Rant for the Day: Government Bailout for Mortgages

I know that there are very mixed feelings about government bailout for defaulted mortgages. In fact, given the comments on this blog, most of you are against it. But the reality is that Congress feels the need to do something, most likely because it is an election year and their butts are on the line. However, an editorial is a small Wisconsin paper kind of hit the wrong chord with me. The Tomah Journal posted online today “Another bailout would send Wisconsin dollars south.” The gist of the article is that less populated, more financially conservative states will be footing the bill for their richer, more wreckless brethen. And, that is probably true, but isn’t that the way it works in the U.S.? If farmers are suffering, aren’t subsidies funded by the whole population? If there is a natural disaster, don’t federal tax dollars go to support effected regions? Yes, the difference being those two examples are not necessarily man-made or borne out of ignorance or stupidity, but the idea being that when one portion of the population suffers, everyone pitches in. And we all pay the same taxes, every year. So the theory that “Wisconsin will, broadly speaking, bail out Las Vegas,” isn’t really accurate. Those Nevadans paid their federal taxes, just like the people in Wisconsin. Their federal dollars are being used to bail themselves out. Could the money be better spent elsewhere? Probably. But the editorial seems to be saying that federal money paid from Wisconsin taxpayers should stay in Wisconsin. That ain’t gonna happen. We’ve got a war to fund, foreign countries to prop up, natural disasters to overcome, roads to pave, national parks to keep open. The fact is our federal tax dollars get spent by Congress they way that they see fit, to benefit the country as a whole. Yes, there is pork barrel spending and pet projects that get funded in home states, but the overall good of the nation is (or should be) top priority. And a financial depression in one state, like Nevada or Florida, can have a ripple effect on other states. It seems that the editorial personalizes the problem, by pointing fingers at individual homeowners, while Congress is looking at the bigger picture and trying to protect the overall national financial health.

My two cent rant for the day….and maybe I shouldn’t have had so much coffee this morning!