Rant #3 The bailout
Does it bother anyone that the largest financial institution in the United States is now 80% owned by the US Government? I can’t see how any good can come of that. That means that most of the capital that flows through our financial system is going to be under the control and scrutiny of our government. They’ve already proved they don’t know how to manage money, what makes them think they can do any better with this one?
Then there is the $700 billion deal that is being finalized. The idea is that the government buys the morgages of homeowners who are at risk of foreclosure so the banks no longer have the risk of losing more money. Great for the banks. They don’t lose the money they were about to. They lower their risk exposure. Now they can start lending money again.
On top of that the homeowners now get a lower interest rate from the government to lower their payments to something they can afford. Great for the homeowner who went into a loan they knew they could not afford.They now get to pay less for something they shouldn’t have in the first place.
But what about people like me. I get to pay for all of those through taxes. My kids will pay for it too. I never missed a payment, I don’t live in a house I cannot afford, and I am not a high risk. What do I get out of this? Same payment, same interest, same house. No gain for doing what I was supposed to. Yet my neighbor up the hill who bought that beautiful 5 bedroom, two story home, with two car garage that was way outside his means, now gets a bonus and gets to keep the house.
As for the banks, they won’t open up the credit market. Why? Because they have been burned so badly by their own lack of dillegence, that they are leaning far toward the other direction of not making loans that have any sort of risk. They are getting their money and hanging on to it. Using the bailout to get what they should not have risked in the first place. Leaving someone like me stuck.