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Thursday, February 19, 2009

Just what we need! A REAL economic life line!

President Obama, yesterday, talked about a home owners backing in his plan to stave off foreclosures .

This is a CERTAIN step in the right direction, in regards to putting faith back into the economy of the US. The measure will have in it: "The three key elements of the proposal include a program that would allow 4 million to 5 million homeowners with little equity in their homes to refinance into cheaper mortgages; a $75 billion program to keep 3 million to 4 million homeowners out of foreclosure; and a doubling of the government's commitment to Fannie Mae and Freddie Mac to $400 billion" (Washington Post, 2008)

I said on a blog entry nugget two weeks ago that the American government has to beef up people's homes, one way or another. This plan, while far short of comprehensive and certainly, more important details will be revealed when he unveils all of its splendor, is a good start.

Jamie Dimon of Morgan Stanley, seems to think so as well. In fact, he is elated.

The best way and the most obvious way- even though it costs allot- is to help stave off foreclosures and, not just that, increase the equity in homes at a time when equity in homes and neighborhoods are going south.

The great true first step. You can forget the merits of TARP for a second and, certainly forget about the stimulus plan. This is the saving grace, if he can pull this off.

The next big step is to reverse the credit accounts in arrears and in deep red as well as help companies, sort out their consumer credit facilities. This is a harder sell, but must be done.

This can only be done with cooperation from the financial companies. They have to have some way to profit off of it, and, trust me, they would find a way regardless--but, to avoid another scandal to cripple the industry when Wall St. finds a way to get around the system, the government, should work with them to make the profit making of such a risky venture, legal; and taxable, to a marginal extent.
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