The Trickle-Up BailoutOf course, this would have its own problems, but of course it would provide an opportunity for Congress to limit it to individual American homeowners, and specifically exclude bailing out illegal alien homeowners.
By Jonathan G.S. Koppell and William N. Goetzmann Wednesday, October 1, 2008; Page A17
The theory underlying the bailout plan stalled in Congress is that rescuing the finance industry will restore market stability and that the benefits will eventually trickle down to average Americans. Thus, solving the subprime mortgage crisis has morphed into a much larger challenge: reassembling the architecture of the financial markets, which seemingly requires giving the Treasury secretary nearly a trillion dollars and extraordinary latitude to pick winners and losers.
There is an easier and more politically palatable fix: Pay off all the delinquent mortgages. [More]
Remember, Fannie, Freddie, and all the banks were explicitly marketing mortgages to illegal aliens, who they said were "good risks."
I pointed this out in 2002, in an article called Why Not Just Give Them A Roomful Of Gold? Or: Immigration - Just Another Government Program. (Excuse my mentioning it—we're holding "I Told You So Week " at VDARE.com.) And Congress, especially the Republicans in Congress, could insist that in a homeowner bailout, no one should be bailed out except those people who were in the country legally. That would not only save some American taxpayer dollars, it would give us some idea of the size of the illegal alien mortgage default problem.
And of course, the illegal alien homebuyers wouldn't necessarily suffer. They could still be bailed out—by the Government of Mexico.