Feb 20, 2009

The Housing Bailout: It's unfair, it's necessary, it's ridiculous

They say a housing bailout is necessary. For all the people who purchased homes they couldn't afford at to-good-to-be-true rates, here's your bailout. I'm generally a liberal but this is going too far.

The problem stems from how the American dream is so closely linked to owning a house. If you can't afford a house - don't buy one. Renting is not the end of the world. It's a lot cheaper. Wait until you can afford a reasonable 30-year fixed mortgage to buy a house. That's what I plan to do.

Of course, given that the government is going to bail everyone out who can't afford their poor choices, it seems I may have been better off buying a condo years ago. I could be facing foreclosure now, with my home underwater. I could be begging the government to bail me out.

I understand that when you have children the situation changes a bit. You want stability, a house that you'll own, and not have to worry about moving if your landlord decides to kick you out. Ok, I get it. I feel for you if that's the situation you're in. But I still think that when it comes down to it, Americans need to be responsible for their own actions.

God, I sound like a Republican.



5 comments:

Anonymous said...

Amen to that.

Fabulously Broke said...

It's just so frustrating to read about and hear, even as a Canadian who isn't embroiled in all of that at the moment.

*sigh*

rachel elizabeth said...

okay, i don't know if i've ever commented before but i read a bunch of pf blogs and i thought i would add my two cents in.

i work in real estate and i've been suffering like crazy along with the rest of america. i was in the business when it was good a few years ago and it will rebound again so i'm not too worried. anyway... one thing that i have to point out is that not all of the people that are being "bailed out" are people that bought houses that they couldn't afford.

i have a few realtor friends that made big money years ago and bought their house on an ARM and now with the market down they have drained their savings and are in big trouble. there are also a lot of really good people that DID have the 20% down and maybe got laid off or are working half their hours or whatever and somehow managed to land themselves in trouble.

the government isn't bailing everyone out. the government is bailing out the people that deserve to be bailed out and they are making it easier refinance your home to a fixed rate and since interest rates are at an all time low right now, if a lot of people could just refinance it would save so many homes, no government money required.

a lot of the people being "bailed out" are good honest, hardworking people who have decent credit but due to the economy and the current state of their mortgages can't get refinancing.

granted, there are a fair share of scumbags out there that are living off of the system and praying that the government comes by and forgives them of their debt so they don't have to lift a finger... but that's not ALWAYS the case. for the people that did things right, saved up 20% down, got an ARM when things were good and planned to pay off their house in ten years... for the people that DESERVE it, this is an amazing thing.

also included in this bailout / stimulus package is an $8,000 first time home buyer credit which i think is so important to motivate QUALIFIED people to buy houses and stimulate the floundering real estate market.

anyway, i just feel like you really looked at this from one side... like it was some terrible thing. i agree that the plan has its flaws and a lot of people that made stupid choices are going to be bailed out... but what about everyone else?

The Money Fairy said...

I'll preface this by saying that I'm quite liberal. I believe in the government occasionally lending a 'hand up' to people when things like layoffs happen, since companies have completely abdicated their social responsibility.

However, saying that people should be responsible for their actions it's a republican things to say. It's common sense and it's something that, without which, government/SOMEONE ELSE will be forced to take responsibility of people's misdeeds (like now).

Most of what's happening right now is due to
1) not having appropriate savings for your current situation - if you own a house, you savings have to be greater than for a renter
2) buying too much house at too great a price
3) having completely unrealistic expectations/thinking that luxuries are things that you deserve

If you've done all those things and a systemic failure causes fiscally responsible people to suffer, then and only then do I think the government should step in.

Slinky said...

LOL, or a libertarian. :)

"But I still think that when it comes down to it, Americans need to be responsible for their own actions." - You

"Individuals should be free to make choices for themselves and to accept responsibility for the consequences of the choices they make." - Straight from the Libertarian platform

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