"Too Little to Fail"

I had only been asleep for two hours before I was awakened by the ringing phone. As a veteran of eight years on night shift, I was used to these interruptions. Blearily, I rolled over and glanced at the caller ID. The digital readout showed “Fannie Mae,“ my mortgage holder. Uh oh. I snatched it up.

“Hello,” I croaked.

“Hello, may I speak to Mr. O’Doyle, please?”

“Speaking.”

“Mr. O’Doyle, I’m calling on behalf of Fannie Mae to let you know that we have yet to receive your mortgage payment for this month. As I’m sure you’re aware, this payment is due on the fifth of every month, and your payment is currently two weeks late.”

“Sorry about that,” I said. “I made a few bad investments down at the grocery store. I thought sure that those four boxes of macaroni and cheese would last us all week, but there I was on Friday, buying Ramen noodles.”

“Excuses aside, when can we expect to receive payment, Mr. O’Doyle?” he demanded.

“Just be patient,” I said, “help is on the way. I saw on television last night that Uncle Sam has realized that folks like me are having trouble paying our mortgages, and he’s stepping in to assist us. I believe the number I heard was $200 billion, so that ought to square us for a while, right? I know that this will increase our tax bill down the road, but Uncle Sam understands that these are tough times, and he’s willing to work things out.”

“Mr. O’Doyle, you seem to have misunderstood,” he said. “The $200 billion in government relief is to rescue Fannie Mae from our bad debts, not you from yours.”

“What? That can’t be right! They’re the same debts, aren’t they?” I asked. “I mean, you guys are struggling because you made idiotic decisions on mortgages like mine. There’s no way I should have been approved for a home loan worth six times my annual salary to begin with. But here I am, stuck with it, and a flexible mortgage rate that keeps going up. Luckily, Uncle Sam knows that we make bad decisions from time to time. He’s willing to step in so we aren’t forced to suffer from our bad decisions. Despite the fact that you never should have issued the mortgages, you still get your money. Are you telling me that when I, as a taxpayer, am giving you the money to cover your losses on my bad mortgage, you still expect me to make good on that same debt?”

“Ummm, yes, well the government is bailing us out, not you,” he explained again.

“So even though the blame lies primarily with your policies, we’re expected to pay not once, but twice? And even though we’re saving you from your own folly with our tax dollars, you figure you deserve to be paid not only the money owed to you, but $200 billion tax dollars on top of it?” I demanded, my voice rising.

“Well, sir, you have to realize that not everyone who owes us money will, in fact, be able to pay it,” he reasoned. “The bailout is designed to cover our losses in those instances.”

“I bet they’d be able to pay it if the government gave them the money,” I said. “And furthermore, if the debt has been covered, shouldn’t they be off the hook for it? You guys foreclosed on my neighbor, Lou, two months ago, and his family has been living in a camper behind his mother’s house ever since. Now that his debt has been covered, where can he pick up his house keys?”

“I’m afraid the bailout doesn’t apply to individual cases,” he said. “Rather, it applies to our institutional debt. The government has decided that we’re ‘too big to fail.’ You aren’t.”

“I’m willing to bet that come tax time, this bailout will be individualized plenty,” I said. “Nobody’s too little to qualify on April 15.”

© Micah Russell, 2008