[quote=chrisp]Its more responsible for me to pour $75K down the drain renting for the next few years? Your argument is that it would be for society for me to wait? But wouldn’t the economy then get worse? Is your issue irresponsibility or wanting the price to be low for yourself?
I didn’t say there would be less risk if I put 10% down. I said it doesn’t mean I wouldn’t be able to make my payments because I only have 10% down.
Yes, something terrible could happen, yes I understand the concept of an emergency fund. Yes, I plan (I understand I don’t have one now) to have one. Yes, I know plans don’t always work out.
I appreciate your argument more now. I might be able to afford the payments, but can’t sell without foreclosure if prices continue to decline AND something bad happens.
Still to make me or people like out to be awful human beings by putting all your money at risk seems a little exaggerated. I believe this discussion has educated me and made me better understand the risks. However, I believe this crisis was a result of lose lending and unregulated credit-derivatives. While prices may continue to fall and cause foreclosures in the circumstance you described, not everyone will fail. And I would guess that the magnitude of that consequence will not be as bad as the decline we are currently in.
Also, I may not know enough about TARP, but wasn’t it a 1 time (3 payment) thing? Yes, a huge multi-billion thing? But, you envision that things will only get worse and you’ll end up footing the bill? I imagine what your’re describing wouldn’t be close to the magnitude of the first credit crisis. Is it terrible to say it will be a drop in the bucket? When combined with keeping prices inflated it is? What about causing the economy to go further in the shitter and make people loose more jobs?[/quote]
The TARP is just the tip of the iceberg…
“TARP does not operate in a vacuum,” Mr. Barofsky said in his prepared testimony. To properly evaluate that spending, “the context of these broader efforts” must be considered.
That $23.7 trillion figure would amount to about $77,000 for every person in the United States, and would be almost $10 trillion more than the country’s entire economic output, which is $14.1 trillion.
To reach that figure, Mr. Barofsky added up all possible Federal Reserve programs, and got a total of $6.8 trillion. He figured the TARP program could end up costing $3 trillion, including possible spending by the Federal Deposit Insurance Corporation and the Fed.
If you read the entire article, you’ll see that this is (so far) the maximum risk, and many people believe it’s impossible to have these kinds of losses. Personally, I believe it’s always best to plan for the worst, and hope for the best. While we may not see the taxpayers bail out these entities to the tune of $23 TRILLION+, we should know what we are backing.
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Yes, the housing crisis was caused by “loose lending” and by borrowers who took on too much risk.
Many people here are older, and have seen and/or studied various cycles before. We’ve seen the **permanent** damage it can cause in peoples’ lives. It’s easy to feel invincible, and that the sky is the limit, when you are young. We’re just trying to be helpful (even if that’s not what you really wanted), and show you why this decision might not be as safe as you think it is.
