Zac, I would like to go with you and help none, but that won't work either. Sounds great and probably is the sentiment of most, but it still won't work. Obama, you and I all agree on lax oversight, but I beat both of you by two years as this was an obvious problem in the making and could have been prevented. However, that's opinion and there is another side to this coin. I am sure you remember what Mr. Smith had to say about this system and know the meaning of laissez faire. We have rules against monopoly and anti trust, we have laws against un-fair lending, the SEC, oversight committees, bank regulators and a host of other financial control. In fact, the current situation is more in the realm of one of Mr. Smith's contemporaries, John Gresham. Gresham gave us value and how you arrive at it and how it works within the system. Gresham is also one of densest economists of all time and I don't claim to understand his theories. Too bad he's dead as he might have an idea to a fix. It's a sure bet that we are going to get anything worth a shot from the government and a lot finger pointing. At least they know enough not to sit idle during and election year.

Every market has buyers and sellers-- so far it seems the remedies for the housing mess have been directed at helping the banks and homeowners (sellers) and, rightly or wrongly, propping up housing prices. This has the effect of helping those who created the mess or who profited from it while possibly hurting potential buyers-- including 1st time home-buyers who may have to pay higher prices for homes that may still be overpriced.

I do believe something had to be done to avert disaster but it looks like sellers are getting everything while buyers may have a lower interest rate but a much higher base price for their home purchase which could more than wipe out any benefit of the lower rate. Thus, some bills gaining steam in Congress now that provide tax credits for home buyers seem worthy of consideration to add balance to a well-intentioned but lopsided effort--- it is emotionally more moving to save homes from foreclosure than to help people who may have been priced out of the market but who is to say the speculators and current homeowners are more worthy than a hard-working family pulling their savings together in an effort to afford a decent place to live. I suspect that to pull out of the slowdown and get the economy moving housing may need more direct help at this point and if that is the case it would be better to have something for the new buyers than just more handouts for sellers.


Of course the government is strapped for cash but there are areas of the budget such as agriculture subsidies that are outdated and unjustifiable in the current environment-- even the farm lobby doesn't have a decent argument for those that I can see (they are saying things like some time in the future conditions might change to where the farmers- mostly big agriculture btw- would actually need the subsidies so the government should just keep paying out now. Do you believe that members of our elected government would fall for such a flimsy case?).

I'm beginning to think everyone on this blog gets paid by how many people view and comment... so you just make ridiciulous conclusions and hope people will call you out.

Fixing the cause and treating the symptom would in no way prolong the issue of lax lending, it would prevent it's recurrence and mitigate the damage.

Please never become a doctor.

I agree with Zac 100% by Capitalist Principle. In a perfect world, meritocracy always wins. But the prold isn't perfect. Banks had an incentive to strengthen shareholder value by keeping up with the Joneses and sell MBS portfolios or face stock depreciation.

Meanwhile, borrowers were foolish enough to think an ARM would be a BRIGHT IDEA, and flipping houses in CA, NV, and FL 5 times a week would last forever.

Letting banks fail would spur a global financial crisis and further deflate equities markets all over the world. Letting homeowners fail would further deflate home values, making even people who opened lines of credit upside down. The result? We have to same them both. The cost? Inflation.

Let the home prices fall until there is a buyer. There should be no backstop, no help with mortgage payments, individuals where to greedy and bought more then they could afford.

Truely I was not in a comfortable place to buy a house 5 years ago, but for the last two I have the stability and income. I took my time and have been looking for bargains, and the government or anyone else should not take that opportunity away from me.

Obama ....subprime ….$30BN …..bailout ….no sense;

It appears that bailing out overextended homeowners is being perceived as a sin to the nth degree. Issue #2 is that bailing out does not mean “handout”. Issue #3 is that the homeowners were burned by greedy banks/lenders with skewed/unconscionable loan conditions. Issue #4 is that overzealous foreclosures resulted in an implosion of home values wiping out equity & resulting in negative value homes (spawning a 2nd wave of foreclosures). Issue #5 is that bailout may be in the form of an equity stake which (collectively) would generate a handsome return to the Federal government as a term investment. Issue #6 is that homeownership should be considered a virtue not a scourge. Issue #7 is that inasmuch that welfare is being deemed virtue, “bailout” should be ranked a fiscal necessity vis-à-vis. Issue #8 is that the American dream should be preserved at all times.