President Obama will go on television tonight to speak to a joint session of Congress about the various economic plans that have been rolled out to date. As is the case with nearly everything he says, it will sound good, it will be stirring, much of it will be wrong for America but will be said with enough of a flourish to play, and much will be contrary to what his administration actually does.

The reason why Team Obama’s housing plan won’t work, and why much of their economic proposals won’t work is that their methodology is flawed at the root. Their methodology primarily involves trying to manipulate outputs, rather than making systemic changes to the inputs. You could certainly argue that you have to stabilize the outputs first, then make system changes and I would agree with that, but even their initial moves aren’t going to work. And worse yet, Obama hasn’t learned a thing from the mistakes George Bush made.

The first part of the Obama plan is to modify existing mortgages so that borrowers are paying what they can afford per some formulas. This is un-American on many, many levels, but it also disregards the fact that many of these people have a chronic finance problem including credit card debt and cars they can’t afford. So not only is setting up price controls flawed per economic theory, but ignoring the underlying problem many of these people have dooms this to failure. Lesson #1: Throwing good money after bad doesn’t work.

Another part of the Obama plan allows for judges to re-write loans to allow people to stay in homes they should have never been able to afford in the first place. This provides a disincentive for people to stay current on their loans, and once again has the government picking the winners and the losers. Welfare programs show what behaviors dis-incentives promote- the wrong ones. Lesson #2: Lack of incentive creates a careless, unmotivated electorate.

For people already in foreclosure and about to lose their homes,our solution is much more of a free-market tactic: Rather than using tax payer money to directly fund loan modifications which may or may not work, allow tax payers with the financial where-with-all (the same tax-payers that are going to end up paying for the modification) to purchase the loans and rent to the current homeowners. The government would guarantee the loans within a certain threshold and would also stipulate the rent structure for the program so that predatory situations are avoided. Only individuals or families that are American citizens can take advantage of the program (no foreign entities and no corporations) and no individual or family can acquire more than five loans in total.

If the former homeowners don’t pay the rent, they’re out on the street. With so many people already losing their homes, there are plenty of available renters. Many loans won’t be assumed because the numbers don’t work- they’re the ones that are headed for default no matter what help is given. The point is the free market selects this vs. the government choosing winners and losers. As an added benefit, jobs will be created through property management companies, maintenance/repair folks, and tax advisors assisting investors.

As an alternative, our second plan involves a method for homeowners to catch up on their payments should they choose. Our plan would provide up to $7,500 in grants to homeowners to help them catch up on delinquent mortgage payments. The catch is the money must be directly applied toward mortgage payments and cannot be used for anything else. And, in order to get the money, the homeowners must perform community service in return. The grant money would be amortized as follows:

*Each hour of community service is worth $10. If a homeowner were to get the entire $7,500, they would “pay back” that amount by providing 10 hours of community service every week for about a year and a half. A steep price to pay but isn’t it better than losing your home- plus it provides something in return for hard-earned tax payer funds that would otherwise go down a hole.

Finally, for those in exotic or highly-escalating adjustable mortgages, you’re out of luck. Call me heartless but there are times in life when you have to learn tough lessons. If you didn’t read what you were signing or knowingly purchased a home that you never should have been able to afford, you’re a renter. If Senators want to create a separate foreclosure status for these people so their future credit is less impacted, go for it.

You’re welcome.

The linebackers worked out yesterday in Indianapolis and on hand for the Buckeyes were Marcus Freeman and James Laurinaitis. Laurinaitis was what everybody thought he was- an All-American, master technician, brilliant in pass coverage, and just a step slower than the fastest guys. The real story was Marcus Freeman, who like Brian Robiskie the day before, probably helped his draft position by at least a round.

Freeman ran the drills very well looking very smooth with quick transitions and good overall speed. His 40-time of 4.74 was enough for 7th best overall among the Linebackers (tied with Brian Cushing from USC). Incidentally, there’s an interesting thread over at Rivals about whether or not Cushing is on roids and here’s a funny throwback post of him coming out of college.

Freeman also tied Cushing for the best bench press (30 reps), tied Aaron Curry for the best vertical jump (37 inches), 4th best on the 3-cone drill (6.98 seconds), and best of the linebackers on the 20-yard shuttle (4.12 seconds).

The DB’s are up today so time for Malcolm Jenkins to shine. Here’s an article indicating Jenkins may have quite a bit to prove.

On the non-Buckeye front, Virginia LB Aaron Curry proved to be the best of the bunch, at least athletically. He looks to have all the tools to be a Pro-Bowler in his first year in the league, and might be the best overall player in the draft this year.

You’re welcome.