What a mess subprime mortgages have created. As pundits announce dire predictions that weakening housing and mortgage markets threaten the economy, borrowers plead for relief and banks appeal for assistance. Congress is apparently ready to help, but do we really want taxpayers bailing them out?

Buying a house on credit used to be simple. A bank would lend money to the buyer with a mortgage. The buyer had to have good credit and a steady source of income. The bank would initiate the loan and receive payments from the borrower, which covered both the principal and interest. Over time, however, we all got greedy -- such simple living was for simple people.

Many homebuyers wanted to purchase bigger and better houses, stretching beyond their budgets. But they presented their case to bankers, anyway, and the bankers gave them mortgages. Loans were made even though buyers had few assets, not enough income and maybe even a spotty credit history. Lenders wanted to earn a profit and beat their competitors. Housing prices were going up, so they figured the investment would be protected by rising asset values.

But they forgot that prices can go down, too. Both borrowers and lenders ignored the risks of mortgages held by those with insufficient income or blemished credit. This disconnect with economic reality was especially true with interest-only mortgages, which allow prospective homeowners to borrow the maximum possible and pay only the interest on the loan.

Bankers also became greedy. Not only did they accept these risky loans, but they peddled them to investors in fancy financial instruments called collateralized debt obligations (CDOs). Some banks even accepted responsibility if the CDOs had problems; after all, housing prices were going up. No wonder Merrill Lynch and Citigroup recently announced humongous quarterly losses. No doubt these will be followed by similar announcements from other big banks.

In response to the subprime lending crisis, Sen. Robert Casey, D-Pa., has introduced legislation to help bail out homeowners who face foreclosure and to upgrade standards for mortgage brokers. Rep. Paul Kanjorski, D-Luzerne, has offered legislation in the House that likewise would raise standards for brokers. Not to be outdone by Democrats, Sen. Arlen Specter, R-Pa., wrote a bill to supply relief to homeowners who are in default. It likely won't be long before members of Congress move to rescue Merrill Lynch and other Wall Street banks. Unfortunately, all such proposals are ineffective and unnecessary.

None of the legislative proposals is directed toward the real problem -- foolishness blinded by greed. Both borrowers and lenders made bad decisions about these mortgages, especially by ignoring the risks implicit in homeownership. If Congress wants to protect people from bad decisions, it will have to expand considerably its proposed legislative remedies.

If our representatives want to get involved, how about introducing bills to require high schools to teach economics and finance? Maybe if more people were trained in these subjects, they would appreciate the risks involved in mortgages and other economic decisions and quit making bad decisions.

Some of the legislative proposals focus on the ethical responsibilities of mortgage brokers. But they are naive to the extent that upgrading standards won't help anybody today. Moreover, higher standards probably aren't needed. Any broker who pushed potential homeowners into high-risk mortgages without warning them of the inherent risks is probably guilty of fraud. Any homeowner who obtained bad advice from a real estate broker should see an attorney and explore legal means of redress.

I also wouldn't rescue the banks that got into the CDO business. They knew what they were doing. They were willing to enjoy large profits from accepting the risk. Let them now experience the pain when the risk materializes and they have losses.

Pouring money into the pockets of homeowners facing default is silly. Excepting clear cases of faulty or unethical advice from brokers, they should accept responsibility for their mistakes. Otherwise, we will become a society teaching everybody to refuse to take responsibility for any error. Besides, we are staring at huge federal deficits already, which are only going to get worse as the baby boomers draw on Medicare and Social Security. This country doesn't have enough wealth to pay for all of our wants or to correct all of our mistakes.

Please, Congress, don't fix the problem of subprime mortgages. Let those responsible take their losses and learn their lessons.