American Dream Turned Nightmare

I can get worked up about many things. Unfairness is definitely one of those things that gets me hot under the collar. There are millions of homeowners getting bailed out by the US government because they thought that they were entitled to the "American Dream." What is the "American Dream" anyway? A house with a white picket fence, a car or two, a 40" flat-screen TV with surround sound, IKEA furniture, a Starbucks latte every morning, vacations every year, etc. These people bought a house with an adjustable rate mortgage (ARM). This means that every time the interest rate set by the Federal Reserve goes up, so does the ARM. So monthly payments climb with the interest rate. Generally, these mortgages are given to people with bad credit. People with bad credit are in general people who are not good at paying their bills on time or at all. This means you are a poor financial planner or you don't have a lot of money. Neither of these types of people should be buying houses. Buying a house is a privilege for people who have worked hard, saved money and want to make an investment in their future. It should not be an entitlement for everyone.

I do not own a house. I would very much like to one day. I am a hard worker, I am trying to save money, and I am working hard to have good credit. I don't owe on credit cards. I don't live outside of my means. So why should I end up paying for these stupid people who never should have bought a house in the first place? Not only did the Federal Reserve cut its interest rate to keep ARMs from settling at a much higher rate, HUD's Federal Housing Administration (FHA) will help an estimated 240,000 families avoid foreclosure by enhancing its refinancing program effective immediately. These families are getting government loans to refinance their homes.

What do I get? Well, I can rest assured that my taxes will end up bailing these people out in some way. Also, inflation is just around the corner due to the government pumping billions of dollars into the economy to stave off recession due to this subprime mortgage crisis and the reverberating effects it is having throughout the economy. Stupid people getting bad rates on a mortgage, then the unscrupulous companies that were selling these mortgages were packaging them up into high-risk securities and selling them to hedge funds. Hedge funds are high-risk investments (hence the term "hedge"-hedge your bet-invest your money at your own risk). None of these companies or investors should get bailed out either. Why should I have to pay for it? Why should anyone have to pay for someone else's mistakes?

The reason this country is screwed right now is because not everyone is entitled to the "American Dream." No one is saving. Savings in this country was at -1% in 2006. The average American household owes $7,300 in credit card debt. And this country is more debt-dependent than ever before-with a total debt of over $48 trillion dollars, or $161,287 per each and every woman, man and child. Check out America's Total Debt Report for some scary figures.

The American Nightmare is upon us. I think that doom and gloom for the US economy is looming large. We have been living on credit for far too long in this country (individuals and the US government), and the bills are going to start coming due. People are going to start losing their shirts along with their homes.