Posted by
dieneces on Tuesday, September 23, 2008 10:17:25 PM
To move beyond less purchasing power relative to gas, there is also another sense in which many of us will be left with another economic disadvantage. This disadvantage is a direct result of the bail-out. Consider the purpose of the bail-out: 1) Take 'bad mortgages' off the books of investment bankers and 2) keep house values from tanking. The second consequence can be discerned from considering the consequences of not bailing out Fannie, Freddie, AIG; if these companies were forced to liquidate, imagine how cheap the paper on these houses would be. It would have a massive effect on housing prices. This effect would be really bad for homeowners in the short-term and really great for people who want to buy a home.
Consider the irony of this: the federal government wanted to let low-income earners buy houses. Indeed, this whole mess was started for that cause. Now, if Congress does nothing, low-income earners would be able to buy houses. Shakespeare couldn't write this sh#t.