Questions About the Bailout

[Julia M]

I have been hearing about the bailout. So, from what it seems to me, the government is now bailing out companies who foolishly and irresponsibly provided funds to people who had no business getting those funds, and now that it's time to pay the piper they can't.

SO, credit card companies are whining because they gave exorbitant credit limits to people who could not demonstrate they had the ability to pay it back, and banks are falling apart because they lent people money to buy homes that there was no way they could afford to pay the mortgage and eat, and so on and so on.

Now, I realize I don't know heads or tails about these issues. DH and I bought a house much less than we were told we could afford 17 years ago, and never "moved up" when "everyone" told us to do so. We have credit cards but we pay them off every month. I never bought anything that I couldn't have written a check for. When I started getting a little too "credit happy", a few years ago, I stopped using credit cards, period. We have had lavish vacations (well, one, but it was awesome!!) when funds were flush and dh was making overtime hand over fist, and budget vacations the other times. When we realized we weren't making our budget on my part time salary, I went back to work full time.

SO, tell me, what am I missing? Because right now I'm a bit tweaked-I feel like once again, the people who acted irresonsibly are being rewarded.

Julia

 

[RitaE]

kind of turns your stomach, doesn't it?

 

[kelleigh1]

I won't claim to be any kind of expert, not even close. But honestly, without the bailout, we could all be in some serious trouble.

When AIG was bailed out a couple weeks ago, most people didn't realize that had they gone under, they would have taken hundreds of companies and banks with them. That would have caused millions of people to lose their jobs. AIG is the biggest insurer in the world. Their failure would have been catastrophic.

It's pretty much the same with this Wall Street bailout. If these companies go under, there goes the general publics money too. Banks are done. 401k's are wiped out. It would be total and utter chaos and disparity.

I agree that it's not fair that we're basically all bailing out these companies with overpaid CEO's who played russian roulette with our money, but the alternative is even uglier.

 

[swald91]

I'm no expert...but I also know the government or anyone else has never come to my rescue! I think these companies should bail themselves out. Take some reponsibility for yourself...that's the problem today. Way too many people don't do that-always blame someone else

 

[duketennisgal]

I also don't think it's fair that we, the taxpayers, are bailing out those that decided to live WAAAAYYY above their means. People need to think logically, if you make $30K a year why do you think you can afford a $200K home.

I have a friend who makes $28K and her boyfriend makes less. They have little girl. They are now looking at homes in the $150k - $200k range. They don't have family money, why do they think they can afford this. Why not look for a home in the $100 - $120 k range, there are plenty of those around right now.

People need to be more responsible, stop looking for others to bail you out.

 

[czycropper]

It gets me mad as well.

We've done the same thing - we pay off our credit cards on a monthly basis, we save and buy our cars outright instead of getting a luxury car on a lease, we bought the house we could afford without a second salary, we don't have any debt other than the mortgage while some people we know have lived way above their means and are crashing hard!

 

[KigerKat]

What worries me is where this money is coming from. Both McCain and Obama are promising tax cuts, but somebody has to pay for this. And don't we owe China a lot of money? Are we just going to be digging ourselves into more debt with other countries? Who's going to bail our country out when we've finally gotten in over our head?

 

[thomas998]

The down fall if they don't do a bailout is not nearly as bad as they claim it will be for the average joe. Yes it would really hurt the politicians because the donations from wall street would dry up but so what....

If there is anything fair to be done it would be be to raise the taxes on any individual that walked away from a mortgage for the rest of their life... let the deadbeats pay for this and stop pushing it onto the backs of people keep their finances in order.

 

[duketennisgal]

Who's going to bail our country out when we've finally gotten in over our head?

Nobody - they'll all be laughing at us for the mess we are in.

 

[bop28]

I have been hearing about the bailout. So, from what it seems to me, the government is now bailing out companies who foolishly and irresponsibly provided funds to people who had no business getting those funds, and now that it's time to pay the piper they can't.

SO, credit card companies are whining because they gave exorbitant credit limits to people who could not demonstrate they had the ability to pay it back, and banks are falling apart because they lent people money to buy homes that there was no way they could afford to pay the mortgage and eat, and so on and so on.

Now, I realize I don't know heads or tails about these issues. DH and I bought a house much less than we were told we could afford 17 years ago, and never "moved up" when "everyone" told us to do so. We have credit cards but we pay them off every month. I never bought anything that I couldn't have written a check for. When I started getting a little too "credit happy", a few years ago, I stopped using credit cards, period. We have had lavish vacations (well, one, but it was awesome!!) when funds were flush and dh was making overtime hand over fist, and budget vacations the other times. When we realized we weren't making our budget on my part time salary, I went back to work full time.

SO, tell me, what am I missing? Because right now I'm a bit tweaked-I feel like once again, the people who acted irresonsibly are being rewarded.

Julia

What you don't hear too much on the news, is that these companies who knowingly lent $$$$$ to people without any means to repay, were actually legislated to make these loans by congress in the 90's. It was a program to let low income people become homeowners. Congress got what they wanted. Lots of people got new homes, and now we (the people who pay our payments) will pay for the people who don't. Oh, and they still keep their homes. I personally feel that it's not necessarily a bad thing for some folks to be renters and not homeowners. It could be a good place to start, in order to save money for a downpayment, and then try to get a regular home loan instead of a FREE one.

 

[swald91]

I remember when we were 1st married-making NO money and looking for a house, the realtor said we qualified for such a huge amt. it was crazy. We had enough sense to realize we'd never be able to afford it. I think back then they wanted more people to buy into real estate -basically be a homeowner. Unfortunately, some were over their head (& knew it) but did it anyway. Yet again-it may have been approved by political (senate/congress-whoever) but I don't think that should be their job. I don't know...I just think we (the tax payers) will be responsible yet again.

 

[eliza61]

Did anyone read the the big 3 auto makers also recieved a bailout package this weekend. very quietly and quickly went through, I believe it's around 25 billion dollars. so let's see our tab so far.

25 billion for ford, gm & chrysler
700 billion for the banks
100 billion for AIG
100 billion for freddie & fannie mac (I think this was the figure, I may be high)

Did I forget anyone?

 

[Mermaid_Ariel]

I won't claim to be any kind of expert, not even close. But honestly, without the bailout, we could all be in some serious trouble.

When AIG was bailed out a couple weeks ago, most people didn't realize that had they gone under, they would have taken hundreds of companies and banks with them. That would have caused millions of people to lose their jobs. AIG is the biggest insurer in the world. Their failure would have been catastrophic.

It's pretty much the same with this Wall Street bailout. If these companies go under, there goes the general publics money too. Banks are done. 401k's are wiped out. It would be total and utter chaos and disparity.

I agree that it's not fair that we're basically all bailing out these companies with overpaid CEO's who played russian roulette with our money, but the alternative is even uglier.

This is really the best way to look at it unfortunately. The alternative is much worse.

 

[GOOFY4DONALD]

Nobody - they'll all be laughing at us for the mess we are in.

No kidding the news said "Ahmadinejad was acting as exited as Bin Laden on stroids". This country is already the laughing stock of many other countries. There are too many countries waiting for us to fail...no one is going to help us.

 

[bavaria]

This country is already the laughing stock of many other countries. There are too many countries waiting for us to fail...no one is going to help us.

Unfortunately they may have no choice - if the US economy fails, it brings down most of Europe and Canada with it. Other countries are already feeling direct impacts as a result - the German economy shrunk in Q2 as a direct result, as it is export based.

This is not a US issue - it is a world issue. The UK economy is actually forecast to be worse off and for longer than the US economy.

 

[duketennisgal]

This is really the best way to look at it unfortunately. The alternative is much worse.

I do agree that we have to do the bailout as the alternative is much worse. I just can't see how it's right that those people that pay their bills/mortgages/whatever and live within their means are now going to have to pay to bailout those who were increadibly irresponsible and decided that b/c they are approved for a $200k house they will go for a $200k house even though they make less than $30k a year and have thousands of dollars in debt.

There needs to be some kind of penalty to those that we are bailing out, I don't know what kind of penalty, but it's not my job, I'm not paid to figure it out.

And there is no way in **** that a CEO of a company that goes bankrupt should get a $20M severance package - especially after only working there for three weeks.

 

[lttlmc3]

Ugh, it's all so frustrating!!!