Why the Spending Bill Will Fail…

I’m most upset with the Housing bail out, it REALLY raises my blood pressure!

I’m now looking for a lender to lend me money to buy a house I can never afford. After I get my loan, I’m going to get in line and wait for my bail out!

sorry angello, the bail out won’t really help you any

basically you have to negotiate a crummy deal, then get behind and hope you don’t get thrown out, and then let the gov’t help get you the good deal you should of and could of gotten, and the gov’t writes a check for the difference to the bank. you don’t get any of the money and it is still the same house.

but i agree, it sux
letting the bad loans fail is actually a good thing. it does cause a temporary disruption to the people living in some homes, but it doesn’t cost them to leave, and there is plenty of other housing to buy or rent reasonably. in most cases it is just a wash, like the person was paying rent. and the banks are punished for their foolish lending which should help to prevent future issues, the people are punished with bad credit which encourages them to be more thrifty to improve it.

the rest of us do have to ride the ripple this creates though, so hold your breath! sadly, some innocent people will have to drown.

what i’m saying is that the only people who will get bailed out are those who way overpaid – due to over estimation of house prices at the time. but the people do not get the bail money, it is going to go to the banks.

basically it is a large fund offered to banks at the banks choice. if the bank will renog, then can take a portion of their losses from the fund. those who can’t afford homes would never get a renog or qualify for the program. so in all, it is a wash for the homeowner, sort of like if they just bought the same home now. the lending is strict and limited so it doesn’t pay the bank to do a deal with a huge loss.

it has yet to be seen, but more than likely few if any lenders are going to go for it, same as with the first round of TARPA where the banks just said thanks and held the money. most of the deals are tightly integrated so the banks often can’t rework them anyway.

i’m not sure i agree with a ‘leave it be’ policy, that is part of the reason japan tanked, they helped a bit, then played leave it alone and it recollapsed for a decade. the instability in doing nothing would really hurt us all, but i’m not sure what all the answers are and neither is anyone else. it is not just simple economics, there are lots of social factor involved. the best solution is probably nationalization, rework the assets, and then resell.

this country, like every country, is rife with sweet deals for certain classes of people. if we cancelled all public pension obligations – we could even pay out the meager contributions – we would fixed all financial problems immediately. it is the same thing GM is trying to do and many businesses that were collapsing; haven’t heard of any airline bailouts recently have you? of course if you are a recipient or future recipient, it is not welfare, it is ‘earned’. the rest of us see it differently. why is a sheriff or mayor any better than me or more deserving of sales taxes when we both grow older.

this is not an ebb and flow and not just an obama thing.