Under a plan unveiled Wednesday (March 4), the White House hopes to avert as many as 4 million foreclosures through mortgage modifications and assist as many as 5 million through low-cost refinancing. The total cost? About $75 billion.
While nearly everyone agrees that stabilizing mortgages is key to economic recovery, there's less agreement on whether responsible taxpayers (or renters) who took out affordable mortgages should bail out those who didn't.
Is it ethical for others to foot the bill for your bad financial decisions? And is it ethical to say no to those pleas for help?
"Presumably, lots of people made very bad judgments (in home buying), and some of them were plain-and-simple wrong to do so. They were unthinking," says the Rev. Edward Vacek, a Jesuit priest and professor of moral theology at the Boston College School of Theology and Ministry.
"But when you get done with that, you say, `What can we do now to make our society and our world better?"'
As Washington takes up the mortgage bail-out, clergy and congregations in 10 cities are holding rallies (March 6-10) to urge quick governmental action to blunt a rash of foreclosures. Religious ethicists, meanwhile, are weighing what's the right thing to do.
Vacek supports a homeowner bailout for two core reasons. First, it falls under society's duty to provide basic necessities for those who are unable to provide for themselves -- even when a beneficiary's woes are of his or her own making. Second, he says a bailout would serve the common good by helping stabilize economies across the globe, whereas permitting an epidemic of foreclosures would invite a ripple effect of increased suffering.
But a bailout likely won't diminish the destructive greed that fueled the current crisis, according to Mu Soeng, director of programs at the Barre Center for Buddhist Studies in Barre, Mass. Greed motivated both aggressive lenders and overstretched consumers, he said. He worries a homeowner bailout would only encourage more greed and eventual heartache.
"The economic system is based on the idea that you take responsibility for your actions, and if you go bankrupt, then that's what life is," Soeng says. "Unless there is a collective effort to reorient society in a different way -- to say, `We are not going to be a culture and society of greed anymore' -- then we are just refurbishing the tired old system, and it will collapse again and again."