Any government attempts to bail out homeowners in foreclosure are wrong and unfair to tax payers.

I am obviously referring only to those that would require tax-payer funding.", I can see you are for a free market, but do you realize that the Great Depression was caused by free market. Laissez-faire There is much debate over the relationship between laissez-faire economics and the onset of the Great Depression. Some economists and historians (such as John Maynard Keynes) argue that laissez-faire economic policy fostered the conditions under which the Great Depression arose. The people caused the housing market crisis not the government. Arguably, the stability of household finances is the biggest single unknown in the U.S. economy today. We have published several pieces on the issue. After analyzing the household sector closely, the author proposes some hard-nosed solutions for the nation. THE STATE OF U.S. HOUSEHOLD FINANCE is worsening rapidly. Every quarter, households sink more and more into debt; every quarter, they deplete more and more of their available liquidity and savings; every quarter, they succumb to greater financial fragility. Some economists have argued that these trends are not that worrisome, for at least three reasons. First, the value and distribution of the debt-service ratio of property debt (debt servicing on mortgages, home equity loans, and land) in 2004 were not much higher than in 1995 (Dorns and Motika 2006). Second, if the level of indebtedness has risen sharply and its quality has declined, it seems that the debt has been incurred for reasonable purposes, and so the net wealth of households has increased significantly through rising housing prices (Greenspan 2004; OECD 2006). Finally, a higher consumer debt burden (leaving aside property debts) is not in itself a reliable lead indicator for economic slowdown (Garner 1996; Maki 2000). These views, however, can be criticized on several grounds. First, if the 2004 debt service burden and other indebtedness measures are indeed similar to those in 1995, their impact on the financial load of households is very different. Second, since 2004 household finance has worsened considerably, in terms of both level of indebtedness and liquidity. Thus, households may not be able to respond to emergency financial needs as well as before. Third, even though the net wealth of households has increased in absolute terms, this is due mainly to higher prices for illiquid assets (houses). Thus the higher net wealth does not directly reflect a higher cushion against financial stress, both because houses are illiquid and because people have to live somewhere. Equity may provide an indirect cushion via the borrowing opportunity that it provides, but the ratio of net worth to total assets has declined sharply over the past five years. In addition, in periods of crisis, the pessimism of loan officers may prevent the availability of refinancing operations. Finally, if higher indebtedness is not in itself a source of problems and even may reflect a dynamic economic activity, its higher level and lower quality increase the sensitivity of the economy to changes in interest rates, incomes, asset prices, and expectations of debtors and creditors. Such sensitivity is increased when net cash flows decline and savings decrease significantly. Given the current state of household finance, there is good reason to worry about what the future could look like. The burden of growth on households has reached unusual proportions. Indeed, while average economic growth has been only a little over 3 percent in the past fifteen years—the lowest rate since World War II—the share of that growth attributed to consumption is more than 70 percent. As a consequence, the financial position of consumers has worsened significantly. This paper presents a more detailed study of the evolution of households' finance, outlines some of the potential problems, and offers suggestions to help restore financially sound economic growth. This paper claims that unless the federal budget deficit is at least 5 percent of gross domestic product (GDP) and short-term rates are low, the financial situation of households will probably continue to worsen. If the U.S. policymakers want to maintain consumption-based growth, they need to create the means to do so. Current trends seem to be unsustainable. Economic growth in the past sixteen years has weighed heavily on households, and by 2000 some authors were already highly preoccupied with the financial state of the overall private sector (Godley 2000; Wray 2000). Since that time, households' financial fragility has increased considerably, to a historically high extent. Although the policies implemented after the 2001 recession provided a breather, that relief was not sufficient to help strengthen the financial situation of households. The current expansion has much in common with the expansion of the 1990s. For example, Figure 1 shows that during both periods, consumption spending made an unprecedented contribution to economic growth—72 percent in the 1990s and 71 percent in the 2000s. Another similarity is the trend in macroeconomic balance. Figure 2 shows that at the end of the last expansion, in 2000, the private sector had a negative net financial balance (gross private saving minus gross private investment) that represented about 4 percent of the gross domestic product (GDP). This was the logical counterpart to the government's willingness to generate a surplus and the tendency of the rest of the world to save dollars: I – S = T – G + J – X (where I = investment; S = saving; T = taxes; G = government spending; J = imports; and X = exports). The last recession and the "war on terror" led to a reversal in the fiscal policy of the government as tax cuts and government expenditures helped the economy recover. However, the growth generatednwas never sufficient to allow the private sector to generate a positive financial balance, and the same trends that were present before the recession reappeared after the fourth quarter of 2003. The rest of the world has been accumulating even more dollars, and the government has once again been willing to generate a surplus. Thus, in order to maintain economic growth, the private sector has had to return to its frenetic spending habits. During the second and third quarters of 2006, the net injection of dollars by the private sector represented on average 4.1 percent of GDP, not too far from the historic high of 4.5 percent in 2000. Compared to the previous expansion, the current one is sustained by much worse ratios of saving, liquidity, indebtedness, and net wealth. Thus, for the first time since World War II, as seen in Figure 3, households (and nonprofit organizations) have recorded negative levels of personal saving, which has been on the decline since the early 1980s, when it reached about 12 percent of disposable personal income. The last recession stopped this decline at 2 percent of disposable income, but, with the burden of growth back on their shoulders, households have been drawing down the rest of their available disposable income, and since the second quarter of 2005 their saving has been negative. On average, they have been dissaving 0.85 percent of their disposable income each quarter, which is about $80 billion that had to come from somewhere other than their disposable income each quarter. Given that the measure of personal saving does not include the cash outflows induced by interest payments on mortgages and payments of principals, the actual size of dissaving is even worse. My arguement is a little longer by the way so just read what you think and rebut and I will rebut in the final round.