So I’ve been thinking. A while back, I bought a big new stereo system that I really could not afford, so I bought it on credit. They gave me a great low-payment introductory offer.
But then, the payments went up and now I can’t afford them. Now the company wants to repossess my stereo and ruin my credit rating. Can you imagine! I need that stereo. It’s like my right as an American to have a stereo system I cannot afford!
I think the government should do something about this. I am not the only one this is happening to. There is a stereo crisis in America!
Pretty ridiculous, huh?
But, replace the word stereo with the word house, and you have our current state of affairs.
It is just as ridiculous. And I am not the only one who thinks so.
I have avoided saying anything about this because, well, these people are losing their homes and it is really sad and a tough situation and I do care. I mean, I have compassion for them and it would be totally lame to rub salt in the wounds.
But… Now this is a political issue. All bets are off.
Hillary Clinton released an ad attacking John McCain’s stance on the housing crisis.
In the advertisement, the Clinton campaign again portrays a family asleep in the middle of the night when the phone rings, meant to evoke a national crisis. The narrator then intones, “John McCain just said the government shouldn’t take any real action in the housing crisis; he’d let the phone keep ringing.”
(How funny would it be if someone in the stock footage used in that ad was a McCain supporter, just as the girl in her other ad was a Barack Obama supporter?)
Within hours, the McCain campaign released an advertisement on the Internet. It starts with images of the Clinton advertisement, with the narrator then commenting, “Hillary Clinton and Barack Obama just said they’d solve the problem by raising your taxes — more money out of your pockets.
I think McCain wins that fight, hands down. Not just because I agree with him, but because of the millions of Americans that did not take out adjustable rate mortgages or buy houses they could not afford, who will not want to foot the bill for the bail out.
It is not the government’s responsibility to help people out of their bad financial decisions. (That goes for businesses, too, so don’t even bother going there.)
Look, we, as a nation, have been living in a period of excess and over-extended credit, on borrowed time, if you will, and it is time to pay the piper.
Don’t you remember what happened when the people of Hamelin didn’t pay the piper?
He took their children.
And if we are not careful in how we handle things, our children will be left to pay for our mistakes, too.
We need to let the market correct itself, even if it is painful, not incur more national debt trying to insulate ourselves from reality.
April 3rd, 2008 at 11:03 am
“these people are losing their homes”
No they’re not. People who own their homes have nothing to worry about.
Until you have the deed in your hands, you don’t own anything, even if you are 29 years and 11 months into you’re mortgage.
These people are defaulting on their loans. It’s a shame, but it’s also their problem, not the government’s and not the other taxpayers’ either.
We need to look at some of the causes of this.
1. The government has been pushing the idea of ‘affordable housing’ and leaning on banks to give loans to lower income people, especially minorities.
2. Middle class whites, blacks, hispanics, asians, etc. (aka ‘Americans’) have been living beyond their means and thinking of the overpriced house they just bought as an investment that will only increase in value.
3. The ‘products’ that banks have cooked up to make mortgages more attractive up front, which was easy with the historically low interest rates.
4. The fact that smaller banks could sell these sub-prime loans to other banks and rid themselves of the risk of foreclosure.
5. The larger banks could roll all this debt into mortgage backed security funds and sell them as investments on the stock market.
What about this was not a disaster in the making?
There’s a lot of blame to go around for this one, but it couldn’t have happened without the people who took out loans they couldn’t afford.
Let them lose their houses and let Bear Stearns go under (too late for this, unfortunately). Get out of the way and let it hit the fan.
Every generation seems to need to learn this painful lesson first hand. Why, I don’t know. Didn’t the dot-com bubble burst just seven years ago???
Who’d have thunk the same thing could happen in real estate?
April 3rd, 2008 at 1:04 pm
I agree. What about the people who worked hard and sacraficed and saved money to pay their house. It doesnt seem fair the people who then didnt do anything the right way just get a free pass.
April 3rd, 2008 at 4:41 pm
Houses aren’t stereos. The housing/banking crisis in this country is very serious indeed, and our govt., unfortunately, encouraged a lot of the reckless buying frenzy by pushing ARMs in the first place. So, I feel like *some* of the blame should be shared by our own govt….after all, if the federal govt. can’t balance it’s own budget, why should you? That very last part is a way overly simplified way to look at things, since the federal govt. can do two things that you and I can’t…print money legally & go to any institution in the world, ask for a loan, pretty much name it’s own terms, and offer basically no collateral for the loan. No one that I know of is getting a ‘free pass” in all of this BTW.
Does anyone out there really think that the billions and trillions of dollars of debt that this nation has run up won’t actually be paid off, at least in part, by higher taxes at some point?? Come on now…
April 4th, 2008 at 7:10 am
“Houses aren’t stereos.”
True, but they are both things that one does not need to own and both are things that should not be purchased if one cannot afford them.
April 4th, 2008 at 8:56 pm
You don’t need shelter? I’m not saying that we all “need” a multi-million dollar house, but I think the need for a place to live is quite universal. I don’t own a home out of choice, but I do need a place to stay none-the-less.
April 4th, 2008 at 9:36 pm
“You don’t need shelter?”
No, that isn’t what I said. I said, you don’t need to own a home.
I don’t own a home, yet I have shelter.
There is a lot more to owning a home then being able to make a mortgage payment. It is more expensive for utilities. There are maintenance costs, insurance, taxes, etc. For some people, renting a small place is the responsible thing to do no matter how much they wish they could have a house (or no matter what a lender tells them).
Interestingly enough, we looked into buying a place (I hate renting) and the bank approved the loan and everything. We ran the numbers ourselves and realized that we couldn’t afford it, especially if anything ever went wrong in the future.
See, the bank approved the loan, yet we decided that we couldn’t afford it. It’s really that simple.
People made the choice to buy a home that they could not afford and it is not the government’s responsibility to fix the situation for them.