In addition, the people who were ‘hit hard’ by the housing decline were the ones responsible for speculatively bidding up prices trying to hit the housing jackpot. We’ve all heard stories of people selling houses for $50K-100K more than they bought them for in a year or two. Did they actually earn that money?

They gambled and they lost. But while the game lasted they were quite happy to take those house flipping profits though, and not share them with me or anyone else (primary residences are exempt from capital gains if you live in them for 3 years)…so they didn’t even pay taxes on the profits.

One could even ask if it’s fair to allow homeowners to not pay capital gains and to deduct mortgage interest…this is another factor in bidding up the asset price of housing that is rarely discussed.

So. Now we’ve got HAMP that:
1: Is encouraging people to keep paying into housing that they are going to lose anyway instead of declaring bankruptcy and getting it over with…they’d be halfway to mending their credit scores by now.

2: Gives banks little incentive to ‘work something out’ since they can hold out for some Uncle Sugar money, then foreclose later.

3: Encourages banks to hold on to foreclosed properties to try and sell at re-inflated prices (this also keeps homes unaffordable for those who saved), and also games their books (if they valued these houses at true market prices, many big banks would be insolvent).

All the gov’t has to do to stimulate the economy would be to forgive income (consumption) and payroll (biz expenditures) taxes for one year – it would cost (for the income tax at least) ~$400B and the PRODUCTIVE people in society would each have the ability to pay down debt, pay the underwater amount in their mortgage and move for work, or if they weren’t in financial trouble they might actually buy that big screen TV or whatever.

Instead, they picked the $700B number out of a hat (they’ve admitted this) to give to the banks, which have taken those TARP funds, and instead of buying back distressed mortgage securities are now using that cash to short municipal bonds (ie: betting that our cities and states will go broke)…nice bunch of guys there.

This is way beyond unfair…

-DaveP
PGH PA

Granted, the areas of the country that suffered the most were also the ones with the greatest levels of risk, but that is no reason to punish them.

I’m sure if YOUR neighborhood got ruined in the greatest recession of the century, you’d be very happy to receive stimulus funds.

People who don’t have mortgages but who file “returns” would be required to pay ALL or as much of their existing debt as $200,000. could accommodate. Again, the banks and the government recoup their investment. Is this fair? I think it is. If you don’t file a “return” you probably don’t contribute much to the country anyway and why would the government give you money from a pool that you never paid in to?

On thing is true for sure: MONEY FLOATS BUT IT NEVER SINKS. The stimulus was given to millionaires and they pocketed it. Credit is almost impossible to get. The folks that really need help still can’t get it. This article is a testament to how this government and its big business / special interest partners are using scams like this to line their pockets and exploit hurting Americans.