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hyonh311 Majority agree that the real estate market triggered the infamous global depression. The loan programs that offered No income loans, No documentation loans, Stated loans, and the 1 year MTA loans is what truly caused the flaw in the mortgage lending. Why don't they spend that money back into the mortgage lending industry? Loan modifications are one thing, but wouldn't it make sense for lenders to drop the mortgage rate backed by the government stimulus? It only makes sense. All the money being already spent due to the trigger effect in that 1 out of every 5 jobs are real estate related. I don't mean bringing back same kind of programs, but full documentation for borrowers only. That way the loans will not reset into payment shock and can offer the 30 year loan programs. It would certainly revive the global economy and any minimal losses compared to spending $700 billion and can end up to $1.4 trillion total makes sense. As long as a major factor such as real estate stays steady, the economy can be like reverse-engineering where it fixes itself by going back to the cause and still making it easier than now to qualify. The bottom line is that greed caused by the banks and Wall Street forming loan programs that maximizes their return, and didn't anticipate the obvious when loan officers are saying "are you sure you can pay for this. you're debt ratio is already high and you don't make that much as we're going stated or no income, etc..program" Borrowers were greedy too because they knew they couldn't pay it as it is but thinking big gain and short term just like the banks, and Wall Street did was the root of this madness. Real estate is the cure, and the remedy is investing back into mortgage lending by allowing lenders to come up with "benefiticial to borrowers" loan programs and any difference in loss the stimulus money can cover wich would be pennies compared to spending 1.4 trillion.
"The Tarp is a fiscal straitjacket"
naked capitalism —
... in this piece. But Sachs more recently has argued for targeted aid for the poorest nations, contending that they are in a poverty trap, and assistance to get them to a higher level of agricultural productivity could give them the boost they need to overcome chronic deprivation. Whether you agree with all of Sachs' argument, his caution about undue haste is well founded and is consistent with the worries of other macroeconomists such as Willem Buiter. From the Financial Times : The US debate over the fiscal stimulus is ...
Sachs: A Fiscal Straitjacket
Economist's View —
...
A fiscal straitjacket, by Jeffrey Sachs, Commentary, Financial Times:
The US debate over the fiscal stimulus is remarkable in its neglect of the
medium term – that is, the budgetary challenges over a period of five to 10
years. ... Without a sound medium-term fiscal framework, the stimulus package
can easily do more harm than good... ...
Washington’s Bubble
Bear Mountain Bull —
... some opinion from the Financial Times : The US debate over the fiscal stimulus is remarkable in its neglect of the medium term – that is, the budgetary challenges over a period of five to 10 years. Neither the White House nor Congress has offered the public a scenario of how the proposed mega-deficits will affect the budget and government programmes beyond the next 12 to 24 months. Without a sound medium-term fiscal framework, the stimulus package can easily do more harm than good, since the prospect of trillion-dollar-plus deficits as far as the eye can see will weigh ...
Errors Galore
winterspeak.com —
... takes the form of additional government debt, the added debt displaces other uses of the same funds. 3. Thus, stimulus plans only enhance incomes when they move resources from less productive to more productive uses. Are any of these statements incorrect?Krugman says 2 is incorrect, and calls Fama pitiful. Krugman, of course, is also pitiful because 1. is wrong too. But I don't have a spot in the NYTimes. 2) Jeffrey Sachs -- has an FT column, which is not that great, Nobel Prize status unknown to me. Still wrong ...
