The second half of the block quote is pretty incendiary though:
"Instead of allowing the housing market to correct to its fair value, President Obama and Barney Frank will attempt to “mitigate” foreclosures. Mr. Frank has big plans for your tax dollars, "We may need more than $50 billion for foreclosure [mitigation]". What this means is that you will be making your monthly mortgage payment and in addition you will be making a $100 payment per month for a deadbeat who bought more house than they could afford, is still watching a 52 inch HDTV, still eating in their perfect kitchens with granite countertops and stainless steel appliances."
What do you think of this position? I tend to agree that housing prices still have a long way to fall, but I also see keeping people in houses as a good for slowing that transition, which has some benefits. I would also dtend to say the externalities on keeping people in houses probably covers some of the cost of helping them with mortgages, but it'd be interesting to see a study on the general economic result of a foreclosure.
Anyways, where do you stand on programs to keep people in houses they can't afford at taxpayer expense?
We simply can't allow everyone who is currently in a home they cannot afford to sell. It must be a gradual transition if the market is to remain stable. Both the market for loanable funds (mortgage market) and the housing market need some help right now. Free markets have their merits, however if the overall negative externalities created by freer markets outweigh the efficiency of this freedom: Then something needs to be done in order for society as a whole to benefit.
ReplyDeletei agree ^^^ people who made poor choices with their spending habits and what they could afford should not get bailed out by the rest of us who were smart with our money. The people who this is going to impact the most? Young adults fresh out of college and looking to buy their first home.
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