A bigger federal bailout for homeowners?
Count me out.
Yes, the story has heartbreaking tales of people who can’t move because they’re chained to an underwater mortgage, people now in new jobs with lower income than when they bought, and so forth. And, yes, for many of these people, federal “stimulus” checks likely will be used to pay down debt, not buy anything.
But, much of the woe the story details is self-inflicted.
A lady in her late 50s when she bought a four-bedroom house for equity and wealth enhancement? Sorry, and yes, sorry that you’re now in a lower-paying job. But, we wouldn’t bail you out if you gambled wrong on stocks or mutual funds.
A couple, even with three kids, buying a house in Memphis with $670,000 in debt? Memphis is not L.A. or even Chicago. Either in terms of size, amenities or both, you bought too much house, or else you bought beyond your means. We wouldn’t bail you out if you bought a Mercedes on a Nissan budget.
Meanwhile, as opposed to previous crises, financial institutions appear unwilling, even afraid A bigger to act to shore up the various arcane, exotic credit tools they created, then expanded, in the last decade or so.
Of course, they don’t have any problem in acting like titty babies to Ben Bernanke and the Federal Reserve, pouting and stomping their feet as they demand another rate cut.
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