Stop the mortgage bail out!
It's finally happening like I predicted years ago: now that reality has sunk in and the numerous people who shoe-horned themselves into houses they couldn't afford are about to pay the price, the federal government is talking about stepping in to save the day. For democrats, I suppose it makes some sense. Perpetually the champions of the downtrodden, the democrats can position themselves as standing up for the little guy while at the same time they are standing up for the big guys who bankroll them. After all, if our tax dollars go to pay the mortgage of the family down the straight who allowed themselves to be panicked into a home they couldn't afford, who really ends up with the money?
The Republicans, likewise can position themselves as champions of business, bailing out the poor, unsophisticated millionaires who bought products which, as it turns out, contained these mortgages. I mean, who could have predicted that what goes up must come down? Certainly not the NAR, who as it turns out are behind Bush's latest proposal.
That means that the only people left holding the bag are 1. the taxpayers and 2. people who have been waiting on the sidelines because they knew the market would come down. This means the market will remain artificially inflated, or subsidized, and the break that many of us anticipated may be further off, or may not even come.
For the Republicans, this is the biggest problem. After all, their values included taking responsibility for ones choices. How exactly does this bail-out fit in with that?
The last bail-out in American history was the Savings and Loan Crisis of the 80's. The government paid 145 billion dollars.
According to this article, the current crisis is nothing like that, and as of yet, we have only spent a measly 25 billion dollars on the subprime meltdown. Moreover "all experts" seem to think this is a short-term problem. '
However, reading this article from sfgate which states
"U.S. Sen. Christopher Dodd, D-Conn., suggested that just less than $200 billion could rescue these poor "homeowners." But a bail out will amount to at least five times that when the Alt A market fails."
or here
"Christopher Cagan, director of research at First American CoreLogic, says rising mortgage payments on adjustable rate loans will force 1.1 million homeowners into foreclosure over the next 6 years. He estimates the cost of paying off the debt for those borrowers would be $120 billion.
"
Thus, it would appear many people are contemplating a bigger bail-out. I include myself in this fine company. To quote a source I don't recall "we don't even know where the bodies are buried."
The Republicans, likewise can position themselves as champions of business, bailing out the poor, unsophisticated millionaires who bought products which, as it turns out, contained these mortgages. I mean, who could have predicted that what goes up must come down? Certainly not the NAR, who as it turns out are behind Bush's latest proposal.
That means that the only people left holding the bag are 1. the taxpayers and 2. people who have been waiting on the sidelines because they knew the market would come down. This means the market will remain artificially inflated, or subsidized, and the break that many of us anticipated may be further off, or may not even come.
For the Republicans, this is the biggest problem. After all, their values included taking responsibility for ones choices. How exactly does this bail-out fit in with that?
The last bail-out in American history was the Savings and Loan Crisis of the 80's. The government paid 145 billion dollars.
According to this article, the current crisis is nothing like that, and as of yet, we have only spent a measly 25 billion dollars on the subprime meltdown. Moreover "all experts" seem to think this is a short-term problem. '
However, reading this article from sfgate which states
"U.S. Sen. Christopher Dodd, D-Conn., suggested that just less than $200 billion could rescue these poor "homeowners." But a bail out will amount to at least five times that when the Alt A market fails."
or here
"Christopher Cagan, director of research at First American CoreLogic, says rising mortgage payments on adjustable rate loans will force 1.1 million homeowners into foreclosure over the next 6 years. He estimates the cost of paying off the debt for those borrowers would be $120 billion.
"
Thus, it would appear many people are contemplating a bigger bail-out. I include myself in this fine company. To quote a source I don't recall "we don't even know where the bodies are buried."
posted by Robert Smith at 7:02 PM
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