Posts Tagged → mortgage bailout
Mortgage bailout could mean higher gas prices
It may sound like rhetorial suicide to say it out loud, but despite 400,000 mortgage borrowers seeking foreclosure help on their homes, the worst thing the US could do now is a bailout. In fact, the $300 billion mortgage bailout bill currently working its way through Congree could lead not only to a bigger crisis down the line, but could even result in higher prices at the gas pump.
With the Democrats in control of both houses of Congress and spending like drunken sailors, the value of the US dollar has fallen precipitously in the last couple years. That’s because Democrats’ only solution to problems is to treat the US Treasury like a money factory and national lottery.
It’s a pretty simple economic principal; the more money you print, the less each dollar bill is worth. And as a country we’ve been printing way too much of the green stuff lately. Annoyed by high taxes? Here’s $600 as a rebate for nearly every American; not based off a budget surplus, mind you, but just to curry favor with voters.
Having trouble paying for that high-risk mortgage you took out on interest-only payments three years ago without thinking ahead? Heck, let the Fed help catch you up, now that you’re hopelessly behind on your payments because, in reality, you paid two or three times what a property was worth thinking the payments would always be that cheap, or you could flip it in a couple years and quadruple your investment. Sorry, doesn’t work that way.
Suffer an epic natural disaster like a bridge collapse, spring flooding or a hurricane? Hey, let the Fed foot the bill at five times what the actual cost is… what’s a couple trillion between friends, right?
Here’s what a couple trillion between friends is: economic disaster. Hate or only dislike OPEC leaders as you choose, but they have one thing right: one of the biggest contributiing factors to the high price at the gas pump is the weakening of the US dollar.
We’ve printed way too much money without economic productivity to back it up, and if we don’t learn out lesson soon, the US dollar is going to start looking more like the Mexican peso than the British pound. And so it is that the mortgage bailout could quickly lead to even higher gas prices; a $300 billion bailout is just rewarding foolish “predatory” high-risk-credit lenders for loaning money to folks without the means to pay it back.
If Congress were sensible, they’d let the market bear the short-term pain of turning 400,000 home owners back into renters, because in the long run, it would teach banks to stop predatory lending and it would strengthen the value of the US dollar. And that would lead to lower prices at the pump more quickly than any other factor.
