Sep 24th, 2008
The Problem With the Mother of All Bailouts
That’s what blogger James Wesley Rawles is calling it, and so far, it really is the Mother of All Bailouts. We are talking about an amount that’s approaching a trillion dollars to bail out investment houses, banks, insurance companies, mortgage companies… almost all of it stemming from the irresponsible housing lending practices in the real estate boom a few years back.
There are multiple problems with all of this, including setting a precedent (what makes anyone think the automakers or the airlines aren’t going to be looking for a bailout too?) and that it adds to our national debt, but the big problem is the same one we talked about the other day: these are your dollars!
If you were one of the many responsible homebuyers who saved for a down payment and got a reasonable mortgage that you could afford, do you think that your tax dollars–the additional tax dollars that you will have to pay for this bailout above and beyond what you were already likely to pay–are best spent bailing out those who didn’t, and the mortgages that were created by those homebuyers as well?
Where does it end?
Remember, these crises are relatively new; Washington hasn’t addressed Social Security yet (although the rumors of the coming death of Social Security have been exaggerated) or the problem they don’t want to talk about that is four times the problem of Social Security: Medicare.
How many bailouts can the taxpayer afford? My guess is that we’re not done yet, although I’d like us to be!
[...] Suenaga presents The Problem With the Mother of All Bailouts posted at Uncommon [...]
[...] a few days ago the House of Representativest rejected the $700 billion bailout package which almost every personal finance blogger I’ve read opposes. It actually was a nice [...]