Paying the Stupid Tax

The Washington Times had an interesting article about the government bailouts now occurring. Part of me wants to do a smug, "Told you so!" and part of me is grieved, and all of me wants to throw up reading about how we the people are going to pay out into the billions to save people who are reaping what they have sown...and the problem here is two fold: I loathe paying taxes to idiots for stupid things, a la an enabling parent bailing out an adult child from the consequences of their unwise behavior...and I loathe the fact that we could be in for another great depression if we simply do nothing because the problem wasn't corrected sooner.

I don't pretend to be an economic analysist. LOL Hardly. Just a mommy with common sense who has been living in the trenches.

As I see it: in the mid to late 1990s, every Tom, Dick, and Sally that wanted a mortgage got one. When we were buying our house, and we found out I had a black mark on my credit report because my dad used my credit without me knowing about it, the lender agent who was still in college said, "Don't sweat it kids, everyone gets a mortgage!" (SCARY!~). I remember thinking that was not really a good thing, you know? I'm sure that some people didn't get a mortgage...but the point was that you had to have really screwed up in order to not get one, and if you didn't qualify for a "good" mortgage you could qualify for a sub prime loan shark style mortgage.

Problem number two started around ten years ago when through various policies and whatnot that I, again, don't pretend to be well educated about these policies. I only know that it suddenly became easier and cheaper to outsource skilled labor jobs overseas. The problem is, many of these sub prime and even normal mortgages were being given to your typical household with dad or mom or both working as skilled labor, especially here in Michigan. We're talking about people who went from making $30 or more per hour down to making what they made when they were starting within a matter of a year. Happened to us; happened to many that we know. (I discuss this more in my book, Thriving on One Income...available here) You won't see any "Hurray for NAFTA" bumperstickers on my car.

The government's response to this was new job training, but the problem there was how do you support a family while getting new job training? Give me a break, guys. Thankfully for me I am married to one very industrious guy who, when the bottom fell out of our income, got creative and was able to do some side consulting to supplement his normal dwindling paycheck. I also serve a very big God who is able to provide in unconventional ways, and we have seen His power in this area, in a mighty way. It makes me want to shout GLORY!

Still, when I think about it, I think of people who (1) don't have God (2) don't have any common sense or creativity to go out there and pound the pavement (3) don't have any frugality skills in them whatsoever.

Suddenly, the Bush administration realized that the sub prime mortgage situation was probably going to end badly, and so they tried to reform how people are given mortgages. According to a pundit I heard on the radio this AM, this proposal was blocked in congress and senate because it was "discriminatory". Remember, we need to be fair about these things. If a worker who works hard and earns $90K gets a mortgage, you are being mean if someone earning $20K can't get their mortgage too.

To be honest, as I see it, I think that these practices are MORE discriminatory. They take advantage of the poor. Someone who is making more usually also has a better handle on money, how money works, economics in general, and so on. They maybe are better educated, they can look over that fine print and recognize problems. They are not going to be shouting glory over a $100,000 mortgage at 14%, thrilled that at least they got a mortgage, kwim? Aaron, the guy who did our mortgage, told us that he had just that morning got someone a 14% ARM Mortgage. Can you imagine? I wouldn't sleep at night if that were me.

So when the person making $20K gets their 14% ARM Mortgage, and their adjustable rate adjusts it self on up to 18% or something like that...and their income is either stagnate or goes down...come on, you don't need me to complete that thought do you? DUH. It defaults, and they likely can't even get into an apartment (some apartments have higher standards than lenders do).

No big deal, right? I mean, I'm not the one losing my house, right? I'm not the one in debt to my eyeballs and taking out foolish loans, right?

Ah, but the even more foolish banks, lending money to the $20K household at 14% adjustable are now suddenly not getting paid as the noose tightens. A few of the big boys have filed bankruptcy (I'm pretty sure that word, in this case, doesn't mean what it used to. I for one would love to see the CEO of some of these institutions on the front page of the wall street journal in a barrel like one used to see in the cartoons....but I am pretty sure they are bemoaning their plight on one of their yachts sipping momomsa). This is sadly a similar scenario that we had in 1929, when the Great Depression occurred...and this is what we are trying to prevent now that the banks are starting to topple.

So, we the people are going to dutifully pay out more money to help those who elected to not use any common sense when lending or borrowing. Maranatha! Come quickly, Lord Jesus.