Bailout Coming and We Get Screwed. By Geniusofdespair

I remember the Saving & Loan bailout during the Reagan years and here we go again with another bail out, this time it is of the Housing Crash! (An aside: Reagan sounded like he had achieved saint status during the Republican debate tonight - does any Republican remember the Iran-Contra affair or has Alzheimer's erased it from everyone's memory). I digress as usual.

In the article Stop the Subprime Bailout they ask: "Can you spare a few thousand dollars to pay somebody else's mortgage?" And, they answer:
"Congress thinks you can, especially Senators Christopher Dodd and Hillary Clinton. What's more, a lot of the people you're being asked to bail out lied on their loan applications or signed up for loans without reading the terms."

According to Caroline Baum of Bloomberg.com (March 21st):

"During the housing boom of the last five years, people with bad credit histories, many of whom lied about their income and nature of employment, got mortgage loans they weren't qualified for to buy houses they couldn't afford. Now that house prices have stopped rising, and the house can't be refinanced or sold at a profit, Congress wants the taxpayer to subsidize the mortgages so these folks can remain in their unaffordable houses."

NOT FAIR! I didn't know enough to lie, someone should have educated us honest folks.

Skipping to near the end of the article:

"The proposed bailout is a moral hazard. It encourages the bad behavior that got us into this mess, because the punishment for foolish borrowing is applied to you and not to the people who made the bad decisions.

Bailing out borrowers also means bailing out their lenders."

Read the whole article, it is a good one. In the end we - the normal people who put 20% or more down on a house we COULD afford, didn't lie and actually thought about our budgets - are all going to get screwed by a bunch of dumb and/or crooked people and a load of unscrupulous lenders.