One family’s loss is another’s gain.

If you’re facing foreclosure, Treasury Secretary Henry Paulson wants to help. “If someone is willing to make a call to reach out,” says Paulson, “there’s a chance we can save their homes.” But Paulson can’t save these homes because the homes are not endangered in the first place. They stand to change hands, not to vanish.

None of these foreclosed houses is going to disappear. After a foreclosure, one family moves out, and another moves in. We see the sad faces of the people moving out, but we don’t as often see the happy faces of the new homeowners moving in. Nevertheless, those happy faces are out there, and we should not discount them.

What I’ve never understood about the debate over the subprime “crisis” and home foreclosures was why should bail out people who made poor borrowing decisions.  Or, from the other perspective, why we should bail out companies who made poor lending choices.  If we insulate people from the consequences of their bad decisions do we not empower them to keep making those bad decisions?

When I see a home get foreclosed I don’t just see a family moving out, I see an opportunity for another family to move in.  More than likely at a bargain price.  And what’s so bad about that?  Nobody likes to see a family lose their home, but those homes aren’t going to stay empty so the societal impact ends up being neutral.  One family loses a home, another gains one.

Certainly this isn’t something we should try to “fix” with crafty policy schemes or the expenditure of large sums of tax dollars.