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Comment by nickff | Hacker News Reader

A taxpayer bailout solves a bunch of problems, at the expense of non-mortgage holders (AKA renters). It seems unjust to take from renters and give to property-holders, given that the latter are generally more affluent, and knowingly took a risk (by taking out a loan).

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If anything, given the last crisis, we should be focusing on how to address this crisis in a way that helps renters. After all, the average homeowner who can't pay their mortgage becomes a renter.

Thanks for pointing out the big elefant in the room.

It looks like this is the ‘new normal’ though. Pushing people to take on debt as it’s almost interest-free and you might even get help from the government paying it back, all to double up on past mistakes and sustain the current asset valuations.

We can just bail them out too.

We're probably going to have to just give most-to-all renters a few months of free rent here pretty soon anyway.

At least bailing out mortgage-holders has zero real world cost. Bailing out renters costs actual real money (since it doesn't just defer a loan, but actually prints new money to cover it).

> It seems unjust to take from renters and give to property-holders, given that the latter are generally more affluent, and knowingly took a risk (by taking out a loan).

Life isn't fair. Renters have landlords with mortgages also, and renters are just as challenged as homeowners currently (30+ million unemployed, 1/5th of the US working population). Broad policy decisions have some moral hazard to be deprioritized.

The goal isn't fairness, it is to return to economical equilibrium as rapidly as possible.

Your proposal would stabilize the situation, but I am not sure why this bailout is better or worse than other proposed bailouts. We can't go bail everyone out, unless we want to go into hyperinflation.

I am not saying I have an answer, I just think there are deep problems with these ideas.

There are always deep problems when the problems are complex. This does not mean you take your time. Just as the Obama administration quickly moved GM through a Chapter 11 reorganization [1] despite objections by free market proponents and shareholders (to save GM workers' jobs), and drastic actions was taken by the Treasury and the Fed to save certain financial services firms (merging them into stronger entities) after the failure of Lehman Brothers during the 2008 GFC [2], complaints can saved for the history book on the topic. In the meantime, move fast to avoid suffering at scale.

I'm not saying you're wrong, by any means, but that you have to be comfortable with your solution being unfair and suboptimal. It is not the best course of action, but the least worst course of action.

[1] https://en.wikipedia.org/wiki/General_Motors_Chapter_11_reor...

[2] https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80...

I would be comfortable advocating for an intervention if it were a Pareto improvement. Unfortunately, such an alternative is not readily apparent.

As a renter and voter, my preferred policy solution is to suspend rental evictions, let the foreclosures go forward as mortgages are a risky asset, then let the market sort it out at auction. That sounds like a more market-oriented solution to me.

Over 62.5 percent of American homeowners have a mortgage, worth collectively over $10 trillion dollars (total equity is ~$18 trillion). You are entitled to your opinion, but are in the minority.

The percentage of homeowners who have a mortgage says nothing about how many rent vs own. That said, the relevant number seems to actually be higher.

64.2 percent of Americans are homeowners. Still a majority compared to renters.

> Still a majority compared to renters.

I'd noted it was higher so that would follow, yes. I left out the precise number because I saw some variation in the across sources and couldn't be bothered to dig into the details as it didn't make a difference anyway.

How many homeowners also rent? I have a mortgage on a cabin in Idaho, but rent in California. I would vote to support the renters, because although I'm practically neutral, homeowners have at least 1 asset and are generally better off in wealth and savings.

Also, majority rule is probably not the relevant metric here (even if renters + owners were mutually exclusive sets). We have a long history of not going strictly with the majority.

Not sure if you'd feel the same if the building you're renting in ended up in the foreclosure bucket, then bought by someone who wants to kick everyone out of the building and raze it.

> That sounds like a more market-oriented solution to me.

Market-oriented solutions in times like these tend to (continue to) optimize for profit and fail to consider the humans involved. No thank you.

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