Latvia, Britain and the US have bagged the top three awards for worst economic policy of the year

I thought that the prize for dumbest economic policy of the year had already been bagged by Latvia on 4th March, when it applied to join the Eurozone within days of Cyprus finally hitting the financial fan. Then, exactly two weeks ago today, George Osborne used his budget to leap ahead of Riga by proposing a Help to Buy scheme, which would encourage house-buyers to purchase new-build houses that they can’t actually afford. Not to be outdone in the stupidity stakes, the Obama administration has now gone one better than Calamity George by urging banks and building societies to repeat the very mistakes that brought the world economy to the brink of collapse in 2008.

In a story from today’s Washington Post headlined “Obama administration pushes banks to make home loans to people with weaker credit”, we read:

President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession. 

In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default.  

Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default. 

Officials are also encouraging lenders to use more subjective judgment in determining whether to offer a loan and are seeking to make it easier for people who owe more than their properties are worth to refinance at today’s low interest rates, among other steps.

So, not only does the American government want banks to lend money to people to buy houses they can’t afford, the US taxpayer gets to pay the bill when the whole deranged plan goes tits up – as it most certainly will.

As Rick Moran sensibly suggested today in American Thinker, "...if consumers have "weak" credit as a result of the recession, let them build it back up by living within their means and paying their bills on time."

Latvia has an excuse: the country suffered under the deadening yoke of Soviet Communism for decades and may simply not realise that by adopting the Euro as its currency it would merely be exchanging one brutal, uncompassionate, economically destructive foreign tyranny for another. But that the country which invented laissez-faire capitalism and the country which turned itself into the most powerful economic force the world has ever known by adopting the system should actively seek to repeat the exact same mistakes which have left their nations owing, respectively, £1,180,988,418,315 trillion and $16,798,751,078, 630.49, is beyond comprehension.

If myriad science fiction authors should prove to be right and there really is a benign alien force watching over us waiting for a sign that earthlings have evolved to the level where they’re worthy of being admitted to the Interplanetary Trade Federation, our visitors might as well turn up the old warp factor dial and head for home – because we’re evidently becoming more stupid by the day!