Bad Credit Blues

I you think that the mortgage giant bailout by the federal government is there to help the average guy (or gal) who is struggling to hang onto a modest home, think again. Sure Joe and Jane Six Pack will help pay for it with his federal income taxes, but it is this move intended to aid them keep their homes?

Well, not really. Sure, the move may help some borrowers access lower rate interest loans if they can qualify. But to me, it looks like the bailout will benefit the stockholders, at home and abroad, the mortgage giants employees, and of course, the CEO who helped himself to a 13 million dollar plus salary this year. The stockholder, employees, and executives get to keep their jobs or assets in a move that certainly hasn’t been based upon their prior performance.

The Chinese, who are deeply invested in the mortgage giants, have said that a collapse will cause economic catastrope for them. So are we bailing out the Chinese too?

In fact Phillip Greenspun makes the point that the wealthy are already subsidized because of the mortgage interest tax deduction, which is much larger on what….? More expensive houses, of course!

Maybe we should have just taken the billions of dollars and made sure everybody had a roof over their head.

Discuss……

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