reverse mortgage dallas

How Bailouts Are Messing with Capitalism

We have a new F word: failure.

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Any thoughtful person reading this should also consider the word "future". And by that I do not mean "future failure", rather looking to the future. It's of course paramount that we deal with the present, since this affects our daily lives and the hope of the future.

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One unhappy hallmark of the Great Recession is a dramatic spike in financial distress. Moody's predicts that the default rate on corporate debt--which helps foretell bankruptcies--will be three times higher this year than in 2008. Home foreclosures are already at record highs, and going higher. Defaults on credit cards and other consumer debt will crest right behind mortgages.

The Obama administration is on the case, bailing out banks and homeowners and aiding dozens of industries either directly, through a financial-rescue scheme that could top $2 trillion, or indirectly, through the $787 billion stimulus bill. Automakers, furniture companies, real estate developers, and even porn magnates have their hands out.

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I was raised to believe in working for what we have and not relying on credit to fuel my spending habits. As I grew older and left the shelter of my parents home and their watchful eyes, like everyone I was taken with the ease of garnering credit, then using either for my determent, or enhancement. For those with good business acumen, OPM (other people's money) allowed them to amass sizable fortunes, while others squandered it passing fancies and are probably today still paying off high interest credit card debt.

I suppose I'm left with a concern, and this is not reflective on what Obama may or may not accomplish, but what has credit done for America. Certainly it has allowed most to realize the American dream, but has that dream now turned into a financial nightmare. In my case (and probably by good fortune and not necessarily wisdom) I didn't borrow against my home, and thus I'm not now facing the dilemma of many Americas.

I'm certainly thankful for reverse mortgages (they allowed my mother to realize her dreams late in life), and loan mods may help money starve off bankruptcy, however are these present financial difficulties the darkness before the dawn, or the twilight before more financial darkness?

I've always believe in looking toward the future, thinking that if I fall, I need to get up again, and again, but that is self preservation and not government interventions. Should we all be able to walk through these shadows of financial gloom unscathed, I trust we will look to our roots (or our parent's roots) and gleam what is necessary to walk forward into financial prosperity without requiring government intervention.

That's my two cents, good post.

Ron