Wednesday, February 25, 2009

Stimulus Package = Predatory Lending

The following article was posted on Copious Dissent by Devil's Advocate yesterday:


"Whenever I assert that people who fail to pay their mortgages should not receive help from the government (they should rent), the Left argues that many of these borrowers were swindled by predatory lenders. The Left claims that some people signed adjustable rate mortgages when the banks knew that these people would never be able to pay the loan back. Then when the monthly payments increase, the bank steps in to reclaim the home.

Ignoring whether or not predatory lending actually takes place, and whether it is a sufficient justification to allow the government to renegotiate mortgages, I have a simple question: How is the definition of predatory lending different from the actual implementation of the stimulus package?

Right now, the government knows that Americans do not have $1 Trillion+ to spend. But, the federal government nevertheless printed money to transfer to State governments, some of which are bankrupt already. California comes to mind.

Now, citizens within those States will be required to pay this stimulus back, and the rate of payment, and burden on society, is going to adjust significantly because of: 1) Inflation; and 2) Interest. If $1 Trillion is borrowed, expect the citizens to be required to pay back a few hundred billion on top of the principle. So what is the difference between this practice and predatory lending?
To answer my own question: The difference is that this economic stimulus package is not just taking place in theory. Another difference is that when America forecloses on repaying this economic stimulus package, we lose much more than a home underwater. We lose the United States of America." (
Source)- Emphasis Added

But I am sure that this matters not to many Americans who are still high on the Obamiate of "Hope & Change".

7 comments:

PaulsHealthBlog.com said...

Not only that, but this so called stimulus money comes with strings attached.

I hope most states turn it down.

We need to stop looking to Washington D.C. as if it were some sort of Mecca, and start looking to God and within ourselves to overcome this economic adversity.

Paul

Eat Well. Live Well.
PurpleGreenPops.com

Katrina said...

CBW, You really need to stop with all these facts and logic.

We all know that irresponsible homeowners are not at fault and we who are responsible should pay for their mistakes no questions asked!

And the stimulus will work! Lord Obama says it. We believe it. That SETTLES it!

Conservative Black Woman said...

LOL at Katrina. You're right, that pretty much sums up the sentiment of my familiars. I have to laugh to keep from crying.

uptownsteve said...

"We need to stop looking to Washington D.C. as if it were some sort of Mecca, and start looking to God and within ourselves to overcome this economic adversity."

Okay let me try it.

God, I know about 20 brothers in Eastern PG County who are looking for gainful employment and a decent place to live.

Could you hook them up please?

Thanks,

Steve

Yo Paul, I'll let you know when I hear from the big guy.

uptownsteve said...

CBW

What I don't get is that you are mocking Obama for trying to fix the problem that the conservatives created.

You can't bring yourself to admit that your side and it's poliicies are the ones who created this mess.

And you're suggestion for getting us out of it is what?

Praying?

Do you have any serious alternative solutions?

Evelyn said...

Very interesting and informative post. You are speaking the truth.

People think that BO is going to magically fix everything with the stimulus package.

This nation is headed for an economic collapse. We can't keep going like this.

Great post! Glad I found your blog via attorneymom.

Evelyn

Zabeth said...

“The Left claims that some people signed adjustable rate mortgages when the banks knew that these people would never be able to pay the loan back. Then when the monthly payments increase, the bank steps in to reclaim the home.”

I’d also like to point out that this statement makes it seem as if banks are in the business of granting loans they know their clients can’t pay back just so they can reclaim the collateral. That’s not what banks are in business to do- that’s the complete opposite of their business plan. It’s bad for their business to have numerous homes on the auction block that they are not collecting interest payments on. But in the end, both consumers and banks made bad financial decisions.

Furthermore, there isn’t just one solution to a problem. There are other things the government can do. They can do nothing and let the market sort itself out. They can lower taxes. They can spend money on things that will lead to economic growth (i.e. not condoms). These just aren’t the nice and popular alternatives; moreover, the public has become so accustomed to government being reactionary that they expect government to just solve it with a snap.