[lbo-talk] How to Stop the Drop in Home Values

Wojtek S wsoko52 at gmail.com
Thu Oct 13 16:07:54 PDT 2011


http://www.nytimes.com/2011/10/13/opinion/how-to-stop-the-drop-in-home-values.html?hp

[WS:] I do not understand how this plan is supposed to increase consumer spending other than by starting a debt-driven bubble again. When people are forced to pay mortgages on which they are currently defaulting, they will have no money left for other spending, no? They will have to borrow against their homes with little equity, which is a bubble redux. One can also argue that defaulting on mortgage frees up resources for consumer spending. Am I missing anything?

Wojtek



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