Discussion in 'Politics' started by Gunny, May 7, 2008.
more ... http://www.msnbc.msn.com/id/24503502/
Just goes to show... the dems need a veto proof majority to get anything done because bush is determined to make sure they can't do anything now.
So you are saying the government should bail out people who have made bad business decisions?
Tell me, is there anyone you hold accountable for their actions besides Republicans?
Allow ME: not so's anyone would notice.
Cute... disingenuous... but really cute.
I guess it's only okay to bail out corporations who make bad business decisions... you know, like airlines; banks; bear sterns...
just so you don't do anything for actual "people".
Is there anyone you hold accountable for ITS actions, or is it only Democrats?
Now allow ME: not so's anyone would notice.
I would imagine Gunny doesn't approve of bailing out corps, either. I'm at a loss for understanding why taxpayers should be responsible for bailing ANYONE out. All that ultimately does is create incentive to take bad risks.
Yes, it encourages people to make bad decisions in the future. Moral hazard applies to people, not just big banks. In addition, people who were doing the honest thing and saving up for a downpayment to buy a house once the bubble popped...well, this screws them. House prices need to revert back to the long-term average, and any bailout prevents that.
Let the people who borrowed stupidly pay for the consequences. Likewise, let the banks who lent stupidly pay for the consequences.
I don't know that I disagree with you, but home foreclosures (and bank failures) do have negative spillover effects that affect more than the people who made poor decisions. That should be taken into account as well. No reason to cut off the nose to spite the face.
Slippery slope arguments while interesting hardly explain the risks some people take when they are given easy credit. And easy credit comes from lenders wanting to do the capitalist thing, make money. There should be some simple way of helping each other without it becoming just a bone of contention between parties. These people bought into the American dream, let's help them have that piece of it, and at the same time make this sort of bubble less possible. But I have to say after reading a book on bubbles, I'm not sure that will ever happen given human nature.
If it were that simple, I might agree with you. But many of the homeowners were misled or even defrauded about the terms of their mortgages. The truth gets buried in a stack of up to 100 pages or more of legal language, and the pressure of moving, closing and resettling.
The ripples hurt more than the careless as well. Even if you read and understand your mortgage papers, your home value can drop by thousands of dollars if foreclosures occur in your neighborhood. That ripple causes further ripples as well.
On a scale of Moral Hazard, I would rank those who acted deliberately as worse than those who were misled. Government policy created a system where people could profit while passing the risk on to others, and the lending industry jumped in like pigs in a trough. Applying strict Darwinian principles here will hurt millions of innocent people.
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