I've been seeing a lot of fur fly here over Obama's homeowner 'bailout'. It seems many of the people who rent their abodes are extraordinarily upset that the, obviously irresponsible people, who chose to buy their homes may be getting government help. Their thought seems to be; "Why should we help these homeowners with our tax money when they are the ones who caused this mess with continual buying of homes, which pushed the prices up, which meant I couldn't afford to buy a home. And now now you want to use my money to keep home prices up so I still won't be able to afford to buy a home. I want the prices to crash so I can buy a home and all of you, who bought during the bubble, or just in the wrong area, can suck on lemons cause now I wanna get mine."
Now I know many DKers who rent aren't feeling that extreme but we are seeing that kind of extreme in the comments being made in some of the recommended diaries. Now I am with the 'rental brigade' on some of the issues. I currently rent and sold my home right before the bubble. I made no profit on the home I owned for 4 years and sold it so I could afford to go back to school. Three years after I sold it it had appreciated by 50%. So not only could I have paid for my schooling with the appreciation I could have literally taken a loan to cover the payments and still made a profit. And when when I am done my schooling I won't be able to afford to buy that same home now. So I want home values to drop so I can afford a home too. And yes, home values are too high for most first time buyers. So the correction must come. But it doesn't have to be in 3 months.
The Obama plan is not meant to keep home values permanently high. It would take well over the 100 billion dollars to do that. It seems to me that its main purpose is to slow the rate of decline of prices and to slow the rate of foreclosures to a point the economy can absorb it without collapsing. It will, by its affect, help slow the downward spiral of the economy which helps everybody.
Yes, these programs may help some people that don't deserve it and won't help some that do. But if you can't see that in the long run helping our neighbors helps ourselves you are on the wrong site. We can argue the particulars of how we help and what would work best. But if you really believe that we should just let everything collapse and let the chips fall where they may then you shouldn't be here, you should be on a Libertarian blog somewhere.
But if you are just pissed off because you couldn't buy a home because the prices went too high due to the bubble. Get over it. Home prices are unsustainable. Unless incomes suddenly shoot up home prices will come down. But letting them come down over a longer period helps everybody.
An airplane always comes back to the ground but how it comes down makes a big difference to everyone inside. And we are all inside this economic plane ride. We are going down but I would prefer to land on our wheels at 100 mph than go nose first into the ground at 500.