Blame game or possible solutions?

Discussion in 'Economy' started by Wry Catcher, Oct 22, 2010.

  1. Wry Catcher
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    Wry Catcher Platinum Member

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    I'd like this thread to be open to all who have ideas on solving the housing crisis. What will or might work, what will not?

    The Problems:
    Too many homes underwater;
    Too few banks willing to work with homeowners in distress;
    Too many homes in foreclosure;
    Too many homes abandoned;
    Too many neighborhoods in free fall.

    More?

    What can/should/might be done?

    Is a strategic foreclosure unethical, or simply a business decision?
    Should banks reduce interest rates to current levels to allow homeowners to remain in their home?
    Is it healthy for the investor class to buy distressed homes, rent them cheaply, forgo repairs/maintainance, and receive a business tax deduction?
     
  2. uscitizen
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    uscitizen Senior Member

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    We just need to suffer a while for our stupidity and things will level back out.

    This cannot be fixed easially or quickly.
    any attempt to do so will only make things worse.

    Yes stupidity often has a high price.
     
  3. LiberalNut
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    LiberalNut Member

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    I would agree that there is no real solution to the housing crisis other than letting prices fall to pre-bubble levels. Only a few fundamentals should actually cause real estate prices to rise and these fundamentals simply were not present in the bubble. It was a Ponzi scheme and that scheme needs to be unravelled. Trying to prop up real estate prices at bubble levels is not only the wrong thing to do, it has no hope of working.

    That said, the housing crisis was a mere symptom of the underlying problems in the economy. the disease is a mal distribution of wealth. You see, when wealth is distributed too much to the high end, the masses cannot afford to consume the output capacity of industry. When industry is faced with insufficient demand, industry cuts production. When industry cuts production, unemployment rises. When unemployment rises, consumption drops further, and so on and so forth. In the short term what the government needs to do is become the "consumer of last resort" and prop-up aggregate demand for the products of industry. In the long term what needs to happen is redistribution of wealth.

    Make no mistake, since Reagan, the so-called conservatives have been redistributionists. They have redistributed wealth from the middle and the bottom to the top. This is the core problem with the economy.

    All the housing boom did was deceive middle class folks into thinking that they were richer than they actually were. Though median incomes were essentially stagnant, people were "property rich" or at least so they thought. So, the ubiquitous home equity loan allowed the middle class to sustain consumption long after it should have dropped off. In other words, the housing boom is synonymous with the growth in GDP during the Bush administration. Without that ponzi scheme, the economy would have slipped into recession much sooner.

    The solution is simple. Return the distribution of wealth to levels of the pre-Reagan era. Until the masses can afford to buy the products of industry without resorting to unsustainable credit booms, we will continue to have the economic troubles that we are dealing with now.
     
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  4. Two Thumbs
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    Two Thumbs Platinum Member

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    The Problems:
    Too many homes underwater;
    Too few banks willing to work with homeowners in distress;
    Too many homes in foreclosure;
    Too many homes abandoned;
    Too many neighborhoods in free fall.

    People bit off more than they can chew. Should they suffer or should we all suffer?
    Detroit is actually making people move (I heard this, can't recall where), some are refusing, of course. No one wants to be forced from a home they actually own, but the utility companies are saying they can't afford to send power down major lines for so few homes.


    More?

    What can/should/might be done?

    Is a strategic foreclosure unethical, or simply a business decision? It's unethical not to pay your loan. It's the same as theft.
    Should banks reduce interest rates to current levels to allow homeowners to remain in their home? Should? No. Can they? Yes, I think they can. Better to get some money than no money.
    Is it healthy for the investor class to buy distressed homes, rent them cheaply, forgo repairs/maintainance, and receive a business tax deduction? If a landlord forgoes repairs, he ends up in court explaining himself to a judge. I know, b/c I watched 2 of my landlord sweat under a judges gaze. :muahaha:
     
  5. iamwhatiseem
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    iamwhatiseem Gold Member

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    WOW.
    Your opinion is just like your avatar: ONE EYE IS SHUT.
     
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  6. California Girl
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    California Girl BANNED

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    Redistribute your own wealth.... and leave mine to me. Fucking whiny assed liberals always wanting to take other people's shit.
     
  7. LiberalNut
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    LiberalNut Member

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    WOW.
    Your opinion is just like your avatar: ONE EYE IS SHUT.


    Wow! Your retort is essentially non-existent. You have ignored everything that was said and offered up a non sequitur.

    Do you have any substantive problem with anything said or is a mindless soundbite all you are capable of?
     
  8. LiberalNut
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    LiberalNut Member

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    Redistribute your own wealth.... and leave mine to me.

    Ummm, that's exactly what I'm advocating. I'm advocating that rich folks like me have their wealth redistributed to middle class folks like yourself. Unless you have a net worth over 3.5 million, which i doubt you do, you would benefit from what I'm advocating.

    Fucking whiny assed liberals always

    OOOoooo, what intellectual rigor you bring to bear! Not.
     
  9. Revere
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    Revere BANNED

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    Do you give the foreclosed homes you buy back to the people who were evicted?
     
  10. California Girl
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    California Girl BANNED

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    Now, this is gonna shock the right and the left.....

    Because we are in such a uniquely disasterous scenario at the moment, I believe that the most ethical - and the most long term advantageous - route for the banks is to allow people maximum flexibility in order to keep their homes. Empty homes do not hold any value to the banks and, given time, most currently unemployed homeowners, will get back on their feet and catch up their loans. This is not just best for the homeowners, it is best for the banks, and for the country.

    Bonus for the banking industry.... it would help restore the public's opinion and faith in their institutions.
     
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