1. if you help housing, you create jobs
in order to 'help' housing, you have misallocate capital which hurts job creation.
2. and if you create jobs, you help the economy.
'make work' jobs wastes capital and hurts the economy.
3. if you allow people to refinance, regardless of whether they are underwater on their mortgage or not, that would really put a lot of money in the pockets of healthy homeowners who will spend it
the total money they pay will be more over time, and there's no guarantee that they will spend more even if they have more in their pockets.
4. allow homeowners to move investment funds from their retirement account - without penalty or taxation - to pay down mortgages
well, he doesn't say what he's asserting here, but if home prices fall they will further lose money on that advice and their investment funds will be gone in addition.
5. reduction in debt would reduce monthly payments and simultaneously increase disposable income.
ok, i see. my answer above would apply here.
6. getting banks to lower principal, as well as what he calls a 'Mortgage Mulligan plan' that would be available to all healthy homeowners and not just those Fannie Mae of Freddie Mac financing.
who's going to pay for lowering the principle? the taxpayers? and if the homeowners are healthy, why should their principle be lowered?
The author refers to this guy as whiz. What would you call him?
economically illiterate. |
