According to Bloomberg, the Federal intervention in the economy totals $9.7 trillion dollars, every cent of it borrowed. Bloomberg has done the math to report that $9.7 trillion is enough to pay off the mortgages on nearly every house in the country.
Question: Wouldn't it be maximally stimulative to just use the money to actually pay off all those mortgages, every single mortgage in the country? The benefits:
- No more "toxic assets" weighing down bankers and secondary markets. This would free up investable funds for other uses, right?
- No more mortgage payments burdening consumers, freeing up hundreds of billions of dollars each and every year for other uses that would produce additional jobs.
- It would instantly match up the housing supply with demand. Without doing any harm to current owners, suddenly unburdened of their borrowings, housing prices could fall to levels where millions more could afford to purchase.
Of course, this is all Obamanomics, which bears the same relationship to reality as does the Mad Hatter. The better approach? Let's ask the political class to take a month or two off, take a vacation and a deep breath. That way, we can all get to work doing what we do best.