Country Shows Strong Reaction To The Bailout Plan

Feb 21st, 2009 @ 8:07 AM by Alden Smith

You don’t need to look any further than the trading floor of the NYSE to see people’s reactions to the proposed mortgage bailout. This week CNBC reporter Rick Santelli went on a rant, wanting to know why people who pay their bills on time need to help bail out people that don’t. It is a common reaction all over the country.

I think the plan has good intentions. There are people that are deserving of help. However in my opinion, there are a great many that don’t. I’m not saying it’s their entire fault. This whole meltdown was engineered by plain greed. Everyone knows that. Yet we see Wall Street bankers and their minions walking away without even so much as a slap on the wrist. I don’t care what side of the aisle you sit on. It is obvious to me that their sense of entitlement extend all the way to the White House. There can be no other reason for people, who have effectively ruined the economy, getting away with it, keeping their jobs, and continuing business as usual.

In the news tonight, I saw that Citibank and Bank of America are in a world of hurt. There’s no doubt in my mind that they will see a good chunk of change from Uncle Sam. Although not that familiar with Citibank, I have had dealings with Bank of America and their credit card department. The way that Bank of America handles credit card debt is nothing short of criminal. For no reason, they can jack your interest rate to whatever level they feel is appropriate at the time. We as a nation have depended on our plastic pal for way too long. Vacations, luxury items, high-end restaurants, gifts and all other sundry items are quickly charged by people with money in their pocket. I suppose you could look at it this way – supposedly the economy of the country is based on consumerism. The credit card companies are only doing their patriotic duty. And if you believe that, I have some really nice oceanfront property in Arizona that I am trying to unload.

People from Florida to New York are expressing their feelings on this situation. There are a lot of angry people out there. Who can blame them? Millions of people are scared for their jobs. It would not surprise me to find out that a lot of families are one paycheck away from living in the street. Yet, the government has seen fit to spend money amounting to trillions of dollars to help everyone that holds her hand out for a worthy cause. This can be a bank that doesn’t want to go under, they can be one of the Big Three, and even insurance companies like AIG. And yet we see people like Joe Sixpack, who has worked hard for a company all his life, and then finds himself out of a job. Mortgages are in default, people have stopped paying credit card bills, and I see daily complaints from middle class people who find themselves wandering the aisles of the food pantries.

I firmly believe that someone who has worked hard, paid their bills on time, and have not overextended themselves by buying a home they cannot afford should see some kind of relief. Millions of jobs have been lost in the past year. Hard-working families are becoming destitute. In hindsight, we see that this has all been caused by by the greed in the mortgage markets. People like Bernie Madoff can while away the hours in his luxury apartment while the government scratches their head and tries to figure out what to do with him. Certainly, there is no equity in that. In that same vein, Wall Street bankers have walked away with huge bonuses and nothing more than chastisement from the boys on the Hill.

It is noteworthy to mention that one of the people interviewed on the nightly news had bought a large home with an interest-only option. Clearly, that spells trouble from the beginning. The woman in the interview had lost her husband, and was struggling with payments. She is facing a reset on her home. She freely admits that the house that her and her husband had bought was more home than they needed. Now, she wishes to stay in the home even though she cannot afford to pay for it. To my line of thinking, it is unrealistic to offer help to someone who has put themselves in a position where they have no equity in the home, have not paid down the principle, and are struggling because of unrealistic goals.

I believe it would be next to impossible for the government to be able to sort out those that deserve help and the people who have made poor decisions. It is criminal to demand that taxpayers bail out people with poor judgment. On the other hand, it is also criminal to bail out the large Wall Street banks, and let Joe Sixpack lose everything because the economy is failing due to the greed of Wall Street. To me, this is more a moral question than a practical one. I don’t have the answers. I also think that no one can truthfully decide who should receive help and who shouldn’t. Regardless of what happens, we can only hope that the Obama administration makes the right decision. My attitude has been, and is, “wait and see.”

Posted in Mortgage Refinancing, Mortgages
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