CAR is right about the injustice to seniors who lived frugally and saved up for their retirement, expecting to live off their interest and nest egg. Now they are getting essentially zero rate of return and are rapidly eroding their principal. This is largely underreported by the media and ignored by the policymakers.
A similar story applies to renters. The effort by the government to prop up falling housing prices, largely supported by the media, has hurt those renters who want to buy, saved up their money, and resisted jumping in when the bubble was building. Even now the policymakers are searching for new ways to bail out the reckless instead of allowing the market to clear at a lower level. Politics dictate that the generally lower-income renters lose in this contest against the higher-income underwater homeowners.
