Full Black - Brad Thor [74]
“Not at all,” replied Standing. “Life has, in fact, gotten better for people around the world. That is thanks to globalization. But quality of life is nowhere near as good as it should be. The planet is possessed of abundant resources and wealth, yet—”
“Yet you think that wealth should be spread around, correct?”
“I think that if it is in our power to make the lives of our fellow human beings better, we should do everything we can to make that happen.”
“Would that include transferring America’s wealth, let’s say, to citizens in poorer nations?”
Standing laughed. “What wealth? America is bankrupt. In fact, if we had a global reset, America would be much better off.”
“Better off how?”
He thought about it for a moment and then said, “This is oversimplifying it, but picture a homeowners’ association somewhere in America. Let’s say there are fifty homes. The spectrum of the owners’ indebtedness will run from no debt and healthy bank balances to one, maybe two families who are hanging on by their fingernails, not sure how they’ll afford their next bag of groceries, much less their next mortgage payment.”
Julia looked at him. “You’re saying the family who has worked hard, paid off their mortgage, and has saved their money should bail out the family who can’t afford their house, much less groceries?”
“It’s not that simple,” cautioned Standing. “What happens if the poor family defaults on their mortgage?”
“Why don’t we examine why they can’t afford their house and groceries? Did they bite off more than they could chew?”
“Who knows? Maybe Mom and Dad just had a run of bad luck. Maybe they both got laid off. That these people have financial problems doesn’t mean they deserve them.”
“I’m not saying they do, but—”
“Answer my question,” said Standing. “What happens if this family goes under and defaults on their mortgage?”
“I assume they’ll be foreclosed on and eventually evicted.”
“Correct,” replied Standing. “And what happens to the house, then?”
“It goes on the market.”
“At what price?”
“At whatever the market will bear,” said Julia. “That’s the way markets work.”
“Not in this case. You see, the bank doesn’t just have one house, it has thousands; hundreds of thousands. It doesn’t want to be in the home ownership business, it wants to be in the money-lending business. Its motivation is not to hang around and wait for the free market system to work. It wants to dump that house as quickly as possible, and to do that, it’s going to dramatically mark down the price. What would that do to the values of the other properties in the homeowners’ association?”
“It would effectively lower them.”
“Which means, through no fault of your own, the equity in your home has been diminished. So, what would make more sense? Losing your equity? Or everyone chipping in together to make sure everyone succeeds?”
The woman looked at him. “You’re offering a false choice.”
“No, I’m not.”
“Of course you are, Mr. Standing. If I have worked hard, saved my money, and paid off my mortgage, I shouldn’t have to bail out another homeowner.”
“Not even if they have fallen on hard times?” he asked. “Imagine if you were in their shoes.”
“I have no doubt that it would be terrible, but it isn’t the government’s job to take money from one group and give it to another.”
Standing smiled again. “Really? What do you call taxes, then?”
“I disagree with a lot of how the U.S. government spends my money, but we’re not talking about taxes.”
“In a way, we are. What happens when the family in our scenario doesn’t pay their share of the fees and assessments of the homeowners’ association?”
“I would imagine that their property would end up getting a lien placed on it,” she replied.
“But in the meantime, the association’s expenses still need to be paid for, and that burden falls more heavily on the other owners. They have to dip into their reserves, or if the reserves are too thin, they have to pay more in order to cover those who can’t. We can