I’m curious about something. Why is it that I, as an American taxpayer, should be responsible for bailing out people and companies that, in essence, screwed themselves over with stupid decisions? Make no mistake, that’s what the Bear Stearns collapse and subsequent bailout is. They banked on — no pun intended — and likely precipitated the subprime mortgage phenomenon and then for all practical purposes got a margin call by everybody. Hey lookie! You’ve got no assets and astounding debt!
So, the Fed is possibly on the hook for $30 billion in buyout for that company which means that you and I are on the hook. Because they were dumb. I follow the reasoning: they’re bailing out this company to prevent a cascade effect since Bear Stearns had so many connections with other companies. I can’t help but be irked that I’m funding utter stupidity, though.
Similarly, the Democratic Presidential candidates both want to provide “assistance to those in mortgage crises” to the tune of another $10 to $30 billion dollars. This is a bailout for people who did the math on that $750,000 house on their $30,000 salary and said “we can swing it!” I can’t swing a 3/4 million dollar house and I make more than that. So I didn’t buy a 3/4 million dollar house. Why am I bailing out people who simply overspent and screwed themselves? I understand the desire to help the less fortunate and those who are truly in financial despair, but not those who brought it on themselves buying things that they had no possibility of ever really affording.
Bryan Says:March 28th, 2008 at 8:46 am
Amen, brah!
Brad Hart Says:April 3rd, 2008 at 6:00 pm
You should be concerned and ready to bail these people out for several reasons. First off foreclosure on these homes will drive down property values everywhere and rental rates sky high because of demand. Secondly high rental rates are going to force more people into social services which are a bitch to get off of once you start getting them. That problem will cost far more than 30 billion in just the short term, and we will be feeling the ripple effect of it for decades and trillions of dollars to come.
Lastly there were very few 30k earners getting 750k houses. I don’t doubt there were some, but any of that got one had several liars in the loan process helping them get it. Those people should be charged with fraud and all the other crimes they are guilty of plain and simple. The majority of people you will be helping out are not your low income earners, or weren’t when they bought there house. The economy and lack of adequate health care has put a lot of us in that category. The majority of the people this plan is going to bail out is all the people who bought houses in their price range for their income and had the market tank before they could refinance them and promptly had their lenders start raising their rates on them just because they could. These are the majority of the people in this predicament and the the people you will be screwed most by if they fail.
plain and simple
foreclosure –> lower property values –> more money on welfare and less on education –> even lower property values –> even more on welfare and even less on education –>
less educated people –> fewer decent jobs more people on welfare–> people have to fight to get sucky jobs while decent jobs go over seas–> more jobs go over seas–> quite possibly you standing in the welfare line with no home of your own.