Monday, September 29, 2008

BAILOUT, NO!!!!

The bailout will extend the duration of this problem. It will spread the cost among those who had no part in its making. These homes that are the subject of subprime loans were sold to those who could least afford them. These loans artificially increased the stock of homes in the U.S. This means until new qualified buyers come along that do not already own homes, there will be substantially fewer homes being built and depressed home values. This could take a very long time considering that only 45% of households are financially capable of owning and maintaining a home.

When Congress passed legislation to increase home ownership, it did not increase the ability to own and maintain a home. This means there could be as much as a 25% surplus in the U.S. housing market.

Transferring the cost of maintaining and disposing of these homes to taxpayers will increase the National Debt causing oil and other commodities to increase in cost. This is a zero sum option with high risk. Therefore, we should not bail out those who made profited from high risk investments.

This mess was caused by unintended consquences. The objective was to increase home ownership. Our elected representatives created this mess by straying from the core responsibilities of the Federal Government. What can all Americans do about this? VOTE THEM ALL OUT!

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