Bailout Money Madness

Way back in December of last year, rumblings were heard about a deal for freezing rates for homeowners having trouble with their mortgages. Yesterday, it was announced that the government may have the plan ready to use about $50 billion from the financial bailout in order to guarantee $500 billion in mortgages.

This must be new math, because I have no idea how $50 billion can guarantee $500 billion. Regardless, I want some of that action. I really don’t get how the people who pay their mortgages and their car loans and credit card bills and every other debt they incur don’t get any relief, while those who don’t pay their bills get to take a free ride. It makes you wonder why you should bother being responsible.

Now I get that there are times when people hit hard times. And I feel bad for them. I really do. I don’t mean to be an ass about it, either. I really don’t. But if there is never any downside and the government is always there with a handout to keep everything from failing, what is the point of saving and trying to make sure that you have built up a safety net?

There is just no need to be a responsible adult and attempt to make good decisions if there is no downside if you don’t.

And it isn’t even just the individuals. The companies and the government themselves are right at the top of the list. Government has been running in the red for decades. Why should they get a pass? Why should companies be bailed out? Let them fail. Will life as we know it come to an end? Perhaps, for a time. But eventually it will all work out and we will be stronger for it.

Otherwise you will have one hand after another all looking for a handout.

When the banks got theirs, the automakers and insurance companies got in line. The executives at the companies defend their payouts saying that they deserve the million-dollar paydays because of the tough decisions that they have to make. And I don’t question them. I am sure they have difficult decisions to make. But when they ultimately have to take money from someone else, perhaps they should take a big cut in pay. Perhaps we all should, rather than waiting on the dole from someone.

Update: On November 10, 2008, it was announced that investors in Countrywide were suing because of their losses. Some 400,000 mortgage adjustments were good news for homeowners but not investors. Someone always loses. Where is the shareholder relief? I have no doubt that a class action lawsuit will be along shortly, but that is not what I mean.

Update: On December 12, 2008, Dubya announced a $14 billion aid package for Detroit automakers. Ford has said they do not need money, at least in the immediate future. I wonder what business will be next. A slippery slope indeed – once the money starts flowing, there is no end in sight.