I just don't understand what all these highly-educated people in Washington are doing with all this money, when they really need to be doing ONE thing with all that money: STABILIZE THE HOUSING MARKET! I don't have a degree in finance or economics or business, but I do know that the problems started when average people back in 2006 were no longer able to afford $500,000 houses with $50,000 salaries. In short, the housing bubble burst.
Every day, I read online or watch CNN or MNBC and these so-called experts are trying to offer "clues" as to where the market may be heading, looking at retail numbers and manufacturing numbers and whatever other numbers. The only number that REALLY needs to be watched is HOUSING!!! Until average Americans know what their house is really worth in this market, no one is going to spend a dime. Plans for home rennovations will be scrapped. Maor purchases will be put on hold. College educations may have to wait. For most Americans, the house is their biggest asset, and when there is so much mystery surrounding the true worth of your most important asset, or even worse, when there are so many signs that the value of that asset continues to plummet, there is just NO CONFIDENCE to spend and loan any money.
For example, Obama has earmarked $6.2 billion for home weatherization, claiming that this will put people to work. I'm sorry, but which American homeowner is going to embark on a major home weatherization project in these times? Who can afford to throw thousands of dollars at a home weatherization project that might not recoup its value?
STABILIZE HOUSING!!!!!! A man's home is his castle. In America's case, housing is the foundation on which everything else is built. I remember back in 2005 when real estate was going through the roof, everyone was talking like they were millionaires. Taking out home equity loans to buy that second BMW. Go on vacation. Expand the business. Whatever. Now that homes are worth considerably less than what they were only three years ago (NYC just LOWERED its tax assessment of my house! Seriously, government NEVER lowers these numbers!), people are feeling a lot poorer.
The best thing the government could do with $900 billion is to have Fannie and Freddie buy up all these toxic mortgages and cut off a few percentage points for the borrowers. Force banks to make housing loans so the ONE-YEAR glut of NEW HOUSES still on the market starts disappearing; until those houses go, there will be constant downward pressure on housing. This is 7th grade economics! And then throw the banking architects into jail so that this problem does not repeat itself. Greed is a Hydra with a million heads that refuse to die--actually, even worse, because Greed is not mythological. This is not to say that the myriad of programs Obama wants to shore up are not worthy. They are. But he's putting the cart before the horse in his recovery strategy.
Really, these guys in Washington and on Wall Street are so clueless as to how Joe Six Pack lives and thinks. Stabilize housing. People will get a grip on what they're worth. They'll spend accordingly, and the economy will take off from there. God, it's really not that difficult.