Decibel (![[info]](http://l-stat.livejournal.com/img/userinfo.gif){kind=small} decibel45) wrote in paradox0220, |
Actually, no... buying the homes outright would be about the worst thing we could do:
a) Now the goverment gets to play landlord. Or kick everyone out of those homes and then try and sell them. What's the opposite of a bubble? It would TANK the housing market (far more so than it is now) for years
b) Buying those homes means the people who wrote these dumbass mortgages WIN. Completely, 100%. Because they get all their money for these turds that they wrote.
c) The real crisis here isn't so much mortgages or personal lines of credit; it's commercial credit. Banks won't even loan to other banks. Which mean's they can't provide credit to businesses. Not only does that hamper (or, more accurately, stop) economic growth, it also has the real potential of forcing a lot of businesses to close their doors. My company, for example, is highly dependent on our lines of credit. If we were to suddenly lose access to all of our credit it would have a huge impact on opperations, and would almost certainly lead to dramatic reductions in headcount.
BTW, I agree with shooting the bill down on Monday. I think people are rushing into this way too fast, just like we did with the PATRIOT act. I suspect that the government will need to do something, but it's also critical that it does it right. To put that in perspective, Warren Buffet feels that if the government handles this right, it would actually make a profit from the bailout, which it absolutely should. Though, sadly I'm betting that if it was able to do that there's be a huge uproar about 'profiting off of a crisis', even though it's the fiscally correct thing to do. We (the taxpayers) would be effectively issuing a loan to these companies, so we should damn-well get a return on that investment.
a) Now the goverment gets to play landlord. Or kick everyone out of those homes and then try and sell them. What's the opposite of a bubble? It would TANK the housing market (far more so than it is now) for years
b) Buying those homes means the people who wrote these dumbass mortgages WIN. Completely, 100%. Because they get all their money for these turds that they wrote.
c) The real crisis here isn't so much mortgages or personal lines of credit; it's commercial credit. Banks won't even loan to other banks. Which mean's they can't provide credit to businesses. Not only does that hamper (or, more accurately, stop) economic growth, it also has the real potential of forcing a lot of businesses to close their doors. My company, for example, is highly dependent on our lines of credit. If we were to suddenly lose access to all of our credit it would have a huge impact on opperations, and would almost certainly lead to dramatic reductions in headcount.
BTW, I agree with shooting the bill down on Monday. I think people are rushing into this way too fast, just like we did with the PATRIOT act. I suspect that the government will need to do something, but it's also critical that it does it right. To put that in perspective, Warren Buffet feels that if the government handles this right, it would actually make a profit from the bailout, which it absolutely should. Though, sadly I'm betting that if it was able to do that there's be a huge uproar about 'profiting off of a crisis', even though it's the fiscally correct thing to do. We (the taxpayers) would be effectively issuing a loan to these companies, so we should damn-well get a return on that investment.
