[Watchman]

The bailout of financial institutions is basically the gov't interfering in contracts between these financial institutions and their debtors. Most financing agreements [authored by the financial institutions] do not accommodate language making a continued obligation of the debtor to the financial institution in the event of a government bailout.

Acceptance of bailout funds is a blanket admission that the financial institution was insolvent. Had the gov't not interfered and followed the rules that were in place prior to insolvency, the gov't would have taken over these financial institutions, sold the assets, called in secured loans, paid off creditors [share holders and bond holders receiving the balance], paid the depositors according to FDIC limits, and the institution dissolved. Regarding unsecured debt [credit cards -- etc.], the gov't would not have wasted money pursuing it in court -- would have made it a write off.

Hence, people should take advantage of the gov't bailout of financial institutions to renogiate payment contracts that are secured. If one has unsecured debt, one might consider not paying it at all.

After all, according to the words of the President, we need to consider the 'greater good'. With years of depressed economy and prolonged unemployment ahead, the greater good would be to hang on to your money for your own needs then to pay institutions which can receive the same money from the gov't.

Why should people assume an obligation still exists to these financial institutions when our gov't will just print the money to keep these institutions solvent?

Originally Posted by Watchman

The bailout of financial institutions is basically the gov't interfering in contracts between these financial institutions and their debtors. Most financing agreements [authored by the financial institutions] do not accommodate language making a continued obligation of the debtor to the financial institution in the event of a government bailout.

Acceptance of bailout funds is a blanket admission that the financial institution was insolvent. Had the gov't not interfered and followed the rules that were in place prior to insolvency, the gov't would have taken over these financial institutions, sold the assets, called in secured loans, paid off creditors [share holders and bond holders receiving the balance], paid the depositors according to FDIC limits, and the institution dissolved. Regarding unsecured debt [credit cards -- etc.], the gov't would not have wasted money pursuing it in court -- would have made it a write off.

Hence, people should take advantage of the gov't bailout of financial institutions to renogiate payment contracts that are secured. If one has unsecured debt, one might consider not paying it at all.

After all, according to the words of the President, we need to consider the 'greater good'. With years of depressed economy and prolonged unemployment ahead, the greater good would be to hang on to your money for your own needs then to pay institutions which can receive the same money from the gov't.

Why should people assume an obligation still exists to these financial institutions when our gov't will just print the money to keep these institutions solvent?

Yes the government has place us in a sticky situation. I do see people take the attitude of "well I just wont pay" and they will probably get away with it. But we must know that in addition to our government and the banks failures they are not completely to blame. The people with the attitude above are also guilty.

Two types of people ..problem people and solution people.

either way I pray the Lord comes quickly.