The number of subprime mortgages in default represent less than 2% of homes. This is not the cause of our woes.
The housing market in general is doing poorly more because new houses are not being bought. Obviously people realized that they could not afford to borrow 300,000 dollars to buy a home that should only cost 250,000 and that they would be better off paying off those credit cards that have reached an average of $8000 per card.
The stimulus package is actually big enough that the gov could pay off all those credit cards but that would encourage people to rack up more debt. We need to sit it out until those are paid off.
I could not agree more that scattershot is the worst thing we can do and it is exactly what this bill is.
We need the money to go to the places that help. Consider what happens when the gov bails out a failing auto industry; the companies that should have gone out of business continue in their reckless ways. Meanwhile if they had gone out of business some other new and robust company would have stepped in to take their place with wise business practices. The wrong thing is the bailout and the right thing is the opposite - the money, if it gets distributed at all, should go to the robust companies that would start. Problem: congress doesn't know what company that would be.
If the auto company failed some new start-ups would step in. the good ones would succeed. Millions of consumers all spending their own money with careful consideration would tend to support the companies that offered a good product with wise business practices. The blind market made of of millions of seeing individuals would automatically distribute that money to the robust businesses and the money would not be stolen first, it would not hurt our kids, and each person would make a deal they felt was a fair trade while they were doing it.
Yes trickle down is a myth. It's a good thing that conservative economists don't propose that we do that. Moveing money from poor people to rich people is just as inherently unfair as moving money from rich people to poor people. What economists do propose is that we move money into businesses that hire a lot of people. I still think a free market is even better than that. how do you get money into the free market? Well for starters just don't take it out to begin with! Leave it with the people who actually own it and who have a vested interest in being very careful about where they spend it.
Will this stimulus package take money FROM THE POOR? The poor don't pay taxes so the answer is no.
