November 22, 2012

INDEED, THE ENTIRE STIMULUS SHOULD HAVE BEEN USED TO PAY DOWN MORTGAGES:

Economists, Obama administration at odds over role of mortgage debt in slow recovery (Zachary A. Goldfarb, November 22, 2012, Washington Post)

One year and one month before President Obama won reelection, he invited seven of the world's top economists into a private meeting in the Oval Office for their advice on what do to fix an ailing economy. "I'm not asking you to consider the political feasibility of things," he told them in the previously unreported meeting.

There was a former Federal Reserve vice chairman, a Nobel laureate, one of the world's foremost experts on financial crises and the chief economist of the International Monetary Fund , among others. Nearly to a tee, they said Obama should introduce a much bigger plan to forgive part of the mortgage debt owed by millions of homeowners underwater on their properties. [...]

The meeting highlighted what today is the biggest disagreement between some of the world's top economists and the Obama administration. The economists say the president could have significantly accelerated the slow economic recovery if he had better addressed the overhang of mortgage debt left burdening Americans when housing prices collapsed. Obama's advisers say that they did all they could on the housing front and that other factors better explain why the recovery has been slow.
Posted by at November 22, 2012 7:32 PM
  
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