Organizing for America | Sally Sova's Blog: Why Main Street doesn't like bail out.

Why Main Street doesn't like bail out.

By SassyOwl - Oct 1st, 2008 at 4:31 pm EDT

Also listed in: 6 groups

Comments | Mail to a Friend | Report Objectionable Content

The average worker is frustrated that they have been asked to take lower wages and higher healthcare cost while executives are getting huge bonuses and bigger exit parachutes based on stock performance, regardless of work performance. For Main Street to except a bail out deal they must feel that they are getting a benefit not just the executives. The reason we need a bail out is because of all the adjustable mortgages. One of the most effective ways to help Main Street is to allow for all the adjustable mortgages to be converted to fixed rate mortgages. The biggest problem with the credit market is not the value of the loans or the lack of available credit it is that as the housing market bubble started to deflate and interest rates started to go up. This means that as many of the interest only loans readjust payments to include principle, many trying to refinance and are now unable to due lower home value and new laws that say that if you are unable to make the future adjusted payments now then you are unable to get the loan. The problem is due not only to the homeowner who bought more house then they could afford but also the realtor and loan companies trying to sell a product to a customer that they knew they could not afford.

Reader Comments	Comments RSS
Comments are closed for this post.

my two cents | Report to Admin

By Mikeystyle Oct 1st 2008 at 4:38 pm EDT (Updated Oct 1st 2008 at 4:38 pm EDT)

The word “bailout” doesn’t fit

Yes we’re providing money to investment banks but we’ll be getting a large portfolio of mortgage-backed securities in return.

These are complicated investments that are hard to value in a slumping real estate market. Unlike investment banks, Uncle Sam has deeper pockets and can wait until the market stabilizes and the value of these assets recover enough to sell. We may even make a lot of this money back over time.

At the moment, the illiquidity of these securities is causing a major credit crunch to the point that even solid companies are having a hard time obtaining loans.

Who should care about this? Anyone who borrows money or works for a company that does—that means all of us in this credit-driven economy. If we fail to act on this problem it means higher interest rates and lack of borrowable funds for anyone with a mortgage, credit card or student loan.

Obama put it best—if the house next door is on fire you put out the fire first and then figure out what caused it and how to keep it from happening in the future.

Our banking system is on fire. It’s time to get out the hose.

Re: my two cents | Report to Admin

By Frederick G. Thorne Oct 1st 2008 at 4:44 pm EDT (Updated Oct 1st 2008 at 4:44 pm EDT)

ahh, my good buddy mikestyles copy and pasting in these sincere folks blogs.

Barack Obama is supporting this bailout.
If this legislation passes, it will not matter who gets elected.

If the Green Party receives 5% of the vote or better, they will qualify for federal funding in 2012.

5%

check out Ron Paul, or Ralph Nader, they are both opposed to this corperate bailout.

contact your reps, help keep the pressure on these clowns

Re: my two cents | Report to Admin

By SassyOwl Oct 1st 2008 at 5:29 pm EDT (Updated Oct 1st 2008 at 5:29 pm EDT)

Yes the house is on fire but will water put the fire out? Knowing the type of loans causing the underlying problem will help to get the problem under control faster. The help needs to be directed to the correct people to solve the problem. The problem is Main Street does not like HR 3997 Economic Stabilization/Bail Out Bill. So before we can put out the fire we need to know where it is and what type of water to use to put it out.

Content on blogs in My.BarackObama represents the opinions of community members and in no way should be interpreted as endorsed or approved by the campaign.