How To Rob A Bank

According as analysis of 2010 census data done by the Mercatus Center at George Mason University, a libertarian-leaning think tank, more than one in three Americans lived in households that received Medicaid, food stamps or other means-based government assistance in mid-2010.  When Social Security, Medicare and unemployment benefits are included, nearly half of the nation lived in a household that received a government check.


For those scoring at home, that's more than 148 million Americans.  By comparison, in 2008 one-quarter of people lived in households receiving a government lifeline, and about 45 percent a government check, according to the Census Bureau.


So what already sucked in 2008 is sucking even more.  I've written before about paying people to not work and how we need better means testing in this country. We don't have to be cruel about it.  Clearly we should have a social security net, we just have to make sure we aren't unfairly providing assistance to those who have made bad/easy choices as opposed to those who have had bad luck.


Based on this week's news, however, we are still headed in the wrong direction.  To wit, this week a bunch of state attorneys general finalized a $25 billion settlement with five big banks, as compensation for the banks' sloppy paperwork in their mortgage foreclosure process.  In the end, $10 billion of this will go toward principal reduction for delinquent borrowers or those on the brink of foreclosure.  Another $3 billion will be used to refinance homeowners who are not delinquent, but who owe more than their home is worth.  (Not sure about the other $12 billion, although you can bet states will get a big chunk of it.)


Let me put this into perspective:  Government is taking money from bank stakeholders - ultimately, their customers in good standing - and giving it to people who chose not to pay their bills and/or who made a choice to buy more home than they could afford.  There is no relief for anybody who properly paid their mortgage and/or lived within their means.


This sucks all right - it sucks money from responsible citizens to feed the irresponsible ones.


If solving this country's economic problems means rewarding bad behavior, we have bigger problems ahead.