Mortgage Bailout- I am a fan of the one Bush has come up with. Here is why.

The bailout isn’t really a bailout at all.  It is banks recognizing that if they continue with the terms as described they will eliminate a portion of their cash-flow as the foreclose on houses.  The foreclosures will flood the market, farther depressing real estate values, and causing more banking problems.

The idea is that banks will just accept lower interest rates as a group for loans that are at high risk of foreclosure, avoiding a meltdown in the financial sector.  This was not Bush threatening fines and regulation or offering to throw money at the problem.  He offered an idea and provided a meeting where people could talk it over.  This is a splendid example of what a president should do.  Not pontificate and demand business lose money, but reconcile groups, without costing the taxpayers millions.

I guess the reason I am a fan is that it really isn’t a bailout.  It’s the banks not asking for more than they can get, so they get what they can.  It is the homeowners getting a break they don’t deserve, but why is that a bad thing?  I hope to get some breaks that I don’t deserve (getting into heaven, for example).   Anyway, your comments and your point of view will be appreciated as always.


1 Response to “Mortgage Bailout- I am a fan of the one Bush has come up with. Here is why.”

  1. 1 rhill December 15, 2007 at 11:51 am

    I don’t see any really good choices.

    Choice 1 – do nothing – results in lots of people losing houses which will seriously damage the economy and the real estate market for years and years to come

    Choice 2 – gov bailout – everyone loses in the long run as you take money from those that work hard (taxes) to bail out those who were stupid…

    And I certainly don’t think that lowering interest rates will help those with subprime mortgages, at least not serious implications on our economy.

    So, sure, I think Bush has come up with an idea that doesn’t cost taxpayers anything, helps the banks maintiain a positive cashflow, with maybe a minor hit to investors (compared to a certain loss if those houses were put into foreclosure). All in all, it’s the best idea I’ve seen yet.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: