No Bailouts for Homeowners or Lenders
By David Holcberg (Wall Street Journal, November 23, 2007)
In regard to Ethan Penner's "Capital Flight and Other Policy Risks" (op-ed, Nov. 17), government should not intervene in the housing market with bailouts.
Any government bailout of either homeowners or lenders would have to be financed with money taxed from other people--and that would be utterly unjust. Lenders knew--or should have known--the risks of making loans to individuals who had shaky finances and deserved little, if any, credit. And borrowers knew--or should have known--the risks of taking loans that they might not be able to repay. In either case, lenders and borrowers are responsible for their decisions and should bear the consequences of their mistakes (or misfortunes) on their own.
Why should responsible, hard-working individuals who pay their mortgages and rents on time, or who already paid for their homes, be forced to pay also for the mortgage of others who defaulted on their obligations?