Reply #9: I don't think anyone is saying things couldn't've been worse (except maybe the newly evicted) [View All]

[LooseWilly]

What I keep hearing is that things could've been a lot better. Bailing out "homeowners" (maybe "mortgage holders" would be a more accurate term?) seems, based upon my model, likely to have been a hell of a lot more "stimulatory" to the economy. The mortgages would've been paid off, the banks would've had their money, AIG wouldn't've been facing the prospect of paying off the insurance on all the sub-prime derivatives that were threatening to implode... people who'd been subjected to predatory loans would've essentially won the "banking crisis lottery"... and all the cash that is currently being dumped into the Wall Street Sinkhole that is the lending agreements that these not-so-savvy consumers signed up for would suddenly be freed up for one big-ass-spending-spree (let's face it... these people would've been in the mood to celebrate and they're obviously pretty easily separated from their money)... all that spending would spike demand and suddenly corporations and small business alike would need to start hiring to produce and retail the crap these people would want... Local & state governments would start collecting sales taxes again. Teachers and fire fighters and police and regulators wouldn't need to be furloughed/fired.

The "middle class" outrage (let's face it, it's really mostly the wealthy that didn't need to rely on sub-prime lending... at least here in CA, with our absurd real estate prices)... would sustain a call for regulation of the lending industry—"So that something like this can never happen again!" (Let's be honest, wealthy people always take it personally when the poor, and especially the poor-of-color, get anything from the government... so Obama could've used that rage, linked it to the TeaBagger rage, and let someone who needs a little "charisma enhancement", like Harry Reid for instance, take the initiative to "pass a law" to make sure such a thing could never happen again.)

As far as I can see... aside from all the people who can afford to buy a house (or several houses) being pissed off that the government paid off houses for others... this would've been a far better solution... and it wouldn't've required a stimulus bill to go with a financial bail-out. Hell, a lot of those people would probably have used the money to buy a car too... saving GM and maybe even Chrysler.

Hmm... wasn't that Kucinich's proposal?

And yes, obviously Republicans don't give a damn beyond Wall St. and corporate board rooms...