Obama plans to use another $75B of taxpayer dollars to bailout those who made poor decisions.
“The plan I’m announcing focuses on rescuing families who have played by the rules and acted responsibly: by refinancing loans for millions of families in traditional mortgages who are underwater or close to it; by modifying loans for families stuck in sub-prime mortgages they can’t afford as a result of skyrocketing interest rates or personal misfortune; and by taking broader steps to keep mortgage rates low so that families can secure loans with affordable monthly payments,” President Barack Obama said in prepared remarks.
Obama’s plan says it will not bailout those who have speculated or made imprudement decisions. If someone can explain how you end up unable to afford your mortgage while making wise decisions along the way I am all ears.
At some point we are going to have to start letting the markets work. Markets are excellent capital allocators. Those who made poor decisions must be allowed to fail and those who were prudent must be rewarded with lower prices. Our capitalist markets will not begin to function properly otherwise.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
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