Have you been responsibly managing your debt? Have you been sacrificing so you don’t get in over your head? Saving instead of borrowing? Accepting lower returns on your money rather than getting greedy and taking on high risk for higher yields?
Sucker.
Bush announced “home loan relief” today. What does this mean?
In short, a huge taxpayer transfer to the rich. Partly by moving more mortgages to federal insurance – meaning the government pays the investors when the mortgage fails. Also getting the housing agencies to raise the limits on “conforming” loans, in other words,a higher threshold before a loan becomes a “jumbo.” Which means taxpayer involvement in the higher-priced housing, too.
Bush said the government will work toward, “lowering down payment requirements, by increasing loan limits, and providing more flexibility in pricing.” Also to, “change its federal mortgage insurance program in a way that would let an additional 80,000 homeowners with spotty credit records sign up.” In other words, MORE bad mortgages.
Jill at Brilliant at Breakfast on the housing bailout,

Don’t kid yourself for one minute that this is about helping low-income Americans stay in their homes. If helping low-income Americans stay in their homes were the goal, the 9th Ward of New Orleans wouldn’t still be in ruins two years after Hurricane Katrina, its citizens dispersed elsewhere, the better to turn Louisiana into a Republican state and a cash cow for Bush’s corporate cronies. This Administration has dragged its heels on helping the most high-profile poor people in the country, but when the wealthy start to feel the effects, suddenly this president rushes into action.

As I observe the professional reaction to the “mortgage crisis” and the credit crunch – coming from the bursting housing bubble – I am struck by the degree to which everyone is looking entirely to the Fed to bail out the big players. It is an expectation. It is the understanding of the financial class that they will be bailed out by the government – at the expense of the taxpayers. Again.
The stock market swings violently up or down depending on what they think the Fed might do. Everything depends entirely, entirely, entirely on the Fed — and not on the supposedly “free market.” Everyone is so used to the government stepping in and bailing out the fat cats. It happened after the S&L crisis. (In fact, it was a feast for the Republican-connected.) It happened when the Long Term Capital Management hedge fund got into trouble. So they are sure it will always happen. And they continue the financialization and securitization foolishness.
For decades massive debt has been building up – both on the government and the consumers’ books. In fact, Democrats keep reducing the borrowing when they are in office — Johnson balanced the budget, Carter submitted balanced budgets and Clinton was actually paying down the debt. But then Republicans get in and cut taxes on the rich, and the borrowing just SOARS! No one denies that we are in an unsustainable situation that has to lead to crisis eventually. But every time a reckoning comes near the Fed bails out the fat cats, and a new and bigger wave of financial foolishness commences.
Imagine if you were sitting at a blackjack table, and every time you ran out of money the manager of the casino said, “It’s OK, we’ll cover it for you.” What kind of blackjack player would you be? Would you be a careful player, managing your money, ready to step away from the table when you lost your limit? Or would you just bet more and more and more, until the casino manager came over against to tell you not to worry, he’ll cover it for you? You wold act exactly like the financial professionals are acting.
The Fed will bail out the fat cats again, which means that when the reckoning finally does come it will be a tsunami that realigns the entire world order.