Should we bail folks out?

From a series in CNN Money, what do you think about the problems these folks are in?
Consider the story of Patricia Guerrero who had to go to the food bank on Good Friday to get food for her family. Her husband left her and she lost her job as a mortgage loan processor. Now we don't know the full story, but one fact immediately leaped out at me - she was on the brink of financial disaster after only two months. One of those months was covered by their tax refund, the other's obligations were met from savings. Guerrero has a $2500 a month mortgage payment and admitted she had to take off her Tiffany bracelet and leave her Coach purse in the car when she entered the food bank. This doesn't help her pity case one bit and commenters lambasted her.

However, it is clear by this story that she, like many other Americans, lives way beyond her means. She had no business getting a $2,500 a month mortgage on a $70,000 salary. Also, why didn't she have more money in savings? Sounds to me like she set herself up for failure. Maybe her story is the wake-up call more Americans need.

I am a single Mom with 2 kids and am scraping by making half of what she does. I don't feel sorry for her that she lives above her means and she better deal with the reality that's smacking her upside her head by moving and living realistically.

This woman should take her kids and move to another part of the US where houses are affordable. I feel nothing from this story; only bitterness at people that make bad decisions.

Longtime readers know I don't trust the media and there are a lot of omissions to this story we don't know. However, one thing you can see all over the Internet is people criticizing, condemning and complaining about failed flippers, overextended homeowners and other financial casualties.

Two themes that are very clear about this downturn is the sense of schadenfreude and the belief there should be no bailouts. As it's an election year, political candidates are being grilled over solutions to the housing problem. At HousingPanic the opinion on who has the best plan flip flops depending on the day. First it was John McCain who was right, then it was Barack Obama. The underlying theme of "correctness" is based on the assumption of personal responsibility and no bailouts. Hillary Clinton is vilified because her plan costs the most - $30 billion. In a presidential race that has been reduced to labels; black, female, war hero, I think we should vote in the smartest candidate and forget about the tags associated with each contestant.

At the root of the issue of bailouts and schadenfreude is our human sense of fairness. I've suggested in the past the housing crisis is like a fire negligently set in an apartment building. Regardless of who set the fire, or how they did it, everyone will suffer if it doesn't get put out.

But this sense of fairness, of justice runs much deeper. I've been thinking about it for some time and realized where I've heard this story before. Forgive me as I'm about to get Biblical.

11And He said, "A man had two sons.
12"The younger of them said to his father, 'Father, give me (A)the share of the estate that falls to me ' So he divided his (B)wealth between them.

13"And not many days later, the younger son gathered everything together and went on a journey into a distant country, and there he squandered his estate with loose living.

21st Century version of loose living - Hummers, granite counter tops, interest only loans and Coach purses.

14"Now when he had spent everything, a severe famine occurred in that country, and he began to be impoverished.

15"So he went and hired himself out to one of the citizens of that country, and he sent him into his fields to feed swine.
16"And he would have gladly filled his stomach with the pods that the swine were eating, and no one was giving anything to him.

Given the Jewish culture and the commandments about unclean animals, this was quite the step down.

17"But when he came to his senses, he said, 'How many of my father's hired men have more than enough bread, but I am dying here with hunger!
18'I will get up and go to my father, and will say to him, "Father, I have sinned against heaven, and in your sight;

19I am no longer worthy to be called your son; make me as one of your hired men."'

It's better to be the servant of a rich man than continue on the brink of starvation.

Rather than hold his son to judgment, the father celebrated his return and utterly forgave him for his mistakes -

21"And the son said to him, 'Father, I have sinned against heaven and in your sight; I am no longer worthy to be called your son.'
22"But the father said to his slaves, 'Quickly bring out (D)the best robe and put it on him, and (E)put a ring on his hand and sandals on his feet;

23and bring the fattened calf, kill it, and let us eat and celebrate;

24for this son of mine was (F)dead and has come to life again; he was lost and has been found.' And they began to celebrate.

In a turn of resentment, the older, responsible brother was robbed of his schadenfreude and complained -

25"Now his older son was in the field, and when he came and approached the house, he heard music and dancing.
26"And he summoned one of the servants and began inquiring what these things could be.

27"And he said to him, 'Your brother has come, and your father has killed the fattened calf because he has received him back safe and sound.'

28"But he became angry and was not willing to go in; and his father came out and began pleading with him.

29"But he answered and said to his father, 'Look! For so many years I have been serving you and I have never neglected a command of yours; and yet you have never given me a young goat, so that I might celebrate with my friends;

30but when this son of yours came, who has devoured your (G)wealth with prostitutes, you killed the fattened calf for him.'

The father concluded the tale by saying -

31"And he said to him, 'Son, you have always been with me, and all that is mine is yours.
32'But we had to celebrate and rejoice, for this brother of yours was (H)dead and has begun to live, and was lost and has been found.'"

I know this parable was not originally about homeowners, but it so eloquently explains human nature and presents the concept and need for forgiveness.

We have to do something to prevent all these foreclosures. Cities like Cleveland and Detroit have been blighted because of them. Crime has risen and governments have cut back on services because of lower revenues. California is in a similar situation. By not helping now, we will all be hurting later. Who cares if an irresponsible person started the fire? The responsible people have to put it out. If we don't, nobody will and the original irresponsibility will eventually consume us all.And here is the rest of it.