WASHINGTON POST: One year and one month before President Obama won reelection, he invited seven of the world’s top economists to a private meeting in the Oval Office to hear their advice on what do to fix the ailing economy. “I’m not asking you to consider the political feasibility of things,” he told them in the previously unreported meeting…
Nearly 11 million Americans, or more than a fifth of homeowners, are buried in debt, owing more than their properties are worth after piling their life savings into their properties — a persistent and largely unaddressed problem that represents the missing link in what many economists consider the administration’s overall strong response to the recession…
But Mian and Sufi’s research showed something more specific and powerful at work: People who owed huge debts when their home values declined cut back dramatically on buying cars, appliances, furniture and groceries. The more they owed, the less they spent. People with little debt hardly slowed spending at all. …(more)
EDITOR: We weren’t invited, but we have been urging the lowering of interest rates and ‘crunch down’ of mortgage debt for five years. We recently learned from former FDIC chairperson Sheila Baer’s book “Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself” that the government had the power to modify poorly performing securitized mortgage loans but, despite Baer’s urgings, did not choose to do so.
