I was driving to Church on Sunday morning when I heard a news report about the federal bailout of Fannie Mae and Freddie Mack. The report discussed how the bailout of Mack and Mae is likely to cost taxpayers billions of dollars. The truth is that normally when I hear a report like this I think “wow, what a bummer!”…and then I go on about what I was doing, yet this time as I listened to the report one rather overlooked question seemed to come to mind—“When?”
For all of the bailouts that the government has done of lending institutions, savings and loans, and now in the mortgage industry, when does it really cost taxpayers? While we hear how so many things are going to cost taxpayers billions it doesn’t seem that our taxes are going up. In fact, in spite of how bad things look it doesn’t really seem like our standard of living in America is changing all that much. Obviously someone will have to have to foot the bill at some point and it’s likely going to come down on you and me and our children.
The problem for most folks, myself included, is that the issue of a federal bailout is too nebulous, too abstract, too far away from where we live. Things would be quite different if, because of the federal bailout, my monthly mortgage were to have an additional tax of $100.00 added to it for the duration of the loan. Then all of the sudden things wouldn’t be so abstract. On the contrary I would be feeling the pain of the bailout in a very real way. And because I felt pain I would probably be inclined to do something to stop the pain.
Look at what the pain of rising gas prices has brought about in this country in a relatively short amount of time. All of the sudden car manufacturers can barely meet the demand for hybrid cars and for the first time in years the subject of an energy policy has actually become one of the key issues of the presidential race, and let’s not forget about what the rise in gas prices has done to help the cause of saving the planet. All of these issues were brought from the periphery to the forefront because of the pain that every American has been feeling on a daily basis in our wallets. In just a matter of months, issues that seemed so abstract or unimportant are now getting a good deal of attention from everyday people. I’m no big fan of pain, especially in the pocketbook, but it is quite the motivator.