Should the US Government Bail out Homeowners?

The answer to this question is a bit more complicated than you might think.

I bet that the average person read the title of this article and had an immediate reaction to the question. The problem is, this question is much, much more complex.

If a home speculator is currently upside down in a mortgage that was way too much money for them in the first place, should the US government help them out?

If a family of four bought a home that was way beyond their means via a teaser loan, should the US government bail them out?

If the US government bailed out hedge funds and banks that were involved in LTCM, do they then have an obligation to bail out homeowners? If the US government bails out Chrysler, should it also bail out US homeowners?

If the subprime mortgage fallout threatens to grind US economic growth to a standstill, should the US government do something about it?

Should the US government spread a projected $100 billion dollars to bail out homeowners?

Would this bailout simply be a bandaid on a bigger problem? Would it stop the speculation or just encourage it even more?

Did Bush do the right or wrong thing today by telling homeowners that there would be no bailout? And that Bush further did the right thing by offering some tools for homeowners to keep their houses through the FHA, but not explicitly offering bailouts?

Should the government ever bail any company out?

What if that company failing would have a drastic impact on the economy?

If you would bail out a company in this situation, why would you not bail out homeowners?

Are homeowners who are in over their heads getting what they deserve by losing their homes? Is this all part of a natural economic cycle?

So many questions. What do you think? What's your opinion? Bailout, yes or no?

Filed under: Real Estate News | The Economic Meltdown | General Knowledge