In the United States, we advocate a limited role for our government in order to ensure as much liberty and freedom for each and every American. Of course, with individual liberty comes individual responsibility. So we have to be very cautious about those times when the government, at any level, assumes responsibility in place of the individual person or business. When we apply this very basic principle to the current situation with the sub prime mortgage industry, where a seemingly vast number of people took out loans that, in hind sight, they may not have been able to afford. In many cases, these folks stretched too much, and bear an unfortunate responsibility for making a poor decision. In some cases, those who took out these loans were victimized by predatory lendors who "crossed the line" in their methods of getting people to take out these loans when they should not have done so. No matter whether the blame lies with the consumer who bought the loan, or a predatory lending company, you can be sure that who is not to blame is "the American people" as a whole — or their government, which is financed by their tax dollars.
I am "hot to trot" on this issue because noises have been coming from some in the mortgage finance business, with sympathetic response from officials as high up the U.S. Government food chain as Treasury Secretary Henry Paulson, that Congress and the President should engage in a government "bail out" for those exposed in this sub prime mortgage crisis. This would be terrible public policy. But don’t take my word for it, take a few minutes to get educated on this subject, and then contact your local Member of Congress to tell them what a terrible idea a bailout would be…
Here are a few different ways to learn more about why a sub prime bailout by taxpayers is a bad idea:
A FEATURED COLUMN FROM CONGRESSMAN ED ROYCE…
Today, the FR features a great column from Ed Royce, entitled A Bailout Is Not An Answer. It begins:
Read the entire column here.
OUR FRIENDS AT THE AYN RAND INSTITUTE WEIGH IN…
Alex Epstein is an analyst for the Ayn Rand Institute, who lays out a great case for why a bailout is very poor public policy in his latest commentary, entitled The Injustice of "Doing Something" about Subprime. It starts out:
As we witness large numbers of defaults on subprime loans–loans extended to those with no credit or bad credit–many are calling for the government to do something to stop the suffering. At the same time, many recognize that a bailout of struggling homeowners would be wrong. Thus, we see a growing list of proposed solutions that purport to save the day without a bailout: "borrower assistance" programs to refinance defaulting mortgages, crackdowns on "predatory lending" practices, or laws restricting mortgages the government deems too risky.
In fact, regardless of how these proposals are described, all embody the essence of a bailout: they absolve individuals of responsibility for their bad decisions–and force those who did nothing wrong to pay the price.
Read the rest at the Ayn Rand Institute website here.
THERE’S EVEN A STOP THE BAILOUT BLOG
You can check it out — I found it because they linked to a commentary of mine — but they are following this issue pretty closely. Wonder if they will link to our Royce column today?
AN OUTSTANDING VIDEO FROM FREEDOMWORKS…
Okay, so you’re a busy person, and the idea of reading a bunch of columns on this issue doesn’t appeal to you? (Shame!) This video is worth the two minutes. Once you’ve watched it, contact your Member of Congress…
Care to read comments, or make your own about today’s Daily Commentary?
Just click here to go to the FR Weblog, where this Commentary has its own blog post, and where you can read and make comments.