politicaleconomitalk

As more and more homeownwea face foreclosure it seems inevitable that the government will initiate a plan to help individual families no matter who is elected.  Given the situation this is probably a good thing as millions of foreclosures would devistate the housing market for years to come and increase the numbr of homless exponentially.  

The bailout of large financial institutions will not work if the government does not help individual families stay in their homes.  If the bailout is managed properly it can become a wind fall of monumental proportions for the government.  Buying the “bad paper” at a fraction of its face value and then holding it until it doubles or triples in value would allow the government to recoup the $700+ billion plus a hole lot more.  There shoud be a law as part of the bailout legislation that forces the government to hold the paper until the time is right to capture the wind fall.  All of the extra mony coud be used to pay down the debt and shore up social security.  This will take patients and disipline but eventually the housing market will turn around and the “bad paper” will be worth much more than it cost.  This scenario will not play out if the democrates win the whitehouse however, because they will spend any potential gain before it is realized on big government give away programs.

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