Tuesday, September 04, 2007

Plan Inadequate?

Daniel in the Lions Den_Peter Paul Ruebens

I just got done reading an article about President Bush’s plan to bail out people that are no longer able to keep up payments on their mortgages. Many of the people that the President’s plan covers took mortgages with interest rates that increase substantially after the first two year teaser rate expires. This is the same idea the credit card comapanies came up with a few years ago to get you to transfer your business over to them. They took your balance and gave a very low interest rate for a year and then increased it to above the regular going interest rate and increased penalties for being late on payments. Oh yeah, and let’s not forget the Cable TV company. When you first hook up with them it’s a ridiculous low monthly payment for the first three months and then after you get used to it and change all your email addresses over, wham! They then sock you with the full price with all the taxes and fees on all the other non essential items that go to providing cable service to your home.

Ok, I got you all worked up, breathing hard, and wanting to choke some credit card or cable company representative didn’t I? Well, it shouldn’t make you angry. The companies provided you with all the information about what you were getting into when you signed up didn’t they? Yes they did, they have the paperwork to prove it and so do you unless of course you threw that contract away and never read it. The point I’m making here is this; you are all adults and you are all responsible for your actions. If you sign an agreement or contract you have to live up to that agreement unless of course the other side breaks their agreement with you first and then it becomes a legal issue between you and the other party.

The President now is proposing that we as taxpayers bail out a segment of the population that weren’t responsible and took out loans they knew they’d never be able to pay back when the lower rate expired and the ridiculously higher rate kicks in. Those low rates attracted speculators and they built or bought houses for dirt cheap and figured they would hold onto them long enough for the value to go up and then dump them onto the market before the higher rates kicked in. The problem with that was the housing market slowed down and they weren’t able to sell the houses for the huge profits they imagined and now they're stuck having to pay for the mortgages at the much higher rate. That is unless they can get some taxpayer fool to pay for it. That’s just what they’re trying to pull here and they’ll get away with it because now the democrats are getting into the fray. The democrats are going to say that the mortgage companies that made these loans did so dishonestly and the taxpayers should pick up the tab.

Right now the President is proposing that the taxpayers will have to pick up the tab for 80 or so thousand mortgages but the democrats are already saying the President's plan is inadequate and are going to want to at least triple or quadruple that number of mortgages. The democrats want to be able to say with a straight face "we did something for poor irresponsible people that were taken advantage of by evil lending institutions" when the case actually can be stated; the democrats are going to take advantage of taxpayers and make us pay for people that are irresponsible, again!

Neither Bloody nor Bowed

They say of me, and so they should,
It's doubtful if I come to good.
I see acquaintances and friends
Accumulating dividends,
And making enviable names
In science, art, and parlor games.
But I, despite expert advice,
Keep doing things I think are nice,
And though to good I never come-
Inseparable my nose and thumb!

Dorothy Parker


dons_mind said...

j_g - when ya get a chance check out the post at thehillchronicles.com entitled "the ant and the grasshopper". personally it's a terrible thing all around - but even more so that we should have to provide the bailout frm our tax dollars. argh........

J_G said...

Don, sounds like the story about the ant and the grasshopper is a take off of one of my all time favorite animation movies "A Bug's Life". Great analogy!!! I listen to Quinn and Rose in the morning on the way home from work. The XM radio in my pickup has turned out to be quite useful after a reluctant acceptance when I bought the truck.

Thanks Gayle, I have to put off buying things I want or need because I know I can't afford it and full well accept the fact that I can't afford. I need a new refrigerator and soon I'll be needing new tires for my pickup truck. They are expensive and necessary but I have to plan and save so I can afford these things. How can anybody have any kind of dignity if they expect the government to take money from your neighbors to pay for things like that when you are too irresponsible to do it for yourself.

Tom the Redhunter said...

Dittos to everything you say in the post, Jennifer.

Some people just don't want to take responsibility for their actions, and want the government to bail them out. I've made a few bad financial decisions like everyoone else, but I don't go crying to Uncle Sam.

SusieQ said...

As usual I have relied on you to keep me informed about government stuff like this. But my guess is that the bail out is needed in order to insure that the economy doesn't go down the tubes. It can have a domino effect I suppose if we don't do something. You no doubt know more about it than I though.

What gets me with these phone service companies is how they switched from giving you a good deal for the first three months with no strings attached to strings attached to that good deal. Now if you sign up for some ot these deals, you are locked into a contract with the company for a year, or more in some cases. Don't you know that switch was in the works long before it took place. Oh, and these contracts are so very wordy and full of tons of information that they become impossible to comprehend and you need a lawyer to look them over. This is why I won't switch my phone service to a new company regardless of how much money they claim they can save me.

J_G said...

Thanks for stopping by Tom_TRH (I hope that's acceptable). I have made some financial mistakes in my lifetime too but I've always had to take the hit and there was never a government official looking to compensate me for my mistakes.I've always had to pay double for them because I should have known better.

Susie, I know I over simplified the problem in my post and there is a problem with over 2 million mortgages coming due for the higher rates in the year ahead. Many of the banks around the globe have pumped cash or equity into into the monetary and lending markets to stabilize them.

I'm no T.Boone Pickens or Warren Buffet but anyone that watches the market can clearly see that there is a problem but it's not the major problem the democrats or the hustlers are making it out to be.

There are many factors that have caused this credit problem and the biggest is irresponsible people borrowing over their heads. The second biggest problem is lenders being irresponsible about lending to these people. There is a big difference between giving someone a chance to improve themselves and lending to people they know are likely to default on the loan.

The bottom line is it's not as big a problem as it's being made out to be and it is just another example how democrat scam artists will use anything for short term political gain no matter what the long term consequences may be.

I purposely left out the phone company Susie, they are the biggest scam artists going and really make me angry. You need an accountant,a lawyer and a fortune teller to figure out what the heck the charges are every month. The greedy government double and triple dip on the taxes and fees, Federal line costs,Federal Universal Service fee, Federal Excise tax, Relay surcharge fee. It's all BS to please the overtaxing authorities.