Another good reason that the federal gov’t should be smaller, not larger.

Sorry Susan, you are wrong on this one. You make a lot of good points, but this is a perfect example of those who make good decisions bailing out those who don’t. Our government used to be about empowering individuals to make their own decisions. Now they try to rescue everyone who uses bad judgement. The Fed created the mortgage mess by flooding our economy with money after the dot-com bubble burst (another example of government trying to step in to save the day). Occasional recessions are a good thing since they force our economy to be less wasteful and more efficient. Our government is trying to avoid them altogether at great peril to the future of our economy (see what is happening to the dollar right now. The price of oil is not appreciating as much in other countries since it is pegged to the dollar).

If the federal government would let poor decision makers be responsible for their actions, they would not only avoid punishing the good decision makers, they would be putting our economy on much more solid ground in the future.

I’m with Justin and David. You’re wrong, Susan.

My point here wasn’t whether or not the government should or shouldn’t be bailing out homeowners or banks. I am a bit ambivalent about that actually, but you do all make good points against that action. My point was that if it should happen, that people in Tomah, Wisconsin feel they have an unfair portion of the cost or that they shouldn’t have to share the burden if it does come to pass.

I actually disagree with all of you. The founding fathers included bankruptcy protections in the Constitution in order to encourage people to take risks because they understood that the way to build a strong democracy was by having all people invested in it through land and home ownership. In the past years, we’ve not only dismantled bankruptcy protections for individuals, but we’ve also systematically under-educated people on financial planning and security, while simultaneously allowing corrupt banking and predatory lending practices to prevail. All of this at the same time as having more than 45 million+ go without health insurance and unemployment rates escalating, and we’ve suddenly found ourselves in a housing crisis.

It’s not the real estate market that’s in crisis. It’s families who are in crisis and I believe that our largely unregulated system of predatory and subprime lending and the new bankruptcy laws that went into affect in 2006 are largely the cause. The Federal govt definitely bears some real responsibility for this. It’s not just some random people making bad decisions. It’s a system that set them up for failure and is now letting them lose everything.

We all tout the dream of homeownership as the greatest thing ever but when that’s shoved in people’s faces along with dangerous loans that they’re told by bankers are just fine, how can people NOT take the bait? People made ignorant decisions while trying to attain the “American Dream” but there were banks out there luring them down that path, and our government gave them license to do so. They should be punished, not the individuals and families who were misled.

Becky: It is easy to not take the bait. I didn’t and many of the renters I know didn’t either. I look around at folks who are complaining about their escalating mortgage and all I see are people who went to Argentina two years ago who were known to say things like ‘My home made more than I did last year, isn’t that great’. You can give me as many sob stories as you want about kids loosing their homes and all I see are people who have been living in a nicer house that I have for the last 5 years and working a lot less to afford it.
Susan: I think your point here is well taken, it is the responsibility of government to take care of its citizens. In modern times we have employed taxes on all classes of society to make that happen. In a very large country like ours that is going to mean that your tax dollars are invariably going to be spent on tings far from your home. That’s life. I choose to believe that my taxes go directly to the NIH and to our wonderful parks. That fantasy allows me to watch the billions going to defense without going mad.

As far as Wisconsin bailing out Las Vegas, not true at all. If we look at where Federal tax dollars are collected and spent, Nevada gets a measly 67% of tax revenues returned; Calif. a little better at 80%. Wisconsin is a bit below break even, (88%) so if they want to get cheesed off a bit at somebody, they should choose New Mexico at 200% or Mississippi at 202%.
(Data from 2005; http://www.nemw.org/taxburd.htm )
In fact, Nevada came in dead last in federal largess in fiscal year 2006 at $5,852 per capita,
The spending in Nevada compares to $16,263 in the top-ranked state of Louisiana.
>> So a BIG bailout of Las Vegas probably will merely even things up.

Jon,

You could not be more correct. Nothing was shoved, nor is being shoved in anyone’s face. When you sign your name to a piece of paper, you need to know that you have certain responsibilities. I know many people like Jon who decided (wisely) that the market was too rich for them. Everyone who decided to jump in did so at their own peril. They may have been misinformed, but I had an option-ARM shoved in my face that I chose not to sign. It was just a matter of reading the fine print and making my own decision. After dodging that expensive bullet, I am going to be paying for the bad decisions of others with my tax dollars. I lose either way.