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how is this ethical? or fair? if people buy homes and make money they don’t share it. they bet and lost. let the chips fall as they may. Those of us who made sound financial decisions should prosper as others struggle.

4 Thoughts on why do we have to bail out banks and reduce payments on peoples mortgages?
  1. Reply
    Babylon Stone
    September 1, 2011 at 4:07 am

    Most Western governments believe in Keynesian Policy, invented by the economist John Maynard Keynes.

    This policy states that we have to stimulate aggregate demand (usually in the form of government spending) to create jobs in a time of recession where there is spare capacity (ie, unemployment).

    Now, the government believes that they must continue spending to bail out banks which will result in less jobs being lost and thus employment.

    In addition, the mortgage payment reduction is to encourage consumers to spend (another component of aggregate demand) which will reduce spare capcity like the government spending on bank bailouts.

    These are both forms of expansionary fiscal policy.

    In terms of ethics this is wrong. Why should incompetent businesses be propped up with taxpayers money? Why should greed be rewarded and shrewd savers be punished due low interest rates?

    This is all wrong logically and morally, but we have to bail out banks and reduce payments on peoples mortgages due to the governments firm belief in Keynesian Policy. If you are opposed to Keynesian Policy like myself I suggest you read about “Austrian School of Economics” on Wikipedia and watch the lectures by Peter Schiff on Youtube.

  2. Reply
    Dr. Moohorn
    September 1, 2011 at 5:01 am

    It is not ethical. It’s socialism and it’s bad for the economy. Bailouts are a safety net that remove the risk of being irresponsible. If a person or company ends up in debt it’s usually the consequence of wasting resources without giving anything back. By socializing losses like this you allow people and firms to continue on destructive paths and everyone else pays for it. This policy of privatizing profits and socializing losses is the basis of corporate limited liability.

    Not to mention the fact that the money for this is extracted from the population by force. If you don’t see how, try not paying your taxes and then defend yourself from the armed thugs that come to throw you in a cage.

  3. Reply
    tongpa-nyi
    September 1, 2011 at 5:15 am

    The reason we are in a deep recession is because banks lent beyond the value of the collateral on which they based their loans. There are a lot of other complicated reasons but let’s stick to home loans. I had a house which lost value. I couldn’t make the payments on it because my business failed, and I couldn’t sell the house because its market value had gone down. So I let it go into foreclosure.

    My story times millions is what this recession is largely about. There was the ridiculous dream by financial institutions that the value of collateral (housing, primarily) would rise forever. But that’s not where the real problem lies. It’s the secondary lending market and all the derivatives that really drove this thing into the toilet. If you want to point a finger at someone for being unethical, don’t point it at me (I was homeless for part of last year and had no ability to do anything about the economy), point it at the millionaires and billionaires who made a profit off of driving the global economy into the toilet. They’re still making huge profits because they know how to manipulate financial markets assets. What they do has no value to the economy. They contribute nothing.

    Banks had to be bailed out or else we’d be in a MUCH worse situation. If the largest banks in the world had failed, then many other institutions would have failed and we’d be in a global depression unlike anything our planet has ever experienced. I hate the bailouts as much as the next person, but something had to be done. I would have chosen to help homeowners make their payments and stay in their homes rather than just dumping a bunch of money directly on lenders, that’s the main disagreement I have with the way Obama has handled things. And he hasn’t come through on the job-creating stimulus, it’s mostly been socialism for the rich so far.

  4. Reply
    John Y
    September 1, 2011 at 5:57 am

    Cleveland 01/21/10

    The great great free Country,..that bolstered “The Great Society,.” begins her shrinking from world leadership,..

    The best possible activities and developments,..new slants in living, etc,..Are being dashed and
    kicked to the curb,..You may state that the venture be Discrimination based,..But, on what,..?

    The country’s got a colored man in the White House,..Being President,..yet,..you may believe
    a degree of Discrimination exists,..I think this Country dislike too dedicated persons of Faith,..
    do not pray too much,..do not be too hooked on serving the Almighty,..

    For what may we lay the Discrimination against my person,.?

    The Health Care Ruling / and adaptation will be,..and, will work perfectly,, Health coverage for
    Every Citizen,..! The U.S. Mortgage refinance service,..will be exactly the tonic the country
    needs,.. the new way to Take Off and Land Airplanes works to perfection,.. The Forest Fire
    Extinguishing System will work perfectly,..Laying all of the Auto Workers for 60 days between
    Dec. 01, and Feb. 01 will take care of the financial problems for the auto industry,. The lowering
    of the price at the pump for gasoline while lowering the price per Barrel of Oil,..Was a great move back in 2008,..The mentioned occurrances,..would put this country back on top,..The Great Po-
    werfully Proud America,..

    For the Life of All of the Demons,..and, my enemies,..the mentioned ought to be in operation as
    the way,..America’s way,..

    Yet,..Discrimination,.And, it would very definitely be a Discrimination,..Only, on what,..???

    Eliasis Yahwehei ( The Main Man )

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