Sunday, June 05, 2011

The real debt crisis

Hint to all the very serious pundits. It isn't the US government's debt load. The real debt crisis is the millions of jobless homeowners.
Morris A. Davis, a former Federal Reserve economist, estimates that as many as a million homeowners slipped into foreclosure because of insufficient help for the unemployed. [...]

Administration officials said their programs have had a positive impact, albeit not as large as they had hoped. But they say that the problems of unemployment and negative equity on homes are not easily solved. They also say programs to curb foreclosure are voluntary, so they are limited in how far they can push mortgage servicers and investors, who often make more from foreclosures than from offering aid.

“We are trying to be careful in designing programs that at the end of the day aren’t just about spending money but getting people back on their feet,” said James Parrott, a senior adviser at the White House’s National Economic Council.
Wrong "wise" advisers. Spending money to bail out the jobless in order to keep them in their homes is exactly what will get these homeowners "back on their feet." It's criminal these people have only spent under $2 billion out of $46 billion earmarked to prevent foreclosures.

Painfully clear to me this has nothing to do with money. It's all politics. White House is afraid of the GOP demagoguery about how unfair it would be to people who can afford to pay their mortgages to help those "lazy unemployed" people keep their homes. Never mind the long term overall effect of helping them would boost the economy in ways no tax cut ever could. Screw the banksters. They're already screwing everybody else. Do something to make foreclosure less of an incentive. And screw the moral hazard. Just help these homeowners, dammit.

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Blogger Jerry said...

Solution: Cut out the program and save tax dollars. No program, no need to drug test.

9:33:00 PM  

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