series of executive orders and other unilateral changes Obama is scheduled to roll out through the end of the year, to do what he can to help the economy without Congress. First up, on Monday, was an expanded Home Affordable Modification Program (HARP) designed to help struggling homeowners refinance at lower interest rates. Obama will follow that up with relief for student loans. Will these measures do any good?
These efforts are "pathetic": Housing is the millstone around the economy's neck, but HARP, which began in 2009, has barely lightened the load, refinancing a sorry 30,000 homes a month in its first two years, says Felix Salmon at Reuters. The expanded HARP II won't do much better, and we're "never going to make a dent in the mountain of 11 million underwater mortgages at that rate." In fact, "this whole exercise is so obviously pathetic" that unless Obama's other ideas are a lot better, it "bodes very ill for the economy."
"Obama's pathetic refinancing initiative"
Actually, the new HARP could do wonders: Obama's much-improved mortgage-relief plan is "a good start," says Joseph Gagnon at the Peterson Institute for International Economics. If he gets the details right and the Federal Reserve commits to keeping mortgage rates low for at least a year, the wave of refinancing could save U.S. households $80 billion a year, providing a long-term stimulus that would boost the broader economy, "perhaps creating 4 million extra jobs."
"The last bullet"
But it won't help Obama in 2012: HARP II might well have "a nice stimulative effect — possibly kicking in in time for the next president to enjoy," says Andrew Leonard at Salon. Which is why Obama and his economic advisers should have done something like this — or bigger — three years ago. Now, belatedly, this will help qualifying homeowners, but it won't do much for Obama before the election. In that context, "the refrain 'We can't wait' doesn't just ring hollow — it actively begs for mockery."
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