Our Future

This comment is from my brother Jerry. I think his analysis is accurate.

This rant is not about politics, it is about prudence. Please try and read this, it may make a huge difference in our lives and that of our families.
This government bailout/ stimulus plan is an unmitigated disaster. One of two things is going to happen. We're going to become a doomed-to-fail socialist nation or we're going into some economic out-of-body experience that will result in mind boggling stagflation (sluggish economic growth coupled with a high rate of inflation and unemployment).
I don't know about you but everyone that pays taxes and is prudent with their money, and that represents more than 60% of homeowners and most likely 75% of renters, should be livid with outrage. This administration and Congress is asking this group of people - you and me - to pay the freight for all of these irresponsible people. Right now, it shouldn't matter what your politics are (unless you truly believe that socialism is the path for the USA), you should simply say enough! We have a process, it's called foreclosure and bankruptcy. When the market forces clear out those individuals that should never have been homeowners the ridiculous run-up in house prices will be reversed and many of the more responsible non-owners may now opt to buy those vacated properties at prices and terms that they can responsibly manage. It's ridiculous to think that this problem was caused by unemployment & a poor business environment. The situation is just the opposite... too many people got caught up in the frenzy to get a home because "everyone was doing it" and the lenders & regulators had gone crazy. You cannot confuse wants with needs. People need housing, a place to live... they want a house. Hey, I need a vacation, I want to go to Europe, but a trip to Lake Tahoe will do for now. That's responsible, even though my credit card company says I can go to Europe right now... and pay later and later and later. Did you go crazy and get yourself jammed up this way? If not, why should you shoulder the consequences? And, no, it's not the American way. America is a capitalistic free market society. Should we track down the scoundrels, crooks and bad actors that perpetrated this fraud on those that were legitimately duped or conned? Absolutely! Should we take pity on all those that took a gamble (bought at sky high prices with unrealistic loans) that turned out to be a loser? This event is not without precedent. For the uninitiated I refer you to the "tulip mania" of the Dutch in 1636-1637 http://en.wikipedia.org/wiki/Tulip_mania. Close to 400 years ago people got caught up in the chase for gains by speculating on a flower. Crazy!
Regarding these bailout plans, I can draw a counter analogy that the average person would most likely call outrageous on its face: How about have the government compensate every stockholder (including their IRA and 401 accounts) for the sharp losses they have suffered as a consequence of these irresponsible "home buyers, lenders, and regulators? This group has actually lost REAL money, upwards of 50% is common, whereas these underwater homeowners in most cases never had ANY equity in these houses. These "home occupiers didn't lose anything other the the title of "homeowner." What a cruel joke. Many of these delinquent mortgages were for 100% - 125% of the absurd bogus appraised sale value. Let's not forget, many of these failing homeowners refinanced their homes (some multiple times) as the prices skyrocketed. They actually took money out of their house and spent it. Remember my want of a European vacation? Some fools actually did it. The banks actually loaned them more money than the house was worth!! The lenders that made these loans should be allowed to go out of business. The government can stand behind newly formed and well capitalized banks and we can get back to doing business in the US and around the world. You cannot REWARD bad behavior. There is one rule that governs all of life, not just business... Behavior that gets rewarded get repeated!

If you want America to get back on its feet and get the economy rolling, I suggest that you contact every elected official you can and tell them to stop this insane solution and let the losers go. It's good for you and your responsible friends. And forward this to like minded individuals.

Jerry Shapiro