The Government to the Rescue!

I would encourage everyone to write their elected representatives and tell them to keep their mitts off the sub-prime malaise.  Here is why:

1.  Housing has to correct in some markets.  It is unsustainable to have home prices appreciating 20-30% per year with real incomes rising 2-4%.  This is a bubble that has to break.  The question is, do you want the pain spread out over years (with government interference) or do you want to get it over with quickly (no government interference).

2.  With only 15-20% of the population able to afford the average price house, falling prices will make it more affordable for many families.

3.  No corporate bail outs are needed.  Let them take their losses.  The government cannot be an insurer to private business with no premiums.  They took the risk, they must face the consequences.  

4.  Real Estate speculators made the money for years, now they need learn that prices can move both ways.  Mowing the yard and painting the walls does not create $100K in value.

5.  As with most programs, the government's good intentions usually lead to some unforeseen consequences.  Just like the legislation passes several years ago (during the Clinton Administration) encouraging lenders to lend money to riskier clientele.  Yes, Congress started this mess.