Percival P. Cassidy wrote:
On 09/23/08 04:20 pm HeyBub wrote:
It's not a "bailout" in the traditional sense: it's an investment.
The government will eventually get its money back - just like it did
with the S&L fiasco.
You're right the problem was caused by the federal government,
specifically the mandate to make PC morgtages. That is, people got
morgtages who would never, in an honest world, have qualified for
them. They got them because various agencies and lending
institutions were required to "service the underserved." Failure to
do so was evidence sufficient of incipient racism, greed, elitism,
or doing the hokey-pokey.
The problem is that the minimum wage is not sufficient to enable
people to support a family, including purchasing a home -- and often not
even
sufficient to pay rent for an apartment in any neighborhood where
anybody would want to live, or anywhere close to their place of
employment.
And guess which ethnic groups get most of those
insufficient-pay-to-live-on jobs.
Oh that's baloney. Even a minimum-wage job is sufficient to afford a
cardboard box!
I read in the paper a few days ago a complaint by a realtor that
people now need to put down 10%, and that is too much.
The realtor was wrong.
For a long time Australian banks were prohibited from lending more
than 80% of the value of a home, and loans were not permitted where
payments would exceed 25% of the husband's salary (on the assumption
that the wife would become pregnant and have to drop out of the work
force).
Yet home ownership was high. How? Because the minimum wage for a
40-hour week was based on the cost of housing and feeding a family of
four.
Less than 20% of people in America in minimum-wage jobs are the primary
income source for the family. The VAST majority are teens, retirees, and
part-time workers. In Australia, the minimum wage is based on OCCUPATION not
family size. It currently is about $13USD/hour.
Bottom line: If you can't afford a family of four, don't HAVE a family of
four.
Here's a recent video on the cause of the sub-prime meltdown:
http://www.youtube.com/watch?v=H5tZc8oH--o