Posted by bad_luck on 3/4/2013 3:04:00 PM (view original):
Posted by tecwrg on 3/4/2013 3:03:00 PM (view original):What???
Well, it kind of does matter. Because what you say you believe goes to your credibility. And if you're going to claim that (effect --> cause), then you reached a new personal low in credibility.
Demand collapsed because of the mortgage crisis.
How would you suggest we deal with the economy, other than addressing the lack of demand?
Here's a simple way. Doesn't cost the government a dime.
Define a qualified mortgage as stipulated in Dodd Frank. The last time I saw the numbers, the average credit score for someone getting a mortgage was 762. The average credit score on a declined
mortgage application was 729. One would assume they would set the bar somewhere below that (say 700, maybe 710 or 720), allowing for more mortgages, which allows for more homebuyers (more spending), which raises property values, which creates equity, which these newly-qualified borrowers can leverage into cash, creating (again) more spending.
It would also create construction jobs, mortgage lending jobs, appraising jobs, etc., which creates wages, which results in more spending.
Then, guess what? That additional spending creates the need to hire in other service sectors (where that money is being spent). Which creates more jobs, which creates wages, which creates more spending.
All that by adding a footnote to an existing law.
Fix the self-inflicted broken leg (the housing market) and that fixes the symptom that appears as pain (the lack of spending).