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Is it fair to force people who have faithfully paid their mortgages to bail out those who haven't?
Is it fair to force people who have faithfully paid their mortgages to bail out those who haven't?
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| Yes | 18% | 45 votes | Total: 246 votes | |
| No | 82% | 201 votes |
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Add to FavoritesThe simple answer to the question, of course, is "no, it isn't fair." But "fairness" should not be the question. The words, "fair," "faithfully" and "force" are emotionally charged and should have no place in a civil discourse. The question we should be asking is, should there be a taxpayer-funded bailout program for those who can't pay their mortgages? The answer must be yes, because it benefits Americans as a whole.
First, a very brief civics lesson. The United States of America was founded as a democratic nation of laws with a strong social contract in the tradition of Hobbes, Locke and Rousseau. In its simplest terms, the social contract means that we as a group agree to do certain things for the benefit of the group. An obvious example is if some other group attacks us, we band together for defense.
Our system of taxation relies on the social contract: my taxes can be used to build a bridge in Alaska that I, myself, will never see or use. But because that bridge theoretically benefits the group as a whole, it's alright for my tax dollars to be used in that way. Of course, the downside is that my tax dollars may be used to pay for something I find objectionable or morally repugnant, such as the 2003 invasion of Iraq. Nevertheless, if I want the benefits of the social contract, I should be prepared to accept the will of the majority on some issues with which I disagree. (And I am always free to change others' minds to agree with me!)
Second, some costs and benefits. Some issues are pretty easy to analyze in terms of costs and benefits: fire and police protection and water and sewer systems benefit everyone. Imagine, if your house caught fire and you had to pay the actual cost of putting it out. Even worse, imagine if your next-door neighbor's house caught fire, and because he couldn't afford to put it out he let it burn and your house then went up in flames! It's easy to see that fire protection benefits you, even if you personally never use the service.
Other products and services are not so easy to analyze in terms of costs and benefits - public schools, libraries and certain types of infrastructure - yet most of us agree that they are necessary to our well being as a society. If we did not have an educated workforce, we might not be able to get the right change at the store, let alone compete as a nation in the global economy. So, even those who don't have children of school age, are willing to support public education because it benefits all of us and our social contract dictates that public education be available.
Third, a mortgage bailout. The President's plan, unveiled last February, calls for $75 billion to bail out nine billion homeowners. This is in addition to the $200 billion each already committed to absorb losses at Fannie Mae and Freddie Mac. There are some less obvious costs as well including decreased real estate values, diminished consumer spending power and declining neighborhoods.
Across the country, real estate values have plummeted 20-30%. In the states of Florida, California, Nevada and Arizona, values have dropped 50% in the hardest-hit areas. On a personal level, this means that because of the huge numbers of foreclosed homes on the market, my home - my single most valuable asset - is worth a fraction today of what it was worth three years ago. On a broader scale, it means less money for retirement, travel, health care and a host of other types of spending - spending which our economy desperately needs.
As home foreclosures increase and homeowners are forced to vacate, more houses in each neighborhood are empty, an invitation to vandals and other criminals. Those of us left in the neighborhood are less safe, and our costs of policing and fire protection are higher. In many instances, vacant houses and untended lawns attract vermin and become a public health concern as well. In Nevada, one out of every 64 homes was in foreclosure in May.
As home foreclosures increase within an area, small businesses disappear as well. The local convenience store and gas station are casualties, along with other small, localized businesses. Local tax revenues drop, necessitating a drop in services or an increase in other taxes to make up the shortfall.
The costs to our society of ignoring the mortgage crisis are very high. But before taxpayers pony up to bail out these mortgages and prevent more foreclosures, there must be some benefits.
The Obama administration claims that turning around the housing crisis is key to turning around the recession and the economy. If more Americans are able to stay in their homes, the real estate market will rebound sooner and property values will start to appreciate again. That makes more wealth available to more Americans, which helps consumer spending and helps the economy overall. With fewer vacant houses, there will be less of a drain on police and fire protection resources and a smaller drain on scarce social support dollars to assist newly homeless families. Local tax revenues will improve. Although harder to measure, I believe the benefits to our nation of keeping families in their homes will outweigh the costs.
Therefore, American taxpayers should fund a mortgage bailout program. Not because it's fair for Sally, who's always paid her mortgage on time, to bail out Bill, who hasn't, but because it's a social benefit for all of us. For this reason as well, discussions of whether individual homeowners are personally responsible for the mess they're in are irrelevant.
The individuals who receive help should occupy the mortgaged property as their primary residence, and meet other reasonable requirements. Supporting a social good doesn't mean we should be stupid about the details!
Learn more about this author, Susanna Perkins.
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No
What I'm about to say will offend a lot of people, but there are many others who will agree with me. It's not fair to force people who have paid their debts to bail out others, but it happens every time someone files bankruptcy. Whether it's the mortgage bail outs or bankruptcy, the government is setting a terrible precedent.
There are so many things wrong with the mortgage bail out. A home is an investment and as an investor we take "risks". No one knows what the stock market or housing market will do from day to day so it's a risk. If you signed a contract then you should be held to that contract. We are all taught that in school and by our parents, at least I hope we are. I've made bad investments in my life, but I suck it up. No one will learn the meaning of responsibility until we as a nation hold each other accountable.
I've been dirt poor and worked myself up to middle class but it seems middle class is slipping into poverty levels. This is a subject that completely angers me to my core because I've worked hard to establish who I am. I have worked two and three jobs to keep my bills paid. As I watch my house fall apart around me , as inflation rises and I can't afford to make minor repairs, I seek alternative methods to make money in addition to my full time job.
Then some loan company decides they want to make huge commissions and loans money to people that they know cannot pay it back. I think that is criminal. I think they need to punish the people who have gotten our nation into this crisis. From the loan officers who gave the outrageous loans to people making minimum wage to the top of the corporate ladder we need some justice here.
Some of those people who borrowed probably didn't have a good enough education to realize what they were getting into. That's part of their lesson in life. When we make mistakes we learn from those mistakes. Others knew but didn't care because they know in America someone is always there to bail you out.
I am a very giving person and believe in helping out people who are down on their luck but not people who play the system. There is a difference here in the type of people I'm talking about. You probably have known or know a person like the types I'm about to mention. They should all probably be behind bars or better yet put to work digging ditches.
There's also the people who defraud our disability system and welfare. I'll start with them. Now don't get me wrong because I have received assistance when I needed it and "needed" is the key word there. The people who sit on welfare because the system "let's" them are the ones that tick me off. Able bodied individuals complaining "I can't find work" but they never even pick up a newspaper to look for a job. People that sit on unemployment the entire time because they feel "they earned it" make me mad too. Yet many Americans find this is their way of life and don't have a problem with it. Why? Well, lets climb another rung of the social ladder.
Middle class and business owners who habitually file bankruptcy. This is yet another form of welfare because they've "gone to the party" and spent the money but can't pay it back. Who gets to pay? WE DO! We all do in the form of inflation. Someone has to eat those financial losses. Did you think the debt just evaporates? No it gets passed on to all of the consumers, EVERYBODY.
Big businesses and the extremely wealthy are just as bad with their loopholes and tax shelters. Big businesses and the extremely wealthy file bankruptcy too. Donald Trump filed bankruptcy. A lot of the wealthy people who have written books about how to be wealthy have filed bankruptcy, kind of makes me think I should too?
I've always said that a politician receives welfare because their salary is tax payer dollars. It's the highest form of welfare. They are a bunch of paper pushers who never seem to accomplish much. I'm stereotyping here, but the majority of them make big bucks and get fat on our money while they simply spout fancy words to appease us.
Let's see, is there anyone I haven't offended? ME! and people like me that have chosen to do what is right. We go to work, we pay our bills, we clip our coupons, we drop our change in the red bucket, and when our fellow man is down we help them up. I've always thought that if everyone worked half as hard as I do the world would be a much better place. Maybe I wouldn't have to work as hard as I do.
It seems like there are some of us who pick up the slack for everyone else. I don't care who you are, if you are breathing and have life in your body then you have a purpose here. You aren't here to be a leech or burden on society. Helen Keller always amazed me and there are people like her and worse off that contribute to society everyday.
Society has allowed us to make excuses and feel like victims. The victim mentality will keep our country down. As long as people and government keep rewarding bad behavior things will not change. This is contagious too. If a neighbor, friend or relative finds that you are getting something for nothing then don't they want it to? Why should you get it if they can't? I've heard this phrase in various forms my entire life from countless individuals including myself at times. Instead of thinking that way we need to motivate each other to do better, be better and live more productive lives.
Look at your own household. Are you one of those parents that still feels your 25 year old or worse 40 year old son or daughter is still a baby? Are you letting them sap the life out of your pocket book and retirement fund? You are not doing your "baby" any favors. Our nation has become like that parent that "babies" their adult child. If we don't bail out these people necesssity would make them find a way. As humans when faced with difficult situations, if we are allowed to resolve our own problems we grow into better people. We need to step back and let nature take its course.
The person who defrauds our welfare and disability systems, the people and businesses who habitually file bankruptcy, the adult child that sponges off their loving parent, and people who have taken out mortgages they knew they could never repay are all the same kind of animal. They are all driven by greed and selfishness or just plain old fashioned stupidity. If you pay your bills and feel one ounce of pity for people like this then you deserve to bail them out, but I don't care to. Greed got our country into this mess but it's hardwork and elbow grease that will get us out.
Learn more about this author, Lucinda Davis.
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