Saturday, October 04, 2008

I'm bitter and resentful over the bailout and its cost

Politics and Law has an interesting analysis of the bailout bill, including this chart, detailing the total estimated costs to American households:

Note that this doesn't include the costs of emergency loans to California.

If all these financial entities, states, automotive companies and homeowners in foreclosure can get bailed out, who's next?

Certainly not me and my family! Nope - families like mine who pay our bills on time, work hard to obtain and maintain good credit, don't buy a house we can't afford, don't buy luxuries on credit, snip coupons and compare prices in order to find the best bargains, keep our a/c off in the summer and our heating temperature low in the winder (62 degrees), cut back on non-essentials to pay for increased gasoline prices - we're the ones who will foot the bill for others' mistakes and bad decisions, including those in Congress who will never admit that their social engineering mandates (can you say Community Reinvestment Act) precipitated this whole mess, even while they stand there grinning and praising each other for 'saving' us from the disaster they caused.

Furthermore, while the bailout is supposed to take care of the problem, it only addresses the symptoms. The defective structure, regulations, rules and laws that created the mess still exist. What happens when the next unqualified home buyer shows up to get a loan and is told they don't meet the standards? Some 'community organizer' will be there with lawsuit in hand.

Am I bitter about this? Absolutely - and I'm not the only one. Interference in the market is what caused the mess, with Congress telling banks and institutions to make loans to people who would never have qualified for them otherwise. Congress - with mandates to Fannie and Freddie - told banks and lenders that unemployment and welfare payments could count as income! Have you ever heard such an absurdity in your life?

Common sense alone tells you that someone who is unemployed and getting a temporary source of money should not be given a loan for a new home. And if you are so poor and destitute that you need welfare support, how does anyone in their right mind think you can afford not only a mortgage, but the additional costs of maintaining a new home???

Only the idiots in Congress like Barney Frank, Chris Dodd, Charlie Rangel and ... Barack Obama. Even though he was not in Congress at the time, Obama was intricately tied to this scheme when he worked on behalf of ACORN, to sue Citibank in an attempt to force them into making such bad loans.

And President Bush, who thinks the government needs to save the markets, is also to blame for insisting on this approach instead of letting the market contract, make the necessary adjustments and then begin to rebuild. Even Wall Street didn't like the bailout plan, as stocks plummeted to a 52-week low following its passage.

Would the alternative of government not doing anything have been painful? Yes, for a short period of time and then it would have recovered and we would all be better off for having done so. As a Sun Tzu taught, "That which does not kill you only makes you stronger."

So I'm bitter over this decision, and resentful too. Suffering the consequences of bad decisions helps you learn to make better ones in the future. People who lose their home because they borrowed when they shouldn't have will be much more careful about what they buy in the future. If the banks had to eat the bad loans they never should have made in the first place, they'd be less eager in the future to accept a government program that looks too good to be true. If Fannie and Freddie - and their executives who lied to Congress about the solvency of the institutions just before being fined millions for cooking the books - had to face the same kind of special prosecutor reserved only, it seems, for Republicans, the public would see just how 'special interests' could manipulate the system in their favor. And if members of Congress are held accountable by the voters of their district for such dereliction of their oaths of office, it would prevent (or at least deter) such actions in the future.

But all this requires that we, the voting public, understand what has occurred, how much it's going to cost us and then be willing to throw the bums out. Sadly, I've been in politics too long to expect such a thing to happen. People who are the recipients of such government largess will continue to elect those who provide it, while the rest of us foot the bill. And the media and those same elected officials will gleefully tell us how much better off we are now that government has saved us, while we sink further into socialism and a government-dependent society.


gordon gekko said...


I'm surprised with your thoughts on these bailouts. Personally I think it's great.



Tim Higgins said...


History has proved to us that Government on every level is unable to run a business, let alone control a free market economy. It is government interference with the free market that by and large created this situation. The creation of Fannie Mae and Freddie Mac in the first place, the congressional influence to protect this failing institution from proper oversight, and now the imposition of massive government bureaucracy to fix a situation that they created simply show the only that they only have one answer to any question. That answer is more government.

We will now never know if the economy could or would have corrected itself, since no one will be able to ignore "the elephant in the room". We have created an even more massive governmental presence in our lives from this day forward, and taken a giant leap away the principles that have made this the strongest economy in the world.

Norma said...

Yesterday I blogged about the tax money we've been wasting the last 10-15 years, and wondered if it would continue on top of this. I think I saw $20 million annually for counseling on predatory lending, while the banks were being forced through a quota system to make more and more risky mortgages! How's that for keeping the bureaucrats employed!

In just one program, CHIP, Ohio already gets $25 million. I wonder just how much of the "poverty is moving to the suburbs" was caused by the gov't social engineering of housing moving people from urban neighborhoods where the poor had a network of organizations, families and churches to high mortgages in the suburbs.

Robin said...

Wasn't McCain one of those idiots who was also pushing this bill?

Maggie Thurber said...

Robin - both McCain and Obama voted in favor of it. Not sure either 'pushed' it, but left that role to the party leaders in the House and Senate.

David said...

Ohio’s Governor, Ted Strickland, is on a movement to convince the people in his state to vote in favor of House Bill 545. Despite the voice of the people earlier this year, this bill would put a cap on annual interest rates that no fax payday loan lenders can charge up to 36 percent. For every $100 that a lender issues to a customer, they make a pitiful dollar and some change. That means there would be no money-making in this industry at all and House Bill 545 will drive the entire industry out of the state. In addition to that, Democratic presidential candidate, Barack Obama, is also supporting this action. Obama has gone record stating that if he does win the White House, he will follow through with his wishes to impose Strickland’s interest rate cap nationally. In return, what alternative will the offer the people when they are stuck trying to make ends meet? Hitting rock bottom is almost inevitable. This expresses the importance of having your voice heard.
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