| The fundamental problem is with banks having been irresponsible in lending ... and insurance companies overextending their promise of protection to the banks and their mortgages. There isn't enough money for consumers to repay rising interest rates on mortgages, and the insurance companies don't have the capital to protect the banks from their own bad decisions.
Far from being overblown, this problem is underreported and the lack of attention afforded it by presidential hopefuls only proves that, yet again, American politicians are of the same elitist mold that have NO CLUE as to 'real world' implications of the market forces at work here now.
The housing market fuels our economy and unless the insurance/banking/mortgage problem is fixed fundamentally, we will steamroll through a recession into a full blown depression .... we will have 100% inventory on housing, people will lose their homes to banks and they will be worth a tiny fraction of what is owed on the mortgage. It will take a generation to come out of it. Tax rebates or cuts will be like putting a band aid on the stump of a missing limb.
The only way to solve a problem like this, that is the result of several parties acting irresponsibly, is to hold all parties responsible for the 'righting of the ship' ... First of all, we tell the insurance companies that they're only liable for 50% of the defaulted mortgages that will occur over the next 18 months (extimated cost of 240B) ... we then turn to the banks and say ... 'sorry ... you're only going to recover 50% of your defaulted mortgage losses' ... we then soften the blow by reducing the liability to consumers unable to pay back mortgages by 50%. Then the system is fixed for good and we can move on ... banks can lend money, building can resume, people can buy/improve their houses.
I would also temporarily close the real-estate speculation market so greedy people don't get into the same habits of 'fuzzy math' to justify huge unsecured (or undersecured) loans.
That's the pill to swallow .... it won't be easy, but it doesn't cost any more than a massive tax cut or rebate plan and it addresses the core issues at hand (which a rebate does not do).
You said you 'miss the $1000' you got a few yrs ago ... well the point is that $1000 didn't really help the economy cuz we're still here now. If you hadn't got that 1000, and interest rates were stable, and we had an energy plan, and the economy as growing and the stock market was healthy ... you probably would have many thousands of dollars more than you do now (either as a result of investment, higher salary, or reduced energy/inteest expenses).
Don't fall for Bush's quick feel-good 'solution' (it's not a solution, it's delaying and worsening the inevitable) of throwing a few bucks your way now only to rob you of thousands later.
This instant gratification mentality is what got us into this mess (no money down!! ... 0% interest!! ... for now) |