July 2008 Archives

Dear Mr. Kirsch:

Thank you for writing me about the current downturn in the housing market and the federal government's role in responding. I appreciate hearing from you on this important issue.

As you know, growing losses in subprime mortgage markets have recently had a negative effect on the United States economy. Thousands of people are on the brink of losing their homes to foreclosure, and as a result many financial institutions have been faced with bankruptcy as consumer confidence in mortgage-backed securities has decreased. I share many of your concerns regarding the appropriate manner for Congress and the Administration to respond to this situation.

Improving the economy is a top priority of mine. There are numerous proposals currently pending in Congress designed to strengthen the regulation of banking and securities trading in order to prevent this kind of economic downturn in the future, as well as various other pieces of legislation to address the current downturn in the economy and create economic stimulus. One of these bills, H.R. 3221, the Foreclosure Prevention Act of 2008, was signed into law by President Bush on July 30, 2008. This bill contains provisions to help thousands of homeowners avoid foreclosure, as well as provisions to stimulate the housing market including refundable tax credits to certain first-time home buyers and resources to cities to buy foreclosed or abandoned properties.

Stabilizing the housing market is vital to strengthening the economy and getting America's financial sector back on track. Although I have concerns about parts of H.R. 3221, overall I believe it will make important reforms to modernize government agencies and help restore confidence in the economy. As the 110th Congress continues, I will keep your thoughts in mind and continue to work to address these critical issues. Thank you for contacting me, and please do not hesitate to write me again in the future.

I hope all is well in Seattle.

I am very concerned with the way Congress is rushing to fix the housing mess without taking the time to understand what the root causes are and the potential ramifications of policy on the future.

My faith in politics hinges on our leaders' ability to look past their own re-election and towards the decisions which will have the most benefit to their constituents and the American people - not in the short-term, but in the long-term.

Short-term thinking gives the illusion of success, but ultimately causes more pain and suffering. An example of this is the potential bail-out of Fannie Mae and Freddie Mac. As a US taxpayer and citizen, I have no interest in saving investors and rewarding institutions which clearly made short-term decisions at the mistake of long-term viability.

Allowing the institutions to fail will certainly destroy investor wealth and create short-term pain. In the long-term, however, new institutions will arise which are built on stronger principles and an acute awareness that they are held accountable for their choices - as we all should be. This will result in long-term wealth creation; not only for the particular investors who have the foresight to invest in these opportunities but also for the American people.

I appreciate your support on this issue and I will be watching your votes and statements carefully.

Thank you.

Nicholas Kirsch