Friday, December 28, 2007

Mortgage Crisis

The Federal Reserve is bailing out a lot of people that took on loans they cannot afford - otherwise known as the mortgage crises currently underway in the U.S. – by loaning $20 Billion dollars of our stolen federal tax money to banks nationwide. I’m sure more than that is on the way.

I think the rest of the country - the approximately 90% of us who did not make irresponsible choices, loans, and quests for money at the expense of others - are getting the short end of the stick.

We hear, “The Federal Reserve is going to help”, “The Feds are stepping in”, and “Washington’s trying to prevent the mortgage crisis” but what they are really saying is that you and I are going to save the day by turning our pockets inside out and having our stolen tax dollars pay for it all (at least they're going to something other than pork).

I’m going to skip over the obvious question about why shouldn’t those who made bad choices be held responsible, to include buyers and loan companies. I've heard that question already asked time and again with no results, even though the answer should be simple.

Therefore, I will instead focus on a question that has yet to be asked:

If a bailout is going to occur, why not at a lower level?

If the states handled this, instead of the federal government, that would relieve a lot of burden on taxpayers nationwide. Take the states of Virginia and California, for instance.

The population in California is far greater than that of Virginia. If the states conducted the bailout, the residents of Virginia wouldn’t have to pay for all the foreclosures in their state AND all the foreclosures in California, of which there is a far greater number of in California due to a much larger population.

Likewise for California. Virginia might have a smaller population than California, but any added amount of population is more than what you had to start with.

What about housing prices? There is a drastic difference in housing prices between states like Mississippi and Massachusetts. Why should tax dollars from residents in Mississippi be used to pay for the foreclosures of homes in Massachusetts, which are a far greater price in Massachusetts than they are in Mississippi?

How is that fair to residents of Mississippi, whose income and cost-of-living is much lower than the income and cost-of-living in Massachusetts? Factor in the population differences I mentioned a moment ago, along with the income and cost-of-living differences, and you can see we have a real problem that the federal government isn’t even considering.

And if taking it down to the state level makes more sense, which I think it does, what about an even lower level, like city, town, or county? How much more fairly distributed would the bailout be then?

What about the lowest level possible – the individual level? I’ve already talked about how places like are empowering the people themselves to break the monopoly of banks.

It’s time we start relying more on our own, localized ways and means of handling such issues. A state, local, or individual solution will always be fairer, more efficient, and more responsible than a oversized, careless, and wasteful federal bailout.

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