I don’t think that’s a viable solution. If investments are overvalued, they will eventually crash. Pumping more money into the system can forestall it — but ultimately, when the bottom falls out, it’s going to come out of the taxpayer’s wallet, and the more they pump it up, the bigger a bang it will make when it bursts.

This is why I’m against government manipulation of the marketplace. Everything they do to try to fix whatever the current problem is has long-range unanticipated consequences somewhere else. Let the free market find it’s natural equilibrium. Yes, there will probably be a disaster. But government meddling won’t avert it. It will only, ultimately, make it worse. IMHO.

I hope you’re teaching your kid(s) basic economics as part of your homeschooling program. It’s never too early to start learning about supply and demand (and personal responsibility). I just wish they would teach it in the public schools. If they did, we wouldn’t be in this situation now.

Personally, I am angry because I scrimped and saved to buy my first little house, and by scrimping and saving, my husband and I now have our dream house. But we did not do it by taking out second mortgages to satisfy our every whim. Why should I have to now use our nest egg to pay for those who did? It seems that bailouts will punish the prudent and reward the foolish.

Don’t they teach “The Little Red Hen” in grade school anymore?

And to the commetor who said: “…we can’t just flush a chunk of a whole industry down the toilet…”
Generally, government intervention into the workings of the market tend to make things worse and for longer. We are not flushing them down the toilet–they jumped in and pulled the lever. They chose the situation and the pain will go away faster if they are allowed to go out of business, while the more prudent lenders get more business as houses come down to realistic levels.

Houses will sell again when the prices comes down to a realistic level.

All the more reason we need Ron Paul.

Even if you save the money…that is not only good for you, but it’s good for the people and businesses that will be able to use that money in the form of loans from your banking institution.

It seems like personal finance experts are always telling us things like Americans don’t save enough. But it feels like the government is giving away this money with the expectation that it will be spent. Isn’t the government sending the wrong message?

Personally I plan to save every penny.

I’ve come to appreciate this reasoning. I was under the misconception that this was a rebate of “excess” taxation…..like Oregon…