the Bush administration hopes that it can help more than half of the two million homeowners who took out adjustable-rate subprime loans with payments due to move sharply higher soon by offering some of them a five-year mortgage-rate freeze.

How nice of the Bush administration to hope! The idea to freeze some of the rates before they reset is a good idea, so that should help those of you out there stuck with a loan about to reset to a much higher interest rate, and therefore a much higher monthly payment. The article further explains that some $367 Billion with a B worth of mortgages are set to reset within the next two years. That number is truly mind-boggling. Now when you read the next quote keep in mind Bush said he hoped to help more than half of the 2 million homeowners… in my mind when someone says more than half of 2 million it’s at least 1 million or more. So let’s listen to Mr. Zandi:

“In theory, the plan could help as many as 750,000 subprime homeowners,” said Mark Zandi, chief economist for Moody’s Economy.com. “In practice, my sense is that it will probably help at best about 250,000 homeowners.”

250,000?? Seems like a lot of people are going to be left out. I bet those living above the poverty line but still really having trouble paying the mortgage are going to be stuck. That means there’s still going to be hundreds of thousands of people making the choice between eating or paying the mortgage. Not a pleasant thought. I understand that some of these people shouldn’t have been thinking about homes, but when they walked in to sign the loans everybody around them was smiling and patting them on the back. As the Reuters article states, the devil is in the details. Those words of wisdom apply in many more situations than just home loans.

And, my favorite quote of the Reuters article:

Some on Wall Street worried they would be forced to accept mortgages rewritten in the borrowers’ favor.

No attribution, but let’s all collectively say “aww, poor Wall Street billionaires” in our most sarcastic tones. I mean seriously you guys.

UPDATE: Details of the plan are now out. Check out my man Mish’s most excellent post on the subject!

To hold you over, I’m linking to three personal finance related carnivals that provide a wealth of information. Take some time out of your busy day and just read a little bit; you never know what you might learn!

The first is the Carnival of Personal Finance #103, hosted over at Cleverdude. He frames the carnival as if it were an episode of the television series 24. Interesting, although I’m not much a fan of the show. In fact I don’t really watch much television.

The next carnival is the 90th Carnival of Debt Reduction, hosted over at No Credit Needed. Debt reduction is a very critical topic insofar as carrying debt reduces your ability to save and invest your hard earned money!

The third carnival is the Festival of Frugality number 77, hosted at My Two Dollars. Frugality is something I practice and preach to all of my friends – see what you can do to try and keep your costs down!

Well I’ll tell you! If you’re not making more money each year, you’re going to be able to purchase fewer and fewer goods and services due to inflation. Inflation eats away at money’s purchasing power, and while inflation has hovered at figures between 2 and 3 % over the past few years, it certainly is having an affect. So if you need more money to purchase needed items, but you’re not earning more money, what are you going to turn to? If you said credit cards, then you’re just like most of America.

Credit card debt has been rising astronomically, with Wolff quoting figures that say 1 in every 7 dollars goes towards paying debt. In the same show during a later interview with Naomi Prins, Naomi mentioned that consumer debt has tripled in the last 10 years. Even worse, in 2005 Congress passed a bill designed to make it harder for consumers to file for bankruptcy, called the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. You can see how all of this wage stagnation and inflation can start a snowball effect that just gets worse and worse. This is a big reason why our lives are filled with so much stress and anxiety. America currently has the dubious distinction of having an extremely high divorce rate, between 40 and 50% of all marriages. One big reason could be the lack of purchasing power coupled with ever increasing debt placing undue hardship on relationships.

So what is there to do about all this rising debt, rising inflation, and not rising income. In my view, there is one solution that would dramatically help the American people: a solid financial education being made a required part of a high school curriculum. Too often, we are forced to sit through classes in high school that have absolutely no bearing on our future lives. I believe a simple one semester financial education on the basics of saving, taxes, loans, and other basic financial concepts would enormously help our children become familiar with important concepts in regards to money and not make the same mistakes we have. Simple lessons, such as don’t spend more with credit cards than you can afford to pay off each month, or it’s better to save up and buy your car outright instead of leasing it, could have a dramatic impact on the financial future of our younger generation.

Now this would obviously be hard to get approved by politicians, simply because it would be against the interests of the major credit card companies and banks, who all spend millions of dollars lobbying Congress to have their views known. Nobody said change was easy. However, in the long run, it could make a big different for a lot of people. Even if schools refused to setup this sort of class, perhaps a course could be initiated online that would be designed by the workers of America and whose children could participate for free. Maybe the next big website will be a collaborative learning center for children designed to make finance fun. What do you think?