Thursday, June 12, 2008

Where's my bailout?

This article nearly made me scream. Ed McMahon was on TV talking about how he is about to lose his house. People called in to ask where they could donate to help him? ARE YOU KIDDING??

http://www.cnn.com/2008/US/06/11/beck.foreclosures/index.html

Like most people in foreclosure, Ed just overspent. Unlike most people, he admits he overspent. Yes, I realize that a few people were taken by bad loans. Yes, I also realize some people once were able to afford their homes but then lost their jobs, had unanticipated medical expenses, etc. If we're honest, though, we will admit that the majority of people in foreclosure just overspent. They decided they deserved a bigger house, fancier car, more expensive vacation, etc.

Now everyone wants to jump in and help these people. Really? Why? Do you think they've learned their lesson and won't overspend next time? Doubt it. Sorry, but I'm not interested in bailing out most of these people in foreclosure. All we're teaching them is it's okay to get into huge financial trouble because someone else will pay for it.

In the meantime, I keep asking "Where's my bailout?" We bought a nice house in a nice neighborhood at the low end of our price range. We work hard, save money, and don't live an extravagant lifestyle. It's a wonderful life, but we're not over the top. So, where's our reward? In the midst of this "mortgage crisis" no one talks about what these people should have done. No one talks about how most of this "crisis" is created by people who couldn't live within their means.

Most of all, no one talks about how the rest of us, who will end up paying for any bailout feel about our hard-earned money being spent to rescue people who never learned basic money management.

4 comments:

Julie K said...

Couldn't agree with you more, but I will say that those folks who did overspend were often led by the hand... the amount of money banks were willing to give us when buying a new house was obnoxious. I ran the numbers... and knew what was a comfortable level. I wonder how many people really understand their finances... basic money management wasn't taught in highschool when I attended HS (though, it should have been). I'm not keen to help 'bail out' folks who made bad decisions and had to laugh when someone said they weren't either, but that the government should (duh... who gives the government the money? WE DO).

Anonymous said...

Not entirely true....doesn't matter how many people loose their house the banks still would own the assets. It's because the assets are so overvalued and no one can afford them that the banks can't turn them around...If they could there would be no shortage of capital...The Problem is the balance sheet is screwed up...they don't call it inflation but that's what it is ....They will sell these properties to us for 250,000(example) even though noone will or can afford to pay that price...it's been artificially inflated. With the bailout they get their inflated price....

Anonymous said...

I couldn't agree more... where's our bailout? All the hardworking citizens that worked all their lives, saved, put their life savings into purchasing a home and now are hearing about all the people who made bad decisions and lived above their means. Our mortgage is a fixed rate, my house is now worth 50% of the value of what we purchased it for 2 1/2 years ago and I lost my job 3 months ago and am struggling to find a job of equal stature and compensation. I did things right but maybe if I didn't I'd have the sympathy and help of the entire US. Where is my bailout and the bailout of all the other hard working individuals who gave their all for a piece of the American dream and now may be responsible for helping to bailout all the individuals who were greedy and did it wrong.

Anonymous said...

There definitely needs to be consequences for the mismanagement and unethical behaviors that have brought our financial markets to its knees. However, does everybody understand that if this bailout doesn't happen and fast, our entire economy will collapse into a DEPRESSION. Houses will be worth less than nothing, jobs will be non-existent...just AIG employs 100,000 people in this country... go to Bill O'Reilly and listen to his talking points from yesterday... He's far from my favorite, but he makes some valid points.

Do the bailout and then start prosecuting.