Everyone with half an economic brain knows that the only ways to "bounce back" from this crisis is either to let debts that cannot be paid default or reflate, creating even greater economic challenges that will have to be fought down the line with less ammo. Let's get on with it, without looking back and trying to recapture a past that is lost to time.

The ancient Hebrew sages knew this when they mandated a forgiveness of debt after a certain period (seven years), and both Islam and early Christianity outlaw usury. Maybe the prophets of old knew something, and weren't just hearing whispers in their heads.

The fact is that the present socio-economic system is structured on an energy source that is at end of life. This is actually good because cheap oil is only only cheap because market price does not reflect true cost, which includes resource depletion as a charge against the future and pollution as a negative externality. Rather than being taken into account by the market, these liabilities against the future are being socialized by past and present generations. Fortunately, it is being acknowledge that this trend is no longer sustainable for long.

The most important factor to realize and acknowledge politically and economically is that humanity is entering a transition from one energy system to another. This is going to profoundly change the way things are done at all levels. For example, the new highways are going to be digital rather than concrete. Clearly, steps like facilitating digital home business is a step in the right direction under these circumstances, stemming principally from the sprawl economy that is dependent on cheap oil.

California communities are already cutting cops because the $200,000 a year price tag is becoming too much. Obama might subsidize this cost for a while to delay the buyer's remorse for a few years.

In general, I think that inflation will kick in and take away whatever gains people claimed since, for example, Los Angeles now has a 10%+ sales tax.

So, morally, housing prices should fall; over stretched mortgage holders should let go and let the economic system work again.

To this end Freddie and Fannie should change mortgage regulations such that communities that have ordinances that prevent home based businesses be listed as "non-conforming."

This would save a fortune on car related expenses.

The best solution proposed so far has been from Sheila C. Bair, the chairwoman of the Federal Deposit Insurance Corporation. Under this proposal, servicers of mortgages would rewrite outstanding mortgages to a more affordable level for the homeowner by lowering the principal amount owed, by reducing the interest rate, by extending the maturity — which would reduce monthly payments — or by combining these steps. In addition, the government would share a portion of the losses in these mortgages if they went into default.

to

"Make the buggers pay back every cent".

I'm not disputing the equivalence- I certainly am not an economics expert- I just don't see them as the same. Can you expand on that?

_{Yes, I can come up with a post-election signature, just... not... yet...}

are very small, and end up "improving the condition of the banks" according to their own numbers. That is, they are going to recover more, on average, than before the face value reductions.

Now, given that she's running the FDIC, this is her mandate, to recover asset value. However, the result for the average home owner is going to be an increase in what they are going to pay over the life of the loan adjusted for inflation.

Better is a reduction/lien combination, with larger face deductions, and a government recapture on sale or transfer.

China Announced Massive Stimulus Package

Will other G20 countries follow suit? It's tiresome to see the financial industry being rewarded and workers being left out while recessions globalize. Makes sense rather for countries to offer desperately needed jobs to workers being displaced by the downturn in economies. Seems an ideal partnership...jobs for workers and badly needed infrastructure being rebuilt. And stupid to keep rewarding lenders and central bankers who created the mess!

It isn't the poor that should pay! What they need most is government funding so they can eat and be able to afford to put a roof over their head regardless of country in which they live.