Few things keep adults awake at night worrying about money like a real estate crisis. When mortgage lenders collapse and the bottom falls out of the housing market, pretty soon people aren't even able to get rid of their condo for sale in order to move away or downgrade to a more affordable place. In times like these, people look to politicians to make plans to deal with the real estate crisis and politicians, ever on the lookout for ways to drum up more support, oblige.

During the subprime mortgage crisis of 2006 and beyond, many homeowners on variable rate mortgages found themselves suddenly unable to keep up with their payments due to skyrocketing interest rates. Many people lost their real estate as a result. This crisis was swiftly followed by a general financial crisis and recession that crippled credit and sent many major companies spiraling into bankruptcy. When cries went out from the populace for the government to do something, to save them from the foreclosure they saw looming on the horizon everywhere from their own homes to their shops or veterinarian offices, the politicians stepped in.

One of the most common government responses to financial crisis, as we saw in the wake of the 2006 subprime mortgage crisis, is to increase government spending while simultaneously cutting taxes for most of the population, with especial emphasis on big businesses. Since government funds are generated by taxes, this necessarily means that the country is plunged into debt so that major companies can hold onto their commercial lots. In the United States, trillions of dollars were spent on rescuing iconic American corporations from bankruptcy.

At other times when real estate becomes unaffordable to a large percentage of the population, politicians in provincial, national, and municipal governments have been known to institute affordable housing initiatives to combat the problem. Lowering interest rates allow some homeowners to get a second mortgage that will help them keep their home, while rebates and subsidies for first time home buyers are another popular choice. For the truly destitute, there is also government sponsored rent controlled housing.

Long after your home inspection was completed by Housemaster but before the results of your home evaluation send you careening through the internet looking for a political candidate willing to spend the government's money on you, first consider carefully the long term effects of such a choice. Spendthrift politicians have sent countries spiraling into unrecoverable debt while misers have abandoned many unfortunates to the harsh ways of the world. Therefore the best course of action over the long run may be to favor those who would increase taxes and penalties on insolvent businesses, make laws to prevent lenders from taking advantage of ignorant homeowners, and raising awareness of fiscal responsibility.




Copyright (c) 2008 -
acticons.com is now thedailygrind.ca