Most of us are against government intervention, however, I believe we can’t just turn it off from one day to the next, but it has to be a process.
Given the current global economic situation, if you were in charge, what would your plan look like?
Interventionism is the cause not solution of the current problems. Any further interventionism will only further the problem, and allow for those who are uneducated and unintelligible about economics to further their agenda. We can in fact turn it off, and I had this very thought last night. If we were to turn it off, what could we do to create an incentive to small businesses to take up where the government left off. If there is a market for people to get things for free, how do we run it? My solution was that we run it the same way a loan business would work with a few exemptions. My solution would be for the government to completely get out of the business, but to encourage other businesses to get into it by allowing for tax free work. For example, if food stamps were stopped, but a business wanted to start selling them, then its employees and the company at large could work tax free for a number of years or eternity. These companies would still be profit driven enterprises, and would require the people taking out the food stamps to pay back the amount they borrowed, or otherwise would be foreclosed or imprisoned. This would make people accountable for the amount that they get. Not only would this create jobs, it would allow the free market to decide what is the correct way for these things to be handled, would allow the government out of the business, and would decrease taxation.
Why?
I’d go down to the bar, chill out.
Milk the sheeple for all they are worth?
Then run for the hills while hiding behind my militarized, federalized police forces when they decide enough is enough.
I’d push the button.
It’s hard to find the right course, because nearly everyone involved is guilty of being a greedy bastard, as the Saturday Night Live parodies have made plain.
It is a fact that people who entered into subprime mortgages did so because a government policy made it possible for this to work out (subsidized interest rates).
It is a fact that a change in government policy (higher interest rates) wiped them out.
It is a fact that low interest rates is a totally unfair tax on owners of dollar assets.
There is really no clean way out of this. To prevent social collapse, you have to keep people in their house, which means letting them go into partial default and getting the mortgage lender to accept his part of the loss (they ought to be doing that without government intervention in the first place). Wipe out all the greedy hedge funds, the 29-year olds driving Maseratis as someone put it, they’ll survive this, to send a message against moral hazard. Then re-establish market interest rates and implement a no money supply growth central bank policy by targeting total bank deposits instead of interest rates. (The Paul Volcker way)
I believe that Joe Sixpack and average Jane wouldn’t allow it. After all, they have been so brainwashed by the current system in place and are actually quite comfortable with no responsibility. I think they would need to be weaned away as to not revolt
What ?? Now housing should be ‘free’ as well ? It’s either socialism or ‘chaos’ ? Maybe you should join bush.com ?
I disagree with allowing people to stay in their houses. That just sets people up to take advantage of the system. Quite frankly, I have very little sympathy for those homeowners who either got talked into a bad loan or knowingly took out a loan on a house they knew they wouldn’t be able to afford UNLESS their speculation was going to work out.
If you don’t have the money, do not speculate with other people’s money.
I heard on the radio the other day that a man in IL managed to get a loan for a 1mil dollar home with an annual salary of 30K. He knew darn well that that house was too expensive for him.
There are many things in this world that I would love to have, but I know what I can and cannot afford and I don’t consider myself the sharpest pencil in the box.
I think I understand where you’re coming from, that we couldn’t just immediately snap our fingers and make everything how we would like it to be. The first thing I would do is withdraw the US military from all over the world and let all the foreign leaders know that we will never enter another nation unless we are attacked first. I’d withdraw from our membership in the UN, NATO, IMF, etc. I would eliminate all managed trade agreements and proclaim completely free trade. I think all this would help the dollar immediately and ease a lot of tension. Next I would announce we were returning to the gold standard. We would begin to eliminate the federal deficit, we’d raise rates, and would permit competing currencies. After we have enough hard currency circulating the Fed would be abolished. Next I’d simply eliminate everything not explicitly authorized in Article I Section 8 and then go further by making an amendment to get rid of the government Postal Service and their duty to provide roads. I’d also repeal the 16th amendment and get rid of the income tax. Pretty much I think it would take a few months minimum to carry out my plans for eradicating over 90% of the federal government, and after that we can see where it goes. 
In liberty,
Chris
They didn’t make Bernanke stop inflating. He screwed them good and hard.
Totally irrelevant. This is basic property rights : they do not own ‘their’ houses because they didn’t pay for them - so they must leave.
It’s not any better for the banks to have a rotting house that they can’t sell because the mortgage market has collapsed and they can never get back their investment on it either.
Your opinion on what is better or worse is irrelevant. This is the market. These people do not own the houses - period. And if the banks can’t “get back their investment” too bad for the banks - next time they should think twice before doing stupid things.
Yes they can, if they ask the ‘correct’ price.
Actually, a bank is a business. If you have a business you will always run the risk of losing your investment. They should have looked at the applications a little bit closer and not throw all their lending guidelines out the window.
There’s a whole legion of ‘predatory opportunists’ waiting to snap up those houses, the only thing stopping them is the political will that says that house prices shall not be allowed to fall.
But yeah, too bad for the banks that bet that house prices will always rise…I’ll shed a tear or two for them when I roll my wheelbarrow full of cash to the store to buy a loaf of bread in the not too distant future.
Gradual change is a farce. If there’s one thing that Milton Friedman was right about, it was shock therapy.
You say this like there was no manipulation involved at all. What do you think would happen to the computer industry if government policy changed and imposed a 100% tariff on computers? Would you say the computer businesses always ran the risk of losing their investment?