I'm betting the usual capitalistas who bitch daily about socialism this and blah blah blah won't decide to make a presence in this thread...
And pass up a chance to go another round with my favorite sparing partner? NEVER!!!
Honestly though I don't see what it's suppossed to accomplish or any good it's suppossed to accomplish. What I got out of the article is that somehow they're going to somehow magically be able to get rid of all this bad debt into a 'bad debt bank'. Okay, so the bad debt is now off the banks books. Is all of that debt just going to be forgiven? Is the bad debt bank going to 'handle it' it someway? Is this going to be one time only deal? i don't think it's the kind of precedent we want to be setting. It woud be like a financial game of chicken. banks pile up bad debt, the government says not our problem, until someon flinches. Either we get economic ruin because the govenrment didn't help (because it isn't their responsibility) or the government does help and we've just told people don't worry about bad debt, if it gets bad enough we'll take care of it.
As far as a capitilistic solution, ironically that would require government policy as well, mainly in the form of reversing policy that encouraged risky lending (thank you President Carter!!). 'In theory' that would keep lenders from making risky loans. the result unfortunately would be a lowered standard of living because it would be harder to purchase things you couldn't really afford. You have complained before Shogun about reducing our standard of living in a variety of ways like jobs going overseas, but at the same time it is undeniable that the standard of living we're at is rather inflated. It does not accurately reflect people's ability to AFFORD that standard of living. The current SoL is probably over what it should be in terms of the SoL one can actually pay for, but the ease with which people can get credit has inflated that.
It's only inflated because you are comparing it to SOLs from nations whose labor is a LOT cheaper than ours. If we were not hemmoraging jobs to slave wage nations then it WOULD be the case that these risky loans COULD HAVE BEEN PAID. I don't thinks it's a matter of nationwide laziness or widescale conspiracies not to pay mortgage bills so much as it is a testement to the hazards of undermining our American employment potential and how that will affect the overall conuming potential of our citizens. In essence, those loans MAY have worked to upgrade our SOLs were it the case that capitalistas werent hellbent on launching employment at third world states that only continue to devalue the cost of labor.
Sure, our SOL is inflated when compared with labor in ghetto mexico or begger india or million man china. But, our concern should not be to normalize OUR SOL to that of a fucking third world country anyway.
Good to see ya, Bern. It;s been a hot minute since we've sparred over economics.
Can't wait to see Bern's reply.