The bailout bill just passed by the Congress and signed into law contained billions of dollars in Christmas Tree ornaments that had nothing to do with bailing anyone out. These items, including provisions for tax cuts, were added to entice politicians to vote for it. We have no business bailing out Wall Street and we have effectively taken 700 billion steps in the direction of Communism*.
I heard Jesse Jackson on Neil Cavuto’s show and Jackson said the bill did not go far enough (surprise) and that if we can give low interest loans to auto makers (we should not be doing that) we should be able to do the same for homeowners. Jackson contended that people should get low interest rate loans from the government in order to restructure their debt and continue to pay for their homes. He insisted that the predatory lending practices led to their problems. Cavuto told him that while some predatory lending took place people were the ones who signed the dotted line. He said they needed to take responsibility for their actions and if they wanted to renegotiate it was up to them to do it with the people from whom they obtained their loans.
This is absolutely correct. Homeowners need to renegotiate with their lenders to get a better deal. It is not up to taxpayers to lend money to them regardless of whether they will pay it back or not. If they default then taxpayers will be left holding the bag (much as we are with Freddie and Fannie loans). Jackson wants to take personal responsibility away from people and have big government come in and take care of them. We no more belong doing that than we belong taking care of bankers or auto makers.
The market should be allowed to react in whatever direction the crisis leads it. People and businesses with money can come in and buy up failing businesses or they can go away. Allow the market to handle the crisis and leave the politicians who caused the problems out of it.
If Jackson thinks people have no responsibility in the contracts that they make and that government should bail them out then we should have some provisions which include a loss of voting rights if you become a ward of the government. If you are not able to understand a contract to buy a home and can be easily swayed then you are unable to understand the voting system and can be just as easily manipulated.
The bottom 50% of wage earners pay only about 4% of the taxes in this country so they will not be affected by the bailout as much as those who will see tax increases in order to pay for this mess. The voting system needs to be changed so that people are afforded more votes if they pay more in taxes. Perhaps each person gets one vote and then people get an additional vote for every $5000 in taxes that they pay. The people who pay for this country should have a greater say in how it is governed much like stockholders in a company who have more votes if they have more stock.
Whether Wall Street executives or distressed homeowners, the philosophy is the same; live with your decisions. If they cause you problems then you can work your way out and be all that much stronger for it.
If government steps in and fixes your bad decisions you will continue to make them. We get more of what we subsidize.
*I heard this phrase on TV but do not know who said it.
