Quote:
Originally Posted by UGAalum94
AGDee, I think some of my differences with you on this point have to do with your having a fundamentally more positive view of human nature and human behavior. Most of the time, you seem to assume that people who want or need help honestly tried their best to meet their obligations but through limited fault of their own have now become unable to. That line of thought more supports the idea that it becomes the moral duty of others to try to help them, and the government's job to kind of provide guarantees of this help.
On the other hand I see some evidence that the current mess reflects a lot of behavior by people who approached things very selfishly and incautiously, who sought to get the most they could rather than what they could safely afford (or morally or ethically deserved, in the case of money managers who made a lot of money losing money for investors or CEOs who screwed their companies), government officials who were more than happy to personally profit from a failure to regulate and turned a blind eye when things were good, who all now turn to people who have been plugging away at steady jobs, living in modest houses, paying taxes, basically trying to carry their own weight, and ask for the second group to subsidize the bad outcomes because of the behavior of the people in the first group.
Oh, hell no.
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I did say that I think the root of the whole problem is greed, so I'm not sure I'm saying that we're basically good and all tried to do the right thing. I see three groups of people in foreclosure. The first group don't have jobs or have had extenuating circumstances (like my neighbor who had breast cancer and then lost her husband) and therefore, can't pay their mortgage. Some of them have paid hundreds of thousands on their mortgages over the years but can't pay it now. So, even if they only owe $20K on their original $150K mortgage, they can't make the payment and the bank gets the house. The second group got into bad mortgages ... interest only or low interest to begin with, with the plan to refinance as the low interest terms of that mortgage came to an end. However, since their housing value has dropped more than 30%, they can't get a new mortgage so they are stuck paying exorbitant interest. I don't know who should "shoulder" the blame for those. I don't think people intentionally said "I'm going to buy a bigger house than I can afford". I think they thought they'd afford it, that property values would continue to rise, etc. The third group are people who have found jobs in other states, have had their homes on the market for over a year and can't sell it. The result of all this is that home values continue to drop at an alarming rate. So even if you had 20% down when you bought your home, you now owe more than it's worth. Whose responsibility was it to predict that home values would drop this much and you should have put at least 50% down on your house 5 years ago if you wanted to have 80% equity today? I don't know. I hear experts say we were in a housing bubble and it was bound to burst, but I don't know how we were supposed to know that. I guess I think some of that stuff should've been regulated.
Do I think we should be bailing out the CEOs of corporations who were making 7 or 8 figures? No. However, shit rolls downhill and it's seriously affecting the people who were paying everything and staying on top of things because they don't have jobs now. The vast majority of these companies that are failing are the middle class working folks, not the CEOs. The actions of the first group are seriously affecting the people in your second group. You think the guys who were making 8 figures are losing their homes? No. They've made more in a couple years than the rest of will make in our lifetimes. I don't see the bailouts as bailing out those individuals. I see it as bailing out society as a whole. I think that's our major difference.