Once again our government finds a way to screw over people who acted wisely and followed the rules, reaching into our pockets to hand our money over to fools who borrowed or lent more than they should have.
Congressional leaders and the Bush administration reached a tentative deal early Sunday on a landmark bailout of imperiled financial markets whose collapse could plunge the nation into a deep recession. ...
The plan calls for the Treasury Department to buy deeply distressed mortgage-backed securities and other bad debts held by banks and other investors. The money should help troubled lenders make new loans and keep credit lines open. The government would later try to sell the discounted loan packages at the best possible price. ...
To help struggling homeowners, the plan would require the government to try renegotiating the bad mortgages it acquires with the aim of lowering borrowers' monthly payments so they can keep their homes.
So taxpayers, responsible homeowners, and people who were sitting out the bubble because they knew prices were too high get screwed.
The government buys up the bad loans and sells them cheaper than the banks were willing to, thereby transferring wealth to these failing companies to prop them up. Does anyone honestly believe that we're going to make a profit from these loans or the equity stake we get in these companies? Please. That's ridiculous. The loans are probably worth fifty cents on the dollar, so there's a lot of ground to make up before there's any profit.
Not only that, but people who bought houses they couldn't afford will now get their mortgages "renegotiated", so there's some free money for them, too. People who bought houses they could afford have to shell out money to help the idiots. Again.
My family works hard, lives frugally, any we deny ourselves many immediate pleasures to provide for our financial security. And the government just spits in our faces.