trillions are already being used to bail out financial institutions. why not just bail out homeowners and start from scratch all over again. there has still not been a compelling reason why it wouldnt work. what is the par value of real estate? this would be one way to find out. surf
the inflation would be counteracted by the spending spree that would be triggered. why is inflation bad? it wouldn't last forever regardless, this is a 30 year plan....
So what happens to the people who were smart and payed for their house in cash. The dumb people get rewarded and the smart people get the shaft?
That would be an outrageous injustice, heaped upon the preexisting injustice of the bailouts/handouts/stimulus. Just imagine the effect on people's thinking -- "Great, now I can go into debt over and over again, and have my more responsible neighbors forced to pay me off, again and again." What the US needs is less consumption based on debt, not phony stimulus. The US will be much stronger in the long run if it faces reality now, rather than trying to put off its problems into the indefinite future.
why shold the taxes of a renter pay off the mortgage of an owner?? That is what the govt does not get. Ford was disciplined. Now they face disadvantages against GM, who got many debtws and obligations wiped clean. Why should the idiot get rewarded while the diligent fund their reward? The govt should have completely stayed out of the Lehman -AIG - GM - Chrysler - mortgage and other things, and let the market do its thing. Now we wasted $3 trillion and are still in a bad market. They claimed it would be a disaster if we didn't take care of the toxic assets last fall, as soon as possible!!! Well, we never got around to that, and now they may never do it.
Just for the sake of fascination, I wonder what would happen if the Fed decided to do a double whammy --- pay off all outstanding private debts in society given some sort of criteria, a sort of reset to benefit debtors, then simultaneously bump up Fed funds to 15% for a period of a few years to attempt to suck up some of the excess liquidity, have the govt raise taxes (to balance budgets and justifiably curb back the extreme ramp up in disposable income that would occur from no debt service cost), etc. etc... Not necessarily a fair proposal, but granted the current debt problem would cease to exist and long term inflationary impact might not be so bad.