... that we don't have, and even though the $700 b Wall Street gift is not yet finalized, apparently some members of Congress are saying they are going to present a new +$50 b "economic stimulus plan" as early as this afternoon.
Is it just me, or does fiscal irresponsibility permeate American society from top to bottom, including corporations, politicians and everyone on my street who attempts to live beyond their means? Is this a result of too many years of entitlement mentality?
Paul
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I definitely feel like I am in the minority for saving money each month and not buying every new toy that comes out.
I might have been better off to buy a home in 2002 with no down, take out a couple hundred k and piss it all away, then line up for my bail out and get the mortgage reduced.
The problem with this bailout is the assumptions that banks will lend once all the bad dept is bought up.
First, I think there is more than $700 billion in bad debt, especially once the Alt-A storm gets going.
Second, banks are not going to lend to people that don't qualify anymore. So now you have to fully document your income and you have to make payments that pay back the principal, or at least all of the interest.
And people don't qualify for that.
Most people's debt is topped out, wages are flat, and home prices continue to fall.
The FED has already injected hundred of billions into the financial markets and it has had no effect.
People are tapped out and home prices are too high and supply is too high. The only cure is time and a lot of pain.
Paul - There just isn't any downside to living beyond your means. Worst case, you go broke and the gov't steps in a gives you unemployment, housing subsidies, food stamps, health care and you get to try again. If the downside was you starve and are homeless, people would save more. We did it to ourselves.
I'm just as frustrated - I've always lived within my means and am now wondering if that is the best plan going forward.
I personally think no matter what happens with the bailout, banks will have to be more strict with lending practices (duh!) to pull themselves out of this, and even then it will be a tough couple years before things settle down...the US needs to gain a bit more "tough times" perspective. Too many years of "new Hummer? Sure! My house will never lose value!"
I just jumped back into the investing game here in Sac so I decided to blog about it. I'm putting my money where my mouth is. Thanks BT for letting me advertise - sacramentia.blogspot.com. Thanks to this board for teaching me a lot.
Robert Reich argues that a stimulus for the non-Wall Street crowd is more important than the bailout. The economic stimulus will keep money circulating in the general economy.
Still holding some CDs, rest in savings and forex accounts. I made a whole 3.2% in the last 9 months -woo-freaking-hoo. It'totally pitiful. I'm just happy I didn't loose 10% or more like a lot of people I know. It's really crappy out there.
Only reason I'm in decent shape is because of a little common sense and a lot of luck - a whole lot of luck.
Peon,
He is absolutely correct.
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