Tuesday, November 9, 2010

But what do we spend on?

There seems to be much agreement that we should kickstart the economy by spending. However, no one seems to be very clear about the type of spending that we need to do. I don't think that shopping at a mall is the best way to kick-start the economy. The stores may do well but the individuals just end up back in debt.


However, today's article in the Times:
http://www.nytimes.com/2010/11/09/us/09foreclosure.html

suggests a new way to promote spending while keeping people off the streets and out of shelters. I have thought it would have been cheaper for the government to pay off the mortgages of the millions of foreclosed Americans andd told them that they owned their house. This would have kept the banks solvent and freed up the homeowner to spend money that would otherwise have gotten to an inflated mortagage on home repair, education, retirement savings, shopping in local stores, etc. Those of us who actually paid our mortgage could have been given a bonus for actually paying it. Let these squatters keep their houses and spend economy-boosting money on them!

Does anyone have other suggestions on good ways to boost the economy by spending? Please post.

2 comments:

Oscar W. said...

John Crudele of the New York Post often suggested during the depths of the financial crisis in 2008-2009 that the government should allow people to dip into their 401(k) accounts on a tax-free basis to purchase housing. He felt it could have put a floor under house prices. It's possible that this could still stimulate the housing market without creating another bubble or jeopardizing people's retirement. The government might put a dollar or percentage cap on the amount that could be withdrawn for this purpose.

Anonymous said...

I not the other hand can not spend no money on anything realy.Things are to hi.i have to pay reant,by food,pay phone bill, by Metrocar. metroCard is not &104.It is to much. The govermant could of don something about this.There is alot of people out in the worl that dont have a home to go to at the end of the day.Why?,because the lost there job's.