Not a Resource

I don’t want my tax dollars bailing out people foolish enough to take on more mortgage than they could afford. Nor do I want my money going to the financial institutions dumb enough to loan those people the money. They all need to suffer for their sins.

A decade of “cheap money” and ridiculously lax lending standards have made it impossible for responsible people to buy a home. I bring in more than the median income for my area, but at 3X my salary I’m looking at homes as old as I am in not-so-great neighborhoods. At 5X salary things look much better but that would have 50% of my net pay going to P&I. And that is with today’s fire-sale prices — a year ago 3X salary would get me a townhouse in the ghetto at best.

Before moving abroad nine years ago I was looking at brand new homes in great neighborhoods at 3X my salary at the time. Very nice new townhouses were at 2X to 2.5X. I don’t regret my time in Europe, but I constantly kick myself for not buying a home while they were still affordable at a much lower income.

I feel bad for my friend that got an interest-only ARM right before the peak, and my co-worker who is suddenly single-income and underwater, and the many other people that were depending on rising prices to keep their financial idiocy from biting them in the ass. But not sorry enough to give them a penny out of my pocket. They gambled, they lost, and now they should suffer the consequences.

Ditto for the banks and investors in mortgage-backed securities. Bailing them out with taxpayer dollars is going to take us from stagflation to Great Depression II.