Is it fair to force people who have faithfully paid their mortgages to bail out those who haven’t? There are reasonable people who can afford to pay their mortgages because they have the capital wherewithal to come up with the necessary dollars to cover the mortgage. On the other hand, there are equally reasonable people who would pay their mortgages but can’t afford to pay their installments when due because they do not have the money to cover the amount due.
We are assuming that those who faithfully pay have the means to pay, whereas those who don’t had the means until such time as they no longer did. We are not talking about deadbeats.
Much turns on intent, if we are talking about homes bought with intent to defraud, that’s a different category. It would be true of people who obtain food stamps fraudulently. In neither scenario are taxpayers forced to pay to help subsidize payment to owners of the debt what is owed. Eventually, those people will go to jail as a result of a government audit or whistle-blower. But, in the meantime, banks have a built-in risk surcharge just to cover the eventuality.
As for lenders sharing responsibility or alleviating the problem if at fault by forgiving the loan or by reducing interest rates, that’s unlikely. That’s where the government steps in to correct an egregious problem.
Maybe it is true as one writer suggests that taxpayers in their initial response to a financial crisis are like children who cry out, “It’s not fair.”
Is it fair to force people who disagree with the current wars to share in the cost of these wars? These are frivolous questions to many who would not join those who would ask, Is it fair to donate money to feed the hungry or to alleviate the suffering of those who live in disaster prone areas of the country?
The argument supporting a view of unfairness is the same for those who cannot afford their homes because of bad loans and those who lose their homes because of an act of nature. As a people, the American taxpayer ends up helping to “bail out” those who have the misfortune of finding themselves in these circumstances through no fault of their own.
Some are lucky enough to have insurance for some of the problems we have noted, but many more are denied insurance, particularly, if there is a great likelihood that one who experiences a flood in a flood plain is more likely to experience repeated flooding. Insurance is not available unless the government steps in.
Therefore, in many, already existing situations, the only way that some of us might survive the aftermath of a calamitous event is to have the government bail us out. Since prognostication is not by line of work, I would thank God for the government’s hand in saving me and my family from dire circumstances far worse than those I risk enduring as a result of a crisis. I think that most Americans would agree.