"It was the best of times.  It was the worst of times."  So begins the epic novel by Charles Dickens about the French Revolution, entitled, "A Tale of Two Cities."  The same words would be a fitting start to a story relayed to me by my brother, Jack.  Unlike Dickens novel, this story is true.

Jack's sister-in-law, Theresa, purchased a home in South Florida in 1995 for $80,000.  She borrowed $40.000 for the purchase of the home and has steadily paid down on the mortgage, since then.  Today, she owes $22,000 on the house.  In 2006, the house was worth more than $300,000.  Since the high, the house has lost approximately 15% of its value, and is, today, worth $260,000.  Despite the downturn, Theresa's careful spending has resulted in an accumulation of nearly $250,000 in her home.

Now meet the Smiths (not their real name), Theresa's neighbors.  The Smiths purchased their South Florida home in 1995, as well.  They were able to purchase their home for $65,000, and like Theresa, borrowed $40,000 to do so.  Unlike Theresa, who diligently paid down her mortgage, the Smiths rode the wave of appreciated value.  As the price of their property increased, they refinanced over and over again.  Here's a short list of some of their purchases:
        Renovated Kitchen
        Renovated Bathroom
        Renovated Living Room
        New Bathroom Addition
        New Ford Expedition (with $3,000 audio/video package upgrade)

Their $65,000 home is now worth $197,000.  But, the Smiths owe more than $186,000 on the house.  They are now burdened with a $1,300/month mortgage payment. 

Until recently, Mr. Smith was a carpet layer.  He primarily plied his trade in the local yacht market.  He would often bring home $2,000/week in cash, not paying taxes on the earnings.  (That's over $100k per year - tax free!)    Obviously, things have slowed down.  Mr. Smith recently turned down a job offer of $24/hour plus benefits, because he wouldn't be able to watch his son play baseball whenever he wanted to. 

The Smith's can no longer afford the mortgage payment, and foreclosure looks fairly certain. 

So while Theresa has been paying her taxes and her mortgage, and living within her means, the Smith's, living tax free and high on the hog, face foreclosure.  But hope is on the horizon.  There's a chance that the Smith's will be bailed out through Obama's new mortgage plan - using Theresa's tax dollars to do so. 

"A Tale of Two Cities" ends with many good and innocent people executed at the guillotine.   In the "tale of two citizens", the Smith's irresponsibility is being rewarded by punishing Theresa's thriftiness with additional tax burdens.
Rewarding the "irresponsible" by punishing the "responsible".
Just what are we encouraging?