Taxpayer bailout for subprime borrowers?

Why not? The government bails out both agribusiness and the small farmer, the corporations and the mom and pop stores, the railroads and the airlines, the state and local government officials who botch up their congressional earmarks, the auto industry, the poor public schools and the floundering charter schools, the state highways and the interstates alike, the student loan recepients and the university administrations that talked them into it, the medicaid nursing homes and the welfare moms. The USA bails out former enemies and future enemies both. We have been conditioned to think that there will be a safety net no matter what because the good times will always roll.

By the end of 2006, 61% of the subprime loans were going to people who had credit scores good enough for a conventional loan. Whether it was greed, thinking they would flip the property, or emotion, they fell for it. And all sorts of industries benefitted in spending frenzies.

We don't have a subprime loan on any of our properties, but we will certainly be affected if our neighbors in UA or Lakeside or Canal go into foreclosure. We have many friends who work in unrelated industries such as retail, or banking, or construction or service trades, or the university, or travel and leisure, to say nothing of the ones who are living on savings and pensions. Those people struggling to meet $1500-$2000 a month mortgage payments certainly won't be buying new baggy jeans for junior, or buying plane tickets to visit Grandma at Christmas, or meeting their college loans for their daughters.

I wasn't around in the 1920s--but the signs of the coming Great Depression were all around as loans were being called in on the people who bought land to support the war effort. Hoover can't be blamed for the depression and FDR didn't do anything to get us out of it that was effective in the long run.

If giving people a few more months on their mortgage, however badly they planned, will save the whole nation from a collapsing economy, how could that hurt?