Over at my PeaBoard this morning I was reading a thread about one women witnessing her neighbor taking anything and everything from his foreclosed home before it was locked tight. She wondered if she should do anything or call anyone about it. Over all the responses were no, not your business. One response, though, got me thinking.
A poster stated that she didn’t understand why people blamed the banks for all their troubles. They signed the loan documents and they couldn’t make the payments. For the most part, I agree with that assessment on many people losing their homes. Buyers got in over their heads, greed, not enough money sense and over buying did them in in many cases.
The world, though, isn’t that black or white. Right now our state of politics leads a lot of people to think it is. On one side you have Democrats wanting to punish banks for taking advantage of people, selling them loans they knew they could never afford. On the other you have Republicans saying that people have free will and should have known the loans would screw them in the end.
For the record here, people did tell Jason and I during the heyday of the bad loans we should go out and buy. We were already in a finical hole I knew would take us years go crawl out of so we did the right thing, we continued to rent rather than take on a loan. I’m not bragging, just pointing out that plenty of people knew what was coming long before it ever hit.
My dad always taught me, there are two sides to a story and I try like hell to get and see both sides before I come to a conclusion. Plenty of people bought into the hype, the constant drum beat heard throughout the land calling them to home ownership. We’re told over and over again we’re not adults until we own, we build wealth on owning, it’s stupid to throw your money down a hole. And hell, home values go UP! And so will your income!
And so, people bought. Some bought small homes as starter homes but many didn’t. They bought a home on par with what their parents worked themselves, or saved themselves, into right out of the gate. The shows on TV made us think we needed granite in the kitchen and a whirlpool tub in our master bedrooms. Without the, we thought, we weren’t doing well.
We bought these homes with no money down, at the height of a housing bubble that even I, who is not in anyway at all financially acute, could see couldn’t last. We bought on credit.
Who can blame us? Our Government lives on credit. We sell our debt to China to finance our needs now, all without having to cut back. If our Government could do it, why can’t we? We can make the minimum payments on our credit card and still take that trip to Disney. Save money? Well, that’s what credit cards are for.
The biggest problem with that way of thinking was that once the house of cards crashed down people who did the right things, paid with cash, saved, bought what they could afford, well they got screwed too. People started getting laid off and couldn’t afford their bills either.
They began to plow through their savings, and live on their good credit. Until the money was gone and their credit was trashed. Now we’re in a black hole of finical instability as a country. And we’re scared. We’re so scared people are doing things they shouldn’t be proud of, spitting at elected officials, using racial slurs against our President. People are demanding our Government fix this.
The problem is, the situation isn’t black and white. The Government can’t ride in and save the day without spending a lot of money it doesn’t have. It can raise taxes, but the people who pay the taxes can’t afford more. They can borrow it, but China isn’t really being very nice as of late.
And sort of like a child who learns if they cry long enough mom will give him the cookie, if we bail everyone out now, what happens when, down the road after they do it again, we don’t bail them out again?
Right now we’re in a scary place. We need to realize that there will be pain here, both at home and in our Government. There has to be. Some people can be helped but others will lose their homes and savings. These aren’t bad people or people we shouldn’t care about. We should care about our neighbors. In some cases though, we have to let people fail so they don’t continue to make the same bad choices.
Jason and I have learned that, the hard way. Our family has helped us out but we’ve learned and continue to try and make smarter, better choices because we failed. Our lives aren’t a zero sum game where there is only one right answer and one wrong answer. We can’t save everyone from every problem they have and expect different results down the road.
I don’t envy our leaders right now. People don’t want to hear the truth, the bad news. Sometimes though, we need too.