I Need a Bailout....

Over the course of the last two weeks, I've been trying to decide whether or not our country's politicians are justified in calling for a tax-payer funded $700 Billion bailout of our failing economy. This is what I conclude.
There are two main ingredients that caused the mess we're in today:
First, just over a year ago we started hearing about the mortgage industry woes and how those individuals who chose to finance their homes with Adjustable Rate Mortgages were having to foreclose because they could not afford the rising interest rates on their mortgages. The result was that several banks lost money on several bad mortgages. Fannie Mae and Freddie Mac were two of the largest casualties of these bad loans. These institutions had been quasi-govermental mortgage lending institutions who did everything they could to get people into homes, following President Bush's genuine desire to allow every American to own their own home. The problem is that, while his vision was noble, President Bush assumed wrongly that corporate responsibility on the part of pretty much every lender would be excercised in deciding who would be given access to credit for home loans. Furthermore, and even more naively, he assumed that homeowners would accept PERSONAL RESPONSIBILITY for the debt that they owed these lending institutions for their new homes. I speculate that a large percent of homes that were foreclosed were those of amateur investors who were trying their hand at owning rental properties, who were over-extended and couldn't cover the rising mortgage payments: I have no pity for these people.
Secondly, in the zeal for more money, financial firms such as Merrill Lynch, Goldman Sachs, Lehman Brothers and Bear Sterns (just to name a few) bought into mortgage securities which, in themselves, were all rolled into giant mortgage securities. Just like stocks, banks traded up and down these securities with each other and set up hedge funds that contained these types of securities. Not to metion hedge funds included stocks of lucrative and seemingly successful mortgage lenders, Fannie Mae, Freddie Mac, Countrywide, Wachovia and WaMu all had stocks that were very prosperous to their investors during the last 10 years. With the housing and mortgage boom during the last decade, who could lose? Everyone was making money.
When I applied for the loan for my house through a local mortgage broker, he wanted to know my wife's and mine combined income in order to evaluate if we could afford the house we were trying to buy. The problem is, he only wanted my "best guess" and wanted my gross income instead of my net income for the application. Even though my income was subject to change from month-to-month because of the work I was in, he also wanted my best-case scenario of income for a month. He checked our credit, but never verified through tax returns or pay stubbs what our true income was. It was only when my wife and I took a pencil and paper to write out our monthly financial obligations in one column and our "worst-case scenario" income in the other column did we realize that even in dire circumstances, we could afford our monthly house payment; and, we could afford it without the extremely low interest rate being advertised for an Adjustable Rate Mortgage. So, I'm wondering how many people who purchased houses that were foreclosed on actually went to the trouble to figure out if they could afford their home purchase, even in a worst-case scenario financial situation?
Our massive lending instutions never verified that people could actually afford the credit for these houses and our investment banks rolled these risky mortgages into investment packages without adequately explaining the risks associated with these investments to their customers who had their life-savings and retirements invested in these securities. For the last 10-15 years, what we thought was a solid, lucrative economy was actually built on a house of cards which we have watch collapse in front of our eyes.
So, my question is, "Is a bailout by the government the right thing for America?" My answer is firmly, "NO!!" A $700 billion bailout would be the largest transfer of governmental dollars into the private sector in American history. Just to put $700 billion dollars into perspective, the US could rebuild its entire infrastructure (roads, railroads, phone lines, power grids, sewage systems, canals, dams, airports) with that amount of money. $700 billion is the amount we spend yearly on oil imports. Folks, $700 billion is A LOT of money and it is money that you and me have paid Uncle Sam through our taxes and hard work. Basically $700 billion will be financing irresponsible behavior by both the consumer and large corporations who have made "ethical business behavior" a catchphrase with no substance.
Whether there is a bailout or not, our economy is in for hard times. We will all feel it in one way or another. I happen to be a capitalist at heart and truly believe that the market will work the situation out without the help of incompetent, self-serving and unethical politicians.
Hugo Chavez essentially did the same thing with his oil production industry. Nationalizing an industry is at the heart of socialism and that's not what America is about.
If we go ahead with this bailout, I'm going to write a letter to my senator and ask congress to bail me out also. I'm up to my ears in school loans, credit cards and car payments, plus, I have a mortgage payment that maybe they would be willing to help me on. I'm an American patriot who pulls my own weight by contributing to the government tax-fund through my hard work. Why shouldn't I get a bailout if I think I need it? The government is in the business of bailing everyone out with MY tax dollars, why should I be any different?
My point is, if we don't allow the market to fix itself, we are demonstrating to the world that we do not truly believe in our capitalist way of life; when times get tough we rely on our government to bail us out. Is that the message we want to send to Russia, China, Iran, Venezuala and the entire Middle East? We talk about capitalism, but when times get tough we are socialists.
Bailout or no bailout, times will be tough and I would rather leave our government out of it.
That's my 2 cents on this mess.....for whatever it's worth.

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Gone Hunting

Great time this weekend dove hunting and blowing stuff up with my longtime buddy, Paul Michael.