Home alone

Barack Obama has one word for those who didn't get in over their heads during the recent housing boom and have paid their mortgages on time: Suckers!

The president on Wednesday traveled to Arizona to unveil a $75 billion bailout intended to slow the nation's foreclosure rate. The plan represented a stark contrast to Mr. Obama's inaugural speech, in which he vowed to preside over "a new era of responsibility."

In fact, this plan is a sop to the irresponsible and a kick in the teeth for the responsible, who will ultimately be forced to cover the subsidies and handouts advocated by the president.

Mr. Obama's "Homeowner Stability Initiative" does not require approval from Congress. It would offer incentives to mortgage lenders -- read: cash, courtesy of taxpayers -- to allow some 4 million homeowners to lower their monthly mortgage payments if the payments currently exceed a certain percentage of their income.

In addition, the plan will encourage mortgage companies to unload more shaky loans on the two quasi-government boondoggles known as Fannie Mae and Freddie Mac in order to allow some 13 million homeowners who are upside down to refinance their properties.

Mr. Obama sought to deflect criticism of his proposal by arguing that it "will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans."

That's sheer poppycock.

Yes, there are some families in dire straits due to a layoff or other economic circumstances beyond their control. Nobody wants to see people forced out of their homes in such situations, but it happens.

By contrast, a great many of those the president seeks to bail out have either spent themselves into oblivion or used an unwise mortgage plan -- involving no money down, an interest-only loan or an artificially low and adjustable rate -- to purchase homes they otherwise might never have been able to afford, betting that housing prices would continue to skyrocket. In fact, some of these homeowners -- those with no equity or who made a minimal down payment, if any -- would be out precious little money were the market simply allowed to operate without interference, pushing them into a rental property for a monthly payment less than they now struggle to cover.

Nor is the Obama plan the end. Congress will soon get into the act. At a hearing last week of Barney Frank's House Financial Services Committee, majority Democrats made it clear they favor a number of other proposals, including a toxic measure to allow bankruptcy judges to rewrite mortgage contracts -- for which the president has previously indicated support.

Meanwhile, congressional Democrats continue to ignore their role in encouraging -- and even demanding -- that lenders issue home loans to people with sketchy credit histories, rasing the spectre of an eventual repeat of the current mess unless these underlying factors are addressed.

No matter how Mr. Obama prefers to gussy it up, the price for all this will be borne by the many Americans who played by the rules and lived within their means. And they're supposed to grin and bear it, according to supporters of housing handouts, because if foreclosures decimate their neighborhoods, it will ruin property values. Which is a lot like saying they should be happy paying protection money to the local thugs lest they find their tires slashed.

Welcome to the "new era of personal responsibility." Suckers!