April 2, 2008
Charity with Other People's Money
When things go wrong for people, society ought at least to weight the costs of helping, even when the problems are wrapped up in the esoteric complexities of modern finance, but when I read news like this, I can't help but wonder from where the money's coming:
The legislation is likely to draw on elements of the Democratic plan such as letting states issue $10 billion in tax-exempt bonds to refinance subprime loans and permitting homebuilders and other money-losing businesses to reclaim previously paid taxes.Democrats also want to provide $4 billion to states to buy up and refurbish foreclosed homes, a plan that the administration opposes as a bailout for lenders and speculators. ...
There is also bipartisan backing for $200 million in new money for debt counselors to help homeowners negotiate with lenders.
I'm sympathetic, of course, to any plan that solves problems by cutting or returning taxes, but if these steps are worth taking, shouldn't there be at least some discussion of what other area of government is going to be sacrificed?
I don't remember anyone asking me my opinion on bailing out Bear Stearns, either.
Posted by: Greg at April 2, 2008 6:40 PMWhile I am sympathetic to those who find themselves in difficult financial situations and under the threat of losing their homes, a bailout is not the answer. We must consider those who made the right decisions.
There are many who considered no-down-payment, 80-20, or risky variable rate mortgages, but determined they were financial risks not worth taking. They decided to wait until their financial positions were more stable, only to watch skyrocketing property values price them right out of the market. As a result, many of these cautious consumers are still renting.
Now more of their tax dollars will be used to assist others who took risks, who borrowed money well beyond their means, and who gambled and lost.
How can we justify directing tax dollars towards those who didn't make wise decisions? If the money is available, maybe Senators Reed and Whitehouse could propose allowing first time home buyers, those who have saved a down payment and have credit worthy of a decent interest rate, a tax break to invest more into their property purchases.
Yet, there's bipartisan support for the bailout. Am I missing something?
Posted by: mikeinRI at April 2, 2008 10:49 PM