Money Mismanagement 101 in Washington, DC
March 26, 2008
Leave it to the federal government to bungle one of its most important tasks: managing the tax dollars we as citizens pay.
From the "stimulus package" debacle to the calls from Congress to create a bailout fund for people who are unable to pay their mortgages, the onus of responsibility has continued to shift from individuals to the government and in doing so, consume resources that are dwindling in a time when more relevant needs are rising exponentially.
Instead of sending checks to every person in America who pays taxes and even more money to people who have children, including those who are financially stable and well off, the stimulus package funding (all $1.5 billion of it) could have been used instead to fund infrastructure projects to help repair and better our nation’s crumbling system of roadways and bridges.
The workers would have been paid the bulk of the funding and more people would have been hired to fill the need for manpower to complete such tasks. This would have been a two-pronged boost to the economy: putting money into the hands of people most likely to spend it (the goal of the stimulus plan) as well as help to decrease unemployment, even if by a small percentage. On top of these achievements, the public would have benefited from a better system of roadways and transportation.
Such a plan as this was used once and provided outstanding results: the New Deal beginning in 1933 by President Roosevelt to lift the U.S. out of the Great Depression.
The other item rolling around the Hill regards some system to bail people out of their mortgages that they can no longer afford. The idea behind the program is to limit or lower the rates that people are paying in order to allow them keep houses that they should have known they could not afford in the first place. Just because an internet-based bank is willing to lend you $700,000 for a house while you make $40,000 a year does not make it anyone else's fault but your own when you are in default on your payments and are facing foreclosure.
Had people been responsible and focused on the reality of their situations instead of literally banking on home prices rising forever, practically all of this housing mess (and by extension the ensuing financial turmoil) would be non-existent.
Additionally, this program rewards people who failed to plan yet provides nothing for those who thought things through and are paying their debts accordingly. The latter group would receive no discount in percentage rate or have their rates locked in. It would be a better financial option to default on one’s mortgage and qualify for this program than to consistently pay one's obligation.
This program also does not differentiate between people who purchased houses as investments versus people who are genuinely in over their heads. Should the person who bought multiple houses figuring they’d hold them for a year and sell them for three times what they paid originally and is now caught upside down on their mortgages be bailed out as well?
We as a nation have lost the resilience and determination displayed so well and so often by previous generations. We rely on the government to provide us with that which we are unwilling to work for, and have become a nation burdened with a false sense of entitlement.
Unless we overcome this delusion that the world is ours for the taking without any effort or sacrifice, we as a nation, too, will become a relic overtaken by those who do not suffer from the same affliction.
Contact your elected officials and encourage them to do what is best for the long-term health and sustainability of our nation, even if difficult in the short run. Your children's children will thank you.