October 28, 2007 (LPAC)--It was just about one month ago now, on October 3, that the entire Democratic leadership of Congress--House Speaker Nancy Pelosi and Majority leader Sen. Harry Reid, economic committee chairmen Sen. Christopher Dodd, Rep. Barney Frank, Sen. Charles Schumer, Rep. Rahm Emanuel--held a special press conference to announce that "emergency" action to stop nationwide mass home foreclosures, was a top priority.

Since that time, none of the measures which were then already introduced in Congress dealing with the foreclosure tsunami, have moved at all. The proposal to use the Federal Housing Administration to help refinance mortgages before they foreclose, has not even gotten into Dodd's Senate Banking Committee, let alone out of it. The Senate legislative proposals to let bankruptcy judges "reform" mortgages and prevent foreclosures, have not moved. The House-passed legislation to expand the capital of Fannie Mae and Freddie Mac has not been heard in the Senate; and so on.

On October 26, the Joint Economic Committee of Congress issued a fat report on the huge devastation of the mortgage collapse--American homeowners will lose $100 billion in personal wealth as 2 million of them lose their homes, it said--and repeated all the same recommendations for action which have gone nowhere since the beginning of October!

The reason? None of these ideas have a chance of stopping foreclosures in a mortgage market collapse of this magnitude.

Foreclosures have to be stopped, by law, as proposed only in Lyndon LaRouche's principles of a Homeowners and Bank Protection Act.

The October 28 New York Times, in its lead editorial, has taken note of this point. The editorial confirms that the Congressional ideas won't work; that Countrywide Financial Corp.'s promise to refinance 82,000 of its mortgages one-at-a-time won't work; that Treasury Secretary Paulson's Master Liquidity Conduit to save the big banks won't work. The Times proposes, that Paulson get behind the desperation proposal of FDIC chairman Sheila Baer, two weeks ago, that 1.5 million or more adjustable rate mortgages (ARMs) just be frozen, right now, at their initial rates, and not allowed to adjust upward.

While Baer's idea of "freezing" these mortgages echoes one point of LaRouche's three principles for protecting homeowners and banks, it falls far short of the "firewall" to protect the economy from the mortgage-bubble collapse, which Congress must enact.

LaRouche’s proposal in its totality, is the only one that will work.