The Obama Administration has already decided they will be assisting some home buyers with their mortgage payments. The idea of helping your neighbor pay the mortgage they can't afford has left many people, including myself, with a sour taste of redistribution in our mouths. Now, I don't know what the requirements are to receive the payment help, nor do i really care. In my opinion these people should not own a house, as they clearly cannot afford it. What pisses me off even more is the thought of these people who are receiving this mortgage help spending money on unnecessary goods and services. I wonder how many of these people have cable TV, have pets, have an alcohol or tobacco addiction, or have some other expenditure that they could cut out that would allow more money to go to their mortgage.
The argument those is favor of this mortgage assist plan could always fall back on is that Americans do need a place to live, therefore, helping them stay in their home is a necessity. Of course I would argue that an apartment is also a place to live and is suitable substitute for a house, and is generally much more affordable.
And now the new issue that really pisses me off!!
As ridiculous as I thought it was for the Federal Government to assist those in mortgage trouble, I am absolutely at a loss for words after GM has unveiled their new incentive program to get consumers to buy new cars.
Let me set this up for you: Under GM's new plan if you buy a new GM vehicle, and then subsequently lose your job, GM will pay your car payment for a certain period of time. Now to be fair, I'm sure this only applies to certain cars and to certain job loss situations. For instance, I'm sure if you are fired for insubordination, you would not qualify for the program. Anyway, the details are really not important to me. Think of this logically. GM has no money. The only money GM has is money that was given to them from the Federal Government. So now theoretically we can have a guy who has his mortgage paid for by the government and assuming he losses his job, will also have the government essentially pay his car payment. WHERE DO I SIGN UP?? Oh wait thats right, you dont actually sign up, you just buy things you cannot afford and have no business buying.
You might be saying, "but how will I get to work?" Here is a novel idea, buy a used car that you can afford. Or better yet, pay cash for the new or used vehicle you want. And guess what, if you don't have enough money to buy that new Escalade you want, you cant afford it and should not have one.
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Hey Cody, good blogging. Proud you're my cousin. Adding this to my link of blogs. Ours is waltandsaundra.blogspot.com but I rarely blog these days...not much since the election anyway.
ReplyDeleteThe car plan thing is pretty strange. I guess you could construct some kind of argument that they're reacting to market conditions - we have a huge number of layoffs occurring right now. It's not impossible that a person in the business of selling cars might think it makes sense to, in a sense, roll some kind of job-loss insurance to the financing offered on a new car. It seems like something you'd purchase, though, instead of being automatically a part of the cost. I'm assuming they're not just blowing the bailout on this, though, because that doesn't actually make sense (if they needed the bailout to stay in business in the first place, why would they turn around and just hand it over to people who have lost their jobs? Doesn't make any sense.)
ReplyDeleteAs to giving assistance to people who can't afford their mortgages...that's slightly more complicated, potentially. Stay with me here.
This is actually pretty close to what I said we should have done back in the first place, IF we as a country decided we had to do anything at all. I am not an economist. I do not know if the results of letting AIG crash under the weight of its own bad business deals would have been as apocalyptic as people said. It looks like Bush, and now Obama, and Congress along with both of them, have decided to cut these huge checks though in an effort to stave off something.
I was rather of the opinion that if we're going to have to foot the bill for something, it should go to the homeowners in the first place. See, if we hand the money straight to AIG, people still get foreclosed, we have neighborhoods full of unoccupied houses that are falling apart, dragging down property values, destroying conumer confidence, etc., etc. Okay, the financial institution stays afloat, but the water it and the rest of us float in is just as dirty.
It would have made more sense in the first place to, if we must hand out that money, hand it out in the form of the state covering the departure between a mortgaged homeowner's ORIGINAL rate and the NEW rate of repayment after they adjusted the interest rate on him or her. In this way, someone who bought a house they actually literally could not afford still doesn't get to keep it (this is a stupid situation to be in to begin with, but whatever.) Someone who bought a house with a mortgage, and for whatever reason did not understand or believe that his repayment rate was going to skyrocket would be able to keep making the same payments. That money floats up to AIG & co. through the network of transactions as intended. The downside to this is that it's difficult to administrate. The upside is that it actually makes at least some degree of sense.
What did we get? We have to foot the bill AND they pay the money out in a demonstrably stupid fashion. Fabulous.
Sorry for the long post. There's a good possibility I'll continue reading, and occasionally engage in some disputes.