Dear Politician ...

[scfr]

I'm mad as hell and I'm not going to take it anymore.

When did the notion of personal responsibility become obsolete?

Regarding bailing out delinquent homeowners ... You do realize that not every one of those folks are the innocent victims of predatory lenders, don't you?

I don't know the statistics, but I do know about my former neighbors. They are very intelligent people, not the sort that could easily be taken advantage of. They simply lived beyond their means. And their means were pretty darn good; the husband had a job that pays very well. But they drove luxury European automobiles, went on fancy vacations, upgraded their perfectly fine home with every expensive upgrade imagineable, had a house full of expensive electronic gear and exercise equipment, dressed in designer clothes, and the wife regularly had her hair professionally styled and her nails manicured. They are the classic example of people who used their home as a piggy bank. They had multiple mortgages and refinanced several times, increasing the amount of the mortgage each time. Their home was foreclosed on awhile ago. If they were facing foreclosure right now, we American taxpayers would probably be bailing them out, wouldn't we?

Why is it fair to ask my husband & I, who live a lifestlye that is in direct contrast to my former neighbors, to help finance their life of extravegance?

I understand that when home values fall due to foreclosure the entire neighborhood suffers. But if we are going to be asked to help these folks out, I first want some reassurance that they are going to learn their lesson, that they are not going to just continue repeating the same mistakes over and over again.

Here in Texas, we can have a speeding ticket dismissed if we take a Driver Safety Course and pass an exam. It's a win-win. The speeder gets let off the hook, but only after they have demonstrated that they have learned something that will hopefully prevent an even bigger problem (such as an accident) in the future.

What if we made people take a "Financial Responsibility Course" before getting bailed out? Make them learn about personal finance. Make them learn about reading and understanding contracts before they sign off. Make them create and stick to a budget, while saving 20% of their income, for a full year. If they can demonstrate that they can handle their personal finances in a responsible manner, then and only then do they get a "Get Out Of Foreclosure Free" card or get to file for "Chapter-whatever" bankruptcy. Why not? As a taxpayer who is being asked to foot the bill, I don't think that's too much to ask.

[Ima saver]

Very good post scfr. I know a couple with the same problem. They are building spec home after spec home. Last year they took a $100,000 european vacation. The last spec home they were building has suddenly come to a halt as they have run out of money. So, they have filed for bankruptcy and now none of the sub contractors will be paid.

[FrugalFish]

Good post, I hope you are really going to send it. It will be interesting to see how this all plays out. I think, and hope, a lot of us responsible citizens are angry that greed and irresponsibility may be rewarded. Time to get out our pitchforks and torches and head for the capital...

We have a case here where a couple on welfare bought a $400K house with one of these loans. I wonder what sort of thing will be done for them?

DH said the other day that he had heard a plan in the works in which the only people who would get the "bailout" were the ones who should have been able to afford their original loan (for a primary residence) with a FRM, but were talked into ARMs of some kind by a broker/lender. Anybody else is out of luck. I don't know if that'll come to pass, but if it does, I might feel slightly better about the situation.

[scfr]

Good post, I hope you are really going to send it.

I did! It went to the Presidential candidate I plan to vote for.

[Troyrb]

During the debate McCain said something about his plan for government buying loans of people forclosing on their houses so they can stay in them. I think this is a very bad idea. I personally chose to buy a house that was under my means and still put 20% down. I did this in-case something bad happen I could still hopefully afford my mortgage. I can't see why my tax dollars should go to people who knowingly or not chose to live outside their own means. Most everyone is at fault for this crisis. The banks talked people into loans they knew they couldn't afford, people lived way outside their means, government on both sides sat back and let this happen. This was bound to happen. I just can't believe it all went on as long as it did.

[maat55]

I'm mad as hell too. I'm just as mad that they chose to do the bailout against the will of the people. I don't like how they created this mess or how they intend to fix it.

If the american people want to truly make a statement that will fully get the attention of the gov., we should vote out every incumbent. I'm sick of the national debt as well, and no one is planning to fix it.

[Scanner]

SCFR:

I am curious as to what you do for a living.

You wrote:

But they drove luxury European automobiles, went on fancy vacations, upgraded their perfectly fine home with every expensive upgrade imagineable, had a house full of expensive electronic gear and exercise equipment, dressed in designer clothes, and the wife regularly had her hair professionally styled and her nails manicured. They are the classic example of people who used their home as a piggy bank. They had multiple mortgages and refinanced several times, increasing the amount of the mortgage each time. Their home was foreclosed on awhile ago. If they were facing foreclosure right now, we American taxpayers would probably be bailing them out, wouldn't we?

So. . .okay. . .

1. What about the people who work at luxury European automobile factories?

2. What about the people who work at Disney and other expensive vacation resorts?

3. What about the people who install corian countertops, hardwood floors, and make this things?

4. What about the manicurist and hairdressors?

5. What about the workers who made designer clothes and the retail stores that sell them and make profit?

Like it or not, these people we have villified have kept America running.

It's just more complex than "Borrowers Bad. Savers Good."

[disneysteve]

They simply lived beyond their means.

1. What about the people who work at luxury European automobile factories?

2. What about the people who work at Disney and other expensive vacation resorts?

3. What about the people who install corian countertops, hardwood floors, and make this things?

4. What about the manicurist and hairdressors?

5. What about the workers who made designer clothes and the retail stores that sell them and make profit?

Like it or not, these people we have villified have kept America running.

It's just more complex than "Borrowers Bad. Savers Good."

Scanner, I think you are missing the point. scfr (or any of us) aren't saying that nobody should buy foreign luxury cars, take expensive vacations, have fancy homes or wear designer clothes. What we're saying is that you shouldn't have those things IF YOU CAN'T AFFORD THEM.

Years ago, luxury items were for folks with high incomes and they were purchased with cash. Everyone else bought normal, run of the mill, functional items that fit their budgets. No more. Today, folks with average incomes (or less) are much more likely to have the home theater with giant plasma screen and surround sound (bought on a 0% financing deal), the luxury SUV (leased), the professional-grade kitchen appliances (bought via a home equity loan), etc. People are living lifestyles that they simply can't afford. That isn't news to any of us, I'm sure.

[scfr]

SCFR:

2. What about the people who work at Disney and other expensive vacation resorts?

3. What about the people who install corian countertops, hardwood floors, and make this things?

4. What about the manicurist and hairdressors?

5. What about the workers who made designer clothes and the retail stores that sell them and make profit?

As long as they pay their bills I have no beef with them.

In fact, I am just as outraged for them that they are going to have to foot the bill for "The Jonses" irresponsibility! I realize my original post was "all about me" and I apologize if it came across that way, but I feel sorry for every single person who lives within their means who is being forced to foot the bill for people who lived extravegantly assuming their home value would constantly increase annually at double digits, or who bought unnecessary things they could not afford with their credit cards and then just decided to declare bankruptcy.

I am sorry, but the "it is complex" argument just does not cut it for me. I was talking about personal responsibility, and not letting people off the hook too easily. I fail to see the complexity in that.

My BIL pays his child support to his ex dutifully every month, even tho it means that my sister has to squeeze every nickel until it begs for mercy. Should he and all the other fathers (and mothers) who do the same throw up their hands, say that "it's complex," and stop paying the support?

Hey! I know! My taxes are awfully darned complex. Maybe I should just stop paying them? Maybe we all should. If personal responsibility means nothing, then why not?

I just want to know that if I help these people, they are not going to keep making the same mistakes. Of course, if they wold prefer not to prove that they have learned something, "The Jonses" are welcome to come to my house and scrub my bathtub and clean up after my dog and give me a @#$%& pedicure to pay me back.

[scfr]

Scanner, I think you are missing the point. scfr (or any of us) aren't saying that nobody should buy foreign luxury cars, take expensive vacations, have fancy homes or wear designer clothes. What we're saying is that you shouldn't have those things IF YOU CAN'T AFFORD THEM.

Exactly. Thank you.

[maat55]

It's just more complex than "Borrowers Bad. Savers Good."

Scanner, I have a question. Who's fault is it, if you have to file bK or get foreclosed on. You seem to have this mentallity that people owe each other something.

You appear to be defending irresponsible borrowers just because someone needs a job. For everytime someone does not pay their debt, someone else gets screwed. BK's don't just evaporate into thin air.

What is so complex about only buying what you can afford?

Your kind of thinking is how you get where our country is.

[Scanner]

All I am saying is that many people are going to lose their jobs that catered to the "Jones" - our whole economy is based on giving the Jones the goods and services they want.

I'll answer the tough questions when SCFR, (I know what DisneySteve does), and Maat tell me what they do for a living.

[Scanner]

DisneySteve,

I'll start with you - do you think everyone who comes to you for family health care can really afford the $1000 MRI's, the $500 blood tests, and $20,000 hospitalizations?

What if people actually had to pay the hospital up front and then wait 30-60 days for the ins. check? Do you think your job/income would be in jeapordy in a cash economy?

[scfr]

Even if I felt like sharing (which I don't), I wouldn't because I am under a confidentiality agreement and it would be like posting a virtual neon sign to the entire WWW saying "This is where I work." Lest this sound like I do something remotely exciting and/or high-paying, let me just say "I wish!" It's just that saying anything specific would be ... well ... irresponsible.

But I'd like to add "good on you" Scanner for being the dissenting voice. I've been in that position here myself a few times. To tell you the truth, it feels odd being in the majority for once. It's always good to hear a different perspective.

[disneysteve]

DisneySteve,

I'll start with you - do you think everyone who comes to you for family health care can really afford the $1000 MRI's, the $500 blood tests, and $20,000 hospitalizations?

What if people actually had to pay the hospital up front and then wait 30-60 days for the ins. check? Do you think your job/income would be in jeapordy in a cash economy?

I think we would see a huge change in the way things are done. Patients would no longer come in demanding an MRI for every minor injury they suffered. Instead, they would let me treat them conservatively and only order the MRI as a last resort if it was really necessary. They wouldn't come in requesting that I do blood tests "for everything". Instead, I could discuss with them which lab tests I thought were really worth doing to get information that might alter their treatment. They wouldn't run to the Emergency Room for every ridiculous complaint. Instead, they would spend a tenth (or less) of the money and wait a day or so to see me for the problem. They wouldn't demand a prescription for brand-name Nexium when generic OTC omeprazole would take care of the problem just as well at a fraction of the cost.

Since I don't earn any income from MRIs, blood tests or hospitalizations, I would very possibly see my income remain stable or even increase. If patients paid me directly at the time of service, my practice wouldn't need to employ a full-time biller. We would just give the patient a receipt at the time of the visit and it would be the patient's responsibility to submit that receipt to the insurance company.

A phenomenal amount of healthcare spending is wasted on overhead and administrative costs that wouldn't exist in a cash economy. The system would be way more efficient.