Did you know that the whole bail out is not about fiscal irresponsibility and risky loans? It’s all about the lack of health care in out country. Yep, you guessed it the brilliant Michael Moore is blaming it all on healthcare. Not on the fact that large loans were given to people with bad credit and/or high debt to income ratios. Not to mention the fact that hospitals not only do not turn people away for care, but they also work out payment plans on a sliding scale. This myth that if you are not insured you will die in the streets is ridiculous. I am not saying that Americans should not be insured, that would be as irresponsible as maxing out all of your credit cards and buying the most expensive house you can afford.
Example: Joe gets promoted. Joe wants a new car so he goes out and buys a brand new Ford Ranger, because the payment fits his new budget. Joe wants to own a home; he has been renting for 6 years and is ready to start investing in his own property. Joe is told he can spend between $120 and $200 thousand on his home. He chooses to spend $200 thousand on his new home after all he is still in the range that the bank told him he could spend. He needs new furniture but he is maxed out on all of his credit cards and he is unable to pay cash because the majority of his income is going to his new car and his mortgage. So he takes out a store credit card. Why not, its 0% interest for a year – and he reasons he will pay it off long before then. Summer time rolls around and he wants to have a few friends and family come over for a grill out, he spends a little more than he planned but reasons that he can just pay the minimum on the credit cards – just this month. Fast forward three months, and a few small get togethers later, two more credit cards and Joe is in way over his head financially.
If Joe would have been living within his means he would not be struggling financially. The media seems to be under the impression that only those with mortgages under $150 thousand were foreclosed upon. Million dollar homes also went into foreclosure. Buying a million dollar home is not just putting a roof over your head – it is a lifestyle.
I will close by saying that not all people can afford to buy a home. Not owning a home is a lot less embarrassing than being kicked out of your home because you could not make the payments.