Bring back the 3 percent mortgage: RFK's plan to level the economic playing field


Robert F. Kennedy, Jr., the Democratic presidential candidate, has demonstrated an impressive talent for policy innovation. He recently began rolling out his economic plans, which, among other things would level the playing fields for working-class Americans who want to buy a house. Inflation is partly to blame. Today’s average annual wage is $5,000 below the cost of basic needs such as food, housing and transportation. In an emergency, 57% of American families could not come up with $1000 cash. Credit card debt is at record highs, topping $1 trillion. Since the 2008 financial crisis, the number of middle-class Americans who own their homes, the foundation of American equity and progress, has steadily declined. Since 2020, the average cost of a home in the U.S. is up 46 percent to more than $400,000. While interest rates for home loans rose from less than 3 percent to an average of over 7 percent, large corporate entities like BlackRock, State Street and Vanguard increased their efforts to corner the residential market by buying vast numbers of houses with cash offers. One study found that by the spring of 2018, large corporations were on track to control 40 percent of all single-family houses in the U.S. They have now diverted their resources to a new business model, built-to rent homes. This also threatens private home ownership. This effectively puts home ownership out of reach for millions of Americans who are struggling. Kennedy’s proposal would alter the tax code in order to discourage corporate takeovers of the residential real-estate market, while guaranteeing mortgage interest rates backed by the government of 3 percent. The program will be funded by tax-free bond purchases by investors, and backed only by the U.S. Government. This would mean that the cost for the taxpayers would be minimal. Kennedy says that if you have a wealthy uncle who is willing to co-sign the mortgage, it will be cheaper because they will use his credit score instead of yours. So I’m going to give everybody a rich uncle, Uncle Sam, who will guarantee mortgages for first-time single-family homebuyers at 3 percent interest.”

Back in the 1930s and 1940s, innovations in housing policy perfected the thirty-year amortized mortgage, introduced government-backed mortgage insurance, and supported developers building good and affordable homes. Kennedy’s plan should encourage a new round of family-centered social renewal. The Kennedy plan will encourage a new wave of family-centered social reform.

He also proposes making passport cards free for every American, which would eliminate the credit disadvantage of the working poor who do not possess a federal photo identification.

The U.S. will not survive with a system that serves only the interests of the elite class at the expense of a growing underclass that has no ownership stake in society. We need to find a way back to a system that benefits everyone, not just the wealthy. Kennedy has shown that he is aware of this truth.