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First, I’m mad as **** that Congress is even having to consider such legislation. What did my tax dollars pay for when it was paying the salaries of all of the regulators at the Federal Reserve, FDIC, and SEC that allowed the problem to get this bad? Why should my tax dollars bail out all the idiots and/or crooks that have gotten themselves into this mess? I have a mortgage that I pay for every month. My father doesn’t have a mortgage. It's unfair for us to pay for all this.
Second, I strongly urge everyone to oppose the proposal until we get some clear answers to some fundamental questions.
1. Where did the $700 billion number come from? What data supports this number? How exactly does our economy get destroyed if we don't do this?
2. What exactly will the federal government be buying – prime mortgages, second lien mortgages, subprime mortgages, “stated income” (liar loan) mortgages, etc.?
3. What price is being paid? How and who is determining the price? Using what criteria?
4. Who exactly will be the sellers? Who decides?
5. What is the government going to do with whatever it buys? If the government isn’t going to do it (e.g., service the mortgages) who’s going to get hired and at what price? What standards measure performance? If loans are going to be restructured, who decides what the revised mortgage loan terms are going to be? Will everyone get the same deal or will there be "favorites" getting better deals than others?
6. What can the selle’s do with the money they receive? Since they’ve already bungled the money they had, what’s to prevent them from making poor investments the second time?
None of these questions are being answered to my satisfaction in the news reports.
Also, I noted that the proposed bill from Treasury allowed for purchases of commercial mortgages. What??! Why are we (the taxpayer) buying commercial mortgages?
$700 billion!!! Legislators fight like a dog over a few million. I expect all voters and citizens to demand answers and hold people accountable. I certainly will be the next time I have to vote.
Thurman Senn
Louisville, Kentucky
You have listed excellent questions that require answers in your Comment. If we ever get the answers, which I doubt, we then should base our decision on open and fair market principles that most of us try to live by in maintaining ethical business relationships. Next, before rendering a decision we should defer to the Constitution of the the United States to look for a foundational principle to justify this bailout.
Oh... wait a second, we have a decision!
If any legislator or elected government office holder supports a taxpayer bailout of a private commercial business he/she has just violated his/her oath of office. Period. That was easy; too bad no one is considering that on Capital Hill.
Dems and Repubs have acted like our foundational document that gave rise to the free and open market system we have enjoyed can be ignored or dismissed. Adherence to the Constitution would have kept us out of this mess and made many problems the US suffers from concurrently non-issues.
NO BAILOUT EVER!
The free and open market sytem will adjust to the temporary lack of credit due to the overwhelming "lack of credibility". And we will survive. Hopefully the central bankers, their masters, minions and pawns will not.
On Monday, Barney Frank, who earlier claimed that the "Bush Administration had agreed to additional aid for homeowners facing foreclosure," "backtracked, saying he had overstated the agreement," after "Treasury Department officials later in the day rejected the details of the Democratic additions to the bill." See Susan Ferrechio, "Re-Election Worries May Hinder Fast Passage of Bailout," Washington Examiner, Sept. 23, 2008, at pg. 16.
Today, however, as noted above, the Los Angeles Times claims that the Bush Administration has now capitulated to Frank's demands to bailout such homeowners.
John R. Lott, "Analysis: Reckless Mortgages Brought Financial Market to Its Knees," Fox News, Sept. 18, 2008, available at http://johnrlott.tripod.com/op-eds/FoxNewsMortg....
How redlining regulations contributed to the crisis: Jonah Goldberg, "Wall Street Fat Cats Aren't at Fault This Time," National Review, Sept. 19, 2008, available at http://article.nationalreview.com/print/?q=M2Qw...
How the Community Reinvestment Act contributed: Wall Street Journal, Editorial, "A Mortgage Fable," Sep. 22, 2008 (quoting Robert Litan, a Brookings Institution scholar and former Clinton Administration official), available at http://online.wsj.com/article/SB122204078161261...
Why in the first place would we even give them a chance now?
My question is, if this bail out is going to bring the value of the dollar down, then guess what, that means that the price of oil and gas will go up, and people who are staggering to keep those homes with even fixed morages, are going to really struggle. What really flusters me, is people who, in good faith, bought a home doing everything right, will be hurt even more. Monies will go only so far, and then there are people who borrow on their home so they can get buy because the cost of living is rediculously rising. They are borrowing against their home just to live, especially if there is a medical crisis. I have seen people who had a good savings but when an unexpected medical emergancy happens, everything is wiped out., sometimes people resort to borrowing against their home. It's those people who will be hurting.