Deserving versus undeserving, part 2
Remapping Debate asked Merrill if he thought the federal government should provide assistance to a homeowner who was caught up in the mortgage crisis and is danger of losing his house because he is behind on his mortgage payments. He said he did not think that was appropriate.
Merrill, who also works at a bank, said too many people were living beyond their means prior to and during the housing crisis and they agreed to mortgages that came to cause them trouble of their own volition.
“Whenever we enter in a contractual agreement with someone we are legally and morally obligated to fulfill the terms of that contractual agreement,” Merrill said.
But what about victims of predatory lenders who were given false or misleading information about the terms of their mortgage? Merrill acknowledged that was sometimes the case, but he said the ultimate responsibility for understanding the terms of a contract falls with the person entering into the contract.
Asked whether that meant a victim of the housing crisis was less worthy than a victim of natural disasters, Merrill denied that was the case, but said the person behind on his mortgage payments was in an “unfortunate situation the [he] entered into” as a result of a “personal mistake.”
“What the American dream is, it’s always been my understanding, is that we want every family to be able to have a home of their own,” Merrill said. He added, however, that “it’s not feasible to think that every family is going to have that privilege. That’s unfortunate but that’s the way that it is.”
Tornado relief, yes; assistance from economic disaster, maybe
Dannie Reed is a Republican state representative from Mississippi whose district includes parts of Choctaw, Grenada, Oktibbeha, and Webster counties. Reed said his district was spared from the level of devastation sustained elsewhere in the state, but still there was an entire school in the community of Cumberland that was leveled.
Like the others, Reed agreed that the federal government had an obligation to step in to help state and local governments recover from natural disasters.
“Once it goes above a certain level obviously there’s so much desolation that the county and the state cannot handle that,” he said. “There’s a financial obligation there.”
But Reed also conceded that there are other, analogous situations in which it would be appropriate for the federal government to provide assistance.
Reed said he agreed with the idea that an economic disaster could be just as quick and devastating as a natural disaster. “Say a plant goes down in Akron, Ohio,” he said. “The federal government might be able to come in and help there.”
Remapping Debate asked Reed whether he thought there was any equivalence between a victim of an economic disaster — such as the mortgage crisis — and a victim of a natural disaster.
“There might be,” he said. “I do bleed for these people that get entangled with companies or banks that just don’t have the assets, and there may be predators,” he said.
Reed said he was wary, however, of offering such people direct assistance, such as through a subsidy program. “A subsidy just enables someone,” he said. “What I think would happen is it would be abused by people and by the mortgage companies.”
Instead, Reed, an educator, said he was in favor of imposing federal regulations and informing consumers to make better decisions.
“Make it very clear to people what their risks are when they go into it,” Reed said. “I’m more for an informed consumer with bottom lines on what companies can and can’t do rather than go into a program where you have these assistance programs that you have to administer on a continual basis.”
Reed said it would also be appropriate for the federal government to provide additional assistance to the unemployed in times of widespread economic distress, such as providing emergency unemployment compensation.
Again, Reed stressed that such a program should not be structured as a blanket subsidy program, but should be tailored to reach areas that need the assistance the most, such as those with the highest unemployment rates.
“That would give folks a little breathing room to move to another area or try to get something started,” he said.
Reed said it was important that any government programs be structured to be efficient and cut down on waste. His experience with FEMA has led him to believe that it could be streamlined. For example, he thought that 20 to 30 percent of FEMA payments that go to individuals to purchase food would be better spent on people who are in need of housing.
“Many times the nuts and bolts and details of a system hold the answers, rather than a blanket solutions,” Reed said. “If one system builds a great government infrastructure to apply aid and to rescue but yet it is not very efficient then we’re building a system that’s going to lose for all of us.”