No deal on bailout legislation has been worked out in Congress at the time this is written.
What do the readers of FedSmith think about the legislation? According to our survey of readers who chose to send in their opinion, Congress’ failure to reach an agreement may not be a bad thing. 56% of those responding did not think the bailout was a good idea and 26% were undecided. The highest percentage of readers responding to the survey (43%) blame the mortgage companies for the problem. 27% blame the Bush administration.
As you will see from reader comments below, some readers see a vast conspiracy between individuals and institutions to ensure substantial profit for some; others see the situation as an inevitable result of affirmative action in giving out loans as a result of government pressure on companies to grant loans to unqualified people; some see the problem as a result of corruption in Congress; and many cited "greed" as being the source of the problem.
Without a doubt, the issue is complex and has been a long time coming without any action having been taken to head off the problem. As with many complex problems, there are different culprits cited as being responsible. Those opposed to the bailout often cited a fear of socialism or a belief in letting the companies with the problems fail without sticking the taxpayers with the bill. Here is a summary of the results.
|1. In your view, where does most of the blame lie for the mortgage/credit crisis?||Total Responses||Percentage||Grand Total|
|2. Are you in favor of the proposed financial bailout legislation to resolve the economic crisis?||Total Responses||Percentage||Grand Total|
Here is a representative sampling of the reader opinions that were submitted.
A Forest Service retiree from New York sees the problem this way: "Give a home loans to those who cannot and will not be able to pay, payoff managers with absurd golden parachutes, prevent the development of our own minerals, sounds like affirmative action to me."
A TSA officer from Denton, Texas had this observation: "Forcing banks, mortgage companies and other lenders to make loans under duress to unqualified borrowers is BLACKMAIL."
A Department of Agriculture employee from Belmont, NY sees the situation this way: "Letting people borrow to much money or especially not checking credit, jobs, assets etc. are the worst contributors. If the lenders had acted more prudently, many families would not now be facing foreclosure."
A program manager from the Department of Homeland Security in Washington commented: "When the Clinton administration deregulated the banks and investment companies, pushed Fannie and Freddie to give loans to low-income it started the slide of the industry."
An operations engineer from the Dept. of Veterans Affairs in Illinois cites the repeal of a law in 1999: "This was caused by the 1999 repeal of the Glass-Steagall Act, it is not Bush’s fault."
An Army retiree from Chambersburg, PA places the blame on Congress and supports the bailout: "I am favor of bail out only because there appears to be no other alternative. The situation was created by Congress when they passed the deregulation of Financial Institutions, thus setting the stage for greed to encourage investment banks to create the mess we are in."
A supervisor with Customs and Border Protection in Eureka, Montana wrote: "I am very conservative. What happened to bank and institutions using the old fashioned way of people borrowing money–being able to pay it back. I am tired of the Bush administration making everything sound like "chicken little" the sky is falling. It should for those businesses that cannot pay back the money borrowed–the good institutions will survive and even be better."
A program analyst with the Naval Shipyard in Bremerton, WA says to let the financial institutions fail: "The last thing we, the taxpayers need, is to assume the debt of these lenders. They took the risk, they should take the loss. The economy will eventually take care of itself."
An attorney with the Dept. of Justice in Washington says the situation makes him sick: "This makes me sick–let capitalism work–and if the banks have bad debt, let them suffer the consequences along with other responsible parties. Not taxpayers."
A program manager from the Dept. of Commerce in Washington supports the bailout with limitations: "We should provide the bailout only, and I do say only if we input the stipulation that no CEO receives a "Golden Handshake, Buy-Out, etc. Also the country should be reimbursed when the country, economy gets back on it feet."
A patient business assistant with the VA in Columbus, OH sees a conspiracy of sorts at play: "He knew banks were convincing naive people that they could buy $100,000 houses. Now he’s just bailing out his friends. Sticking the taxpayers with the bill, and all CEO’s get a walk and get to keep their money."
A purchasing agent with the USDA in Kansas City, MO cites a fear of socialism: "Do not bail these idiots out with our tax dollars. I would rather lose some of my savings than socialize the finances of this country and let the government have almost total control."
A revenue agent with the IRS in Phoenix sees multiple sources of the problem: "People overextended themselves during the housing boom and purchased a house they couldn’t afford. The mortgage companies overlooked the fact that the purchasers would not be able to make the mortgage payments when the interest rates adjusted upwards. Unfortunately, it is the individuals that are impacted the most when their house is foreclosed on."
A human resources specialist with the Forest Service in Albuquerque places the blame on Congress and wants an investigation of those responsible: "The real culprits in this mess is Congress. There should be an indepth investigation to determine how regulation of these programs was thwarted. I am not an economics major but do understand not to make loans to risky borrowers. All I have read says these companies were forced to make the loans by Congress."
A contracts manager with NASA in Huntsville, AL says the guilt is equal among several parties: "Congress, the Bush Administration, the Mortgage Companies and their over-paid executives, and the Irresponsible borrowers are all equally guilty of causing the mess that America is now in."
Our thanks to the readers who took the time to respond to this survey and a special thanks to those readers who took the time to send in their written comments.