Friday, September 19, 2008

Dear Bush Administration,

I'm just wondering why you think it's ok for the "government" and by that I mean me and my fellow taxpayers, to buy up all this bad debt. Seems to me, and I am hardly a financial genius, that buying it doesn't make it go away. In fact, it seems like taking on that bad debt means you will be at risk of the same bankruptsy you are resuing the mortgage companies from.

It seems like you are telling us that by buying it it will go away. But like other "toxic" items, redistributing it doesn't make it go away, it only redistributes the problem.

Now, I know that people are losing their homes. And that the economy is tanking fast. That what happens in our economy affects the world and I DON'T EVEN WANT to look at my 401K because I know it isn't looking so good.

But I don't know if continued government bailout is the answer. It seems like the "easy way" and a continuance of the very issue that got us in this predicament in the first place.

Buying more than we could handle, and figuring the goverment would protect us if we got in trouble.

I realize that I only have a high school diploma and a certificate in Massage Therapy. I am also aware that I tend to sleep in class, which is precicely why I didn't go to college. But I do remember something in Economics class about supply and demand. And it seems as though this country has forgotten the neato little fulcrum drawing provided by countless high school teachers. (I didn't forget, Mr Haiman!) It also seems to have forgotten that credit is a neat and powerful thing if used wisely. And a dangerous toy of used unwisely.

It seems to me like I am paying for other people's mistakes. That many folks are getting away with being irresponsible. The banks for giving out loans more feely than the guy on Halloween who buys full size candy bars and dumps them into your bag by the case. The citizens for knowingly taking on more house and toys than they can afford.

I'll never forget the first time I got prequalified for a loan. I went to my friend and said, "What can you do about getting me into this house?" I prequalified for $160,000. the house was $400,000 for a two bedroom 1 bath on a little bit of land. In hicksville. And she said we could swing it. That I could state my income higher than it was and get into that house if I really wanted it. I decided it was too much. Smart move for me, if I still lived in the neighborhood, I could probably buy the house for half that.

I made a smart choice. But I still have to pay for other's mistakes. I'm not sure how that is protecting my interests if that is indeed what the government is supposed to be doing.

A concerned constituant


media kingdom said...

it's hard to object to the government's mass bailouts since similar debt-producing methods were put into action to bring the U.S. out of the Depression; maybe we've had a heart for socialism all along...

Anonymous said...

My two cents is that Media might be just about 180 degrees away from correct in this instance. True there were "debt producing methods" instituted, but they were not to bail out businesses and banks during the great depression. They were to stimulate the economy by putting people to work and giving people the means to live, eat, and consume. The difference between then and now is then the government was largely investing the money in its own growing infrastructure where as now its going to pay for inept mistakes made by business men. The similarity between the two situations is largely as Ginamonster has stated, businesses haphazardly racking up uncollateralized debt and banks silly enough to provide that debt. The root cause is still bad debt.