We are accelerating down the wrong road.

When the government started planning for TARP 1, the hair on the back of my neck stood up. Face it - the banks in the U.S. were in a difficult position but it was the government that helped them get there so perhaps they should help bail them out. I was against the 'covering of the tracks' by Mr. Frank of Massachusetts but knew that I did not have a vote in the outcome. The government decided to spend 'my money' because they are smarter than the common man (tongue firmly planted in cheek at this point) and they gave the banks the first $350 billion dollars .... with absolutely no strings.

Follow along:
Mistake number 1 - all the garbage pressure place on the banking industry to loan money to those that can not afford to purchase a home.
Mistake number 2 - TARP 1 .
Mistake number 3 - Failure to control, watch, manage or even track where TARP 1 funds actually went.
Mistake number 4 - Requesting TARP 2 funds.
( up to this point this has been on President Bush' watch, except mistake number 1 that started back during the Carter administration)

Now, in addition to the proposed 'stimulus' package which is nothing more than a big list of pet programs, bailouts for states that can't manage their own budgets, and a justification to spend more taxpayer money now and in the future, President Obama is raising the concerns about how banks spend their money. Face it - the banks are making huge political mistakes with the way they continue to spend money. BUT - IT IS THEIR MONEY! It is very easy to be swept up in the anti-Wall street sentiment if we allow our jealousy to get the better of us, but consider what this means. How much is enough? How much is too much? I am no longer talking about Wall street - I am talking about an individual or corporation - in the eyes of the government. There are plans to limit executive compensation to any bank that received funding to $500,000. Granted that is a lot of money to someone who makes less than $100,000 but what business is it of the government to dictate how a business operates? If they want to start setting limits and controlling compensation - perhaps they should look at themselves first - Fannie Mae anyone and this is a government 'corporation'?
So now consider that a corporation is no different than a citizen in this country. Does the government have the right to regulate how much money you make? Yes the incrementalism argument begins to build at this point. What if the government decided that any individual, organziation or company that has ever received government assistance was then beholden to any regulation on compensation they want to impose (after award of the assistance )? If BIG GOVERNMENT wants to start down this path - let's start by limiting compensation for any artist (actor) that ever participated in any activity paid for by the NEA. Next, any athlete that attended school on any form of government paid scholarship can only receive compensation of $150,000 (roughly 5 times that of the average American according to U.S. Department of Labor)? University professers are limited on compensation and length of employment - afterall they are paid for partly from the government trough. I can continue ..... but won't.

The point of my argument is taxes are a voluntary (according to Harry Reid) contribution to the government. The government(at least the legislative branch in this blog entry) has completely lost site of this simple fact. The money is not theirs - it is ours. Our founding fathers knew this and warned against a government becoming too powerful for the common good. We are heading down the wrong road and someone is standing on the gas pedal. How do you get off of this ride?

"There are two distinct classes of men...those who pay taxes

and those who receive and live upon taxes." -- Thomas Paine (1737–1809)

Where is the integrity? Loyalty?

I clearly remember the nervousness that I lived with when I was going through the purchase of my first new home. I followed that up several years later when my wife and I decided to 'move back home' and purchase our second new home closer to the in-laws and out-laws. It was very clear, from a financial perspective, what we were up for and I was honestly scared regarding paying it all back. The rules of .28 and .32 were etched in my mind and those numbers seemed way to high. The 28 % of my gross pay could be allocated to paying off my mortgage? And all of my long term debt must fit within 32%.

When I looked at the numbers it was clear that 1) I could not afford much and 2) How was I ever going to be able to spend that much money on those debts. All these years later - I still panic (slightly) when I look at those values - but those numbers are now only mine. The industry has thrown out those 'recommendations' and allowed people to run the numbers way above what could be considered sane. History is prologue.

Today I heard, not that I was completely surprised, that the government is making it easier for those that can't afford their homes. Take a read at the article 'Are you an idiot to keep paying your mortgage?' and tell me what is wrong with this picture. Basically, those of us who care about our word, save for our futures, make wise decisions with taking on obligations are going to support those that can't seem to live within their means.

I understand the way the market turned - I really do. I have lost most of my retirement (401K), but I am not standing on the corner looking for a handout. My loss is my loss - I get that. Why doesn't everyone else need to play by the same rules?