If you're watching CNBC, Fox Business or any other financial channel you're hearing the same mantras every day.
"We had to bail them out, otherwise there would have been a major financial meltdown."
"This is the purpose of the government, when the free market loses control."
WRONG AND WRONG.
The essential purpose of the free market is you have good times, and you have bad times. The mortgage and financial companies make irresponsible decisions. If you and I operated like they did we'd be in debt up to our ears with no lifeline. All because we're not "too big to fail".
So what's the moral of this? If you're going to make irresponsible decisions, just make sure you do it at a magnitude that can hurt the maximum amount of people possible. If you do it any less, nobody cares to help you. Just make sure you're too big to fail.
So, now that the government comes in and buys up all the debt. No big deal, they'll just print some more money. All the financial institutions face no punishment for their decisions, and get to do it all over again. You and I get to pay this for the rest of our lives.
Welcome to the United Socialist Republic of America.
Subscribe to:
Post Comments (Atom)
Posts
2 comments:
What is worse is idiots think this bailout plan is a great idea. This is a band-aid, the market will be down within a month. They just needed a way to screw all the shorters. The real cause of the crash is not the shorters, you need to look deeper, its the bond rating companies. Moody's and S&P, they downgrade the bonds and then there is huge selloff. They just need to stop changing the ratings until 2009, the ratings are bs anyway.
people are not getting it. this is not a banking issue. this is not a
"lack of confidence in the system" issue. this is not a fed policy issue.
the issue is pretty simple.. it's called FORECLOSURES. Foreclosures are the root of the problem here. The fact that home owners are foreclosing is causing the price drops. When the price drops, they can't sell their homes.. banks reposses the home and the bank loses money.
sounds obvious? then why is the focus on banks???
why are we trying to save banks?? Target the problem and the banks will stabilize automatically. Take that $700 billion (or $1 trillion, whatever we are up to) and inject that into programs to save the morons that are foreclosing.. or, offset their foreclosures with hungry buyers. It will cost far less to find a way to stabilizing pricing, than it will be to bail out the entire financial system.
don't get me wrong, I don't think those home owners deserve a dime.. but that's the cause of the problem here.. and if we want to save our system, that's what we need to focus on. Injecting $700 billion into the banking system by taking debt off their books buys us another 6 months. In another 6 months, more people will lose their homes and we will need another $700 billion.
why isn't everyone seeing this?
If we had the govt call us today and say.. Mr. G, would you consider a
second home (vacation, rental etc) if we offered you a $100k rebate and no property taxes for 2 yrs? My answer. Sure. Mr. W, would you consider the same? How about a $200k rebate? Mr. K, how about a new home, closing costs covered and no property taxes for 7 yrs. Eventually, you get the guys on the sidelines with $$$, back into the game.. and those are the folks that will help buy up property, afford that property and stabilize pricing and in turn, will stabilize the system.
Post a Comment