Does anyone understand the government stimulus package?

Whoa, I'm pretty negative, but even I don't think it is that bad.

 

40-year mortgages have been available for many years, but they are definitely not the solution...Extending debt over a longer period of time is usually not the best answer for financial stability...

 

As I understand it the longer mortgages are some of the things that have caused the current problems, as now when a person defaults they are defaulting on a higher value property and impacting revenue projections far into the future.. I think a better answer would be more 15/20 year mortgages, which would push down what you could afford into hopefully something a bit more in line with reality. I, for example, got a 15 year mortgage on a very modest house, and only have 5 years left to pay it off.

 

Very true! I was speaking to my brother-in-law who is a mortgage-broker in Toronto. In Canada, even 30-year mortgages are very rare and are somewhat shunned. 10-year mortgages are much more common. This is one of the main reasons that Canada has been only modestly affected by the current global recession.

The problem with all of the solutions that people keep coming up with to solve this "crisis" is that we are trying to find ways to continue business as usual as far as lifestyle is concerned. The reality is that the American lifestyle has become incredibly out of whack and unsustainable. The solution is not longer mortgages, more government assistance, more federal spending or even bigger tax cuts. The real solution is to challenge individuals to be more fiscally responsible. The American way of life has morphed into a society so dependant on credit that the slightest blip in the road can easily spell disaster. Unfortunately, our current administration is not modeling a fiscally responsible response to this "crisis." In fact, I just heard one of Obama's chief economic advisors encouraging people to spend as much “discretionary” income as possible in order to "help the economy." Is that really the message that we should be sending..."If you have any extra money...spend it?" People need to wake up and begin to live within their means and start saving and spending responsibly. It has been done in the past and it can be done again. Banks do not need to "unfreeze credit." In fact they need to freeze it even more. Stop giving money to unworthy borrowers and unworthy companies that will eventually default and then stick the American taxpayer with the bill...

 

Some of my extended family live in Canada . Their mortgage interest rates change every year - I understand from them that there are no fixed rate mortgages.

 

Most mortgages in Canada are tied to Prime or LIBOR...

 

I didn't vote for Obama and I really don't like that much at all personally either. I think no matter what I hope it works just for the sake of everything turning around. Let's just hope that maybe in a year or two some politicians get some sense and start repealing a good majority of this stimulus before it goes into effect.