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The new "Bailout Plan" and why I don't think it will solve the problem

By
Real Estate Agent with COMPASS DRE# 01339266

Timothy Geithner (the new Treasury Secretary) is scheduled to announce the new financial industry bailout plan next week.

While I appreciate the urgent practical need for this assistance, I find it unacceptable that there is not a condition requiring the recipient banks to increase their lending.

Isn't that the rationale behind the assistance in the first place?

Without this requirement I fail to understand why taxpayer's money shoould be used to help badly managed businesses. 

With property prices having dropped substantially and many homeowners upside down on their mortgages, someone has to take the loss. If the owner who borrowed the money cannot, then the bank that holds the mortgage needs to. And if the bank cannot afford to, that bank deserves to fail. That's business!

It appears that the plan currently being financed with taxpayer money will not solve the problem, but simply delay the ultimate pain.

Comments(4)

Karen Fiddler, Broker/Owner
Karen Parsons-Fiddler, Broker 949-510-2395 - Mission Viejo, CA
Orange County & Lake Arrowhead, CA (949)510-2395

And the irony of all the "Stimulus" and "Bailouts" is that it's not going to increase consumer confidence which is the main index we need to target to change behavior.

Feb 07, 2009 03:14 AM
Terry Haugen STAGE it RIGHT! 321-956-2495
Stage it Right! - Melbourne, FL

Stewart, I think its waaaaaaaaaaaaay too late for anything to help.  Any programs in that package to stimulate employment will take a while to implement, in the mean time hundreds of thousands of us will continue to lose our jobs, healthcare, and homes.  The horse is out of the barn.  The only thing we can do is wait to see if it comes back to its stall.

Feb 07, 2009 04:06 AM
George Bennett
Inactive - Port Orford, OR
Inactive Principal Broker, GRI

Stewart - I'm with you I don't like the way this is shaking out. There is not enough transparency to support the govt.'s plan. Personally, I don't like bailing out banks that deserve to fail. If we need to take action to stabilize the economy then do it without rescuing the banksters responsible for this mess.

Feb 07, 2009 05:56 PM
COMPASS PALM SPRINGS | Stewart Penn
COMPASS - Palm Springs, CA
COMPASS Palm Springs - Broker Associate

Why was there no stipulation that a certain percentage of bailout funds needed to be loaned to consumers within a specified time period?

Mar 20, 2009 07:39 AM