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Monetary Policy

Good Credit Score Holders Penalized in New Policy

people with good credit scores will subsidize low credit mortgages
Photo by Pixabay on Pexels.

Have you been working on improving your credit score? Well, congratulations are in order because you are now probably responsible for paying someone else’s mortgage. A new policy, which the Biden administration just issued, mandates that homebuyers with good credit scores, those with a score of 680 or higher, will be charged additional money every single month in order to subsidize and lower the monthly payments of homebuyers who have poor credit scores. This rule was issued to help homebuyers with bad credit scores. 

A backward reward system

If you’ve put in a lot of effort and been financially responsible throughout your entire life, it looks like you’re going to get what you deserve. But what about those people who have built up a history of bad credit because they have been careless with their money and haven’t paid their bills on time? They are going to receive a reward for their efforts. However, at this point, we really shouldn’t be surprised.

This is the way of thinking that underpins the egalitarian agenda of the left. People who behave ethically are reprimanded for their actions. People who don’t live up to our society’s standards are rewarded for their actions.

A pattern of double standards

This double standard corroding our country is evident throughout our government’s policies. Take our immigration system, for example. If you are an immigrant with a doctoral degree and wish to enter this country legally, you will be required to wait in the back of the line for a significant amount of time. It’s almost like we don’t want people with valuable skills coming to our country, regardless of how qualified they are.

But what if you are a violent criminal who illegally enters this country and has no skills to offer other than the ability to fashion shanks out of toothbrushes? You are going to have the opportunity to “skip ahead” in line and remain here. It’s highly unlikely that you’ll ever be deported.

You reap what you sow

And this hypocrisy is felt in other parts of the housing sector, not just mortgages. If you are a family living in San Francisco or Los Angeles, and you pay insanely high taxes, and you want to take a pleasant stroll in the park without being harassed or fearing for your life, well, tough luck to you. 

But the meth addict who pitches his tent on the sidewalk and uses the public restrooms in the park as his own private facilities is eligible for monthly payments from the state of California.

Charlie Munger, considered one of the most successful investors of all time, is credited with the following famous quote: “Show me the incentives, and I’ll show you the outcome.” When we apply this to our double standard when enforcing policy, things make a lot of sense. If you encourage anarchy, you shouldn’t be surprised if you find yourself living in purgatory.

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