Should the Government Bail Everyone Out?

The humble taxpayer is expected to do a lot as April 15th looms. Bail out a lot of defaulting homeowners and Bear Stearns. When will it all end?

The government thinks money grows on treesA quote from the article White House Proposals Target Risky Mortgage Practices from the Los Angeles Times caught my eye.

 

“Looking back, most economists think the mortgage problems were rooted in the fact that loan brokers were rewarded for the volume of borrowers they brought in, not the borrowers’ ability to pay…”

 

The article goes on to speculate how involved the government may become.

 

This comment by Rep. Barney Frank (D-Mass.), chairman of the House Financial Service Committee  concerns me.

“We’re going to try to make this as least likely a loser for the government as possible,” he said at a news conference.

 

Question is should the taxpayer have to bail all these defaulting homeowners out?  Why not allow the market to take care of the problem? 

 

But this is an election year.

 

Read White House Proposals Target Risky Mortgage Practices

 

But what about Bear Stearns?  Should the government bail it out also?  Is there a bottom to this pit?

 

Read the Wall Street Journal’s  Fed Races to Rescue Bear Stearns in Bid to Steady Financial System

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