Wednesday, April 23, 2008

Mortgage bailout = wealth redistribution

When we bought our first house in San Francisco 14 years ago, we bought a small fixer-upper, with a multitude of problems. We could have gotten a mortgage for a better house, but the payments would have been higher, and money would have been too tight if anything changed in our financial situation.

Well we were smart to go with the fixer. Not long after we got the house, Pat was laid off when the hospital he worked for made cutbacks, and a few months later, I was given six months notice that my job at a Law firm was going to be eliminated. If we had bought a more expensive house, we would have lost it.

In the current national situation, we have a small bunch of people (homes in foreclosure are less than 2%), who made bad choices, and now want "the government" to bail them out. "The government" means tax payers like us, home owner's who chose not to live beyond their means, and renters (32% of households) who have also chosen to be careful, and who are often saving up to buy a house that they can afford. Why should WE all be punished for other people's mistakes?

Losing a house to foreclosure is a hard lesson to learn. But hard lessons also have the benefit of teaching people not to repeat the same mistakes again.

Conversely, bailing people out from the consequences of their mistakes, only teaches them that they do not have to consider the consequences of their actions, because "the government", Big Daddy, is going to step in and fix it for them.

And if the government does it even once, it sets a precedent. If they did it last time, why shouldn't they do it again? And again? And again? After all, they did it the LAST time.

How is this fair to the rest of us who were smarter? Since when is it the roll of government to subsidize foolishness? How is it wise to reward the consequences of bad decision making?

And let's not forget that is was the Democrats who pushed and pushed to have bank mortgages made available to people who couldn't otherwise get them, in the name of "fairness". Now those loans have defaulted, and we who were smarter with our money have to subsidize those who weren't? How is that "fair"?

Once again, the Democrats create a problem, then offer themselves as the solution for the problem they created, using our tax dollars, taking money away from people who earn it and spend it wisely, and giving to people who did neither. It's something to remember, when you vote in November.

H.T. to It’s about time:

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