[Tusanoc]

Well then, I have nothing to say here.

[derty]

It would have cost more and it would have been harder to administer plus you'd hear endless whining from renters (or folks who have paid off their mortgage) about how unfair it was they didn't get any... But I do think it would have helped the economy more and here is why. One of the biggest problems is more then half of the people in the country owe more on their house then it is worth so lots of people are simply walking away and giving the keys back to the bank. This results in still further price declines and even more incentive for people to walk away. Once good neighborhoods become empty, the empty houses become neglected or vandalized, and generally blighted. Keeping people in their homes would have directly stopped that part of the cycle, people would have seen (at least on paper) that their net worth was better off after home owners got bailed out, and even more critically after mortgages got reset to the new lower balance with the proposed lower fixed rate APR folks would have had more money in their pockets which would have actually helped the real economy. In short, instead of just helping the banking sector it would have helped a wider section of the economy as well as the banks so it would have been a better policy.

The down side is it would have had to have been a real one time payment from the government to individual mortgage holders so it would have been money directly out of the budget which the government would never see again. The upside to TARP is you're buying assets which spooked investors no longer want so by waiting until the market recovers and then reselling those assets the government can remake some or all of it's initial capital investment. You can't do that if you basically just gave the money away to home owners.

[valensds]

By the net amount of money that is left at the end of the month.

Now, what DanS is saying holds true if the house price doesn't drop too much. Otherwise I fail to see how the situation would have been any different for the banks.

[avarberickibe]

If the US government had, instead of refueling the financial institutions, spent an equal amount of money on covering the mortgages themselves (we'll pay X percentage of your mortgage, up to Y, for 18 months), wouldn't it have helped more?

If your answer is going to be "No, I'm smarter than you", **** OFF.

The government didn't spend any money on the bank bailouts, you retard.

[mussmicky]

Do you mind explaining that claim, oerdin?

[SoorgoBardy]

Well, it didn't on TARP but there have been a number of other programs which have cost money

Of course, the most notable programs that cost the taxpayers money were the auto bailouts.

[Sipewrio]

Of course, the most notable programs that cost the taxpayers money were the auto bailouts.

That remains to be seen and will depend on exactly what the share price is when the government sells and how they sell it (I.E. do they dump it all at once thus depressing the price or do they follow the more sound track which France used with privatizing Renault, selling off a bit then waiting for prices to recover before selling off another bit).

[andreas]

The government didn't spend any money on the bank bailouts, you retard.

So in essence they did spend an equal amount on covering the mortgages themselves.


Question answered. Thread may be closed.

[beethyday]

Because housing prices were a bubble, and injecting cash into the bubble is a horrible idea?

Housing prices are vastly out of whack, even still with their average appreciation rate over time. Average home price should be close to 3x the average income, but that's not what we see.

[RastusuadegeFrimoum]

Gather round, children, for possibly the most heart-warming foreclosure story ever.

Here's what happened: Bank of America tried to foreclose on a couple that didn't have a mortgage with them. The couple took the bank to court, and won. Then the bank didn't pay back the couple's legal fees as ordered by the judge, so the couple brought a moving van and foreclosed on the bank. http://www.thecomedynetwork.ca/Displ...9-7240c8eb9910

This is from The Daily Show a couple of months ago, and the best op-ed I've seen on the American forclosure crisis.

[suilusargaino]

dp

[mireOpekrhype]

No, the reason the government went for capital injections was to take advantage of the banks' ability to leverage. 700 billion *10X leverage = 7 trillion

Now that is true but due to deregulation banks can leverage 40 to 1 not just 10 to 1.

[exeftWabreava]

Heh. Which is why the debt to GDP is over 100 percent by now? Spending is spending, KH. Unless the government is willing to retire 'assets', then the 'assets' are just more smoke and mirrors.

You're a ****ing moron, Ben.

[FYIbiatches]

What, is Ben going to try and argue with KH over financial matters now?

[rbVmVlQ2]

No. Ben in his blind hatred for anything that is not ultra right christian fundi says something stupid again. Uh, attacking the bailout is 'ultra-right?" Wouldn't that make me more of a commie socialist? You know that whole 'corporate welfare' thing?