Preventing A Collapse?

Every day it is something new in the government bailout sweepstakes. Yesterday our fearless leaders stopped bouncing off the walls long enough to announce a new plan to provide Treasury backing for securities that will allow banks to grant new mortgages at rates as low as 4.5% in order to revive the housing market. Refinancings will not qualify.

This is egregiously unfair to strapped homeowners who are struggling to do the right thing and pay their debt obligations, often while raising young children, putting food on the table and clothes on their backs, and trying to find enough money to pay for the other essentials of everyday life such as utility bills, gas for the family car and education expenses. In order to provide these basic necessities, many of these people diligently go to work every day to often low paying jobs they are in danger of losing because some overpaid morons in Washington D.C. and corporate executive offices piled too much additional debt on top of an already over-leveraged economy.

Changing the rules any time by creating government directed subsidies, preferences or other bailouts is always unfair to many more people than the new rules are designed to benefit, and inherently inappropriate. Changing the rules on a daily basis just creates even more confusion and gross inequities, and is no way to manage any organization - let alone a national government. In this particular case, if the government does decide it is necessary to take action and interfere in the mortgage markets by creating below market rates of 4.5%, it makes no sense and is clearly unfair to the vast majority of homeowners unless the rate is also allowed to apply for refinancings, accompanied by the waiving of all fees or charges involved in doing so. Only then would there be a degree of equal opportunity and fairness for those who are complying with their contractual and moral duty to pay off their obligations.

Of course, those who have already paid off their mortgage and those who rent or lease receive no benefit from this government generosity at taxpayers expense, and are therefore dumped on by their elected representatives. Besides, where does it say that everybody has to own a home? There is nothing wrong with renting.

Daily announcements of changes in plans to fix the financial markets and stimulate the economy are doing more damage to those two related problems than any other response possibly could. Supposedly this government intervention is intended to prevent the financial system and American economy from collapse. Perhaps if the lords of the gilded halls of Congress and massive edifices of federal bureaucracy inside the DC Beltway would pull their heads out of their asses they might notice that the markets and the economy have already collapsed. Thanks to their panic driven anti-capitalistic maneuvers and rapidly changing quick fixes, they have screwed up the situation and made it much worse than it ever needed to be. Staying the hell out of the way and letting the markets sort it out, as government is supposed to do in a free market economy, would have been and still would be a much better course of action.