The $700B Bailout, Paying for the Sins of Others

Two months before this history-making downturn in our nation's economy, Samantha and I were having dinner at the Red Oak with my parents and my Aunt, who works in commercial real estate. 

We were talking the possibilities of owning a house in the near future. Market prices were in decline and we had just gotten hitched just a month ago. Starting prices of a decent house (with property) in Jersey can run you from a third of a million dollars and up. At the moment, the standard mortgage will require a 20% down payment, which means we would have to somehow put up around $30,000 just to get started in the house.

My Aunt provides an alternative: there are loans, especially for first-time buyers that offer a very low down payment, somewhere in the tune of 3%-5% down. Of course, the catch being you pay much more for the house in the long run, given the higher interest and the larger principal. We ultimately came to the conclusion that it was smarter to wait it out until the prices finally bottomed, giving us some time to save up for that big down payment.

My story illustrates the point that has caused this current financial crisis. Irresponsible lending to irresponsible people. Risky investments were taken by the banks. People who could not afford a house were given one under unethical pretenses and ended up defaulting. So who is really at fault? And does anyone deserve a "bailout" or a life line? Do you give a mulligan to people for making bad decisions on both sides of the fence?

Honestly, I don't think anyone deserves any bailout for these bad investments. The lenders were unethical in their sub-prime lending. The folks taking out the mortgages should have taken some due diligence in fully understanding their financial commitment. Not to say I am paranoid that everyone is out to screw you, but how can you deny the proof in this hole that we've dug for ourselves? People were swindled and now ALL of us are paying for the fleecing. If no one is willing to take the responsibility, we all suffer.

By the way, I am looking to cash in on the profits of all the companies that we bail out once they gain their footing. Why? Well, we're absorbing their losses, aren't we? If we're going towards a socialist economy, lets all bask in the glow of the windfall profits of oil companies. Wouldn't that be grand?