Wednesday, December 05, 2007

Are Mortgage Bail Outs A Good Idea?

On KMOX today, I talked with Seth Jayson of The Motley Fool about the idea of a five-year freeze on interest rates for people with subprime and adjustable mortgages. The question is whether the government should bail out people who made bad personal finance decisions.

Jayson explained, in layman's terms, why it's not a good idea, who will foot the bill (got a mirror?), and what the economic impact of these bail outs will be. He also talked about the corporate side of this and the role of lenders in making these bad loans.

The vast majority of my callers this afternoon are opposed to the bail outs and rate freeze, with one of them saying, "Much of the blame for this crisis goes to those companies that acted in a predatory manner, and are now finding themselves at risk of losing their businesses. To that, I say good riddance!"

Listen, then add your comments below.


Read Jayson's piece at The Motley Fool, and a funny commentary on the topic by Roben Farzad in Business Week called "Dude, Where's My Bailout?"