Who's gonna bail me out?
Posted by: Michael Reitz | 08/06/2008 8:24 PM
The housing-bailout bill Congress will likely pass irks me. Why should Taxpayer A, who makes wise fiscal choices, be required to bailout Taxpayer B, who took on a questionable mortgage? (To say nothing of rescuing the lenders.) And then I saw this item--apparently one of the Extreme Makeover families is now in foreclosure. Here you have someone who received a $450,000 house (for free!!) and somehow managed to throw it away. To paraphrase P.J. O'Rourke, our basic human right is to do as we please. But with that comes the obligation to accept responsibility for our own actions.
I suppose this is personal for me. At this stage my wife and I want to grow our family and she's at home with our young kids. That decision comes with financial tradeoffs, which we're happy to make at this time. But government kills the incentive to make smart financial choices with Robin Hood rescue attempts like this housing bill, in my opinion.
Incidentally, when we're driving, my one-year-old daughter has decided she likes the power of passing out cookies in the back seat. She'll make a good senator someday.
Cross-posted at Liberty Live.
Mike, I like the O'Rourke reference. He is one of my all time favorite writers. 'Give War a Chance' was a classic!
Its simple economics. While tax payer A has made wise fiscal decisions the banks to which many tax payers such as A have put their life savings into have not.
So when irresponisble banks and people such as Tax payer B, who didn't adequetly plan for the rise in interest rates on their homes, are no longer able to pay their house payments. It is the banks that take the fall along with Tax payer A's life savings minus the 250,000 that the goverment insures.
One might look to the situation in Japan that occured in the 90's for further illustration.
My problem with this entire issue lies with people who make $20,000 a year at Starbucks thinking that they can afford a $450,000 mortgage. They expect the rest of us to bail them out now that they've defaulted. How did these people ever think that they could afford the mortgages they signed for and promised to pay? (Crooked lenders aside.)