The latest bailout seems to be aimed at bailing out all the irresponsible people we know. Bought a new house at payments you knew you couldn’t afford and hoped the market would go up? It didn’t. Time you paid the piper. I don’t like it, I don’t celebrate it and I’m not happy about it. On the other hand, all my life I have seen people who over reach lose it all. Their errors were part of my education. Now the government wants to bail out these people when they dont’ deserve it, we can’t afford it, and they won’t really learn the lesson. What’s more, the last round of payment adjustments redefaulted at about 60%. They STILL couldn’t afford it. It didn’t work. The process of a young person or couple saving that 10 – 20% down payment makes them more responsible and instills in them the habit of saving. And it limits their ability to buy beyond their means since they must come up with that down payment and closing costs. There is a REASON we did it that way for years. I could go on and on about it and I’m sure you could too.
But just wait, there will be more coming down the line. And to add insult to injury, who will pay the bill when we start to come out of this economic slump? The same people that didn’t participate in the bailout. The prudent people who saved their money and did the right thing. After all, we KNOW those people we just bailed out don’t have any money. … And this “tax the rich” idea? The truly wealthy in many cases don’t recieve income as ordinary income that these new tax rates would apply to. And in any case, they can always incorporate out of the country, and they have a host of other options. The people who pay this tax will fall into two broad categories. Older business owners and degreed professionals who are reaching their peak earning years and young professionals who are trying to make it from the middle class wage earner to the top 10%. In other words, like much of Europe, we will kill our citizen’s ability to succeed. In the United States, 80% of our millionares every year are new, not the children themselves of millionares.
So if you have tried to live within your means, and look forward to making some extra money those last few years of your career, after you sent the kids to college and paid off the house… Forget it. You will be the evil reach that will pay the tax. Congratulations – You’ve made it !