What America can do to avoid a depression

I read the full page statement in the USA Today. I concur with the rationale presented and suport the recommendations proposed. In my view, our economic crisis stemmed from non-regulated mortgages being
granted to unqualified applicants using methods bordering on fraud, violtion of truth in lending and outright deception. Correcting the mortgage dilema by offering 1% , 30 year fixed rate to all Americans on new or refinaned homes will go a long way toward restoring financial stability to our Nation. It will also lend a transparant, regulated and publicly approved method to track Government monetary infusion thus helping to restore confidence and trust to taxpayers. I will be encouraging all my associates to respond to your web site and hope that enough public pressure will be created to insure the adoption of this policy.

I agree, this is a wonderful solution

reply to post by gormly


yes!!

the question is will we be able to avoid
a depression or it is alreadt to late

Originally posted by gormly

What America can do to avoid a depression

remortgageamerica.blogspot.com

WHAT AMERICA CAN DO TO AVOID A DEPRESSION
The US government offers every US citizen a 30-year mortgage at a 1½% fixed rate of interest. All financially qualified US citizens, not just those in immediate danger of default, would be able to finance a new or existing primary residence, with a $500,000 lifetime limit of government capital for everyone.

(visit the link for the full news article)

If your plan were to be put in place, the biggest effect it would have is for the rich to get richer and the poor to get poorer. The plan we have now is working great. House prices are overblown beyond belief which is the problem, and now house prices are crashing due to lack of the demand, which is the solution. If your plan were put in place, then the extremely bad problem of excessive prices would continue on for another decade or more. So no I strongly oppose the idea of 1.5% loans for all for homes.

Furthermore, the $500,000 limit would put hyperinflation into place right off the bat. So your plan would actually all but destroy our economy.

However, I strongly support the premise that individual citizens should have just as much OR MORE access to the newly printed federal reserve money as those hated fatcat bankers! I'm all for $70,000 of credit at 1.5% per adult + an additional $30,000 per dependent. That way the program would not be supporting $300,000 mortgages for a merely larger than average home, which is complete insanity.

American homes are HUGE compared to other countries. A serious downsizing of the American home is in order. So no I strongly am against the idea of continuing the problem by giving even $200,000 worth of credit because the problem will just continue to fester if that is what happens.

[edit on 14-12-2008 by truthquest]

All other reverberations aside there is only one solution to housing prices. Proping them up artificially will only extend the situation. The price of housing must either drop or wages should rise to a point where the average home is no more than 3-4 times the average income of the area where that home is. Require 20% down and MAYBE 10% down on certain agency backed homes. NO solution other than this will only kick the can of massive default down the road.

It's simple: We either prepare for an economic collapse or create a sustainable, resource-based society not based on money. I hear people talking about this now when I posted this years ago when no one was talking about it or even cared. People thought that the idea of a resource-based society was non-sense. They kept saying, "I don't think it would work". Now they're more curious. They say, "It sounds like a good idea. How will it work?". It's simple. The level of precision with which a plan is executed depends on both sound preparation and correct approaches. Once we as a people realize the goal, we'll work towards making that goal a reality. What we need is a motto that will help remind us what the goal is. Every year, America should have a new motto that sets the collective goal of our society in place. In 2009, our motto should be something like this: "Sustainability Is The Key To Prosperity". We're so closed-minded as a nation, we can't even understand how small, subtle changes can have a huge impact on society. Our government keeps creating and implementing new laws and policies trying to make major changes, when truthfully, its the small, positive changes that create positive results. It's the same way every technology that was ever created came to be. They all started with a simple, subtle idea. So please, let's try to think small before thinking big when it comes to making changes. If one is building a brick house, he or she doesn't begin with the whole house, rather they start brick by brick, with the brick being the fundamental basis and structure of the whole house.

reply to post by dariousg


It would not help. The problem is that people can't pay mortages, and this Idea would tax even more money away from everyone to pay for this program. If you think you have a hard time making payments now, wait until you have to pay for your neighbor. Of course you can always just have the FED print more, and then you'll be paying 8 bucks a gallon for gas and 6 bucks for a small snickers bar.

The government only has the money they take from you. In order for them to help certain people, other people have to suffer. This is why overtly large governments that meddle in economies and attempt Massive social programs always fail, always, period. The reason? Because the only way to handle those expenditures is to debase the currency the nation uses. No State survived the onslaught of a fiat empire. Ever. Fiat money always fails, and it fails because of the idea held in the first post in this thread.

Analogy-

In the fishing industry off the Alaskan coast, there is a cardinal rule to follow if a person goes overboard. And that is, do not go in after them. A drowning person will force his/her rescuer under in an attempt to keep themselves alfoat. It is a survival instinct. It will override all logic and reason, and there is no stopping it. Husbands will force their wives under, mothers will force their children, and so on. A drowning person has only one purpose, to survive. That is why you throw them a line, toss them a flotation device, but you do not go all in. If the US government forces it's citizens to pay for this, it would be the equivalent of jumping ship.

Prices of these homes have to go down, because they are not worth what they paid for. The gains are artificial. And these prices have to adjust downward.

The last thing the American public needs right now is to be taxed more, while taking on more debt.

I don't mean to be harsh, but the government needs to get out of the way and allow this to run it's course so we can get back to work. If they don't they will inflate the dollar to a point where it won't matter how much money you make because you wouldn't be able to buy much more than a few potatoes with it.

People will be ok, this isn't the first time SHTF, it won't be the last. How long it goes and how bad it gets is up to the government. If they try to stop it, and they have tried, and they will continue to try, it will go on much longer, and it will be much much worse. Price controls, food lines, you haven't seen anything yet,

If they get out of the way, we get hit hard for 2-4 years at most, and then we get back to work. But what they are doing now, this is going to last for a decade, wouldn't be suprised if it lasted longer.

For the people that need help, Throw them a line. Donate food, build them a shelter, donate old clothes, blankets, maybe a car.

But do not jump off the boat.