Once Again

Once again, the responsible are taking responsibility for the irresponsible. The government announced Sunday that we, the American taxpayers, will be bailing out Fannie and Freddie. So congratulations, America, you now own a majority of the nation's mortgage debt. I don't recall getting a call or an email or a personal letter asking my opinion on the matter, so I thought I'd take it to the blog. So here it is:

I have some sympathy for people who have lost their jobs or have some health issue that is draining their bank accounts. As for the people who just over extended themselves ZERO sympathy. I understand the argument that possibly the third-party lenders and some banks should have taken a little more precautions when deciding to loan the money in the first place, but they are a business. They are in business to make money lending people money. The responsibility ultimately falls to the person filling out that application.

My wife and I have been married for a little more than six years. We both have a bachelor's degree and my wife has a master's degree that she earned last August. So we have been out of school for just a little more than a year. We have two boys and a stupid cat (trade off for an iPhone, not my best call). For the first five-and-a-half years of our marriage, we rented or leased places to live. Why? That's just throwing money away, right? I mean who in their right mind would rent/lease for that amount of time? Answer: A person or couple who can't afford to make the payments on a house. We wanted to buy a home. And man did we find and look at a bunch of houses that would've been great. But when we sat down and looked at the inflow vs. the outflow of money, it couldn't happen. So we kept on doing what we could (not what we wanted to).

I took the liberty to write my Senators and Representatives a letter expressing my opinion. I'm sure you can guess how that worked out for me. In the letter, I didn't ask for a bail out, I didn't ask for my entire or even half of my mortgage to be removed from my debt record. I simply asked for them to pay my house note for two months. For personal reasons, I won't disclose what that amount would be, but I explained that if I was allowed relief from my mortgage for two months, I could take my family on a nice vacation, I could jump start my kids' college funds or I could invest it. I thought those were reasonable uses of that money. I didn't say I want to buy a new car or TV or make some McDonald's really happy with a big purchase from the dollar menu.

I still have yet to understand what this bailout or any bailout for that matter affords anyone. It doesn't teach responsibility in business or personal finance. It furthers the welfare state that the other side of the aisle has worked so hard to create. It breaks my heart to think of children who may not get to sleep in their own bed because their parents were irresponsible. But someone must be held accountable and I don't feel as if it should be those of us who have taken our responsibilities as a citizen, parent and homeowner seriously.

Hey, Remember Capitalism, Part 2

Well, apparently members of Congress aren't reading my blog. Or perhaps they are embarrassed that a 26-year-old has a better understanding of our constitutional economic principles? Probably the former.

Regardless, the Senate tried again today to readdress the issue of oil companies making too much money. Fortunately, enough of our Senators had their wits about them today to defeat the bill. Here are a couple of links to spark your interest:

Story on the Senate...(Fox News)

See how your Senator voted...(Senate.gov)

One of my favorite quotes of the day was from the number 2 Democrat in the Senate, Richard Durbin of Illinois, he said, "The oil companies need to know that there is a limit on how much profit they can take in this economy." I may be mistaken, but that seems to be the exact antithesis of a free market economy.

Just for fun I did a little check on the gas taxes that we pay. For every gallon of gasoline that we purchase we pay 18.4 cents in Federal taxes, and in the great state of Arkansas, we pay an additional 21.5 cents. (Gas Price Watch). According to the CIA World Factbook, 64% of our population here in the states is between 15 and 64 years of age, which is 203,987,724 people (CIA Factbook). Just taking this group of people, assuming that each of them drive a car, I came up with the following data:

I am fairly average, so I'm basing all of this data on my personal buying habits, which I openly admit may be higher or lower than the national average, but the point of this exercise is to provoke thought. On average, I fill up once a week (17 gallons of unleaded gasoline at $3.85/gallon). This means that each week I pay the Federal government roughly $3.13 in taxes. This doesn't seem that much, but when we multiply this by the 64% of Americans in our example, it turns out that the Federal government collects $638,481,576 in gas taxes weekly. Or $33.2 Billion each year. And this doesn't even include the 18-wheelers or mass transit fuel expenses.

Perhaps the time has come to start identifying areas where the Congress should realize that "there is a limit on how much profit they can take in this economy." Maybe the Congress should hold itself to the same fiscally responsible standards to which they want to hold businesses. Just as corporations are accountable to their shareholders, our representatives should be held accountable to the oath they took to "well and faithfully discharge the duties of the office on which" they hold.