Too much of a bad thing …
is a good thing? Too much debt on the books of poor credit quality businesses and individuals is one of the main reasons for our current economic black hole. So, here is how we get out of the recession, its easy … just lend more money to the lowest quality of the low quality home buyers. Makes sense right?
The government can go find those individuals who purchased homes they couldn’t afford … they can go find the individuals who most irresponsibly handled their finances … and award them with more money and government assistance. Funding failure will correct our economic failure. Make sense?
Not to me, especially when you look at the facts. According to the December report by the Comptroller of the Currency and the Office of Thrift Supervision, “The number of loans modified in the first quarter that were 30 or more days delinquent was 37% after 3 months and 55% after 6 months. The number of loans modified in the first quarter that were 60 or more days delinquent was 19% at 3 months and nearly 37% after 6 months.” Basically, the interest rates and underwater mortgages are not the major problem, it’s the people.
Many individuals clearly cannot afford to live this lifestyle. The government must let these foreclosures occur and individual consumption and debt levels reset. The government needs to stop believing that the 2006 lifestyle is supportable. Not everyone can have a 5 story, 10 bedroom, mini-mansion on the water; some people can’t even afford a 1 bedroom condo in ohio. Live with it.
3 years ago