Probably not. Sudden and simplistic measures can be horribly destructive. But can we permit a system to continue, that is built on inflating (or maintaining the absurdly high level of) the cost of our dwellings? In cartoon-mythical ancient times, all a tribe of cavemen had to do was get rid of the bear - all in a day's work - and now the right to live in your own space takes years and years of toil.
Back to Thoreau and Walden?
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og.
5 comments:
Good morning, Sackerson. You give thumbs down to the notion of paying off everyone's mortgage, because "Sudden and simplistic measures can be horribly destructive."
But we already had a sudden and simplistic bailout of $14T. Sudden, anyhow.
I wouldn't suddenly put fourteen trillion toward anything, myself. But if this financial crisis came about because of excessive debt, then the "simple" solution is to reduce debt. Direct and simple.
Wouldn't it be better to reduce total debt than to create more??? Wouldn't it get us closer to a solution?
On this topic, I have a question that perhaps you can answer: Suppose the Fed printed a trillion of new money and used it to pay off debt for people, say $3333.33 per person or about $10,000 per family.
New money is created when a loan is made... Money is destroyed when a loan is repaid... Here is my question: If the Fed creates new money and uses it to pay off existing debt, doesn't that new money cease to exist?
Are M1 and M2 unaffected by that trillion-dollar fix?
Good morning, Arthurian. Money is maddening - it looks so simple, yet... I like the idea of paying off all debt, but it just seems too simple. The twisters who run the financial system would find a way to exploit it. You ask good questions, I have no answers.
Without debt - and assuming you banned house mortgages in future - house prices would collapse, wouldn't they? What would the consequences of that be?
How do you feel about the demand from some commentators, that the US government should be the only issuer of money? Or Ron Paul's call for liberlaising the rules so others can introduce their own currecny systems? Wasn't there a time when many States had their own currency?
We've opened a can of worms.
Sackerson - there was a time when many banks in the US printed their own money. In fact, if I recall, one bank in South Dakota had a $3 bill with Santa Claus on it.
C'mon, Paddington, you're makin' that up!
To our host: A can of worms? Okay, so let's go fishing. We don't need to pay off ALL debt... Just what we need to get the economy growing again (plus a factor of safety). We'll still have plenty of debt if we pay off 5% or 10% or 15% of it under some grand scheme of Forgiveness.
Those "twisters" -- nice epithet -- who run the financial system are taking advantage of de-regulation, aren't they? We cound re-institute the regs, but that would be like admitting we've not solve the problem that led to de-regulation in the first place. And we'd have to find some other solution, more's the pity.
I cannot imagine why we might want to ban mortgages. I know, I lack imagination. But I cannot imagine why we might want to knead that loaf at all, other than to emphasize that, for better or worse, economic policy is highly significant.
Mortgages before Great Depression #1, I hear, were typically 3- to 5-year loans, rather than 20 or 30 or more.
I'm sure I have no coherent thought to offer regarding the balkanization of money. But my intuition opposes it.
Actually, it's quite true. One of those whimsical events in history.
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