Saturday, May 15, 2010
Moral hazard in the USA
CNN: Taxpayers to pay your mortgage
I am at a loss what to say.
Posted by chrisch @ 10:35 AM (1028 views) Add Comment
9 Comments
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1. rumble said...
Haha! GObama! Big gov writhing its tentacles into every orifice. It's 'cos we care.
2. mick rupert said...
Easier to be somewhat sympathetic for them since at least in the US their crash was PERMITTED to occur by TPTB.
If this was a policy in the UK, however, I for one would be edging 1 step closer to REVOLUTION.
Hang on, Mortgage Rescue Scheme anyone???
Seems The Powers That Be just WON'T let prices correct from their historically overvalued prices, as independently regarded by publications such as the Economist.
3. Nice Weather We're Having said...
re: The Economist being independent - laughable. Have you seen the Bilderberg guest list for 2010 (to be held in Greece)? Those Economist boys will attend to 'learn' what spin is required. George Osborne and Mandy will also be there, representing er........the UK?
By the way, heard the one about the IMF SDR?
4. mr g said...
This is already happening in the UK.
Savers are being penalised with cr*p interest rates in order to subsidise the profligate who have been allowed to borrow more than they should have.
5. drewster said...
Stable door. Horse.
6. Sammy said...
This is ridiculous. Why should Tax payers bail out mortgage defaulters. Privatize Profits but Socialize Loss
7. Pideypuss said...
I know exactly what I want to say... not in polite company though...
8. mark wadsworth said...
It's a triumph of one-sided economics.
Many people wrongly view rising house prices as A Good Thing that somehow make us richer, when of course they make us poorer.
So interest rates go down and down, and prices go up and up until we are teetering at the edge with interest rates more or less at nil% - there was that article a couple of days ago saying that five million households wouldn't be able to afford interest rate rises. But the losses to savers are more or less completely ignored.
Repo's are seen as A Bad Thing because the everybody looks at the misery of a reckless borrower, or indeed a sensible borrower who has lost his or her job, and does not net off the corresponding gain to the person who can buy at a more sensible price.
So having screwed interest rates down to nil%, the only way to keep the bubble going is to start paying people's mortgages for them - about half of BTL landlords have their mortgages paid out of taxpayers' money - it is called 'Housing Benefit'.
9. Sam2002 said...
Moral Hazards. This is an attempt to privatize profits and socialize losses. As always, the victims are prudent savers or those who rely on fixed income.