Monday, September 29, 2008

Checking Account

Wow, I am really confused. All the news about the economy sure sounds bad but the proposed fixes sound even worse. Since I grew up on a red dirt road and never got a degree in macro- nor micro-economics, it is necessary to simplify the discussion for my understanding. I can't even picture how big a pile $700 Billion is. Isn't the largest bill printed these days the $100? If so, would the pile of money be as large as a living room? A house? A block? Montgomery? They are saying that it is not a bailout, but rather an investment. If that is so, do I get some kind of receipt? Do I own a couple of houses in Miami? Or 5% of 30 houses? Who is going to keep up with my return on investment? What if I decide not to invest in real estate or mortgages at this volatile time? Can I just withhold my taxes for a couple of years? What will the government do if I refuse to pay taxes? Put a lien on my house? So what? I am not going to be paying the mortgage anyway. Why should I struggle to make a mortgage AND pay taxes when the government is paying for much nicer houses than mine? In fact, I think I will just let the government buy my house as part of that $700 billion investment and pick out.....say a $800,000 house. Wouldn't my friends be more impressed if I were behind on a $800,000 mortgage than on a $36,000 mortgage?

This is not helping me understand at all. Can somebody explain why the CEO of a failed company that needs government help to remain solvent is given a multi-million dollar severance package? Is this the business world's version of paying farmers not to produce crops? Man, I wish I could bankrupt just one company and retire as a millionaire.

So what would happen if we looked at the government budget like you and I have to look at our checking account? You know, where you can only write checks for the amount you have in the account. What would happen if everybody actually had to pay for the items they purchased? What would happen if everybody knew that ahead of time--before signing for a mortgage beyond their means? On the other hand, what will happen if there is always a bailout and we know ahead of time that if we can't pay, that somebody else will?

And finally, how is it fair for me to have to pay more in taxes to service a debt created by elected officials in order to remove bad mortgages from the books of aggressive lenders? How is it fair that many live in much nicer houses and will be subsidized by my tax money when I have stayed in a modest house I could afford and get no help with my mortgage? How is that going to encourage financial wisdom and discipline in the future? Am I really the only one that is so confused?

3 comments:

Lerra said...

I just try not to think about it too much. {Which, BTW, you ruined by this post. ;-)}

Kathryn said...

It really is a bunch of crap, isn't it? Sheesh.

I don't understand why the politicians don't just ask Alan Greenspan and some of his croanies what to do instead of their own stupid economic advisors. Clearly they don't know that they are doing. We need help!

Thats whats going on here said...

I think Dave Ramsey should get in there and help out. He could put them on a cash only plan and start the baby steps then we will see in a year if we need this bail out plan.