In his March 27 article for AP, Tom Raum notes that while there’s little enthusiasm for government bailouts in general, voters are increasingly demanding immediate government relief as the economy ebbs. And Democratic presidential candidates, quick to recognize potential votes, are fanning the flames with promises of government aid for homeowners facing foreclosure. Clinton wants a $30 billion fund to assist those at risk of foreclosure, while Obama’s “plan” includes $10 billion to help homeowners avoid foreclosure.

I’m afraid I have to agree with Senator McCain: “It’s not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers.”

Sure, the Fed orchestrated a bailout, if that’s you want to call it, for Bear Stearns. It reasoned that allowing a major investment bank to fail could so adversely affect the nation’s economy that helping shore it up, even with some detrimental economic effects of its own, would be the lesser of two evils. But now homeowners facing foreclosure want a slice of bailout pie as well, and both Clinton and Obama want government (read “taxpayers”) to serve them one. But is that such a good idea?

Not as I see it. I’m a believer in the philosophy that if you make a mess, you’re responsible for cleaning it up. And in this case, we taxpayers didn’t make the mess. So who did?

Well, first in line are mortgage lenders and brokers. In their reckless desire to increase business, they invented the ill conceived concept of sub-prime mortgages and in doing so turned their backs on such fundamental concepts as requiring borrowers to have some “skin in the game,” usually in the form of at least a 20 percent down payment. The new “loan product” required far less, sometimes even no down payment at all. Then they fashioned a way to qualify more borrowers by setting the initial interest rate well below prime but with offsetting rate increases down the road. The effect was that folks with no money to invest in a home and with insufficient income to make typical loan payments were able to “qualify” and make at least the initial minimized payments on homes they otherwise couldn’t afford. New home sales skyrocketed and, at least for a while, everyone riding the bubble was happy.

Mortgage lenders, of course, don’t usually keep their mortgage loan portfolios. They bundle them up and sell them to investment banks who, in turn, sell them to investors in the form of investment “paper”. So the sub-prime mortgages wound up as small components of larger portfolios held by investment banks and in which investors invested.

The mortgage brokers and bankers were now essentially out of the picture having shifted their risk to the investment banks who should have, one would think, employed proper due diligence to assure the loans they were buying were worth their face value. Sadly, it appears they chose to look the other way.

Up to this point, the new home owners were managing to make their payments. But then, just like their loan documents said they would, the interest rates on their loans increased and the honeymoon was abruptly over. Borrowers had gambled that the rate increases would be farther down the road and hopefully less severe. Suddenly, many could no longer make their payments and were forced into foreclosure.

All the foreclosures, of course, severely devalued the portfolios now held by the big investment banks and, since these portfolios represented such a large part of their overall holdings, most struggled. They couldn’t sell the tainted portfolios - they were essentially worthless paper - so their balance sheets took enormous hits. Bear-Stearns nearly crumbled under the weight which is what brought about the Fed’s intervention on their behalf in the form of loan guarantees to J.P. Morgan.

That’s all well and good, some may say, but homeowners are the victims here and should be rescued. Really? I don’t think their hands are clean, either. They read the loan documents. They knew interest rates could and would go up. And most knew they wouldn’t be able to make the payments when that happened. But they gambled they could handle the payments until their home values increased, then refinance or sell at a nice profit, all with little or no money of their own invested. I see them as gamblers, enticed by the siren of desire or the lure of easy money, or both. Didn’t work out. Sorry. That’s why it’s called gambling.

So there’s plenty of blame to go around. Taxpayers, however, weren’t involved and shouldn’t be expected to cover the losses of those that were. First, mortgage brokers and lenders, those responsible for creating the pie-in-the-sky loans, deserve a hefty dose of financial responsibility. They got rid of the flimsy paper early on and have since been flying under the radar. Investment banks that bought the high risk loans, then bundled and booked them as “AAA” paper, should be next in line. They failed to perform required due diligence, or perhaps did but chose to wink and look the other way. And finally, the borrowers themselves that had to know the risks involved but signed on the dotted line anyway. They have to share in the financial pain as well.

Oh, I know some will argue that at least a few of them were too “naive” to understand what they were signing. Those falling in that category should seek restitution from the mortgage brokers or lenders that talked them into the loan knowing they didn’t understand what they were getting into.

But a government taxpayer bailout for any of them? I don’t think so.